Marleen Van Kerckhove, Sep 30, 2013
The EC’s 2009 Sector Inquiry Report on certain practices in the European pharmaceutical sector described in considerable detail the practice and nature of settlement agreements between originator companies and generic companies in the European Union in the period 2000-2008. The Report did not intend to lay down guidance on the compatibility of these agreements with EU competition law. However, it does refer to the FTC having found some of these agreements (the so-called “reverse payment settlement agreements”) to be an infringement of antitrust rules, adds a brief overview of the U.S. settlement practice, and also discusses the similarities and differences between the EU and U.S. systems. In addition, the EC followed the FTC’s example and started monitoring settlement agreements in the wake of the Sector Inquiry.
In June of this year, the U.S. Supreme Court-in FTC v Actavis-for the first time ruled on the compatibility of reverse payment settlement agreements with antitrust rules. In the same month, the European Commission (“EC”) issued its first decision finding that Lundbeck and a number of generic companies had infringed EC competition rules by entering into reverse payment settlement agreements.
Although the EC is, of course, not bound by U.S. precedent, it has on more than one occasion taken inspiration from the United States when applying its competition rules to the pharmaceutical sector. More generally, it is keen to underline the similarities in approach between the EC and the U.S. on IP/antitrust interface cases.
So how close is the EC’s current approach to the majority ruling in FTC v Actavis? In particular, the Supreme Court rejected the FTC’s “quick look” approach in favor of a “rule-of-reason” approach. Where does that leave the EC’s “by object” approach that it seems so far to have been pursuing in these settlement cases?
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