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Damages in life sciences arbitrations

February 4, 2021
Genetic research, conceptual image

In “Damages in life sciences arbitrations”, a chapter published in The Guide to Damages in International Arbitration, we explore arbitrated disputes in the life sciences sector. The goal of the damages inquiry in this sector is standard: to restore the claimant to the financial position it would have achieved had the improper conduct not occurred. Standard approaches are used to attain this goal, namely determining the claimant’s ‘but for’ profits at each point in time during the damages period and subtracting from these the claimant’s actual profits (if any). The differences between these amounts are then brought forward (in the case of past damages) or discounted back (in the case of future damages) to the relevant date (often the date of the hearing, or the expected date of the award), using appropriate interest and discount rates. There are, however, some complexities to damages calculations in the life sciences industries worthy of further discussion.

The first section of this chapter provides a brief overview of salient characteristics of the life sciences sector, with a focus on the biopharmaceutical industry. We then outline the main types of disputes heard in life sciences arbitrations. Following this, we discuss the aspects of common analyses specific to life sciences that are used to determine damages in these types of disputes.

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