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Australia: Analysing pharmacoeconomics and patent practice in Australia

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Despite being a market of only 26 million people, Australia possesses a world-class healthcare system and well regarded scientific community. This is most recently demonstrated through the participation of Australian scientists in the race to successfully manufacture a COVID-19 vaccine, and by the low infection death rates from the current pandemic in Australia.

The pharmaceutical benefits scheme

To access the Australian market widely, in addition to marketing approval, listing a new therapeutic on the pharmacoeconomically driven Pharmaceutical Benefits Scheme (PBS) is highly desirable. This government programme enables Australians to access listed therapeutics at heavily subsidised prices (after government negotiation with a sponsor). Under the scheme the price of the originator therapeutic is compulsorily reduced at the expiry of specified periods and when a generic competitor obtains its own PBS listing.

The Australian government actively participates in patent litigation

A legal tussle between the Australian government and an originator (relating to efforts by the originator dating back over 12 years to prevent a generic market entrant) underscores the significance of the PBS as a market moderator. In Commonwealth of Australia v Sanofi (formerly Sanofi-Aventis) (No 5) [2020] FCA 543 the Australian government sought to recoup the subsidies Sanofi received while it was able to stop (via an interlocutory injunction) a generic competitor product to Sanofi's clopidogrel, from entering the market. When the patent was ultimately found to be invalid, the government sought to take advantage of the usual undertaking as to damages given by Sanofi to the court, in return for the interlocutory injunction.

To date, the Commonwealth has been unsuccessful in its claim, but the decision may yet be appealed. Another similar claim by the government relating to aripiprazole is still pending, and two further claims have been settled. There is reason to believe that the clopidogrel matter may be confined to the facts of the case. But the vigour with which the government has pursued the case, together with the time and costs of getting new therapeutics to market, suggests that back-up protection for new therapeutic products in Australia is worth considering.

Protecting further medical indications

New chemical or biological forms, new formulations and methods of treatment for first line indications as well as second and further indications and dosage regimes (deriving from clinical trials for example) are all patentable in Australia.

Some difficulties may arise where delivery of a therapeutic for a first indication might be said to inherently treat a second or further indication or regime therefore destroying novelty or inventive step of a later claim. However, recent developments at the Patent Office indicate that even where the site of treatment is the same, careful choice of claim language can overcome the collision of new claims with a patentee's own earlier prior art.

Post-grant amendments

Another, perhaps less obvious strategy is to take steps to mitigate against the risk of patent invalidity. In the past, patentees have commonly considered post grant amendment after legal proceedings have commenced. However, Australian courts have more recently, been less inclined to exercise the discretion available to them in favour of patentees when amendment is sought as part of a broader infringement and invalidity proceeding. Where a patent is clearly a critical asset guarding market access, an early and regular strategic review of its robustness (and considered anticipatory amendments) may be money well spent.

Final consideration

While Australia remains an attractive destination for patentees, careful thought as to patent strategy is required to negotiate Australia's relatively complex regulatory, demographic and socioeconomic environment.

Karen Sinclair

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