EU Patent Settlements Still Preventing Generic Drug Entry

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A new report by the European Commission points the finger at pharmaceutical firms again. Despite fines of millions of Euros in the past, nearly three-quarters of patent settlements are delaying entry to market for generic pharmaceuticals.

These findings were based on monitoring across the whole of 2015. 58 originator firms and 50 generic pharmaceutical firms took part in the monitoring. The EC was happy that this was a representative sample for the pharmaceutical industry.

Increase in settlements

There were 125 patent settlements between originators and generic pharmaceutical companies in 2015. This in itself is worth noting as this number is a sharp increase on previous years. In the early part of the century, from January 1, 2000, to June 30, 2008, there were only 207 settlements across eight and half years.

Of those 125 patent settlements, 74% led to a delay in the time taken for the cheaper generic drug to reach the market.

Out of that 74%, just 10% were settlements that limited market entry for generic pharmaceuticals and included a payment or value transfer from the originator firm to the generic company. 64% were settlements that limited generic pharmaceutical market entry, but without any payment or transfer of value. Therefore, 26% of settlements did not limit market entry for generic drugs at all.

As well as the increase in total numbers of patent settlements, there was a large increase in the number of international non-proprietary names for a pharmaceutical substance (INNs) which related to patent settlements – from less than 10 between the years 2000 to 2003 to 53 in 2015 alone.

The report detailed the different forms that make up the value transfers in patent settlements. These included early entry and a license or payment.

Fines for delaying

When drug companies have been found delaying generic market entry in the past, they have been heavily fined. In 2014, Servier was fined €330 million, and a number of generic producers fined €97 million for their part in delaying entry for the generic blood pressure drug, perindopril. Johnson & Johnson, Novartis and Lundbeck have also received heavy fines in 2013 for similar offenses. Time will tell if similar punishments are levied.





Wilson Sonsini Goodrich & Rosati is the premier legal advisor to technology, life sciences, and other growth enterprises worldwide. In today’s fast-growing, highly regulated generic pharmaceutical market, companies require specialized legal guidance beyond the scope of general corporate and securities counsel. WSGR has an experienced team of experts in key practice areas, including intellectual property, litigation, antitrust, FDA/regulatory, technology transactions, exports and FCPA, trade secret, and trademark and copyrights. Learn more at www.wsgr.

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