The EC’s Investigation into the Pharmaceutical Sector: Trouble Ahead at the IP/Competition Intersection?

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David Hull, Feb 07, 2008

Efforts by innovative pharmaceutical companies to protect their markets against generic drugs have generated a wide-ranging debate over how to achieve the proper balance between these companies’ legitimate interests in reaping the full rewards of their research and development efforts and the public’s interest in having access to cheaper drugs. In Europe, this debate has largely centered on issues relating to healthcare policy, national pricing, and reimbursement policies, and the overall pharmaceutical regulatory regime. To date, competition law has not played a prominent role in this debate. With the notable exception of its decision in AstraZeneca – in which the European Commission found that AstraZeneca had abused its dominant position by pursuing certain strategies aimed at keeping generics off the market – the Commission has not published any decisions dealing with the competition law implications of efforts by pharmaceutical companies to delay the entry of generics. The AstraZeneca decision signaled that such efforts could give rise to competition concerns, but it provides limited guidance because the practices at issue were very specific to the facts of the case. This situation changed overnight with the Commission’s announcement on January 16, 2008 of a competition investigation into the pharmaceutical sector “relating to the introduction of