CAT dismisses claim for interim relief in Phenytoin challenge

20 Jan 2017

The Competition Appeal Tribunal (Peter Freeman QC) has rejected an urgent application by Flynn Pharma for interim relief against the CMA’s decision that Flynn should reduce its prices of Phenytoin capsules with effect from Monday.  The Directions form part of the CMA’s decision of 7 December 2016 in which it found that Flynn’s prices (and those of its supplier Pfizer) were excessive.  Flynn and Pfizer both intend to appeal against the CMA’s Decision.

Flynn brought an application for interim relief to prevent the Directions from taking effect until its appeal had been resolved.   Flynn argued that the Directions would cause it serious and irreparable harm including financial losses, a potentially permanent effect on market prices and changes to the organisation of its business.  Flynn offered a cross undertaking to protect the NHS against financial losses which interim relief would cause.  The CMA opposed the application and the Department of Health intervened in support of the CMA.

The Tribunal found that the grant of interim relief would take funds out of the NHS which would otherwise be used to treat patients in need of care in the period pending the appeal.  This would cause irreversible harm to the patients in question.  The Tribunal found that this non-financial harm was detrimental to the public interest, and was the very harm which the Decision was intended to prevent.  The Tribunal ruled that this outweighed any harm which the Directions would cause to Flynn.  It also identified difficulties in applying the cross undertaking which Flynn had proposed.

The application is the first to be decided under the new rule 24 of the Tribunal’s Rules of 2015 which the Tribunal found establishes a new jurisdictional threshold for interim orders.

The judgment can be found here.

Ronit Kreisberger acted for Flynn Pharma.

Rob Williams acted for the CMA.

Brendan McGurk acted for the Department of Health.