The Pharmaceutical Sector: An overview

Thèmes abordés

Pharmaceutical sector originator generic competition policy

Résumé du document

General health has always remained a topic guaranteed to attract maximum attention. In the context of the European countries, must be safe, accessible and affordable for everyone, especially because the European population's expenses have continued to increase over the years. As an introduction to our pharmaceutical case, let's begin with some characteristics of this market followed by two key elements that the European Commission has to take into account.

Concerning the characteristics of the market, we can state that the pharmaceutical sector is R&D driven and there exists on the supply side two types of companies: the originator companies, which are active in research and whose products are generally subject to patent protection, and manufacturers of generic products, which produce medicines that are equivalent to the original products after patent expiry of the pre-existing original product. On the demand side, it is to be noted that the patient is not the decision maker. Therefore, medicines are not very price sensitive and, consequently, this feature facilitates anti-competitive behavior.

Extraits

[...] Art.101§1 and are relevant when it comes to the two previous types of practices. It appears that those agreements are slightly likely to give rise to the exemption of art.103 TFEU because their restricting effects on competition are quite manifest while their economic benefits do not seem to be consequential. Moreover, in order to be accepted, agreements have to let the consumers benefit from a substantial part of the benefits. These reasons explain why the Commission decided to further focus on monitoring those agreements on basis. [...]

[...] November 19th 2010 The Pharmaceutical Sector Fiona Lootvoet Sophie Poukens-­‐Renwart Ludovic Van Sinay [ E C O N C o r p o r a t e S t r a t e g y a n d A n t i T r u s t ] 1. Introduction It seems clear that the health of European citizens is an important topic that we have to care about. This is why medicines must be safe, accessible and affordable for everyone, and especially because the European population's expenses continue to increase over the years. [...]

[...] Nevertheless, the Commission tries to evolve the competition policy the best possible to adopt a single Community patent and a unified and specialized patent litigation system in the EU because they would create significant cost and efficiency improvements. The Commission also supports the initiatives by the European Patent Organization to adopt high quality standard and to accelerate procedures. For instance, as one of the developments to maintain as better as possible the competition in this market, the Commission has raised monitoring procedure. Another way to do that could be to facilitate the administrative aspect for new invention to create incentive to innovate. This could be a good way to encourage originator to create. [...]

[...] Another thing is that the sector has recently undergone changes. Firstly, we can notice that several “Blockbuster” medicines have lost their patent protection, and thus companies have lost a significant part of profit. Secondly, the number of new medicines reaching the market is decreasing, despite of an increase in R&D. Because of that, companies are more and more dependent on their revenues of their existing products. This change, due to the diminution of new medicines, will affect generic medicines in some years. [...]

[...] The pharmaceutical sector inquiry launched by the Commission focused on competitive relationship between originator and generic companies and amongst originator companies. Competition between Originator and Generic Companies The findings indicate that originator companies use a wide range of tools to extend the commercial life of their medicines and suggest that their behaviour contributes to delay generic entry. They can indeed change their patent strategy in order to increase the breadth and duration of the patent protection. The first strategy is known as the practice of “patent thicket” which constitutes in filling numerous patent applications for the same medicine and whose goal is to delay the market entry of generic medicines by leading to more uncertainty for generic firms as they have to analyse more patents in order to be sure not to infringe them. [...]