Patents, Generics and Anticompetitive Practices (GSK v CMA)
On January 30, the Court of Justice of the European Union (CJEU) published an interesting decision (C-307/18) in the field of patents and competition law. In particular, it decides for the first time on the matter of the agreements that sometimes establish pharmaceuticals with each other to delay the entry of generics into the market, known as pay-for-delay agreements.
The case was referred to the CJEU by the Competition Court of Appeal of the United Kingdom, who was assigned the task of deciding whether the Competition and Market Authority of the United Kingdom had legally fined generic drug manufacturers and the pharmaceutical company GlaxoSmithKline (GSK) for having reached one such agreement. In this case, GSK offered payments to generics manufacturers in exchange for refraining from entering the market of the paroxetine antidepressant.
This decision by the Court confirms that these types of agreements are contrary to free competition. On the one hand, it is considered that every generic manufacturer that is offered this type of agreement is a potential competitor of the originating company, and that such payments are aimed at restricting competition.
This decision reflects the consistent position of the European Commission on the matter so it is not too surprising. The CJEU will have to rule on two other cases that deal with similar patent settlement agreements. The first case involves Danish Lundbeck (C-591/16 P) and the second case French Servier (C-201/19 P and C-176/19 P).
Pharmaceutical patents companies invest a great deal of time and resources to research new medicines, which can then be exploited exclusively for a number of years thanks to patent rights. After this period, the invention goes into the public domain and can be developed by generic manufacturers. This has as a necessary consequence a dramatic drop in the price of medicines, which is beneficial both for patients and for national health systems. That is why pharmaceutical dealings are often controversial and always on the spotlight for regulators and the public alike.
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