Recent enforcement activity in the U.S., EU, and UK reveals an increasing focus by antitrust authorities across the globe on patent strategies and disparagement tactics by pharmaceutical companies holding dominant market positions, which is a trend which can be expected to continue. In the pharmaceutical industry, the law on exclusionary conduct by companies with significant market power is being developed, driven by the prevalence of patient-critical blockbuster drugs, and the long periods of market exclusivity afforded by patent protection.

Given the political importance of cost-effective treatment options, antitrust authorities are homing in on conduct in the context of end-of-lifecycle patent management strategies that are designed to deprive actual or potential competitors of effective access to a market.

Lifecycle management strategies have been an area of enforcement focus by the U.S. Federal Trade Commission for decades. Certain lifecycle management strategies challenged in the U.S. as anticompetitive are not unique to the U.S., such as reverse payment patent settlements. Yet, other lifecycle management strategies are unique to the country as they arise from the complex structure of the Hatch-Waxman Act, including the use of citizen petitions to delay generic entry, and the improper listing of patents in the Orange Book.

While characterization of such conduct as an abuse of dominance is relatively novel in Europe, key risk factors can be identified from recent enforcement examples, with fines reaching over €460 million in some cases:

• Abusive patent litigation strategies and patent settlements to delay generic entry.
• Misuse of patent procedures to artificially prolong exclusivity.
• Disparagement and/or spreading of misleading information about competing products, with at least one live investigation underway by the European Commission following a dawn raid in the vaccine sector late last year.

These risk factors are in addition to more traditional categories of abuse, such as excessive pricing. While marketing and patent lifecycle management strategies are not in and of themselves problematic from an antitrust perspective, any conduct by dominant pharmaceutical companies that is designed to hinder generic entry into a market or otherwise exclude or delay competing products carries significant antitrust risk.

Therefore, companies developing and implementing pharmaceutical lifecycle management strategies should weigh antitrust considerations early and carefully manage external statements on competitor products. It is imperative to manage risk under the increasingly bright spotlight that antitrust authorities are shining on pharmaceutical companies and blockbuster products.