The European Commission has requested from a certain number of pharmaceutical companies information about the patent settlement agreements concluded between originator and generic companies in 2010. This second monitoring exercise carried out by the Commission after the competition sector inquiry of 2009 which pointed to significant risks for European consumers stemming from certain types of patent settlements.

Within this monitoring exercise, the Commission has asked a selected number of originator and generic companies to submit a copy of all patent settlement agreements relevant for the EU/EEA markets concluded in the period from 1 January 2010 to 31 December 2010. Companies will have to submit all the annexes, related agreements and amendments relating to these settlement agreements. In order to limit the administrative burden on companies, they were asked for limited additional background information.

A first monitoring exercise was carried out by the Commission in 2010 showing a significant decrease in the number of potentially problematic patent settlements in the EEA. The number fell to 10% of total patent settlements in the sector in the period July 2008 to December 2009 compared with 22% in the period covered in the inquiry into the pharmaceutical sector (January 2000-June 2008).

The amount of money involved in the settlements, between the so-called "originator" pharmaceutical companies and producers of generic drugs also decreased from more than 200 million euro recorded in the sector inquiry period to less than 1 million euro, according to the 2010 report. This suggested an increased awareness of the industry of which settlement agreements may attract competition law scrutiny. It was also good news for consumers that cheaper generic drugs are not being unduly kept out or delayed into the market.

Why monitoring patent settlements in the pharmaceutical sector

The Commission's competition inquiry in the pharmaceutical sector showed that certain patent settlements may cause consumer harm because they delay the market entry of cheaper generic medicines. Based on these findings, the Commission now carries out periodical monitoring exercises in order to analyse the agreements submitted and publishes a report providing a statistical overview of each period. If a specific settlement raises additional questions, a more targeted request for information could follow.