Australia: Does the act of applying for PBS listing constitute an offer to supply a pharmaceutical product?

In pharmaceutical patent litigation, complex questions can arise about what type of conduct by a generic pharmaceutical company might amount to an infringement of a patentee's right to exploit its own invention, provided by the Patents Act 1990 (Cth) (Patents Act).

One question that has long had an unclear answer is whether an application for listing of a generic pharmaceutical on the Pharmaceutical Benefits Scheme (PBS) would amount to an 'offer to supply', in contravention of the patentee's right to exploit the originator version of the pharmaceutical. A recent decision of the Federal Court has shed new light on this issue.

In Apotex Pty Ltd v Warner-Lambert Company LLC (No 3),¹ Nicholas J held that the proposed application for PBS listing would not be an 'offer to supply' within the definition of 'exploit' in the Patents Act, and would instead be no more than a mere preparatory step to enable exploitation at a later time.

Background

In an earlier final decision², Nicholas J held that Warner-Lambert Company LLC (together with four related entities, collectively 'Pfizer') was entitled to injunctive relief against Apotex Pty Ltd (Apotex) and Generic Partners Pty Ltd³ for threatened infringement of Australian Patent No. 714980 (Patent). The Patent concerned, among other things, the use of pregabalin for the treatment of pain. Pregabalin is currently marketed in Australia under the name Lyrica.

The decision

In determining the form of injunctive relief to which Pfizer was entitled, a key issue was whether Apotex's proposed application to its generic versions of Lyrica on the PBS would infringe the Patent.

Nicholas J observed that the 'method of treatment' claims of the Patent would not be exploited unless the specified method was performed during the term of the Patent. Further, section 117 of the Patents Act, concerning infringement by supply, did not apply in this scenario. This was because the application for PBS listing was not itself an infringing supply of a product that could be used to perform the method of treatment.

However, the question of whether Apotex's proposed PBS listing of its generic versions of Lyrica involved an exploitation of the Patent (and therefore an infringement) needed to be considered in the context of the other claims at issue. Pfizer argued that by applying for PBS listing of its generic pregabalin products, Apotex was exploiting the claimed invention by 'offering to sell or otherwise dispose of' products that resulted from the use of a method of manufacture encompassed by these claims. Nicholas J disagreed, holding that the application involved no more than an intention to engage with the statutory scheme by which Apotex would be able to offer its products at subsidised prices.

Nicholas J did not accept Pfizer's submission that the act of applying for PBS listing would otherwise involve an exploitation of the Patent. His Honour held that the application would be no more than a 'mere preparatory step' for Apotex's later supply of its products, although in an appropriate case that step may justify injunctive relief. Nicholas J distinguished other decisions dealing with the question of PBS listing and patent infringement on the basis that those decisions were made in the context of applications for interlocutory relief, in which it was necessary to also consider the 'balance of convenience' analysis (which essentially involves the court weighing up the inconvenience and injury to one party of granting an injunction against the inconvenience and injury to the other party of not doing so).

On that basis, Nicholas J ordered that the injunctive relief to which Pfizer was entitled did not include preventing Apotex from taking any steps to list its generic product on the PBS. Further, although not discussing issues of timing in detail, his Honour did not order that Apotex should be prevented from applying for PBS listing where that listing would occur before the Patent expired, commenting that whether such a listing would be made under those circumstances was a matter for the Minister of Health or his delegate.

Conclusion

When final orders for injunctive relief are made in cases where a pharmaceutical patent holder is otherwise entitled to an order preventing an infringer from infringing the patent in suit, it may not be possible to obtain an injunction against a generic competitor applying for a PBS listing of their product before the expiry of the patent. In other words, even where a generic competitor may be restrained from selling or supplying their product before a patent's expiry, they may not be prevented from taking the important preparatory step of seeking its listing on the PBS.

The effect of this decision on future applications for interlocutory injunctions in which a patentee seeks to restrain an alleged infringer from applying to list products on the PBS remains to be seen.

Footnotes

¹Apotex Pty Ltd v Warner-Lambert Company LLC (No 3) [2017] FCA 94.
² Apotex Pty Ltd v Warner-Lambert Company LLC (No 2) [2016] FCA 1238
³ Generic Partners Pty Ltd adopted Apotex's submissions and is not discussed further in this note.

This article is intended to provide commentary and general information. It should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this article. Authors listed may not be admitted in all states and territories