1. The Pharma Sector: IP Rights and Competition Policy Ninette Dodoo Clifford Chance LLP UOHS Conference, 11 November 2009

2. Outline Introduction Recent Developments in IP & Antitrust Current Issues in IP & Antitrust Where Next and Likely Follow up Actions Conclusion 2 The Pharma Sector: IP Rights and Competition Policy

3. Introduction Innovative pharmaceutical companies are entitled to protect valuable IP rights The key issues for antitrust authorities or courts when faced with IP claims are: may they intervene to protect competition - Magill, IMS, Microsoft set rules may they assess the value of an IP right i.e. whether it rewards innovation - side-stepped in Magill, IMS, Microsoft although partially addressed in Microsoft remedies proceedings Antitrust authorities and courts are grappling with these issues in the pharmaceutical arena 3 The Pharma Sector: IP Rights and Competition Policy

4. Recent Developments in IP & Antitrust In the EU: Astra Zeneca: alleged abuse involved misuse of rules on supplementary patent certificates and marketing authorisations to delay generic entry Boehringer investigation: alleged abuse involved blocking of competing compounds and combinations Pharmaceutical sector inquiry: blocking or delaying entry of generics Servier, Teva, Mylan et al investigation: alleged anticompetive conduct relates to pre-market entry agreements with generic companies 4 The Pharma Sector: IP Rights and Competition Policy

5. Recent Developments in IP & Antitrust In the US: Rambus: alleged anticompetitive conduct concerned participation in a standard setting body and failing to disclose existence of patents related to technology incorporated in the standard Schering Plough: case related to settlement of IP litigation 5 The Pharma Sector: IP Rights and Competition Policy

6. Current Issues in IP & Antitrust Blocking Tactics Against Generics Patent thickets (e.g. Boehringer) Defensive patents Patent settlements (e.g. Schering Plough, Servier investigation) Vexatious litigation (ITT Promedia) Pre-entry agreements (e.g. Servier investigation) Regulatory complaints (e.g. Astra Zeneca) Agreements between innovators: R&D restrictions, exclusivity, high market shares 6 The Pharma Sector: IP Rights and Competition Policy

7. Where Next and Likely Follow up Actions Bad faith regulatory complaints and litigation Innovator/Generic pre-entry agreements Agreements between innovators Patent settlements 7 The Pharma Sector: IP Rights and Competition Policy

8. Conclusion Antitrust authorities and courts are reluctant to intervene: strong patent protection stimulates innovation But, attempts to block or delay generic entry or to limit innovation will be subject to antitrust scrutiny Policy objective: promote competition by ensuring a wider choice of pharmaceutical products to patients at affordable prices 8 The Pharma Sector: IP Rights and Competition Policy

9. Clifford Chance, Jungmannova Plaza, Jungmannova 24, 110 00 Prague 1, Czech Republic © Clifford Chance LLP, sdružení advokátů 2009 PRAGUE-1-716567-v1C www.cliffordchance.com The Pharma Sector: IP Rights and Competition Policy