Patent Strategies and Competition Law in the Pharmaceutical Sector: Implications for Access to Medicines

Abstract

Competition policy is an under-utilised tool. Policy coherence between the IP system and competition must be strengthened in order to promote innovation and access to health technologies. Article 8(2) of the TRIPS Agreement provides flexibilities for governments to adopt competition law measures to prevent abuse of intellectual property rights, including IP rights related to the life sciences, namely the pharmaceutical industry and the biotechnology sector. Post-TRIPS, some countries have implemented competition laws but in practice are not using these effectively. This is particularly striking in the pharmaceutical sector, where abuses of intellectual property rights, such as reverse payment agreements and strategic patenting, risk allowing pharmaceutical companies to extend their market monopoly by blocking the entry of both generic and innovative medicines and, as a result, stifling competition and harming consumers. Nevertheless, these practices lack adequate attention by competition authorities. Such anti-competitive practices create particular challenges for the developing world as they can lead to significant barriers to innovation and access. Used effectively, competition policy can be in the best interests of society. It is conducive to freedom of choice and lower prices while, potentially, also serving as an important driver for innovation and access.