Astrazeneca AB & Anor v Glenmark Pharmaceuticals Europe Limited [2025] EWHC 1339 (Pat)

[2025] EWHC 1339 (Pat)Case No HP-2025-000006; - 000012;-000014; -000015 and -000017
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY LIST (ChD)
PATENTS COURT
Venue The Rolls Building 7 Rolls Buildings, Fetter Lane London EC4A 1NLDate Wednesday, 28 th May 2025
Before
HIS HONOUR JUDGE HACON
Between
(1) ASTRAZENECA ABClaimants(2) ASTRAZENECA UK LIMITEDClaimant
MR. GEOFFREY PRITCHARD KC and MR. THOMAS LUNT (instructed by Freshfields LLP) appeared for ClaimantsMS. ANNA EDWARDS-STUART KC and MR. TIM AUSTEN (instructed by Pinsent Masons LLP) appeared for TevaMR. JEFF CHAPMAN KC and MR. SIMON PAUL (instructed by Pinsent Masons LLP) appeared for SandozMS. KATHRYN PICKARD KC (instructed by Powell Gilbert LLP) appeared for GlenmarkMR. BRIAN NICHOLSON KC (instructed by Taylor Wessing LLP) appeared for Generics (t/a Viatris)
Approved JudgmentIf this Transcript is to be reported or published, there is a requirement to ensure that no reporting restriction will be breached. This is particularly important in relation to any case involving a sexual offence, where the victim is guaranteed lifetime anonymity (Sexual Offences (Amendment) Act 1992), or where an order has been made in relation to a young person.This Transcript is Crown Copyright.  It may not be reproduced in whole or in part other than in accordance with relevant licence or with the express consent of the Authority.  All rights are reserved.Transcript of the Stenograph Notes of Marten Walsh Cherer Ltd.,2 nd Floor, Quality House, 6-9 Quality Court, Chancery Lane, London WC2A 1HP.Telephone No: 020 7067 2900. DX 410 LDEEmail: info@martenwalshcherer.comWeb: www.martenwalshcherer.com
[1]On 28th April 2025, Michael Tappin KC (sitting as a Deputy Judge of the High Court), handed down his judgment following a trial relating to dapagliflozin, a compound used in the treatment of Type-2 diabetes. The sole claimant at the trial was one of the five respondents in the present application, which I refer to as “Glenmark”.[2]The defendants at the trial are the present applicants. The first, AstraZeneca AB, is the owner of two supplementary protection certificates or SPCs covering dapagliflozin. Save for a minor point I will come to, I need not distinguish the applicants and will refer to them collectively as “AZ”.[3]The judge found that the patent on which the SPCs were granted was invalid; consequently, the SPCs were invalid. This was, in effect, a finding that Glenmark could lawfully market its generic dapagliflozin product, subject to any interim order that may be granted pending appeal. AZ have appealed.[4]Another two of the present applicants, which I will call “Teva” and “Viatris”, have brought their own separate actions seeking a declaration that the SPCs are invalid.[5]AZ now seek an interim injunction to restrain Glenmark, Teva, Viatris and two other respondent parties from marketing their dapagliflozin products pending the resolution of the appeal.[6]This is not the first application by AZ for an interim injunction in these proceedings. On 20th February 2025 Glenmark notified AZ that it intended to launch its generic product on about 17th March 2025, which was shortly before the trial.[7]On 28th February 2025 AZ told Glenmark that would apply for an interim injunction to restrain the marketing of Glenmark's product pending the form of order hearing after the trial. AZ issued their application notice on 6th March 2025. Glenmark gave undertakings not to market before the hearing of the interim application and AZ gave cross-undertakings.[8]The application came before the trial judge after the trial had concluded but before judgment had been handed down. The application was heard on 27th March 2025 and a decision on the application given the next day. It was dismissed.[9]Arnold LJ gave AZ permission to appeal and the appeal from this interim order was heard on 9th April 2025. The appeal was allowed that day. The court's reasons were given in a judgment dated 16th April 2025. I will refer to this as the "AZ Appeal Judgment". Glenmark was thus restrained from marketing its product until the form of order hearing.[10]The form of order hearing was on 28th April 2025 at which matters consequent upon the judgment in the trial were decided, save for two. AZ's application for permission to appeal was adjourned. Also AZ made it clear that they would seek an interim injunction to restrain any party from marketing the dapagliflozin product pending the resolution of their appeal, should there be one. That application was left to be heard in due course.[11]The interim injunction against Glenmark granted by the Court of Appeal was extended until the hearing of AZ’s application to restrain the marketing of generic dapagliflozin pending appeal. Teva and Viatris gave undertakings not to market before that application.[12]The two final respondents today are Sandoz and Bestway. Sandoz is another company that wishes to market a generic dapagliflozin product. Bestway is a wholesaler of pharmaceuticals. In March 2023, Sandoz and Bestway agreed that Sandoz would supply Bestway with its dapagliflozin product, to be held by Bestway and not distributed until further notice. In April 2025 such supply took place. The day after the judgment of 28th April 2025 and the finding that AZ's SPCs were invalid, Sandoz told Bestway that it could lawfully put the product on the market. That was done, resulting in sales to pharmacists of all the stock supplied. I was told that this stock has since been recalled.[13]AZ started separate proceedings against each of Sandoz and Bestway and issued an application against each for an interim injunction. By an order of the court dated 6th May 2025, Sandoz and Bestway are restrained from marketing dapagliflozin products until resolution of AZ’s application for an injunction pending appeal.[14]What all this comes to is that the five respondents in the five joined actions want to market generic dapagliflozin products and all are currently restrained from doing so until the outcome of AZ’s application. That application are now before me. The issue be decided is whether there should be an injunction restraining the five respondents from marketing generic dapagliflozin between now and the decision of the Court of Appeal in Glenmark's validity action.[15]The appeal is due to be heard on 25th and 26th June 2025, four weeks from now. If a decision is announced at the end of the hearing, the relevant period for an injunction is the next four weeks. If a decision is given at the time of reserved judgment, I think that is likely to happen within four weeks of the appeal hearing, before the end of July. So the relevant period may well be four weeks and is unlikely to be more than eight weeks.[16]Geoffrey Pritchard KC and Thomas Lunt appear for AZ, Anna Edwards-Stuart KC and Tim Austen appear for Teva; Jeff Chapman KC and Simon Paul appear for Sandoz; Kathryn Pickard KC appears for Glenmark; and Brian Nicholson KC appears for Viatris.

Letters

[17]I have received two letters from the Department of Health and Social Care Anti-Fraud Unit, the DHSC AFU. The first is dated 14th May 2025, sent with copies of letters earlier sent to Dr. Tappin and to the Court of Appeal. The second letter from the DHSC AFU is dated 23rd May 2025. These were the subject of some debate and I will come back to them.[18]I have also received a letter dated 7th May 2025 from the British Generic Manufacturers Association Limited, trading as Medicines UK.

