LIDC Prague, 12 October 2012 EU competition law and end-of-lifecycle pharmaceutical products Blaž Višnar DG Competition DISCLAIMER “The views expressed are purely those of the writer and may not in any circumstances be regarded as stating an official position of the European Commission.”

Ori-Gen competition Impact of generic entry Static effect of undue delays: average price with and without generic entry

Ori-Gen competition Impact of generic entry Dynamic effects (of undue delay): “Misuse of the patent system potentially reduces the incentive to engage in innovation, since it enables the company in a dominant position to maintain its exclusivity beyond the period envisaged by the legislator” General Court in T-321/05 AstraZeneca, para 367

Pharma Sector Inquiry opened in January 2008 main focus of the SI company behaviour in view of generic delay (ORI-GEN) & decline in innovation (ORI-ORI) preliminary report in November 2008 Practices in focus: patenting, litigation, agreements (including settlements), interventions, follow-on products Conclusion of the Sector Inquiry in July 2009 Policy Recommendations Enforcement of Competition Law Improvement of the Regulatory Framework Regulatory Framework (EU and MS) Transparency Directive EU patent & Single Patent Judiciary

Commission Enforcement Important legal precedents: AstraZeneca: on-going judicial review by the Court of Justice Recent procedures: Servier: Patent settlements: Pay for generic delay agreement Lundbeck: Patent settlements: Pay for generic delay agreement Cephalon: Patent settlements: Pay for generic delay agreement Fentanyl: Distribution agreements: Pay for generic delay agreement

The AstraZeneca Judgment Commission Decision 2005 fining AZ €60 million for abusing its dominant position (Article 102 TFEU) Market defined as PPI inhibitors (=proton pump inhibitors treating various gastrointestinal diseases, e.g. such as peptic ulcers) Two abuses delaying generic entry: misrepresentations to patent offices: Submission of wrong/misleading information in order to obtain prolonged exclusivity (SPC) – duty of transparency for dominant companies misuse of regulatory procedures: Deregistration of capsules of 1st generation product, required reference product for generic market authorisation; deregistration but not withdrawal/product switch to tablets constituted an abuse. Judgement of General Court 1 July 2010 essentially upholds Commission Decision (reducing fine to €52 million) judgment under appeal, AG Mazák opinion 15 May 2012

Statements of Objections issued in July 2012 Statement of objections – intermediary step in Commission proceedings to establish infringements of Article 101/102 TFEU Lundbeck generic entry became in principle possible when certain of Lundbeck's citalopram patents had expired agreements that foresaw substantial value transfers from Lundbeck to its four generic competitors, who subsequently abstained from entering the market with generic citalopram. The value transfers included direct payments from Lundbeck to the generic competitors and also occurred in other forms, such as the purchase of generic citalopram stock for destruction or guaranteed profits in a distribution agreement.

Statements of Objections issued in July 2012 Servier Servier considered to be dominant in the market for perindopril Acquisition of scarce competing technologies to produce perindopril, rendering generic market entry more difficult or delayed (Art. 102) Conclusion of patent settlements whereby Servier induced its generic competitors to limit competition to the benefit of Servier's market exclusivity (Art. 101 and 102)

Patent settlements Third patent settlement monitoring exercise launched January 2012 confirmed trends: Use of patent settlements on the rise in the EU Proportion of potentially problematic settlements (restriction and value transfer to generic) remains limited Review of Technology Transfer BER & Guidelines May extend to guidance in situations where patent settlements involve licensing

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