Generic EVISTA kept out of market pending determination of patent infringement claims
Eli Lilly and Company v Generic Health Pty Ltd  FCA 1254
The Australian Federal Court has recently made orders preventing generic pharmaceutical company, Generic Health, from promoting and selling generic versions of Eli Lilly’s post-menopausal osteoporosis drug, EVISTA pending the determination of Eli Lilly’s patent infringement claims.
The decision highlights the difficulties generic pharmaceutical companies face in entering a market in which the originator product has patent protection and is listed on the PBS. The decision also indicates that an interlocutory injunction applicant’s willingness to make itself ready for an early final trial may be an important factor taken into account by a Court in determining whether to “maintain the status quo” by ordering a generic drug out of the market until relevant infringement and validity issues are finally determined.
Eli Lilly’s EVISTA patent
Eli Lilly is the owner of an Australian patent relating to the active pharmaceutical ingredient, raloxifene (and its salts and solvates, relevantly including raloxifene hydrochloride (raloxifene HCl)) with particular particle size characteristics (which were said to enhance the bioavailability of the raloxifene compound and its manufacture).
Eli Lilly sells its raloxifene HCl product in Australia under the trade name “EVISTA”. EVISTA is a prescription only medicine which is indicated for the treatment of osteoporosis in post-menopausal women (amongst other things). EVISTA has been listed in the “single brand” section of the Australian Pharmaceutical Benefits Scheme (PBS) since November 1999.1
Eli Lilly’s interlocutory injunction application to stop generic EVISTA
In September 2013, Eli Lilly commenced a proceeding in the Federal Court against Generic Health, alleging that Generic Health’s generic tablets comprising raloxifene HCl as an active ingredient (with other excipients), as well as the “bulk” or “raw” raloxifene HCl Generic Health used to make those tablets, infringed its EVISTA patent.
In the proceeding, Eli Lilly made an interlocutory application seeking an injunction to stop Generic Health from promoting and selling generic versions of EVISTA in Australia and from listing those products on the PBS pending the determination of Eli Lilly’s claims of infringement.
The Court accepted that if the interlocutory application was not granted, Generic Health’s products would be listed on the PBS, promoted and sold from 1 December this year.
The legal requirements for interlocutory injunctive relief
Justice Nicholas confirmed that Eli Lilly’s application would be granted if:
(a) Eli Lilly demonstrated that it had a “prima facie” case of infringement of the relevant claims of its patent (having regard to any invalidity arguments2); and
(b) the “balance of convenience” favoured the grant of an injunction, in the sense that it would do more harm to Eli Lilly not to have the injunction than it would do to Generic Health if it were kept out of the market at least until the substantive infringement and validity issues were determined by the Court.
(a) Eli Lilly has a prima facie case of infringement
In an attempt to make out a prima facie case of infringement, Eli Lilly obtained, and had tested, Generic Health’s bulk raloxifene HCl and raloxifene HCl tablets, to determine whether they comprised raloxifene HCl with the particle size characteristics specified in claim 1 of the EVISTA patent, which claimed:
A compound of [raloxifene] and pharmaceutically acceptable salts thereof [including raloxifene HCl]; characterised in that the compound is in particulate form, said particles having a mean particle size of less than about 25 microns (emphasis added).
Those tests demonstrated that the raloxifene HCl bulk did not satisfy the particle size characteristics of claim 1, but that the raloxifene HCl tablets had the claimed particle size characteristics when the raloxifene HCl was sonicated3 after being extracted from the tablets to disaggregate the extracted raloxifene HCl particles.
Generic Health argued that the “post extraction sonication” step used in the raloxifene HCl tablet extraction process (as well as other features of the extraction process) rendered the raloxifene HCl tablet particle size results unreliable.
The Court recognised the conflict between Eli Lilly and Generic Health on this issue, but said it was not in a position to resolve the conflict at the present interlocutory stage of the proceeding (because, amongst other things, the experts who expressed the competing opinions on the topic were not available for cross-examination).
Generic Health also sought to undermine the strength of Eli Lilly’s claim 1 infringement case (in respect of the raloxifene HCl tablets) by arguing that:
(i) the term “compound” used in the claim only covered bulk raloxifene HCl as opposed to raloxifene HCl in a tablet or capsule form;
(ii) if the term “compound” in fact covered raloxifene HCl in a tablet form, the claim “travelled beyond” the disclosure in the specification (which Generic Health asserted was limited to bulk raloxifene HCl) and therefore was invalid for lack of fair basis; and
(iii) the presence of the word “about” in the claim rendered it invalid for lack of clarity.
