Spanish Court issues damages ruling in pharmaceutical case

Summary

On 23 June 2023, the recently created Section 32 of the Madrid Appeal Court, specialising in patents, handed down a judgment (no. 18/2023) that is of great interest to the pharmaceutical industry for the following reasons:

• Firstly, due to the detail with which it addresses the issue of damages arising from an infringement of a pharmaceutical patent and its supplementary protection certificate ("SPC").
• Secondly, and what is even more novel, the court attributed the liability derived from the reduction of the price of the original drug only to the holder of the first generic drug that launched before the expiry of the patent and SPC. It did not attribute liability derived from the reduction of the price to the rest of the companies that launched subsequently, despite also launching when the patent and the SPC were also still in force.

Background of the case

Launch of generics

The claimants were the owner and exclusive licensee in Spain of a patent protecting the use of the active ingredient raloxifene in the preparation of a medicament for preventing or treating osteoporosis. The drug was protected by a patent expiring on 28 July 2012, and subsequently by a SPC, valid until 5 August 2013.

The defendants were two companies that launched their generic drugs on the market before the expiration of the patent and the SPC, but did so at different times. The first company launched its generic in May 2011, while the second company did so in January 2012. (This time difference was decisive for the imputation of liability arising from damages to each of the defendants as we discuss below.)

Following the launch of the first generic drug in May 2011, the so-called “homogeneous group” was created, consisting of drugs with the same active ingredient, dosage form, content, pharmaceutical form and route of administration. The grouping therefore was formed by two original raloxifene drugs, marketed under the trade marks OPTRUMA and EVISTA, together with the first raloxifene generic.

Innovator’s response

Under the lower price system, pharmacists have to dispense the lowest priced drug of those that were part of the same homogenous grouping. Consequently, to match the price of the marketed generic, the claimants reduced the price of their drugs by…