EXPERT VIEW: Fewer ‘pay-for-delay’ agreements are likely but they might not disappear altogether

The pharmaceutical sector is still reeling from the latest fines imposed by the European Competition Commission as part of its crackdown on so-called ‘pay-for-delay’ agreements. As a result, such practices could be used less frequently in the future but they are unlikely to disappear altogether, according to patent and trade mark attorneys Withers & Rogers.

The Commission recently imposed fines totalling more than 420 million euros ($562 million) against five pharmaceutical companies for entering into deals to delay the introduction of generic products in order to maximize their own commercial gain. Among them, French privately-held drugmaker Servier has been fined 331 million euros for delaying the introduction of a generic version of the hypertension drug, Coversyl (perindopril). In this case, Servier had faced a series of challenges from generic competitors attempting to revoke a number of its patents and discussions took place during which deals were apparently struck to prevent this. The other companies fined include Israel-based Teva Pharmaceutical Industries (NYSE: TEVA), Indian drugmaker Lupin (LOPN: BO), US generics major Mylan (Nasdaq: MYL), Slovenian drug maker Krka and Unichem Laboratories. The US Federal Trade Commision (FTC) has also recently launched a series of probes into agreements between pharmaceutical companies.

Agreements facing growing scrutiny