Part VI Agreements Concerning Patented Technology, 13 Exclusionary Agreements in the Biopharmaceutical Industry

Subject(s):

European Union — Copyright — Rights — Technology transfer agreements — United States

This chapter discusses antitrust issues in the biopharmaceutical industry, focusing on pay-for-delay agreements. Paying for delay raises fascinating policy issues, dividing commentators and courts alike. Post-Actavis, for instance, both US and EU law would condemn a patentee that settles infringement litigation by paying the accused infringer to stay out of the market. If the same patentee later successfully sued another entrant, proving infringement and successfully opposing an invalidity challenge, its earlier reverse-payment settlement would thus have imposed anticompetitive effects subsumed within the claims of a valid patent. Yet, an antitrust violation would endure. Given the complexity of pay-for-delay agreements, the chapter begins with an economic assessment of this conduct. Having explained that, in most cases, reverse exclusionary payments benefit the contracting parties at disproportionate cost to society, it discusses the current state of US and EU law, which remains in flux at the time of writing.