The European Commission's Closer Look on the Pharmaceutical Sector - New Development on the Interface between IP and Antitrust Law

Abstract

A recent investigation of the EU's pharmaceutical market carried out by the European Commission has been shedding new light on the question of abuse of a dominant position pursuant to Article 102 TFEU by holding, acquisition or exploitation of IP rights. This so-called 'sector inquiry' identified practices and strategies which 'originator companies' exert on a large scale in order to target competitors, and found that such behavior results in significantly higher costs for buyers and competitors, in delay in the entry of generic medicine as well as in the access to innovative medicine, and in obstruction of innovation. This article investigates recent antitrust proceedings by the Commission and the decision practice of the European Courts - within and beyond the pharmaceutical sector - and argues that the practices revealed by the sector inquiry can be predominantly assumed to lack objective justification, lead to foreclosure of competitors and therefore constitute infringements of Article 102 TFEU. Towards the end, the article shows that the Commission's proactive policy in IP-related antitrust matters and its sensitivity to issues of abusive acquisition of intellectual property and abuse of public procedures by misleading representations establish a new quality in the application of European antitrust law, and serve as a guidance how to draw the line between IP protection, lawful business strategies and anti-competitive behavior under EU law.

Keywords: antitrust, competition, European Commission, European Union, generic medicine, intellectual property, licensing, patent ambush, patent cluster, pharmaceutical market, sector inquiry

JEL Classification: K11, K21, K33