COM(2009)351 - Executive Summary of the Pharmaceutical Sector Inquiry Report {SEC(2009) 952}

official title

 

Legal instrument	Report
reference by COM-number111	COM(2009)351
Additional COM-numbers	SEC(2009)952
CELEX number114	52009DC0351

This page is also available in a full version containing the latest state of affairs, the legal context, other dossiers related to the dossier at hand, the stakeholders involved (e.g. European Commission directorates-general, European Parliament committees, Council configurations and even individual EU Commissioners and Members of the European Parliament) and finally documents of the European Parliament, the Council of Ministers and the European Commission.

• 1. 

  Commission Communication of 16 July 2008 on an Industrial Property Rights Strategy for Europe - COM(2008) 465.
  
   
• 2. 

  See, in particular, Commission Communication of 10 December 2008 - COM(2008) 666, 10.12.2008: Safe, Innovative and Accessible Medicines: A Renewed Vision for the Pharmaceutical Sector.
  
   
• 3. 

  The Innovative Medicines Initiative is a Public-Private Partnership (PPP) between the pharmaceutical industry represented by the European Federation of Pharmaceutical Industries and Associations (EFPIA) and the European Communities represented by the European Commission. See: imi.europa.eu/index_en.
  
   
• 4. 

  See, for instance, Regulation (EC) No 726/2004 and Directive 2004/27/EC of the European Parliament and of the Council of 31 March 2004 amending Directive 2001/83/EC.
  
   
• 5. 

  Directive 89/105/EEC of 21 December 1988 relating to the transparency of measures regulating the pricing of medicinal products for human use and their inclusion within the scope of national health insurance systems.
  
   
• 6. 

  See, further to the above, the High Level Pharmaceutical Forum
  
   
• 7. 

  Commission Communication
   
• 8. 

  ec.europa.eu/pharmaforum/docs
  
   
• 9. 

  High Level Pharmaceutical Forum: Guiding principles for good practices implementing a pricing and reimbursement policy (ec.europa.eu/pharmaforum/docs).
  
   
• 10. 

  Commission Communication of 10 December 2008 - COM(2008) 666, 10.12.2008: Safe, Innovative and Accessible Medicines: A Renewed Vision for the Pharmaceutical Sector.
  
   
• 11. 

  Commission Decision of 15 January 2008 initiating an inquiry into the pharmaceutical sector pursuant to Article 17 of Council Regulation (EC) No 1/2003 (Case No COMP/D2/39.514).
  
   
• 12. 

  Article 17(1) 1st paragraph of Council Regulation 1/2003 reads: 'Where the trend of trade between Member States, the rigidity of prices or other circumstances suggest that competition may be restricted or distorted within the common market, the Commission may conduct its inquiry into a particular sector of the economy or into a particular type of agreements across various sectors. In the course of that inquiry, the Commission may request the undertakings or associations of undertakings concerned to supply the information necessary for giving effect to Articles 81 and 82 of the Treaty and may carry out any inspections necessary for that purpose.'
  
   
• 13. 

  See, for instance, Directive 2004/27/EC of the European Parliament and of the Council of 31 March 2004 amending Directive 2001/83/EC.
  
   
• 14. 

  Article 10(6) of Directive 2001/83/EC as amended by Directive 2004/27/EC: this provision was to be transposed by Member States by 31 October 2005. Prior to the introduction of the Bolar provision in the EU regulatory framework, pre-patent-expiry development was not regulated at EU level. Consequently, generic manufacturers carried out their product development and related testing in countries where the basic patent had already expired or where such protection did not exist, outside the EU or in European countries where a Bolar-type provision existed or in EU Member States where experimental work was in certain cases permitted (cf. section B.2.2.1 of the technical annex).
  
   
• 15. 

  See: Commission Staff Working Document on Market Monitoring: State of Play and Envisaged Follow-Up, at: ec.europa.eu/economy_finance/publications (see in particular Section 4 par. 5 on monitoring the retail sector); Commission Staff Working Document on The Single Market Review: one year on, at: ec.europa.eu/internal_market/strategy/docs (see in particular p. 11 par. 3 and the following box on market monitoring as part of the follow-up to the 2007 Single Market Review).
  
   
• 16. 

