ECJ: potential competition exists between originators and generics
On 30 January 2020, the European Court of Justice released its judgment relating to a patent dispute between the pharmaceutical patent-holder, GlaxoSmithKline (GSK), and a generic drug maker concluding that originators and generics are in fact "potential competitors" if the generic drugmaker has "a firm intention and inherent ability to enter the market."
The preliminary ruling followed a request from the UK Competition Appeal Tribunal ("CAT") requesting further clarification of EU law in relation to what constitutes a restriction by object or by effect and a possible abuse of dominant position by GSK in this case.
Berlin Partner, Ann-Christin Richter, spoke with Emily Craig of GCR, noting:
"With this judgment the ECJ gives much needed guidance on the application of European competition law to patent settlements between manufacturers of originator and generic medicines. The ECJ confirms, in particular, that the mere fact that there is patent protection for the originator medicine does not preclude competition between the manufacturers, meaning that competition law does apply."
"As a result, manufacturers of originator and generic medicines are banned from concluding agreements in which the generic manufacturer undertakes not to enter the market in exchange for a value transfer even in the context of a settlement (so called pay-for-delay agreements). Since prices for medicines tend to fall considerably as soon as a generic product enters the market, this is good news for insurance companies and, in the end, consumers. Healthcare providers and insurance companies that are seeking to recover the damages they suffered due to anti-competitive pay-for-delay agreements have been given a boost by the ECJ’s judgment."
Advocate General Juliane Kokott released an opinion earlier the same week following the CAT’s request for a preliminary ruling in the appeal by GSK, Generics (UK) Ltd, Xellia Pharmaceuticals, Alpharma, Actavis and Merck of the CMA’s infringement decision adopted on 12 February 2016. That opinion was reviewed by London Partner, Lesley Hannah in a Hausfeld Perspective.