3 min read

The Therapeutic Goods Administration (TGA) has commenced a timely public consultation into the repurposing of prescription medicines, which seeks to better understand the incentives and potential hurdles influencing sponsors’ decision-making on whether to extend the approved indication for an existing medicine. Of particular interest to the TGA is the viability of repurposing medicines for rare diseases or less commercially profitable indications, or in circumstances where the new indication is already accepted clinical practice, albeit ‘off-label’ in Australia or elsewhere.

As part of its consultation paper the TGA has proposed far-reaching changes that have the potential to significantly reduce the regulatory burden on sponsors when applying for the inclusion of a new indication, improve information sharing and access to related international regulatory and reimbursement approvals, and implement open access to Australian medicine usage data.

Repurposing and ‘off label’ use

Repurposing, also referred to as second medical use, is the use of a known drug for a new therapeutic purpose. Repurposing is a promising avenue in drug discovery and has been an active area of growth in the last decade for a variety of drug classes, particularly chemotherapeutic agents.

Among the most visible recent examples of potential repurposing have been the investigation of known medicines such as chloroquine and hydroxychloroquine (both anti-malarials), remdesivir (an antiviral developed to treat Ebola) and tocilizumab (a monoclonal antibody developed to treat rheumatic conditions) and numerous other existing medicines as potential COVID-19 treatments.

Repurposing has the important benefit of decreasing the overall cost of bringing a new treatment to market and broadening access to it by Australian prescribers and patients, as the safety and pharmacokinetic profiles of the repurposed candidate have already been tested and established in connection with its original indication(s). 

In recent years, the TGA has worked with innovator sponsors to enable them to make submissions based on peer-reviewed literature, rather than clinical data, for registration of new indications for existing medicines on the Australian Register of Therapeutic Goods (ARTG). This in turn has enabled reimbursement for the indication through listing on Australia’s Pharmaceutical Benefits Scheme (PBS). 

In one such example, the TGA worked with the sponsor of Tamoxifen, a well-known breast cancer hormonal treatment in clinical use since the 1970s, to submit a literature-based application for a new indication (the prevention of breast cancer in high-risk women), which is an off-label use supported by recommendations in both Australian and international clinical care guidelines.

However, the TGA cannot compel sponsors to seek ARTG registration for a new indication that does not meet the sponsor’s business objectives, even where widespread and clinically-supported off-label use exists. Commercial imperatives are therefore one of the main barriers to less profitable second medical use indications becoming registered and subsidised.

Proposed approaches to facilitating and encouraging repurposing of medicines

The TGA has outlined three broad approaches to encouraging ARTG regulatory and PBS reimbursement applications for repurposed medicines, summarised below.

Proposal 1 – Reduce regulatory burden

  • Develop and provide specific regulatory support and guidance for repurposing medicines, including clinical trial design and scientific advice.
  • Assist with the development of literature reviews to simplify literature based submissions.
  • Facilitate access to comparable overseas evaluation reports, where they exist.
  • Improve the coordination of multi-jurisdictional submissions with other regulators.
  • Provide fee relief (currently a TGA application and evaluation for an extension of indication is approximately $148,000), for submissions for medicines that have low commercial returns but high public health gains.
  • Streamline simultaneous submissions for regulatory and reimbursement evaluation.
  • Provide exclusivity periods for the first sponsor of new indications of repurposed off-patent medicines.

Proposal 2 – Enhanced information sharing and access

  • Facilitate open access to Australian medicine usage data.
  • Provide a simple mechanism to find related international regulatory and reimbursement approval assessment reports or decision summaries.

Proposal 3 – Actively pursue registration and review

  • Seek public expressions of interest for sponsorship of new indications of a medicine, potentially limited to non-commercial organisations.
  • Compelling sponsors to make an application for an additional indication.
  • Pharmaceutical Benefits Advisory Committee (PBAC) to have the ability to approve the inclusion of an additional indication without the need for an application by the sponsor.

The issues raised by this consultation paper have important and far-reaching implications for both innovator and generic sponsors, and it will be of interest to see the outcome of this first round of pubic consultation, which concludes on 30 March 2021.

Authored by Duncan Longstaff

Welcome to Shelston IP’s wrap-up of the most notable patent law decisions in Australia and New Zealand delivered during 2020 – a remarkable year indeed. The High Court delivered its first decision in a patent case since 2015, and there was an interesting spread of Full Federal Court, Federal Court, Australian Patent Office and Intellectual Property Office of New Zealand decisions relating to issues of patent validity, infringement and amendment as well as procedural issues.

Read our full report

  • The High Court of Australia has endorsed the doctrine of exhaustion in favour of the longstanding doctrine of implied licence with respect to patented products in Australia, but made clear the critical question remains whether the modifications made to a product in each case are properly characterised as permissible repair or impermissible re-making (Calidad v Seiko Epson).
  • An enlarged Full Federal Court has confirmed that a protocol for a clinical trial that is publicly available can be novelty-defeating, provided the information disclosed is sufficiently specific and complete to disclose the invention that is later claimed. The Full Court has also provided important guidance on the nature and scope of Swiss-style claims, and the circumstances under which such claims may be infringed (Mylan v Sun).
  • The Full Court of the Federal Court has found that a computer-implemented method that linked website users to online advertising was not a manner of manufacture and therefore not patentable subject matter (Commissioner of Patents v Rokt). In separate decisions, a computer-implemented method relating to “sandboxing” (Facebook) and an invention relating to the hardware and software components of an electronic gaming machine (Aristocrat v Commissioner of Patents) were held to be patent-eligible subject matter, while a modified roulette table was found not to be patent-eligible (Crown).
  • The Full Court of the Federal Court has confirmed that section 105(1A) of the Patents Act 1990 (Cth), introduced by the Raising the Bar reforms, confers on the Federal Court the power to direct amendments to patent applications during the course of an appeal hearing (Meat and Livestock Australia v Branhaven).
  • In the long-running patent dispute relating to Lundbeck’s antidepressant, Lexapro (escitalopram), the Full Court of the Federal Court overturned a decision that had found Sandoz liable for patent infringement during the extended term of a patent after it was restored, and awarded damages. Lundbeck has recently been granted special leave to appeal to the High Court of Australia, which for the third time will hear an appeal regarding an aspect of this long-running litigation (Sandoz v Lundbeck).
  • The Federal Court provided its first detailed analysis of the Raising the Bar reforms to Australian patent law concerning sufficiency and support. A subsequent judgment on final relief, delivered in November 2020, highlights the challenges facing a defendant who seeks to resist final injunctive relief on public interest grounds (Merck Sharp & Dohme v Wyeth). Those sufficiency and support requirements, as well as best method, were also considered in detail by the Australian Patent Office (University of British Columbia, Gliknik v CSL).
  • In an unprecedented decision, the Federal Court of Australia has considered and dismissed a claim by the Commonwealth Government for compensation from sponsors of innovator pharmaceutical products, pursuant to undertakings as to damages given in exchange for an interlocutory (preliminary) injunction restraining the launch of the first generic product (Commonwealth v Sanofi).
  • A party which gave undertakings not to launch an allegedly infringing biosimilar without first giving notice successfully resisted an application for preliminary discovery (Pfizer v Sandoz). Conversely preliminary discovery was granted against a former employee, but limited in scope due to the prevailing financial circumstances (Sovereign v Steynberg).
  • Extension of term applications were refused for pharmaceutical patents (Pharma Mar, Ono).
  • An opposition to an Australian patent application based solely on a challenge to entitlement was successful (Liquid Time v Smartpak).
  • The Federal Court considered the applicability of the Crown use defence to infringement, and the effect of prior disclosures by the Crown on validity (Axent v Compusign).
  • The nature and detail of disclosures in prior art and the common general knowledge proved determinative of the validity in decisions concerning a combination pharmaceutical product (Boehringer v Intervet) and a parking management system (Vehicle Monitoring Systems v SARB).
  • The construction of claims in the context of the entire specification proved determinative of issues of infringement and validity in several decisions (Caffitaly v One Collective, Nufarm v Dow, CQMS v ESCO).
  • The Intellectual Property Office of New Zealand has delivered decisions demonstrating the difficulty of opposing an application under the “old” 1953 Act (Lonza v Koppers), the high burden for computer-implemented methods (Thomson Reuters) and the more onerous support requirements under the “new” 2013 Act (Taiho Pharmaceutical).

As we continue into 2021 (and away from 2020), we hope this review provides a practical and comprehensive resource. Please do not hesitate to take the opportunity to contact our authors, all subject-matter experts in their respective fields, for advice on the issues raised by these important decisions.

Authored by Duncan Longstaff

11 min read

Switching patients from an originator biologic (the reference product) to a biosimilar version has been a topic of keen interest in recent years, both in Australia and globally, as more biosimilars have emerged onto the market. This trend has flowed from the expiration of data exclusivity and patent protection for a number of important originator biologics. While biosimilar medicines have been available in Australia for over a decade, biosimilars to the disease‐modifying antirheumatic drugs (DMARDs) (e.g. infliximab, rituximab, etanercept and adalimumab biosimilar products) have only come onto the market in the last 2-5 years. As at February 2020, the Schedule to Australia’s Pharmaceutical Benefits Scheme (PBS) listed 86 originator biologics, with 17 of these biologics having one or more biosimilar brands.[1]

Despite more biosimilars becoming available as alternatives to established biologics, and initiatives by the Australian Government to reduce the administrative burden of switching for prescribers and to enhance consumer confidence in biosimilars, the uptake of biosimilar products has remained limited in Australia.

There are strong financial incentives for the Australian Government to seek to increase the uptake of biosimilars and thus drive competition and lower prices for biological medicines in Australia. In the 2018-2019 financial year, biologics accounted for 8 of the top 10 PBS-subsidised drugs by expenditure.[2] Further, the majority of blockbuster biologics are intended for long-term use in chronic diseases, adding significantly to the cost of subsidising their supply.

In this article, we examine some concerns that have been raised in relation to the practice of biosimilar substitution by pharmacists, and review the current medical consensus on substitution and interchangeability. We also consider Australia’s regulatory arrangements for biosimilar approval and substitution, which present some unique opportunities for promoting wider biosimilar adoption.

Concerns related to switching

Unlike generic versions of small molecule medicines, which are assumed to be identical (in relevant respects) to the originator drug, biosimilars are highly similar, but not identical, to their reference biologic, which has raised concerns about their substitutability. When biosimilars first emerged, interchangeability was an issue of considerable controversy, with concerns expressed about:[3]

  • whether efficacy and safety would be compromised when patients were switched between a biologic and biosimilar product or from one biosimilar to another, and in particular when multiple switching occurs;
  • whether switch-related immunogenicity (neutralising antibodies against the biosimilar product and/or any naturally occurring counterpart protein) may be triggered when switching from a biologic to a biosimilar (or between biosimilars); and
  • whether it is desirable for biosimilar sponsors to be permitted to seek marketing approval for multiple additional indications by extrapolation from the reference biologic’s data, once biosimilarity has been established for a single indication.

These concerns have in some respects remained, despite evidence and better understanding concerning the safety and efficacy of individual biosimilars, as discussed in further detail below.

Terminology – interchangeability and substitutability

The use of terminology in this area varies between jurisdictions, and has been the source of some confusion. In Australia and Europe, interchangeability generally refers to the practice of changing one medicine for another equivalent medicine by the treating physician, with the clinical decision to exchange one medicine for another medicine (with the same therapeutic intent in a given patient by the prescribing doctor) referred to as switching.

The term substitution, as used in Australia, refers to the practice of dispensing one medicine instead of another equivalent and interchangeable medicine by a pharmacist, without requiring consultation or approval from the prescriber.

By contrast to Australian usage, in the United States the term ‘interchangeable biosimilar’ refers to a regulatory standard, whereby a pharmacist is permitted to substitute an interchangeable product for the reference product without consulting the prescriber, subject to individual state regulations. The United States’ ‘interchangeable biosimilar’ designation is roughly equivalent to Australia’s substitution practices, although no biosimilar to date has obtained interchangeable status in the United States.

The issue of structural variability

Much of the concern about switching patients from biologics to biosimilars arises from the inherent structural variability of biologic molecules. Biologics are pharmaceutical products that contain one or more active substances that are derived from living cells or organisms. A common form of a biologic medicine currently in use is a monoclonal antibody. A biosimilar is a version of a reference (approved) biologic that has established similarity to its reference product in terms of quality, safety and efficacy.

