This week, the Federal Court of Australia ordered Sigma to stop marketing and supplying the anti-depressant Evelexa-XR pending the final hearing and determination of the patent proceedings between Sigma and Wyeth. This continues the current trend in proceedings brought by originators against generics of the originator patentee obtaining an interlocutory injunction against a generic company. The interlocutory injunction was granted in the context of the recently commenced proceedings between Sigma and Wyeth, in which Sigma has alleged that Wyeth’s patent for a method of treating patients using a single daily dose formulation of venlafaxine hydrochloride (Patent) is invalid, and Wyeth has cross-claimed alleging that Sigma’s supply of Evelexa-XR infringes the Patent.
Venlafaxine hydrochloride is used in the treatment of depression. Wyeth markets an extended release formulation of venlafaxine hydrochloride in Australia under the brand name Efexor-XR. In February 2009, Sigma obtained registration of an extended release formulation of venlafaxine hydrochloride on the Australian Register of Therapeutic Goods under the brand name Evelexa-XR on the basis of bioequivalence to Efexor-XR. Sigma launched Evelexa-XR in Australia on 1 May 2009, and commenced importing the product into Australia and taking orders from pharmacists on the basis that the product would be delivered to pharmacists for sale by 1 June 2009.
The Federal Court (court) was required to consider three issues in determining whether to grant the interlocutory injunction:
- whether Wyeth had made out a prima facie case (or serious question to be tried)
- whether Wyeth would suffer irreparable harm for which damages would not be an adequate remedy, unless an injunction was granted, and
- whether the balance of convenience favoured the granting of the injunction.
Ultimately, it was the question of the adequacy of damages and the balance of convenience which weighed in Wyeth’s favour and led to the grant of the interlocutory injunction against Sigma.
Serious question to be tried
On the question of the prima facie case, the court considered that both parties had prima facie cases. The court noted that Sigma had conceded that there was a serious question to be tried as to infringement, and the court concluded, on the basis of the evidence before it, that Wyeth’s prima facie case on infringement was reasonably strong. At the same time, the court was also satisfied that there was a prima facie case in relation to Sigma’s challenge to the validity of the patent, specifically in relation to the inventive step and manner of manufacture requirements.
In this context, the court noted that, unless the case for invalidity is sufficiently strong to qualify the conclusion that overall the patentee has a serious question or probability of success, the court should move to consider the adequacy of damages, the balance of convenience and other discretionary matters. Further, in a patent case the fact of registration constitutes prima facie evidence of validity in the context of an interlocutory injunction application.
Irreparable harm
The court considered that damages would not be an adequate remedy. A new entrant such as Sigma would have an effect on the market which was unpredictable and irreversible. In particular the court was swayed by the fact that, if Sigma was allowed to supply Evelexa-XR, it was likely that:
- Wyeth would suffer a loss of market share, especially given Sigma’s large sales force and the presence it has at the pharmacy level
- Wyeth would be forced to reduce the price at which it sells Efexor-XR due to discounting by Sigma, and
- although Sigma contended that Evelexa-XR was the only generic venlafaxine hydrochloride on the Australian market and that Wyeth’s loss would be readily quantifiable, other generic companies would enter the market, which would make quantification of Wyeth’s losses impossible.
Sigma had previously offered to Wyeth an undertaking that it would, among other things, maintain full and complete accounts and records of its sales of Evelexa-XR, and not provide ‘bundle’ discounts to purchasers of venlafaxine hydrochloride. However, for the above reasons, the court was not satisfied that the undertaking would adequately protect Wyeth. (Sigma’s proposed undertakings also included that it would not apply to list Evelexa-XR on the Pharmaceutical Benefits Scheme. This meant that the automatic 12.5 per cent price drop following a listing of the first generic product on the PBS, which has been in issue in a number of recent interlocutory injunction applications, was not a factor to be considered in this case.)
Balance of convenience
Further, the court considered that the balance of convenience favoured the granting of the injunction. Despite the preparatory steps undertaken by Sigma for the launch of Evelexa-XR in Australia, the court held that Wyeth, as the established participant in the market, was more likely to suffer from a disturbance of the status quo than was Sigma, as a new entrant to the market. In addition to this, Sigma, after discovering the existence of the Patent in early March 2009, continued with its preparations for the launch of Evelexa-XR. Sigma therefore had taken a calculated risk ‘with its eyes wide open’.
The court also considered that there was a risk of patient confusion if Sigma’s product entered the market and Wyeth later succeeded at trial, requiring patients who may have switched from Efexor-XR to Evelexa-XR to switch back. The court considered that it was not in the public interest that vulnerable people such as those with mental health issues be subject to confusion as a result of the refusal of interlocutory relief.
This article was written by Helen MacPherson Senior Associate & Dan Posker, Solicitor, Sydney.
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