European Commission Says Pharma Company Teva Abused The Patent System To Violate Antitrust Laws

I always find it vaguely amusing when the government realizes that the system of monopoly rights it created is used to restrain competition. The latest is over in the EU, where the European Commission has gone after pharmaceutical giant Teva, for abusing the patent system to limit competition for its multiple sclerosis medicine. Of course, this shouldn’t come as a surprise, we’ve written about Teva a few times, and many of them involve the FTC and various states going after Teva and other pharma companies for sketchy practices to limit competition and inflate prices.

The FTC case was about Teva using “pay-for-delay” tactics, where its drugs would be on the verge of going off patent, but it would engage in a variety of scammy behaviors, including paying competitors (via bogus lawsuits leading to pre-planned “settlements”) not to enter the market, in order to retain the monopoly for longer than the law allowed.

It appears that Teva was up to similar tricks in Europe. Here’s the summary from the Commission of what Teva did to retain its ability to extract monopoly rents for drugs that were going off patent:

• Misused patent procedures: after the original, basic patent expired, Teva artificially extended glatiramer acetate’s basic patent protection by filing and withdrawing secondary patent applications, thereby forcing its competitors to file new lengthy legal challenges each time. This scheme is sometimes referred to as the “divisionals game”. This is because the strategy implies filing so-called “divisional patents” which are patents derived from an earlier secondary patent and whose subject matter is already contained in the earlier patent. This artificially prolongs legal uncertainty to the benefit of the patent holder, and can effectively block or delay entry of generic or generic-like medicines.
• Implemented a systematic disparagement campaign targeting healthcare professionals and casting doubts about the safety and efficacy of a competing glatiramer acetate medicine and its therapeutic equivalence with Copaxone.

Of course, all of this seems quite ironic, given that Teva rose to fame by being one of the biggest makers of generic drugs after those drugs went off-patent from other pharma companies. Hell, just last week Teva asked the Supreme Court in the US to hear an appeal on a case regarding whether or not its use of “skinny labels” (marketing generic drugs by leaving out still patented uses) violates patents or not. So, for Teva to be such a giant in the generic market, while simultaneously trying to block other generics from coming to market seems mighty hypocritical.