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Arbitration in Life Sciences Disputes: a View from New York

Life science companies are increasingly turning to international arbitration as a preferred dispute-resolution mechanism due to its confidentiality, comparative cost-effectiveness, and nearly universal enforceability.

Evidence illustrates an uptick in arbitrations in the life sciences industry, with the International Chamber of Commerce reporting that health and pharmaceutical disputes have more than doubled between 2015 and 2020.1 Similarly, the American Arbitration Association saw a 40% increase in the number of life sciences cases filed in 2019.2

The increase in life sciences arbitrations reflects the industry’s collaborative and globalized nature. Most major pharmaceuticals and biotechnologies are developed and commercialized as a result of collaboration agreements between two or more companies—often from different countries—with distinct spheres of technological, scientific, business, and regulatory expertise. These relationships take the form of joint ventures, licensing agreements, and co-marketing arrangements. Disputes inevitably arise out of such intricate contractual agreements and complex transactions. Arbitration is an effective tool to help life science companies settle commercial disputes, protecting their valuable intellectual property and relationships with their strategic partners while saving both time and money.

Life sciences companies are turning to arbitration because it can offer a dispute-resolution mechanism that better aligns with their business needs. Arbitration can reduce the cost of life sciences disputes and make their outcomes more predictable by offering confidential, efficient proceedings adjudicated by arbitrators who are industry experts. Moreover, arbitration allows parties to consolidate multi-jurisdictional disputes into one proceeding and easily enforce the ensuing award around the world.

In the following blog post, we will discuss these and other advantages of arbitrating disputes that arise in the field of life sciences.

AAA-ICDR, 2019 Annual Report & Financial Statement, 8.