With the UK’s Patents Court Guide formalising the practice of notifying the National Health Service (NHS) when parties seek an injunction for an approved medicine or device, innovator drug companies say they are unconcerned by the development.
The update, which was introduced in April 2019, automatically includes the NHS in any cross undertakings on the basis that single payer health authorities can lose money if a generic product is unfairly kept off the market. Parties have notified health authorities in the past when requesting an injunction, but the update reinforces this procedure.
But despite the risk of having to pay damages to both health authorities and the generic drug manufacturer should an injunction be used and the patent later to be found valid, innovator companies say their strategies have not changed.
“I don’t think people are worried about this and it has been around for a while. I also don’t really see the NHS intervening; but we’ll have to see,” says the assistant general counsel of a European pharma innovator company. “This is only a big deal if the NHS bothers to intervene and past experience shows they are not keen to press for damages.”
The IP director at a UK-based pharma innovator agrees, and says that the update will only be one factor among many that innovators might consider when they are deciding whether or not to seek an injunction against a generics company.
“This won’t make innovators worry or massively change their way, but if they have a case and are thinking about suing a generic company there will be lots of reasons they do or don’t move forward. If there are 10 considerations an innovator asks themselves before seeking an injunction, this might be the 11th,” he says.
It would potentially only be worth the NHS’s time to seek damages against an innovator if they incurred significant losses due to an injunction because there are relatively few high-earning blockbuster drugs on the market.
“It would have to be more than just a simple win for generics for the NHS to take a step,” says the IP director. “There would have to be some demonstration the innovator was aggressive, and this is seldom the case.”
Unless the drug is a blockbuster, the NHS will make an economic consideration of whether it believes it will lose more by pursuing damages than it could win.
“This will only be a problem for innovators if they do something really naughty,” says the IP director.
One reason few pharma companies are worried about the risk of paying damages to two parties is that injunctions against generic companies remain a powerful tool. Because infringement and validity cases can take years in court before reaching a ruling, generic companies stand the risk of paying out massive damages.
Unless there is a substantial likelihood of the courts finding a patent to be invalid, few generic companies will take the risk of launching a new product without first clearing the way.
“From the generics’ point of view, there is a danger in the injunction process, because it is generally going to be a cash positive thing for an innovator to apply and obtain an injunction,” says Tomos Shillingford, associate general counsel of IP at Insud Pharma in the UK.
Keeping it clean
Sources in the generics industry say they see the update to the Patents Court Guide as a positive development because it will hold the industry accountable to all parties.
“What has happened is you are seeing the state starting to get involved. It is right in principle that third parties claim all their losses, and they should be put back in the position they would have been without the injunction,” says Shillingford.
“There are instances when injunctions have been reasonable, but on occasion it does happen that companies go for injunctions that are not warranted. Any system that disincentives abuse of the system is a good thing.”
An industry source from a Europe-based generic drugs company agrees, and believes the added risk of paying out twice might make the innovators rethink their tactics before seeking an injunction.
“Even if you have to pay out to the generic, which would be fair, it is still going to be worth going for the injunction. But if you have to pay out to the government as well it does give you pause for thought. All benefits are neutralised if you have to pay for both the generic and the government.” he says.
Toni Santamaria, patent attorney for UK-based generic company Accord Healthcare, says the recent update is unlikely to embolden generic companies to litigate against innovators.
“From our perspective at Accord Healthcare, this decision is unlikely to have a major impact on our litigation activities. We will continue to strive to bring affordable medicines to patients by litigating patents that we consider should never have been granted. It also remains to be seen how willing the NHS will be to actively engage in the process,” he says.
Show me the money
The NHS has been known to pursue damages against innovator drug companies for keeping cheaper generic drugs off the market. In 2011, the NHS sued Servier Laboratories, a French firm, for £220 million for allegedly delaying generic drug companies from releasing a blood pressure medication.
In a more high profile case, Pfizer could now owe the NHS half a billion pounds as a result of losing its appeal in the UK Supreme Court’s decision of Warner Lambert v Generics.
Despite the risks involved, Shillingford tells Patent Strategy that the updates to the Patent Guide are not particularly worth worrying about as the risk of being sued for damages by government authorities has been a known risk for some time.
“I would be surprised if anyone was terrified about this, in general it should be seen as a positive development. In reality, it is not a terrifying situation and it will focus the mind as to whether an injunction is warranted, which is not a bad thing,” he says.
The innovator IP director agrees the notification system is a positive development if it keeps some companies from improperly seeking an injunction.
