On 12 June 2018, Justice Burley of the Federal Court of Australia granted the first interlocutory injunction to restrain the threatened launch of a biosimilar pharmaceutical product in Australia, in the decision of F.Hoffmann-La Roche AG v Sandoz Pty Ltd [2018] FCA 874.
Background to the proceedings
The proceedings were commenced in December 2017 by F. Hoffmann-La Roche AG and its Australian subsidiary, Roche Products Pty Ltd (together Roche), against Sandoz Pty Ltd (Sandoz). Roche sought urgent orders, including an interlocutory injunction, to restrain Sandoz from launching its biosimilar rituximab medicine in Australia on the basis that in doing so, Sandoz would infringe five claims of four Roche patents.
The medicine in issue was the monoclonal antibody rituximab, which is prescribed to treat a number of conditions, including non-Hodgkin’s lymphoma, chronic lymphocytic leukaemia and rheumatoid arthritis. Roche’s rituximab product available for sale in Australia is branded MABTHERA and the Roche patents in issue cover certain methods of use of rituximab in the treatment of a number of medical conditions.
On 30 November 2017, Sandoz obtained regulatory approval (i.e. inclusion on the Australian Register of Therapeutic Goods (ARTG)) for two rituximab biosimilar products branded RIXIMYO (Sandoz Products). On 20 December 2017, the Sandoz Products were listed for consideration by the Pharmaceutical Benefits Advisory Committee as to whether they should be listed on the Pharmaceutical Benefits Scheme (PBS). The evidence indicated that, without an injunction, the Sandoz Products were likely to be listed on the PBS on 1 August 2018.
The impact of PBS listing of the Sandoz Products is that upon listing, Roche’s MABTHERA product would move from the F1 Formulary to the F2 Formulary and the price of MABTHERA would be immediately reduced by 16%. The evidence in the case also indicated that further reductions to the price of MABTHERA would be likely as a result of factors such as price disclosure mechanisms and competition in the marketplace.
Decision of the Court
In determining whether Roche should be granted interlocutory injunctive relief to restrain Sandoz from infringing the four Roche patents, Justice Burley noted that the principles concerning the grant of interlocutory relief are not controversial, being:
a. whether Roche has established a prima facie case for final relief; and
b. whether the balance of convenience favoured the grant of an injunction.
Prima facie case
For the purposes of the interlocutory application, Sandoz did not dispute that it proposed to infringe the asserted claims of the patents by the supply of the Sandoz Products.
However, Sandoz contended that it had established a sufficiently strong case that the asserted claims of the patents were invalid for lack of inventive step. Whilst Sandoz asked the Court to conclude that the challenge to validity meant that it had a strong prima facie case, Roche submitted that the validity challenge was merely arguable and did not weaken the strength of its infringement case.
In considering issues of validity of the patents in issue, the Court considered affidavits from a number of expert witnesses in the fields of haematology and rheumatology.
In relation to Sandoz’s invalidity case, Burley J concluded that whilst the invalidity case was arguable, on a provisional view, it was not possible to conclude that it was strongly arguable. This was, in part, due to his Honour’s view that the question of whether a claimed invention involves an inventive step is nuanced, fact rich and involves balancing questions of fact and degree, akin to a jury question (at [122]), which is difficult to determine at the interlocutory stage.
As such, his Honour held that Roche had established a strong arguable case that the patents would be infringed if Sandoz commenced supplying the RIXIMYO Products in Australia, and a prima facie case for final relief.
Balance of convenience issues
On the balance of convenience, Roche’s arguments in support of injunctive relief included that the launch of the Sandoz Products would cause Roche to suffer substantial and irreparable harm (including the mandatory 16% price drop on PBS listing of the Sandoz Products), the quantum of which could not be calculated easily.
Roche also argued that the calculation of damage suffered would be affected by the entry of additional biosimilars, and pointed to the ARTG registration, and likely PBS listing (absent restraint) on 1 December 2018, of a second rituximab biosimilar product, TRUXIMA, by Celltrion Healthcare Australia Pty Ltd (Celltrion).
In response, Sandoz asserted that the difficulties argued by Roche in calculating its losses were not as complicated as Roche claimed. Sandoz also submitted that if an injunction were granted and then overturned at final hearing (and a claim made on the undertaking as to damages), it would be far harder to calculate the harm suffered by Sandoz. This calculation would involve constructing a hypothetical market for the Sandoz Products, which would be complex and uncertain.
Sandoz also argued that if it were to be restrained from supplying the Sandoz Products now, it would lose significant sales and the first mover advantage. Sandoz also raised a number of public interest factors that it argued weighed against the grant of interlocutory relief, including that the Sandoz Products would likely be cheaper than MABTHERA, leading to decreased costs for hospitals and patients for off-label use and the possibility of new research into potential new indications for rituximab.
In his decision, Burley J accepted that matters raised by Sandoz made the balance finely tuned. However, his Honour acknowledged the significant losses Roche stood to suffer if an injunction were not granted and the difficulties in calculating such loss. With respect to Sandoz’s position, in light of the proposed launch of Celltrion’s TRUXIMA product in December 2018, the Court agreed with Roche that the loss of the first mover advantage for Sandoz was not likely to be a significant factor. The Court did not place significant weight on the public interest arguments raised by Sandoz.
Ultimately, the Court found that the balance of the case and justice favoured the granting of interlocutory injunctive relief to Roche.
In terms of relief, the Court granted an interlocutory injunction to Roche restraining Sandoz from supplying for use, offering for supply or sale, supplying or selling rituximab until 11 August 2019 (being the first expiry date of the four asserted Roche patents). Prior to 11 August 2019, Roche also has leave to apply to the Court for an extension of this order, having regard to the circumstances prevailing at that time.
Implications
While this decision is the first interlocutory injunction granted to restrain a biosimilar product in Australia, it demonstrates that Australian courts are likely to grant interlocutory injunctions to pharmaceutical patentees where:
- a prima facie case for infringement has been established by the patentee;
- the challenge on validity is weak; and
- the evidence as to the patentee’s loss if injunctive relief is not granted is greater than that of the respondent’s loss if an injunction is granted, which is especially the case if a mandatory price reduction will apply following PBS listing of the respondent’s product.
Spruson & Ferguson Lawyers Pty Ltd represented Roche in these proceedings.