‘Pay for delay’: privity and Lundbeck

Pharmaceuticals company Lundbeck has been the subject of two important decisions in recent weeks — the first concerning the practice of pharmaceuticals companies seeking to prevent or delay the entry onto the market of generic competitors and the second relating to privity of interest in a patent dispute.

The European Commission has been investigating perceived anti-competitive practices in the pharmaceuticals sector. It launched an inquiry into the sector in January 2008, publishing its final report in July 2009. The final report found that the market was not functioning as it should and that these deficiencies could largely be attributed to delays in the entry of generic medicines to the market. 

In particular, the European Commission concluded that originator drug companies were using a number of methods to extend the commercial life of their medicines and to prevent or delay the entry of generics. It has been monitoring patent settlement agreements, reflecting its concern that such agreements are being used as a means to delay the entry of generic products onto the market and thus to extend artificially the patent holder’s monopoly…

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