A new dimension to EU pharma antitrust product hopping and unilateral pay for delay

Abstract

Pay for delay settlements are currently high on the competition law enforcement agenda. The focus in these investigations is on the collusive nature of the agreements between a brand company and generic companies. However, this article moves the discussion away from the commonly recognized collusive anticompetitive potential, advocating for the expansion of antitrust scrutiny of pay for delay settlements to unilateral conduct. Pay for delay settlements could be used as a “facilitator” for a broader unilateral strategy by the brand company such as product hopping – the coercive switch of patients to a reformulated version of the original brand drug in anticipation of generic drug competition. The proposed theory of harm is in line with the European approach to related conduct in AstraZeneca and the CMA’s decision in Reckitt Benckiser, but also finds support in the US Second Circuit’s judgment in State of New York v. Actavis from May 2015.