ON-TOPIC: EUROPEAN UNION – UNILATERAL PRACTICES – PAY-FOR-DELAY AGREEMENT – POTENTIAL COMPETITION

The Lundbeck case and the concept of potential competition

Antitrust rules have been brought into play in situations whereby a company tries to prevent, or at least delay, the entry into the market of potential competitors. This issue has gained prominence in the context of patents and intellectual property (IP) rights in the pharmaceutical industry. Patent holders of a drug sometimes enter into a ‘reverse payment agreement’ with generics manufacturers, in order to settle prospective patent litigation. The sum agreed might also cover delaying the entry of the generic version of the drug into the market (‘pay-for-delay’ settlement), which could be harmful for competition. And yet the fact remains that, when reverse payment agreements are entered into, the generics manufacturers are not actual competitors of the patent holder. To what extent should the application of competition extend to a future threat which may never materialise? This paper brings together a panel of experts in order to analyse these issues, recently highlighted by the General Court’s judgment in the Lundbeck case.

General introduction Sandra Marco Colino Assistant Professor, Chinese University of Hong Kong. Director, Centre for Financial Regulation and Economic Development (CFRED) 1. Should competition law be applied to the future? As far-fetched as the question might initially seem, antitrust rules have been brought into play in situations whereby a company tries to prevent, or at least delay, the entry into the market of future—potential—competitors. This issue has become strikingly prominent in the context of patents and intellectual property (IP) rights in the pharmaceutical industry. The controversy can be summed up as follows: when a company develops a new drug, it will normally resort to patents to protect its investment in innovation and prevent other manufacturers, who could

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Authors

  • The Chinese University of Hong Kong
  • Hong Kong Competition Association
  • Catholic University of Portugal - Law School
  • Compass Lexecon (Hong Kong)
  • London School of Economics

Quotation

Knut Fournier, Derek Ritzmann, Sandra Marco Colino, Sofia Païs, Niamh Dunne, The Lundbeck case and the concept of potential competition, May 2017, Concurrences Review N° 2-2017, Art. N° 83827, pp. 24-50

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