On July 6, 2011, the European Commission adopted its
second report on the monitoring of patent settlements in the
pharmaceutical sector in the EU. The monitoring exercise collected
data on settlement agreements between originator and generic
companies during 2010. The report follows the Commission's EU
competition law inquiry into the pharmaceutical sector concluded in
July 2009 and the first monitoring exercise, which covered part of
2008 and 2009.
This second monitoring exercise identified 89 patent settlement
agreements in the EU between originator and generic companies in
2010. This compares with 207 such agreements during the 8.5 years
covered by the sector inquiry and 93 agreements during the 18
months covered in the first monitoring exercise. The report
emphasises, however, that the number of settlements potentially
problematic from a competition law point of view – in
particular those that limit generic entry against payment from the
originator to the generic company – decreased
significantly more in importance and number.
The Commission is careful to point out that at the same time the
continuing use of patent settlements shows that neither the sector
inquiry nor the monitoring exercise drove companies to litigate
patent disputes until the end and that in most cases companies are
able to find solutions that are considered unproblematic from a
competition law perspective.
The Commission has indicated that it will continue monitoring the sector to make sure that settlements are not delaying entry of generics into the market and that they do not contain other restrictions that would be problematic under EU competition law. It will repeat the monitoring exercise in 2012.
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