Alphapharm's case
106 Alphapharm's approach to this issue implicitly acknowledged the undeniable fact that Sundberg J had carefully analysed similar competing considerations in the Sigma decision in which his Honour concluded that an interim injunction should issue. Alphapharm, accordingly, emphasised key factors which were not in evidence before or relevant to the Sigma decision. One such factor is the identification of the status quo (given the purpose of an interlocutory injunction as being to maintain the status quo pending the final resolution of the rights between the parties) as a consequence of Wyeth's actions in relation to Pristiq.
107 Alphapharm said the evidence available on this application established that there is no stable status quo to protect. The "established trade" in Efexor-XR, on which Sundberg J relied in the Sigma decision at [59], was a result of Wyeth's evidence when the true position is that, by Wyeth's own hand, the market is being altered so as to shift it from Efexor-XR to Pristiq. Alphapharm supported this submission by reference to affidavits from Belinda Cowell, Alphapharm's head of marketing, Peter Astles, Alphapharm's business development manager, Mark Hurley, Alphapharm's executive director, and Dr Stephen Downes, an independent marketing expert, as well as confidential documents produced by Wyeth.
108 According to Alphapharm, Wyeth's evidence in chief presented a picture of Efexor-XR as the leading antidepressant in Australia with annual sales of $115 million or about 25% of Wyeth Australia's income. However, after December 2008 the picture has changed. The compound patent had expired. Wyeth became exposed to competition from generic venlafaxine products. According to Mr Hurley, if such a generic product is launched with a listing on the PBS, it may be able to secure 50% of the market. If launched without PBS listing, it may be able to secure about 13.5% of the market.
109 Alphapharm said that Wyeth had altered its marketing strategy in anticipation of the ARTG approval for and PBS listing of its new product, Pristiq. Pristiq is not listed on the PBS in the same product code as Efexor-XR so that generic venlafaxine products cannot compete with Pristiq. By about January 2009 virtually all of Wyeth's marketing efforts focused on Pristiq. Alphapharm said that confidential internal documents showed this focus on Pristiq, in effect, at the expense of Efexor-XR in terms of both new and existing patients. In other words, Alphapharm said that Wyeth is attempting to switch patients from Efexor-XR to Pristiq in circumstances where the latter is not exposed to competition from generic substitutes due to the Pristiq patent. The former, however, is exposed to competition due to the expiry of the compound patent. The consequence is to reduce the market for Efexor-XR (and thus the market in which generic substitutes can compete) by Wyeth's own hand. This, , said Alphapharm, is supported by evidence about a range of measures known in the pharmaceutical industry including: - (i) frequency of detailing for Pristiq compared to Efexor-XR (that is, one-on-one visits to medical practitioners), (ii) share of voice (that is, detailing frequency for Pristiq as a proportion of the overall detailing frequency for all products), (iii) total marketing spend for Pristiq compared to that for Efexor-XR, (iv) priority given to Pristiq in visits by sales representatives, (v) provision of free samples of Pristiq compared to Efexor-XR, and (vi) Wyeth's marketing message about Pristiq.
110 Based on this material Alphapharm said that Wyeth must be inferred to be happy to allow Efexor-XR's market share to be eroded by a competitor product (that is Pristiq). Further, evidence showed that Pristiq is in fact being prescribed by medical practitioners and, on Wyeth's evidence, is anticipated to increase to about 38% of the combined sales of Efexor-XR and Pristiq by 31 December 2010. Hence, Wyeth's conduct means that the market for venlafaxine is rapidly diminishing.
111 Alphapharm submitted that, in these circumstances, first, Wyeth could not assert a stable status quo warranting protection by an interlocutory injunction. Second, the public interest in competition is a discretionary factor weighing in Alphapharm's favour. Third, Wyeth is seeking an interlocutory injunction for a purpose outside the scope of the protection of the method patent, namely, to shelter itself from competition, a factor which also weighed in Alphapharm's favour. Fourth, Wyeth's conduct undermined its submissions about the risk of patient confusion in the event that Enlafax-XR is permitted to enter the market, to which Sundberg J referred in the Sigma decision at [63]-[65]. Wyeth is encouraging switching from Efexor-XR to Pristiq. Further, on Wyeth's evidence, 15% of patients prescribed Pristiq had to be switched to Efexor-XR. Alphapharm referred to the evidence of Dr Julian Parmegiani which established that concerns about patient confusion are largely illusory. The vast majority of patients treated for depression lead ordinary lives and are capable of dealing with a brand change, including a brand change back to Efexor-XR should Wyeth succeed in the final hearing. In summary, Wyeth may not both approbate and reprobate by obtaining an interlocutory injunction to protect its proposed product switching from Efexor-XR to Pristiq on the basis of claims against any such switching to a generic substitute for Efexor-XR.
112 Alphapharm described the effect of an injunction on it as irreparable. If an injunction were granted, it would remain in place until the final hearing. However, this is a type of case in which an appeal is inevitable. Even if Alphapharm succeeded at first instance, Wyeth would undoubtedly seek a stay to enable the appeal to be determined. The final result may not be available for two years or more. In that period Wyeth's actions will substantially reduce the market in Efexor-XR. Alphapharm had incurred more than $750,000 in direct costs, a large amount of executive and sales force time, and would lose its investment in purchasing stock, which was substantial.
113 Alphapharm contended that its offered undertaking (not to take any action which would result in the Commonwealth imposing a 12.5% price reduction of Efexor-XR under the PBS), combined with its undertaking to maintain full accounts and proceeds of sale of Enlafax-XR separately, meant that damages or an account of profits would be an adequate remedy for Wyeth. The position is thus different from that before Sundberg J as summarised in [51] and [52] of his Honour's reasons. The proposed limited private launch of Enlafax-XR may cause a modest drop in sales of Efexor-XR up to about 13.5%. Wyeth's evidence grossly exaggerated the likely impact. The fact that other generic venlafaxine products may also enter the market does not make damages or an account of profits impossible. Given Wyeth's intention to restrain all alleged breaches of the method patent, those generic suppliers too could be required to maintain separate accounts on sales of their generic equivalent. A complex calculation should not deter the Court from accepting the adequacy of the remedy (contrary to Sundberg J's conclusion at [56]). Similarly it is not correct that Wyeth could never recover its position if it ultimately succeeded. In that event, Efexor-XR would be the only product on the market (apart from Pristiq).
114 By contrast, Alphapharm's position is not adequately protected by Wyeth's undertaking as to damages if the method patent is found to be invalid. First, Alphapharm was particularly concerned that Wyeth would remove Efexor-XR from the PBS, which would negate Alphapharm's capacity to list. This prompted Wyeth to offer to undertake not to do so until further order. Second, Alphapharm's loss would be hypothetical (lost sales) in the context of Wyeth's continuing cannibalisation of the market for Efexor-XR by Pristiq. Calculating such losses would be far more difficult than the task required to protect Wyeth if an injunction were refused, particularly given that Wyeth could be expected to argue that any changes in the market were not reasonably foreseeable when it gave the undertaking (citing Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd (1981) 146 CLR 249 at 306). Third, the inroads of Pristiq into the market will continue to diminish the market within which Alphapharm, if it succeeds, will be able to compete.
115 Contrary to Sundberg J's finding at [62] that Sigma had proceeded with its "eyes wide open" (citing Interpharma Pty Ltd v Commissioner of Patents at [77]), the fact is, as Mr Hurley said, the pharmaceutical industry involves a myriad of patents, not all of which are enforced. Alphapharm was not aware of the method patent until 19 March 2009 by which time it had made a substantial investment of time and money in Enlafax-XR.