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Seitz, Claudia --- "Pay for delay agreements" [2017] ELECD 827; in Matthews, Duncan; Zech, Herbert (eds), "Research Handbook on Intellectual Property and the Life Sciences" (Edward Elgar Publishing, 2017) 451

Book Title: Research Handbook on Intellectual Property and the Life Sciences

Editor(s): Matthews, Duncan; Zech, Herbert

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781783479443

Section: Chapter 26

Section Title: Pay for delay agreements

Author(s): Seitz, Claudia

Number of pages: 17

Abstract/Description:

The assessment of pay for delay agreements has grown in importance in the European Union: on 15 January 2008 the European Commission (EU Commission) launched an inquiry into competition in the pharmaceutical sector of the EU.This inquiry was another step in a process in which the EU Commission monitored the pharmaceutical markets in the EU.The EU Commission especially observed several indications for potential restrictions of competition such as delays of market entry of generic products as well as the fact that fewer pharmaceutical products were brought to the market.Because of these indications the EU Commission suspected that the pharmaceutical markets in the EU were not working well and launched the so-called sector inquiry into competition in the pharmaceutical sector (Pharmaceutical Sector Inquiry). One of the objectives of this inquiry was to investigate potential restrictions of competition between originator and generic companies.In particular, the inquiry sought to examine the reasons for observed delays in the entry of generic medicines to the market and the apparent decline in innovation as measured by the number of new medicines coming to the market.In this context the inquiry examined whether agreements between pharmaceutical companies blocked or delayed the market entry of generic medicines. The EU Commission identified a ‘tool box’ of various potential restrictions such as ‘patent clusters’, ‘patent thickets’ and so-called patent settlement or pay for delay agreements.Patent settlement or pay for delay agreements in pharmaceutical markets have been the subject of investigations for some time. The US Federal Trade Commission (FTC) has started several investigations and has filed a number of lawsuits since the turn of the millennium.Since then the investigations into pay for delay agreements and their anticompetitive effects have evolved into one of the top priorities of the FTC to ‘oppose a costly legal tactic that more and more branded drug manufacturers have been using to stifle competition from lower-cost generic medicines’ since ‘drug makers have been able to sidestep competition by offering patent settlements that pay generic companies not to bring lower-cost alternatives to market’.