The Court considered that Generic Health’s arguments were “reasonably arguable”, but concluded that Eli Lilly had demonstrated a requisite “prima facie” case for final relief.
(b) The balance of convenience lay in Eli Lilly’s favour
The Court held that the “balance of convenience” favoured the maintenance of the “status quo” (i.e. a marketplace without generic raloxifene HCl) for a number of reasons, including:
(i) Eli Lilly was willing to make itself ready for an early final hearing (a matter to which Justice Nicholas gave “considerable weight”4);
(ii) Another generic pharmaceutical company, Apotex, is currently restrained by court order from supplying its generic raloxifene products in Australia. The Court acknowledged that Eli Lilly may find it difficult to maintain the orders against Apotex if Generic Health were allowed to enter the market;
(iii) If Generic Health were not restrained, Eli Lilly was ready to supply its own authorised generic EVISTA product in Australia and list that product on the PBS. The authorised generic EVISTA product would then compete with EVISTA as well as Generic Health’s generic raloxifene HCl (and any other generics that entered the market (such as the Apotex product)) which would make it very difficult for the Court to calculate the damage caused to Eli Lilly solely by the Generic Health product if an injunction were not granted but Eli Lilly was ultimately successful at trial. The foreshadowed entry of the authorised generic tablet also cast doubt on whether Generic Health would obtain any significant “first mover” advantage in this case;
(iv) Eli Lilly would suffer damage if a generic raloxifene HCl entered the market and was listed on the PBS, as, amongst other things, the entry would5:
- trigger a compulsory statutory 16% reduction to the price of EVISTA and the operation of the PBS’s mandatory price disclosure regime (which may only be reversed in the Minister of Health’s discretion);
- allow other generic EVISTA products to be listed on the PBS more quickly than would otherwise be the case; and
- cause Eli Lilly to suffer a substantial loss of market share;
(v) Eli Lilly’s EVISTA patent has been in force for many years and Generic Health failed to try to “clear the way” by applying for a non-infringement declaration and / or revocation of the patent;
(vi) EVISTA had an established position in the market, whereas Generic Health’s product had not yet been sold in Australia; and
(vii) Eli Lilly was willing to give the “usual undertaking as to damages”, which would require it to pay damages to Generic Health (and any third party) who suffers loss if the injunction is granted but ultimately found to be unjustified following the final trial. In this regard, it is worth noting that the Department of Health and Ageing is currently seeking compensation from Sanofi-Aventis and Wyeth “for additional costs to the PBS resulting from a delay in listing”6 generic versions of Plavix and Efexor, respectively, pursuant to similar undertakings given by Sanofi-Aventis and Wyeth as the “price” for an interlocutory injunction precluding the listing of Sanofi’s and Wyeth’s generics on the PBS.
For these reasons, Justice Nicholas made orders:
- restraining the promotion and sale of Generic Health’s generic raloxifene HCl products until the final determination of the dispute; and
- requiring Generic Health to withdraw its PBS applications for those products.
In relation to the latter point, his Honour accepted that “it is sufficiently arguable that by procuring the listing of the [generic raloxifene HCl products] on the PBS, Generic Health will have exploited the claimed invention and thereby infringed the exclusive right conferred on [Eli Lilly].”7
Lessons for pharmaceutical patent litigants
- Generic pharmaceutical companies may well find it difficult to enter a market in which a competing product has patent protection and is listed on the PBS.
- Such companies (or other persons who are concerned about being stopped from promoting or selling a product by a patentee) should explore making an application with the Court for revocation of the potentially blocking patent or a non-infringement declaration (whilst acknowledging its limitations) before significant steps are taken to commercialise the relevant product.
- Parties seeking an interlocutory injunction must be mindful of the fact that they will typically be required to give an “undertaking as to damages” as the “price” for such an injunction. The undertaking may be enforced by the enjoined party as well as a third party who is adversely affected by the wrongful grant of the injunction.
- A Court is more likely to grant an interlocutory injunction maintaining the “status quo” if the party seeking the injunction demonstrates a willingness and ability to ready itself for an early final determination of the issues in dispute.
- The F1 Formulary of the PBS.
- See, for example, /pub/detail/538/samsung-allowed-to-sell-its-ipad-competitor-in-australia-just-in-time-for-christmas
- “Sonication”, in this context, involves the application of sound energy to agitate particles in a sample.
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- See also: /pub/detail/660/hospira-ordered-to-withdraw-pbs-application-pending-determination-of-novartis-patent-infringement-claims and //pub/detail/628/merck-granted-interlocutory-relief-to-stop-the-alleged-infringement-of-nasonex-patent
- Australian Government, “Budget Strategy and Outlook Paper” for 2013 / 2014
- at