There could be more at stake for Pfizer in its UK Supreme Court pregabalin patent dispute than was previously thought. A recently-released study argues that if the pharma company loses the case, it will be liable to pay the National Health Service (NHS) £502 million in compensation.

The study highlights a danger for pharma innovators: if they are unsuccessful in seeking to maintain or enforce patents, they could be sued by third-party healthcare providers seeking to recoup excess prescribing costs. Such an approach is already established government policy in Australia; and, if it were to become more common in other markets, such as the UK, it would create new enforcement headaches for Pfizer and other innovators.

As IAM reported recently, in mid-February the UK Supreme Court heard a dispute between Pfizer subsidiary Warner-Lambert and several generic competitors over a second medical use patent for the use of pregabalin (marketed by Pfizer as Lyrica) in treating neuropathic pain. The patent in question was invalidated on grounds of insufficiency in late-2015 when challenged by Actavis and others.

Pfizer has been trying to have the decision reversed ever since, failing at the Court of Appeal in 2016, and now fighting its corner before the UK’s highest court – even though the patent at issue expired in July 2017. The Supreme Court decision is set to answer the crucial question of what role ‘plausibility’ should play in the test for sufficiency of disclosure of a patent.

And there could also be a substantial sum of money riding on the outcome of its final decision, if a new study by researchers at the University of Oxford and EIP Europe is to be believed.

When Pfizer sued Actavis for infringement of its patent in 2014, a court ordered the NHS to instruct its Clinical Commissioning Groups to prescribe Lyrica, rather than generic versions of pregabalin, for neuropathic pain. The study argues that, if Pfizer is unsuccessful in overturning the invalidation of its patent, it should be held liable for the excess costs of prescribing Lyrica between the invalidation and the IP right’s expiry in July 2017. This, it calculates, adds up to £502 million.

Of course, the paper’s recommendations could come to nothing. But a compensation battle with the NHS would be a painful end to Pfizer’s gruelling Lyrica dispute – not only financially, but potentially also in terms of reputation, as there is very little held in higher esteem in the UK than its perennially cash-strapped, free-at-the-point-of-service universal healthcare provider. Such a claim would surely catch the attention of other pharmaceuticals innovators concerned about the prospect of similar actions.

Third-party claims are already well-established in Australia, where the government seeks ‘market-size damages’ as a matter of course from life sciences companies that pursue unsuccessful patent claims. Indeed, it is currently embroiled in a highly-controversial Federal Court case against Sanofi-Aventis, in which it is seeking $54.8 million to compensate the publicly-funded Pharmaceutical Benefits Scheme for extra money it spent on an IP-protected product that Sanofi sought to enforce against a generic competitor, but whose patent was ultimately invalidated.

Australia’s approach was criticised recently by the Intellectual Property Owners Association, which stated in its submission to the US Trade Representative’s Special 301 review that the policy “unfairly tips the scales in commercial patent disputes” in favour of generics.

What is being proposed in the NHS case is different from what has happened in the Australian government’s Sanofi-Aventis dispute: the prospective £500 million in compensation relates to costs incurred after, rather than before, an initial invalidity ruling.

But the possibility of increased third-party involvement in patent disputes in the UK and other jurisdictions – a prospect that became an unexpected talking-point at IAM’s second annual Pharma and Biotech IP Summit earlier this month – should not be ruled out. And as delegates and speakers at our event emphasised, such a trend would create significant additional risks for pharma innovators to factor in when deciding how or whether to enforce their rights.