European Commission launches second monitoring purge of patent settlements in pharma sector

In a further crackdown on anti-competitive practices, the European Commission has addressed information requests to selected pharmaceutical companies, asking them to submit copies of their patent settlement agreements - also dubbed pay-for-delay deals - concluded in the European Economic Area (EEA) in 2010 between originator and generic companies. Such practices are claimed to have cost health care providers about 3 billion euros ($4 billion) between 2007 and 2008.

This is the second monitoring exercise following the Commission's competition sector inquiry of 2009 (The Pharma Letters passim) that pointed to significant risks for European consumers stemming from certain types of patent settlements, the Commission notes. It did not mention any company from which it requested information from, although several drugmakers have previously confirmed that they had been contacted in this respect, including Anglo-Swedish drug major AstraZeneca (LSE: AZN), UK pharma giant GlaxoSmithKline (LSE: GSK), France's Sanofi-Aventis (Euronext: SAN) and the two Swiss drug majors Novartis (NOVN: VX) and Roche (ROG: VX). Germany’s Bayer (BAY: DE) has also been approached by the Commission, the company has confirmed.

As recently as late last year, Commission officials carried out unannounced inspections at the premises of a limited number of companies active in the pharmaceutical sector in several European Union member states, including AstraZeneca (TPL December 3, 2010). Moreover, the London-headquartered drugmaker was fined 60 million euros for blocking generic competition to its once blockbuster gastro-intestinal drug Losec (omeprazole; TPL July 2, 2010).