On November 28, 2008, the European Commission published its preliminary report and findings in connection with the sector inquiry it launched late last year on competition in the pharmaceutical sector. The Commission acknowledges that patents are vital to providing pharmaceutical companies with an incentive to innovate and that patenting activities and litigation are generally legitimate. The report, nonetheless, concludes that “originator” companies (i.e., those that bring new products to market) have employed a “tool-box” of patent practices and product lifecycle strategies (e.g., multiple patent applications; vexatious litigation, follow-on medicines and secondary patents) that may have the object or effect of delaying or blocking the entry of generic and other new medicines. (We discuss the specific practices that the Commission analyzed in greater detail below.) If such delays could have been avoided, the Commission believes substantial cost savings would have been achieved through the more timely purchase of lower priced medicines.

Please see full update for more information.