 Thank you for the invitation to speak. It's always nice to be back at Cambridge. I was realising as I sat here, I first sat in these rooms nearly 25 years ago. Which is terrifying. I'm a patent litigation partner at Freshfields. But I also do some competition law. Saying that to people tends to make a lot of IP lawyers look at you like, you say you live in a Brexit area and speak a foreign language. I've got a similar warning from the organisers saying, Remember most the audiences are IP lawyers, they won't understand much competition law. That seems a bit like the warning Stephen Hawking got when he wrote his book of Every time you put in an equation you'll have the sales of your book. We've already had chemistry upon board but that's okay for our IP lawyers. So, this is all I'm doing in competition law. Hwnna, beth mae gydag wedi ei beth o'ch ffwrdd. A dyna rwy'n meddyl i'r mwyaf arall. Ond yna, y dyna'r topicau, oherwydd mae'n dweud ar gyfer bod ydydd y cysylltu yng Nghymru, mae'r ddau cymryd yn gyffrifedig, a'r ddefnyddio'r ddau'r ddau, felly mae'r ddau'r ddau'r cyffredig. Dydag, mae'n ddau'r ddau'r ddau'r ddau'r ddau. Y c Honestly is how this market works… We often think about the market in very simple terms that there's the patent owner, they've got their drug, they've got a monopoly and then the patent goes and everyone flows into the market and the price crashes and it becomes a commodity product. That's kind of our simplified view of it and that's what we often talk about in the patent scope when we look at preliminary enjunction cases. It's not always quite like that, if you auch a generic company… Yes, you can make a bit of money like that, but you can make a hell of a lot more money if you are the only generic company to come into the market rather than one of many, many ones. Teva, and I always forget it, Teva used the term first and alone. They want to be first and alone, the first and alone generic company. I'm afraid I always think of Chesney Hawks with that. Those are the right vintage and maybe Professor Bentley can tell me why I think of Chesney Hawks with first and alone. I was checking your paying attention. The one song, his one famous song being one and only. So if the competition stuff too much, just remember Chesney Hawks, one and only, that's what actually most generic companies want. They want to be the one and only generic company in the market because then they can make some real money. But what are the competition topics we're looking at? Well, I bucketed them to three real types. The patented drugs where there's settlements, pay for delay. There's other patented drugs issues which are discounts and then some other related issues. And then there's the off-patented drugs where we see price rises or the price gouging cases. And they're really quite different, but they often get merged again, particularly if you're an IP lawyer and don't like competition law. It's all kind of competition-y stuff, but I'm trying to split them into these three buckets. Starting off with the settlements, that's what gets people very excited, that gets the headlines. It's got pretty boring now, to be honest, although all the cases are coming through. I'm not sure we're getting very many surprises. The pharma sector inquiry was in 2008, 2009. And that was with a great fanfare and all the outrageous things that pharmaceutical companies were doing like having a toolkit and life cycle management. All these things that everyone had talked about at conferences very openly for dozens of years, but were suddenly secret things that had been found out by the commission. That came down in the final report in the pharma sector inquiry and one of the big issues that was still seen as outstanding was pay for delay settlements. And the way that you described that is a generic company threatens to launch and then settles with the innovator paying them a very large sum of money. And if that wasn't part of a pharmaceutical patented market, I don't think anyone would see a surprise that that was anti-competitive. I would like to launch a new market. Here's a large packet of money to not launch in my market. Okay, that'll do. You kind of understand why that might be seen as anti-competitive. These cases really then dried up pretty quickly. The commission put in monitoring so they had to be notified every year and we rapidly saw those kind of cases falling away. And if we look at the three judgments that are coming up, we've got Surveyor generics and Generics UK, which is just, we've had the judgment and Lundbeck. All of those were conduct in the early to mid 2000s. It's all pretty old conduct. Yes, we're 2020. That's just a reflection of how fast competition law tends to work. We have had the judgment of the court just before Brexit from the CJAEU on the 30th of January. And that was a pretty clear statement that that kind of reverse payment is typically going to be anti-competitive. There were some wonderful blogs with those involved in the casing. No, no, it doesn't really say that. But if you read it, it's pretty clear that's what it says. If it's a very large payment, if there's no explanation beyond payment to keep off the market, then it's going to be regarded as anti-competitive. And it's a long judgment because it goes through all the very clever arguments the lawyers have come up with to say, well, it's scope of the patent or it's this or that. Most of those have been rejected pretty clearly and that was following the