Monday, February 18, 2008

Trouble Ahead at the IP/Competition Intersection?

Posted by D. Daniel Sokol

David Hull of Covington asks about Trouble Ahead at the IP/Competition Intersection?  based on the EU investigation of the pharmaceutical sector.

ABSTRACT: 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 innovative and generic medicines for human consumption on the market.”

This sector-wide investigation moves competition law to the center of the generics debate. As discussed in this comment, it also raises thorny issues on the relationship between the competition rules and the intellectual property rules.

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