Ajitesh Arya
The pharmaceutical sector, characterized by intensive research and development (R&D) efforts and evolving diseases, relies heavily on the continuous development of new medicines. Patent protection incentivizes drug developers by granting them a period of monopoly over production and distribution in exchange for disclosure. However, unscrupulous practices, such as patent evergreening and pay for delay (PFD) agreements, threaten competition and access to medicines. This paper explores the emergence and implications of PFD agreements, particularly in jurisdictions like India, where regulatory frameworks may differ from those in the United States and the European Union. Drawing on legal cases and regulatory responses, it examines the anti-competitive nature of PFD agreements and their impact on market dynamics and consumer welfare.
The analysis begins by discussing the rationale behind patent protection and the role of PFD agreements in extending market exclusivity beyond patent terms. It scrutinizes the legality and ethical implications of such agreements, highlighting concerns about market manipulation and access to affordable medicines. Using case studies from the USA and the EU, the paper evaluates regulatory responses and judicial interpretations of PFD agreements. It examines the application of competition law principles, such as the rule of reason and per se illegality, in assessing the anti-competitive effects of PFD agreements.
Furthermore, the paper delves into the specific challenges and considerations for regulating PFD agreements in India under the Competition Act, 2002. It discusses the applicability of competition law provisions, such as Section 3 on anti-competitive agreements and Section 4 on abuse of dominance, in addressing PFD practices. Finally, the paper concludes by proposing a nuanced approach to assessing PFD agreements, considering factors such as payment amounts, duration of delay, and potential market effects. It emphasizes the need for regulatory vigilance and robust enforcement mechanisms to safeguard competition and ensure access to affordable medicines in the pharmaceutical sector.