Biologics and biosimilars differ from traditional small-molecule drugs, with the latter being structurally simple, chemically synthesised and easily characterised. Biologics, on the other hand, are large, highly complex molecules that are not easily characterised. Biologics are also sensitive to manufacturing process conditions, particularly in relation to post-translational modifications, such as glycosylation patterns. This can lead to variability in the final structure of individual molecules, referred to as micro-heterogeneity, which can lead to a risk of product divergence.[4] Slight variation may also occur between each batch of a biologic manufactured, referred to as batch-to-batch variation.

Is switching considered safe?

The propensity for minor structural variability in biologics, as described above, has given rise to concerns that biologics and biosimilars may be less suitable for pharmacy-level substitution than traditional, small-molecule medicines. On the other hand, there has now been over 10 years of real-world clinical experience with switching involving biosimilars that have been launched,[5] as well as a growing number of studies regarding the safety and efficacy of switching, such as between certain erythropoietin-stimulating agents, filgrastim, insulin, adalimumab, rituximab, infliximab and etanercept, and their corresponding biosimilars.[6]

Australia’s biosimilars regulatory scheme

In Australia, the Therapeutic Good Administration (TGA) has responsibility for registration and marketing authorisation of medicines (focusing on safety, efficacy and manufacturing quality) while the Pharmaceutical Benefit Advisory Committee (PBAC) advises the Australian Government on whether supply of a medicine should be subsidised (focusing on cost-benefit analysis) as well as advising on brand substitutability and other matters relating to the PBS.

Due to the complexity of biologic molecules and their propensity for structural variation, establishing biosimilarity requires more rigorous regulatory processes than those applied to establishing bioequivalence of generic medicines. The TGA assesses each biosimilar based on the totality of available data, comparing it to the reference product in terms of its physicochemical structure, biological activity, preclinical data (pharmacokinetic and pharmacodynamic data) and clinical trials data (efficacy, safety and immunogenicity). Regulatory approval for a biosimilar requires that no clinically meaningful differences exist and that the biosimilar molecule is therapeutically equivalent to the reference medicine.[7]

In general, a Phase III clinical trial for a single indication will be sufficient to confirm biosimilarity (together with preclinical and physiochemical data). Once biosimilarity is established, it may be possible for a biosimilar to be approved for other indications by so-called ‘indication extrapolation’ from the reference product’s data.[8] An Australian consensus statement on the use of biosimilars in haematological conditions published by an expert panel in April 2020 reported that post-approval experience has confirmed that extrapolation of indications is a safe practice.[9]

Australia’s approach to substitutability

‘a’ flagging

The Australian Government has taken a relatively pro-substitution approach to biosimilars, with substitutable biosimilars denoted in the Schedule of Pharmaceutical Benefits with an ‘a’ superscript (a-flagged). However, the prescribing physician can prevent pharmacy-level brand substitution by ticking the “brand substitution not permitted” box on the prescription form.[10] Where a prescription indicates that no substitution is allowed, it is an offence under section 103(2) of the National Health Act 1953 for a pharmacist to dispense a brand other than that specified on the prescription. Where brand substitution is permitted, good pharmacy practice further requires that the pharmacist consult with the patient before substituting another brand. These safeguards are intended to ensure that no uncontrolled substitution occurs in practice in Australia.

As noted previously, the PBS (as at February 2020) lists 86 originator biologics, with 17 reference biologics having one or more biosimilar products,[11] with all but a few biosimilars being ‘a’ flagged to their reference product.

PBAC assessment of biosimilar substitutability

The PBAC first announced in April 2015 that biosimilar products would be ‘a’ flagged to their reference product as a default position in Australia.[12] However following consumer consultation, this position was revised in July 2015, with the PBAC instead stating that recommendations for ‘a’ flagged status would be made on a case-by-case basis. This change in stance, the Committee indicated, was meant to reassure consumers that biosimilars would not, simply by virtue of being a biosimilar, be provided with automatic substitutability. The PBAC further advised that the following matters would be relevant considerations in support of ‘a’ flagged PBS listing status:[13]

  • TGA determination of biosimilarity to the reference biologic;
  • absence of any evidence to suggest significant differences in clinical effectiveness or safety compared with the reference product;
  • absence of any evidence identifying patient populations where the risks of using the biosimilar product are disproportionately high;
  • availability of data that the biosimilar was safe and effective in treatment-naïve patients initiated on the biosimilar product; and
  • availability of data to support equivalent safety and effectiveness when switching between the reference product and the biosimilar.

In March 2018, the PBAC once again revised its position on the assessment of brand equivalence and substitution for biosimilars, this time noting that the TGA’s determination of biosimilarity adequately covered matters of safety and efficacy. The PBAC’s simplified criteria now includes only the following matters:[14]

  • TGA determination of biosimilarity;
  • availability of supportive data relating to the effects of switching between the reference product and the biosimilar product(s); and
  • practical considerations relating to substitution by the pharmacist at the point of dispensing (e.g., strength of formulation and number of units per pack).

The PBAC indicated that where there is insufficient data to support ‘a’ flagging, additional data should be collected to facilitate future reconsideration. The Committee has also made clear that its preference is to extrapolate biosimilarity across all indications proposed for subsidy rather than requiring indication-specific data.

The United States’ ‘interchangeability’ designation

By contrast, in the United States interchangeability is a regulatory standard with a higher bar in terms of the clinical data required. The Food and Drug Administration (FDA) released updated guidance for biosimilar interchangeability in May 2019,[15] which contemplates two categories of licensed biosimilars – ‘biosimilars’ and ‘interchangeable biosimilars’. However, to date, no biosimilar products approved for marketing in the United States have been designated as ‘interchangeable’ by the FDA.[16]

The United States is currently the only country that requires a biosimilar sponsor to submit additional clinical trials data to obtain an interchangeability designation.[17] Qualifying ‘interchangeable’ products must demonstrate to the FDA’s satisfaction that they may be expected to produce the same clinical result as the reference product in any given patient. The FDA requires sponsors to conduct switching studies for any biosimilar that is administered more than once. Such studies must incorporate at least two separate exposure periods for each of the products tested (i.e. at least three switches between reference biologic and biosimilar). In order to produce this data, biosimilar sponsors must expend significant resources to conduct clinical switching studies satisfying these requirements. Once the product meets the requirements of an interchangeable biosimilar for at least one indication, the sponsor may seek to be licensed for additional indications for which the reference product is licensed by extrapolation.[18]

Does substitution occur in Europe?

Unlike the FDA, the European Medicines Agency (EMA) has not adopted a stance on interchangeability and does not regulate interchangeability, nor substitution practices, which fall under the authority of individual European Union (EU) member states.[19] In this regard, it is reported that no pharmacy-level substitution occurs in the EU,[20] and moreover no EU member has deemed that switching studies are a necessary requirement for biosimilar substitutability.[21]

By way of example, the United Kingdom does not permit pharmacy-level substitution and instead leaves this to the prescribing physician’s discretion.[22] France went as far as introducing laws granting pharmacy-level substitution of biosimilars for treatment-naïve patients only, but it is yet to put this into practice as a result of opposition to the implementation of substitution practices.[23]

‘a’ flagging and skinny-labelling strategies

Sponsors of both biologics and biosimilars should take note of the interplay between ‘a’ flagging and so-called ‘skinny-labelling’ strategies aimed at carving out patent-protected indications to allow a biosimilar supplier to potentially avoid patent infringement by arguing that it does not have reason to believe its product would be put to an infringing use. The PBAC is only permitted to list a product on the PBS in respect of indications for which the product has been granted marketing approval by the TGA. Thus one potential approach for biosimilar sponsors is to limit their application for marketing approval to only those indications for which patent protection has expired or is unlikely to withstand a validity challenge. However, it is not clear that such an approach will avoid patent infringement in respect of a non-indicated use. Australian courts have grappled with these indirect infringement issues in recent years, which are legally complex and highly dependent on the specific facts attending the products, patent and market relevant to the innovator and generic/biosimilar products in question.

The way forward?

The slow market uptake of biosimilars in Australia has generally been attributed to the understandable lack of familiarity and comfort with biosimilar products by treating physicians, pharmacists and patients alike.

It is to be expected that confidence in biosimilars will increase with time. It is also likely to be enhanced through substitution policies and initiatives (such as Australia’s practice of ‘a’ flagging biosimilars on a case-by-case basis), clearer guidelines on interchangeability and substitutability designations, expert medical consensus statements on biosimilar use, as well as pricing incentives. In this regard, it will be of interest to see how the market uptake of biosimilars develops over this decade.

[1] PBS. ‘Biological Drugs and Brands listed on the Pharmaceutical Benefits Scheme’. http://www.pbs.gov.au/info/browse/biological-medicines-currently-listed-on-the-pbs#P. Accessed 23 May 2020.

[2] PBS. ‘PBS Expenditure and Prescriptions Report 1 July 2018 to 30 June 2019’. http://www.pbs.gov.au/statistics/expenditure-prescriptions/2018-2019/PBS_Expenditure_and_Prescriptions_Report_1-July-2018_to_30-June-2019.pdf. Accessed 23 May 2020.

[3] Gregory G.P. et al. ‘A consensus statement on the use of biosimilar medicines in hematology in Australia’. Asia-Pacific Journal of Clinical Oncology. April 2020. https://doi.org/10.1111/ajco.13337; Weise M et al. ‘Biosimilars: what clinicians should know’. Blood. 2012;120:5111‐5117.

[4] Ramanan S and Grampp G. ‘Drift, evolution, and divergence in biologics and biosimilars manufacturing’. BioDrugs. 2014;28(4):363–72.

[5] Ibid; La Noce A. and Ernst M. ‘Switching from reference to biosimilar products: an overview of the European approach and real-world experience so far’. European Medical Journal. September 2018. https://emj.europeanmedical-group.com/wp-content/uploads/sites/2/2018/09/Switching-from-Reference….pdf. Accessed 23 May 2020.

[6] McKinnon R. et al. ‘Biosimilarity and Interchangeability: Principles and Evidence: A Systematic Review’. BioDrugs (2018) 32:27–52. https://doi.org/10.1007/s40259-017-0256-z.

[7] TGA. ‘Biosimilar medicines regulation – Version 2.2’. https://www.tga.gov.au/sites/default/files/biosimilar-medicines-regulation.pdf. Accessed 23 May 2020.

[8] As above note 3

[9] As above note 3, Table 2 – Table of Recommendations.

[10] Department of Health. ‘Biosimilar medicines: the basics for health care professionals’. March 2017. https://www1.health.gov.au/internet/main/publishing.nsf/content/biosimilar-awareness-initiative/$File/Biosimilar-medicines-the-basics-for-healthcare-professionals-Brochure.pdf. Accessed 23 May 2020.

[11] As above note 1.

[12] PBAC. ‘Reimbursement of Biosimilar Medicines’. PBAC Special Meeting April 2015. http://www.pbs.gov.au/industry/listing/elements/pbac-meetings/pbac-outcomes/2015-04/2015-04-biosimilars.pdf. Accessed 23 May 2020.

[13] PBAC. ‘Consumer Hearing on Biosimilars’. PBAC Meeting July 2015. http://www.pbs.gov.au/industry/listing/elements/pbac-meetings/pbac-outcomes/2015-07/consumer-hearing-record-on-biosimilars-2015-07.pdf. Accessed 23 May 2020.

[14] PBAC. ‘Public summary document – Considering brand equivalence/substitution for biosimilar medicines’. PBAC meeting March 2018. http://www.pbs.gov.au/info/industry/listing/elements/pbac-meetings/psd/2018-03/Biosimilar%20medicines-psd-march-2018. Accessed 23 May 2020.

[15] FDA. ‘Considerations in demonstrating interchangeability with a reference product: guidance for industry’. http://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/UCM537135.pdfAccessed 23 May 2020.

[16] Centre for Biosimilars. ‘Boehringer Ingelheim Policy Chief Discusses Biosimilar Outlook’. 8 May 2020. https://www.centerforbiosimilars.com/conferences/festival-of-biologics-2020/boehringer-ingelheim-policy-chief-discusses-biosimilar-outlook. Accessed 23 May 2020.

