Good news for patentees? An update on pharma PIs in the UK

A recent case was brought before the High Court concerning Glenmark's alleged imminent infringement of AstraZeneca's patent covering its dapagliflozin product. Not dissimilar to the rivaroxaban preliminary injunctions heard last year, this case involved an initial injunction request made while a revocation action between the parties was pending: very shortly before trial in this instance. The application was heard on the 27 March 2025 and a decision refusing the PI was handed down on the 28 March 2025. 

The first instance decision was relatively straightforward - an application of American Cyanamid to the facts, with the second step (considering the adequacy of damages to the patentee) being a gateway. The result, however, was somewhat unusual in a small molecule pharma case. Judge Tappin found that the damage to the patentee was quantifiable - an adequate remedy that need not be perfect - and therefore refused the PI without the need to consider the adequacy of damages to Glenmark/ the NHS or the balance of convenience. This finding appears to have been driven by the fact that the relevant period for consideration was short (6-8 weeks until the form of order hearing); AZ having submitted that it had no clear plan whether it would seek further injunctive relief if we were unsuccessful at first instance in the merits case. The Judge considered it unlikely that there would be a price spiral in that time. There was no evidence to support a multiple generic launch, although the Judge did hold that "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.". Despite that, he considered that any generics that launched would keep prices high to protect themselves against damages liability, and that AZ would likely maintain or be able to reinstate its price. He also found that AZ would make little or no changes to its supply chain in the short period in question. It was also noteworthy that AZ was entitled to security for damages, which included Glenmark providing an undertaking to pay an estimate of a profit per pack into a separate bank account for each pack sold between the injunction being refused and the formal order hearing.

Permission to appeal was refused by the first instance judge, but granted by the Court of Appeal on the basis that the well-established principles had recently been questioned, because the application itself was rather unusual, and because the situation was an evolving one. The appeal was expedited to be heard on 9 April 2025 and Lord Justice Arnold handed down the leading judgment shortly thereafter on 16 April 2025. As demonstrated also in the rivaroxaban matter, the UK Courts are willing to move fast in these cases.

Lord Justice Arnold made very clear that the court should apply the guidelines laid down in American Cyanamid, but also that "when the court is in doubt as to the adequacy of the respective remedies in damages" for either side, it should "take into account all of the relevant factors in deciding what cause is least likely to cause immediate prejudice to the one party or other.". He made clear that the judge at first instance was "wrong to discount the fact that Glenmark sought to launch its product in the middle of trial and without waiting for judgment when considering whether to preserve the status quo". Glenmark was "jumping the gun", and was behaving in a way that attempted to gain a commercial advantage rather than allowing the orderly resolution of the case. Such matters are arguably irrelevant when a gated approach to American Cyanamid is applied and damages to the patentee are adequate; so it seems that the key issue is whether there is sufficient doubt that damages would be an adequate remedy to the patentee.

Lord Justice Arnold made clear that PIs are more likely in pharma cases for three reasons:

1. Entry by one generic company is often but not always followed by entry of others resulting in a downward price spiral and re-categorisation of the product in the drug tariff. This goes to the adequacy of damages.
2. NHS resistance means that it is practically difficult for the patentee to restore its price, and doing so would lead to a loss of goodwill which patentees consider unacceptable. Again, this goes to the adequacy of damages.
3. Launch of a pharmaceutical requires an MA, which means launches planned some time in advance. It is therefore proper to consider that the generic company could have cleared the pass by bringing revocation actions in advance, failing which the status quo may be maintained. Such considerations play into the balance of convenience.

AZs appeal was principally one against an exercise of discretion. In normal circumstances the Court of Appeal could only intervene on limited grounds. However, additional evidence that was available to the Court of Appeal "inevitably tempers the degree of deference" that the court gave to the assessments of the first instance judge. In particular, the Court of Appeal was swayed by evidence suggesting that at least two further generics would launch before the form of order hearing. On that basis, Lord Justice Arnold suggested that it followed that it was inevitable that there would be a price spiral.

In considering that AZ's damage was unquantifiable, Lord justice Arnold's view of the original evidence (read in light of the new evidence making at least 3 generic launches a certainty) was that a price spiral was likely, AZ may have to reduce the price, and that it may not be able to raise it again. Perhaps most interesting is the judge's view that the status quo at the time of the form of order hearing forms part of the adequacy of damages step (as opposed to the balance of convenience step). 

Stepping through the remaining limbs of the test Arnold LJ held that there was real doubt as to the adequacy of damages not just for AZ but also for Glenmark and the NHS, and that it was therefore prudent to maintain the status quo until the form of order hearing. He made clear that this does not dictate the outcome of an application made by AZ at that time for further injunctive relief pending appeal. 

In short, small molecule pharma PIs remain very much on the table.

While the real impact of the judgment remains to be seen, it rather supports that, given the right case, the Supreme Court may be interested to weigh in on whether American Cyanamid is the right test, and if so whether it should be gated or holistically applied. In the meantime, this decision makes clear that the courts are likely to consider the effect of any change in the status quo down the line as part of the analysis of the adequacy of damages to patentees; and will consider the balance of convenience where there is any doubt as to the adequacy of those damages.