On 25 August 2009, the Federal Court ordered Alphapharm to stop marketing and supplying the anti-depressant Enlafax-XR pending the final hearing and determination of the patent proceedings between Alphapharm and Wyeth. Earlier this year, the Federal Court granted a similar interlocutory injunction against Sigma in relation to corresponding patent proceedings between Sigma and Wyeth (the Sigma proceedings).1

The Federal Court’s grant of these two interlocutory injunctions in favour of Wyeth continues the current trend of an originator pharmaceutical company being able to successfully obtain an interlocutory injunction against a generic pharmaceutical company. In both cases, it was notable that the Federal Court was willing to grant an interlocutory injunction notwithstanding the offer of an undertaking in each case from the generic pharmaceutical company which in effect meant that the generic pharmaceutical company would not seek listing on the Pharmaceutical Benefits Scheme (PBS), thereby preventing the automatic 12.5 per cent price reduction which follows the listing of the first generic product on the PBS.

Background

As in the Sigma proceedings, the interlocutory injunction application concerned Wyeth’s patent for a method of treating patients using a single daily dose formulation of venlafaxine hydrochloride, which is used in the treatment of depression (Patent).

Wyeth markets an extended release formulation of venlafaxine hydrochloride in Australia under the brand name Efexor-XR. On 30 April 2009, Alphapharm obtained registration of an extended release formulation of venlafaxine hydrochloride on the Australian Register of Therapeutic Goods under the brand name Enlafax-XR on the basis of bioequivalence to Efexor-XR. At the time the proceedings were commenced, Alphapharm intended to begin supplying Enlafax-XR from 1 September 2009.

Alphapharm commenced proceedings in June 2009 seeking revocation of the Patent. Wyeth cross-claimed alleging that Alphapharm’s intended supply of Enlafax-XR would infringe the Patent.

As in the Sigma proceedings, Justice Jagot of the Federal Court was required to consider three issues in determining whether to grant the interlocutory injunction:

  1. whether Wyeth had made out a prima facie case (or a serious question to be tried)
  2. whether Wyeth would suffer irreparable harm for which damages would not be an adequate remedy, unless the interlocutory injunction was granted, and
  3. whether the balance of convenience favoured the granting of the interlocutory injunction.

In line with Justice Sundberg’s reasoning in the Sigma proceedings, Justice Jagot ultimately granted the interlocutory injunction against Alphapharm on the basis that the balance of convenience (including the question of the adequacy of damages) weighed in Wyeth’s favour.

Serious question to be tried

Unlike in the Sigma proceedings, Alphapharm did not concede that there was a serious question to be tried as to infringement, alleging that the use of hydrogel tablet technology in Enlafax-XR was excluded from the Patent. Justice Jagot rejected this argument and found that Wyeth had a reasonably strong prima facie case on infringement.

As regards Alphapharm’s challenge to the validity of the patent, Justice Jagot took the same approach as Justice Sundberg in concluding that Alphapharm had a prima facie case on invalidity in relation to the inventive step and manner of manufacture requirements. Justice Jagot also found that Alphapharm had a prima facie case on invalidity on the ground of false suggestion or misrepresentation.

However, as in the Sigma proceedings, Justice Jagot did not consider that Alphapharm’s case for invalidity was sufficiently strong to qualify the overall conclusion that Wyeth had a serious question to be tried as to infringement. Accordingly, it was necessary to turn to the question of the adequacy of damages, the balance of convenience and other discretionary matters.

Adequacy of damages and balance of convenience

Justice Jagot considered the question of the adequacy of damages as part of the weighing of the balance of convenience.

Consistent with Justice Sundberg’s reasoning in the Sigma proceedings, Justice Jagot considered that Wyeth was more likely to suffer from a disturbance of the status quo than Alphapharm. Alphapharm’s losses were likely to be calculable since Enlafax-XR was not yet on the market, Wyeth’s losses would be impossible to calculate as Alphapharm’s entry on the market would have an unpredictable and irreversible effect. Accordingly, Justice Jagot accepted Wyeth’s contention that, if an interlocutory injunction was not granted, it would suffer irreparable harm for which damages would not be an adequate remedy on the basis that:

  • it was not possible to know the effect on the market of Alphapharm’s (and, consequently, Sigma and other generic suppliers) entry, and so their effect on Wyeth’s sales of Efexor-XR, given the likelihood of rapid and aggressive competition for market share
  • it was not possible to know whether and to what extent Wyeth might have to discount Efexor-XR to retain some market share, in circumstances where Alphapharm’s proposed undertaking to maintain full accounts and proceeds of sale of Enlafax-XR could not compensate Wyeth for such a price reduction, and
  • it was unlikely that, if Wyeth was ultimately successful, the sales price of Efexor-XR could simply revert to its current price.

Alphapharm had sought to counteract Wyeth’s arguments in relation to of irreparable harm and patient confusion by pointing to Wyeth’s recent introduction of a new anti-depressant (under the brand name Pristiq) onto the market that was likely to compete with Efexor-XR. However, Justice Jagot did not accept Alphapharm’s contention that Wyeth was attempting to switch patients from Efexor-XR to Pristiq as Wyeth’s intensive marketing strategy for Pristiq was consistent with the usual approach to a new product that is intended to have a broader market.

Further, while Alphapharm contended that, unlike Sigma, it had not proceeded with its ‘eyes wide open’, Justice Jagot considered that the risk that the market may alter to Alphapharm’s detriment only existed because Alphapharm was insufficiently diligent about maintaining a watch over Wyeth’s patents. In any case, Alphapharm had continued to take steps for the launch of Enlafax-XR even after it became aware of the Patent in March 2009 and the likelihood of an infringement claim by Wyeth.