In 2009, the European Commission (EC) published a report on the pharmaceuticals sector. It found that increasing numbers of patent settlement agreements were being concluded between originator and generic companies, which the report stated might reduce the choice of medicines available on the market for consumers as nearly half of the settlement agreements concluded restricted the generic company in marketing the medicine, and others included a transfer of value from originator to generic companies in return for limiting entry into the market. The report concluded that such settlement agreements might be anti-competitive under European Union (EU) law. As a result of the report, the EC stated its intention to continue to monitor patent settlements that might have competition implications.
The EC has now published the second monitoring report in this area. The report shows that there has been a reduction in those types of settlement agreements that are most likely to have anti-competitive effects, where there was a value transfer from an originator company to a generic company. The reports concludes that the reduction is likely to be because of the increased scrutiny from the EC following the first report and increased awareness by those entering patent settlements of the competition impacts. Patent settlements are still being entered into between companies, but they are increasingly of the harmless variety.
The EC intends to continue monitoring this area for anti-competitive aspects for at least another year.