Canadian Lawyer InHouse

june 2014 30 INHOUSE THE COMPETITION BUREAU is hon- ing in on the pharmaceutical sector, amid concern about alleged market distortions caused by legal settlements and industry practices. At a conference held last November in Delhi, India, the bureau submitted a paper highlighting the huge signifi cance of the Canadian health care system to the national economy and to residents' well-being. The paper added: "However, some phar- maceutical companies employ strategies throughout various international markets that aim to maintain their existing market shares and frustrate competition from generic substitutes." A workshop was also held by the bureau earlier that month called "Antitrust Issues in the Pharmaceutical Sector." At the time of writing, no materials from the workshop had been made public, though one of the main items on the Nov. 13 meeting's agenda was "pay-for-delay" settlements, also known as "reverse payment" settlements. These come about when a branded phar- maceutical company involved in patent in- fringement proceedings pays a generic com- pany a sum of money on the condition the generic product's market entry is delayed for a period of time. Not everyone sees the settlements as ne- farious or inherently anti-competitive. Gowling Lafl eur Henderson LLP partner William Vanveen, who attended the November workshop, says: "It's a matter of public policy in this country that litigators are entitled to settle their dispute. That's all that's going on here. "Patent holders have a right to exclude oth- ers, because that's what a patent gives you." But across the border, the Federal Trade Commission sees things differently, strong- ly opposing large pay-for-delay settlements on the basis that branded drug manufactur- ers only offer them when they are likely to lose a patent case. Without the payment, the public would have access to a competitor generic drug, it is argued; why would such large sums be offered otherwise? The FTC is less concerned about modest payments aimed at bridging the gap between parties' assessment of risk. Last June, the U.S. Supreme Court con- cluded patent settlements should be re- viewed wherever there are large reverse pay- ments made to generic drug manufacturers. FTC v. Actavis Inc. found the payments were not "presumptively unlawful," but could be challenged by governments and private parties. The case is widely seen as having piqued the Competition Bureau's interest here BY CHArlOTTe SAnTrY Pharma is on the Competition Bureau's radar is it just about exploration or enforcement? I n d u s t r y S p o t l i g h t

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