A wave of disputes on the horizon for pharma

By Michael Frisby, partner, and Robert Eriksson, managing associate at Stevens & Bolton LLP

The pharmaceutical industry is facing the prospect of an increase in disputes in the coming months. A combination of recent events such as the pandemic, the changes arising from Brexit and the war in Ukraine have all had an impact on supply lines. The energy crisis and other economic conditions are contributing to inflationary pressures across the board.

These factors can result in difficulties in performance of contracts and where a contract might once have been profitable, economic and political conditions might now make them uneconomic, leading parties to seek to terminate, sparking claims of breach and claims for specific performance and damages, potentially leading to insolvency. In the wake of the pandemic, we have seen court decisions on the issue of force majeure. It is a contractual entitlement under English law and its scope depends upon the wording of the contract. Where the contract sets out a procedure, failure to follow it could be fatal.