The law

[19]In the AZ Appeal Judgment, Arnold LJ, with whom Coulson and Warby LJJ agreed, discussed the law. He set out the four well-known guidelines which emerge from the judgment of Lord Diplock in the American Cyanamid Co v Ethicon Limited [1975] AC 396: “(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.” .[20]Arnold LJ went on to discuss issues liable to arise in applications for an interim injunction in patent actions, in particular those concerning generic pharmaceuticals. Since the facts in issue in the AZ appeal judgment have some similarity with those relevant to this application, though they are not identical, I will quote this discussion of the law in full:
“[21] In patent infringement claims, it is often the case that damages will be an adequate remedy for the claimant if it is successful at trial because a final injunction will restore the claimant's monopoly and the claimant can recover damages for its lost profits due to lost sales and/or price depression as a result of infringing acts in the intervening period. This is so even though the quantification of such damages may be heavily disputed. As Floyd LJ explained in Neurim Pharmaceuticals (1991) Ltd v Generics UK Ltd [2020] EWCA Civ 793, [2021] RPC 7 (‘Neurim I) at [16]: ‘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.’ [22] Over the last quarter of a century, a considerable number of interim injunctions have been granted in cases where a generic pharmaceutical company has launched a product at risk of patent infringement. This class of cases is distinguished by three factors in particular. [22] First, the entry of one generic company into a market which has hitherto been monopolised by the patentee is often (but not always) followed by the entry of one or more additional generic companies into that market. This is liable to lead to price-cutting by all the suppliers in order to build or maintain market share, and a resultant downward price spiral. The effect of this on the patentee is liable to be exacerbated, if it continues, by recategorisation of the product under the NHS Business Services Authority (‘NHSBSA’) Drug Tariff, which affects the reimbursement price of pharmaceuticals dispensed against prescriptions which do not specify a brand. [24] Secondly, the practical ability of the patentee to restore its previous price if successful at trial is generally constrained by NHS resistance to such price rises. Although in theory there is little to stop patentees raising their prices, at least in the absence of recategorisation, this would lead to a loss of goodwill which is generally regarded by patentees as unacceptable. So far as I am aware, there are very few, if any, cases in which a patentee, having cut its prices due to generic competition following the refusal of an interim injunction before trial, has successfully raised its prices back to where they were after having prevailed at trial. Counsel for Glenmark submitted that there were three such cases, but two do not correspond to the situation I have described. One is the apixaban case discussed in paragraph 69 below, where there is evidence of an unexplained price rise recently after a long period of price depression following the judgment of this Court (Sandoz Ltd v Bristol-Myers Squibb Holdings Ireland [2023] EWCA Civ 472, [2023] RPC 12). The other is Cephalon Inc v Orchid Europe Ltd [2010] EWHC 2945 (Pat), which concerned parallel imports. His best example is the Neurim case discussed in paragraphs 27 to 31 below, where there is evidence that product was returned to Category C and the reimbursement price returned to the original price after the defendant's substantive appeal was dismissed (Neurim Pharmaceuticals (1991) Ltd v Generics UK Ltd [2022] EWCA Civ 699, [2022] RPC 19, ‘Neurim III’), but no further details. It appears, however, that there was only one generic company on the market during the intervening period. [25] The first two factors can lead to the conclusion that damages will not be an adequate remedy for the claimant because of the uncertainty involved. It is usually the case that damages will not be an adequate remedy for the defendant either, however, because it will have no track record of selling the product in question to enable its lost sales to be quantified. Moreover, establishing the relevant counterfactual can be particularly difficult if it is either known or probable that other generic companies would have entered the market in the meantime, because then there will be uncertainty as to the extent to which the defendant would have benefitted from being the first generic entrant (e.g. by establishing relationships with customers for the product in question). [26] This leads to the third factor, which is that a generic company intending to launch a product at risk must first obtain an MA in order lawfully to be able to market its product and must have a source of supply of a product which has obtained all necessary regulatory approvals. This must be planned some time in advance. Furthermore, the generic company will usually be well aware of the risk of infringement. Typically, it will only launch at risk if it thinks it has a sufficiently strong case that the patent (or SPC) is invalid. In such circumstances the decision of this Court in SmithKline Beech plc v Apotex Europe Ltd [2003] EWCA Civ 132, [2003] FSR 31 establishes that it is proper for a court to take into account, when considering the balance of the risk of injustice and deciding to preserve the status quo, that the generic company could have ‘cleared the path’ for its launch by bringing proceedings for revocation of the patent sufficiently far in advance. [27] Returning to the first of these factors, as Floyd LJ noted in Neurim I at [13], ‘whether a price spiral will occur in the period until trial in any given case is intensely fact specific’. In Neurim I itself Marcus Smith J held that damages would be an adequate remedy for the claimants, and therefore refused to grant an interim injunction. This Court upheld his decision at least in part because the evidence fell a long way short of establishing that any generic company in addition to the defendant was likely to enter the market in the period up to trial and therefore a downward price spiral was unlikely: See Floyd LJ at [46] and [50]. [28] There was a sequel to Neurim I after the trial. Marcus Smith J held that the patent was valid, granted a final injunction, refused permission to appeal and refused the defendant a stay of the injunction. This Court granted the defendant permission to appeal, expedited the appeal and granted the defendant a stay of the injunction pending the appeal: Neurim Pharmaceuticals (1991) Ltd v Generics UK Ltd [2022] EWCA Civ 370 (‘Neurim II’). The three members of the Court gave slightly different reasons for reaching the last conclusion. [29] My reasoning was that there had been no relevant change of circumstances since Neurim I, and therefore it remained the case that damages would be an adequate remedy for the claimants: [26]-[31]. Even if the claimants would suffer damage which would be adequately compensated by an award of damages, the damage to the defendant would be more difficult to quantify and adequately compensate: [32]-[33]. Even if both sides were equally likely to suffer damage that could not be adequately compensated, it was prudent to preserve the status quo, which was that the defendant was on the market: [34]. [30] Birss LJ said at [37]: ‘… 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.’ [31] Newey LJ said at [38]: ‘ … 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.’ [32] The importance of preserving the status quo is illustrated by the decision of HHJ Hacon sitting as a High Court Judge in a case which has some similarities with the present, Bayer Intellectual Property GmbH v Aspire Pharma Ltd [2024] EWHC 711 (Pat), [2024] FSR 23. The compound patent protecting rivaroxaban was due to expire on 1 April 2024, but Bayer had a patent (‘EP 961’) which protected tablets for once-daily administration. Six generic companies brought claims for revocation of EP 961. The claims were tried by HHJ Hacon and the trial concluded on 22 February 2024. Not having been informed of the significance of the date of 1 April 2024, HHJ Hacon told the parties that he planned to hand down judgment on 9 April 2024 with argument on the form of order on 11 or 12 April 2024. The defendants, and one other generic company, subsequently indicated an intention to launch generic rivaroxaban products for once-daily administration immediately after 1 April 2024. Bayer applied for an interim injunction to restrain them from doing so until the FOO hearing. HHJ Hacon heard the application on 25 March 2024. On 27 March 2024 he granted the injunction for the reasons given in his judgment of that date. [33] As HHJ Hacon explained, the short and crucial point about the application was that it was designed to preserve the status quo for a period of only 9-10 days. He doubted that either Bayer or the respondents would suffer a great deal of irreparable harm on the alternative hypotheses of an injunction being granted or not. He did not consider that Bayer was not at risk of any irreparable harm at all because there would be uncertainties, but they would be modest. The same applied to the respondents. The decisive consideration was the one he identified at [56]: ‘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.’” ‘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.’”[21]Arnold LJ referred to the question whether the American Cyanamid guidelines are to be applied sequentially or accumulatively in a one-step analysis. As he noted American Cyanamid remains binding. And as I think he implied, the more natural reading of Lord Diplock's judgment is to approach the guidelines sequentially. That is what the parties have done in the present case and I will do likewise[22]A further point arises where an interim injunction is sought pending appeal. An overriding consideration is the need to arrange matters so that the Court of Appeal is best able to do justice between the parties itself, see Skatteforvaltningen (the Danish Customs and Tax Administration) v Solo Capital Partners LLP (in special administration) [2021] EWHC 1683 (Comm) at 7-16.[23]In this application, a serious prospect of success means AZ having a real prospect of succeeding in the forthcoming appeal. Unsurprisingly, the parties differ as to the likely outcome of the appeal but it was not contended that AZ have no prospect of success.[24]With regard to the second and third American Cyanamid guidelines, neither side contended that the other would not be good for damages, which may be payable in due course. The issues were whether either side, AZ or the generic companies, would suffer irreparable harm on the alternative hypotheses of an injunction being granted or not and if both would suffer irreparable harm, whether on balance the harm on one side was greater than that on the other. There was also some consideration of the status quo: whether it is relevant on the present facts and, if so, how it should correctly be characterised.

