In a major victory for the NHS, the High Court in London ruled on 21 February 2022 against attempts by French pharmaceutical giant Servier to limit damages it owes for serious infringements of competition law in the sale and supply of a widely prescribed blood pressure drug.

The 109-page judgment by Mr Justice Roth is a key milestone in the 11 year dispute between Servier and the Secretary of State for Health and Social Care and the English, Welsh, Scottish and Northern Irish health authorities .

Servier has already been found by the European Commission and General Court to have committed a very serious breach of competition law by agreeing to delay market entry of a generic version of their drug perindopril. (brand name Coversyl)

Now – to the unease and astonishment of many legal observers – Servier were arguing that damages to the NHS should be reduced because the NHS should have taken steps to avoid purchasing their more expensive product.

Mr Justice Roth found that this argument could not succeed, noting that:

“…a disinterested observer might find it surprising that such arguments would, or could, be advanced by a defendant found to have committed a very serious infringement of competition law”

The Judge added that Servier was now having to deny responsibility for some of the key claims it made at the time to doctors about perindopril, which Servier’s own expert witness called “not remotely justified”, “fake science” and “misleading”.

The final judgment in the European proceedings is expected later this year.

Jonathan Tickner, Head of Fraud and Commercial Disputes at specialist disputes law firm Peters & Peters, said:  “This is major victory for the NHS. Having already lost hundreds of millions of pounds because of Servier’s unlawful behaviour, the health service will now be able to avoid being dragged into further expensive and time-consuming arguments by the pharma company. This is a relief at a time when most would agree the NHS is quite stretched enough.”

In depth

The long-running case is entitled The Secretary of State for Health and Another  -v – Servier Laboratories Limited and Others. Jonathan Tickner and Emma Ruane of Peters & Peters acted for the first claimants, the Secretary of State for Health and Social Care and the NHS Business Services Authority.

This case is of enormous public interest. The Lawyer magazine named the case one of the top 20 cases of 2019 and 2021.

This is an important decision in the long running proceedings brought by the Claimants, the Secretary of State for Health and Social Care and the NHS Business Services Authority.

The claims allege serious misconduct by a large multinational pharmaceutical group (Servier) in respect of the sale and supply of a blood pressure lowering “blockbuster drug”, perindopril, to the NHS. The case is highly topical given that it covers the interaction of reverse payment settlement agreements and the intersection between Competition and Intellectual Property law.

The Claimants seek damages in excess of GBP £250 million for breaches of EU and UK competition rules on the basis that Servier entered into “pay-for delay” (or reverse patent settlement) agreements. The European Commission has already found that Servier has committed a very serious infringement of competition law.

The 109-page judgment handed down on 22 February is an important decision on a defence run by Servier that the NHS should have avoided the losses it claims by encouraging doctors and clinicians not to prescribe Servier’s own product (Coversyl) which Servier was actively seeking to promote to those clinicians at the time. Servier’s “Prescribing Argument” went even further and contended that the failure by the NHS to take steps to discourage clinicians to prescribe Perindopril was the sole effective cause of the Claimants’ loss.

The Judge made an important point and noted that: “a disinterested observer might find it surprising that such arguments would, or could, be advanced by a defendant found to have committed a very serious infringement of competition law”. The Judge also noted that Servier was in the position of having to deny responsibility for some of the important claims it made at the time to doctors for perindopril, and where its own expert variously described some of those claims as “not remotely justified”, “fake science” and “misleading”.

These claims are claims in competition law. As the Judge noted, “the purpose of competition law is to protect consumers and the economy generally from the consequences of anti-competitive conduct, of which the most notable example is the artificial maintenance of higher prices than would occur under competitive conditions”.

The claims allege serious misconduct by a large multinational pharmaceutical group (Servier) in respect of the sale and supply of a blood pressure lowering “blockbuster drug”, perindopril, to the NHS. The case is highly topical given that it covers the interaction of reverse payment settlement agreements and the intersection between Competition and Intellectual Property law.

The Claimants seek damages in excess of GBP £250 million for breaches of EU and UK competition rules on the basis that Servier entered into “pay-for delay” (or reverse patent settlement) agreements.

Whilst the civil case was issued in 2011, the English Court has been unable to progress the proceedings in a substantive way  because of the existence of parallel proceedings brought by the European Commission. In July 2014, the European Commission decided that Servier had entered into anti-competitive agreements with generic manufacturers and had abused their dominant position in the market for perindopril. Servier appealed the Commission’s decision and the General Court handed down that appeal in December 2018. Both Servier and the Commission have appealed to the European Court of Justice. The determination of these appeals is anticipated in 2022.

Although the English Court is prevented from taking any decision which may run counter to the judgment of the European Courts, the assigned judge, Mr Justice Roth, ordered the trial of certain preliminary issues which should be capable of resolution in advance of the main trial and notwithstanding the appeal to the Court of Justice.  The preliminary issues trial was heard in June and July 2021.

The judge said: “Unless Servier can show that the Claimants, at least to some extent, failed unreasonably to observe clear standards in the provision of medicines management which applied at the time, then given Servier’s efforts not only to persuade clinicians to prescribe perindopril but to forestall any initiatives by PCTs and Health Boards to dissuade them from prescribing perindopril, I consider that it would not be fair or reasonable or just to reduce by reason of Servier’s prescribing argument the amount which the Claimants would otherwise recover for purchasing perindopril at the higher prices which resulted from Servier’s actions to delay generic entry. Far from finding that there was such a failure to do what was reasonably required, I found that the evidence from all four nations demonstrated a considered and thoughtful effort to apply the evolving approach of medicines management to promote more cost-effective prescribing, within the limits of their resources and taking account of national and local considerations and priorities.”