He’s a big man, he’s in big trouble and he’s facing big fees from the lawyers in the small country where Megaupload founder Kim Dotcom has been sequestered while fighting the US authorities wanting to extradict him to the US on copyright, money laundering and racketeering charges. Problem for the US is things aren’t going too well.

Dotcom lawfuel

He’s a big man, he’s in big trouble and he’s facing big fees from the lawyers in the small country where Megaupload founder Kim Dotcom has been sequestered while fighting the US authorities wanting to extradict him to the US on copyright, money laundering and racketeering charges. Problem for the US is things aren’t going too well.

Kim Dotcom’s New Zealand lawyers are looking for $2.5 million to be released to take care of fees to date.Dotcom, represented by Simpson Grierson lawyers Willie Akel and Greg Towers and by leading QC Paul Davison, have apparently gone unpaid to date although they have been fully engaged in a range of high profile, high pressure and evidently – if only the funds are released – highly paid appearances.

The latest win for the team was yesterday when the Auckland High Court ordered that the FBI prove it has evidence to extradict the dotcom tycoon. Justice Winkelman’s decision effectively upholds a lower court decision that the FBI, who originally sought Dotcom’s extradition to the US, needed to produce evidence it held against him.

It is a further victory for the Dotcom lawyers and yet another reversal for the US attempts to move the man to the US for trial.

The costs applicatin seeks existing costs, close to $2.5 million, to be paid and also the release of a further $2.5 mill8ion for future legal costs as the Dotcom caseload continues with US attempts to extradict the Finnish-German, New Zealand resident businessman to the US on alleged copyright theft, racketeering and money laundering charges.

The US efforts, which started with the January helicoper and land-based police raid on the Megaupload boss’s Auckland mansion, under New Zealand police and FBI direction, have resulted in an initial imprisonment for Dotcom but since then the US efforts have all been down hill.The latest application for costs saw lawyer Willie Akel, a media and litigation expert, argue that the fees charged by his firm and Paul Davison QC were fully justifiable given the extraordinary circumstances of the case.

Mr Akel had earlier told LawFuel that the initial raid and closure of the massively profitably Megaupload business had been a “Blitzkrieg” that had seen himself and other lawyers working full time for at least three months on the case.He told Justice Judith Potter that the Dotcom lawyers included both a senior and junior barrister who worked with Mr Davison, together with his own firm’s fees.

The “non-stop” work since the Dotcom raid had included a bail hearing, judicial review of the search warrants, disclosure in the extradition proceedings and the recent challenge to the police activities.

Justice Potter wanted to ensure there was no “waste” in the bill estimate, to which Mr Akel indicated that the urgency, the seriousness of the charges and the “new areas of law” being explored meant there was no wastage of time, nor over-lawyering involved.Dotcom’s three co-accused were sharing one lawyer and the suggestion was made that Dotcom’s own legal services could be overseen by an independent Queen’s Counsel.


UK Legal Newswire – Heavyweight Battle: Buyer-Versus-Supplier Showdown in Childhood Vaccines

LONDON, UK (GlobalData), 16 August 2012 – LawFuel.com – A federal judge has decided to give a group of doctors their day in court after finding that they have sufficient standing to proceed with their antitrust suit against Sanofi. Last December, the physicians filed suit alleging that Sanofi, one of the world’s largest pharmaceutical companies, used its size to monopolize the United States meningococcal vaccine market. Meningococcal disease, which is caused by the bacterium Neisseria meningitidis, results in life-threatening meningitis and bloodstream infections. It is especially common in adolescents 16 through 21 years of age. Consequently, the Centers for Disease Control and Prevention (CDC) recommended that all 11 and 12-year-olds receive a meningococcal vaccine, which has created a stable market for vaccine manufacturers. Sanofi was the only provider of meningococcal vaccines, such as Menomune (meningococcal polysaccharide vaccine) and Menactra (meningococcal conjugate vaccine), in the United States until 2010, when Novartis received FDA approval for Menveo (meningococcal conjugate vaccine). Within two years, Novartis captured 20% of the $700m US market.

The physicians filing suit, who are organized into physician buying groups (PBGs), claim that Sanofi wrote language into their contracts to stifle competition within the childhood vaccine market. PBGs are collectives that aggregate the buying power of member physicians (general, family, and pediatric doctors) to negotiate for lower vaccine prices with pharmaceutical companies. The suit alleges that PBGs would be forced to pay higher prices for vaccines if they failed to purchase over 90% of their childhood vaccines from Sanofi. The physicians also contend that PBGs were threatened with penalties if they purchased similar vaccines from Novartis or GlaxoSmithKline.

Sanofi refutes the allegations of misconduct, and has stated that it is actually the victim in this case. To emphasize its point, Sanofi filed a counterclaim in February alleging that PBGs are illegal buyer cartels, since physicians conspire to act cooperatively rather than competitively. The actions of both parties in this lawsuit highlight the issue plaguing the meningococcal vaccine market — that is, buyer-versus-supplier power in the market today.

Sanofi had control over the market for almost 30 years as the sole supplier of meningococcal vaccines in the United States. Due to Sanofi’s monopoly, PBGs were unable to leverage their collective buying power into favorable prices for meningococcal vaccines. However, the market dynamic shifted after Novartis’ Menveo was approved in 2010. With a second option to choose from, PBGs should have been able to leverage their buying power into better purchasing prices by intensifying the rivalry between the two vaccine makers to create a price war. However, with anti-competitive language written into their contracts with Sanofi, the PBGs face limitations on their negotiating power. One might expect Novartis to help free the PBGs from their contracts with Sanofi, since this would likely increase the sales of its own vaccine. However, Novartis has remained on the sidelines, possibly to avoid the ramifications of a hyper-competitive market, which would force manufacturers to drop vaccine prices. Instead, the two companies may adopt a pricing scheme similar to Coke-Pepsi and maintain similar pricing to one another, regardless of what happens with the ongoing antitrust suit. This would allow them to sidestep any repercussions that might alter the face of the childhood vaccine market.

Victory for Sanofi would likely mean continued higher prices for healthcare providers and patients, but it could maintain the incentive for other companies to continue vaccine production by preserving revenue. On the other hand, if the PBGs emerge victorious, pharmaceutical companies may abandon childhood vaccines in pursuit of more lucrative endeavors, similar to what happened when antibiotics became an unprofitable market. While the long-term ramifications of decreased vaccine production would likely not be as detrimental as those associated with abandoning antibiotic R&D (that is, emergence of drug-resistant pathogens), it could manifest as a glaring unmet need in child healthcare. The verdict of this case will determine the winner in this battle but, as with most trials, it could be years before a decision is finally reached.

This suit has the potential to become a precedent for PBG-Big Pharma negotiations in other therapy areas. However, spill over into other vaccine and therapy areas is unlikely due to the unique nature of the meningococcal vaccine market. The expense and expertise required to produce meningococcal vaccines creates a high barrier to entry for potential generic competitors, which maintains the exclusivity of this market for Big Pharma companies. Sanofi’s apparent monopolization seems to make this an open-and-shut case in favor of the PBGs, but it remains to be seen if Sanofi has an ace up its sleeve.

* Heavyweight Battle: Buyer-Versus-Supplier Showdown in Childhood Vaccines

-ENDS-

-NOTES TO EDITORS-

This expert insight was written GlobalData’s infectious disease analyst, Dr Brad Tebbets. If you would like an analyst comment or to arrange an interview, please contact us on the details below.

-ABOUT GLOBALDATA-

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