The evidence

[25]There was a lot of evidence. AZ relied on six witness statements from Christopher Stothers, a partner of Freshfields LLP with conduct of the proceedings on behalf of AZ and also two witness statements from Dr. Oonagh McGill, Unit Director of the Cardiovascular Renal and Metabolic business of AZ. In addition AZ filed expert evidence from Richard O'Toole, Head of Supply Chain and Commercial Manager of Partnerships at AZ.[26]Glenmark filed three witness statements from their solicitor, Thomas Oliver of Powell Gilbert LLP, a witness statement from Stuart Meanwell, General Business Unit Manager at Glenmark, and two expert reports from Andrew Farrant who is General Manager of a UK pharmaceutical company and a director of a pharmaceutical consultancy.[27]Much of the foregoing evidence was before the Court of Appeal.[28]Teva filed a witness statement from each of Christopher Sharp, a partner at Pinsent Masons LLP, Michael Merriman, a GP, and Rebecca Paddy, Senior Director of Business Innovation at Teva. Teva also filed two expert reports. One was from Dr. Avantika Chowdhury, an economist and partner of Oxera Consulting LLP, a firm providing economic consultancy services. The other was from Richard Williams, a chartered accountant.[29]Teva was not given permission to file expert evidence, but no objection was raised and I gave permission to Teva and to AZ for its expert report.[30]Viatris filed a witness statement from Gerard Fox, their General Sales Lead and from Matthew Royle, their solicitor from Taylor Wessing LLP.[31]Sandoz filed a witness statement from Gareth Morgan, their solicitor and a partner at Pinsent Masons, two witness statements from Peter Kelly, who is Head of Generics Business at Sandoz, and one each from Sarah Innes, Head of Legal and Compliance at Sandoz. Bestway filed a witness statement from Tom Ferguson, General Counsel at Bestway.

Background

[32]Some of the background evidence was not controversial. In 2023, sales to the NHS of AZ's dapagliflozin product, marketed under the brand name Forxiga, reached £235 million. That was up from £70 million in 2021. There seems to be a continuing upward trajectory in sales.[33]These are prescription products. Around 92% or so of the prescriptions are written using the International Non-proprietary Name or INN. The remaining 8% use the Forxiga brand name. So generic suppliers potentially have access to around 92% of the very substantial UK market.[34]The Department of Health and Social Care, the DHSC, runs a scheme in collaboration with pharmaceutical companies which is known as the voluntary scheme for prices and growth or VPAG. Its aim is to promote innovation by the pharmaceutical industry on the one hand and cost-effective patient access to medicines on the other, with NHS finances in mind. Dr. McGill's evidence was that under the VPAG scheme, AZ pays to the NHS 22.9% of its revenue from its sales of Forxiga. The VPAG scheme assumed significance during the course of this application and I will come back to it.[35]There are three categories of price relevant to a drug sold for use in the NHS. First, there is the list price. This is the headline price at which pharmaceutical companies sell a drug, usually to wholesalers. It is a figure agreed between the DHSC and the company and is published in the dictionary of medicines and devices. The second category was referred to in the evidence as the actual price. Pharmaceutical companies commonly offer discounts to wholesalers. The actual price negotiated with each wholesaler is the list price less the discount. The actual price is almost always confidential as between seller and buyer.[36]Third, there is the drug tariff price, sometimes more simply called the drug tariff. This is the sum reimbursed by the NHS (or possibly more accurately the DHSC) to pharmacists for dispensing the drug.[37]Drugs which are subject to the drug tariff are divided into three categories: A, C and M. Those in categories A and M are readily available. The difference between A and M is the means by which the drug tariff reimbursement is calculated.[38]Category C drugs are those not available as a generic. They have the list price negotiated between the DHSC and what is usually a single supplier of the branded product. The drug tariff will typically be the same as the list price. However, pharmacist may benefit from discounts and to prevent excessive profiteering the DHSC may impose a mark-down on the list price. In the case of Category C drugs, where this applies it will generally mean that the reimbursement to pharmacists is 5% less than the drug tariff.[39]Forxiga is a Category C drug. The evidence was that its list price and drug tariff price is £36.59 for a pack of 28 tablets. The reimbursement paid by the DHSC to pharmacists is 5% less, i.e. £34.76. This sum is paid to pharmacists irrespective of the price at which pharmacists purchase the product.

Preliminary issues

[40]There are some preliminary issues which I will discuss before turning to the arguments on irreparable harm.

AZ’s standing

[41]Glenmark pointed out that AstraZeneca AB owns the SPCs in suit, but the marketing of dapagliflozin products in the UK is carried out solely by AstraZeneca UK. Glenmark said that only AB has a cause of action and is entitled in law to restrain the respondents, yet it will suffer no harm through the marketing of generic dapagliflozin. For that reason alone, Glenmark argued, no injunction should be granted. I was taken through a history of this having been raised with AZ by Glenmark. Glenmark submitted that they had just been fobbed off by AZ's solicitors[42]It may be that AB’s lack of a direct financial interest is not, in law, a necessary barrier to the grant of an interim injunction. In SmithKline Beecham plc v ApotexEurope Limited [2003] EWCA Civ 137, Aldous LJ said, at paragraph 18:
“... However it must be remembered that the grant of an interlocutory injunction is a discretionary remedy that should be available to prevent injustice. It would be unusual to grant an interlocutory injunction to protect a property right if no damages for infringement could be recovered. But if the claimant has a cause of action to protect a property right recognised by the law, there is no reason in principle why the court should not grant an interlocutory injunction to protect that right, even if damages are not recoverable.”
[43]Carnwath LJ agreed with Aldous LJ and added an observation on this point at [42]-[43]. Sir Christopher Staughton agreed with both judgments.[44]In any event, AstraZeneca AB has now granted a retrospective exclusive licence under the SPCs to the UK company and Glenmark accepted that this has resolved the point.

