The UK Competition and Markets Authority (CMA) announced on 3 March 2017 that it is investigating another alleged breach of competition law arising out of a type of pay-for-delay arrangement in the pharmaceutical sector.
This follows several pay-for-delay patent settlement cases at EU and UK levels and an important EU General Court (GC) judgment last year. In this new case, the CMA alleges that Concordia (formerly Amdipharm) and Actavis UK (formerly Auden Mckenzie) entered into agreements under which Actavis UK incentivised Concordia not to enter the market with its own competing version of hydrocortisone tablets.
Under the agreements, Actavis UK allegedly instead supplied Concordia with a fixed supply of its own 10 mg tablets for a very low price for Concordia to resell to customers in the UK. Actavis UK remained the sole supplier of the tablets in the UK during most of this period, when the cost of the drug to the NHS rose from £49 to £88 per pack. Concordia was the first potential competitor to Actavis UK to obtain a marketing authorisation for 10 mg hydrocortisone tablets, a necessary step to enter the market and compete with Actavis UK.
Although this may not be a true pay-for-delay patent settlement case, the CMA appears to be focussing on all of the key points developed in the previous cases and to a large extent upheld by the GC. The basic concern is that an originator company provides a value transfer (a reverse payment) to a potential competitor (a generic supplier) which induces it to agree to restrictions on its market entry.