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End of the Lundbeck saga and new rules for medical devices in Norway

It has been an active first half of 2021 for the pharmaceutical industry – also on the legal front: The now almost 20 year-old "pay-for-delay" antitrust saga of Lundbeck found its conclusion in the Court of Justice on 25 March, and the new EU rules on medical devices entered into force in Norway from 26 May.

In 2013, the Danish pharmaceutical company Lundbeck, which at the time only held limited secondary patents related to certain antidepressants, was fined EUR 93.7 million by the European Commission for having entered into settlement agreements in 2002 whereby Lundbeck paid generic manufacturers for not challenging its patents. The payments corresponded to the profits that the generic manufacturers could have made if they had successfully entered the market. The generic manufacturers received fines as well, totalling EUR 52.2 million. The “pay-for-delay” was deemed to restrict competition by object, thus infringing Article 101 TFEU, mirroring Section 10 of the Norwegian Competition Act. Danish competition authorities had notified the Commission back in 2003, but an investigation was only opened after the 2008 pharmaceutical sector inquiry.

In 2016, the General Court dismissed the appeals against the 2013 decisions, whereafter the cases were brought before the Court of Justice. On 25 March 2021, the Court dismissed all appeals in a series of cases (C-586/16 P, C-588/16 P, C-591/16 P, C-601/16 P, C-611/16 P and C-614/16 P). The Court did not accept that Lundbeck and the generic manufacturers were not potential competitors. It was deemed sufficient that, in the absence of the “pay-for-delay” arrangements, there would be real and concrete possibilities for the generic manufacturers, who had a firm intention and inherent ability to challenge the patents, to enter the market in competition with Lundbeck. The case goes to show that since the existence of patents cannot necessarily be regarded as an insurmountable entry barrier, settlement agreements with regard to pending patent challenges should be carefully considered and drafted to avoid being deemed as “payments to keep competition out”.

Meanwhile in Norway, the EU Medical Devices Regulation and In Vitro Diagnostic Medical Devices Regulation have been incorporated into Norwegian law, and entered into force from 26 May. The new rules aim to improve the safety of medical devices, and include many amendments, e.g. an express prohibition of all claims that may mislead users or patients with regard to the device’s intended purpose. Upon further conditions, devices certified under the old directives may still be marketed and sold until the lapse of their certificates.