Patenting Strategies by Pharmaceutical Companies: A Lawful Use of the Patent System or an Abusive Conduct?

Abstract

To delay generic competition, pharmaceutical companies have been increasingly relying on the patent system. Some of their patent-related practices, such as pay-for-delay agreements, have attracted significant attention of competition authorities in several jurisdictions. However, other practices remain outside of competition authorities’ investigative activities in most jurisdictions, including in Europe. This chapter will discuss two strategies that are employed by pharmaceutical companies to prevent generic competition, namely: (a) strategic accumulation of patents and (b) product hopping. These strategies have the capacity to produce negative effects on the market by delaying market entry of cheaper generics and resulting in a substantial additional cost to the public. The main aim of this chapter is, therefore, to attract attention of policy makers world-wide to these practices explaining their essence, anticompetitive nature and effects.