First mover advantage and clearing the path

[45]Teva, Viatris and Glenmark all relied on loss of first mover advantage. This is a well-recognised potential head of loss that can be suffered by generic companies. In its simplest form, there is one generic company in a position to enter the market. If the generic company were allowed to do so in the period between the application for interim injunction and, usually, either the expiry or revocation of the patent-in-suit, it would establish a distribution network that would be solidly in place by the time any other generic companies lawfully enter the market, giving the first generic company a competitive advantage. In the event of the grant of an interim injunction, that advantage would be lost.[46]I was shown one authority in which more than one generic company relied on the argument, i.e. they were said to be joint first movers. It seems to me that there must be a limit to how many first movers there can be while first mover advantage still has any real practical effect.[47]Teva argued that it, Viatris and Glenmark had acted responsibly in seeking to revoke AZ's SPCs in advance of marketing their generic products. They had sought to clear the path, unlike Sandoz and Bestway.[48]In fact, the submission made by all three was that the court should not stop them from marketing generic dapagliflozin because of their responsible behaviour and potential loss of first mover advantage, but should grant an interim injunction restraining Sandoz and Bestway from doing so together with any other generic company.[49]Teva tied this to an argument on the status quo, that it was in line with what Lord Diplock said in American Cyanamid: the date at which to measure the status quo was the date of AZ's claim form bringing infringement proceedings against Teva, namely 12th April 2025. As of that date, Teva retained its potential first mover advantage which must therefore, perforce, be taken into account.[50]There was a policy argument from Teva, Viatris and Glenmark in support. If those who cleared the path are not given privileged status in this way, there would be no incentive for generic companies to bring actions to revoke invalid patents and SPCs. All generic companies would freeload, entering the market after someone else had cleared the path for them and paid for doing so. This would not be in the public interest given how much less the NHS has to pay for generic drugs.[51]Taking the policy argument first, there is certainly a public interest in having cheaper generic pharmaceuticals available. There is also a public interest in allowing research pharmaceutical companies sufficient profit to carry out their work. I am in no position to say with any precision how that balance must be struck and it is not my job to do so. I must apply the law as it is. I do know that the profits which can be made by marketing a generic pharmaceutical can be very substantial and my impression is that this is a case in point. I doubt that applications to revoke patents will dry up where profit is to be made from such applications. In each case, a cost-benefit analysis will no doubt be applied by the generic company in question. Sometimes there is a joint application by more than one generic company, thereby sharing the costs. Sometimes one generic company perceives that there is a realistic possibility of a first mover advantage which merits going it alone.[52]It seems to me that even if there could be circumstances in which the discretion of the court may be influenced by this policy argument within the law as it is, this is not such a case. Potential profit to be made from marketing generic dapagliflozin was always likely to lead one or more generic companies to seek to revoke AZ's SPCs. That was a decision freely taken on a commercial basis.[53]Next, the status quo. The Court of Appeal has held that in cases similar to the present one if it is not possible to say that the balance of irreparable harm or convenience tips significantly one way or the other, the status quo assumes importance. In Neurim Pharmaceuticals (1991) Limited v Generics UK Limited [2022] EWCA Civ 370, Arnold LJ identified the status quo in this way:
“The status quo is that there is only one generic supplier in the market place.”
All three members of the panel identified the potential importance of the status quo, Birss LJ and Newey LJ giving it particular emphasis. I have no doubt that the status quo they had in mind was the reality of the position on the ground at the time of the relevant hearing: who was on the market and who not. That is the meaning I will apply in this case.[54]With regard to clearing the path, it is certainly the case that this is proper for the court to take this into account when considering the grant of an interim injunction, see SmithKline Beecham plc v Apotex Europe Limited [2003] EWCA Civ 132 and paragraph 26 of the AZ appeal judgment.[55]In effect, I am being invited to find that this is a point which tips the balance in favour of Teva, Viatris and Glenmark but not in favour of the other respondent companies; clearing the path makes all the difference. I do not reach that conclusion. The Court of Appeal has not made it clear how much weight should be given to the clearing the path point relative to others, but at least in the present case I take the view that the evidence on irreparable harm matters significantly more. Either all the respondents will be enjoined or none of them will.

Potential irreparable harm to AZ

[56]I turn to the irreparable harm, if any, that AZ would suffer in the event that there is no injunction. This is the topic that has occupied by far the bulk of the submissions and evidence from the parties.

AZ’s submissions

[57]AZ submitted that the overall picture provided by the evidence now is similar to, though to some extent has developed on from, the evidence before the Court of Appeal.[58]It is therefore useful to summarise briefly what the Court of Appeal said about the potential harm to AZ. The court referred to the evidence of Dr. McGill and summarised it as clear evidence that, first, AZ would be likely to have to reduce its actual price for Forxiga, in the event of a price spiral, and secondly, AZ would have difficulty in restoring its price, even if the generic companies were later excluded from the market. The Court of Appeal further accepted that it was clear that multiple generic entry into the market was both a certainty and would happen more quickly even than Dr. McGill feared.[59]Arnold LJ said that the consequence of this was there was room for doubt about whether damages would be an adequate remedy for AZ because it was not certain how long the period would be before the present hearing. Significantly, a period after this hearing also had to be taken into account. The overall conclusion was that there was real doubt as to the adequacy of damages as a remedy for AZ.[60]Since the AZ appeal judgment Dr. McGill has provided further evidence on behalf of AZ, largely building on what she said before. The following are the principal points she makes. With at least four generic companies in the market and possibly more, a downward price spiral is even more likely than she had indicated in her evidence before the Court of Appeal. The most likely result is that AZ would be forced to reduce its price dramatically if the respondents enter the market in the absence of an injunction.[61]Alternatively if there is no price spiral, the generic competitors would be sure to market their products at an actual price 20% less than that currently charged by AZ. AZ would be required to compete by reducing its price accordingly.[62]In either event, there would be irreparable harm. AZ have summarised that irreparable harm under three heads in their latest written argument in closing.[63]The first head is that if AZ win the forthcoming appeal, they will have difficulty in restoring their price. This will put pressure on AZ to reduce its financial support for a joint project with the NHS to encourage those with Type-2 diabetes to come forward and be treated with a drug such as dapagliflozin. She said:
“44. The following comments apply on the assumption that AZ succeed on appeal but, as explained above, there are material and unpredictable difficulties in restoring its price/market share. 45. In my First Statement at paragraphs 63-67, I referred to Joint Working projects. These are a suite of projects conducted by AZ in partnership with the NHS and seek to improve patient outcomes. As I mentioned in paragraph 59 of my First Statement, AZ estimates there are 3.7M people in the UK diagnosed with conditions making them eligible for treatment with an SGLT2 inhibitor such as dapagliflozin but not currently on treatment. The performance of the Joint Workings projects encourages the use of SGLT2 inhibitors such as dapagliflozin where appropriate including in such patients 46. However, if the revenue to Forxiga is materially damaged and does not restore to the original price almost immediately (as described above), then the cumulative result of the depression in the revenue stream together with a lack of predictability as to if (if ever) the revenue stream will be restored, there will be increasing pressure (accelerating month by month) on AZ to reduce its investment in these such projects. Quite how and when this pressure would crystallise is unpredictable, but it would occur in a matter of months following generic launch.”
[64]Secondly, Dr. McGill believes that an attempted restoration of the actual price of Forxiga following a temporary fall in the price would impair AZ's relationship with the NHS.[65]This, I think, is no so much a head of irreparable harm as evidence that AZ would in reality be unable to retore the price of Forxiga.[66]The third alleged head of irreparable harm is that a restoration of the actual price of Forxiga to wholesalers and/or retailers in the event of an interim reduction in the actual price would damage its relationship with those wholesalers. AZ relied on an observation made by Floyd LJ in Warner-Lambert Company LLC v Teva UK Limited [2011] EWHC 1691 (Pat). Floyd J was considering the balance of irreparable harm over a period of two weeks. He said:
“14. AAH and Phoenix take as their primary position that Warner-Lambert will suffer no irreparable harm at all pending the hearing on 11th July. They say that over that very short period, it is extremely unlikely that Warner-Lambert will have to reduce their prices. If Warner-Lambert stand firm on their prices then damages, according to the usual measure, will be a perfect recompense for them. 15. I have to say that I am wholly unable to accept that submission. A launch on the scale which was contemplated and has begun would undoubtedly distort the market in Lipitor beyond the ability of any inquiry as to damages to compensate the claimants. One only has to think of the effect on Warner-Lambert's reputation when it is made clear that a price differential of 22.5% is available to purchasers of the generic product to see that some damage of an irreparable nature is bound to be incurred.”
[67]Again, Dr McGill’s point under this head is that AZ would be unable to restore the price of Forxiga. On the assumption that AZ elects not restore the price, there would be no damage to AZ’s relationships with either wholesalers or retail pharmacists.[68]Thus, heads two and three seem to me to support an essential part of AZ's argument under its first head, namely that having discounted the price for Forxiga in the interim period, AZ would be unable to restore the actual price to its present level in the event that they were to win the appeal.[69]Dr. McGill had four reasons why this would be the case, but I think they can be fairly said to come down to two, since three consisted of variations on the same theme. The first was that under the terms of the VPAG scheme, AZ would be prevented from raising the price of Forxiga after a period of selling the drug at a lower actual price. Otherwise, Dr. McGill's evidence was that the NHS is under financial stress and is in a very strong negotiating position in relation to AZ. Encouraged by the temporary reduction in price, the NHS would find a way to prevent or limit the full return of the price of Forxiga after the decision of the Court of Appeal. This is head two of the alleged irreparable harm mentioned above. To which, presumably, must be added head three.

