Pharmaceutical Patent Settlements – A Presumption in Reverse

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Patrick Harrison, Kristina Nordlander, Aug 13, 2009

On July 8, 2009, the European Commission’s Directorate General for Competition (“DG Comp”) issued the much-anticipated Final Report (consisting of a Commission Communication and Staff Working Document) of its sector inquiry into competition in pharmaceuticals (“Sector Inquiry”). One of the areas examined in detail during the course of the Sector Inquiry was the conclusion among originator and generic manufacturers of settlement agreements relating to patent litigation. This paper argues that the final report’s apparent suspicion of patent settlement agreements that involve a “reverse” value transfer (i.e. from the originator to the generic) and the presumption that they are anticompetitive may be misplaced, and indeed moving EU competition law “in revers” in the sense that it goes back to an outdated position in the U.S. courts which has now been abandoned.