Patent settlements in the pharmaceutical sector

In the pharmaceutical sector, the overwhelming majority of patent settlements are entirely legitimate as they do not involve any payments by originators to exclude generic companies. Furthermore, by avoiding the costs of market uncertainty and/or expensive litigation patents may bring real benefits to enterprises and consumers.

However, sometimes patent settlements involve a value transfer from the originator to the generic with the aim of limiting the generics’ market entry and may constitute a restriction of competition by object, as well as part of an abusive anti-competitive strategy. 

Indeed, disrupting the balance between lawful and unlawful use of patent settlements is especially harmful in the field in question, due to the essential role played by pharmaceuticals in the fullfilment of the fundamental right to health: consumers in both developed and developing countries are harmed, with the latter suffering to an even greater extent as a result of these anticompetitive practices because of the economic and capacity expenditure constraints that are inherent to their current conditions.

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