Debunking the pay for delay myth: pay for delay settlements are no ordinary patent settlements

On 12 February 2016 the Competition and Markets Authority (CMA) issued its first infringement decision concerning so-called pay for delay settlements in the UK pharmaceutical market, imposing a fine of £44.99 million on the branded pharmaceutical company GlaxoSmithKline plc and a number of generic pharmaceutical companies. This article considers the CMA's decision and seeks to debunk arguments that pay for delay agreements are patent settlements that reduce litigation costs, create legal certainty and are also pro-competitive as they allow for early generic entry. It argues that pay for delay agreements are not “normal” patent settlements whose exclusionary power is derived from the validity of the underlying patent and should therefore never be immune from competition law scrutiny.