Drug-delay tactics called into question
17 Oct 2016
A meeting in Geneva this week will question the practice of extending the life of drug patents as a means of delaying ‘Big Pharma’s’ exposure to competition from generics companies.
Ebru Gokce, a United Nations Conference for Trade and Development (UNCTAD) economist working on competition policy and consumer protection issues, says there is growing concern that some pharmaceutical manufacturers are employing ‘pay-for-delay’ tactics to stave-off competition.
We're questioning the anti-competitive nature of practices, such as pay-for-delay agreements, that prolong market exclusivity
Ebru Gokce, a United Nations Conference for Trade and Development (UNCTAD) economist
"We're not questioning the merit of patent protection,” Gocke said, in light of pharma firms arguing that patent protection was necessary to cover the average $1.38 billion (£1.1bn) costs of developing new drugs.
“We're questioning the anti-competitive nature of practices, such as pay-for-delay agreements, that prolong market exclusivity,” Gokce said, referring to agreements that occur when a patent holder compensates a competitor to delay or abandon the launch of a generic drug.
In the UK in February this year, the Competition and Markets Authority (CMA) fined a number of pharmaceuticals firms – including GlaxoSmithKline (GSK), Merck and Generics UK (GUK) – for anti-competitive conduct.
The £45 million total fine was imposed because of conduct and agreements between 2001 and 2004 wherein GSK agreed to make payments and other value transfers totalling over £50 million to suppliers of generic versions of paroxetine – an anti-depressant drug.
Tackling the issue, Gokce said: "The key is to find the right balance between the inventor's rights and those of the consumer.
"The goal is to prevent anticompetitive practices while maintaining the rewards and incentives provided by a fair and reliable patent system."
Gokce added that pay-for-delay deals were much more prevalent in developed countries.
"But we've seen a few in emerging markets, and as generic manufacturers in developing countries continue to grow, this tactic may become more frequent."
The 15th Intergovernmental Group of Experts Meeting on Competition Law and Policy, which takes place from 19 to 21 October, marks the 70th anniversary since the UN first discussed 'restrictive business practices'.
