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Theo Peters, Director of Intellectual Property, Synthon B.V,
EU Competition Commission's Investigation into the Pharmaceutical Sector
Friday 28 November 2008 saw the release of the Commission's preliminary report on alleged competition abuses in the pharmaceutical sector. Since January 2008 a sector inquiry has seen numerous companies receive detailed questionnaires and finding themselves caught unawares by on-site inspections some as recently as 24 November. The report in particular raises questions over originators' patent strategies and how exploitation of an inadequate patent system might be unlawfully blocking entry of generic pharmaceuticals onto EU markets.
COMMISSION FIRES WARNING SHOT
The Commission has not yet given its conclusions, but the tone of its preliminary report into the pharmaceutical sector and the statements given by the Commissioner spell out a clear message to pharmaceutical companies; current patent strategies are affecting competition and them Commission will enforce in respect of Competition law breaches.
Competition law and intellectual property rights have always been curious bed fellows but Friday morning's address by Neelie Kroes, European Commissioner for competition, has signalled that the relationship is set for further turbulence. The inquiry was to explore complaints that competition in Europe's pharmaceutical sector may not be working correctly as fewer new medicines are being brought to market and that a generic's entry into the market was sometimes unnecessarily delayed.
Addressing the crowd of journalists, industry representatives and lawyers (and notably, Lord Justice Jacob of the English Court of Appeal) the Commissioner stated that even at this preliminary stage it is clear that competition in the sector does not work as well as it should. The Commissioner went on to highlight her dissatisfaction with the current system for protecting intellectual property rights specifically citing one originator's internal strategy document that read "[we] identify options to obtain or acquire patents for the sole purpose of limiting the freedom of operation by our competitors."
In addition to examining market authorisation, pricing and reimbursement regimes, the preliminary report identifies types of originator conduct that potentially affect competition as between originators and also between originators and generics companies - specifically: filing patent clusters (e.g. up to 1300 applications for one medicine); use of divisional applications; litigation as a signal to deter generic entry rather than on its merits; and the terms of patent dispute settlement agreements. One thing that the industry and the Commission agree on is their dissatisfaction with the current European patent system, both championing the idea of a Community wide patent right.
For now we must wait for Spring for any conclusions from the further consultation period. It will be interesting to see how the Commission frames any Art. 81 or 82 objections to patent strategies - strategies based on examined and granted rights that are prima facie valid and what impact that has on the EPO, its many users and importantly, the prospects of a Community patent.
Rachel Bunn
1 December 2008
Waterfront Solicitors
For more info contact Rachel Bunn, partner, on +44(0)20 7234 0200 or send her an email at rachel.bunn@waterfrontsolicitors.com
© Waterfront Solicitors LLP 2008