The VPAG Scheme

[70]The way Dr. McGill initially presented the VPAG scheme was unfortunate. In her second witness statement, she quoted two paragraphs of the 2024 published version of the scheme as follows:
“7.6 Any Scheme Member that intends to change its overall distribution arrangements during the duration of the 2024 Voluntary Scheme will notify the Department of such changes as early as possible, and at least four (4) months in advance of any such change being made operational. Scheme Members are not required to notify the Department of routine commercial transactions that would not be expected to have a cost to the NHS. ... 7.8 If there are reasonable and objective grounds to believe that changes made to a Scheme Member’s distribution arrangements during the duration of the 2024 Voluntary Scheme have, or would have, an adverse net impact on NHS expenditure in relation to the purchasing from that Scheme Member then the Department and the Scheme Member will discuss and agree any adjustments to those distribution arrangements and where the Scheme Member has influence on the pharmacy discount, this may include the Scheme Member separately paying a sum of money to the Department equal to any additional costs to the NHS.”
[71]At the first part of the hearing of this application, Sandoz pointed out that Dr. McGill had failed to quote paragraph 7.9, which is as follows:
“7.9. Paragraph 7.8 does not affect the right of Scheme Members unilaterally to offer or withdraw competitive trade discounts at any time, nor to determine individually how todistribute their own products.”
[72]As counsel for AZ fairly conceded, Dr. McGill's omission of paragraph 7.9 was not satisfactory. Sandoz said the omission was compounded by her also having failed to refer to other passages in the published scheme, specifically paragraphs 6.30 and 6.32. It was said that these showed that the NHS would offer no resistance to the restoration of a price after a temporary reduction. They read:
“6.30 Scheme Members may make temporary reductions to an NHS list price and increase the NHS list price to a level no more than the NHS list price before the reduction without the agreement of the Department. Scheme Members must inform the Department at least twenty one (21) calendar days before the changes take effect and provide information on the existing and new prices, and the expected duration of the reduction. … 6.32 Where temporary price reductions or temporary price increases in NHS list prices have been made, Scheme Members will continue to be required to pay the Scheme Payment at the rate applying to all Scheme Members as a percentage of their Eligible Sales and in accordance with Chapter 5 and Annexes 3 to 5.”
[73]A complication was that on the morning of the first part of the hearing I received the letter of 14th May 2025 from the DHSC AFU. The letter stated that it was written on behalf of the Secretary of State for Health, the First Minister of Wales and the Welsh Ministers, the Scottish Ministers and the Scottish and Northern Ireland Health Service bodies. These were jointly referred to in the letter as, “the Interested Parties”. On its face, the letter represented an indication of a widespread policy view held among significant figures. The letter included this: “4. Additionally, in case it assists the Court, the Interested Parties would like to take this opportunity to provide further information in relation to an aspect of the Court of Appeal’s 16 April 2025 judgment in AstraZeneca AB, AstraZeneca UK limited v Glenmark Pharmaceuticals Europe Limited. 5. Paragraph 73 of the Court of Appeal Judgment accepts a submission, set out at paragraph 72, that: ‘Now that it is clear that multiple generic entry is both a certainty and will happen more quickly even than Dr McGill feared, the correct conclusion is that AstraZeneca would be likely to reduce their actual price prior to the [final form of order] hearing and that, assuming they did so, they would have serious difficulty in raising them again.’ 6. This echoes the statement, in paragraph 24 of the Court of Appeal Judgment, that: ‘… the practical ability of the patentee to restore its previous price if successful at trial is generally constrained by NHS resistance to such price rises’ 7. The Interested Parties are concerned that these paragraphs of the Court of Appeal Judgment may reflect a misunderstanding, namely that obstacles would be raised to a price increase that would necessarily be difficult or even seriously difficult to overcome. This is not the expectation of the Department, which is that such a reduction and subsequent increase would be permissible on the basis of established arrangements for a temporary reduction of a list price.” ‘Now that it is clear that multiple generic entry is both a certainty and will happen more quickly even than Dr McGill feared, the correct conclusion is that AstraZeneca would be likely to reduce their actual price prior to the [final form of order] hearing and that, assuming they did so, they would have serious difficulty in raising them again.’ ‘… the practical ability of the patentee to restore its previous price if successful at trial is generally constrained by NHS resistance to such price rises’[74]Although the Court of Appeal had been discussing a temporary reduction in the actual price, the letter from the DHSC AFU appeared to be discussing, at least primarily, the list price. Nonetheless, the overall tone of those paragraphs could certainly be taken to mean that the Court of Appeal had misunderstood the position regarding the actual price of Forxiga. If so, AZ's fears about restoring its actual price after temporary reduction, which the Court of Appeal had accepted, may have been unfounded.[75]The letter went on to draw my attention to paragraphs 6.29 and 6.30 of the VPAG scheme as paragraphs to be taken into account.[76]The extent of the potential significance of the VPAG scheme – which seems to have been given no attention either by the Court of Appeal or Dr Tappin – emerged at the last minute. Submissions from the parties did not do a great deal to resolve the position, probably because the letter from the DHSC AFU had come so late. AZ became understandably concerned that there could be a finding that Dr. McGill had misled this court and other courts at the earlier hearings and therefore sought time to consult her and to serve clarifying evidence, if needed.[77]For that reason and because there was a substantial risk that judgment in the application could be given on a false understanding of the facts, the hearing was adjourned until today.[78]During the break in the hearing, the DHSC AFU sent a further letter to the court, dated 23rd May 2025. This is part of that letter:
“4. ... Although NHS bodies have interests that are liable to be affected by the decision whether to grant an injunction restraining generic entry, and the Interested Parties have written to the Court to ensure that those interests have been drawn to the Court’s attention and are taken into account in the form of any relief it grants, the Interested Parties are (of course) neither parties to the Proceedings, nor respondents to any injunction application. They have not sought to put any witness statement(s) before the Court; nor to make extensive submissions; they have restricted themselves to writing three relatively circumscribed letters to the Court. The Interested Parties are mindful that the parties have, by contrast, filed substantial amounts of evidence; that delays to the disposal of the applications presently being heard have the potential to cause prejudice; and that there has already been an adjournment of the hearing over to 28 May 2025. Given this context, the Interested Parties wish to clarify that they are not, at this advanced stage, seeking to put any evidence before the Court in the form of a witness statement; nor are they seeking to have this letter treated by the Court as containing evidence, to be weighed in the balance with or against that adduced by any of the parties. What it is nevertheless legitimate for the Interested Parties to do, they would respectfully suggest, is to make clear by means of correspondence whether they do or do not accept a particular proposition about the NHS. This is particularly so in light of the suggestion that, by failing to express their position in relation to evidence given by Dr McGill about the NHS, the Interested Parties can be taken to have implicitly endorsed that evidence.”
[79]The letter went on to say that the Interested Parties should not be taken to have accepted any of the evidence given by Dr McGill. The writer added:
“However, the Interested Parties in no way accept that any NHS body would pursue a policy directed to deterring an originator drug company from restoring historic levels of actual selling and/or list prices, following an earlier reduction in the face of generic competition, that was sought to be reversed following the vindication of the originator’s patent rights so as to eliminate that competition.”
[80]It seems to be common ground now that paragraphs 6.30 and 6.32 of the published VPAG scheme, relied on heavily by Sandoz, solely concern the list price, not the actual price. To resolve this part of the argument, following an inquiry from me, AZ has offered an undertaking not to increase the list price of Forxiga pending the decision of the Court of Appeal. I accept that undertaking, so those paragraphs have no direct application, though I will still have to come back to them.[81]It is also common ground that paragraphs 7.6 and 7.8 of the VPAG scheme apply to “overall distribution arrangements” but there was a debate as to what that means.[82]In her third witness statement, drafted during the break in the application, Dr. McGill apologises for not including paragraph 7.9 in her earlier witness statement. I accept it was an unintended oversight. She continues, however, by saying that its omission was anyway irrelevant. That is because the discount that would be removed if AZ were to restore its actual price after the interim period would affect the profits of pharmacies and may require the NHS to provide substantial funding. This would have the sort of adverse net impact on NHS expenditure contemplated by paragraph 7.8. For that reason, the removal of discounts is governed by paragraph 7.8, not paragraph 7.9.[83]I find this unpersuasive and possibly a little desperate. First, Dr. McGill says elsewhere in her third witness statement that on her understanding of the VPAG scheme, paragraph 7.6 would require giving the NHS four months' notice of a change in its overall distribution arrangements and that this would apply to the introduction (or removal) of a discount of a significant nature. If the introduction of the discount would be a change in the overall distribution arrangement, there would seem to be no prospect of any change in AZ's actual price of Forxiga in the next four to eight weeks. This would be contrary to the bulk of Dr. McGill's evidence that AZ could, if it chose, offer a discount in the interim period and restore the price afterwards - although that would have consequences.[84]Secondly, Mr. Williams, who is an accountant who specialises in pharmaceutical and healthcare clients, which has led him to have some knowledge and experience of the VPAG scheme says that the provisions relating to overall distribution arrangements were introduced in 2009 to deal with the entirety of arrangements that a pharmaceutical company might have with a particular wholesaler, hence the use of the word “overall”. A change in the overall arrangements could affect the profit margins of wholesalers and this could affect aggregate profit margins of pharmacies, which the DHSC had sought to maintain at an agreed level.[85]In Mr. Williams's view, paragraph 7.9 was added to provide express exemptions to this, in particular in relation to trade discounts. These can be offered or withdrawn at will.[86]In my view, Mr. Williams's interpretation of paragraphs 7.5-7.9 makes considerably more sense than that of Dr. McGill.[87]I conclude that the VPAG scheme would not inhibit AZ from applying discounts to its price of Forxiga if it so wished in the interim period. Likewise, the VPAG scheme would provide no hindrance to the restoration of the actual price to its former level as and when AZ should choose.

