The Pfizer case and slowpoke justice
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.