Australian Government Pursues Pharma Preliminary injunction Compensation Claims

Australian Government Pursues Pharma Preliminary injunction Compensation Claims

Australian Government Pursues Pharma Preliminary injunction Compensation Claims

This article was first published in the Intellectual Property Owners Association (IPO) Daily News

The Australian federal government is currently seeking compensation from a number of originator pharmaceutical patentees who obtained a preliminary injunction (PI) against a generic supplier, only to lose at trial with dissolution of the injunction. The first of these cases relates to Sanofi’s anti-clotting drug, clopidogrel (PLAVIX); the hearing is due to begin on 28 August 2017. The government is alleging that it has suffered losses of $60 million in the Sanofi PLAVIX case.

As a condition for obtaining a PI, patent owners in Australia are required to give the “usual undertaking” as to damages, which is an undertaking to pay compensation to any person, whether or not a party, adversely affected by the PI. The government is making a claim under this undertaking, arguing that as a result of the restraint of the generic supplier by the PI it was forced to continue purchasing (and subsidizing) the patented pharmaceutical at a premium price under the Australian Pharmaceutical Benefits Scheme (PBS), so has suffered losses (by “over paying” for the pharmaceutical).

The risk that the government might seek compensation under the “usual undertaking” has always existed, but the government has only in recent times decided to apply to recover compensation. The pharmaceutical industry’s concerns with the government’s action were raised at a recent parliamentary committee hearing. The government’s action is a factor for patentees of PBS-listed pharmaceuticals to consider when deciding whether to seek a PI in Australia.

For more background on these proceedings, please see the articles we have previously published here (on 21 July 2017), here (on 18 May 2017), here (on 17 March 2016) and here (on 29 April 2015).