Competition Bureau closes two investigations into pharmaceutical patent litigation settlements

News release

Bureau proactively monitors settlements between drug manufacturers to identify potentially illegal agreements

May 20, 2022 – GATINEAU, QC – Competition Bureau

The Competition Bureau announced today that it has closed two recent investigations into potentially anticompetitive patent litigation settlement agreements involving pharmaceutical drugs.

The investigations were launched as a result of the Bureau’s proactive monitoring of agreements between branded and generic drug manufacturers. In Canada, companies are not required to notify the Bureau of agreements that settle cases involving patented medicines. To protect competition and innovation, the Bureau proactively monitors these cases using publicly available information. It then identifies legal proceedings that have been closed with the consent of the parties involved and gathers information to determine whether an agreement may contravene the Competition Act.

The Bureau’s Intellectual Property Enforcement Guidelines (IPEGs) identify that patent litigation settlement agreements between drug manufacturers may be anticompetitive, such as when payments (whether monetary or non-monetary) are made to delay the entry of generic drugs into the market.

Evidence gathered during these recent investigations suggested that the agreements under review did not contravene the Act. Nonetheless, the Bureau recognizes that these types of agreements have the potential to result in significant anticompetitive and economic harm – hence the importance of its proactive enforcement efforts.

A complete position statement summarizing the Bureau’s general approach to reviewing these types of agreements, and areas of concern is available on its website.

Promoting and protecting competition in the Canadian health care sector is a priority for the Competition Bureau. The Bureau continues to actively monitor patent litigation proceedings and will take appropriate enforcement or advocacy action in the future, if warranted.

Quick facts

  • The Bureau remains focused on supporting Canadians’ access to safe, effective and affordable medicines. Generic drugs help to control prescription drug costs and make drugs more accessible to Canadian patients and payers.

  • In a recent submission to Senator Howard Wetston’s consultation on Canada’s competition policy framework, the Bureau recommends implementing a system that requires the Bureau to be notified of any pharmaceutical patent litigation settlement agreements.

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The Competition Bureau is an independent law enforcement agency that protects and promotes competition for the benefit of Canadian consumers and businesses. Competition drives lower prices and innovation while fueling economic growth.

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