The competition law is being used against drug patent holders to ensure they don't abuse their market power
The competition law is being used against drug patent holders to ensure they don't abuse power
ON THE face it, intellectual property rights which confer monopoly rights on the holder and anti-trust regulations which aim to ensure fair competition would seem to be in direct conflict.
What after all is a patent? It is a right or ownership that allows the patentee for a fixed period to enjoy a monopoly right on his invention by excluding others from making, using or selling it. The competition law, on the other hand, aims to foster competition by ensuring that monopolies do not abuse their dominant position to control the market. Although the two laws would appear to be antithetical to each other, both aim to ensure a balance between opposing interests.
Legal experts argue the ultimate aim of both the laws is to protect public interest. It would seem that agencies charged with ensuring competition are taking a stricter view on market abuse by patent holders, especially in pharmaceuticals. Public health experts are heartened by a June 28 decision by a US district court which found two drug firms guilty of abuse of monopoly power by blocking the entry of competition from generics. Judge Harvey Bartle of the District Court of Pennsylvania was ruling in a suit filed by the Federal Trade Commission, the equivalent of the Competition Commission of India (cci), against AbbVie and its partner Besins Healthcare, who were knowingly pursuing a sham patent infringement case against competitors to block the entry of generic versions of their testosterone replacement therapy. They were also ordered to pay damages of US $448 million.
At home, too, there has been a similar development with cci putting pharma giants on notice for abuse of monopoly power. In 2017, cci had ordered investigation against drug major Roche for its actions related to its blockbuster biological cancer drug Trastuzumab on a complaint filed by Biocon and Mylan Pharmaceuticals, which had produced biosimilar versions of the drug. cci said that when baseless anti-competitive litigation is launched by a dominant enterprise, it amounts to abuse of market power if it is established that the impugned action is intended to harass the rival companies or to eliminate competition. It found prima facie that the practices adopted by Roche Group to “create an impression about the propriety of the approvals granted, the safety and efficacy of biosimilars, the associated risk and the outcome of the on-going court proceedings in the medical TARIQUE AZIZ / CSE fraternity,” as a collective effort aimed at blocking the penetration of biosimilars in the market.
And it is not just the legal lettering of the law that cci cited in its ruling. It pointed to the social obligation in section 4(2) which places a special responsibility on the dominant enterprise not to indulge in abusive conduct. Increasingly,
cci may be called upon to play a pro-active role in forcing drug majors, however strong their patents may be, to act in a more responsible manner on the pricing of medicines and ensuring a more level field for generic competitors. Experts believe the competition law may be a critical tool in controlling the runaway prices of drugs since governments are reluctant to take other measures.