In brief 6 min read
The Therapeutic Goods Administration has consulted on whether it should disclose earlier that a prescription medicine is under evaluation and what types of prescription medicines should be published. The proposal that it publish the details of applications for generic medicines and biosimilars at the time of application, rather than registration, would, if adopted, have major advantages in terms of facilitating early resolution of pharmaceutical patent litigation in Australia. Partner Richard Hamer and Senior Associate Lauren John report.
How does it affect you?
- Presently, unless notified earlier by an applicant for registration of a generic or biosimilar medicine, an originator pharmaceutical company typically receives notice of the applicant's intention to enter the market when the medicine is listed on the Australian Register of Therapeutic Goods (the ARTG).
- The Therapeutic Goods Administration (the TGA) has consulted on various transparency options relating to applications for prescription medicines. One option would see the TGA publish information on all new chemical entities and all generic and biosimilar applications when applications are accepted for evaluation.
- If this option were implemented, it would provide patentees with earlier warning of generic or biosimilar medicines about to enter the market, and so facilitate the earlier resolution of pharmaceutical patent disputes in Australia.
Background
The TGA is currently considering options for reform regarding the publication of information about the evaluation status of applications for registration of prescription medicines.
Presently, the TGA only notifies the public after a medicine has been registered on the ARTG. The TGA does not publish the fact that an application for evaluation has been made, nor does it publish information about the ongoing evaluation. It has adopted this practice because it considers information that an application for registration has been made is potentially commercially valuable to the applicant. This practice means that the TGA publishes less information than do comparable overseas regulators.
Current notification requirements in relation to patents
Currently, when a patentee learns that a generic medicine or biosimilar has been registered, they demand that the generic company undertake not to supply or offer to supply the product before patent expiry. Where registration has been sought in anticipation of patent expiry, such an undertaking will usually be given and no litigation ensues. However, where the generic company threatens to launch at risk during the patent term and refuses to give such an undertaking, the patentee will typically then commence patent infringement proceedings on a quia timet basis, seeking an interlocutory injunction to restrain the product's launch.
On the one hand, since infringement proceedings inevitably take years to result in a judgment, the generic supplier is often kept out of the market until that time, and the Federal Government and community are denied the alternative product and the associated cost savings. On the other hand, if an interlocutory injunction is not granted, the patentee is deprived of its statutory monopoly and, assuming it is ultimately successful, will have suffered irreparable damage.
The obvious solution is to bring forward patent litigation, with the aim of resolving the case concurrently with the registration process and before the product is ready for launch.
The Australia-United States Free Trade Agreement (the AUSFTA) attempted to do this. Under the AUSFTA, Australia is required to provide a system whereby patentees are notified of generic applications for marketing approval. Given the TGA takes approximately a year to determine applications for generic medicines and biosimilars, this would permit infringement proceedings to be commenced a year earlier, and thereby avoid the need for courts to grant interlocutory injunctions; or, at least, reduce the duration of any interlocutory injunctions granted.
However, the AUSFTA was implemented with a major loophole. An applicant for registration can avoid giving notice to the patentee if it provides a certificate, which is only given to the TGA, stating that it believes on reasonable grounds that it does not propose to market the therapeutic goods in a manner that would infringe a valid claim of a patent. Since the alternative option is for the applicant to provide a certificate to the TGA and the patentee, which effectively requires the applicant to certify positively that their product will infringe, such a certificate is rarely given.
This problem with the laws on patent certificates was identified in the Pharmaceutical Patents Review Report 2013, but no solution was implemented. The problem has been further highlighted by recent cases involving large claims for damages where interlocutory relief has ultimately been wrongly granted, and the difficult and lengthy exercise required to determine such damages claims.
TGA consultation on transparency options
In February, the TGA sought comments from interested parties on whether or not it should disclose that a prescription medicine is under evaluation and what types of prescription medicines should be published. The consultation paper it released included four options:
- Option 1: maintain the current publication arrangements;
- Option 2: list all applications accepted for evaluation;
- Option 3: list all applications at two different time points – new chemical entities (including biological medicines) and extensions of indication would be published on acceptance of the application, whereas generic/biosimilar medicines would be published later, on approval of an application but before registration on the ARTG; and
- Option 4: list applications of innovator medicines of high public interest, but not generic or biosimilar medicines.
The consultation period has closed, and the TGA has not yet published its response.
Implications for pharmaceutical patent litigation in Australia
Option 2 clearly provides the greatest level of transparency and does not discriminate between applications for 'innovator' medicines, on the one hand, and generic medicines, on the other. The TGA recognises that innovator companies may prefer Option 2 because it will provide a significant early warning of generic medications about to enter the market. Indeed, Medicines Australia has thrown its support behind this option.
In the context of the issues addressed in this Focus, Options 3 and 4 will not facilitate the early resolution of pharmaceutical patent litigation. The inclusion of Options 3 and 4 appears to stem from the TGA's concern that Option 2 may discourage some early generic applications, presumably because of the risk of inviting infringement proceedings. However, this is the same risk that generic companies already face when their products are successfully registered on the ARTG before patent expiry. The effect of earlier publication will be to bring forward infringement proceedings, not create disputes that would not otherwise arise.
In any event, the risk of inviting infringement proceedings remains within the control of the generic company. An application for marketing approval is not of itself an infringing act; rather, it is the threat to supply during the patent term that gives rise to the risk of infringement proceedings. As is common practice today after obtaining ARTG registration, a generic company can avoid litigation by giving an undertaking not to supply or offer to supply during the patent term. Alternatively, the generic company can commence revocation proceedings at any time of its choosing, including years in advance, to clear the way.
The earlier determination of pharmaceutical patent disputes, particularly for generic products, would not only be of great value to the parties involved but also to the community as a whole, having the potential to reduce the cost of pharmaceuticals to the Government and to patients.