The Secretary of State for Health and Others v Servier Laboratories Ltd and Others
| Jurisdiction | England & Wales |
| Judge | Mr Justice Henderson |
| Judgment Date | 04 October 2016 |
| Neutral Citation | [2016] EWHC 2381 (Ch) |
| Docket Number | Case No: HC-2011-000064 |
| Court | Chancery Division |
| Date | 04 October 2016 |
[2016] EWHC 2381 (Ch)
The Honourable Mr Justice Henderson
Case No: HC-2011-000064
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Rolls Building
Royal Courts of Justice
Fetter Lane, London EC4A 1 NL
Mr David Drake and Mr Philip Woolfe (instructed by Peters & Peters Solicitors LLP) for the English Claimants
Ms Helen Davies QC and Ms Sarah Ford (instructed by Bristows LLP) for the Defendants
Hearing dates: 10 and 11 May 2016
Introduction
The issue on this application, which I heard on 10 and 11 May 2016, is whether the defendants ("Servier") should be granted permission pursuant to CPR rule 17.1(2)(b) to re-amend their defence to plead that the English claimants failed to take reasonable steps to encourage switching from the prescription of Perindopril to the prescription of cheaper alternative ACE inhibitors in generic form. This broad contention, which I will call "the prescribing argument", is set out in paragraphs 83B to 83D of the draft re-amended defence ("the draft RAD"). It gives rise to the following specific defences, which Servier now seeks permission to plead:
i) the English claimants have failed to take all reasonable steps to mitigate their loss, and Servier is not liable to compensate them in respect of loss suffered by reason of this failure (paragraphs 83A and 83H of the draft RAD);
ii) save in so far as the English claimants' claim is advanced on the basis of the intentional tort of interference with their economic interests by unlawful means, these matters amount to contributory negligence on the part of the English claimants and the damages recoverable should be reduced or extinguished to the extent just and equitable having regard to their share in the responsibility for the damage (paragraph 83.M of the draft RAD); and/or
iii) these matters broke the chain of causation and/or rendered any damage suffered by the English claimants too remote (paragraph 83.L of the draft RAD).
It should be noted that the English claimants do not object to the introduction by amendment of a further argument, set out in paragraphs 83E to 83G of the draft RAD, that the English claimants failed to act expeditiously in order to move Perindopril into Category M of the Drug Tariff, and to the defences based on that alleged failure. Accordingly, it is only the introduction of the prescribing argument, and the defences based on it, which remain in issue between the English claimants and Servier.
It should also be noted that the Scottish/NI claimants and the Welsh claimants have each consented to Servier's application to amend its defence to introduce similar amendments, including those based on the prescribing argument, in the Scottish/NI and Welsh proceedings respectively. A prime motivation of the English claimants in opposing Servier's application to make the amendments based on the prescribing argument is that giving disclosure of all documents formerly held by the English Primary Care Trusts in relation to the prescribing argument, as well as addressing it comprehensively in witness evidence and at trial, would be extremely burdensome and expensive: see the 10 th witness statement of Jonathan Tickner, the partner of Peters & Peters who has conduct of the proceedings on the English claimants' behalf, dated 19 November 2015. Rightly, however, counsel for the English claimants, Mr David Drake, appearing with Mr Philip Woolfe, have not relied on these alleged consequences of permitting the amendments as an independent reason for opposing them. If the disputed amendments are allowed, careful consideration will need to be given to the resulting disclosure by the English claimants, and the need to keep it within reasonable bounds, for example by confining it to a representative cross-section of Primary Care Trusts and Strategic Health Authorities.
For the general background to these proceedings, and their history down to the last case management conference which I held on 26 and 27 November 2015, reference should be made to the judgment which I handed down on 26 February 2016, dealing mainly with further disclosure to be given by Servier, and various disputed amendments to the particulars of claim of the Scottish/NI and Welsh claimants: see [2016] EWHC 3066 (Ch). In particular, that judgment contains at [13] to [21] a summary of the issues in the English proceedings, and at [10] to [11] a description of the background to Servier's application to re-amend its defence.
The Disputed Amendments
With this introduction, I will now set out the disputed amendments:
" K1. FAILURE TO MITIGATE, CAUSATION/REMOTENESS AND/OR CONTRIBUTORY NEGLIGENCE
83A. Without prejudice to the foregoing denials, further and/or alternatively the Claimants have failed to take all reasonable steps to mitigate their loss. Pending full disclosure, the best particulars that the Defendants are able to give of the Claimants' failure to mitigate their loss are set out below.
