CAT rules that the NHS is not time-barred from pursuing damages claims against drug manufacturers involved in the citalopram “pay for delay” cartel

21 Jun 2024
George Peretz KC

The Competition Appeal Tribunal today ruled that the NHS is not time-barred from pursuing claims for damages against Lundbeck, the Danish pharmaceutical company, and various manufacturers of generic pharmaceuticals, arising out of the “pay for delay” cartel found by the European Commission.

In 2013, the Commission found that Lundbeck, which held various patents in relation to the manufacture of citalopram, a regularly-prescribed treatment for anxiety and depression, had agreed with generic manufacturers that they would abandon their legal challenges to Lundbeck’s patents and stay out of the market in return for payments equivalent to the amount of profit that those generic companies would have made on successful entry.  The Commission found that those agreements breached EU competition law.  In March 2021 the European Court of Justice gave judgment upholding a ruling of the EU General Court that dismissed the companies’ appeals against the Commission’s decision.

The NHS brought an action for damages arising out of the companies’ breach of competition law in the High Court in 2019, just before the sixth anniversary of the Commission’s decision, and that action was transferred to the CAT in 2021.  It was agreed in the transfer order that the NHS would file a claim form in the CAT setting out the details of its claim, which it did in March 2023 (less than 2 years after the Court of Justice’s ruling).

The companies then claimed that the NHS was out of time, under the six year period set out in the Limitation Act 1980, on the basis that it knew or should have known before the date of the decision that it had a cause of action.  The NHS conceded that point, but relied on a separate limitation period under the CAT’s rules that ran for two years from the date of the Court of Justice’s judgment.  The companies accepted that that separate period could have applied, but argued that the filed claim form could not be regarded as a claim form making a new claim, as it was no more than a step in the transferred proceedings.  They also argued that the NHS was estopped from relying on the separate limitation period.

The CAT held that the claim form did have the legal effect of starting proceedings within the separate limitation period, and that proceedings were therefore brought in time.  It also held that there was no estoppel as alleged by the companies.

The NHS’s claim for damages will now proceed.

George Peretz KC represented the NHS before the CAT: he previously represented the European Commission in its successful defence to the appeals in the EU General Court and Court of Justice.