The recent decision in Cipla Australia Pty Ltd v Novo Nordisk A/S [2024] FCA 1414 offers important guidance on patent term extensions (PTEs) and the statutory interpretation of “pharmaceutical substance” under the Patents Act 1990 (Cth).

The Federal Court of Australia upheld a PTE granted for a formulation of liraglutide, a diabetes treatment marketed by Novo Nordisk under the brand name Victoza.

The decision confirms that pharmaceutical formulations, including those containing excipients, qualify as pharmaceutical substances for the purposes of s 70 of the Patents Act and are thus eligible for PTE.

Background

The case involved Australian Patent No. AU2004290862 (862 Patent) relating to formulations of liraglutide, a GLP-1 receptor agonist used to treat type 2 diabetes. Originally set to expire on 18 November 2024, the patent's term was extended to 26 August 2025 following Novo Nordisk’s successful PTE application.

The patent claims two types of formulations, the first comprising liraglutide and two excipients, a tonicity agent of polyethylene glycol and a buffer of disodium phosphate dihydrate; and the second formulation comprising the same but including a third excipient, a preservative.

Cipla intended to launch a generic liraglutide product in January 2025 and sought rectification of the Register under s 192 of the Act, arguing that the 862 Patent did not qualify for a PTE.

What Is a “Pharmaceutical Substance”?

Section 70 of the Patents Act permits PTE only for patents that disclose a “pharmaceutical substance per se.” Relevantly, as defined in Schedule 1 of the Patents Act:

“Pharmaceutical substance means a substance (including a mixture or compound of substances) for therapeutic use whose application (or one of whose applications) involves:

(a) a chemical interaction, or physico-chemical interaction, with a human physiological system; or

(b) action on an infectious agent, or on a toxin or other poison, in a human body;

but does not include a substance that is solely for use in in vitro diagnosis or in vitro testing.”

Cipla’s argument hinged on a narrow interpretation of that definition - that the patent in question did not cover a pharmaceutical substance because it related to formulations (combinations of an active ingredient and excipients), rather than the active pharmaceutical ingredient alone. In this regard, Cipla presented five components to their argument:

• the decisions in H Lundbeck A/S v Alphapharm Pty Ltd [2009] FCAFC 70; 177 FCR 151 (‘Alphapharm (FC)’) and Alphapharm Pty Ltd v H Lundbeck A/S [2014] HCA 42; 254 CLR 247 (‘Alphapharm (HC)’) suggest that a formulation could not be a pharmaceutical substance;

• the ordinary meaning of the definition of “pharmaceutical substance” excluded formulations - the phrase “for therapeutic use” limits pharmaceutical substance only to active ingredients; the phrase “including a mixture or compound of substances” means combination of active ingredients only; and the term “application” means application to the target, which, again, limits pharmaceutical substance only to active ingredients;

• the legislative history and secondary materials of the PTE provisions and the definition of “pharmaceutical substance” show that a formulation could not be a pharmaceutical substance;

• the underlying policy of the PTE provisions supports their preferred construction; and

• while the decisions in Pharmacia Italia SpA v Mayne Pharma Pty Ltd [2006] FCA 305 (‘Pharmacia’) and Spirit Pharmaceuticals Pty Ltd v Mundipharma Pty Ltd [2013] FCA 658 (‘Spirit’) ruled that formulations could be pharmaceutical substances, these decisions pre-date Alphapharm (HC) and the considered versions of the Patents Act.

Furthermore, Cipla also presented an alternative argument that even if formulations could be pharmaceutical substances, Novo Nordisk’s claimed formulations cannot be considered pharmaceutical substances because the excipients in the formulation are inactive ingredients and have no therapeutic use.

The Court’s Reasoning and Decision

In determining the validity of Novo Nordisk’s PTE, Justice Perram undertook a detailed analysis of the legislative history and policy of the PTE provisions, the ordinary meaning of the definition of “pharmaceutical substance”, and relevant case law. His Honour ultimately rejected all of Cipla’s arguments and concluded that “a pharmaceutical substance includes a formulation and has done so since it first appeared in the Act in 1989”.

Legislative history and policy of the PTE provisions

Justice Perram noted that the definition of “pharmaceutical substance” inserted in the Patents Act in 1989 was intended to operate in the same way as the definition of “therapeutic substance” in regulation 2 of Customs (Prohibited Imports) Regulations 1956, which included formulations of therapeutic substances. Later legislative amendments, including the Intellectual Property Laws Amendment Act 1998 which first referred to “pharmaceutical substance per se” and The Intellectual Property Laws Amendment Act 2006 which inserted a new springboarding provision, did not alter or narrow this definition. His Honour also found no evidence of a legislative intention to exclude formulations from PTE eligibility.

Ordinary meaning

The Court also addressed Cipla’s contention that the ordinary meaning of the definition of pharmaceutical substance excludes formulations. One of Cipla’s arguments is that the term "application" in the definition should be read as requiring application to a physiological target (e.g. a GLP-1 receptor). On this reading, only the active ingredients in a formulation would qualify as a pharmaceutical substance, since inactive ingredients (i.e. excipients) do not interact with such targets.

The Court rejected this interpretation and noted that “application” in ordinary usage, can also mean ‘use’ to which the substance is put, which more naturally aligns with the statutory context and legislative history. The Court further found that the phrase “including a mixture or compound of substances” is inclusive, rather than limiting as Cipla contended, and supports the view that formulations can be pharmaceutical substances as long as they are used therapeutically and involve the necessary interaction with human physiology or action on the human body, as dictated by subpart (a) and (b) of the definition.

Case Law

The Court also considered a number of cases concerning the meaning of “pharmaceutical substance”. His Honour found that the decisions in Pharmacia and Spirit both support the proposition that a pharmaceutical substance may include a formulation.

However contrary to Cipla’s argument, his Honour found that Alphapharm (FC) and Alphapharm (HC) both did not address whether a formulation is a pharmaceutical substance. Cipla contended that footnote 40 of Alphapharm (HC), which stated that “the extension of term scheme under the Act covers standard patents for pharmaceutical substances per se pursuant to s 70(2)(a), hence patents for pharmaceutical methods or tablets do not fall within the scheme”, means that a tablet, which is necessarily a formulation, is not a pharmaceutical substance. However, his Honour found that the footnote does not say anything about whether a formulation is a pharmaceutical substance, only that a patent for a tablet is effectively a patent for a method of delivery and that a method patent is not a pharmaceutical substance per se.

Cipla’s Alternative Case

After having found that formulations can be pharmaceutical substances, the Court also went on to consider Cipla’s alternative argument that since the excipients in the formulations have no therapeutic use, the claimed formulations are not pharmaceutical substances. However, his honour found this argument to be a repetition of Cipla’s primary argument and rejected it for the same reasons.

As a result, Cipla’s application to rectify the Register was dismissed, and Novo Nordisk was entitled to injunctive relief to restrain Cipla from launching its product until the expiry of the patent on 26 August 2025.

If you have any questions about pharmaceutical patents or extension of term applications in Australia then please contact Daniel McKinley or Catrina Olivera.

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