EC investigation on patent deal by originator and generic drug companies

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Brussels, 12 th January 2010

Antitrust: Commission launches monitoring of patent settlements concluded between pharmaceutical companies

The European Commission can confirm that on 12 January 2010, on the basis of EU antitrust rules, it addressed requests for information to certain pharmaceutical companies asking them to submit copies of their patent settlement agreements. The requests cover patent settlement agreements concluded between originator and generic pharmaceutical companies in the period from 1 July 2008 to 31 December 2009 and relating to the EU/EEA. The Commission is in particular looking at patent settlements where an originator company pays off a generic competitor in return for delayed market entry of a generic drug. This monitoring exercise has been launched in the light of the findings of the competition inquiry into the pharmaceutical sector Inquiry (published in July 2009, see IP/09/1098 and MEMO/09/321 ). The sector inquiry highlighted the risk that certain types of patent settlements may have negative effects on European consumers by depriving them of a broader choice of medicines at lower prices and indicated that the Commission could monitor such patent settlements.

Commissioner Kroes commented: "The Commission's pharmaceutical sector inquiry points to significant shortcomings in the pharmaceutical sector. Patent settlements are an area of concern, not least if there are situations where an originator company pays off a generic competitor in return for delayed market entry. We need to monitor this type of agreement in order to better understand why, by whom and under which conditions they are concluded. The monitoring will also provide us with the possibility to act should this become necessary. Since completing the sector inquiry, the Commission has launched a number of new antitrust investigations and we will continue to do so should this be necessary."

A selected number of originator and generic companies received an information request in which they are asked to submit to the Commission a copy of all patent settlement agreements relevant for the EU/EEA markets and concluded in the period from 1 July 2008 to 31 December 2009, as well as copies of all annexes, related agreements and amendments. In order to limit the administrative burden on companies, they were asked for copies of the agreements without additional background information. Following receipt of the responses, the Commission will analyse the agreements and publish a short report providing a statistical overview. In case a specific settlement raises additional questions, a more targeted request for information could follow. Depending on the outcome of the exercise, this round of information requests may be repeated annually for as long as the Commission considers that there is a potential problem.