Preliminary discovery denied: Wyeth v Secretary, Department of Health and Ageing [2009] FCA 313

On 2 April 2009 the Federal Court of Australia dismissed Wyeth’s application for preliminary discovery seeking the identity of third parties wishing to register on the Australian Register of Therapeutic Goods (ARTG) a product containing venlafaxine. Wyeth was ordered to pay the costs of the Department of Health and Ageing.¹

Background

At the date of commencement of the proceedings, Wyeth Australia was the only sponsor on the ARTG for products containing venlafaxine². Venlafaxine is a prescription medicine generally used in the treatment of major depression.

On 6 December 2008 Wyeth’s compound patent for venlafaxine expired (the Compound Patent). However, Wyeth also owns a patent for the extended release formulation of venlafaxine which does not expire until 2017 (the Extended Release Patent).

In September 2008 Wyeth made a Freedom of Information application to the Therapeutic Goods Administration (TGA) requesting documents relating to any new applications by any third party for inclusion on the ARTG of generic products containing venlafaxine.

The TGA declined to provide the requested documents but in its letter annexed a schedule listing potentially relevant documents. The list did not disclose the identity of any third party. However, from the list Wyeth formed the view that:

• there are five pending applications for products containing venlafaxine
• it appears that those applications are seeking to establish bioequivalence to Wyeth’s ‘Efexor-XR’ branded products, and
• the products the subject of the applications may infringe the Extended Release Patent.

On 13 January 2009 Wyeth commenced proceedings in the Federal Court of Australia seeking urgent preliminary discovery of:

1. the names of any person or company who has made an application to register a medicine containing venlafaxine (Order 15, rule 3 – Identity discovery)
2. all documents relating to an application to register a medicine containing venlafaxine (Order 15, rule 6 – Information discovery from a prospective defendant).

In brief, Wyeth’s position was that the entry of a generic venlafaxine product onto the PBS will cause an irrevocable 12.5 per cent price reduction. Due to this, Wyeth may seek interlocutory injunctive relief to restrain the sponsor of any generic venlafaxine products based on infringement of the Extended Release Patent. However, Wyeth was of the view that there will be insufficient time between the public ARTG registration (ie when the identity of the sponsors will become public) and PBS listing procedures resulting in a 12.5 per cent price reduction, in order to obtain interlocutory injunctive relief restraining supply of the generic products and ensuring that the 12.5 per cent price reduction does not occur.

The hearing of the application was on 25 March 2009. At the hearing, Wyeth only pursued the order for identity discovery.

The judgment

There were two principal issues that the court dealt with in dismissing Wyeth’s application: firstly, whether Wyeth had established that it had sufficient prospects of success in its claim of patent infringement against the sponsors and; secondly whether it was in the interests of justice to order the preliminary discovery.

Prospects of success

Wyeth’s ‘working hypothesis’ on the prosects of success was based on the process by which sponsors of generic products obtain ARTG registration of a generic product. Wyeth argued that as the unknown sponsors of generic venlafaxine products are seeking to establish their products are bioequivalent to Wyeth’s products, such products would fall within claim 1 of the Extended Release Patent.

The court inferred, given the following, that it would require further evidence to demonstrate that Wyeth had any real prospect of success:

1. there are serious penalties for providing a false section 26B(1) certificate which requires a generic sponsor to certify they believe on reasonable grounds that the product will not, if marketed, infringe a valid patent claim
2. Wyeth did not put forward any medical evidence over and above its regulatory affairs director to support its hypothesis, and
3. the hypothesis depends upon the examination of a large volume of material filed by the sponsors with the TGA.

The interests of justice

The court accepted that Wyeth would need to obtain an interlocutory injunction by no later than one month prior to any PBS listing of generic venlafaxine products in order to avoid a 12.5 per cent price reduction. The next likely PBS listing date is 1 August 2009 so this would mean an interlocutory injunction would need to be obtained by at least 1 July 2009.

Notwithstanding this, the court found that it is not in the interests of justice to order the identity discovery. Firstly, without further evidence the court was not satisfied that Wyeth has good prospects of success in its patent proceedings at a final hearing. Secondly, Justice Jacobsen was not satisfied that, even if preliminary discovery was ordered, the court would be in a position to give judgment on a contested interlocutory judgment prior to 1 August 2009. This would mean that the ‘commercial inconveniences and possible difficulties in restoring Wyeth to the status quo’ will arise whether the preliminary discovery was granted or not.

Commercial implications

It remains, following this decision, that the earliest point at which a company bringing a generic medicine to market will face the threat of an interlocutory injunction application will be upon registration on the ARTG, not before.

This article was written by Kathryn Everett, Partner and Alison Laughlin, Solicitor, Sydney.

Endnotes

1. The information contained in this document is based on a review of publicly available sources. We are not acting in these proceedings and only have knowledge of publicly available information.
2. Sigma Pharmaceuticals Australia Pty Ltd now has three venlafaxine products listed on the ARTG under the brand name Evelexa.

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