Neil Sadler

Federal Court grants interlocutory injunction against generic drug manufacturer

Neil Sadler

3 December 2012

Patents

In a recent decision Justice Yates was called upon to determine whether a generic drug manufacturer (Hospira Pty Limited) should be prevented from selling 3 types of drug which were derivatives of zoledronic acid. They were to be used in treatment of bone cancer and oesteoporosis.

 

One of the respondent’s drugs had been placed on the Australian Register of Therapeutic Goods, the other two had not yet. The respondent had issued proceedings for revocation of the patents upon which the applicants (Novartis AG and Novartis Pharmaceuticals Australia Pty Limited) relied in issuing proceedings for damages and other relief for infringement.

 

A prima facie case of infringement was found with the injunction turning on issues of balance of convenience. Justice Yates was not persuaded that the revocation challenge weakened the applicants’ case on infringement.

 

The court found that the respondent’s claim that granting an injunction would damage its position as first mover of generic drugs of that type was not determinative where it was engaging in infringing conduct, it had not obtained ARTG registration for 2 out of 3 drugs, the applicants were not proposing to market their own generic drugs as this would result in a 16% price reduction under the PBS scheme and the applicants undertook to prevent any infringement by other rival generic drug manufacturers.

 

Further, the court was not satisfied that damages would be an adequate remedy, in the event that an injunction were not granted, if the applicants ultimately succeeded at trial. Relevant factors were:

 

  • a likely immediate and irreversible reduction in the applicants’ pricing for its drugs;
  • loss of volume of sales;
  • difficulty in calculating damages especially loss of future income;
  • ┬áthe likelihood of other generic manufacturers entering the market necessitating further legal proceedings and difficulties in proving loss;
  • the likelihood of income loss affecting the ability of the applicants to fund other activities relating to the development and promotion of its products.

 

This decision reinforces the dangers in delaying revocation proceedings while potentially infringing product development. See Novartis Ag v Hospira Limited [2012] FCA 1055.