DISPUTES IN THE HEALTHCARE AND LIFE SCIENCES INDUSTRY
CD: What types of dispute are commonly taking place in the healthcare and life sciences sector? Furthermore, what do you see as being the underlying cause of the disputes that have taken place in the sector in recent months?
Bell: Innovation is the lifeblood of the life sciences sector. It is the focus of value creation and it is at the heart of the sector’s most significant disputes. Three types of these disputes tend to dominate life sciences: patent infringement issues, antitrust issues involving patent settlement agreements, and collaboration concerns. Patent disputes have been and remain a constant in the sector. Patent issues are likely to attain an even higher profile as large-molecule products, or biologics, mature and biosimilars begin to come to market. Biologics tend to be supported by a large portfolio of patents and operate under a fundamentally different regulatory regime than small-molecule products. Unlike conventional pharmaceuticals, there’s no direct equivalent to the US ‘Orange Book’, which might make for a burdensome process to identify relevant patents. As the marketplace for biosimilars evolves, many of the more familiar metrics used in patent disputes – such as the rate of substitution and price differentials – are expected to be of little use. Interest in patent settlement deals remains high. These issues go to the very heart of dispute resolution and the ability of parties to resolve patent disagreements without the burden of litigation. The Supreme Court’s Actavis decision suggests a ‘rule of reason’ approach to the valuation of patent settlement agreements and the potential for anti-competitive harm. As a result, we expect there to be continued litigation regarding the potential for anti-competitive behaviour in association with patent settlements and the related entry of generic and eventually biosimilar products.
Apr-Jun 2016 issue
Charles River Associates; Epstein Becker & Green
Novartis Pharma AG
Stevens & Bolton LLP