The Lundbeck Case and the Concept of Potential Competition
Concurrences Review, No. 2, 2017
51 Pages Posted: 14 Mar 2017 Last revised: 15 Mar 2017
Date Written: March 1, 2017
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the IP rights of the originator, the generic version of the drug will only hit the market once the basic patent is no longer in force.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: Suggested Citation