Harm to AZ’s relationships

[88]I also take the view that this does not cut across Dr. McGill's evidence that the NHS (as I understand it, strictly speaking the DHSC) would, nonetheless, find a way to prevent or limit a price restoration in the event of a drop in the price of Forxiga. She said:. “32. As I explained in paragraph 48 of my First Statement, I expect that the NHS will be resistant to price restoration of dapagliflozin given the sheer size of the market. I fully maintain that statement and wish to add further detail to it. … 34. Second, from my experience, AZ has observed that the NHS resistant to price increases. AZ has experiences this resistance in a number of ways: … (c) Due to the NHS’s position and as a matter of reality (since the NHS is by far the largest consumer of medicines in the UK), when AZ negotiates with the NHS on price (for example, under tenders or when negotiating deals for new indications under an existing drug as referred to above), the NHS adopts a negotiating position in which the price should not exceed what has been previously offered. The NHS has a stronger than usual negotiating position in relation to dapagliflozin since, if it does not agree with AZ’s position on price, the NHS is able to promote treatment with patient using other gliflozins. (d) To give an example, as part of a Health Technology Appraisal of an AstraZeneca product, a senior member of NHS England informed me that he expected AZ to submit a lower price for a particular indication of a medicine because he was aware that such a price had been offered previously. He made clear that even though AstraZeneca was entitled to submit the higher price under the later submission, it would be viewed badly by NHS England if we did so and would count against us in negotiations in the future. I am also informed by our Legal Director, Dominic Hornblow, that in almost every NHS vaccine tender he has been involved in, the NHS seeks to set the expectation that prices should come down across successive tenders but should not go up. These examples speak to the fact that the NHS is extremely resistant to prices going back up.”[89]It was submitted by Sandoz that in her subparagraphs 34(c) and (d) Dr McGill did not expressly say that she expected resistance from the NHS to a restoration in the actual price of Forxiga after a temporary reduction. That is not how I read her paragraphs 32 and 34. I think that the alternative would require me to conclude that what is said in those paragraphs constitutes a deliberate attempt to mislead the court. I am not prepared to draw that conclusion. No doubt if there were a trial and Dr McGill were to be cross-examined on the matter, it is conceivable that those paragraphs would turn out to be unsatisfactory. But as matters stand I accept Dr McGill’s evidence on this.[90]Finally, there is Dr McGill’s evidence that a restoration in price would damage AZ’s relationship with retail pharmacists:
“Third, aside from the NHS, I am informed by Mr O’Toole that an increase in prices of Forxiga after a period of reduced prices (owing to generic entry and then removal) would upset relationships between AZ and retail pharmacists. This is because, even if AZ is able to re-assert fully or partially the original price, that action would be perceived by retail pharmacists as a unilateral action by AZ against their interests and a displacement from the lower price to which they had become accustomed.”
[91]Teva pointed out that the present facts are not the same as those considered by Floyd J in Warner-Lambert. The court there was considering the consequences of not reducing the price of the branded drug and the effect of the consequential price differential. Here, the point in issue is whether there would be a wholesaler resistance to a restoration of the price after a temporary reduction. There would be no price differential on such a hypothesis because there would be no generics on the market. I agree. However, this does not, of itself, negate Dr. McGill's evidence that price restoration would harm AZ’s relationships with retail pharmacists.[92]There was contrary evidence from Mr. Ferguson of Bestway. He said:
“9. If AstraZeneca prevails in any appeal and generic dapagliflozin has to be removed from the UK market I do not consider that there would be any resistance or resentment in the wholesaler or pharmacy levels of the supply chain. I hold this view for a number of reasons: 9.1 Over such a short period of time the market would not have become accustomed to the lower costs of dapagliflozin and many pharmacies may continue to hold branded stock for some or all of the period in question (depending on the rate at which they dispense the product). The wholesaler and pharmacy part of the supply chain would just be happy to have been given access to cheaper stock for that time within the overall context of their product costs across all products stocked. 9.2 The effect of this sort of temporary price reduction on overall pharmacy costs is limited as dapagliflozin is one of very many products that a pharmacy will dispense each week. As an illustration, Well pharmacies (the primary retail pharmacy brand operated by Bestway) dispense on average approximately 8,200 prescription items per store per month. 9.3 In reality, we are always seeing availability and stocking problems for different products where the price is going up and down continuously. Any return of the market to the branded dapagliflozin pricing would not be seen as exceptional by a retail pharmacy. Further, paramedics will not hold a negative view in relation to a product manufacturer when considering product pricing due to the fact that they only buy through wholesale channels.”
[93]AZ stated that Mr. Ferguson is a legal officer of a wholesaler and cannot be expected to have as much knowledge and experience on the matter as Dr. McGill. On balance, I accept Dr. McGill's evidence on this, given that she is more likely to have relevant experience. While the circumstances are not the same as those in Warner-Lambert, this would not be the first occasion on which a court has found that an increase in the price of a drug following a temporary decrease can damage the relationship with wholesalers and/or retail pharmacists.[94]If AZ is right to say that in the interim period it will be obliged to cut the price of Forxiga and then will be unable to restore the price should it win the appeal, the only head of damage relied on by AZ by the time of serving its final written submissions is that this would lead AZ to reduce its investment in a project currently undertaken with the NHS to steer patients with Type-2 diabetes towards being prescribed SGLT2 inhibitors such as dapagliflozin and this would cut the potential revenue stream for Forxiga.

