183 patent settlements between originator and generic drugmakers were concluded in the European Union (EU) in 2012, compared to 120 in 2011, but last year’s total drops to 125 when those relating to new legal provisions in Portugal are excluded.

Nevertheless, 2012 is the fifth consecutive year in which the total number of settlements increased, says a new report from the European Commission, but it also finds that the number of “problematic” settlement agreements has decreased “significantly in importance and number.”

While such “pay for delay” agreements had accounted for 45 out of 207 (22%) agreements reported between 2000 and first-half 2008, they stood at only 7%, or 12 out of the 183 settlements concluded in 2012.

“Even omitting agreements related to the new law in Portugal, this figure would still stabilise at just 10%,” says the report, which is the outcome of a monitoring exercise launched in last January as a follow-up to the Commission’s competition inquiry into the pharmaceutical sector which concluded in July 2009. 

“The statements of certain stakeholders during the sector inquiry that the Commission would be forcing companies to litigate each patent dispute until the end has proved to be unfounded, given the substantial increase in settlements overall,” the report points out.

93% of these settlements fall into categories that raise no need for competition law scrutiny, it says, adding: “companies, in most cases, are able to solve their disputes in a manner that is typically considered unproblematic from a competition law perspective.”

Joaquin Almunia, Commission Vice President in charge of competition policy, commented that these latest findings show companies are “increasingly aware of the competition concerns that some settlements may raise,” and that Commission action has not prevented companies from settling patent disputes in line with the antitrust rules.

- So far, the Commission has opened thee formal antitrust proceedings related to patient settlements. In June 2013 it imposed a fine of 93.8 million euros on Lundbeck and fines totalling 52.2 million euros on several generics firms over pay-for-delay deals relating to the market entry of generic versions of the blockbuster antidepressant Cipralex (citalopram).

Two other probes are ongoing: one involves Servier and other firms and relates to the potential delay of market entry for generic Aceon (perindopril); the other involves Cephalon and Teva and concerns an agreement that may have hindered the market entry of generic Provigil (modafinil).