[17] Welch A. R. 2017. ‘What Systems Are Needed to Create a Viable Biosimilar Market?’ Biosimilar Development. https://www.biosimilardevelopment.com/doc/what-systems-are-needed-to-create-a-viable-biosimilar-market-0001

[18] Ibid; Murphy A. et al. ‘New FDA Guidance on Biosimilar Interchangeability’. Life Science Leader, July 2019. https://www.lifescienceleader.com/doc/new-fda-guidance-on-biosimilar-interchangeability-0001. Accessed 23 May 2020.

[19] La Noce A and Ernst M. ‘Switching from reference to biosimilar products: an overview of the European approach and real-world experience so far’. European Medical Journal. 2018;3[3]:74-81.

[20] As above note 17.

[21] As above note 19.

[22] As above note 17.

[23] Ibid.

Authored by Duncan Longstaff

3 min read

In Part 1 of this series (available here), we examined the impact of the proposal by Australia’s Therapeutic Goods Administration (TGA) to provide early confidential notification to innovators of applications under evaluation for generic and biosimilar product registration. In this Part 2, we focus on the TGA’s other proposed reform, the earlier publication of applications for marketing approval relating to major innovator prescription medicines. The TGA is currently seeking feedback on its Prescription Medicines Transparency Measures by 9 June 2020. The proposed reforms relating to publication of major innovator applications are aimed at providing better access to information on new prescription medicines for healthcare professionals and the general public, but will also have important implications for both innovators and the sponsors of generic and biosimilar medicines, including from a patent perspective.

In February 2019, the TGA released its initial consultation paper entitled Whether the TGA should publish that a prescription medicine is under evaluation, seeking feedback from industry and other interested parties on whether, and if so how, the TGA should disclose that an application for marketing approval for a prescription medicine has been accepted for evaluation. The submissions received showed a consensus of support for early publication of all prescription medicines being evaluated for marketing approval in Australia, with many submissions noting that Australia’s current approach is out of step with the practices of overseas regulators including Medsafe New Zealand, Health Canada and the European Medicines Agency (EMA), all of whom publish information on all prescription medicine applications accepted for evaluation.

Current practice

The longstanding practice of the TGA has been to treat the submission of an application for marketing approval for a prescription medicine as confidential unless and until the product has been approved and entered on the Australian Register of Therapeutic Goods (ARTG). In practice, this has meant that the TGA will only state that it can “neither confirm nor deny” receipt of an application for registration of a new prescription medicine, including for reasons of commercial confidentiality. Efforts to obtain access to information or documents from the TGA under the Freedom of Information Act 1982 (Cth) proved futile for a patent owner in Secretary Department of Health and Ageing v iNova Pharmaceuticals (Australia) Pty Limited [2010] FCA 1442 (21 December 2010). However, some exceptions to this general rule may apply in specific circumstances. For example:

  • The meeting agenda for Australia’s Pharmaceutical Benefits Advisory Committee (PBAC) is published 2-3 months ahead of each meeting. The meeting agenda may identify applications for marketing approval that are under evaluation by the TGA.
  • The TGA publishes the outcome of the process to designate orphan drug status or to determine a drug’s priority or provisional status, which occurs prior to the acceptance of the drug for evaluation.
  • Where the TGA and an overseas regulator are jointly conducting the review of a prescription medicine, the overseas regulator may publish that the drug is under active review.

Additionally, the sponsor of the innovator medicine retains the discretion to make public, at any time, that its application for marketing approval is being considered by the TGA.

The TGA’s proposal

Under the reforms proposed, commencing as early as June 2020, the TGA will publish information on the following application types:

  • Type A – new medicines (i.e., new active pharmaceutical ingredient (API));
  • Type B – new combinations of medicines (contains at least one new API); and
  • Type C – new indications for an existing approved medicine.

It is proposed that, within one month of the date that an application for marketing approval falling within one of the categories above has passed preliminary assessment, the TGA will publish the:

  • Sponsor name;
  • Product name;
  • API(s);
  • Proposed indication; and
  • Application type.

Implications for the pharmaceutical industry

Advance notice of applications for registration of a new drug or new indication for an approved drug will be valuable to generic and biosimilar sponsors, and competitor innovators, in some circumstances. Earlier notification of these products and indications may inform decision-making and planning by competitors with respect to their own products and timelines to market. This could impact competitors’ research and product development priorities, product identities and dosage forms, and strategies for potentially challenging an innovator’s patents (either proactively or defensively).

Innovators should also be mindful of the potential consequences of earlier publication for their patent portfolios. In particular, it will be increasingly important for innovators to ensure that relevant patent applications for specific indications, second medical uses or specific formulations, dosage forms or production processes are filed prior to the TGA publishing key details early in the process for obtaining regulatory approval. The early publication of key details such as the compound, dosage regimen and indications by foreign regulatory authorities, including the US Food and Drug Administration (FDA), have created novelty and inventive step issues for Australian patents relating to specific indications or second medical uses in several cases in recent years, which could not benefit from Australia’s “grace period” provisions.

If you are a sponsor of therapeutic goods in Australia and have questions on how these reforms may impact your business, please do not hesitate to contact us.

Authored by Duncan Longstaff and Andrew Rankine

5 min read

In an unprecedented decision, the Federal Court of Australia has considered and dismissed a claim by the Commonwealth Government for compensation from sponsors of innovator pharmaceutical products, pursuant to undertakings as to damages given in exchange for an interlocutory (preliminary) injunction restraining the launch of the first generic product: Commonwealth of Australia v Sanofi (No 5) [2020] FCA 543.

Notwithstanding this first-instance decision against the Commonwealth, given some of the findings in the case, the potential for Commonwealth damages claims would appear to remain a relevant factor to be taken into account by innovators in their risk assessment, prior to commencing any application for an interlocutory injunction to restrain the launch of a first generic or biosimilar competitor product.

The judgment also provides a number of other “takeaways” for both innovators facing generic launch during the term of a patent, and generics defending their position in such circumstances, which are discussed further below.

Key Findings

  • In principle, the Commonwealth is not precluded from claiming compensation under a patentee’s usual undertaking as to damages, where it can be established that the Commonwealth’s loss would not have occurred but for the grant of the interlocutory injunction, the loss was a direct legal consequence of the grant of the injunction, and the loss was reasonably foreseeable.
  • However, the Court found that the Commonwealth’s losses were not a direct consequence of the interlocutory injunction granted in this case which, although restraining infringement of Sanofi’s patent generally, did not explicitly restrain listing on the Commonwealth’s Pharmaceutical Benefits Scheme (PBS) (instead, Apotex gave a separate undertaking, not supported by any undertaking as to damages, to refrain from listing its products on the PBS pending the outcome of the patent case). This finding calls into question future Commonwealth damages claims based on interlocutory injunctions that do not explicitly restrain PBS listing.
  • Compelling evidence (supported by contemporaneous documents) from the ultimate decision-makers at the generic party and the Commonwealth is likely to be required to convince the Court that, but for the grant of the interlocutory injunction, the generic product would have been launched and listed on the PBS in the face of the significant damages risk if the patent owner ultimately succeeded in establishing infringement of a valid patent claim. In the present case, the Commonwealth failed to lead evidence from those key decision-makers and, in those circumstances, the Court was not prepared to draw inferences favourable to the Commonwealth, or accept the evidence given by subordinates without the relevant decision-making authority.
  • The Court found that it was more likely than not that the Commonwealth would have been prepared to reverse statutory reductions in the reimbursed price for Sanofi’s products triggered by the generic listing on the PBS, if sale of the generic product was subsequently restrained by a permanent injunction.

Background to the litigation

The case concerned the blockbuster blood-thinning (platelet-inhibiting) medication clopidogrel, sold in Australia by Sanofi as PLAVIX and by Bristol-Myers Squibb (BMS) as ISCOVER, under a global co-marketing arrangement. Apotex proactively commenced proceedings in August 2007 against Sanofi seeking revocation of Sanofi’s Australian Patent No. 597784 (the Patent), relating to clopidogrel and various of its salts. The litigation progressed relatively quickly, compared to more recent cases in the Federal Court. An interlocutory injunction was granted in late September 2007, the trial on validity was conducted in April 2008 and a first-instance decision upholding the validity of some claims of the Patent was delivered in August 2008. A Full Court appeal decision, revoking all claims of the Patent, was delivered in late September 2009 and an application by Sanofi for special leave to appeal to the High Court was refused in March 2010. Apotex’s clopidogrel products were listed on the PBS from 1 May 2010. In 2010, Apotex and other generic companies commenced damages proceedings, seeking compensation from Sanofi and BMS pursuant to the undertaking as to damages. Those claims were settled in 2014. The Commonwealth brought its claim for damages in 2013.

The interlocutory injunction obtained by Sanofi in September 2007 restrained Apotex from infringing the Patent, including by importation and sale of pharmaceutical products which had clopidogrel as their active ingredient. Sanofi gave the usual undertaking as to damages in connection with the interlocutory injunction. Importantly, the interlocutory injunction did not expressly prevent Apotex from applying for inclusion of its products on the PBS. However, on the same date (and noted in the same set of orders as gave effect to the interlocutory injunction) Apotex gave the Court a voluntary undertaking (the Apotex Undertaking) that it would not apply to list its clopidogrel products on the PBS until the determination of the patent proceeding. Sanofi did not provide any cross-undertaking as to damages for the Apotex Undertaking.

The Commonwealth’s claim

The Commonwealth claimed losses in respect of the supply of clopidogrel products under the PBS, said to result from the delay in the Commonwealth’s ability to reduce the subsidised price for those products via statutory price reductions triggered by first generic entry and subsequent price disclosure-related reductions. The various components that made up the claimed price difference amounted to a sum of approximately AU$325 million, excluding interest:

AU$51 m

Mandatory statutory price reductions that would have occurred if generic clopidogrel products had been listed on the PBS on 1 April 2008 (then a 12.5% reduction), with a further 2% reduction on 1 August 2009.

AU$216 m

Price disclosure-related price reductions that would have occurred between 1 April 2010 and 31 December 2014.


Payments made by the Commonwealth to subsidise supply of clopidogrel plus aspirin combination products in the period 1 December 2009 to 31 March 2016.

This is the first case in which judgment has been given on a Commonwealth claim for damages pursuant to a pharmaceutical patentee’s undertaking as to damages given in connection with grant of an interlocutory injunction. The Commonwealth has previously settled claims for compensation against Wyeth,[1] relating to extended release formulations of the antidepressant venlafaxine (EFFEXOR-XR) (a decision in that case concerning damages claims by generic suppliers issued in late 2018), and against AstraZeneca relating to the “super statin” rosuvastatin (CRESTOR) (in that case, both the Commonwealth and the generic parties reached a settlement with AstraZeneca).[2] A Commonwealth claim for damages pursuant to undertakings given by Otsuka and BMS in relation to the antipsychotic aripiprazole (ABILIFY) is continuing.[3]

The guidance provided to the Australian pharmaceutical industry by this clopidogrel decision complements the recent (late 2018) Federal Court decision relating to venlafaxine, in which generic party claims arising from an undertaking as to damages were upheld: Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth [2018] FCA 1556. In the venlafaxine case, the Court found that the unsuccessful innovator patentee should pay compensation to both the generic companies party to the litigation, and third party generic companies who were affected by the interlocutory injunction. The Commonwealth settled its claim with the patentee Wyeth before trial, but its evidence and submissions were referred to in the decision on the generic party claims, with an intimation that the Commonwealth could, in the right circumstances, have a sound claim to compensation. However, Nicholas J’s decision in the present clopidogrel case highlights the need to satisfy the threshold requirement for the Commonwealth’s loss to flow directly from the interlocutory injunction itself, and the significant circumstantial and evidentiary hurdles the Commonwealth will often face in proving what would have happened if there had been no interlocutory injunction.

