End of a blockbuster? – Preventing evergreening of pharmaceutical patents under EU competition law

Abstract: The pharmaceutical industry is dependent on the granting of patents. Patents make it possible for pharmaceutical companies to invest in the necessary R&D to bring new drugs to the market. This benefits consumers and the health care sector at large. The biggest pharmaceutical companies invest in R&D, and as a result are the major holders of pharmaceutical patents. While the big pharmaceutical companies contribute positively to the health of European citizens, the conduct of those companies may sometimes have a negative impact on competition. EU competition law can be used for this purpose to prevent competition on the internal market from being distorted. Evergreening is one type of anti-competitive conduct where originator companies use different strategies to extend expiring patent rights in order to maintain their market position and to keep generic competition off the market. This thesis investigates abuse of dominant position by evergreening of pharmaceutical patents. The aim is to examine the effectiveness of EU competition rules to prevent evergreening practices by pharmaceutical companies on the internal market. This is carried out by first providing an analysis of the pharmaceutical sector in Europe and its special characteristics. This includes a definition of evergreening and a summary of the Pharmaceutical Sector Inquiry which was conducted by the European Commission in 2009. Thereafter, EU competition law in the pharmaceutical sector is investigated, with special focus on the assessment under Article 102 TFEU. The findings of the thesis indicate that EU competition rules can be a suitable tool to deal with evergreening in the pharmaceutical industry. However, the efficiency of competition rules is limited because of the lack of precedent and guidance primarily from the Commission, CJEU and national competition authorities. One way to increase the effectiveness would therefore be if pharmaceutical companies were provided with clearer guidance regarding use of their patent rights. This could be implemented through guidelines issued by the Commission in relation to evergreening under Article 102 TFEU in combination with a notice on the definition on the relevant market in the pharmaceutical sector.