GlaxoSmithKline Australia Pty Ltd v Pharmacor Pty Ltd [2014] FCA 1202

A recent preliminary discovery decision of Justice Beach of the Federal Court of Australia may have made life that little bit harder for generic pharmaceutical companies. The Pharmacor decision handed down at the end of last year has potentially opened the door to allow innovators to block the launch of otherwise approved generic medicines, even in the absence of a claim of patent infringement.

GlaxoSmithKline (GSK) applied to the Federal Court for preliminary discovery of documents lodged by Pharmacor Pty Ltd (Pharmacor) with the Therapeutic Goods Administration (TGA) as part of Pharmacor’s successful application to have its Osteomol 665 Paracetamol products (the Pharmacor Products) included on the Australian Register of Therapeutic Goods. The Pharmacor products were approved by the TGA as being bioequivalent to GSK’s modified release paracetamol products that included Panadol Osteo. Pharmacor subsequently applied to list the Pharmacor Products on the Schedule of Pharmaceutical Benefits from 1 December 2014.

GSK contended that it had reasonable cause to believe that it may have a right to obtain relief from Pharmacor arising from:

  1. alleged representations in contravention of section 18 and 29 of the Australian Consumer Law (ACL), being that the Pharmacor Products are bioequivalent to, or interchangeable with or substitutable for Panadol Osteo; or
  2. potential infringement of GSK’s Australian Patent No. 2001260212 for a bilayer sustained release oral paracetamol tablet with stipulated dissolution rates (the Patent).

It was not disputed that GSK’s Panadol Osteo fell within the claims of the Patent. The Pharmacor Products were approved by the TGA as bioequivalent to Panadol Osteo. However, the Pharmacor Products were formulated differently and apparently did not infringe any of the claims of GSK’s Patent. This was established in confidential tests referred to in general terms in His Honour’s judgment.

GSK submitted that if Pharmacor markets and supplies the Pharmacor Products to pharmacists and consumers on the basis that the products are ‘bioequivalent as approved by the TGA’ then it may be engaging in ‘a half-truth scenario or misleading or deceptive conduct by omission or silence’ on the basis that this conduct conceals the differences between Panadol Osteo and the Pharmacor Products.

Justice Beach noted that, from the regulatory authorities’ perspective, GSK had not demonstrated any reasonable belief that the Pharmacor Products were not bioequivalent to Panadol Osteo.

Second, His Honour accepted that there was no evidence of misrepresentation or material non-disclosure made by Pharmacor to the TGA during the regulatory approval process for the Pharmacor Products.

Third, His Honour found that any notification or representation as to bioequivalence between the Pharmacor Products and Panadol Osteo during the regulatory approval phase was made by the TGA to the Pharmaceutical Evaluation Branch of the Department of Health (the PEB), and not by Pharmacor itself. Based on the TGA’s representation, the PEB approved the Pharmacor Products as interchangeable or substitutable with Panadol Osteo.

However, His Honour stated that the concept of bioequivalence as applied by the TGA has an inherent degree of imprecision and variability. Bioequivalence may be established with the TGA using only in vitro dissolution tests, and may not involve reference to in vivo bioavailability parameters. Further, bioequivalence may be assessed by the TGA using a 90% confidence interval approach. His Honour commented that this confidence interval increased the imprecision involved in the TGA’s comparison exercise and may result in products being approved as bioequivalent and brand equivalent from a regulatory perspective, while displaying different clinical and therapeutic effects in consumers.

GSK succeeded in establishing that it had a reasonable belief that it may be entitled to relief pursuant to the ACL based on the promotion of Pharmacor Products to pharmacists and consumers. Justice Beach found that pharmacists may or may not appreciate the subtlety of the phrase ‘approved by the TGA as bioequivalent to Panadol Osteo’. His Honour commented that ‘once there is this “brand equivalence” flowing from the TGA’s characterisation of bioequivalence, pharmacists are likely to treat the products as, for all relevant purposes, the same and to supply or promote them to consumers accordingly’.

His Honour stated that ‘approved by the TGA as bioequivalent’ added gravitas and fortified the representations to consumers who may interpret the phrase as meaning ‘the same as, or having ‘identical benefits to’ the innovator’s existing product.

His Honour stated that Pharmacor could not ‘hide behind’ the TGA’s or PEB’s labels or ascriptions, particularly as the objective in using the equivalence labels was to compete with GSK and to gain market share at GSK’s expense.

While this decision did not deal with GSK’s entitlement to injunctive relief, it does leave the door open for innovators to potentially stop the launch of approved bioequivalent generic medicines using the provisions of the ACL. If so, this will further cement Australia as being a jurisdiction favourable to innovator pharmaceutical companies.

One thing is certain following the Pharmacor decision - the interplay between the concepts of bioequivalence and brand equivalence as applied by the TGA and PEB, and consumers' understanding of it, is likely to obtain further attention from both innovator and generic pharmaceutical companies alike during 2015.