The Court’s reasoning

The Court’s findings regarding the complex issues, arguments and evidence led by the parties can be distilled as follows:

  • Did the interlocutory injunction restrain Apotex from PBS-listing? – Nicholas J found that the Apotex Undertaking, which had been given voluntarily, was not a necessary or natural consequence of the making of the interlocutory injunction. His Honour did however accept the Commonwealth’s position that the Apotex Undertaking would not have been proffered but for the interlocutory injunction, and that the interlocutory injunction had the practical (indirect) effect of preventing Apotex from applying for PBS listing of its generic clopidogrel products.
  • Would Apotex have PBS-listed “but for” the interlocutory injunction? – Despite Apotex’s Australian Managing Director giving evidence that Apotex would “almost certainly” have launched “at risk”, Nicholas J was not satisfied that Apotex’s CEO and ultimate decision-maker would, in September 2007, have authorised such a launch in the circumstances where:
    • hypothetically, no interlocutory injunction had been granted;
    • a judgment in the validity trial was expected within 1 year, given that the presiding judge was due to retire; and
    • significant financial consequences would result if the challenge to the validity of the Patent failed, because Apotex “…could find itself having to cease any further sales following the grant of a final injunction shortly after obtaining a PBS listing that triggered a price reduction that might not be reversed or, at least, might not be reversed for some significant period of time”.
  • Was the Commonwealth’s loss a direct consequence of the interlocutory injunction, or too remote? – Nicholas J found that the interlocutory injunction did not directly affect the legal rights, obligations or interests of the Commonwealth as it did not prevent the Commonwealth receiving applications for PBS listing from Apotex or any other generic supplier. His Honour also considered that the fact that Sanofi’s undertaking as to damages did not extend to the Apotex Undertaking gave strong contextual support to the view that the undertaking as to damages should not be interpreted as extending to loss suffered by the Commonwealth due to Apotex being prevented from applying for PBS listing as a result of its voluntary undertaking.
  • Could the Commonwealth’s loss have been foreseen at the time the interlocutory injunction was granted? – Nicholas J found that all losses claimed by the Commonwealth, including the operation of the price disclosure price reduction regime and the pricing of the clopidogrel plus aspirin combination products, were reasonably foreseeable. His Honour rejected Sanofi’s contention that it could not have reasonably foreseen that the Commonwealth would be affected, as no legal right or liability of the Commonwealth was affected by the interlocutory injunction.
  • Was the loss claimed by the Commonwealth compensable (in principle)? – Nicholas J found that the Commonwealth was in principle entitled to seek compensation under Sanofi’s undertaking because its circumstances were not different from those of a natural person, notwithstanding that it had control over the PBS regime.
  • Would the statutory PBS price reductions have been reversed? – Nicholas J considered it more likely than not that the Commonwealth would have de-listed Apotex’s clopidogrel products from the PBS, and reversed the 12.5% statutory price reduction for PLAVIX and ISCOVER, if (in the counterfactual) Apotex’s products had been PBS-listed but their supply was later restrained by a final injunction. His Honour was strongly influenced by evidence of two previous examples of (discretionary) PBS price reductions for other products having been reversed and lamented the lack of evidence from the senior Commonwealth decision-maker to support its contentions that it would not have reversed the 12.5% price reduction.

Implications for the conduct of pharmaceutical patent litigation in Australia

The implications for the conduct of pharmaceutical patent litigation flowing from this long-awaited decision are multi-faceted and can be summarised as follows:

  • Commonwealth damages claims are possible in principle – This decision is consistent with the view that loss incurred by the Commonwealth as a result of delayed PBS-listing of generic products due to patent litigation is compensable, in principle, where the necessary elements are established, and reinforces comments to that effect made in the recent venlafaxine case. Patentees seeking interlocutory injunctions must therefore continue to take into account a possible Commonwealth claim as an incident of obtaining an interlocutory injunction.
  • Remoteness of loss may be an impediment to claims for compensation under the usual undertakings as to damages – The Court’s findings on the question of whether the connection between the interlocutory injunction and the alleged loss is sufficiently direct may present an impediment to future Commonwealth claims for compensation based on interlocutory injunctions that do not expressly restrain PBS-listing of generic products. It will be of interest to see how the Full Court views this question of remoteness of loss, should an appeal take place. It will also be interesting to observe whether the Commonwealth becomes more actively involved in the hearing of interlocutory injunction applications and specifically presses for the issue of PBS listing to be addressed in the terms of any interlocutory injunction granted and the associated cross-undertaking as to damages.
  • Evidentiary hurdles for the Commonwealth and other third-party compensation claims exist – On this occasion, the Commonwealth failed to establish on the evidence that Apotex would have launched “at risk” if no interlocutory injunction was granted, demonstrating the difficulties faced by the Commonwealth and other third parties in making good this proposition, particularly in circumstances where the generic involved has settled its claim. The Commonwealth’s failure to call key decision-makers from the restrained generic party and its own PBS-pricing authority were significant factors. The Commonwealth’s case was further hampered by the need to obtain documents from Apotex by subpoena, many of which were produced in heavily redacted form, to preserve privilege. Such evidentiary difficulties could potentially be lessened where both the Commonwealth and the generics are parties to the claim for compensation from the innovator. However, even where the generic parties pursue their own damages claims under a patentee’s undertaking at the same time as the Commonwealth, the Commonwealth and other third parties will be dependent on the generic parties’ evidence and therefore potentially vulnerable.
  • Contemporaneous records or communications must establish the generic decision maker’s intent to PBS list in the counterfactual – For generic parties, the Commonwealth or any third parties to claim compensation under the “usual undertakings” given by an innovator, they must be able to establish by contemporaneous business records, and if necessary by calling evidence from the ultimate decision makers, that they would, in all the circumstances, have made the decision to launch and supply their generic product to the Australian market, if not restrained by grant of an interlocutory injunction. It will be important for parties planning to launch “at risk” in circumstances where they may be the subject of an interlocutory injunction to consider what contemporaneous records will be available to establish the course they would have pursued had no injunction been granted.
  • Innovators and generics should consider carefully the terms of an interlocutory (preliminary) injunction and any voluntary undertakings sought – Where an innovator is able to obtain voluntary undertakings from a generic party, to the effect that it will not take steps to PBS-list pending the resolution of patent enforcement proceedings, this may reduce the likelihood of a successful Commonwealth damages claim. In light of this decision, innovators can be expected to seek interlocutory injunctions that restrain infringement of their patent(s) generally, without any express refence to the generic party’s ability to list their products on the PBS (while noting the possibility that a court could nevertheless find that the injunction had the practical effect of preventing PBS-listing because the generic will not be able to give the required “guarantee of supply”). The decision also sounds a warning to generic parties to carefully consider any voluntary undertakings they may provide to the Court, where such undertakings are not supported by any cross-undertaking as to damages given by the innovator. In the latter circumstances, the generic party is unlikely to be compensated for losses flowing from its undertakings, even if ultimately successful in the patent proceedings.
  • Statutory price reduction(s) may be reversed – The Court’s finding that, on the balance of probabilities, it was likely that any statutory reduction in the PBS-price for Sanofi’s products would have been reversed had an interlocutory injunction been refused and final judgment subsequently delivered in Sanofi’s favour, may have implications for future interlocutory injunction applications in pharmaceutical patent cases. It has previously been suggested that such price reductions would be effectively irreversible, even if the innovator was ultimately successful in obtaining a final injunction. The finding of Nicholas J in this case has the potential to contribute to the trend away from the routine granting of interlocutory injunctions in pharmaceutical patent disputes, observable in a number of recent judicial decisions.[4]

Given the size of the Commonwealth’s claim and the novel legal issues raised in the case, it appears likely the Commonwealth will consider an appeal.

[1] Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth (2018) 136 IPR 8.

[2] AstraZeneca AB v Apotex Pty Ltd; AstraZeneca AB v Watson Pharma Pty Ltd; AstraZeneca AB v Ascent Pharma Pty Ltd (2015) 323 ALR 605.

[3] Otsuka Pharmaceutical Co Ltd v Generic Health Pty Ltd [2015] FCA 848

[4] See the reasons of the Full Court  comprising Jagot, Yates and Moshinsky JJ in Sanofi-Aventis Deutchsland GmbH v Alphapharm Pty Ltd (2019) 139 IPR 409; Jagot J in Sigma Pharmaceuticals (Australia) Pty Ltd (ACN 004 118 594) v Wyeth (2009) 81 IPR 339 and H. Lundbeck A/S v Sandoz Pty Ltd (2018) 137 IPR 408; Yates J in Mylan Health Pty Ltd v Sun Pharma ANZ Pty Ltd (No 2) (2019) 141 IPR 26.

Authored by Duncan Longstaff and Andrew Rankine

9 min read

Regulatory changes recently approved by the Australian Government are likely to impact the way in which pharmaceutical patent litigation is conducted in Australia. The Therapeutic Goods Administration (TGA) is currently seeking feedback on options for implementing the proposed Prescription Medicines Transparency Measures by 9 June 2020. The reforms are directed at:

1. Early publication of major innovator prescription medicine applications.

2. Early confidential notification of generic or biosimilar medicine applications to innovators.

In Part 1 of this series we examine the reforms pertaining to generic and biosimilar medicine applications and their expected impact on the conduct of pharmaceutical patent litigation in Australia. In Part 2 (to follow), we will address the reforms relating to major innovator prescription medicine applications in further detail.

The reforms were the subject of a consultation paper released in February 2019. A total of 39 submissions were received from industry, government and interest groups, with a clear majority supporting early publication of all prescription medicines being evaluated for marketing approval in Australia. The consensus position was that TGA should be consistent in the way in which it manages all applications for registration, including generic and biosimilar applications.

Existing notification scheme

Under the current regime, the TGA does not release information about the lodgement or acceptance of an application for evaluation of a prescription medicine, in contrast to the practices of many overseas regulatory authorities including Medsafe New Zealand, Health Canada and the European Medicines Agency (EMA). Under Australia’s current practices, it is only after a prescription medicine has been evaluated, granted marketing approval and entered on the Australian Register of Therapeutic Goods (ARTG) that information about that product becomes publicly available. It is usually at this stage that an innovator will first become aware of the impending launch of a generic or biosimilar competitor.

At present, where an applicant for registration of a prescription medicine under s 23 of the Therapeutic Goods Act 1989 (the TG Act) intends to rely in whole or in part on safety or efficacy data for a reference (innovator) medicine, and the applicant has identified one or more potentially relevant patents that have not expired, the applicant must certify under s 26B of the TG Act either:

  • that the applicant believes on reasonable grounds that the marketing of its product will not infringe a valid claim of the relevant patent(s); or
  • where the applicant proposes to market its product before the expiry of the term of the patent(s), that it has notified the patentee of its application for registration.

However, an applicant seeking marketing approval for a generic or biosimilar product is currently able to avoid notification where:

  • the applicant forms a view that no relevant patent(s) exist; or
  • the applicant believes on reasonable grounds that it will not infringe any valid claim of otherwise relevant patent(s).

This has meant, in practice, that sponsors seeking marketing approval for a generic or biosimilar medicine in Australia generally do not notify the innovator of their application, and the innovator only becomes aware of the generic or biosimilar product when it is approved. This leaves very limited time after publication of the approved generic or biosimilar product on the ARTG (often less than 2 months) for the innovator to obtain information about it (eg, in relation to its manufacturing process or formulation), including through a contested preliminary discovery application if necessary. During that short period after publication of ARTG approval, the innovator must consider whether to commence patent enforcement proceedings (including whether to seek an interlocutory injunction) before the generic or biosimilar product is listed on Australia’s Pharmaceutical Benefits Scheme (PBS) (triggering reductions in the subsidised price of the innovator’s product) and launched on the Australia market.

Australia’s current regime for belatedly and somewhat passively notifying innovators of generic and biosimilar product approvals contrasts with the rigid and transparent processes of the US Food and Drug Administration (FDA). The FDA’s Paragraph IV Drug Product Application process (under the Hatch-Waxman Act) provides that a generic company submits an Abbreviated New Drug Application (ANDA) and the innovator is given 45 days to file an infringement suit. The generic company is automatically restrained until the entire process (including any litigation, which has set timeframes) is resolved, with the first ANDA applicant receiving 180 days exclusivity for the generic drug if successful. This regime encourages generic companies to seek to launch new products and challenge innovators’ patents, while protecting the innovators’ position until the patent issues are resolved without the urgency, cost and uncertainty associated with seeking a preliminary injunction in a small window between generic products obtaining regulatory approval and pricing subsidies. It is also worth noting that it is open to debate as to whether Australia’s current arrangements are consistent with its obligations under the Australia-United States Free Trade Agreement (AUSFTA).[1]

TGA’S proposed reforms for notification of generic and biosimilar applications to innovators

The proposed changes are aimed at providing earlier notification to innovators that an application has been made for registration of a generic or biosimilar product, and to reduce or remove the discretion currently afforded to sponsors of generic or biosimilar products in determining whether or not a relevant patent exists (option 2), and if so, whether marketing of the generic or biosimilar product would infringe a valid claim of that patent (options 1 and 2). Whichever option is chosen, implementation of these measures is anticipated to commence in early 2021.

