The antitrust report: a legal perspective
There are three key points to note about the EC's final report on the pharmaceutical sector inquiry:
Innovation through IPRs
Whilst Neelie Kroes, the Competition Commissioner, maintained that there are competition problems in the pharmaceutical sector and that company practices are a contributing factor, the tone of the final report and the analysis it contains is far more measured. Apocalyptic attacks on pharmaceutical companies' patent strategies now looks to be significantly less likely than it did at the end of last year.
The Commission has, however, announced the opening of its first case: a restrictive agreement and abuse of dominance case against Servier and several generics companies. This looks to be a settlement agreement type case where the generic suppliers agreed to stay out of the market in return for payment from the branded supplier.
EC calls upon member states
First, EC calls upon member states more fully to implement mutual recognition procedures. It also asks marketing authorisation and reimbursement bodies to disregard unmeritorious interventions by originators in applications by generics. Second, it recommends changes to pricing and reimbursement: eg, inviting member states to grant automatic pricing and reimbursement status to generic products.
If implemented, these proposals should help the Commission achieve its aims in a more legitimate manner than using competition rules to attack patenting strategies. The rub for the Commission, of course, is that whilst it controls the enforcement of the competition rules, it does not directly control marketing authorisation or pricing decisions.
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