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The Lundbeck Case and the Concept of Potential Competition

51 Pages Posted: 14 Mar 2017 Last revised: 15 Mar 2017

Sandra Marco Colino

The Chinese University of Hong Kong (CUHK) - Faculty of Law

Niamh Dunne

London School of Economics - Law Department

Knut Fournier

Leiden University - Leiden Law School; City University of Hong Kong (CityUHK) - School of Law

Sofia Pais

Catholic University of Portugal (UCP) - Centro de Estudos e Investigação em Direito (CEID)

Derek Ritzmann

Compass Lexecon

Date Written: March 1, 2017

Abstract

Antitrust rules have been brought into play in situations whereby a company tries to prevent, or at least delay, the entry into the market of potential competitors. This issue has become strikingly prominent in the context of patents and intellectual property (IP) rights in the pharmaceutical industry. Patent holders of a drug, or drug originators, sometimes enter into a ‘reverse payment agreement’ with generics manufacturers, which involves paying the latter to settle prospective patent litigation. The sum agreed might also cover delaying the entry of the generic version of the drug into the market (‘pay-for-delay’ settlement). Delaying the entry of would-be competitors would almost certainly entail pushing back the benefits typically derived from a competitive market, the very ones that competition law was designed to protect. And yet the fact remains that, when reverse payment agreements are entered into, the generics manufacturers are not actual competitors of the patent holder. Unless they infringe the IP rights of the originator, the generic version of the drug will only hit the market once the basic patent is no longer in force. To what extent, therefore, should the application of competition extend to a future threat which may never materialise? This paper brings together a panel of experts in order to analyse these fascinating issues, recently highlighted by the General Court's judgment in the Lundbeck case.

Keywords: Competition law, antitrust, pay-for-delay agreements, pharmaceutical sector, patent law, intellectual property rights, potential competition, potential competitors

JEL Classification: A1, A10, K00, K21, K20, D4, L4, L40, L41, O30

Suggested Citation

Marco Colino, Sandra and Dunne, Niamh and Fournier, Knut and Pais, Sofia and Ritzmann, Derek, The Lundbeck Case and the Concept of Potential Competition (March 1, 2017). Concurrences Review, No. 2, 2017; The Chinese University of Hong Kong Faculty of Law Research Paper No. 2017-05. Available at SSRN: https://ssrn.com/abstract=2931411

Sandra Marco Colino (Contact Author)

The Chinese University of Hong Kong (CUHK) - Faculty of Law ( email )

6/F, Lee Shau Kee Building
Shatin, New Territories
Kowloon, Sha Tin
Hong Kong

HOME PAGE: http://www.law.cuhk.edu.hk/en/people/info.php?id=31

Niamh Dunne

London School of Economics - Law Department ( email )

Houghton Street
London WC2A 2AE, WC2A 2AE
United Kingdom

Knut Fournier

Leiden University - Leiden Law School ( email )

P.O. Box 9520
2300 RA Leiden, NL-2300RA
Netherlands

City University of Hong Kong (CityUHK) - School of Law ( email )

6/F, Lee Shau Kee Building
Kowloon, Shatin, New Territories
Hong Kong

Sofia Pais

Catholic University of Portugal (UCP) - Centro de Estudos e Investigação em Direito (CEID) ( email )

Portugal

Derek Ritzmann

Compass Lexecon ( email )

United States

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