Breach of Contract for a Branded Drug


Cornerstone Research and an affiliated expert analyzed the impact on a branded drug’s value when a pharmaceutical company interrupted the supply and promotion of the drug.

An investment firm that owned the intellectual property rights to a branded drug brought suit against its partner, a pharmaceutical company. The investor plaintiff alleged that the defendant failed to uphold its obligations to manufacture and promote the drug. The plaintiff claimed that the defendant’s failure led to supply interruptions and periods where the drug was not promoted to physicians, which irreversibly damaged the drug’s long-term value.

Plaintiff counsel retained Cornerstone Research and an affiliated expert to assess the role that consistent supply and promotion play in generating drug sales and to estimate damages by valuing the drug before and after the alleged breach of contract.

Cornerstone Research and the expert analyzed the health economics literature and data on promotion and sales for drugs in the relevant therapeutic category. The expert concluded that the cessation of promotional activities and the temporary interruption in supply substantially impacted the drug’s contemporaneous and future sales.

Working with Cornerstone Research, the expert also calculated the economic impact of the defendant’s alleged misconduct, building a discounted cash flow model to estimate what the drug’s value would have been with consistent supply and promotion. He then compared this amount to the value the plaintiff actually received to arrive at an estimate of damages.

For additional information about this case, please contact Rahul Guha or Zoya Marriott.