Advocate General's opinion. We do have this week another Advocate General's opinion coming out in the Lundbeck case. It's the same Advocate General. So I don't want to bet on what the outcome will be, but I can't imagine it's going to be a complete reverse turn. And then at some point we'll get the survey judgment. None of those cases really tell us, I think, very much new. And the question was, should this conduct be regarded as anti-competitive? The US Supreme Court a few years ago told us, well, it's a rule of reason. We need to look at the facts. We are looking at the facts, but these aren't particularly good facts in most of these cases. So it's hot because it's coming out new, but I don't think we're learning very much new about these ones. The more interesting ones, I think, are those in the US at the moment. I've mentioned one and I've got another one to talk about. Baltimore and Abbey is quite interesting because that's a challenge to Abbey's conduct in trying to restrict entry of competitors for Humira. Humira was the world's biggest, most profitable drug for a number of years, and so big money involved. Lots of the stuff is what you would expect in the normal case. What is, I think, interesting is there have been a number of settlements with Humira where entry was allowed in Europe now, effectively, but not for a number of years in the US. And these competition cases, among other things, are challenging that and saying doing a settlement where you allow differential entries in different jurisdictions is anti-competitive. That's interesting because that's what most people are doing. In the light of the, you cannot pay people to not enter, then a lot of people have been crafting jurisdiction by jurisdiction entries. I think most people think those are not anti-competitive, but we've got a real challenge in the US saying, well, we are anti-competitive if you do this. So I think that's a case to watch because that maybe means that a lot of the settlements that we're doing now might be at risk if that succeeds. I don't think it will, I don't think it should, but if that succeeds, then some of the current approaches we think are okay, may not be okay. The other one I think is interesting is Staley and Gilead. I read a dismissal judgment this week. And in that case, particularly if, again, there's lots of parts of it, the interesting piece I think is in relation to a settlement agreement between Gilead and Teva, which had most favourite entry and most favourite entry plus clauses. And most favourite entry said, we will give you as good a date for entries as anyone else. So we're not going to let anyone else come in the market before you can. So if we settle with other generic companies, they can come in the same date. Most favourite entry plus said, you know what, we will let you enter first. We won't let any others enter until at least six weeks after you in one case, or six months after you in another case. Gilead sought to get that struck out saying whether this does miss, there's no competition problem here. The court said, well, there might be a competition problem. The most favourite entry may be not a problem because we're just ensuring parity with others. Most favourite entry plus where you give Teva the first chance to get into the market, the first and the only one they want, that might be competition. So we don't, again, we don't know quite where that goes. But that's another area where we're prodding the edges of, right, we know pay for delay, straightforward, big payment, that's going to be problematic. But even on allowing early entry, if it's jurisdiction by jurisdiction, that's being challenged if it is allowing one to enter before others, or possibly even promising we will give you as the most favourite nation type that may be problematic. So as a settlement case, that's why I say I don't think they are really so exciting, but there is more interesting developments in the U.S. And the U.S. also led the way with pay for delay. We saw that happen in the U.S. significantly before we saw it happen in Europe. Right, what about other cases? As you can probably tell by the fact I'm speaking too quickly, I grew up in Scotland. And as many of you will know in Scots criminal law, there's three potential pleas you can give if you're accused of a crime. Which are obviously guilty, not guilty, and a big boy did it and ran away. And those lead to the formal legal conclusions of not guilty, guilty or not proven. The first two of these cases I put in the not proven category. So in both of them, the competition markets authority in the UK investigated discount schemes. So where discount schemes are being put in place by a pharmaceutical company, with the goal of restricting competition, so it would say the CMA. In both those cases, the CMA checked and I haven't said, well actually we're not going to make a finding. In both those cases it's enter nasty letters saying, but don't do it again. Renwickade, we get a bit more because we've got a very detailed no grounds for action decision. We know a lot less about the first case. But there is a nervousness about how discounts work. But particularly the Renwickade case is quite interesting because the CMA's decision says, well they tried to use discounts to block entry, but it didn't work. So we're not finding it to, we're not taking action because although they tried to do something we didn't like, in fact it didn't work very well. And I think that rebates and discounts are