Study on Reverse Payment Agreements in the Competition Law and its impact on the production and supply of Generic drugs

The research and development sector in the pharmaceutical industry is very complex, and companies are constantly engaging in competition with each other for opening of their new products. In fact, the generic producers because principally have no research and development programs, are economically able to offer their products to the market with lower prices. Finally, this difference in cost can cause erosion of market share of the originator companies and consequently leads to the withdrawal of originator of the competition. For all these reasons, the originator companies tries to delay their entry or make them encountering the dead-end by getting the patents certificate and the related legal support to it and in the next stage by conducting the transactions with generic producing competitors, and protect their position in the market. The instances of these transactions are considerable in the contracts and the conflicts that are posed and discussed out-of-court. These transactions for the reason that it can be effective in commercializing of medicinal products and at the entry of generic producing competitor to the market, considered a satisfactory technique to protect the economic interests of Originator Company, which sounds very deliberative. Such agreements are currently placed under the anti-competitive practices. And the European Commission considers it irrelevant to the legal protection of intellectual property and an illegal practice contrary to the competition law rules to pay the fund in exchange for keeping generic makers distant from the market with the incentive of maintaining the market share and increasing the profits rate of the major manufacturers. This is despite the fact that the Federal Trade Commission of United States of America has taken a different stance on this issue.