The respondents’ submissions

[95]I turn to the respondents' evidence and submissions regarding irreparable harm to AZ. I begin with an argument raised in Teva's evidence by Dr. Chowdhury. She assumed that at most the respondents together could only supply about 60% of the market, the other 40% remaining available to AZ. Two consequences would follow. First, because the generic market would not be saturated, it would make no sense for the respondents to cut their prices to gain market share. It would be far better to sell all the product they had on the usual 20% discount on AZ's branded price. 10-20% was the figure given in evidence as a typical minimum discount in the price for generic compound compared to its branded equivalent. I know that the sales Sandoz made before giving undertakings were at a 20% discount, which I think probably provides the more accurate figure.[96]Thus, on Dr Chowdhury’s assumption of no market saturation, there would be no market spiral downwards.[97]Dr. Chowdhury continued: in those circumstances AZ would have every incentive to maintain its price. Cutting its price may increase its sales above 40%, but that would lead to a lower overall profit than supplying 40% of the market at its existing price.[98]Dr. Chowdhury backed this up with two further reasons why AZ would not reduce their price over the next 4-8 weeks. First, there would be a risk that even if it wins the appeal, it would risk being stuck with the lower price until the SPCs expire in 2028. It is better for put up with a 40% market share until the appeal is decided and then potentially recover lost profit by way of damages. Secondly, she said the NHS price can have an impact on prices in other European countries. Again, the better bet from AZ's point of view is to keep the price as it is until the appeal.[99]Mr. Kelly, in his evidence, added that the 22.9% payment to the NHS under the VPAG scheme, which generic companies would not have to bear, served as a further incentive for to keep the present price.[100]Based on the foregoing, the respondents' overall point argument was that AZ's damage over the forthcoming weeks, should it fall due, would be simply calculated by multiplying the respondents' total sales in that time by the profit AZ would have made on equivalent sales at its existing actual price.