Option 1

The first option being considered by the TGA provides early notification to the innovator of a generic or biosimilar application, regardless of whether or not the applicant believes that marketing of its generic product would infringe one or more relevant patents. Specifically:

  • Applicants would be required to provide notification on a confidential basis to the innovator, when the application passes preliminary examination, and before acceptance for evaluation under section 25 of the TG Act, where the applicant has a reasonable belief that the term of any relevant patent has not expired.
  • Where the applicant has formed a reasonable belief that no relevant patent exists, it may instead provide the TGA with a declaration to that effect.

While this option would remove the discretion currently afforded to a generic applicant to form its own view as to whether it will infringe a valid claim of any relevant patent(s), it would remain within the applicant’s discretion to decide for itself whether any relevant patent(s) exist, which in practice could significantly dampen the impact of these reforms.

Option 2

The second option mandates early notification for all generic and biosimilar applications:

  • regardless of the applicant’s belief as to the existence of any relevant patent(s); and
  • even if the applicant considers that no valid patent claim would be infringed by the marketing of its product.

All applicants would be required to notify the relevant innovator, and provide a copy of that notification to TGA upon passing preliminary assessment. For innovators, this option is likely to be preferred.

Impact on pharmaceutical patent disputes

Information about the status of an application for registration of a generic or biosimilar medicine is of commercial value to innovators, where a relevant pharmaceutical patent exists and may be infringed by marketing of the generic or biosimilar product.

Early notification of generic applications for registration will provide innovators with more time to consider and, if appropriate, commence patent enforcement proceedings before the generic or biosimilar product is launched. As noted above, under Australia’s current arrangements, innovators typically obtain notice of impending generic or biosimilar competition at a late stage, shortly before the generic or biosimilar product is due to be listed on the PBS and launched on the Australian market. In these circumstances, it has been very common for innovators to seek an interlocutory injunction (also referred to as a preliminary injunction) to restrain PBS-listing and launch of the generic or biosimilar product pending the outcome of patent enforcement proceedings.

To secure an interlocutory injunction, the innovator is required to undertake to compensate the sponsor of the generic or biosimilar product, and any third party adversely affected by the grant of the injunction, if the patent is ultimately held to be invalid or not infringed. There are currently a number of cases pending (or recently settled or decided) in which generics and the Australian Government have made claims on such undertakings, with the Government seeking compensation for additional costs to Australia’s PBS where generic or biosimilar market-entry has been delayed by ultimately unsuccessful patent enforcement proceedings. The first decision in such a case found that the unsuccessful innovator patentee should pay compensation to generic companies who were party to the litigation as well as generic companies who were not party to the litigation but were still affected by the interlocutory injunction (the Commonwealth settled its claim with the patentee in that case): Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth [2018] FCA 1556. Yesterday (28 April 2020), the Federal Court of Australia handed down the first major decision in relation to a claim by the Commonwealth under a patentee’s undertaking, dismissing the Commonwealth’s claim for AU$325,000,000 plus interests and costs and awarding costs to the innovator: Commonwealth of Australia v Sanofi (formerly Sanofi-Aventis) (No 5) [2020] FCA 543. An appeal from the latter judgment is possible.

Earlier notice of applications for registration of generic or biosimilar products may enable any patent enforcement proceedings to be resolved before marketing approval is granted for the generic or biosimilar product, thereby removing the need for an interlocutory injunction and associated undertaking. Innovators who do apply for an interlocutory injunction will be able to do so much earlier in advance of the potential PBS listing and launch of generic or biosimilar products, making injunction hearings less urgent and potentially impacting upon the prospects of obtaining an injunction given the balance of convenience as between the parties’ respective interests and potentially irreparable harm may be different. In some cases, the sponsor of a generic or biosimilar product may choose to delay launch of their product for the time period necessary to complete patent proceedings commenced prior to the grant of marketing approval, and thereby avoid the potential for damages arising from an ‘at risk’ launch.

Even if patent enforcement proceedings are not completed by the time marketing approval is granted and a generic or biosimilar product is launched,[2] the proposed reforms would be expected to reduce the period of time for which any interlocutory injunction, and associated undertakings, would remain in place, thereby reducing the potential liability of innovators in the event of any damages claim ultimately made on their undertakings.

The impact of these changes for sponsors of generic and biosimilar medicines is more difficult to predict and would depend upon the circumstances of each individual case.

Overall, the proposed reforms have a number of possible implications for the conduct of pharmaceutical patent disputes in Australia:

  • Amending claims – Innovators may have more time and a greater opportunity to amend their patent claims and/or initiate divisional filings in the Patent Office, prior to the commencement of any enforcement proceedings, where this will improve the innovator’s overall prospects of success.
  • Preliminary discovery – Under the proposed reforms, innovators will have more time to initiate and obtain preliminary (i.e., pre-action) discovery, for example in relation to the manufacturing processes for a generic or biosimilar product, or in relation to its formulation, to assess whether patent enforcement proceedings should be commenced.
  • Interlocutory injunctions – Innovators will have more time to consider and prepare for any application for an interlocutory injunction. In addition, it is likely that such applications could be heard and determined on a less urgent basis, which would be of assistance to the courts called upon to decide such applications. Earlier notice may also enable patent enforcement proceedings in some cases to be resolved before marketing approval is granted for the generic or biosimilar product, avoiding the need for an interlocutory injunction and associated undertaking.
  • Quantum of damages – Early notice may enable patent enforcement proceedings to be resolved earlier, reducing the period of time for which any interlocutory injunction and associated undertakings remain in place. This would be expected to reduce the quantum of any claim for damages made pursuant to those undertakings, if the innovator (patentee) is held to be ultimately unsuccessful.
  • Non-adversarial options – Innovators will also have additional time to seek information from generic or biosimilar sponsors that will assist innovators in assessing whether their patent(s) would be infringed by marketing of the generic or biosimilar product. Innovators and the sponsors or generic or biosimilar products will also have increased time to seek to reach a negotiated outcome which may avoid the need for patent enforcement proceedings.
  • Licensing agreements – As an example of such non-adversarial options, it is possible that innovators and the sponsors of generic or biosimilar products may choose to enter into licensing arrangement to avoid lengthy and expensive litigation. It will be essential for the parties to ensure that any such arrangements are not considered anti-competitive.

It remains to be seen whether early mandatory notification will ultimately lead to any significant reduction in patent litigation between innovators and the sponsors of generic and biosimilar products in Australia. On the other hand, for the reasons noted above, early notification would be expected to reduce the likelihood, or at least the quantum, of damages claims made on undertakings given by innovators to secure interlocutory injunctive relief pending the outcome of patent enforcement proceedings.

The main beneficiaries of early mandatory notification of applications for generic or biosimilar marketing approval will be the sponsors of innovative medicines, who will be afforded more time to prepare for and commence any patent enforcement proceedings prior to generic or biosimilar launch. Generic parties may be less enthused by the early notification proposals, not only because innovators will have more time to consider and commence patent infringement proceedings, but also because, if they are sued, their generic competitors may through the court process receive advance notice of the products they are seeking to bring to market.

More generally, when implemented, these reforms will achieve closer regulatory harmonisation between Australia and comparable overseas jurisdictions, which is a desirable outcome.

If you are a sponsor of therapeutic goods in Australia and have questions on how these reforms may impact your business, please do not hesitate to contact us. We would be happy to assist you with your enquiries.

[1] Australia – United States Free Trade Agreement (2004), Article 17.10.5(b).

[2] The time period between acceptance for evaluation and entry onto the ARTG (where the generic or biosimilar is approved) will vary between applications. For generic products, the TGA advises that the process is designed to take approximately 8.5 months. See TGA, Prescription medicines registration process, Appendix 1, Version 2.3, March 2018.

Authored by Andrew Rankine and Duncan Longstaff

13 min read

In this article we examine how standard polymerase chain reaction (PCR) based testing for the novel coronavirus (SARS-CoV-2) works, explore the new CRISPR-based tests under development and the new rapid point-of-care tests being rolled out, and consider the initiatives by governments and medical device regulators to fast-track the availability of SARS-CoV-2 diagnostic tests.

Diagnostic testing capacity has emerged as a key limitation of our ability to contain SARS-CoV-2, the novel coronavirus responsible for COVID-19 disease. Regulatory barriers and shortages of test kits have impeded effective scale-up of SARS-CoV-2 testing. In response to this health crisis the World Health Organization (WHO) has a simple message for all countries: “test, test, test”.[1] Now governments, regulatory agencies and laboratory-diagnostic and biotechnology companies are responding with multiple new SARS-CoV-2 tests being fast-tracked for use, and production of test kits and reagents being dramatically scaled-up globally.

The identification of symptomatic and asymptomatic at-risk individuals is of immediate importance to enable early case detection and contact-tracing. In these circumstances, diagnostic testing is an essential tool not only to clinical care, but also to tracking and containing the disease in the community.[2] In order to achieve this end, reliable test kits, reagents and laboratory capacity must be readily available. Below, we discuss how these challenges are starting to be met.

Current strategies and the need for scaled-up testing capability and capacity

As a preliminary consideration, there is a distinction between testing for public health surveillance and testing for clinical care. Clinical testing is aimed at diagnosis of individuals with symptoms for the purpose of clinical care, together with a secondary purpose of quarantining and contact-tracing. Surveillance testing is broader community testing for individuals with risk factors such as overseas travel and in high-risk settings such as aged-care facilities, Indigenous communities and for essential-service and healthcare workers. Community surveillance can also occur more generally for early symptoms such as a raised body temperature.

One difficulty with surveillance testing is the prolonged incubation period of SARS-Cov-2, demonstrated to be a mean of 5 days (with a range of between 1 to 14 days),[3] with the effect that a point in time negative result may not rule out infection. Standard molecular testing (known as qRT-PCR, explained further below) is also limited by the type of sample taken (such as a nasopharyngeal swab) as the virus may only be detectable within the lungs. Once an infection is resolved and the virus cleared, the test will also be negative. Detection of past infection instead requires serological blood testing.

It is well documented that testing capacity for SARS-CoV-2 is lacking worldwide, and particularly so in the US and parts of Europe where the disease is spreading rapidly through asymptomatic carriers and individuals with only mild non-specific symptoms. At a WHO forum convened to identify research gaps and priorities for COVID-19 in February, the first of the eight immediate needs identified was for rapid point-of-care diagnostics, recognising the urgent need for accurate and standardised tests which can be deployed in community settings.[4]

Government and regulatory-agency interventions

In Australia, pathology diagnostic tests are regulated by the Therapeutic Goods Administration (TGA) as in-vitro diagnostic medical devices (IVDs). In response to the urgent need to make testing widely available, the Australian Federal Parliament on 22 March 2020 enacted emergency exemptions under the Therapeutic Goods Act 1989 (Cth) permitting the importation, manufacture and supply of SARS-CoV-2 IVDs without prior TGA assessment, for use only by accredited laboratories.[5] Specifically, this exempts SARS-Cov-2 diagnostic tests from regulations including compliance with the TGA’s essential principles for manufacture, conformity assessment certification, and requirement for inclusion on the Australian Register of Therapeutic Goods (ARTG) until 31 January 2021.[6]

While Australia currently has one of the highest rates of per capita SARS-CoV-2 testing, readily accessible community testing is still lacking. The Federal Government has announced a comprehensive AU$2.4 billion funding-package to address COVID-19, which includes Medicare-funded and bulk-billed pathology test for SARS-CoV-2, and AU$2.6 million in research funding to the Peter Doherty Institute for research into the development of improved SARS-CoV-2 diagnostics testing protocols, and for the post-market assessment of the new rapid point-of-care tests.[7]

Similarly, in the US the Food and Drug Administration (FDA) has, as of the date of this publication, provided Emergency Use Authorizations (EUAs) to 20 SARS-CoV-2 tests, including those by Abbott Laboratories, Roche Molecular Systems and ThermoFisher Scientific.[8] This follows the US Federal Government’s declaration of a national emergency,[9] allowing the US Federal Emergency Management Agency to deploy support and provide disaster funds to US state and local governments, including US$50 billion in funding to fight the disease.[10] The manufacturing capacity for SARS-CoV-2 diagnostic testing in the US is expected to be significantly scaled-up as a result of these measures.

