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As the COVID-19 pandemic is affecting the lives of thousands of people worldwide, the problem of timely access to affordable medicines has intensified today. Based on past experience of accessing medicines for life-threatening diseases there is a justifiable fear that access to any vaccines and treatments that are eventually developed may be hindered by patents, leading to unaffordable prices. In particular, one of the reasons that typically leads to high prices is strategic patenting employed by pharmaceutical companies. While this practice is currently considered lawful, this article argues that strategic patenting requires a long-overdue intervention by competition authorities and aims to attract their attention to its harmful effects. It maintains that, along with a more immediate negative effect in the form of high drug prices, strategic patenting affects dynamic competition by stifling innovation of both originators and generic companies. The article outlines the current approach to strategic patenting and provides arguments for the intervention of competition law. This, in turn, will open the possibility for competition authorities to investigate this practice and prevent its harmful effect on drug prices and pharmaceutical innovation, for the benefit of consumer welfare.

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The pharmaceutical industry extensively relies on the patent system. It actively lobbies for the strengthening of patent protection of its medical products and the results of its efforts may be found in the majority of bilateral and multilateral agreements, including the TRIPS and the most recent TPPA, augmented by private patent strategies pursued by pharmaceutical companies. However, some recent developments show the emerging tendency of implementing different business models by pharmaceutical companies that may mark the beginning of transformation of this industry. Among these developments is an “Open innovation” model, which has increasingly been followed by some research institutions and pharmaceutical companies aiming at facilitating the creation of new and affordable medicines, as well as providing transparency in order to enhance safety and efficacy of drugs. This article will discuss these two current developments in the pharmaceutical industry, that is, strong IP protection against open innovation.