In January 2008, using surprise raids, and with great fanfare, and in some cases a few shockwaves, the European Commission launched a Sector Enquiry into Competition in the pharmaceutical industry.

Today the preliminary report was released with similar fanfare and a public presentation.

Here are a few interesting tidbits from the executive summary:

1. ‘The Preliminary Report does not seek to identify wrongdoing by individual companies or to reach any conclusion as to whether certain practices described in the report infringe EC competition law. 
   >>So presumably this is to follow?
2. ‘the inquiry finds that individual blockbuster medicines are protected by up to 1,300 patents and / or pending patent applications.’
   >>This figure is high and in any event, the vast majority of these are not filed by the innovator who’s drug it is.
3. 700 cases of patent litigation between originator companies and generic companies were reported in the medicines investigated between 2000 and 2007. 
4. Only 149 of these went all the way to a judgment.  Generic companies won 62% of cases that went to judgment.
5. Average duration of the above litigations (which understandably varied considerably between jurisdictions) was 2.8 years.
6. Two or more European Courts gave conflicting final judgments in 11% of the above cases.
7. Innovators requested injunctions in 225 of the 700 cases and were granted them in 112.
8. The average duration of interim injunctions was 18 months.
9. The total cost of patent litigation in the period 2000 – 2007 relating to the 68 medicines analysed is estimated to have exceeded 420 million Euro.  (~6.1 million Euro per case.)
10. EPO Oppositions are much more frequent in pharmaceuticals than in Organic Chemistry.
11. Most EPO Oppositions were in relation to secondary patents (ie not the original composition of matter patent).
12. About 80% of EPO final decisions took more than 2 years to obtain.
13. 75% of decisions before the EPO (including the Boards of Appeal) were in favour of the Opponents.
14. A major factor which forces settlement from the generic perspective was avoiding costs of lengthy and complex patent litigation.
15. 48% of the settlements analysed imposed some restriction on generic entry to market.
16. 40% of medicines studied involved some sort of second generation / follow on product from the innovator.
17. Nearly 60% of the patent related litigation cases concerned medicines that were subject to a switch from first to second generation products.
18. Interventions by the innovator companies in the Regulatory Approval pocess for generic drugs were common.

The European Commission would like to hear your views on all of this, so please do read the full report and send in your thoughts to: COMP-SECTOR-PHARMA[at]ec.europa.eu

The final report is expected in the Northern Hemisphere Spring of 2009.