SARS-CoV-2 Testing

Diagnostic testing for viral pathogens can be by molecular means to identify viral genetic material (nucleic acid – DNA or RNA) or by serological testing to identify antibodies directed against the virus (Immunoglobulin M (IgM) and Immunoglobulin G (IgG) antibodies). IgM antibodies are produced as a first response to a new infection providing short-term protection. They increase for several weeks and then decline as IgG production begins, with specific IgG antibodies forming the basis of long-term protection against viral pathogens.

Molecular testing by quantitative reverse-transcription polymerase chain reaction (qRT-PCR) is now well established as the gold-standard in testing and is highly sensitive (capable of detecting genetic material from a single viral particle) and specific (capable of distinguishing between similar strains).

Standard qRT-PCR

Diagnostic testing for RNA viruses such as SARS-CoV-2 are routinely performed by qRT-PCR. The PCR reaction alone only amplifies DNA. RT-PCR testing works by first converting viral RNA to its complimentary DNA (cDNA), amplifying the cDNA by standard PCR, and then detecting specific target DNA sequences unique to the virus by fluorescent-labelled probe.[11] Testing encompasses a number of steps and takes at least 4-6 hours in the laboratory, with final results taking up to several days were there is a back log of testing to be performed in the laboratory:[12]

  • A nasopharyngeal swab is used to collect secretions from the back of the nose or throat.
  • The swab is placed into viral transport media and sent to the lab for testing.
  • In the lab the sample is mixed with reagents that release the viral RNA from its capsule, allowing the viral RNA to be isolated.
  • The conversion of RNA into cDNA is facilitated by combining the RNA with deoxyribonucleotides, primers and other reagents. Primers anneal to the RNA strand and provide the reverse transcriptase enzyme with a starting point for DNA synthesis.
  • The cDNA is then used as the template for PCR amplification.
  • The amplified cDNA is labelled with a fluorescent marker that is detected by the real-time PCR machine, which quantifies the amount of fluorescence detected.
  • This value of fluorescence is called the Ct number, and is inversely proportional to the amount of cDNA. Typically Ct values are analysed relative to a ‘housekeeping’ gene to determine whether viral sequences are present in the sample.

The qRT-PCR test is performed in many laboratories worldwide for a variety of different viral pathogens. Since the sequencing of the SARS-CoV-2 genome, many companies have customised their qRT-PCR tests for SARS-CoV-2, using different primers designed to bind to differing target viral genetic sequences.[13]

Serological testing

Serological testing is performed on blood samples analysed by enzyme immunoassay or lateral flow devices and allows for the detection of IgM and IgG antibodies directed against the virus. Viral antibodies take 5 to 7 days to become detectable, making serological testing of more limited use for the diagnosis of acute infection. Antibody tests are also prone to ‘cross-reactivity’ with other similar antibodies (such as antibodies produced by similar strains of seasonal coronavirus causing the common cold), making the test less reliable.[14] Serological testing is however of use in testing for evidence of past resolved infection, and may be used in combination with molecular testing to detect evidence of both current and past infection.

Rapid point-of-care tests

The new rapid ‘point-of-care’ tests use the same qRT-PCR method implemented through a small portable device that can be used in clinics and community-screening settings, and provide results within 5 to 45 minutes depending on the test. Examples of such rapid tests are the Cepheid Xpert Xpress,[15] which in Australia has been included on the ARTG since 22 March 2020, and Abbott’s ID-NOW[16] authorised by the FDA. Similar rapid testing for blood serology by finger prick are also being rolled out, for example VivaCheck Biotech’s VivaDiag SARS-CoV-2 IgM/IgG Rapid test[17] which has been included on the ARTG since 20 March 2020.[18]

CRISPR-Cas tests in development

Two CRISPR biotechnology specialists, Sherlock Biosciences and Mammoth Biosciences, are working with various collaborators to adapt their CRISPR platforms for SARS-CoV-2 diagnosis. Both have developed diagnostic assays using CRISPR technology for the detection of viral pathogens.

CRISPR-associated Cas-proteins developed within bacteria as an evolutionary adaptive immune mechanism to enable bacteria to fight off foreign invaders such as bacteriophages.[19] The discovery of this mechanism led to the development of the CRISPR-Cas system as technology capable of its known use as a genome-editing tool.

The technology is now also being applied to diagnostics, whereby a small segment of ‘guide’ RNA binds to a target sequence of genetic material, followed by use of a Cas12 or Cas13 nuclease for precise target location and cleavage of a ‘reporter’ molecule added to the reaction.[20] This in effect uses CRISPR’s functionality as a means of detecting unique genetic “fingerprints” of virtually any DNA or RNA sequence, in any organism.

Sherlock Biosciences has licensed CRISPR and related technology from the Broad Institute of MIT and Harvard and the Wyss Institute of Harvard[21] to develop a diagnostic test, known as SHERLOCK (Specific High-sensitivity Enzymatic Reporter Unlocking). The test detects two SARS-CoV-2 genes – the S gene and the Orf1ab gene. The test can be adapted to work on a simple paper strip test (similar to a pregnancy test), on laboratory equipment or by electrochemical readout that can be read on a mobile phone.[22]

Mammoth Biosciences has also applied CRISPR-Cas9 gene-editing technology to develop its molecular diagnostic platform called DETECTR (DNA endonuclease-targeted CRISPR trans reporter). As with the SHERLOCK test, DETECTR can be tailored to detect any DNA or RNA target, with results provided in an instrument-free and disposable format within 20 minutes. The technology can also be integrated into other products and platforms. DETECTR is now being developed for identification of the N and E SARS-CoV-2 genes.[23]

These innovations are yet to be validated for clinical use in humans but nonetheless represent a promising development in advanced clinical diagnostics

Currently approved or authorised diagnostic tests

A plethora of SARS-CoV-2 diagnostic tests have been deployed around the world. In Australia 16 SARS-CoV-2 tests have been included on the ARTG as of the date of this publication, including most notably:[24]

  • Cepheid’s Xpert® Xpress (rapid portable RT-PCR test)
  • Roche Diagnostics’ Cobas® (real time RT-PCR test)
  • Becton Dickinson’s VIASURE (real time RT-PCR test)
  • Shanghai ZJ Bio-Tech’s 2019-nCoV (real time RT-PCR test)
  • Viva Check Biotech’s VivaDiag IgM/IgG Rapid (rapid serology test)
  • Hangzhou Clongene Biotech’s COVID-19 IgG/IgM Rapid (rapid serology test)

As of the date of this publication the FDA has provided EUA authorisation to 20 SARS-CoV-2 tests, with a few notable examples not yet available in Australia listed below:[25]

  • Abbott’s ID NOW (rapid portable RT-PCR test)
  • Abbott’s Real Time SARS-CoV-2 assay (real time RT-PCR)
  • ThermoFisher Scientific’s TaqPath (real time RT-PCR)

Concluding remarks

Governments, regulatory bodies and industry are now starting to respond to the immense challenge of meeting the demand for reliable, fast and portable SARS-CoV-2 diagnostic tests in response to this global pandemic, bringing new testing technologies to fruition and scaling up the manufacture of existing tests with increasing urgency. Hopefully, this increased testing capability, together with range of other public health measures currently being implemented, can assist in reducing COVID-19 infection rates in the coming weeks and months.

[1] World Economic Forum, 17 March 2020. “The World Health Organization has called on countries to ‘test, test, test’ for coronavirus – this is why” (https://www.weforum.org/agenda/2020/03/coronavirus-covid-19-testing-disease/, accessed 29 March 2020).

[2] Hellewell J et al, 28 February 2020. Centre for the Mathematical Modelling of Infectious Diseases COVID-19 Working Group. – “Feasibility of controlling COVID-19 outbreaks by isolation of cases and contacts”. Lancet Global Health. February 2020; S2214-109X(20)30074-7. (https://www.thelancet.com/journals/langlo/article/PIIS2214-109X(20)30074-7/fulltext, , accessed 29 March 2020).

[3] Lauer SA et al, 10 March 2020. “The Incubation Period of Coronavirus Disease 2019 (COVID-19) From Publicly Reported Confirmed Cases: Estimation and Application”. Annals of Intern Medicine. 2020. (https://annals.org/aim/fullarticle/2762808/incubation-period-coronavirus-disease-2019-covid-19-from-publicly-reported, accessed 29 March 2020).

[4] WHO, 11-12 February 2020. “COVID 19 Public Health Emergency of International Concern (PHEIC), Global research and innovation forum: towards a research roadmap”. (https://www.who.int/blueprint/priority-diseases/key-action/Global_Research_Forum_FINAL_VERSION_for_web_14_feb_2020.pdf?ua=1, accessed 29 March 2020).

[5] Therapeutic Goods (Medical Devices—Accredited Pathology Laboratories) (COVID-19 Emergency) Exemption 2020 (Cth) (https://www.legislation.gov.au/Details/F2020N00032, accessed 29 March 2020).

[6] As above, note 5.

[7] PM.gov.au Media Release, 11 March 2020. “$2.4 Billion Health Plan to fight COVID-19”. (https://www.pm.gov.au/media/24-billion-health-plan-fight-covid-19, accessed 29 March 2020); Health.gov.au Media Release, 21 March 2020. “$2.6 million for coronavirus research, including a new simpler Australian pathology test” (https://www.health.gov.au/ministers/the-hon-greg-hunt-mp/media/26-million-for-coronavirus-research-including-a-new-simpler-australian-pathology-test, accessed 29 March 2020). ).

[8] FDA, 28 March 2020. “Emergency Use Authorizations” (https://www.fda.gov/medical-devices/emergency-situations-medical-devices/emergency-use-authorizations#covid19ivd, accessed 30 March 2020).

[9] Whitehouse.gov, 13 March 2020. “Proclamation – Proclamation on Declaring a National Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak”. (https://www.whitehouse.gov/presidential-actions/proclamation-declaring-national-emergency-concerning-novel-coronavirus-disease-covid-19-outbreak/, accessed 29 March 2020).

[10] Reuters, 14 March 2020. “Trump declares coronavirus national emergency, says he will most likely be tested”. (https://www.reuters.com/article/us-health-coronavirus-usa-emergency/trump-declares-coronavirus-national-emergency-says-he-will-most-likely-be-tested-idUSKBN2102G3, accessed 29 March 2020).

[11] BioSistemika, 4 July 2017. “Real-Time PCR (qPCR) Technology Basics”. (https://biosistemika.com/blog/qpcr-technology-basics/, accessed 29 March 2020).

[12] Sheridan C, 23 March 2020. “Fast, portable tests come online to curb coronavirus pandemic”. Nature Biotechnology News article. (https://www.nature.com/articles/d41587-020-00010-2, accessed 29 March 2020); Dharmaraj, S (ThermoFisher Scientific). “The Basics: RT-PCR”. (https://www.thermofisher.com/au/en/home/references/ambion-tech-support/rtpcr-analysis/general-articles/rt–pcr-the-basics.html, accessed 29 March 2020); Sharfstein JM et al, 9 March 2020. “Diagnostic Testing for the Novel Coronavirus”. Journal of the American Medical Association (JAMA). (https://jamanetwork.com/journals/jama/fullarticle/2762951, accessed 29 March 2020); Corman V et al, 23 January 2020. “Detection of 2019 novel coronavirus (2019-nCoV) by real-time RT-PCR”. Eurosurveillance, 2020;25(3). (https://www.eurosurveillance.org/content/10.2807/1560-7917.ES.2020.25.3.2000045, accessed 29 March 2020); Tang Yi-Wei et al, 1 November 1997. “Molecular diagnostics of infectious diseases”. Clinical Chemistry, 1997:43(11),2021-2038. (https://academic.oup.com/clinchem/article/43/11/2021/5640827, accessed 29 March 2020).

[13] Nature News Explainer, 23 March 2020. “Coronavirus tests: researchers chase new diagnostics to fight the pandemic” . (https://www.nature.com/articles/d41586-020-00827-6, accessed 29 March 2020).

[14] Department of Health, 22 March 2020. “PHLN statement on point-of-care serology testing for SARS-CoV-2 (the virus that causes COVID-19”. (https://www.health.gov.au/resources/publications/phln-statement-on-point-of-care-serology-testing-for-sars-cov-2-the-virus-that-causes-covid-19, accessed 28 March 2020).

[15] Cepheid. “Xpert Xpress SARS-CoV-2 has received FDA Emergency Use Authorization”. (https://www.cepheid.com/coronavirus, accessed 29 March 2020).

