The pharmaceuticals industry is facing a 'perfect storm', but Astellas general counsel Jerry Temko tells Alex Aldridge he is ready to weather it

Most in-house counsel have spent the recession attempting to maintain standards in the face of reduced resources. But Jerry Temko, general counsel and chief compliance officer of the European arm of Japanese pharmaceutical giant Astellas, has been very much in proactive mode.

The credit crunch and subsequent economic crisis didn't change Temko's robust pursuit of breaches of patents and licensing contracts – in fact, if anything, it has strengthened resolve to police the company's intellectual property (IP).

The strategy has paid off: during the last five years Astellas has recovered over €10m (£8.2m) in patent damages from generic pharma companies and in excess of €6m (£4.9m) from change of control licensing events. "Generating these recoveries changes the role and perception of the legal team; it means we're not simply a cost centre," says Temko.

With the loser typically paying in such cases, it is an approach that comes with a degree of risk. "So far, without wanting to tempt fate, we haven't made any errors of judgement in deciding when to enforce our [IP] and other contractual rights," says Temko, who insists he has lost no sleep on the calls he has made.

The tricky part, he adds, was persuading the company – formed in 2005 following the merger between Japanese pharmaceutical companies Fujisawa and Yamanouchi – to shrug off the traditional Japanese aversion to engaging in disputes. "Initially there was some strong resistance, but we managed to persuade senior management that litigation is worthwhile where a negotiated outcome isn't available," says Temko.

In other areas, however, Astellas' focus remains firmly committed to promoting harmony. The company's dealings with its panel law firms, for example, are all about the careful nurturing of long-term relationships.

Hence the lack of formal periodic reviews for the company's roster of European legal advisers, of which the key firms are Arnold & Porter (regulatory and competition law), Hoffmann Eitle (patent litigation), Covington & Burling (licensing), Wragge & Co (licensing and IT), Osborne Clarke (real estate) and Mayer Brown (employment).

Temko comments: "Our focus is more on the ongoing performance of individual lawyers at the firms we use and we would never forsake longstanding relationships for short-term economies." Astellas holds a similar attitude towards its 13 European internal lawyers (the majority based in London), over half of whom have achieved further professional qualifications while working in the department. "We tend to be very successful in retaining our lawyers because of the opportunities for development and level of autonomy we can offer," says Temko.

Getting lawyers on board in the first place can present more challenges, with Astellas – one of the top 20 pharmaceutical companies in the world – forced to go head to head on recruitment with the largest pharma companies like Novartis and Pfizer.

Still, with pharmaceuticals seen as one of the most legally challenging industries to work in – and also an area which has bred a particularly strong in-house bar – the standard of lawyers the company is able to attract is high.

Temko looks for new members of his team to be "fit, passionate and flexible". He continues: "Fit, in terms of fitness to deal with people in respect of soft skills; passionate about life sciences; and flexible in that they are prepared to roll up their sleeves to deal with whatever is required, because there's a great deal of variety in this job."

It was this variety, allied to the "legal richness" of pharma, that first drew US-born Temko to the sector, seeing him move as a young lawyer from private practice in New York with Kevin MacCarthy Associates to Philadelphia-based Wyeth, a Fortune 100 pharmaceutical and consumer healthcare company that is now part of Pfizer. A spell at electronics and engineering company Invensys followed, with its necessary transfer to London a major draw for Temko, who studied law at Cambridge after high school in the US. Missing pharma, he joined Astellas legacy company Yamanouchi as European general counsel in 2003, before assuming the same position at Astellas after the 2005 merger.

He says the secret to success in his role is "establishing the right balance between commercial risk and legal protection and compliance"; something which, he adds, "is just a skill developed over time".

Not that Temko is getting complacent. Although the economic storm clouds are lifting, the pharma industry is facing a tough outlook in the form of what those in the business describe as 'the three Ps': patent expiries (according to consultancy firm Evaluate Pharma, around half of the $383bn (£255bn)-worth of patented drugs sold worldwide last year will lose patent protection in the next five years), pricing pressures driven by cost containment agencies like the National Institute for Clinical Excellence and increased promotional compliance enforcement responsibilities arising from the new Bribery Act and the extra-territorial enforcement of the US Foreign Corrupt Practices Act.

"It's the perfect storm," adds Temko, "but one that we're optimistic Astellas has the capacity to weather."

Career timeline

1982 Graduates from Cambridge University with law degree
1983 Starts career at Lord Day & Lord, New York as an associate
1986 Moves to Kevin MacCarthy Associates, New York
1989 Goes in-house with Wyeth as an international attorney
1999 Takes GC role at APV, a division of Invensys
2003 Joins Yamanouchi as European general counsel
2005 Assumes general counsel and chief compliance officer positions at Astellas following merger between Fujisawa and Yamanouchi

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Networking pharma-style

Alongside his role as general counsel and chief compliance officer of the European arm of Japanese pharmaceutical giant Astellas, Jerry Temko is the founder of the European chapter of Pharmaceutical In-House Lawyers Legal Seminars (PILLS).

PILLS is a group of over 300 in-house counsel from 35 pharmaceutical, medical device and biotechnology companies. It was founded 10 years ago in New York, and later in San Francisco, to provide concise and advanced legal education relevant to the global pharmaceutical industry.

PILLS Europe is now actively soliciting European practitioners to form a similar critical mass of in-house lawyers who have a shared interest in continuing professional development, networking and benchmarking and best practice.