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Australia – Generic EVISTA Evicted.

23 April, 2014

 


Eli Lilly and Company v Generic Health Pty Ltd [2013] FCA 1254

 
What You Need To Know

 

  • Eli Lilly has obtained an interlocutory injunction to prevent Generic Health from launching a generic version of raloxifene product ‘EVISTA’ in Australia pending the final hearing.
  • In assessing the balance of convenience, Nicholas J gave primary weight to the detriment Eli Lilly would suffer, including as a result of price reduction on its product if the Generic Health products were listed on the Pharmaceutical Benefits Scheme, the difficulty presented by a number of other generic products then entering the market, the likelihood that the price would then never be reinstated, and the availability of an early final hearing.

 
Background

 
Eli Lilly and Company (Eli Lilly) is the owner of Australian Patent No. 723797 which is titled “Benzothiophenes, formulations containing same, and methods” (the Patent). The invention the subject of the Patent relates to the use of raloxifene “in particulate form” in the preparation of formulations and compositions used in the treatment of various conditions, including osteoporosis. The commercial embodiment of the invention the subject of the Patent is marketed in Australia under the brand name ‘EVISTA’. EVISTA is registered on the Australian Register of Therapeutic Goods (the ARTG) and has been listed on the PBS since 1 November 1999.

 
On or about 7 June 2013, Generic Health Pty Limited (Generic Health) obtained registration of three raloxifene hydrochloride products on the ARTG. Eli Lilly sought to restrain Generic Health from, amongst other things, manufacturing and selling products containing raloxifene hydrochloride in Australia.

 
Had interlocutory relief not been granted by the Court, the Generic Health products would have been listed on the PBS from 1 December 2013 and would have been available for sale in Australia thereafter, in competition with EVISTA.

 
The Decision

 
On 26 November 2013, the Federal Court of Australia granted an interlocutory injunction restraining Generic Health from importing, manufacturing, supplying, offering to supply or agreeing to supply any raloxifene products. Justice Nicholas also ordered that Generic Health take all necessary steps to withdraw all applications for inclusion of any relevant raloxifene products on the PBS.

 
Although not satisfied on the basis of the expert evidence that Eli Lilly had a strong case, Nicholas J did not regard it as weak. Ultimately Nicholas J was satisfied that Eli Lilly had demonstrated a “prima facie” case of infringement, and turned to consider the balance of convenience.

 
Generic Health’s expert evidence focused on the difficulties involved in quantifying the harm that it would suffer if it were deprived the “first mover advantage” in the market for generic raloxifene products (assuming that it would be the first supplier or one of the first suppliers of generic raloxifene in Australia). However, Justice Nicholas found that Generic Health was unlikely to obtain any significant first mover advantage.

 
One of Generic Health’s major competitors, Apotex, was already the subject of an interlocutory injunction in favour of Eli Lilly, restraining it from supplying raloxifene products in Australia. In Nicholas J’s view it was unlikely that Eli Lilly would be able to maintain its interlocutory injunction against Apotex in circumstances where there would be a material change in circumstances as a result of Generic Health entering the market. Eli Lilly had also made an application to list its own authorised generic on the PBS, which would become listed in the event Generic Health’s product was listed.

 
In considering the balance of convenience, the Court considered how the market would likely be affected if the interlocutory relief was refused and the Generic Health products were included on the PBS.

 
First, there would be an immediate 16% price reduction to the Price to Pharmacists (PTP) for EVISTA pursuant to the National Health Act 1953 (Cth). Secondly, the listing of the first generic product would likely cause other generic products to be listed on the PBS, including Eli Lilly’s authorised generic product, at a rapid pace. Thirdly, Nicholas J accepted Eli Lilly’s evidence that EVISTA would suffer a substantial loss (up to 40%-60%) of its market share within 3 to 4 months of the price reduction taking effect. Once a number of generic products entered the market, calculation of that loss and damage and assessment of its causes would be difficult.

 
Perhaps most significantly, Nicholas J noted that if Eli Lilly successfully restrained Generic Health at a final hearing, reinstatement of the PTP for EVISTA would be in the discretion of the Minister for Health, and that it was unlikely in the circumstances that the PTP for EVISTA would ever recover if an interlocutory injunction was not granted and Eli Lilly successfully restrained Generic Health at a final hearing.

 
His Honour also inferred that Generic Health must have been aware of the parallel proceeding commenced by Apotex more than 18 months ago, which raised substantially the same issues, and noted the delay by Generic Health in either commencing revocation proceedings or seeking a declaration of non-infringement, against the willingness of Eli Lilly to be ready for an early final hearing.

 
Conclusion/Implications

 
Although questions of the balance of convenience are always weighed in the circumstances of the particular case, this decision highlights the tendency for interlocutory injunctions to be granted in Australia to prevent generic products from entering the market and listing on the PBS pending final hearing, particularly in circumstances in which there is evidence of multiple generic products registered, and any delay can be attributed to the respondent. The willingness of the applicant to proceed to an early final hearing, thus reducing the duration of an interlocutory injunction, may also tip the balance.

 

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For further information, please contact:

 

Ben Miller, Partner, Ashurst
[email protected]

 

Amber Dalrymple, Ashurst
[email protected]

 

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