On 6 July 2011, the European Commission published the results of its second round of monitoring of pharmaceutical patent settlement agreements. It noted that while the number of patent settlements increased in 2010, the number which are potentially problematic under EU competition rules continues to decline, as firms settle disputes within the boundaries of EU competition law.

The Commission carried out a focused monitoring exercise in order to come to the finding that only 3% of the agreements provided to it might raise competition concerns. This covered the period from January to December 2010.  This finding contrasts with 22% of settlements during the period of the EU pharmaceutical sector inquiry (15 January 2008 to 8 July 2009, see below) and 10% in the first monitoring period (mid 2008 – end 2009). See the Commission’s press release for more details.

The monitoring exercise consisted of sending formal requests for information to originator companies and generic companies which had cooperated with the Commission during the pharmaceutical sector inquiry and/or companies reported in the specialised press as having concluded a patent settlement during a particular time period.

The aim of the monitoring exercise was to enable the Commission to understand better the use of patent settlement agreements in the EU and to help identify those that might need further scrutiny. The monitoring exercise stems from the Commission’s inquiry into the overall pharmaceutical sector concluded in July 2009, where the Commission explained that in order to “reduce the risk that settlements are concluded at the expense of consumers”, it would consider further monitoring of settlements “that limit generic entry and include a value transfer from an originator company to a generic company”, also known as “pay for delay” agreements.

The Commission has noted that it will carry out a further round of monitoring in 2012.

On 6 July 2011, in a separate development, the Commission confirmed that it had closed a competition investigation into allegations by Spanish pharmaceutical company Almirall concerning Boehringer Ingelheim. The Almirall allegations were that Boehringer had misused the patent system in relation to combination products treating chronic obstructive pulmonary disease. Concerns were raised by Almirall that Boehringer’s patent applications would have the potential of blocking or considerably delaying the market entry of Almirall’s competing medicine.

The Commission has closed the case after Boehringer agreed to remove the alleged blocking positions for Europe, to grant a licence for two countries outside Europe and to end pending litigation between the parties. This case was not specifically connected to the monitoring exercise mentioned above but demonstrates the Commission’s continued close interest in the sector.