Drug patent settlements to come under EU scanner

Patent settlements between pharmaceutical companies that make original drugs and their generic manufacturing rivals are to come under renewed scrutiny from the European Union's competition regulation authority, as part of an ongoing probe into the sector.

In a statement on Tuesday, the European Commission said it had requested 'information from certain pharma companies asking them to submit copies of their patent settlement pacts.'

Although it did not name which companies in particular were under investigation, Britain's AstraZeneca Plc and GlaxoSmithKline confirmed they had been contacted by the Commission as did Germany's Boehringer Ingelheim.

Brussels has asked for patent settlements reached between originator and generic pharmaceutical firms from July 2008 to the end of 2009.

The reason for this request is the findings of a survey which gave rise to suspicions of the existence of cases where 'an originator company pays off a generic competitor in return for delayed market entry of a generic drug'.

The commission had launched an investigation into the suspected illegal relationship between original drug and generic manufacturers last July.

A number of pharma firms had then been confirmed as being under investigation, including Indian companies such as Lupin Ltd, Matrix Laboratories Ltd, and Niche Generics Ltd (a subsidiary of Unichem Laboratories Ltd), for patent settlements they had reached with the French company Les Laboratoires Servier.

The original enquiry 'highlighted the risk that certain types of patent settlements may have negative effects on European consumers by depriving them of a broader choice of medicines at lower prices,' Tuesday's statement read.

The European Commission had said last year that generic drugs are on average 40 per cent cheaper than their branded rivals two years after they launch and that it knew of some 200 deals between generic and brand-name drug makers that could restrict the rollout of generic versions.

Earlier this month, the EU revealed that it was investigating Danish company Lundbeck of delaying the launch of a generic version of the antidepressant drug citalopram.

The commission said it would analyse the patent agreements it obtained following Tuesday's request and publish a report on that basis. If a specific settlement raised additional questions, a more targeted request for information could follow.