  See on the application of competition law to parallel trade in the pharmaceutical sector the judgment of the ECJ of 16 September 2008 (Joined Cases C-468/06, C-469/06, C-470/06, C-471/06, C-472/06, C-473/06, C-474/06, C-475/06, C-476/06, C-477/06, C-478/06 Sot. Lélos kai Sia). See also pending Case C-501/06 P GlaxoSmithKline Services v Commission.
  
   
• 17. 

  See: Commission Staff Working Document on Market Monitoring: State of Play and Envisaged Follow-Up, at: ec.europa.eu/economy_finance/publications (see in particular section 4 par. 6 on the pharmaceutical sector).
  
   
• 18. 

  Pharmaceutical Sector Inquiry, Preliminary Report, DG Competition Staff Working Paper, 28.11.2008.
  
   
• 19. 

  The non-confidential versions of these responses are available at: ec.europa.eu/competition/consultations
  
   
• 20. 

  The originator companies subject to the inquiry confirmed in the course of the sector inquiry that they carry out research on a global scale.
  
   
• 21. 

  This figure includes failed
   
• 22. 

  This factor has to be kept in mind when comparisons are made to, for example, the United States situation, where pricing and regulatory conditions are quite different.
  
   
• 23. 

  In those cases where data exclusivity under pharmaceutical law expired after patent protection period including SPC (about 7% of the cases in the sample), the above calculations should be considered in the light of the legal provisions of Community law on data exclusivity relevant during the period covered by the inquiry, which in practice would not have allowed for generic market entry at the point of the expiry of data exclusivity. The rules were amended in 2004 so that, as regards originator products applied for and authorised under the new rules, generic applications may be submitted two years in advance of the loss of exclusivity, but the effects of the amendment will only be felt in 2013 as the new periods of protection apply to originator products applied for and authorised after the coming into effect of these rules in 2005. It should be kept in mind that the sector inquiry measured the time between loss of exclusivity and actual generic market entry; the delays established might have a number of reasons, including regulatory factors, logistics etc.
  
   
• 24. 

  As pointed out above, patent law does not make a distinction between 'primary' and 'secondary' patents, and patents need to be evaluated on the basis of the statutory patentability criteria, not on the basis of the stage in which applications are made. The notion of
   
• 25. 

  All patent applications do, however, need to be evaluated on the basis of the statutory patentability criteria by the patent offices, not on the basis of underlying intentions of the applicant. For terminology, see above.
  
   
• 26. 

  The inquiry confirmed that the average number of patents and patent applications for the top selling medicines is 140% higher (i.e. 237) than the average of the overall sample (98.5).
  
   
• 27. 

  The adverse effects of the current situation would be addressed by the rapid adoption of the Community patent and its consequent use by stakeholders.
  
   
• 28. 

  This concerns, for instance, cases where generic companies may have concrete grounds to doubt the validity of a particular patent or consider that a pending patent application does not meet the criteria for patentability.
  
   
• 29. 

  See the Decision of the Administrative Council of the European Patent Organisation of 25 March 2009 amending the Implementing Regulations to the European Patent Convention (CA/D 2/09) at: www.epo.org/patents/law/legal-texts/decisions
  
   
• 30. 

  The calculation is based on the closest available proxy for the pharmaceutical sector.
  
   
• 31. 

  EPO acknowledges the importance of timely proceedings and recalls its efforts to improve the situation. See p. 5 of "EUROPEAN COMMISSION PHARMACEUTICAL SECTOR INQUIRY PRELIMINARY REPORT
   
• 32. 

  See section 3.2.2. above. NB: One settlement agreement can relate to more than one litigation case.
  
   
• 33. 

  211 cases were reported whereby originator companies made claims regarding generics (sometimes multiple claims). The claims were that the generic products were less safe (75% of the cases), less effective (30% of the cases), inferior (30%) or subject to counterfeit (1.4%).
  
   
• 34. 

  As indicated above, other factors quoted by the originator industry for the decline in innovation as evidenced by a decline of novel medicines reaching the market include increased scientific complexities, high attrition rates in late stage development due to regulatory risk aversion and uncertainty about the financial rewards. These factors were not subject of the inquiry.
  
   
• 35. 

  As stated above, the term
   
• 36. 

  For the efforts of the EPO to limit the possibilities of voluntary divisional patent applications see above footnote (...)29.
  
