Patent Law

A December 1, 2008 article that appears at mediLexicon states, in part:

The European Commission's 426 page Interim Report on the Pharmaceutical Sector (the "Report") , which was released on 24 November, makes no specific allegations of anticompetitive behaviour against particular companies but sets out in considerable detail how originators and generic manufacturers inter-connect within a highly regulated commercial environment. Originators are companies that develop and sell new medicines whilst generic manufacturers lawfully produce and sell equivalent medicines once the originators' patents expire.

The Executive Summary of the Report outlines many practices by originators which the Commission characterised as "shocking" in its press conference. These include:

• Protecting their existing patents through a strategy of seeking additional secondary related patents, particularly nearer the time that the primary patent is due to expire. This practice of "patent clustering" is claimed to make it more difficult for competitors (including generic manufacturers) to develop innovative products.

• Resorting very readily to litigation with generic companies, despite the likelihood of losing the case. The Commission implies that this practice is seen by the originators as a valuable way of delaying the entry on the market of rival products from manufacturers.

• Settling litigation with some competing generic manufacturers on terms that might involve the transfer of alleged payments to the generic companies and which resulted in additional delays to the arrival of the generic manufacturers' products on the market.

• Creating average delays of 4 months or more in national procedures for the approval of generic medicines by raising every manner of potential objection to such applications.

If the Commission...has evidence that payments by originators to generic manufacturers were motivated by the sole purpose of preventing new products coming to market in a timely way, then such a practice could be vulnerable to challenge under EU competition law. The Commission's dawn raids in the pharmaceutical sector on 24 November may have been motivated by this issue of "reverse payments".

Read the full article and access a link to the full European Commission report here.