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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Astrazeneca AB & Anor v Glenmark Pharmaceuticals Europe Ltd [2025] EWCA Civ 480 (16 April 2025) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2025/480.html Cite as: [2025] EWCA Civ 480 |
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ON APPEAL FROM THE HIGH COURT OF JUSTICE, BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES, INTELLECTUAL PROPERTY LIST (ChD), PATENTS COURT
Michael Tappin KC sitting as a Deputy High Court Judge
Strand, London, WC2A 2LL |
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B e f o r e :
LORD JUSTICE ARNOLD
and
LORD JUSTICE WARBY
____________________
(1) ASTRAZENECA AB (2) ASTRAZENECA UK LIMITED |
Claimants/Appellants |
|
- and - |
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GLENMARK PHARMACEUTICALS EUROPE LIMITED |
Defendant/Respondent |
____________________
James Abrahams KC (instructed by Powell Gilbert LLP) for the Respondent
Hearing date : 9 April 2025
____________________
Crown Copyright ©
Lord Justice Arnold:
Introduction
Dapagliflozin
The revocation proceedings
The application
AstraZeneca's application to adduce further evidence
The applicable principles
(1) Is there a serious question to be tried (or, in current terminology, does the claimant have a real prospect of success)? If not, no injunction should be granted.
(2) Would damages be an adequate remedy for the claimant for the loss sustained pending trial as a result of the defendant continuing the acts complained of if the claimant were to succeed at trial in establishing its right to a permanent injunction? If they would, and the defendant would be in a financial position to pay those damages, then no injunction should normally be granted.
(3) If not, would damages on the claimant's cross-undertaking be an adequate remedy for the defendant if the defendant were to succeed at trial in establishing its right to do acts which had been enjoined? If they would, and the claimant would be in a financial position to pay those damages, then an injunction should normally be granted.
(4) Where there is doubt as to whether damages would be an adequate remedy for either side or both, where does the balance of convenience lie? This depends on all the circumstances of the case. Where other factors appear to be evenly balanced, it is a counsel of prudence to preserve the status quo. There may be special factors which need to be taken into account.
"In practice, however, it is often hard to tell whether either damages or the cross-undertaking will be an adequate remedy and the court has to engage in trying to predict whether granting or withholding an injunction is more or less likely to cause irremediable prejudice (and to what extent) if it turns out that the injunction should not have been granted or withheld, as the case may be. The basic principle is that the court should take whichever course seems likely to cause the least irremediable prejudice to one party or the other. This is an assessment in which, as Lord Diplock said in the American Cyanamid case [1975] AC 396, 408:
'It would be unwise to attempt even to list all the various matters which may need to be taken into consideration in deciding where the balance lies, let alone to suggest the relative weight to be attached to them.'"
"As the judge noted, when Lord Diplock spoke of damages being an 'adequate' remedy, he was not suggesting that damages must provide a perfect remedy. As the judge also observed, there comes a point where 'damages as a remedy falls so far short of the perfect, that the remedy can no longer be described as adequate'. I agree with this. The boundary between the adequate and the inadequate is not a precise one. It is a matter for judicial evaluation on the evidence in any given case whether or not the boundary is crossed. If it is not crossed in relation to the claimant's loss then, normally, an injunction will not be granted."
"… I would hold that there is a material risk that damages will be an inadequate remedy for each party in the relevant circumstances (for Mylan if no stay is granted but Mylan win the appeal, and for Neurim/Flynn if a stay is granted and Mylan lose the appeal). This is clearly so for Mylan but I believe it is also true for Neurim/Flynn. If Neurim/Flynn win the appeal then there will be a damages enquiry relating to Mylan's patent infringement. The various features of this market and the complexities, actual and potential, are all matters which the Patents Court is familiar with and can handle. The court is well able to conduct a damages enquiry in the circumstances of this market and to arrive at a figure it finds to be just. However that does not mean that damages are an adequate remedy. The uncertainties in this case, relevant to either side, are very significant. In mathematical terms a numerical result can always be found but the error bars will be large. In my judgment the decisive factor here, given that the appeal has been expedited and will be resolved before the patent expires, is the preservation of the status quo. That status quo is that Mylan is on the market and has been since September 2020. The uncertainties do not justify disturbing that state of affairs."
