Biosimilars in Australia
Published on 19 Dec, 2019
A ‘biosimilar medicine’ or ‘biosimilar’ is a highly similar, but not identical, version of an original biological medicine (‘reference medicine’) – a medicine comprised of large complex molecules derived in some way from a living organism. In this sense, a biosimilar differs to some extent from a traditional small molecule “generic” medicine, which is commonly understood as a pharmaceutical product that is identical, at least in terms of active ingredients, to the original branded “originator” or “innovator” product. As the understanding and technology required to develop biological medicines continues to advance rapidly, they are increasingly prominent in the Australian and global pharmaceutical markets.
Biological medicines are costly to develop, manufacture, store and supply, making their cost to healthcare providers such as the Australian Government through the Pharmaceutical Benefits Scheme (PBS) relatively high compared to conventional “small molecule” medicines. In 2015, the Australian Government committed AU$20 million to a 3-year awareness campaign to support the increased use of biosimilar medicines by patients, pharmacists and specialists.1 The Government recently granted a further AU$5 million to the Generic Biosimilar Medicines Association (GBMA) to continue the awareness initiative until December 2020.2 The Government hopes its investment in biosimilars will provide significant savings and improve competition.
In a patent context, the encouragement of biosimilar products may bring with it more litigation as innovators seek to protect the markets for their biological medicines through patent enforcement. The dynamics of that patent litigation will often be different to conventional “innovator vs. generic” disputes over small molecule medicines. Often the party seeking to introduce a biosimilar product is itself traditionally an innovator pharmaceutical company, and the costs of developing both an original biological medicine and a biosimilar are orders of magnitude higher than the costs of developing most small molecule medicines (especially generic versions). These and other factors will undoubtedly influence parties’ commercial imperatives and their appetite for litigation or settlement, as well as the factual and legal issues that emerge during litigation.
Biological medicines include antibody-based medicines that treat diseases such as cancer and rheumatoid arthritis, as well as other recombinant proteins that ameliorate conditions such as diabetes. Biological medicines tend to be significantly more expensive to manufacture than traditional generic medicines that are limited to chemically-synthesised small molecules. These increased development costs are reflected in significantly higher prices for biological medicines, including biosimilars, compared to most small molecule medicines. For example, a year of treatment with pembrolizumab (trade name Keytruda, Merck Sharp & Dohme), a selective humanised monoclonal antibody for metastatic malignant melanoma, cost up to AUD $150,000 before it was subsidised by PBS.3 There are currently 24 biosimilar brands listed on the Australian Register of Therapeutic Goods (ARTG), 12 of which are subsidised by the PBS.4 Under the National Health Act 1953 (Cth), Part VII, Division 3A, a statutory price reduction of 25% is applied to existing PBS-listed products on the listing of the first new bioequivalent or biosimilar item that has the same route of administration as an existing brand or item.
Although biosimilars are necessarily highly similar to the innovator biological medicine (“reference medicine”), they are not bioequivalent and do not follow the same regulatory pathways as generic small molecule medicines. More rigorous testing is required for biosimilars.5 Generic versions of small molecule medicines must contain the same active ingredient as the innovator product, and must also be bioequivalent (the rate and extent of absorption by the body of the same dose of the active ingredient are expected to be essentially the same).6 In the context of small molecule medicines, bioequivalence can generally be reliably proven. However, as biological medicines are often produced by living cells, differences may exist between different batches of the same medicine. Their safety and effectiveness can also be affected by small changes in manufacturing and storage conditions. This necessitates different approval procedures.
The Australian Therapeutic Goods Administration (TGA) has largely adopted the European approach to regulatory approval of biosimilars.7 To obtain TGA approval, each biosimilar must be evaluated using clinical, pre-clinical and laboratory-based comparability studies to generate evidence of similar quality, safety and efficacy of each new biosimilar. There has been some controversy nationally and internationally about appropriate data threshold requirements for biosimilar regulatory approval. Concerns have also been expressed regarding patient switching between a reference medicine and a biosimilar, due to, for example, limited long-term efficacy, safety and immunogenicity data.8
Compared to the courts in the US and Europe, which have been busy applying and interpreting the law around biosimilars, and where there are a number of pending biosimilar-related disputes, this space has to date been relatively quiet in Australia. Litigation is continuing to emerge, though, and this trend is expected to continue in light of the Australian Government’s encouragement of biosimilar medicines.
Over much of the past decade, Australian courts have demonstrated a readiness to grant interlocutory injunctions restraining launch of generic products while patent litigation continued through to at least a first instance (trial) decision on validity and infringement, with the patentee required to give an undertaking to compensate any party for losses arising from the injunction should the patent ultimately be found invalid or not infringed. This has occurred primarily on the basis that the balance of convenience favoured the innovator/originator in light of the practically-irreversible price drops for PBS reimbursement once a generic product enters the market. However, in a number of more recent cases, Australian courts have declined to grant interlocutory injunctions to pharmaceutical patentees. In particular, having recently conducted the first contested trials to enforce the patentee’s undertaking as to damages, the Federal Court has cited “the difficulty, complexity and uncertainty involved in assessing compensation under an undertaking as to damages given in patent infringement proceedings involving the supply of pharmaceutical products in the Australian market” as a factor pointing against the grant of an interlocutory injunction: Mylan Health Pty Ltd v Sun Pharma ANZ Pty Ltd (No 2)  FCA 505 (11 April 2019) at . Accordingly, it has become more difficult to predict whether an interlocutory injunction is likely to be obtained by a patentee seeking to prevent the PBS listing and launch of a biosimilar pending the trial outcome, and each case will turn very much on its own facts regarding the market and also the strength of the patents and nature of the products involved.
