The EC asked a selected number of originator and generic companies to submit a copy of all patent settlement agreements concluded between them in the European Economic Area in 2010. The Commission’s original competition inquiry in the pharmaceutical sector showed that certain patent settlements may cause consumer harm because they delay the market entry of cheaper generic medicines.

This latest monitoring exercise identified 89 patent settlement agreements between originator and generic companies in 2010. This compares with 207 such agreements during the 8.5-year period covered by the sector inquiry concluded in July 2009. It also compares with 93 agreements during the 18-month period covered by the first monitoring exercise.

The first monitoring exercise in 2010 found that the number of patent settlements in the pharmaceutical sector that are ‘potentially problematic’ under the EU’s antitrust rules, or so-called ‘pay-for-delay’ deals, fell to 10% of total patent settlements in the sector inquiry during the period July 2008 to December 2009 compared with 22% in the period January 2000 to June 2008. This second monitoring exercise showed that in 2010, only 3% or three out of 89 of the settlements fell into the category that might attract scrutiny by the EC’s antitrust commission.

This reduction in potentially problematic settlements highlights an increased awareness by originator and generics companies of which types of settlements can give rise to antitrust scrutiny, and is good news for consumers who will benefit from cheaper pharmaceuticals.

Commission Vice-President in charge of competition policy Mr Joaquín Almunia said that ‘the Commission will remain vigilant that companies’ behaviour respect antitrust law and do not delay entry of cheaper pharmaceuticals.’

The EC intends to repeat the monitoring exercise in 2012.

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