EU to scrutinise generic drug patent settlements


Patent settlements between pharmaceutical companies are set for European Commission scrutiny over concerns that some of the deals could deny EU consumers broader choice and lower-priced medicines.

The European Union’s antitrust watchdog said it had asked certain companies for copies of their patent settlements. The requests covered deals concluded between originator and generic pharmaceutical companies from July 2008 to December 2009. 

It did not identify the companies, but Britain’s AstraZeneca PLC and GlaxoSmithKline said the Commission had contacted them about drug patent settlements. 

“We have received a request from the EU Commission, as part of their ongoing monitoring, for information regarding interactions with generic manufacturers. We will be providing the Commission with all relevant information,” said Claire Brough, a spokeswoman for Glaxo. 

Privately-owned Boehringer Ingelheim, Germany’s second-largest drugmaker, also said it had received a questionnaire from the Commission and was cooperating. 

A spokeswoman for AstraZeneca said the firm remained confident that all its agreements complied with the law and that they benefitted consumers and parties involved in the settlements. 

“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,” the EU executive said in statement yesterday (12 January). 

Sector inquiry

The move follows an inquiry into competition in the pharmaceutical sector and a series of unannounced raids on the offices of top pharmaceutical companies (EURACTIV 17/01/0826/11/08). 

The EU executive vowed to pursue companies suspected of anticompetitive acts after investigations revealed some practices had cost healthcare providers about €3 billion between 2007 and 2008. 

The Commission has so far targeted a number of generic drug makers including Matrix Laboratories Ltd., now a unit of Mylan Inc., Niche Generics Ltd., part of Unichem Laboratories Ltd., and Israel’s Teva Pharmaceutical Industries Ltd., in its investigations. 

“The Commission’s pharmaceutical sector inquiry points to significant shortcomings in the pharmaceutical sector. Patent settlements are an area of concern,” EU Competition Commissioner Neelie Kroes said in a statement. 

“We need to monitor this type of agreement [patent settlements] 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,” she added. 

The Commission said it would analyse the agreements and publish a report. If a specific settlement raised additional questions, a more targeted request for information could follow and the requests could be repeated annually. 

(EURACTIV with Reuters.)

The European Union has spent more than two years investigating competition issues in the pharmaceutical sector. An investigation was launched in January 2008 in response to concerns that fewer new medicines were being brought to market, amid allegations that generic drugs were being delayed from reaching consumers. 

Tensions had been high between the industry and the EU executive following a dramatic series of unannounced raids on the offices of top pharmaceutical companies in January and November 2008 (EURACTIV 17/01/08EURACTIV 26/11/08). 

A damning preliminary report was published in November 2008, which alleged that anti-competitive practices in the sector are hampering innovation and blocking the entry of cheap generics onto the European market (EURACTIV 28/11/08). According to the November report, big pharma firms were applying for multiple patents for the same medicine and seeking to prevent competitors from developing new drugs. 

However, there was relief in industry circles when the Commission published its final report in July 2009, which took a somewhat soft tone (EURACTIV 09/07/09). 

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