The purpose of this Master Thesis is to analyse and determine the legal and economic aspect of “pay-fordelay” agreements in the pharmaceutical sector. These settlement agreements are considered as agreements where an originator company compensate one or several generic companies to delay their market entry with the introduction of a generic product. These kind of settlement agreements are placed in an area of conflict between EU Competition Law and intellectual property rights. Originator companies obtain patent protection when developing new medicines. The patent protect these medicines against generic competition. Settlements between originator and generics are patent disputes related to the patent expiration, or the patents validity. After the European Commission investigated patent settlements in the pharmaceutical sector, these agreements became object for further investigation and competition concern. The aim of the investigation was to determine whether or not patent settlements has as their object to prevent, restrict or distort competition in the EU Member States. More specifically, if originator companies behaved anticompetitive, and in restriction of the Treaty on the Functioning of the European Union. In extension of the report, the Commission opened cases against H. Lundbeck A/S and Servier SAS. The legal analysis aims to analyse under which conditions a “pay-for-delay” settlement is a restriction of TEUF Article 101 and 102. This will be analysed based on the cases of Lundbeck and Servier. The legal analysis finds that agreements constitute an extreme form of market sharing and restricting production, and thereof a restriction by object. However, EU Commission and General Court are in this thesis criticized in their way of determining “pay-for-delay” as an object restriction based on lack of experience of assessing these kind of agreements. In the economic analysis the incentives of originators and generics will be outlined. It will be concluded that the parties always will have an incentive to enter into a “pay-for-delay” agreement. The analysis also show that this will have a negative impact on consumer welfare. “Pay-for-delay” agreements have received extensive attention from competition authorities, both in Europe and the United States. Even though european competition law and american antitrust policy have some regulatory differences, it should be considered whether european competition authorities can use the american experiences on this area of conflict as an inspiration regarding the assessment of the legality of “pay-for-delay” agreements. In the legal policy analysis a comparative analysis will be conducted to investigate whether these agreements should be analysed under an “effect based” approach, rather than a restriction “by object”.
|Educations||MSc in Commercial Law, (Graduate Programme) Final Thesis|
|Number of pages||125|
|Supervisors||Grith Skovgaard Ølykke & Niels Blomgren-Hansen|