Implications for pharmaceutical patent strategies in Australia 7 min read
A recent Federal Court decision has struck down a patent term extension (PTE) granted to Novartis for its blockbuster heart failure drug Entresto.
The decision in Novartis AG v Pharmacor Pty Limited (No 3) [2024] FCA 1307 follows a recent trend of successful challenges to PTEs by generic pharmaceutical companies, and underscores the complexity of the PTE regime in Australia.
In this Insight, we outline the details of the patent term extension case and its implications for pharmaceutical patent strategies in Australia.
Key takeaways
- Challenging the validity of PTEs has become a powerful tactic for generic pharmaceutical companies to avoid infringement liability. PTE for patents covering combination products have proven to be particularly vulnerable to attack.
- Goods listed on the Australian Register of Therapeutic Goods (ARTG) on which the PTE is based must contain or consist of the 'pharmaceutical substance per se' that is claimed and disclosed in the patent specification. Patentees are not at liberty to define the goods differently in order to satisfy this requirement.
- Innovators should carefully consider their patent strategy and product listing to ensure there is no disconnect between the 'pharmaceutical substance per se' disclosed and claimed in the patent and the product on which the PTE is based.
Background
Novartis AG is the owner of an Australian patent tilted 'Pharmaceutical compositions comprising valsartan and NEP inhibitors' (the Patent). Broadly, claim 1 of the Patent is directed to pharmaceutical compositions containing a combination of two APIs: (i) an AT 1-antagonist (valsartan or a pharmaceutically acceptable salt thereof); and (ii) a NEP inhibitor (sacubitril or sacubitrilat, or pharmaceutically acceptable salts thereof), for the treatment of hypertension and heart failure.
In Australia, a pharmaceutical patent may be eligible for a PTE of up to five years. In 2016, Novartis secured a PTE which extended the Patent's expiry date from 16 January 2023 to 16 January 2028—the maximum possible extension period.
Novartis AG and its exclusive licensee Novartis Pharmaceuticals Australia Pty Limited (together, Novartis) commenced proceedings for threatened infringement of the Patent based on Pharmacor's intended supply in Australia of Valtresto. Pharmacor denied infringement and cross-claimed for revocation of the Patent and rectification of the Register of Patents to remove the extension of term.
Infringement claim
Novartis claimed that Pharmacor's product, Valtresto, which contained a complex of valsartan, sacubitril and sodium, infringed claim 1 of the Patent. Pharmacor denied infringement, arguing that Valtresto contained only one salt, not the two separate salts required by claim 1.
Novartis argued that claim 1 should be construed broadly to include any form of combination of valsartan and sacubitril, including a complex where the two active ingredients are non-covalently bonded with sodium ions. Pharmacor contended that claim 1 expressly required two separate salts of valsartan and sacubitril, and a carrier.
Justice Yates applied the ordinary meaning of the words of the claim, read in the context of the specification as a whole, and rejected Novartis' argument for a purposive and broad construction. As a result, Valtresto did not infringe claim 1 as it did not meet the requirement of containing two separate salts.
Novartis' PTE for Entresto
Section 70 of the Patents Act allows the patentee of a standard patent to apply for an extension of term if certain conditions are satisfied, namely:
- The patent must relate to a pharmaceutical substance per se, or a pharmaceutical substance when produced by recombinant DNA technology. The pharmaceutical substance must (i) in substance be disclosed in the specification, and (ii) in substance fall within the scope of at least one claim—ss70(2).
- Goods containing or consisting of the pharmaceutical substance must be listed on the ARTG before the standard 20-year term of the patent expires, and at least five years must have elapsed between the date of the patent (ie the ultimate filing date) and the 'first regulatory approval date' of a product containing the pharmaceutical substance—ss70(3).
- The term of the patent must not have been previously extended—ss70(4).
Novartis' PTE application identified the goods containing, or consisting of, the pharmaceutical substance included in the ARTG as: 'ENTRESTO sacubitril/valsartan (combined as a sodium salt hydrate complex)'.
The active ingredient in Entresto is a salt complex of the anionic forms of sacubitril and valsartan, sodium cations, and water molecules in the ratio of 1:1:3:2.5, termed 'TSVH'. Novartis' PTE application stated that the 'pharmaceutical substance per se' fell within the scope of the claims because:
a pharmaceutical composition comprising valsartan and sacubitril and a pharmaceutically acceptable carrier is claimed in the patent, for example in claim 1.