[16] Abbott. “Abbott launches molecular point-of-care test to detect novel coronavirus in as little as five minutes”. (https://abbott.mediaroom.com/2020-03-27-Abbott-Launches-Molecular-Point-of-Care-Test-to-Detect-Novel-Coronavirus-in-as-Little-as-Five-Minutes, accessed 29 March 2020).

[17] Viva Chek. “VivaDiag SARS-CoV-2 IgM/IgG Rapid Test”. (https://www.vivachek.com/vivachek/English/prods/prod-covid19.html, accessed 29 March 2020).

[18] tga.gov.au, 28 March 2020. “COVID-19 diagnostic tests included on the ARTG for legal supply in Australia”. (https://www.tga.gov.au/covid-19-diagnostic-tests-included-artg-legal-supply-australia, accessed 30 March 2020).

[19] Hille, F et al, 8 March 2018. “The Biology of CRISPR-Cas: Backward and Forward”. Cell. 2018;172(6):1239-1259. (https://www.cell.com/cell/fulltext/S0092-8674(17)31383-1?_returnURL=https%3A%2F%2Flinkinghub.elsevier.com%2Fretrieve%2Fpii%2FS0092867417313831%3Fshowall%3Dtrue, accessed 29 March 2020).

[20] Chiu C, 13 June 2018. “Cutting-Edge Infectious Disease Diagnostics with CRISPR”. Cell Host & Microbe. 2018;23(6):702-704. (https://www.cell.com/cell-host-microbe/fulltext/S1931-3128(18)30270-1?_returnURL=https%3A%2F%2Flinkinghub.elsevier.com%2Fretrieve%2Fpii%2FS1931312818302701%3Fshowall%3Dtrue, accessed 29 March 2020).

[21] Broad Institute of MIT and Harvard News Feature, 15 March 2020. “Enabling coronavirus detection using CRISPR-Cas13: Open-access SHERLOCK research protocols and design resources”. (https://www.broadinstitute.org/news/enabling-coronavirus-detection-using-crispr-cas13-open-access-sherlock-research-protocols-and, accessed 29 March 2020).

[22] Sherlock Biosciences. “Better diagnostic testing should be elementary”. (https://sherlock.bio/technology/, accessed 29 March 2020).

[23] Mammoth Biosciences. “The CRISPR-based detection platform”. (https://mammoth.bio/diagnostics/, accessed 29 March 2020); Mammoth Biosciences, 2 March 2020. “A protocol for rapid detection of the 2019 novel coronavirus SARS-CoV-2 using CRISPR diagnostics: SARS-CoV-2 DETECTR”. (https://mammoth.bio/wp-content/uploads/2020/03/Mammoth-Biosciences-A-protocol-for-rapid-detection-of-SARS-CoV-2-using-CRISPR-diagnostics-DETECTR.pdf, accessed 29 March 2020).

[24] As above, note 18.

[25] As above, note 8.

Authored by Duncan Longstaff

6 min read

The urgent need to develop an effective vaccine to provide individuals and populations worldwide with immunity against the COVID-19 disease caused by the novel coronavirus, SARS-CoV-2, has led several biotechnology companies to leverage messenger RNA (mRNA) technology and take a novel approach to vaccine development.

As the COVID-19 pandemic continues to unfold, there are a multitude of biotechnology companies, governments and research institutions concentrating their efforts on developing a prophylactic vaccine against the novel coronavirus known as SARS-CoV-2. Many conventional vaccine development approaches are problematic because they involve prolonged lead times of between 2 to 5 years and require significant capital investment, making them poorly-adapted to responding to a rapidly spreading pathogen. By contrast, mRNA-based vaccines can be developed, clinically trialled and scaled-up into production and distribution relatively quickly – with the possibility of mass-immunisation commencing within 18 months of vaccine development commencing.

The premise of mRNA vaccines is simple: a vaccine that utilises a synthetic strand of mRNA, the minimum genetic instruction that allows human cells to make and express the target viral protein, which then triggers an adaptive immune response against the virus. This approach enables a rapid and scalable response to new viral pathogens as it bypasses the need to work directly with the virus itself.

US-based mRNA pioneers Moderna and Arcturus Therapeutics, as well as Germany’s BioNTech, each have a candidate mRNA vaccine. Moderna’s mRNA-1273 vaccine was produced 42 days following the sequencing of the SARS-CoV-2 genome – a response that is unprecedented in vaccine development. It is the first candidate COVID-19 vaccine to commence human trials, with a Phase I clinical trial under way in the US in collaboration with the National Institutes of Health (NIH). The study is aimed at assessing the vaccine’s safety, reactogenicity (common adverse reactions) and immunogenicity (ability to elicit an immune response) in a limited number of healthy volunteers.[1]

Coronavirus genome and proteins

The coronaviruses are a large family of viruses consisting of spherically-shaped viral particles covered with spike proteins protruding from their surface, which give the virus its crown-like appearance (corona being Latin for crown). The coronavirus uses its spike proteins to attach to and penetrate the surface of host cells by binding to ACE2 receptors on these cells.[2]

Researchers in China have sequenced the genome of the novel coronavirus (SARS-CoV-2), which has allowed mRNA sequences encoding viral proteins to be rapidly developed. Of particular interest has been the genetic sequence encoding the spike protein, which Moderna and Arcturus Therapeutics have incorporated into their respective candidate vaccines.

COVID-19 mRNA vaccine candidates

  • Moderna’s first-in-class mRNA-1273 vaccine encodes for a stabilised form of the spike protein, formulated with a lipid nanoparticle carrier.[3] The US Food and Drug Administration has allowed the vaccine to proceed to a Phase I study in humans under an Investigational New Drug (IND) application filed by the NIH, in parallel with animal studies.[4] The NIH commenced a Phase I trial on 16 March 2020. The study will enrol 45 healthy adults in order to evaluate the vaccine’s safety and immunogenicity at three dosage levels (25mcg, 100mcg and 250 mcg) to be administered by intramuscular injection on a 2-dose vaccination schedule given 28 days apart.[5] If the Phase I trial proves successful, Moderna expects to commence larger Phase II efficacy trials (enrolling several hundred participants) under its own IND filing within a few months.[6] If all Phase II clinical endpoints are met, then Phase III clinical trials may occur towards the end of 2020, but any approved vaccine is anticipated to be 12 to 18 months away by both industry and health authorities.
  • Arcturus Therapeutics and Duke-NUS Medical School have partnered in the development of a candidate self-replicating mRNA vaccine, currently in preclinical testing.[7] The partnership will receive up to US$10 million from the Singapore Government to co-develop the vaccine, which utilises mRNA encoding the viral spike protein, delivered by a lipid nanoparticle delivery system.
  • BioNTech is collaborating with Pfizer to co-develop its mRNA-based vaccine candidate BNT162, leveraging an earlier agreement between the parties to jointly develop an mRNA-based influenza vaccine. The agreement with Pfizer excludes distribution rights within China, where Shanghai-based Fosun Pharma will distribute and market any COVID-19 vaccine developed by BioNTech.[8] BNT162 is currently in pre-clinical testing with clinical trials expected to begin in April 2020.[9]

The rationale for mRNA vaccines

Vaccine platforms using mRNA-based technologies utilise two approaches: non-replicating and self-replicating mRNA. Non-replicating mRNA vaccines only code for the antigen required to elicit the desired immune response (such as the spike protein of SARS-CoV-2), making them relatively simple to develop and often more economical to administer (particularly where direct intradermal injection is feasible). Self-replicating mRNA vaccines include not only the genetic sequence of the antigen required but also the RNA replication machinery required for the mRNA to be amplified, thereby enabling a large amount of antigen production from a small dose, potentially reducing reactogenicity but complicating the development, manufacture and administration of the vaccine.

For both non-replicating and self-replicating mRNA vaccines, the mRNA is formulated with a carrier such as a lipid-nanoparticles that encapsulates the mRNA to protect it from degradation and to allow uptake into human cells. There are various possible modes of delivery of the mRNA to the patient, including direct intradermal injection and more complex cellular therapies (removing, modifying and reintroducing target cells). Once within the cytoplasm of a patient’s host cell, the mRNA is translated by the host cell’s translational machinery (ribosomes) to produce the target protein, which then undergoes further post-translational modifications such as folding to produce a functional protein. This protein mimics the SARS-CoV-2 spike protein and therefore has the ability to elicit an adaptive immune response to the SARS-CoV-2 virus. As noted above, self-replicating mRNA constructs additionally have the ability to be translated by ribosomes to produce the replicase machinery necessary for self-amplification of the mRNA itself.[10]

This mRNA vaccine approach offers potential advantages over conventional inactivated and live-attenuated whole virus vaccines and subunit vaccines (which use a specific part of the virus such as its proteins, sugars, or capsule) in its simplicity and capacity to bring into effect a rapid and scalable response to novel pathogens. There is also likely to be potential for improved vaccine safety and efficacy:[11],[12]

  • mRNA vaccines allow for rapid, cost-effective and scalable manufacture of vaccines as there is no need for viral growth and expansion or the development of viral-specific cell cultures.
  • Once the viral genome has been sequenced, the target mRNA can be produced by a standardised process, rendering production faster and more cost-effective.
  • Delivery of mRNA into a human cell can be achieved by formulating the mRNA onto carrier molecules, allowing for rapid uptake and expression within cells.
  • Modifications to mRNA vaccine constructs can make them more stable and highly translatable.
  • Vaccines containing mRNA are capable of inducing both a T-cell (cellular) and B-cell (antibody) immune response.
  • The use of mRNA confers no risk of infection from the vaccine itself.

This approach also has advantages over DNA-based vaccines because mRNA does not need to enter the host cell nucleus in order to be transcribed. This means the dosage of vaccine can be significantly lower and no special delivery mechanisms are required. Additionally, there is no risk of DNA integrating into the host cell genome, avoiding concerns about the possibility of insertional mutagenesis.

Other candidate vaccines

A number of other COVID-19 candidate vaccines are currently in pre-clinical testing and also hold promise of a viable vaccine being produced during the next 1-2 years, most notably:[13]

  • Janssen’s (Johnson & Johnson) intranasally delivered recombinant adenovirus-based vaccine, incorporating a SARS-CoV-2 protein and utilising the vaccine platform it developed for the Zika and Ebola viruses;
  • Sanofi’s recombinant vaccine expressed in a baculovirus system and incorporating a SARS-CoV-2 protein;
  • LinealRx’s DNA vaccine encoding a SARS-CoV-2 protein;
  • Inovio Pharmaceuticals’ DNA vaccine encoding the SARS-CoV-2 spike protein;
  • Clover Biopharmaceuticals’ and GlaxoSmithKline’s recombinant SARS-CoV-2 spike protein subunit vaccine; and
  • the University of Queensland’s recombinant subunit vaccine incorporating the SARS-CoV-2 spike protein.

A number of these candidates have expectations of moving into Phase I clinical trials within 3 to 6 months.

Concluding remarks

Vaccines utilising mRNA platforms remain an unproven technology, with no vaccine approved for use to date. However, mRNA vaccine technology holds great promise and, if ultimately proven successful, could reduce vaccine lead-time and cost of development and manufacture and thereby shorten the time to product regulatory approval and implementation. While still too early to predict, the outcome of this race to develop a successful COVID-19 vaccine appears destined to yield a variety of improved techniques and new technologies, while also providing important lessons on how best to develop a vaccine in the face of future rapidly emerging epidemics and pandemics.

[1] ClinicalTrials.gov, “Study ID NCT04283461”. (https://clinicaltrials.gov/ct2/show/study/NCT04283461, accessed 22 March 2020).

[2] Tai W et al, “Characterization of the receptor-binding domain (RBD) of 2019 novel coronavirus: implication for development of RBD protein as a viral attachment inhibitor and vaccine”. Cellular & Molecular Immunology (2020). (https://www.nature.com/articles/s41423-020-0400-4, accessed 22 March 2020).

[3] National Institutes of Health, “NIH clinical trial of investigational vaccine for COVID-19 begins”. (https://www.nih.gov/news-events/news-releases/nih-clinical-trial-investigational-vaccine-covid-19-begins, accessed 22 March 2020).

[4] Moderna, Inc., “Moderna’s Work on a Potential Vaccine Against COVID-19”. (https://www.modernatx.com/modernas-work-potential-vaccine-against-covid-19, accessed 22 March 2020).

[5] As above note 1.

[6] As above, note 2.

