The Pfizer case and slow­poke jus­tice

Jamaica Gleaner - - OPINION&COMMENTARY -

THE HUGE awards, in Ja­maican terms, de­manded by the Ja­maican firms Lasco Dis­trib­u­tors and Med­im­pex Ltd from the global phar­ma­ceu­ti­cal giant, Pfizer, have, un­der­stand­ably, gen­er­ated sig­nif­i­cant in­ter­est in the fi­nal leg of their patent case, which Pfizer lost. It has the el­e­ments of a clas­sic David and Go­liath bat­tle as well as a juicy busi­ness thriller, with cash slosh­ing around at the end.

In­deed, the prospect of Jus­tice Viviene Har­ris award­ing the pub­licly listed Lasco the US$311 mil­lion (J$39.6 bil­lion) — plus in­ter­est — or any­thing near that sum, in dam­ages for loss of sales dur­ing the five years when it was barred from sell­ing its generic blood pres­sure drug, is likely to be caus­ing much sali­va­tion among stock­hold­ers. Not only would the com­pany’s stocks rise on the mar­ket, but you can ex­pect calls for di­rec­tors to make a big dis­tri­bu­tion for share­hold­ers to ben­e­fit from the wind­fall.

Med­im­pex’s de­mand is a mere four per cent of Lasco’s. But ex­tra­or­di­nary in­flow of US$11.5 mil­lion (J$1.5 bil­lion) would, no doubt, have sub­stan­tial im­pact on the bal­ance sheet of a rel­a­tively small com­pany.

But be­yond the pos­si­ble ef­fect on the bot­tom lines of the two Ja­maican com­pa­nies in­volved, the case again un­der­lines an im­por­tant is­sue to which the Ja­maican au­thor­i­ties need to pay at­ten­tion and move quickly to re­solve: the slow pace at which busi­ness dis­putes are re­solved in the is­land’s courts.

The case in­volved the Pfizer drug for hy­per­ten­sion, Nor­vasc (Am­lodip­ine be­sy­late) and whether the Ja­maican firm vi­o­lated its patent when it started sell­ing generic ver­sions of the drug in the early 2000s. Pfizer, through a lo­cal lawyer, ap­plied for a Ja­maican patent for Am­lodip­ine be­sy­late in 1992, which was granted in 2002 — a whole decade later. The rea­son for that de­lay is not clear, but it is a mat­ter that is still wor­thy of ex­plo­ration to en­sure that what, on the face of it, ap­pears to have been a lin­ger­ing crawl is not the norm for this kind of un­der­tak­ing. It is cer­tainly not good ad­ver­tise­ment for a coun­try keen on at­tract­ing in­vest­ment.

Armed with its patent, Pfizer, in 2005, ob­tained court in­junc­tions against Lasco, Med­im­pex, as well as a third com­pany, which im­me­di­ately halted the sale of its generic drug and, un­like the other two, didn’t bother to chal­lenge Pfizer. That in­junc­tion re­mained in place un­til 2012.

The prob­lem for Pfizer is that courts, in­clud­ing the Privy Coun­cil in the UK, held that un­der Ja­maica’s patent law, the phar­ma­ceu­ti­cal pow­er­house had no patent to in­fringe. The is­sue is that in the event of a per­son or com­pany hold­ing patents in mul­ti­ple coun­tries for the same in­ven­tion/in­no­va­tion, it loses the right to re­ceive one in Ja­maica once the first of the for­eign patents has ex­pired. In the case of Am­lodip­ine be­sy­late/ Nor­vasc, its patent had ex­pired in 1997, five years be­fore it pur­port­edly ac­quired one in Ja­maica.

STRAIGHT­FOR­WARD ON SUR­FACE

All this seems pretty straight­for­ward. But it will have been a dozen years since Pfizer ac­quired its in­junc­tion when Jus­tice Har­ris is ex­pected to present her find­ings on dam­ages later this week. The sub­stan­tive mat­ter reached the courts in 2009, four years af­ter the in­junc­tion. The Ja­maican firms won.

Pfizer ap­pealed, and the first two hear­ings were on March 2 and 3, 2010. Ac­cord­ing to the ap­peal court rul­ing, the next ses­sion was two years later, on May 31, 2012. Pfizer lost again. The case reached to the Privy Coun­cil, and that same year, that court ruled against Pfizer. It is now an­other three years on.

We see this in the con­text of Ja­maica’s po­si­tion of 75 of 138 coun­tries in the Global Com­pet­i­tive­ness Re­port. While Ja­maica is ranked 35 for ju­di­cial in­de­pen­dence and 45 for the en­force­ment of prop­erty rights, it is 70th with re­gard to the ef­fi­ciency with which it set­tles le­gal dis­putes and 73rd on how ef­fi­ciently gov­ern­ment reg­u­la­tions can be chal­lenged. The long time in set­tling dis­putes such as the Pfizer case doesn’t al­low for cor­po­rate cer­tainty, which af­fects in­vest­ment de­ci­sion, which, not­with­stand­ing the oc­ca­sional big pay­out for firms, is not good for the econ­omy.

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