Pharmacor's challenge to the PTE
Pharmacor challenged the validity of the PTE on two bases. First, if claim 1 is construed to cover a complex (TSVH), then ss70(2) is not satisfied because the complex is not disclosed or contemplated in the specification. Alternatively, if claim 1 is construed to cover a combination of valsartan and sacubitril, or salts thereof, then ss70(3) is not satisfied because Entresto is a complex, which is a single salt, not two salts, and is not disclosed and claimed in the Patent.
In response, Novartis argued that 'a combination of sacubitril and valsartan per se' is a 'pharmaceutical substance' for the purposes of s70, and that Entresto contains a 'combination' of two active ingredients—it argued that the presence of non-covalent bonds in the complex does not cause valsartan and sacubitril to lose their identities as distinct molecules and distinct active agents. Novartis also relied on the ARTG certificate, which refers to Entresto as 'sacubitril/valsartan (combined as a sodium salt hydrate complex)', and the Product Information (PI) for Entresto, which identifies the medicine as 'sacubitril and valsartan'.
What is the 'pharmaceutical substance per se'?
For the purposes of the s70(2)(a) enquiry, Justice Yates determined that two 'pharmaceutical substances per se' are disclosed and fall within the scope of claim 1—specifically, the AT 1-antagonist (identified as valsartan or a pharmaceutically acceptable salt of valsartan); and the NEP inhibitor (identified as either sacubitril or a pharmaceutically acceptable salt of sacubitril, or sacubitrilat or a pharmaceutically acceptable salt of sacubitrilat).
Does Entresto include the pharmaceutical substance per se?
Turning next to the s70(3) enquiry, Justice Yates held that the pharmaceutical substance per se in Entresto was not valsartan or sacubitril, as claimed by Novartis, but TSVH—a single crystalline complex that is one salt with a unique set of physiochemical properties—which is not disclosed or claimed in the Patent.
In reviewing the ARTG materials, Justice Yates observed that the PI refers to Entresto's active ingredient as:
A salt complex of the anionic forms of sacubitril and valsartan, sodium cations and water molecules in the molar ratio of 1:1:3:2.5 respectively.
The PI also gives Entresto a single chemical name, with a single molecular formula, and a single relative molecular mass. Justice Yates said (emphasis added):
The extension application was based on Entresto and, despite the language in which Novartis AG chose to couch that application, the relevant pharmaceutical substance in Entresto is TSVH—a single crystalline complex that is one salt with a unique set of physiochemical properties.
Novartis AG’s description in the extension application of the pharmaceutical substance as “a combination of sacubitril and valsartan” is notable for its obscurity. Entresto does not contain or consist of a “combination” of sacubitril and valsartan unless that description is taken to mean that sacubitril and valsartan, in some form, are inputs in a complexation process that results in the production of a different entity, TSVH, which is then used in Entresto.
Justice Yates rejected Novartis' argument that the form of the pharmaceutical substance did not matter, as long as the active ingredients were present. His Honour said the specific form of the substance, as used in the product, must be disclosed and claimed in the patent.
Justice Yates also rejected Novartis' arguments that the ARTG and the PI for Entresto conclusively determined the identity and nature of the substance, and that the extension of term was justified by the policy objective of compensating the patentee for the time lost in obtaining regulatory approval. His Honour emphasised that the extension of term regime sought to balance a range of competing interests, and that the court's duty was to give effect to the meaning of the legislative command according to the terms in which it was expressed.
The court's finding on the invalidity of the PTE meant the Patent expired on 16 January 2023 and, as a consequence, Pharmacor's challenge to the validity of claim 1 of the Patent on other grounds did not arise for determination. The court ordered that the Register of Patents be rectified by removing the reference to the extension of term and recording the original 20-year expiry date of the Patent.
A trend to invalidate PTEs
The Novartis decision is one in a series of recent Federal Court decisions that have examined the validity of PTEs. Those closely watching pharmaceutical litigation in Australia will know that, in 2021, Pharmacor successfully challenged the validity of a PTE granted to Biogen. Similarly, in 2022, Sandoz succeeded in overturning a PTE granted to Merck Sharp & Dohme. You can read our Insight on those decisions here.
These decisions highlight that term extensions for pharmaceutical patents are far from straightforward. Patentees should carefully consider their patent strategy in light of their broader product portfolio and take into account that Australia's PTE provisions have important differences and nuances relative to other jurisdictions.