Case note: Commonwealth v Sanofi and the Federal Court decision
On 28 April 2020, Justice Nicholas handed down his decision in the case of the Commonwealth (Australian Department of Health) v Sanofi (Commonwealth of Australia v Sanofi (formerly Sanofi-Aventis) (No 5)  FCA 543).
In this case, the Commonwealth claimed damages from Sanofi in the sum of AU$325 million pursuant to the Cross-undertaking given by Sanofi in order to qualify for a Preliminary Injunction (PI) (which was granted and later overturned) to compensate any party adversely affected by the PI. The Commonwealth argued that the granting of the PI prevented it reducing the subsidy paid to Sanofi pursuant to the Australian PBS that would have been consequent upon the generic, Apotex, entering the market. The Commonwealth argued that the damage could roughly be calculated as multiplying the amount of the subsidy that would have occurred if the PI had not prevented Apotex entering the market by the duration of the injunction.
In a lengthy judgment available here which considered numerous legal arguments and issues, Justice Nicholas ultimately rejected the Commonwealth’s argument finding that:
“I am not persuaded that Apotex Australia would have sought and obtained the PBS listing of its clopidogrel products from 1 April 2008 even if the interlocutory injunction had not been granted”.
Given this conclusion, his Honour noted that it was unnecessary to proceed any further. The finding that Apotex would not have applied for PBS listing in the face of threatened litigation meant that the Commonwealth could not prove that it suffered any loss as a result of the granting of the preliminary injunction. However, given the extent of the evidence and submissions, and the likelihood of an appeal, his Honour went on to make further findings in relation to the other key issues raised by the parties. For example, his Honour concluded that any application made by Apotex to list its clopidogrel products on the PBS from 1 April 2008 would most likely have been approved by the Minister or Delegate, notwithstanding the risk of the PI.
Obviously, there is a high prospect that the decision will be appealed to the Full Federal Court of Australia but for the time being it represents the law. We will prepare a more detailed summary of the case over the next few days.