Damage Evaluation in the pharmaceutical industry
Pharmaceutical Multinational Group active in the manufacturing and marketing of products under Therapeutics, Primary Care and Active Ingredients categories.
The Group markets its products either directly, through its own sales force, either indirectly through distributors.
The Group, defendant within an international arbitration regarding an alleged damage claimed by the Italian distributor (plaintiff), has asked VVA a support, from an economic standpoint, in order to either limit or avoid the alleged loss.
The period immediately preceding the termination of distribution agreements between manufacturers and distributors, usually long-term lasting, represents a critical moment in the relationships between the parts, especially considering the possible renewal. During these phases the risk of litigation increases and often leads to damage refund claims due to contractual infringements.
In the present Case History, VVA has exploited its expertises in the field of commercial litigations in the pharmaceutical industry performing its support to the defendant within the international arbitration started by its Italian independent distributor.
According to the plaintiff’s thesis, the delayed delivery of products and the following shortage in stocks has led to the impossibility to implement the marketing strategy aiming to achieve a relevant market opportunity.
In performing its expert’s report, VVA has focused on two specific elements, i.e. the availability of sufficient stocks and the scarce reliability of the distributor’s business plan assumptions. In details:
as to stock levels, a detailed historical trend analysis has demonstrated that the presence of the products along the whole distribution chain would have allowed at least to start the implementation of the marketing strategy;
as to the economic unreliability of the distributor’s business plan assumptions, the competitive analysis within the relevant market, the examination of the link between marketing efforts and sales, the analysis of the reasonability of the forecasted market shares have allowed VVA to demonstrate the lack economic soundness in the distributor’s business plan.
In the light of the argumentations developed and presented to the Paris International Chamber of Commerce (ICC) by VVA, the damage refund claim was rejected.