COM/2009/0351

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Pharmaceutical Sector Inquiry Report. Executive Summary change log oeil

see also http://euwiki.org/COM/2008/0666

Original report from Commission: http://ec.europa.eu/competition/sectors/pharmaceuticals/inquiry/index.html (lots of text: read!)

Contents

Sources

"Står immaterialrätten i konflikt med konkurrensrätten"

also to keep in mind: Elsa Arbrandt in Europarättslig tidskrift (nr? årgång 2009) s. 231-249 (available in afk photo copy from Amelia if there's interest): "Står immaterialrätten i konflikt med konkurrensrätten"

main points:

  1. commission wants to use competition against first- and second generation patents, patent clusters and originator companies suing generics producers off the market
  2. the existence of IPR does not violate the Treaty, but the enforcement might, insofar as enforcement goes beyond what is necessary to protect the exclusive right
  3. IPR for innovators, competition for consumers: IPR<->Competition jurists need good understanding for both areas
  4. There can be no justification in competition law for forcing rights holders to license their products (cf IMS Health (for compulsory licensing) or Verizon Communications Inc v Law officies of Curtis V Trinko, LLP, 540 US 398 (2004)(against compulsory licensing)).
  5. Commission does not understanding that patent thickets of 800 patents may only protect 30 patent families or inventions, where each patent family constitutes "a part innovation"
  6. On bombmats: how would you decide how many patents are one patent too many?
  7. Lax US competition law strategies in relation to IPR have led to.... ? (more innovation?) Commission criticized for being to hard on IPR.

http://arxiv.org/abs/0912.1262

Open Access, Intellectual Property, and How Biotechnology Becomes a New Software Science: http://arxiv.org/abs/0912.1262

main points:

  1. innovation in the pharmaceutical sector is going down (fewer approved medicines by the FTA since drug companies started pursuing the fruits of university research actively)
  2. patents expiring for many of the most important pharmaceuticals over the last few years will cause a massive influx of new research data
  3. life sciences and biotechnology researchers in general very good at utilizing open access and public information
  4. will lead to an open innovation strategy like that seen in open software? the effects could be a more dynamic (perhaps even personalised) medical innovation.

EU Technology Transfer Final Report http://www.eutechnologytransfer.eu/files3/report.pdf

Points of view

From HAI

  1. Make a register of all patents per product and their expiration date publicly available to increase transparency and prevent delays of generic entry to the market;
  2. Request that originator companies refund national social insurance systems when legal cases against generic manufacturers are lost and manufacture is upheld as legitimate;
  3. Pharmaceutical policy should be transferred from DG Enterprise to DG SANCO (also from BEUC

The final report on the Pharmaceutical sector inquiry seems to forego one of the main problems stressed in the preliminary report as well as the final report: secondary patenting. While several large public health NGOs have expressed their concern with weak secondary patents, and while most generic companies also stress their concern with the slack granting of weak patents on secondary products, the Commission in their report entirely misses that target and only suggests the introduction of a EU patent, around which the arrangement of courts is highly dubious (cf CNS/2003/0326)

The introduction of a public register of soon to be released drugs, as well as a public register of originator-generic company litigation prior to patent expiry should be speedy.

Deployment of delay tactics in market authorisation processes will not be impeded by well-documented market authorisation procedures, even if such may also be desirable. If pre-litigation or litigation measures around market authorisation causes a delay of market entry, the litigating originator company should be liable for costs caused to society by generic market entry delay.

To facilitate further research and improve innovation, the Union should consider expanding the research exemption so that it simulates the Belgian research exemption. (cf EUTTFP)

The Union should consider employing programs and methods of alternative financing of medical research and innovation. As has been stressed by numerous sources, and also by the Commission itself in its reports, it is a big problem that originator companies seem to be engaging in "ever-greening" and non-incremental innovation instead of groundbreaking research to find for a) cures for neglected diseases or b) new groundbreaking drugs.

The Union should further prepare a functioning policy for the future event of many groundbreaking medicines becoming free. This event provides a perfect opportunity for a major restructuring of the market, but the Commission's dedication to the prolongation and strict maintenance of data confidence will delay that market renewal. The Commission should consider promoting an open access and participative approach to medical research, by for instance educational programs for medical researchers or extended research exemptions.

The Pirate Party commends the conclusions that merger control and anti-trust laws be more strictly applied in the pharmaceutical sector and the dismissal of originator company interventions with price and reimbursement authorities. Anti-trust legislation exists to secure the diversity on the market surely needed for a consumer friendly and competitive inner market.

