Strategic prevention of the introduction of generics breaches antitrust law

The European Commission has fined the French pharmaceuticals manufacturer Servier and five manufacturers of generica a total of EUR 427.7 million. In the Commission’s view, Servier concluded a number of patent settlement agreements with competing producers of generica in order to prevent or delay their market entry after the expiry of the primary patent protection of its blockbuster blood pressure control medicine.

As part of the settlement, the generic producers were to receive payments to conclude the patent disputes as compensation for not entering the market. The decision is in line with the Commission’s practice in 2013 vis-à-vis anti-competitive settlement agreements in the pharmaceutical industry.

In addition, the Commission also found an abuse of market power by Servier consisting in an exclusionary strategy towards its  competitors. The Commission relies on the assessment that Servier acquired an alternative technology without using it and thereby forcing the shut-down of a number of generic projects.

This aspect of the strategic acquisition of a competing technology represents a controversial category of  an abuse of dominance. The decision reflects the increased competition law policy focus of the Commission on the pharmaceutical industry and underlines the need for sound advice to develop safe-harbour strategies for the exploitation of patents for pharmaceuticals.