The first interlocutory injunction against a biosimilar was granted by the Federal Court of Australia in F. Hoffman-La Roche AG v Sandoz Pty Ltd  FCA 874 (12 June 2018). Roche is the registered proprietor of several patents relating to methods of use of rituximab, a biologic therapy prescribed in Australia to treat immunological conditions such as chronic lymphocytic leukaemia, lymphoma, and rheumatoid arthritis. The Federal Court restrained Sandoz from launching its biosimilar, Riximyo, on the basis that there was a prima facie case that such supply would infringe the claims of 5 method of treatment type patents owned by Roche and the balance of convenience favoured preserving the status quo pending the trial outcome.
By contrast, the Federal Court in Sanofi-Aventis Deutschland GmbH v Alphapharm Pty Ltd (No 3)  FCA 2060 (19 December 2018) refused Sanofi’s application for an injunction to prevent Alphapharm from launching and selling its Semglee product. The Semglee product is a biosimilar to Sanofi’s product, Lantus SoloStar, both of which are new generation insulin products. Sanofi’s patent relates to the syringe containing a medicine. The Semglee product was intended to be sold with a syringe. Sanofi applied for leave to appeal to the Full Federal Court (Sanofi-Aventis Deutschland GmbH v Alphapharm Pty Ltd  FCAFC 28) but leave was refused.
As previously reported, Burley J of the Federal Court denied Pfizer’s application (Pfizer Ireland Pharmaceuticals v Samsung Bioepis AU Pty Ltd  FCA 285 (21 March 2017)) for preliminary discovery of documents sought in order to determine whether Samsung Bioepis AU’s biosimilar product (trade name BRENZYS) infringed one or more patents claiming manufacturing processes for Pfizer’s biological medicine, Etanercept (trade name ENBREL). As we subsequently reported, Pfizer appealed the decision and the Full Federal Court unanimously overturned Burley J’s decision, granting Pfizer preliminary discovery (Pfizer Ireland Pharmaceuticals v Samsung Bioepis AU Pty Ltd  FCAFC 193). That litigation between Pfizer and Samsung Bioepis AU continues, and Pfizer has recently applied for preliminary discovery from Sandoz with respect to potential infringement of those same manufacturing process patents by Sandoz’s ERELZI etanercept biosimilar products (which have TGA approval but are not yet listed on the PBS).
It appears inevitable that the Australian Government will continue to focus on reducing healthcare expenditure and we will likely see further policies and developments that encourage biosimilars. We expect a corresponding trend towards litigation activities relating to biosimilars in Australia, as sponsors of original biological medicines seek to protect the markets for their products through their patent portfolios. Given the technical complexity and unique commercial factors involved in producing and supply biological medicines, such litigation, including the trials and any appeals in the cases that are already underway, will likely produce interesting and important case law on an array of invalidity and infringement grounds.
1 Media release by the Honourable Sussan Ley, Member for Farrer, Minister for the Environment, Pharmaceutical Benefits Scheme to be reformed, <http://sussanley.com/pharmaceutical-benefits-scheme-to-be-reformed/>.
2 Australian Government, Department of Health, Biosimilar Awareness Initiative (02 Dec 2019) <https://www1.health.gov.au/internet/main/publishing.nsf/Content/biosimilar-awareness-initiative>.
3 ABC News, ‘Revolutionary’ melanoma drug worth $150,000 a year listed on PBS, saving Australian patients thousands (28 Jun 2015) <https://www.abc.net.au/news/2015-06-28/melanoma-drug-listed-on-pbs-saving-patients-thousands/6578554>.
4 Australian Government, Department of Health, Which biosimilar medicines are available in Australia (02 Dec 2019) <https://www1.health.gov.au/internet/main/publishing.nsf/Content/biosimilar-which-medicines-are-available-in-australia>.
5 Australian Government, Department of Health, Biosimilar medicines regulation (04 Apr 2018) <https://www.tga.gov.au/publication/biosimilar-medicines-regulation>.
6 Australian Government, Department of Health, Prescription medicines: registration of new generic medicines and biosimilar medicines (05 Dec 2019) <https://www.tga.gov.au/prescription-medicines-registration-new-generic-medicines-and-biosimilar-medicines>.
7 Australian Government, Department of Health, EU guidelines (18 Dec 2019) <https://www.tga.gov.au/ws-sg-index?search_api_views_fulltext=CHMP/437/04>.
8 Thomas Dörner, Vibeke Strand, Paul Cornes, et al, ‘The changing landscape of biosimilars in rheumatology’ (2016) 75 Ann Rheum Dis. 974-982.