EU documents

http://ec.europa.eu/competition/sectors/pharmaceuticals/inquiry/staff_working_paper_part1.pdf

  • (67) several blockbusters will expire before 2012. will force new market strategies (non-blockbuster-based)
  • (94) generics companies also patent (process patents)
  • (105) originator companies now buying generics companies. generics companies merging
  • (143) delay between patenting and market entrance of originator medicines seems to be decreasing since 1973
  • (192) average number of months before generic entry: 12.9 in absolute terms (considerably faster for popular pharmaceuticals)
  • (293-297) SPCs -> effective protection of 15 years (measured from market entrance) AND additional six months on top of that for paedriatic innovation(!!)
  • (300) market authorisations requests granted more and more since 2000 in some member states but also the community as a whole
  • (326) MA documents get 10 years of protection, in some (but not all) cases extending protection from generic market entry by a maximum of 4 years after the expiry of the patent.
  • (328) there is also a possibility for FURTHER market exclusivity with one more year. generic ma can be applied for during originator ma protection, but generic entry is further delayed.
  • Table 20: product-by-process claims 4% of secondary product claims?! not recognised by EPO unless the product cannot otherwise be explained (Intellectual Property Law, Sherman & Bently, 2008, page 366)
  • (453) why does heavy secondary patenting suddenly cease when the patent cycle is nearing it's end? heavy secondary patenting==innovation according to originator industry...
  • (456) in a third of the cases, secondary patents were used to delay generic market entry
  • (495) secondary patents ARE filed for to decrease generic producer abilities to devise new processes or methods of producing the original substance
  • (501) because secondary patents are weak, 60% of invalidation cases against originator company secondary patents are lost.
  • (519-521) secondary patent filing causes legal uncertainty as to when market entrance of generics can occur
  • (534-535) patent thickets cause generics to be reluctant to enter the market, or in some cases stop developing a generic substitute at all.
  • Figure 79: success of primary patent litigations for generic companies 62% ((621)) of total litigation. consequences: annulment of patents and declarations of non-infringement
  • (619) most cases were still pending, and a lot of cases were settled.
  • (630-633) litigation over secondary patents very much won by generic companies, except for process patents where they were won by originator companies in 53% of the cases.
  • (720-721) originator company settling: when case will not be won (usually) generic company settling: when they can't afford the litigation
  • Tables 21-22: reasons for settlement
  • Figure 106: settlement license conditions
  • pages 271
    • Category A: no limit on generic production or sales (GPoS) (52%)
    • Category B1: licenses that limit GPoS in time (26%)
    • Category B2: licenses that limit GPoS in time and/or ORI pays G to not sell product (22%)
  • (763) B2 licenses considered "anti-competitive"
  • (770) Originator company paid generic company to refrain from entering the market.
  • (822) early-entry agreements sometimes contain specific price conditions (not allowed under EC competition law?)
  • (871) ORI intervene in market authorisation because of patent claims
  • (875) ORI claims in market authorisation that generics are inferior, less safe, less effective or counterfeited (percentages)
  • (878) data exclusivity infringement claims by ORI to market authority (see (326))
  • (899) litigation around market authorisation is often unsuccessful but delays market authorisation of generics in 76% of the cases
  • (905) also common with pre-litigation/litigation claims against price and reimbursement bodies (health insurances) around market entrance of generics
  • (941) originator companies send warning letters to hospitals, doctors and pharmacies about risks with generics
  • (956) originator companies contact whole-salers asking them to not distribute generics during a) litigation or b) enter into non-distribution agreements.
  • (994) on "ever-greening": releasing second-generation medication with no or next to none increased therapeutic effect or other non-incremental changes
  • (1058) toolbox of measures against generic companies by originator companies does cause generic market entrance delays
  • (1295) originator companies want community patents to decrease application and litigation costs claiming this would benefit consumers
  • (1296) generics companies want community patents because it's inconvenient to be forced into court processes in each member state individually (see also (1303))
  • (1306) ORI finds it takes too long to get interim injunctions
  • (1318) BEUC very concerned about too easily granted patents by EPO especially with secondary patents
  • (1320) originator companies considerably more happy with current granting practises and requirements
  • (1349) lack of transparency in patent settlements. introduction of american requirement to publicize with public authority?
  • (1564) will be important to use anti-trust laws and merger control in originator/generics industry (cf (105))
  • (1568) IPR not immune to competition law
  • (1578) need to establish community patent soon
  • (1588) submissions by third parties in the market authorisation process need to be well-documented but can not be disregarded by responsible authorities
  • (1589) patent claims are not for market authorities BUT data exclusivity laws (new 10 year rule extending protection) will be enforced thoroughly
  • (1599) interventions by originator companies before pricing and reimbursement authorities regarding the safety or patent status of a generic should be disregarded

Comparison between final report and preliminary report conclusions

http://ec.europa.eu/competition/sectors/pharmaceuticals/inquiry/preliminary_report.pdf appears to be very similar to the final report, and the conclusions of the preliminary report do not suggest any measures to be taken. For proposed measures see points (15xx) in the list above.

Quick overview of results of public consultation on preliminary report

http://ec.europa.eu/competition/consultations/2009_pharma/index.html

It could be worth comparing the results.

NGO replies are concluded in Points of View above.

Lawyers and law firms seem biased towards the patent system.

Generics companies seem eager to decrease secondary patenting and facilitate market clearance.

Government bodies seem unspecified.

Originator companies??

Potentially interesting Competition Case Law

Astra Zeneca

http://ec.europa.eu/competition/antitrust/cases/index/by_nr_75.html#i37_507

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