   
• 37. 

  These overlaps are based on information provided by responding originator companies identifying such cases.
  
   
• 38. 

  Council Regulation (EC) No 139/2004 of 20 January 2004 (OJ L 24, 29.1.2004, p. 1).
  
   
• 39. 

  Commission Notice
   
• 40. 

  See Commission Notice
   
• 41. 

  See, for instance: Joined cases C-241/91 P and C-242/91 Radio Telefis Eireann (RTE) and Independents Television Publications (ITP) v Commission (Magill)
   
• 42. 

  A number of other cases were concluded or are ongoing.
  
   
• 43. 

  See decision of the director general of faire trading No CA98/2/2001 of 30 MARCH 2001, NAPP pharmaceutical holdings and subsidiaries (NAPP), (available at: www.oft.gov.uk/shared_oft/ca98_public_register).
  
   
• 44. 

  See Judgment of the Cour de Cassation of 13 January 2009, Pourvoi no. P 08-12.510 (press release available at: -->
   
• 45. 

  See Decision of Autorità Garante della Concorrenza e del Mercato of 8 February 2006, No 15175 (Case A363 - Glaxo-PRINCIPI ATTIVI), available at: www.agcm.it/.
  
   
• 46. 

  See Commission Decision of 15 June 2005 (Case COMP/A. 37.507/F3 - AstraZeneca); currently under appeal before the Court of First Instance (T-321/05).
  
   
• 47. 

  The latest draft text of the proposal for a Council Regulation on the Community patent can be found in Council Working Document 8588/09 of 7 April 2009, at
  
   
• 48. 

  The latest text of the Draft Agreement on the European and Community Patents Court and Draft Statute can be found in Council Working Document 7928/09 of 23 March 2009, at register.consilium.europa.eu/pdf/en/09/st07
  
   
• 49. 

  Changes subsequent to the placing of medicines on the EU market (e.g. change in the production process, change in the packaging, change in the address of the manufacturer etc.) are called
   
• 50. 

  Directive 2001/83/EC of 6 November 2001 (OJ L 311, 28.11.2001, p. 67), last amended by Directive 2008/29/EC of 11 March 2008 (OJ L 81, 20.3.2008, p. 51).
  
   
• 51. 

  Judgment of the Court of First Instance, Case T-326/99 (Olivieri) of 18 December 2003, ECR 2003 p. II-06053.
  
   
• 52. 

  With the emergence of new technologies like pharmacogenomics and patient-specific modelling and disease simulators, personalised medicine is now on the horizon. In the long term, doctors may be able to use genetic information to determine the right medicines, at the right dose and time. This field is already affecting companies' business strategies, the design of clinical trials and the way medicines are prescribed. Although it is too early to say whether
   
• 53. 

  For details see recommendations of the Pharmaceutical Forum (adopted in October 2008, see ec.europa.eu/pharmaforum/), the Commission Communication of 10 December 2008 - COM(2008) 666, 10.12.2008: Safe, Innovative and Accessible Medicines: A Renewed Vision for the Pharmaceutical Sector) and the in-depth monitoring of the functioning of markets in the pharmaceutical sector (as announced in Objective 7 of the above referred Communication).
  
   
• 54. 

  The specific time limits laid down in Directive 89/105/EEC are 90 days for pricing decisions, 90 days for reimbursement decisions or 180 days in case of joint procedures.
  
   
• 55. 

  Recommendations of the Pharmaceutical Forum, Commission Communication of 10 December 2008 on a Renewed Vision of the Pharmaceutical Sector and the in-depth monitoring of the functioning of markets in the pharmaceutical sector.
  
   
• 56. 

  Commission Communication of 16 July 2008 on an Industrial Property Rights Strategy for Europe - COM(2008) 465.
  
   
• 57. 

  See, in particular, Commission Communication of 10 December 2008 - COM(2008) 666, 10.12.2008: Safe, Innovative and Accessible Medicines: A Renewed Vision for the Pharmaceutical Sector.
  
   
• 58. 

  The Innovative Medicines Initiative is a Public-Private Partnership (PPP) between the pharmaceutical industry represented by the European Federation of Pharmaceutical Industries and Associations (EFPIA) and the European Communities represented by the European Commission. See: imi.europa.eu/index_en.
  
