Commonwealth fails in $325 million Recovery Bid

– – On the evidence, it was unlikely that Apotex would have continued to supply after the first instance decision was handed down due to exposure to damages, so the likely scenario was that Apotex would de-list the Apotex Product and cease supply until the determination of the appeal, rather than simply continuing to supply. –– The Commonwealth would have likely exercised its power to reverse the automatic price reduction of 12.5% caused by the initial listing of the Apotex Product (thereby reducing the damage suffered by the Commonwealth) once Apotex de-listed, because this power had been exercised by the Commonwealth in similar circumstances previously. –– The Commonwealth did not need to show that no other generics listed on the PBS as a direct result of the interlocutory injunction (rather than the patent proceeding), because even if other generics were deterred for other reasons, it does not follow that the Commonwealth did not suffer loss as a result of Apotex not being listed before them. – – The Commonwealth was “adversely affected” by the interlocutory injunction . –– None of the discretionary factors raised by Sanofi were sufficient to deny the Commonwealth’s claim for compensation . The delay in the Commonwealth notifying Sanofi that it would make a claim was explained; that the supply of the PI for the Apotex Products would have constituted an infringement of Sanofi’s copyright in its PI was irrelevant when the evidence showed that Sanofi would never have pursued Apotex for copyright infringement in its PI; it was not established that the manufacture of Apotex Products in Canada would have infringed a valid claim of the Canadian patent; and no further public interest considerations arose. –– To determine quantum, it was necessary to identify the market share that the Apotex Product would have achieved . Nicholas J preferred the “backdated actual market share” approach to calculating market share which was based on actual sales figures in the post injunction period, over the “bottom up” approach which was based on an analysis of the clopidogrel market during the injunction period.

listing (if it had been filed) even though the pending litigation may have ultimately restrained Apotex’s ability to supply product in the future. The Minister would have taken Apotex’s assurance of supply (provided in the application process) on face value, and noted the absence of an interlocutory injunction restraining the supply. –– The appropriate hypothetical scenario was that the interlocutory injunction had been refused, and that the opportunity for Sanofi to obtain an interlocutory injunction was foreclosed, and not (as Sanofi contended) that Sanofi had not made an application for an interlocutory injunction but may yet do so. –– The Commonwealth’s loss was not directly caused by the interlocutory injunction because PBS listing was not an act of infringement covered by the interlocutory injunction. While the practical effect of the interlocutory injunction was that Apotex could not obtain PBS listing (because it could not guarantee supply), the Commonwealth’s loss did not directly flow from the interlocutory injunction. The Commonwealth’s loss was a direct consequence of Apotex not being able to list on the PBS and that was a consequence of the Apotex First Undertaking, which stopped Apotex from listing its products on the PBS. As noted above Apotex’s undertaking was volunteered and Sanofi did not provide an undertaking as to damages in return. If the interlocutory injunction hadn’t been granted, the Apotex First Undertaking wouldn’t have been given and there would have been no restraint in place to stop the PBS listing application. However, the terms of the injunction itself did not explicitly or implicitly prevent Apotex from applying for a listing, and did not directly affect the legal rights, obligations or interests of the Commonwealth. The loss suffered by the Commonwealth was a result of Apotex not securing registration for the Apotex Product on the PBS from 1 April 2008. That was not a loss that flowed directly from the interlocutory injunction, but was the direct and immediate consequence of the Apotex First Undertaking. –– The Commonwealth’s loss was reasonably foreseeable, as Sanofi was aware of and understood the various price reduction mechanisms provided in the PBS scheme. The fact that the Commonwealth had not sought compensation of this nature in previous proceedings did not indicate that the loss itself was not foreseeable. – – The appropriate hypothetical scenario for assessing damages was how things would have turned out if the relevant event (i.e. interlocutory injunction) was removed from the equation. Other real world facts such as the timing of trial, final judgment or findings made are not assumed away.

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