" … Like Birss LJ, I take the view that damages will not necessarily be a fully adequate remedy for Neurim/Flynn should they succeed on the appeal, but it seems to me that the risk of uncompensatable loss to Mylan in the absence of a stay is greater and, perhaps more importantly, that preservation of the status quo favours the grant of a stay."
"The Court of Appeal has emphasised the importance of maintaining the status quo in circumstances such as those of this application. It seems to me that it is all the more important where the period in question is so short. And as I have said, it would change the status quo in respect of any application there may be after judgment is handed down. That has the potential to give rise to significant irreparable harm to Bayer."
"The panel considered that there is a point of law of public importance touching on the question whether the four-stage test outlined by of Lord Diplock in American Cyanamid Co v Ethicon Ltd [1975] AC 396 should be applied in a rigid and strictly sequential manner or whether a more overarching and flexible approach to the issues adumbrated by Lord Diplock would be appropriate - cf. the observations of Lord Goff in R v Secretary of State for Transport ex p. Factortame Ltd (No 2) [1991] 1 AC 603.
The panel decided, however, that permission should not be given in this case. Prominent among the reasons for this decision was the imminence of the trial in the action. …"
The judge's judgment
"Overall, in my view, there is a real risk that one or more generic companies will enter the UK market following Glenmark and before the form of order hearing, though that entry may not be immediate."
"63. More important though is how AZ will respond to that. Dr McGill did not say whether AZ would lower its price in response to a generic price spiral, let alone in response to a single generic entrant. Instead, she merely explained that if AZ chose not to reduce its price it would progressively lose market share as generics entered the market and, once they saturate the market, it would lose virtually all sales for prescriptions by INN, whereas if it did reduce its price it would reduce its profits on branded prescriptions and may see the reduced price impacting its prices in other markets, for instance through reference pricing.
64. Mr Farrant said he did not expect AZ to reduce its list price over the period before the form of order hearing. He gave a number of reasons. First, AZ would have in mind that if the patent was held valid at trial, its market share may be completely restored. Secondly, in the case of a single generic entrant, there would be no price spiral to respond to. Thirdly, to the extent that the whole of the INN prescription market was not satisfied by the generic supply capacity, AZ would retain its profit margin on that segment of the INN market. Fourthly, AZ would retain its profit margin on the branded prescription share of the market. Fifthly, dropping its list price could affect its prices elsewhere through the reference pricing mechanism. Sixthly, because AZ was a member of the VPAG scheme, once the list price had been reduced it was unlikely to be possible to increase it again. While the second reason did not apply if there was a price spiral, all the other reasons did. He added that the apixaban case provided a good example of an originator maintaining its list price while generics entered the market pending a final decision on patent validity.
65. Dr McGill did not respond to that evidence and neither did Mr O'Toole. For the reasons given by Mr Farrant, I think it is highly unlikely that AZ will decrease its list price over the period before the form of order hearing. That is the case whether other generics enter the market causing some degree of price reduction or not."
"67. Further, neither Dr McGill nor Mr O'Toole said that AZ would be likely to change its actual price to wholesalers. Nor did they give evidence that if AZ decided to do so, it would not be possible to reverse the position once generics were removed from the market. Mr Pritchard told me, on instructions, that if AZ wanted to remove a discount it had given to wholesalers, it would need to speak to the NHS first. It was not satisfactory for a point as significant as AZ's ability to change its actual price in the market in such circumstances to be dealt with on instructions during the hearing, but in any event what Mr Pritchard said does not establish that AZ could not remove a discount or that it would face any serious obstacles to doing so.
68. Overall, there is no evidence that AZ would be likely to change its actual price to wholesalers in the period between now and the form of order hearing and no evidence that, if it did change its actual price, it would not be able to reverse that without obstacle."
"101. It will be apparent from what I have said that, had it been necessary to consider stage 4 of the American Cyanamid guidelines, I would have held that the balance of risk of injustice lay against the injunction sought.
