European Commission happy that most pharma patent settlement agreements do not offend competition law

The European Commission is happy that most patent settlement agreements between originator pharma companies and generic companies do not cause competition law issues, it has said in its 2014 report on pharma patent settlements. The EU’s competition law regulator has been reporting annually since it raised concerns over “pay for delay” settlements, which is where brand owners pay generics businesses in return for settling their patent disputes. The Commission has generally seen those cases as anti-competitive, because the cheaper competitor is agreeing, in return for a payment, to stay out of the market, which leads to higher costs to healthcare payers. The Commission said in its latest report that 88% of settlements raised no competition law concerns. Some uncertainty still exists, though, in light of the fines in 2013 and 2014 against Lundbeck and Servier respectively in relation to their patent settlement agreements with generic competitors. Those companies’ appeals against those decisions are yet to be heard.