The legal status of pay-for-delay agreements in EU competition law: generics (Paroxetine)

Pharmaceutical companies developing patents (hereafter: originators) have an incentive to preserve, for as long as possible, the exclusive rights over their medicines (and the higher prices that come with them). Some of the strategies aimed at preserving or extending intellectual property protection can amount to a breach of competition law. The so-called “pay-for-delay” agreements (or “reverse payment settlements”), closely scrutinized by the European Commission in recent years, are among them. These agreements are typically concluded when the generic versions of a medicine have been launched or are about to be launched. Litigation is not unusual in that context – as part, more often than not, of the defensive tactics displayed by originators. As an alternative to litigation, originators and generic producers may reach a settlement to avoid or put an end to court proceedings.