a really complex area of competition law more generally. These aren't particularly to do with patents or the IP side, although with Renwickade it was about that period of products coming off patent. But there are real complexities if you're thinking about these schemes, basic work, think about getting some advice and make sure you think about getting advice from an external legal counsel not from your economist because otherwise you may end up, your documents go in front of the court which you might not want. The other two cases I think are the quirkier cases. We had the AstraZeneca case some time ago. The two types of conduct being challenged there were AstraZeneca filing for supplementary protection certificates, which Trevor's talked about a bit. But rather than providing the dates on which marketing authorisations were granted in some countries providing the dates on which the product was price approved or reimbursement approved. And the criticism seems to be that AstraZeneca, when they did that, didn't say that's what they were doing. They just provided the date in the form and didn't say we think we're entitled to use the date of pricing and the price of date of reimbursement rather than the date of authorisation. That went through the courts and the courts later decided you couldn't use the date of authorisation but it was fine not to be anti competitive to try to do it. That always seemed to be quite an extreme case because even if you think that was trying to push the limits of the law it seems a bit difficult to see why that is actually anti competitive. And there was a lot of concern among the IP world about what's it's going to lead to. What it's going to lead to was the Pfizer case. The Pfizer case, Pfizer had screwed up and had failed to file some SPCs and certain jurisdictions. In those jurisdictions they use a divisional patent then to file the SPCs and the divisional patent. Any IP lawyer looks at that and thinks fine what's wrong with that. Don't see what the problem is. The Italian competition authority investigating said that was anti competitive because you're trying to block competitors. Yes that's what patents and SPCs do. There's nothing very weird about that. Went up an appeal, the appeal court said rubbish, nonsense, this is not anti competitive. Hallelujah we've got some sense. Went up to the supreme administrative court who then said no no no the authority got it right. That's anti competitive. Really really hard I think for any IP lawyer to understand where the problem is there. Even trying to say I'm not an IP lawyer I think competition law. But that's challenging and I think we still have some challenges there particularly with national competition authorities who can take a very strong view of a case, think the conduct is wrong and therefore go after it. And then we turn to our third bucket where we've got completely off patent drugs. I think these are some of the most damaging cases for the pharmaceutical industry and they're not being done by innovators in large part. Although you'll notice Pfizer up at the top on this. They're generally not being done by the innovators but the innovators get tarnished by these cases coming through. We talk a little bit about the Pfizer case. The Pfizer-Finn case was about a very old epilepsy drug called phenatoin which Pfizer so does eponaten. Price had gone to next to nothing in the UK market. Pfizer weren't particularly interested in it. Flynn came along and said to Pfizer you know what we'll buy that drug off you. And we can put the price up. Because actually there's not much of a competitive market for that. We can put the price up on that. You might not want to put the price up because it's part of your basket of goods and you might not want the sort of response from the authorities if you put the price up. But no one knows who we are. We'll whack the price up. The documents and the decision are fascinating on that. And that's what happened. Flynn bought the drug off Pfizer in the UK. Whacked the price up massively. NHS got very upset. CMA investigated. CMA found a competitive conduct both by Pfizer and Flynn. Pfizer were still producing the same drug from the same factory. It still had the name eponaten on the individual drugs because it really was the same factory. But Pfizer were charging Flynn far, far, far more than they'd been charging the public. And then Flynn were putting their own mark on it. So there was two stages. There was clearly an agreement there. So article 101 going back to our basics of competition law. But the CMA went after it as an article 102 problem saying this was a dominant position. And that there had been abuse of that dominant position. And they went after it very strongly. They said this is clearly terrible conduct. But they really tried to push some points about market definition and also about how much of a high price becomes an abusive price. And they said for a generic product abusive price is really not very much over cost price. If it's very much more than cost price then that itself is going to tell you it's abusive. That's not consistent with most case law on abusive pricing. That would really push things forward. But it wasn't a great facts case. I think anyone looking at that and looking at the documents that came out in particular about why it was being done. Not a good facts case. CMA was challenged before the competition appeal tribunal. Competition appeal tribunal said all very well it's a bad case. We