102. Mr Pritchard emphasised the importance of maintaining the status quo and referred me to what Birss J said in Neurim v Generics UK [2022] EWCA Civ 370 at [37]. That was a case where Birss LJ regarded the uncertainties on either side as being very significant. Here the uncertainties involved in assessing damages under the cross-undertaking are in my view significantly greater than those involved in assessing damages to AZ. I acknowledge that status quo would favour the grant of an injunction had other factors been evenly balanced but, in my judgment, they are nowhere near being evenly balanced.
103. Mr Pritchard also contended that Glenmark had failed to clear the way in time to launch the product now. However, Glenmark did ask for a January 2025 trial back in January 2024. In my judgment this is not a case in which the fact that Glenmark is ready to launch shortly before the court has managed to produce a judgment on the validity trial is a factor of any significance in the balance of convenience."
AstraZeneca's grounds of appeal
The new evidence and ground 4
i) Teva's position as set out in its solicitors' letter dated 30 March 2025 is that it has had an MA since May 2024, and since December 2024 it has made "significant preparations including securing commitments with wholesalers in the UK for an immediate launch". The letter confirmed that Teva would not dispose of products containing dapagliflozin in the UK prior to the conclusion of the permission to appeal hearing on 31 March 2025. It made the point that, since Teva did not have sight of whether Glenmark was in fact ready to launch its product, Teva contended that it had "first mover advantage". Counsel for AstraZeneca informed us on instructions that Teva was negotiating an agreement not to launch its product prior to the conclusion of the hearing of Glenmark's appeal, in return for a cross-undertaking in damages from AstraZeneca, subject to the qualification that it be able to distribute 175,000 packs of its product to wholesalers in order to match Glenmark.
ii) Another generic company (referred to in argument as "Generic X" since its identity is claimed to be confidential, although it is not hard to work out who it is likely to be) has adopted the same position as Teva. Thus, as Mr Stothers explains, Generic X has also demanded the right to be able to distribute 175,000 packs of its product to wholesalers.
iii) Three generic companies holding MAs for dapagliflozin products had still not replied at all to AstraZeneca's solicitors' letters by 3 April 2025, and one had not replied substantively.
The test on appeal
Ground 1a: adequacy of damages for AstraZeneca
"AstraZeneca will clearly be harmed in the event of early generic entry. The extent of that harm is difficult to quantify for two main reasons. First, as is typically the case whenever generics launch …, a price spiral is likely to occur. Once the NHS becomes accustomed to lower prices, AstraZeneca is unlikely to be able to restore its price even if the generics have to leave the market. I expect that the NHS will be especially resistant to price restoration of dapagliflozin because of the sheer size of the market and volume of prescriptions. This drug alone will account for a sizeable part of the NHS reimbursement budget. Second, and more unusually for a mature product, the demand for dapagliflozin is growing very rapidly and will do so for the foreseeable future as the impact of the 2022 changes to the NICE Guideline continues to flow through the system. This introduces additional uncertainty and will likely mask the true extent of AstraZeneca's harm. I address these and related points below."
"52. Price erosion is … certain to occur in the event of [multiple] generic launch and it will happen rapidly. The only uncertainties are the speed and quantum of that erosion. …
…
54. AstraZeneca will be put in a difficult position. If AstraZeneca chooses not to reduce the price of Forxiga, it will progressively lose market share as generics enter the market and once they saturate the market, AstraZeneca will lose virtually all sales for prescriptions by INN. However, if AstraZeneca does choose to reduce the price of Forxiga, it will reduce its profits from branded prescriptions and may see the reduced price impacting its prices in other markets (for instance through reference pricing).
55. Over time, having grown accustomed to lower prices, the NHS will be highly resistant to the budgetary impact of a return to the original price, even in circumstances where the competitors were subsequently found to be in breach of patent. This is particularly relevant in the circumstances of Forxiga …"
Ground 1b
Ground 2: damage to AstraZeneca after the FOO hearing
"The final point on the status quo is one has to look at one other point that arises is that once a party is on the market (that is the third point in paragraph 27 of [Bayer v Aspire]) it is all the more difficult to come back and ask for an interim injunction. That is an important movement in the status quo, potentially a very valuable one, if it turns out in fact there ought to have been an injunction in a month or two months' time."
Ground 3: adequacy of damages for Glenmark
Ground 1a: clearing the path and status quo
Conclusion
Lord Justice Warby:
Lord Justice Coulson: