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EU General Court Confirms 'pay for delay' Agreements Infringe EU Competition Law

on Tuesday, 11 October 2016.

The European Union General Court has given its judgment, upholding the European Commission's ruling, that Lundbeck and various generics businesses had breached competition law with a series of 'pay for delay' agreements

The Court also upheld the level of the fines - of €150 million - for their infringement of Article 101 of the Treaty on the Functioning of the European Union by entering into anti-competitive agreements.

Over several years, the European competition law authorities have been closely scrutinising agreements between branded suppliers of medicines and generics businesses and deals that they have entered into to settle patent disputes. If the branded supplier ended up paying the generics businesses as part of the settlement and this lead to a delay in entry onto the market of new generic competition, this is likely to  have raised suspicions amongst the regulators that there has been anti-competitive behaviour.

Failure to compete means that payers do not benefit from cheaper competition and prices from the generics suppliers.

In this case, Lundbeck had entered into an agreement with generics competitors and the Commission had felt that the deal had slowed down likely competition. The potential new entrants had abstained by receiving payments in lieu of the profits that they may have expected to have made had they entered the market.


For more information, please contact Paul Gershlick on 01923 919 320.

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