Discussion

[101]I will consider first the likelihood of a downwards costs spiral. Dr. Chowdhury's evidence was characterised by AZ as speculation from someone who has no background in the pharmaceutical industry. Apparently she does not, although much of the evidence in this application is necessarily speculation. As ever with expert evidence, the important point is less the overall conclusion and more whether the reasons which are given to support that conclusion are credible. Although no market operates perfectly, I find Dr. Chowdhury's reasoning persuasive that if the generic market is not saturated the generic entrants will have good reason to sell at around 20% discount on the branded price and there would be incentives for AZ to maintain its existing price.[102]The problem I have with the evidence is her starting assumption that there will be no saturation of the generic market. It seems to me that the more likely outcome is that there will be saturation.[103]I have seen confidential figures about how much stock is held by the respondents. The current evidence is that a total of 12 generic companies have Marketing Authorisations (MAs) for dapagliflozin. AZ has obtained undertakings from them not to market dapagliflozin if an injunction is granted against the five respondents in this application. I also know that more authorisations are expected. Aside from the respondents before the court, I cannot of course be sure whether all or any of the others would enter the market if there were no interim injunction.[104]However, one matter on which all are agreed is that the market for dapagliflozin products is large, growing and above all is lucrative. It seems to me likely that in the event of no injunction, the respondents, each competing with the others, will sell as much as possible and they will be joined in this by at least some other generic companies, quite possibly all of those who currently hold an MA and maybe more than soon afterwards.[105]Taking all this in account, in my view, it is more likely than not that the generic market will be saturated. It follows that a key assumption made by Dr. Chowdhury falls away. I would add that even if the market price of generic dapagliflozin is only 20% below the current actual price of Forxiga, which on balance seems unlikely, AZ would, none the less, still stand to lose around 92% of the market if it maintained the current actual price.[106]Would that force AZ to cut their price? Existing authority, including the AZ appeal judgment and the cases there referred to, supports AZ's position on this. I can see no reason why wholesalers would buy from AZ when a lower price is on offer from the generic companies. Short of largely abandoning almost all of an important market, it seems to me more likely than not that AZ would cut their price by a significant amount.[107]The next question is whether AZ could put its price back up if it were to win the appeal. Sandoz said this was the key point in the application. Sandoz (and by inference Bestway) accepted that if AZ could not in practice restore its price, AZ would suffer irreparable harm. Viatris said the same thing, subject only to Dr. Chowdhury's evidence on no saturation which I have rejected. Glenmark did not dissent. Teva did dissent and I will consider that in a moment.[108]On price restoration, it was not in dispute that AZ would be free to restore the price of Forxiga if it so chose. The debate was whether, in practice, the consequences of doing so would make it workable. I have earlier referred to Dr. McGill's evidence on this.[109]Sandoz argued that irrespective of what Dr McGill said, the real position was represented by the VPAG scheme. It provides a code of behaviour as between drug companies and the DHSC which governs their relationship with regard to pricing, to the exclusion of other considerations. Neither the DHSC nor a Scheme Member would ever act inconsistently with VPAG.[110]This was a submission unsupported by evidence. I have no evidential reason to believe that the VPAG scheme has an overriding effect on the pricing of drugs to the exclusion of all else. No witness said that it does and I was not shown anything within the published scheme that establishes as much.[111]Dr. McGill's evidence in this regard was directed to the likely behaviour of the DHSC notwithstanding the parties’ agreements under the VPAG scheme. There was no directly contrary evidence.[112]Instead, Sandoz, along with Teva, had an alternative submission. They relied on the passage from the DHSC’s letter of 25th May 2025 which I have quoted in paragraph 79 above.[113]Teva and Sandoz said that I should take this to be a clear statement from the DHSC that it would not act in the way that Dr. McGill suggests. I cannot accept the submission. The letter makes it very clear that the DHSC does not intend its correspondence to be evidence of any kind, which is plainly correct. The DHSC and the NHS employ a huge number of individuals in their many different branches. Had there been a witness statement from an individual in the DHSC or NHS, I would or should have known from its contents with what authority the deponent spoke, whether any view expressed could be reliably accepted as applying across all relevant parts of the DHSC and/or NHS, and would have been provided with reasons for the view expressed, given in appropriate detail. I would then have been able to assess the relevance of the evidence and to give it appropriate weight. I cannot treat the letter in the same way and to be fair to the DHSC, the writer states that I should not. I must rely on the evidence as filed.[114]Dr. McGill has an apparently justified claim to experience the behaviour of the NHS in such circumstances and she believes that a way would be found by the NHS to prevent or limit the restoration of the price. I have no good reason to reject that evidence.[115]I find that in practice AZ would find it difficult to restore the price of Forxiga after a likely reduction in price over the next 4-8 weeks while maintaining a satisfactory relationship with the NHSC and would probably not restore the price.[116]As I have said, Sandoz (and by inference Bestway) and Viatris accepted that this would lead to irreparable harm to AZ. Glenmark did not contend otherwise.[117]Teva, on the other hand, addressed AZ heads of irreparable harm which, as I have indicated, came down to one. It rests on Dr. McGill saying that a temporary cut in the price of Forxiga would threaten its joint project with the NHS regarding patients with Type-2 diabetes and thereby potentially affect the market for Forxiga.[118]Teva submitted that Dr McGill’s evidence is fatally undermined by the final sentence of paragraph 46 of Dr. McGill's second witness statement, which I have quoted above at paragraph 63. I agree that no such effect would follow from a reduction in price over the next 4-8 weeks. But I do not understand that to be Dr McGill’s point, which is rather that a forced long-term reduction in the price of Forxiga would cause a cut in the investment in the project, potentially having an unpredictable though negative effect on the demand for Forxiga. I accept that evidence. Although not a point argued by any of the parties, I would assume that the matter would require a careful assessment by AZ between two unattractive options, but the scope for irreparable harm is there. This is an important and lucrative drug, so I cannot dismiss the possibility that the damage would be significant.

Potential irreparable harm to the respondents

[119]I therefore turn to whether damages on the cross-undertaking would be an adequate remedy to the respondents in the event of an interim injunction pending the appeal. Fortunately, this is a good deal more straightforward.[120]The Court of Appeal reviewed the evidence as it was then and noted that Glenmark would not have first-mover advantage, since it was apparent that Teva and another generic company were, at that time, in a position to follow suit. For the reasons I have discussed, I find that the same reasoning applies now with greater force.[121]The Court of Appeal took the view that if there were an injunction pending this hearing and it was lifted afterwards, the sales pattern of the three generic companies from that point on would give a reasonably accurate guide to the sales pattern during the interim period. The difference would be just one of timing. Nonetheless, the Court said that the uncertainties involved in such back-dating were such that it was no more possible to reach a reliable view as to the adequacy of damages as a remedy for Glenmark than it was for AZ.[122]I note that both sides considered only the potential damage due to an injunction granted or not being granted in that period. In contrast to the position before the Court of Appeal, there was no argument that there would be any relevant potential damage caused by what may happen after that period.[123]The respondents’ main arguments on their potential loss in this application are again based on the difficulty of assessing speculative damage based on the counterfactual, that sales were made by the respondents in the next 4-8 weeks. They contrast this with the task of, in respect of damage to AZ, which would be assessed on the basis of known facts.[124]The respondents emphasise the uncertainties that would bedevil the counterfactual sales that they would have made if there had not been an injunction. The main evidence on this came from Dr. Chowdhury. She pointed to factors which could have affected those sales and which would be difficult to decide, namely:(1) the speed with which each respondent would have entered the market;(2) the sales thereafter by each respondent;(3) the potential sales by other generic companies that entered the market. Sales of each generic company would depend on the price charged and efficiency of its distribution, reliability of supply and brand strength. Dr. Chowdhury said that all of these would be difficult to assess.[125]With regard to the possibility of backdating sales patterns as they happen after judgment in the appeal in June, the respondents argue that, contrary to what the Court of Appeal found, this would not provide a reliable guide. They said the readiness of each of the generic companies to enter the market after judgment in the Court of Appeal will differ from their readiness now. Some of them may be risk-averse and choose not to enter the market until after the appeal. The respondents say that all of this would have to be taken into account in the very complex counterfactual in the event of an inquiry as to damages on the cross-undertaking[126]I think I can fairly summarise AZ's submission on irreparable harm to the respondents by saying it endorsed what was said in the AZ Appeal Judgment.

Conclusion

[127]The picture that emerges from the evidence overall is that if the respondents are restrained from marketing pending the appeal in June and then the injunction is lifted, the pattern of each generic company going forward would provide a starting point for assessing what would have happened as of now. Undoubtedly, there would be uncertainties, as the Court of Appeal found although I am not convinced that the readiness of generic companies to enter the market, likely to be high, adds anything of significance. Not do I think that the uncertainties would be as great as Dr. Chowdhury contends.[128]In an inquiry on the cross-undertaking, the court would be able to reach a result. It is the sort of exercise that courts have to perform on a fairly regular basis. There is a clear possibility of error, which of course could go either way – in the respondents' favour or AZ’s. It is the prospect of error which creates the potential irreparable harm to the respondents. There is a risk that they will not be adequately compensated.[129]As against that, if there is no injunction, there is likely to be a price spiral downwards and even if not, a virtual certainty that the price of the generic products will undercut the actual price of Forxiga by around 20%. It is also likely that AZ would be forced to cut its price and would in practice be unable to restore the price to its current level if it were to win the appeal. AZ’s joint project with the NHS regarding SGLT2 inhibitors would be undermined with an unpredictable but potentially damaging effect.[130]Each side is likely to suffer irreparable harm on the alternative hypotheses of an injunction being granted or not. The harm on either side is different, so there is no question of comparing like with like in assessing the comparative risk with any measure of accuracy. Uncertainties exist on both sides.[131]In those circumstances, following a principle of law emphasised by the Court of Appeal in Neurim Pharmaceuticals and endorsed in the AZ Appeal Judgment (see above) I am persuaded that it is appropriate for me to maintain the status quo. All the more so, since the Court of Appeal may well deliver its decision in only four weeks' time. The status quo requires the grant of an injunction as sought. (For continuation of proceedings: please see separate transcript) - - - - - - - - - - -

Cited in 3 later judgments