Servier ‘pay for delay’ litigation: Monckton success for NHS in the Court of Appeal

07 Jul 2023

The Secretary of State for Health & Or v Servier Laboratories Limited & Ors

The Court of Appeal has dismissed an appeal by Servier against a landmark judgment given by the High Court in 2022.

The High Court’s judgment represented a major victory for the NHS in claims which it has brought against Servier for serious infringements of competition law, in relation to the sale and supply of the blood pressure drug perindopril (brand name Coversyl).

Those claims concern actions between 2005 and 2007, in which Servier entered into “pay for delay” agreements with generic drug manufacturers, under which the generics companies agreed not to enter the market for supplying perindopril. The NHS claimants allege that, as a result of Servier’s conduct, they paid hundreds of millions of pounds more for perindopril than they would otherwise have paid, and claim damages for the difference. The question of whether Servier’s conduct infringed competition law is awaiting final determination by the CJEU.

Pending the conclusion of the CJEU proceedings, the High Court judgment dealt with the preliminary issue of whether, as Servier argued, any damages recoverable by the NHS should be reduced as a result of the NHS’s failure to take steps to avoid buying Coversyl, and instead purchase cheaper generic alternatives. Mr Justice Roth rejected Servier’s arguments in their entirety, commenting 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”.

Servier appealed to the Court of Appeal, arguing that Roth J had erred in dismissing all of its case on the preliminary issue without fuller disclosure being given by the NHS claimants.

In a judgment handed down this week, the Court of Appeal unanimously dismissed Servier’s appeal, finding that “Servier’s contentions on this appeal…run entirely counter to the basis on which the [preliminary issue] trial was directed and maintained”.

The Court of Appeal’s judgment represents a further victory for the NHS claimants in this long-running litigation. It is anticipated that a full trial to determine the level of damages due to the NHS claimants will be listed following the conclusion of the European proceedings, in which a final judgment is expected later this year.

The Court of Appeal’s judgment can be found here.

Jon Turner KC and Josh Holmes KC acted for all of the NHS bodies.

Philip Woolfe (instructed by Peters & Peters Solicitors LLP) acted for the English health authorities.

Julian Gregory  (instructed by RPC LLP) acted for the Scottish / NI health authorities.

Laura Elizabeth John and Ciar McAndrew (instructed by Geldards LLP) acted for the Welsh health authorities.