Proposed TGA Transparency Reforms: Impact of the changes

Key Takeaways

The TGA has announced ‘Transparency Reforms’ that will – at least on the face of it – require the disclosure of ‘commercial-in-confidence’ information (most notably that an application to list a prescription medicine on the ARTG has been made and is under evaluation by the TGA) either to the public or to competitors.

What are the changes?

This significant departure from Australian regulatory and commercial practice impacts innovators and biosimilar/generic sponsors differently (despite a number of submissions calling for transparency across all medicines):

• Innovators: From January 2021, the TGA will publish information on applications for ‘major’ innovative medicines, including new indications and new combinations, under evaluation by the TGA. The information to be published will include the sponsor name, product name, application type, active ingredients and a summary of the proposed indications.
• Biosimilars and generics: The existing patent holder notification provisions in the Therapeutic Goods Act 1989 (the Act) are to be amended to require applicants for the first generic or biosimilar medicine to notify the patent holder that their application has been accepted for evaluation by the TGA before the evaluation can proceed.

What were the objectives?

The stated objectives of the reforms include increasing transparency for applications under evaluation in a way that balances availability of information to the public while recognising that this information could have commercial value to the applicant, and enabling the earlier resolution of patent disputes between innovators and biosimilars/generics. Whether these objectives have been achieved is debateable.

What impact will the changes have?

The reforms may well have negative ramifications for industry on both sides of the innovator-generic divide. For example, the reforms create an uneven playing field by requiring the disclosure of ‘commercial-in-confidence’ information from some but not all sponsors, either to the world at large (in the case of major innovative medicines, new indications and new combinations) or to one but not all market competitors (in the case of the first generic or biosimilar application). Significantly, submissions from industry in the lead up to the TGA’s recent announcement (including innovators and biosimilar/generic stakeholders) overwhelmingly preferred an open process whereby details of all applications would be published.

Given the earlier notification scheme will only apply to the first generic or biosimilar application, this may create a perverse disincentive for generic or biosimilar companies to be the ‘first mover’, in order to remain ‘off the radar’ until they are registered on the ARTG.

Another potential consequence of the limit to the ‘first’ is that it is not uncommon for innovators to strategically list their own generic brands on the ARTG prior to the registration of the first independent generic product. The TGA is silent on whether, and how, it plans to deal with this approach to ensure that the first independent generic does not escape the earlier notification scheme in this manner.

Conclusion

Overall, the TGA’s recent announcement represents a missed opportunity to introduce genuine and effective reform aimed at increased transparency (for example by introducing a patent linkage register of prescription medicine related patents) and an early notification of relevant patent holders that actually works. Indeed the vagaries and complexity of the notification scheme could simply be avoided by publication of relevant details of all applications.

Earlier publication of major innovator medicine applications

The proposed reform

According to the TGA’s Second Consultation Paper, the Australian Government is proposing to increase transparency for applications under evaluation in a way that balances availability of information to the public, while recognising that this information could have commercial value to the applicant. More specifically, the TGA recently stated that:

“Presently, to the frustration of patients, carers and health practitioners, information on market authorisation approval of a prescription medicine only becomes publicly available with registration in the Australian Register of Therapeutic Goods (ARTG).”

Under the first proposed policy reform, the TGA will publish details about “major innovator medicine applications” within one month of passing preliminary assessment. The new publication regime will apply to new medicines, new combinations of medicines and new indications for an existing medicine, but it will exclude generics and biosimilars.

Although the TGA already has wide-ranging power to publicly publish any therapeutic goods information that relates to a decision or action under the Act (which presumably includes a determination that a listing application has passed preliminary assessment and can be evaluated for registration),² this reform marks a significant departure from the TGA’s long-standing practice of treating all applications and their contents as strictly confidential.³ Indeed the TGA has successfully defended its previous approach of neither confirming nor denying even the existence of an application in response to FOI requests.⁴

Objective achieved?

What is the legislative basis for expanding the TGA’s publication powers?

Presently, the TGA can only state that it can “neither confirm nor deny” receipt of an application for registration for commercial-in-confidence reasons.⁸

As noted above, the TGA already has a power to publish to the public therapeutic goods information that relates to a decision or action under the Act.⁹ Previously, the TGA limited the use of this publication power by not releasing commercially confidential information unless doing so was necessary to inform the public about safe use of therapeutic goods. In particular, the TGA did not release information about the making of applications or about the ongoing evaluation of applications.¹⁰ Whether the legislative basis for the TGA’s proposed publication of “major” applications is covered within the scope of this publication power has not been tested, although this expansive view of the publication power appears to make redundant the numerous other publication and notification powers listed in section 61 of the Act.

Impact on listing applications currently under evaluation?

Despite this, if the TGA does consider itself bound by confidentiality having accepted a listing application as “commercial-in-confidence”, this begs the question: will it publish “major” applications under evaluation as at the date of the policy change, which were submitted under the existing practice of confidentiality? Currently, the proposed reform is slated to commence from January 2021. The TGA has not provided any guidance as to whether this policy change will be applied retrospectively to listing applications made before this date.

Earlier notification for first generic or biosimilar

The proposed reform

The existing patent holder notification scheme in section 26B(1) of the Act requires a generic or biosimilar applicant to certify to the TGA either that:

1. The applicant, acting in good faith, believes on reasonable grounds that it is not marketing, and does not propose to market, its generic medicine in a manner, or in circumstances, that would infringe a valid claim of a patent that has been granted in relation to the listed innovator medicine (a Section 26(1)(a) Certificate); or
2. A patent has been granted in relation to the medicine in question and the generic proposes to market the therapeutic goods before the end of the term of the patent and the applicant has given the patentee notice of the application (a Section 26(1)(b) Certificate).

However, generic and biosimilar applicants rarely use Section 26B(1)(b) Certificates. The TGA has recently noted that these applicants “in practice… do not notify innovator companies of their anticipated entry into the market.”¹¹ Generic and biosimilar applicants instead file Section 26(1)(a) Certificates (ordinarily on the basis that relevant granted patent claims are considered invalid). This has the consequence that the innovator only becomes aware of the application when the generic or biosimilar medicine is listed on the ARTG. The TGA recognises that this industry practice leaves little time for the innovator to consider and prepare for potential patent infringement claims, often leading to the need for costly interlocutory injunctions, that might have been avoided if additional time was available.¹²

The TGA now proposes to amend this scheme in the following manner:

• Sponsors of the first generic or biosimilar medicine in respect of an innovator medicine must notify ‘the patent holder’ that their application has been accepted for evaluation by the TGA before the TGA commences the evaluation. This is intended to ensure patent holder notification will occur earlier in the process, following preliminary assessment.
• The existing (later notification) s26B regime will continue to apply to all other generic and biosimilar applications (following the first).¹³

Objective achieved?

Comparison to comparable regulatory regimes: The EU, Canada and Switzerland deliver transparency of all applications including new molecular entities, generics and biosimilar medicines – a model the TGA has not followed.