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Billion-pound legal disagreement between pharmaceutical company and the National Health Service (NHS) moves forward

NHS's Claim Over Unjustified Antidepressant Prices, Deemed Not Too Late by Court of Appeal and Competition Appeal Tribunal.

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Appeals Court Upholds Competition Appeal Tribunal Decision, confirming NHS's Anti-Depressant Price...
Appeals Court Upholds Competition Appeal Tribunal Decision, confirming NHS's Anti-Depressant Price Claim Within Legal Timeframe.

NHS Victory in Court of Appeal Challenges Drug Price Claim

Published on May 27, 2025

The Court of Appeal has confirmed a ruling in favour of numerous NHS bodies against pharmaceutical giants, including Lundbeck and Generics (UK) Limited. In a trial on Friday, May 23, the court dismissed an appeal concerning the validity of the NHS's claim for damages exceeding £500 million, stemming from inflated anti-depressant drug prices.

The dispute originates from unlawful agreements found to be in breach of Article 101 of the Treaty on the Functioning of the European Union (TFEU). These arrangements, perpetrated by Lundbeck and other generic drug manufacturers, aimed to impede the market entry of cheaper generic versions of Lundbeck's antidepressant drug, citalopram.

Background

The European Commission initiated an investigation into these agreements in 2010, culminating in a decision on June 19, 2013, which revealed anti-competitive practices by Lundbeck and its generic competitors. The companies received fines totaling €146 million, prompting appeals to the Court of Justice of the European Union, which were dismissed in March 2021.

In June 2019, the NHS bodies launched High Court proceedings, claiming damages for the overpriced citalopram. Proceedings were paused pending the European Union's appeal verdict, and in July 2021, the High Court transferred the case to the Competition Appeal Tribunal (CAT), where the NHS bodies submitted a new claim form in March 2023 – within the two-year limitation period established by CAT rules.

Arguments

The defendant pharmaceutical companies argued that the claim was time-barred under the Limitation Act 1980, asserting that the initiation of the High Court proceedings in 2019 had already passed the six-year time limit and that the transfer to the CAT did not reset the time limit. They also asserted that the NHS bodies were contractually estopped from maintaining that their claim fell within the limitation period.

The NHS bodies, on the other hand, asserted the validity of their claim under the CAT rules, which provide a two-year limitation period for follow-on claims originating from the date the European Commission decision becomes final. They argued that the filing of the claim form in the CAT in March 2023 was well within the stipulated timeframe, and the transfer from the High Court did not render their claim invalid.

Judgment

The Court of Appeal unanimously endorsed the CAT's decision. Lord Justice Green, alongside Sir Julian Flaux and Lord Justice Phillips, ruled that the claim was validly constituted under the CAT rules, which are extensive and self-contained. The court rejected the pharmaceutical companies' claim that the transfer from the High Court rendered the claim subject to the Limitation Act 1980, determining that the filing of the claim form in the CAT constituted the commencement of proceedings.

In rendering their verdict, the court highlighted the significance of legal certainty and emphasized the need for objective interpretation of limitation rules. The court also rejected the pharmaceutical companies' contractual estoppel argument, stating that the Transfer Order did not limit the NHS bodies' right to bring a claim within the CAT's limitation period. The court referred to relevant precedents, including the UK Supreme Court's judgment in Sainsbury's Supermarkets v Mastercard, which affirmed the autonomy of the CAT's procedural rules, ensuring that claims filed under these rules were unaffected by external time limits or procedural constraints. Applying Sainsbury's, the court determined that the NHS bodies' claim was not time-barred and could continue in the CAT, with Lord Justice Green concluding, "The filing of the claim form, despite being envisaged as a substitution for Particulars in the High Court, and in general, the parties' understanding of the filing as a continuation of transferred proceedings rather than a free-standing claim, does not impact the legal consequences of the filing regarding limitation periods, which are outlined in the Rules themselves."

Furthermore, the court stated, "In the interests of legal certainty, rules on limitation should be construed objectively, and the question of whether the filing of a claim form has successfully interrupted the running of time should not rely on extraneous factors or the parties' understanding."

This ruling presents a decisive and important victory for the NHS bodies, enabling them to pursue substantial damages for inflated citalopram prices, while reinforcing the autonomy of the CAT's procedural rules and the importance of adhering to specific limitation periods for follow-on claims.

The Parties

The case, Secretary of State for Health and Social Care and Others (respondents) v Lundbeck and Others (appellants), saw the NHS bodies represented by George Peretz KC of Monckton Chambers and David Drake of Serle Court, instructed by Peters & Peters. The appellant pharmaceutical companies were represented by Sarah Ford KC and Tim Johnston of Brick Court Chambers, with Paul Luckhurst of Blackstone Chambers, and instructed by Clearly Gottlieb Steen & Hamilton, Skadden, Arps, Slate, Meagher & Flom, Dentons, Macfarlanes, CMS, Clifford Chance, and Pinsent Masons.

  1. The ruling in favor of the NHS bodies by the Court of Appeal could have far-reaching implications for the health-and-wellness industry, as it may encourage further investigations into medical-conditions-related price-fixing agreements among pharmaceutical companies and generic drug manufacturers, potentially leading to further waves of finance-based actions and investing in the industry.
  2. The judgment serves as a reminder of the importance of science and innovation within the medical sector, as the NHS bodies' ability to challenge price-inflation on life-changing drugs like citalopram could pave the way for more affordable treatment options, positively impacting public health and wellness in the future.
  3. The legal victory achieved by the NHS bodies against pharmaceutical powerhouses like Lundbeck and Generics (UK) Limited spotlights the need for ethical business practices within the finance and investing landscapes, particularly within the health sector, where the wellbeing of millions of people relies on fair pricing and competitive market dynamics.

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