Failure to take all reasonable steps to encourage switching to cheaper ACE Inhibitors
83B. The Claimants were aware or should have been aware that:
(a) Alternative ACE Inhibitors were available in generic form. In particular, generic launch of Enalapril took place in or around December 1999, Lisinopril in or around September 2002 and Ramipril in or around December 2003;
(b) ACE Inhibitors exert a 'class effect' and there was no clinical difference between Perindopril and the other ACE Inhibitors already available in generic form. NHS prescribers could therefore prescribe these ACE Inhibitors as an alternative to Perindopril; and
(c) The reimbursement prices of generic ACE Inhibitors were significantly less than the reimbursement price of Perindopril during the relevant period.
83C. In these circumstances, the Claimants should have taken all reasonable steps to encourage switching from the prescription of Perindopril to the prescription of cheaper alternative ACE Inhibitors in generic form. In particular, but without limitation, the Claimants should have:
(a) Removed Perindopril from the local formularies;
(b) Issued national guidance encouraging a switch from Perindopril to the prescription of cheaper alternative ACE Inhibitors in generic form;
(c) Issued local PCT guidance encouraging a switch from Perindopril to the prescription of cheaper alternative ACE Inhibitors in generic form, including through meetings with GPs, through newsletters and through meetings with individual PCT pharmacists or agents;
(d) Used the national Quality and Outcomes Framework to incentivise a switch from Perindopril to the prescription of cheaper alternative ACE Inhibitors in generic form. For example in 2004, GPs were incentivised to meet with their prescribing advisor and review all patients with repeat prescriptions for multiple therapies. This would have provided the opportunity to encourage switching;
(e) Introduced or encouraged the introduction and use or further use of software such as 'Scriptswitch' which provides a visual prompt for NHS prescribers in order to highlight the availability of an alternative, more cost-effective treatment;
(f) Provided additional support reasonably necessary to facilitate the switching of patients from Perindopril to cheaper alternative ACE Inhibitors, including by providing patient information leaflets and/or template letters for use by GPs when switching patients; and
(g) Taken all reasonable steps and allocated reasonable resources to ensure that the foregoing measures were complied with, including monitoring compliance and taking further steps in circumstances of non-compliance.
83D. Pending full disclosure, the Defendants are presently unable to particularise the extent to which each individual Claimant took or failed to take one or more of the above identified steps. However, each of the Claimants either failed to take the steps identified above and/or alternatively having taken such steps, failed to take any or any sufficient steps to ensure compliance with them.
Failure to act expeditiously in order to move Perindopril into Category M of the Drug Tariff
…
83H. In the light of the foregoing, the Claimants have failed to mitigate their loss and the Defendants are not liable to compensate the Claimants in respect of loss suffered by reason of such failure to mitigate.
The Claimants' knowledge
83I. Insofar as the extent of the Claimants' knowledge of the alleged wrong or wrongs complained of and/or any alleged loss is relevant to the Claimants' failure to take all reasonable steps to mitigate their loss (which proposition is for the avoidance of any doubt denied), pending full disclosure the extent of the Claimants' knowledge of these matters is not a matter within the Defendants' knowledge, but the Defendants will say that the Claimants had or ought to have had sufficient knowledge for these purposes at the latest by the following dates, advanced in the alternative and/or cumulatively:
(a) 4 November 2004, being the date by which a series of opposition notices together with detailed grounds of invalidity were filed at the EPO against the 947 patent by [ details are then given of the dates when opposition notices were filed by Niche Generic Ltd and seven other producers];
(b) 8 August 2006, being the last date of the hearing of D1 and D3's applications for an interim injunction in the Apotex proceedings. The First Witness Statement of Colin Darroch for Apotex dated 5 August 2006 stated that patent 947 was invalid at paragraph 7 and Apotex's skeleton argument for the hearing asserted ' a strong invalidity case' although it was accepted for the purpose of the hearing that validity was arguable;
(c) 18 August 2006,...
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The Secretary of State for Health and Another v Servier Laboratories Ltd
...prescribing argument was opposed by the English Claimants. In granting permission to amend, Henderson J (as he then was) observed, [2016] EWHC 2381 (Ch) at [3]: “A prime motivation of the English claimants in opposing Servier's application to make the amendments based on the prescribing ar......