Full Federal Court to hear appeal against generic drug injunction

On 23 April 2012, Katzmann J delivered a judgment that will see the Full Federal Court reconsider an interim (interlocutory) injunction imposed on Generic Health (GH) in relation to the anti-psychotic drug aripiprazole.  The effect of Katzmann J’s orders is to allow the Full Federal Court to hear the application for leave to appeal immediately before, or simultaneously with, the appeal itself.

The application at first instance was brought by Otsuka Pharmaceutical Co (Otsuka), the patentee, and Bristol-Myers Squibb Company (BMS), the exclusive licensee, who markets aripiprazole under the name Abilify.  In a judgment delivered on 16 March 2012, Yates J found that an interim injunction was justified based on one of the two patents on which the applicants sought to rely.  His Honour’s judgment considered the relevance of the indications in respect of which GH’s product was listed on the Australian Register of Therapeutic Goods (ARTG), and addressed the possibility of the originator introducing its own generic product onto the market.

In considering the first stage of the two-stage test outlined by the Full Federal Court in Samsung Electronics Co Limited v Apple Inc [2011] FCAFC 156, Yates J was satisfied that there was a prima facie case of infringement of the first patent, which related to the treatment of schizophrenia.  However, his Honour was not satisfied of a prima facie case of infringement of the second patent, which related to the treatment of a range of other disorders, such as depression, that are associated with the 5-TH1A serotonin receptor.  This was because GH’s products were only indicated for treating schizophrenia and no evidence was led by Otsuka/BMS to demonstrate that pharmacists would dispense these products for indications not the subject of GH’s ARTG registration.

In assessing the balance of convenience (the second limb of the Samsung v Apple two-stage approach), Yates J favoured the granting of the injunction since a failure to do so could cause “significant, unquantifiable and irreparable harm” to the applicants.  Such harm was said to arise primarily as a result of the 16% reduction in the Pharmaceutical Benefits Scheme (PBS) list price of Abilify that would be triggered if GH were allowed to list its products on the PBS Schedule.  Moreover, his Honour was not persuaded by GH’s argument that the risk of BMS introducing its own generic version of Abilify onto the market was a factor militating against imposition of the injunction.  His Honour regarded this as “a prospect that is and has been available to [BMS] at all times, whether or not interim injunctive relief is granted against the respondent”.

Finally, Yates J considered the adequacy of the undertakings proffered by GH, which included an undertaking “to send a letter to pharmacists every three months advising that the GH products are not to be substituted for the Abilify products on any non-PBS prescription”.  His Honour rejected these undertakings, first, because the effect of the undertakings and the extent to which they would alleviate the injury to the applicants was uncertain and, secondly and most importantly, because the undertakings would not prevent the imposition of the 16% PBS price reduction on Abilify.

The decisions of Yates J and Katzmann J are available here and here.  A date is yet to be set for the Full Federal Court hearing.