SIlver PoundAstraZeneca has been fined £60m (about $73 million) by the European Commission for illegally trying to prevent generic competition to its best-selling ulcer drug Losec. After a six-year investigation, the EC said the firm gave incorrect information about when the drug was first approved, enabling the firm to extend the patent’s life.

Losec (omeprazole) is a proton-pump inhibitor for acid-related diseases, which is the world’s largest-selling gastrointestinal product market. Losec was launched in its first markets in 1988. While still under patent protection in the 1990’s, Losec was one of the biggest-selling prescription drugs in the world, with sales of around $6 billion a year.

In Europe especially, everyone feels a natural right to health and medicine, a sort of public good, naturally intended for the free circulation and use. In 1855, Carlo Farini, a philanthropic physician and scientist, investigator of tropical diseases, prevailed over the Piemontese patent law, which would become the Italian patent law, prohibiting the patentability of pharmaceutical inventions (which remained in force until 1978). This doesn’t mesh well with the incentive-based patenting system designed to spur innovation in the first place.

I try to remind clients that a patent isn’t a license to do anything you want in the marketplace. This was made clear by the U.S. Supreme Court long ago when it warned:

“…the possession of a valid patent or patents does not give the patentee any exemption from the provisions of the Sherman Act beyond the limits of the patent monopoly.”

U.S. v. Line Material Co., 333 US 287 (1948)

Some say AstraZeneca got off easy since the Commission has the ability to impose a fine equivalent to 10% of a company’s annual sales if it is found guilty of anti-competitive actions. AstraZeneca said it had acted in good faith when it sought to extend the patent and would appeal against the verdict in the EU’s Court of Justice.

More here.

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