   
• 59. 

  See, for instance, Regulation (EC) No 726/2004 and Directive 2004/27/EC of the European Parliament and of the Council of 31 March 2004 amending Directive 2001/83/EC.
  
   
• 60. 

  Directive 89/105/EEC of 21 December 1988 relating to the transparency of measures regulating the pricing of medicinal products for human use and their inclusion within the scope of national health insurance systems.
  
   
• 61. 

  See, further to the above, the High Level Pharmaceutical Forum
  
   
• 62. 

  Commission Communication ' Enhancing the patent system in Europe ' - COM(2007) 165.
  
   
• 63. 

  ec.europa.eu/pharmaforum/docs
  
   
• 64. 

  High Level Pharmaceutical Forum: Guiding principles for good practices implementing a pricing and reimbursement policy (ec.europa.eu/pharmaforum/docs).
  
   
• 65. 

  Commission Communication of 10 December 2008 - COM(2008) 666, 10.12.2008: Safe, Innovative and Accessible Medicines: A Renewed Vision for the Pharmaceutical Sector.
  
   
• 66. 

  Commission Decision of 15 January 2008 initiating an inquiry into the pharmaceutical sector pursuant to Article 17 of Council Regulation (EC) No 1/2003 (Case No COMP/D2/39.514).
  
   
• 67. 

  Article 17(1) 1st paragraph of Council Regulation 1/2003 reads: 'Where the trend of trade between Member States, the rigidity of prices or other circumstances suggest that competition may be restricted or distorted within the common market, the Commission may conduct its inquiry into a particular sector of the economy or into a particular type of agreements across various sectors. In the course of that inquiry, the Commission may request the undertakings or associations of undertakings concerned to supply the information necessary for giving effect to Articles 81 and 82 of the Treaty and may carry out any inspections necessary for that purpose.'
  
   
• 68. 

  See, for instance, Directive 2004/27/EC of the European Parliament and of the Council of 31 March 2004 amending Directive 2001/83/EC.
  
   
• 69. 

  Article 10(6) of Directive 2001/83/EC as amended by Directive 2004/27/EC: this provision was to be transposed by Member States by 31 October 2005. Prior to the introduction of the Bolar provision in the EU regulatory framework, pre-patent-expiry development was not regulated at EU level. Consequently, generic manufacturers carried out their product development and related testing in countries where the basic patent had already expired or where such protection did not exist, outside the EU or in European countries where a Bolar-type provision existed or in EU Member States where experimental work was in certain cases permitted (cf. section B.2.2.1 of the technical annex).
  
   
• 70. 

  See: Commission Staff Working Document on Market Monitoring: State of Play and Envisaged Follow-Up, at: ec.europa.eu/economy_finance/publications (see in particular Section 4 par. 5 on monitoring the retail sector); Commission Staff Working Document on The Single Market Review: one year on, at: ec.europa.eu/internal_market/strategy/docs (see in particular p. 11 par. 3 and the following box on market monitoring as part of the follow-up to the 2007 Single Market Review).
  
   
• 71. 

  See on the application of competition law to parallel trade in the pharmaceutical sector the judgment of the ECJ of 16 September 2008 (Joined Cases C-468/06, C-469/06, C-470/06, C-471/06, C-472/06, C-473/06, C-474/06, C-475/06, C-476/06, C-477/06, C-478/06 Sot. Lélos kai Sia). See also pending Case C-501/06 P GlaxoSmithKline Services v Commission.
  
   
• 72. 

  See: Commission Staff Working Document on Market Monitoring: State of Play and Envisaged Follow-Up, at: ec.europa.eu/economy_finance/publications (see in particular section 4 par. 6 on the pharmaceutical sector).
  
   
• 73. 

  Pharmaceutical Sector Inquiry, Preliminary Report, DG Competition Staff Working Paper, 28.11.2008.
  
   
• 74. 

  The non-confidential versions of these responses are available at: ec.europa.eu/competition/consultations
  
   
• 75. 

  The originator companies subject to the inquiry confirmed in the course of the sector inquiry that they carry out research on a global scale.
  
   
• 76. 

  This figure includes failed
   
• 77. 

  This factor has to be kept in mind when comparisons are made to, for example, the United States situation, where pricing and regulatory conditions are quite different.
  
   
• 78. 