[7] Duke NUS Medical School, “Arcturus Therapeutics and Duke-NUS Medical School Partner to develop a coronavirus (COVID-19) vaccine using STARR Technology™”. (https://www.duke-nus.edu.sg/about/media/media-releases/media-releases/arcturus-dukenus-covid-19-vaccine-using-starr-technology, accessed 22 March 2020).

[8] BioNtech SE, “Pfizer and BioNTech to Co-develop Potential COVID-19 Vaccine”. (https://investors.biontech.de/news-releases/news-release-details/pfizer-and-biontech-co-develop-potential-covid-19-vaccine, accessed 22 March 2020).

[9] Pfizer Inc., “Press release – Pfizer and Biontech to co-develop potential COVID-19 vaccine”, 17 March 2020. (https://investors.pfizer.com/investor-news/press-release-details/2020/Pfizer-and-BioNTech-to-Co-Develop-Potential-COVID-19-Vaccine/default.aspx, accessed 22 March 2020).

[10] Pardi, N., Hogan, M., Porter, F. et al, “mRNA vaccines — a new era in vaccinology”. Nature Reviews – Drug Discovery 17, 261–279 (2018). (https://www.nature.com/articles/nrd.2017.243, accessed 22 March 2020).

[11] As above note 8.

[12] Jackson, N.A.C., Kester, K.E., Casimiro, D. et al, “The promise of mRNA vaccines: a biotech and industrial perspective”. Vaccines, 5, 11 (2020). (https://www.nature.com/articles/s41541-020-0159-8, accessed 22 March 2020).

[13] Hodgson J, “The pandemic pipeline”. Nature Biotechnology, News Feature (2020). (https://www.nature.com/articles/d41587-020-00005-z, accessed 22 March 2020).

1 min read

Welcome to Shelston’s wrap-up of the most notable patent decisions in Australia and New Zealand delivered during 2019. It was a busy year for patent jurisprudence with some interesting themes emerging – in particular, it has been a banner year for decisions on the “manner of manufacture” requirement for patentable subject matter.

Read our full report

  • An expanded Full Federal Court clarified the “manner of manufacture” test for computer-implemented methods to be patentable (Encompass), a topic that was also central to several other Federal Court (TettmanRepipeWatson) and Patent Office (Apple) decisions.
  • There were also important “manner of manufacture” decisions in the life sciences space, with single judges finding both a diagnostic method involving a process of detecting genetic material (Sequenom) and use of genetic information to infer traits (Meat & Livestock Australia) to be patentable subject matter.
  • The Full Court confirmed there is no doctrine of patent exhaustion in Australia, the critical distinction being between repairs permitted by implied or express licence terms brought home to the purchaser of a product, and the impermissible re-making of the product beyond the scope of any licence (Calidad (No. 1)).
  • The Full Court confirmed that a permanent injunction framed in general form by reference to the claims of an infringed patent is generally appropriate and may be ordered in addition to a specific injunction describing products or conduct found to infringe (Calidad No. 2).
  • The Full Court overturned an award of additional damages for flagrant patent infringement on the basis that the infringer had believed, on objectively reasonable grounds, that its conduct did not infringe the patent (Oxworks).
  • The tide continued to turn against pharmaceutical patentees being granted interlocutory injunctions (MylanSanofi-Aventis).
  • Patentees learned some harsh lessons as the Full Court dismissed infringement claims based on the construction of the terms “contains” (construed exhaustively in Nichia) and “recognise” (construed broadly in Davies).
  • There were several applications by patentees to amend patent claims and specifications after commencing infringement proceedings (Meat & Livestock AustraliaNeurimBlueScope), with mixed success.
  • Consideration was given in the Patent Office to Australia’s “raised bar” requirements for support and sufficiency (Gary CoxUniversal Polymers).
  • Both clinical trial patient consent forms (InterPharma) and academic conference posters (Regeneron) were considered prior art documents in life sciences cases.
  • There were further decisions regarding families of patents that have been litigated for a decade or more (GlobaltechSNF).
  • There were also decisions regarding the admissibility of “WayBackMachine” evidence (Dyno Nobel), summary dismissal of an infringement case (Pilkin), a successful application for preliminary discovery (MMD), a failed cross-claim for unjustified threats (Liberation), a failed attempt to withdraw admissions relating to infringement (Juno), a “strawman” opponent to a patent application having to pay security for costs in an appeal despite winning the opposition (Toolgen) and a party commencing infringement proceedings despite not being a proper exclusive licensee having to pay indemnity costs (Vald).
  • Two recent decisions issued by the Intellectual Property Office of New Zealand provide new hope that, in certain circumstances, it may be possible to obtain an extension of time to file a divisional patent application (PrimapakMagic Leap).

As 2020 gets underway, we hope this provides a useful and practical resource and, of course, please do not hesitate to take the opportunity to contact our authors, all subject-matter experts in their respective fields, for advice on the issues raised by these important decisions.

Authored by Duncan Longstaff and Onur Saygin

This important decision by the Full Court of the Federal Court in Calidad Pty Ltd v Seiko Epson Corporation [2019] FCAFC 115 clarifies the position on an area of law that, surprisingly, is still developing in Australia, namely the scope of the implied licence issuing from the sale of a patented product.

Re-manufacturers that refurbish and repurpose used patented products should take heed of this decision, as work that goes beyond mere repair of damaged or broken parts, or that replaces or refurbishes parts that extend the useful life of the product, may be considered an infringement of the patentee’s exclusive right to make the product.

Calidad has foreshadowed a request for special leave to appeal to the High Court on the anterior question of whether the “implied licence” or the “patent exhaustion” doctrine is the correct approach in Australia. Calidad has until 2 August 2019 to apply to the High Court for that leave to appeal.


Seiko Epson sells Epson printer cartridges worldwide. The Epson cartridges embody the invention claimed in the two Australian patents in suit. The cartridges are designed as a consumable product, and are intended to be discarded and replaced when the ink runs out. This is achieved by memory chips programmed to recognise when a cartridge is spent, thereby preventing the cartridges from being refilled. Each cartridge is also configured to be compatible with only certain Epson printers.

After initial sale of the original Epson cartridges, a third party modified the used cartridges to enable them to be re-used. Calidad then imported and sold the cartridges in Australia, in competition with the original Epson cartridges.

Calidad asserted an implied licence to treat the cartridges as an ordinary chattel deriving from Seiko’s unconditional sale of the original Epson cartridges. In the alternative, it asserted that a patentees’ right to exploit the patented product under the Patents Act 1990 (the Act) did not include the right to prevent a subsequent owner of the product from repairing or refurbishing the product and dealing with the refurbished product.

The Modifications Made

The process of refurbishment carried out by the third party, first, involved cartridges being emptied and cleaned in preparation for refilling. Replacement ink was then injected into the cartridge through a new entry port created in the cartridge, which was subsequently sealed.

Next, for some cartridges, the memory chip was reprogrammed so that the cartridge would not read as spent (referred to as the “current products”). For other cartridges a new memory chip was inserted and the modified circuit boards refitted to the cartridges. Some cartridges were further modified by changing their interface pattern to allow them to be used with a wider range of Epson printers than originally intended. These latter categories were referred to as the “past range of products”.

There was no dispute that all the modified cartridges supplied by Calidad fell within the scope of claim 1 of each of the patents in suit.

Opposing Doctrines: Implied Licence vs Patent Exhaustion

The right of a patentee to control what may be done with a patented product, once sold, gives rise to competing rights: the patentee’s exclusive right to “exploit” the patented product under the Act, which includes the right to make, use, sell and import the product inter alia, and the personal proprietary rights of ownership in a chattel at common law.

Two opposing doctrines have developed to address this tension.

  • The doctrine of patent exhaustion was endorsed by the United States Supreme Court in Impression Products v Lexmark (2017) 581 U.S. 1523. Under this doctrine, upon the first authorised sale of a patented product by or with the consent of a patentee, all patent rights in that article are exhausted. The Full Court in the present case confirmed unequivocally that under Australia’s current law there is no doctrine of exhaustion.
  • The implied licence doctrine provides that the sale of a product embodying a patented invention with the authority of the patentee carries with it an implied licence permitting the purchaser to use, maintain, re-sell and import the product without infringing the patent. Such implied licences are subject to any conditions of sale the patentee imposes and “brings home” to the purchaser at the time of sale. This approach was adopted in the United Kingdom and Australia following the Privy Council’s decision in National Phonograph Co of Australia Ltd v Menck (1911) 12 CLR 15 (Menck).

At first instance Justice Burley found that Menck applied in Australia. Both parties advanced the appeal and cross-appeal on this basis. However Calidad has reserved the right to challenge the approach taken in Menck in any subsequent appeal to the High Court, including raising at that stage its contention that the doctrine of exhaustion should apply in Australia, as it does in the United States.

The First Instance Decision

Material modifications?

Justice Burley held that Calidad infringed the Seiko patents in relation to the past range of products (where memory chips were replaced or the interface pattern was changed), but not the current products. Burley J’s analysis turned on whether the implied licence, which was taken to have arisen validly, was terminated by the modifications carried out by the third party. This was to be determined by whether the product was “materially altered” by the modifications.

The Full Court

Scope of the Implied Licence

The Full Court (Greenwood, Jagot and Yates JJ), each in separate judgments, found entirely in favour of Seiko. The Full Court concurred in finding that the primary judge erred by asking the wrong question – that is, was the implied licence brought to an end by the materiality of the modifications. Instead, the question to be addressed was whether the modifications constituted conduct outside the scope of any implied licence arising from an unrestricted sale. Each of the Full Court judges held that the modifications brought into existence a new article, which could only be properly characterised as an impermissible making of the patented product, and unequivocally outside any possible licence recognised by Menck. The licence did not come to an end by reason of the materiality of the modifications – it never authorised the relevant conduct of Calidad and the third party from whom it procured the cartridges.

Yates and Jagot JJ, in their separate reasons, pointed to the fact that none of the modifications amounted to repair on any reasonable view. The cartridges were not damaged – they had instead been consumed in the manner intended by Seiko upon their manufacturer and sale. An implied licence did not authorise modifications or refurbishment after the useful life of a patented article. Jagot J also observed that the refurbishment process involved “unmaking” the patented cartridges by effectively removing one integer of the patent claims (by creating a hole in the ink container) and then making a new patented article when adding that integer back in (by sealing the newly-made hole to re-establish a functional ink container). Yates J considered that Calidad’s assertion of a right of refurbishment was an unsupported embellishment of the subject matter dealt with in the United Kingdom cases, as the cases themselves refer only to repair.

Licence to repair?

The question of whether Australian patent law recognises an implied licence to repair did not arise on the facts of the present case, leaving this question, ostensibly, to be resolved on another occasion.

However the exclusive right to “exploit” the invention granted to a patentee under s 13 and Schedule 1 of the Act does not include (at least expressly) the exclusive right to repair a patented product. Under the current legislative regime, arguably, an implied licence to repair is not required, provided the work performed does not cross over into an impermissible making of the invention. Consistent with this view, the United Kingdom courts have long recognised a right to repair (essentially as an implied contractual term associated with the purchase of a product), but more recently have characterised this as a residual right to do whatever does not amount to making the invention (Lord Hoffman in United Wire Ltd v Screen Repair Services (Scotland) Ltd [2001] RPC 24).

Patent Exhaustion – would the outcome be any different?

Even if the patent exhaustion doctrine were found to apply in Australia, the outcome of this case may be unchanged. As Jagot J persuasively states in obiter, neither an implied licence nor the doctrine of exhaustion would “result in the loss of the right to prevent the making of new embodiments of the invention, whether or not the new embodiment involved starting from scratch or re-using and modifying parts of the patented product as sold”. Patent exhaustion applies to the particular product as sold, and not to the making of a new embodiment of the invention.

Implications for Re-manufacturers 

Re-manufacturers will need to carefully consider whether their activities may infringe the patent rights of original product manufacturers, particularly where work goes beyond mere repair of damaged or broken parts, or where parts are replaced or refurbished thereby extending the useful life of the patented article.

Each case will, however, turn on its facts – both with respect to the nature of the patented invention and the article that embodies it. As observed by Jagot J, “…all the cases, in one way or another, are about the scope of the implied licence which necessarily arises on the sale of every patented article, the scope of which will depend upon all relevant circumstances including but not limited to the nature of the patented article, the circumstances of the sale, and the imposition at the time of sale of any express restrictions on the use which the purchaser may make of the article after sale”.

We await with interest any further developments in the law should the High Court choose to address this question.

Authored by Duncan Longstaff