should be applying the law and the law doesn't say that that is an excessive pricing. That's not the test for excessive pricing. Please CMA look at it again. CMA didn't say fair enough we'll look at it again and try and find a more normal way of dealing with it. It has appealed before the Court of Appeal and super-helpfully the judgement comes out on Monday. So I can't tell you what the judgement was going to be. I've not seen it and if I see that I wouldn't be able to tell you. But it feels like it'll go one of two ways. Does the Court of Appeal think this is really bad conduct? We should be allowing this bad conduct to be taken out. So the bad facts piece in which case the Court of Appeal may reinstate what the CMA did or something along those lines. Or does the Court of Appeal take the view that this is important that we have the framework right? Therefore we follow the competition appeal tribunal and say this needs to go back to be done properly. You can't short-circ it just because it's a bad facts case. You can't short-circ it the law. I would think and hope the Court of Appeal will do the latter. But we'll find out on Monday because I'm not going to put it more than that. Then there's a whole slew of other CMA investigations in this. And this is not a surprise. If you do any googling on this you will find the NHS published long lists of these long-off patent products where there have been price spikes. So this has been known for years. The prices go up. Why are the prices going up? Because it's generic and anyone can compete. Well the problem with lots of generic competition is the price spirals down and down and down and down until it hits cost level more or less. And then people say well I can produce this drug and make next nothing on it or I could produce some other drug and maybe make a bit more on it. So people start dropping out and dropping out. And then eventually one generic company looks around and says no one else is making this drug. Let's put the price up. Like you would expect to happen in a competitive market. What is a competitive market then? Other people say they're making money from that. That's a bit interesting. I'll start entering the market. And that's exactly what we do see but that takes time. And in that time the price goes up and up and up. And we've seen that there was a decision in the North Tryptoline case today. This is the third one from the bottom. That came out this week. That was a product that was first marketed in 1963. Patents, IP, nothing to do with any of it. Last year, in 2018, the most recent figures we've got the NHS prescription data for, the sales to the NHS were £3.5 million. On roughly the same volume in 2014 and 2015 it was £27 million and £32 million. For a very long off patent drug where the price had shot up to that level. How did it shot up to that level? What the CMA tells us is that it shot up to that level because there had been a cartel, there had been a conspiracy between the first player in the market who was pushing the price up and someone else who was coming on the market saying, okay guys, you can supply some of that, we'll supply some of this. So there had been a price agreement that way. And then as more came onto the market there had been information sharing about what was happening and where. So removing uncertainty, removing competition from the market in that way. And those are the kind of two lines of attack to that kind of conduct. So one could say, a very kind of Chicago school competition lawyer would say, there's no problem here, this is precisely how the market should work. The price shoots up, that's a competitive signal for someone else to come in, they come in and sort it out. And these are just little bumps in the way. The NHS doesn't take the same view saying suddenly why the hell am I paying $30 million for something that should be costing me $3 million? There's something wrong here. What might be wrong here? Well there may be a dominant position being abused but that gets to difficult questions about what is excess pricing and that's why the Pfizer-Flin case matters so much to find out what the test is for abusive pricing. Or on the easier line of attack for the competition authorities is to say, well that might be the case but if you start entering into agreements with the people who are trying to come in, then you're playing with a competitive framework. And that is not dissimilar to the pay for delay because there's only one or two competitors at any one time to see if we can pay them off. That's the legal theory, that is an easier legal theory to do if the facts support it. But that doesn't give you an answer in all circumstances which I think is why we're seeing a push to try to get a 102 remedy in and an excessive pricing remedy in for these cases. But I think it's really important particularly from an innovator side of the industries these are nothing to do with innovators by and large. These are all drugs but they very much get bundled together. I heard a very good competition lawyer talking about these cases earlier this week and he described all these as pay for delay cases. And to some extent they are but they're nothing to do with patterns. They're nothing to do with IP so the problem that's arising in these price gouging cases is a market structural and regulatory problem. It is not an IP problem. And in that attempt at a positive note I will wrap up and leave time for questions if there are. Hello to the audience.