  In those cases where data exclusivity under pharmaceutical law expired after patent protection period including SPC (about 7% of the cases in the sample), the above calculations should be considered in the light of the legal provisions of Community law on data exclusivity relevant during the period covered by the inquiry, which in practice would not have allowed for generic market entry at the point of the expiry of data exclusivity. The rules were amended in 2004 so that, as regards originator products applied for and authorised under the new rules, generic applications may be submitted two years in advance of the loss of exclusivity, but the effects of the amendment will only be felt in 2013 as the new periods of protection apply to originator products applied for and authorised after the coming into effect of these rules in 2005. It should be kept in mind that the sector inquiry measured the time between loss of exclusivity and actual generic market entry; the delays established might have a number of reasons, including regulatory factors, logistics etc.
  
   
• 79. 

  As pointed out above, patent law does not make a distinction between 'primary' and 'secondary' patents, and patents need to be evaluated on the basis of the statutory patentability criteria, not on the basis of the stage in which applications are made. The notion of
   
• 80. 

  All patent applications do, however, need to be evaluated on the basis of the statutory patentability criteria by the patent offices, not on the basis of underlying intentions of the applicant. For terminology, see above.
  
   
• 81. 

  The inquiry confirmed that the average number of patents and patent applications for the top selling medicines is 140% higher (i.e. 237) than the average of the overall sample (98.5).
  
   
• 82. 

  The adverse effects of the current situation would be addressed by the rapid adoption of the Community patent and its consequent use by stakeholders.
  
   
• 83. 

  This concerns, for instance, cases where generic companies may have concrete grounds to doubt the validity of a particular patent or consider that a pending patent application does not meet the criteria for patentability.
  
   
• 84. 

  See the Decision of the Administrative Council of the European Patent Organisation of 25 March 2009 amending the Implementing Regulations to the European Patent Convention (CA/D 2/09) at: www.epo.org/patents/law/legal-texts/decisions
  
   
• 85. 

  The calculation is based on the closest available proxy for the pharmaceutical sector.
  
   
• 86. 

  EPO acknowledges the importance of timely proceedings and recalls its efforts to improve the situation. See p. 5 of "EUROPEAN COMMISSION PHARMACEUTICAL SECTOR INQUIRY PRELIMINARY REPORT
   
• 87. 

  See section 3.2.2. above. NB: One settlement agreement can relate to more than one litigation case.
  
   
• 88. 

  211 cases were reported whereby originator companies made claims regarding generics (sometimes multiple claims). The claims were that the generic products were less safe (75% of the cases), less effective (30% of the cases), inferior (30%) or subject to counterfeit (1.4%).
  
   
• 89. 

  As indicated above, other factors quoted by the originator industry for the decline in innovation as evidenced by a decline of novel medicines reaching the market include increased scientific complexities, high attrition rates in late stage development due to regulatory risk aversion and uncertainty about the financial rewards. These factors were not subject of the inquiry.
  
   
• 90. 

  As stated above, the term
   
• 91. 

  For the efforts of the EPO to limit the possibilities of voluntary divisional patent applications see above footnote (...)29.
  
   
• 92. 

  These overlaps are based on information provided by responding originator companies identifying such cases.
  
   
• 93. 

  Council Regulation (EC) No 139/2004 of 20 January 2004 (OJ L 24, 29.1.2004, p.
  
  1).
  
   
• 94. 

  Commission Notice
   
• 95. 

  See Commission Notice
   
• 96. 

  See, for instance: Joined cases C-241/91 P and C-242/91 Radio Telefis Eireann (RTE) and Independents Television Publications (ITP) v Commission (Magill)
   
• 97. 

  A number of other cases were concluded or are ongoing.
  
   
• 98. 

  See decision of the director general of faire trading No CA98/2/2001 of 30 MARCH 2001, NAPP pharmaceutical holdings and subsidiaries (NAPP), (available at: www.oft.gov.uk/shared_oft/ca98_public_register).
  
   
• 99. 

  See Judgment of the Cour de Cassation of 13 January 2009, Pourvoi no. P 08-12.510 (press release available at: -->
   
• 100. 

  See Decision of Autorità Garante della Concorrenza e del Mercato of 8 February 2006, No 15175 (Case A363 - Glaxo-PRINCIPI ATTIVI), available at: www.agcm.it/.
  
   
• 101. 

  See Commission Decision of 15 June 2005 (Case COMP/A. 37.507/F3 - AstraZeneca); currently under appeal before the Court of First Instance (T-321/05).
  
   
• 102. 

  The latest draft text of the proposal for a Council Regulation on the Community patent can be found in Council Working Document 8588/09 of 7 April 2009, at
  
   
• 103. 

  The latest text of the Draft Agreement on the European and Community Patents Court and Draft Statute can be found in Council Working Document 7928/09 of 23 March 2009, at register.consilium.europa.eu/pdf/en/09/st07
  
   
• 104. 

  Changes subsequent to the placing of medicines on the EU market (e.g. change in the production process, change in the packaging, change in the address of the manufacturer etc.) are called
   
• 105. 

  Directive 2001/83/EC of 6 November 2001 (OJ L 311, 28.11.2001, p. 67), last amended by Directive 2008/29/EC of 11 March 2008 (OJ L 81, 20.3.2008, p. 51).
  
   
• 106. 

  Judgment of the Court of First Instance, Case T-326/99 (Olivieri) of 18 December 2003, ECR 2003 p. II-06053.
  
   
• 107. 

  With the emergence of new technologies like pharmacogenomics and patient-specific modelling and disease simulators, personalised medicine is now on the horizon. In the long term, doctors may be able to use genetic information to determine the right medicines, at the right dose and time. This field is already affecting companies' business strategies, the design of clinical trials and the way medicines are prescribed. Although it is too early to say whether
   
• 108. 

  For details see recommendations of the Pharmaceutical Forum (adopted in October 2008, see ec.europa.eu/pharmaforum/), the Commission Communication of 10 December 2008 - COM(2008) 666, 10.12.2008: Safe, Innovative and Accessible Medicines: A Renewed Vision for the Pharmaceutical Sector) and the in-depth monitoring of the functioning of markets in the pharmaceutical sector (as announced in Objective 7 of the above referred Communication).
  
   
• 109. 

  The specific time limits laid down in Directive 89/105/EEC are 90 days for pricing decisions, 90 days for reimbursement decisions or 180 days in case of joint procedures.
  
   
• 110. 

  Recommendations of the Pharmaceutical Forum, Commission Communication of 10 December 2008 on a Renewed Vision of the Pharmaceutical Sector and the in-depth monitoring of the functioning of markets in the pharmaceutical sector.
  
   
• 111. 

  De Europese Commissie kent nummers toe aan officiële documenten van de Europese Unie. De Commissie maakt onderscheid in een aantal typen documenten door middel van het toekennen van verschillende nummerseries. Het onderscheid is gebaseerd op het soort document en/of de instelling van de Unie van wie het document afkomstig is.
   
• 112. 

  De Raad van de Europese Unie kent aan wetgevingsdossiers een uniek toe. Dit nummer bestaat uit een vijfcijferig volgnummer gevolgd door een schuine streep met de laatste twee cijfers van het jaartal, bijvoorbeeld 12345/00 - een document met nummer 12345 uit het jaar 2000.
   
• 113. 

  Het interinstitutionele nummer is een nummerreeks die binnen de Europese Unie toegekend wordt aan voorstellen voor regelgeving van de Europese Commissie.
  Binnen de Europese Unie worden nog een aantal andere nummerseries gebruikt. Iedere instelling heeft één of meerdere sets documenten met ieder een eigen nummering. Die reeksen komen niet overeen met elkaar of het interinstitutioneel nummer.
   
• 114. 

  Deze databank van de Europese Unie biedt de mogelijkheid de actuele werkzaamheden (workflow) van de Europese instellingen (Europees Parlement, Raad, ESC, Comité van de Regio's, Europese Centrale Bank, Hof van Justitie enz.) te volgen. EURlex volgt alle voorstellen (zoals wetgevende en begrotingsdossiers) en mededelingen van de Commissie, vanaf het moment dat ze aan de Raad of het Europees Parlement worden voorgelegd.
   
• 115. 

  Als dag van bekendmaking van een Europees besluit geldt de dag waarop het besluit in het Publicatieblad wordt bekendgemaakt, en daardoor in alle officiële talen van de Europese Unie bij het Publicatiebureau beschikbaar is.