In Australia, certain pharmaceutical patents are eligible for a ‘term extension’ of up to 5 years. These extensions are often commercially significant and have increasingly become an attractive target for generic challengers. Two recent Federal Court decisions illustrate that term extensions are available for a broad range of patents, including formulation patents.
Patent term extensions
In Australia, the term of a standard patent is up to 20 years.
However, because pharmaceutical products require extensive assessment for quality, safety and efficacy, the effective lifespan of pharmaceutical patents that protect those products is often much shorter.
To offset this, pharmaceutical patentees may apply for a term extension of up to 5 years if:
- their patent discloses and claims one or more ‘pharmaceutical substances per se’[1] and
- goods containing or consisting of the pharmaceutical substance have regulatory approval in Australia, and at least 5 years passed between the date of the patent and the first such approval.
Which patents are eligible?
To be eligible, a patent must disclose and claim a ‘pharmaceutical substance per se’.
A ‘pharmaceutical substance’ is a substance which (among other things) is ‘for therapeutic use’.
Patents that disclose and claim a new active ingredient will comfortably satisfy this requirement. On the other hand, patents that only disclose and claim a method – for example, a method of making or using a pharmaceutical substance – will not be eligible.
Two recent Federal Court decisions have clarified the eligibility of certain other types of patents.
Pharmaceutical formulations
In Cipla Australia Pty Ltd v Novo Nordisk A/S [2024] FCA 1414 (Cipla), the Federal Court affirmed that pharmaceutical formulations are eligible for term extension.
This decision related to formulations of the diabetes medicine liraglutide. The patent claimed formulations of an active ingredient and 2-3 excipients (inactive ingredients). It was granted a 9-month term extension.
Cipla challenged the extension on the basis that a formulation is not a ‘pharmaceutical substance’.
The Court upheld the extension. Following an extensive analysis, Justice Perram concluded that the phrase ‘pharmaceutical substance’ includes a pharmaceutical formulation. It was immaterial that the excipients in the formulation had no therapeutic use individually.
Substances that are not ‘ready-to-use’
In Sun Pharma ANZ Pty Ltd v Otsuka Pharmaceutical Co Ltd [2025] FCA 44 (Sun Pharma), the Federal Court clarified that a ‘pharmaceutical substance’ does not need to be in a ‘ready-to-use’ form.
This decision related to formulations of the antipsychotic medicine aripiprazole. The patent, which was granted a term extension, included claims for freeze-dried formulations (which must be reconstituted with water before use).
Sun Pharma argued that freeze-dried formulations are not a ‘pharmaceutical substance’ because they are not directly ‘for therapeutic use’ – they must be reconstituted before they can be administered.
The Court rejected this challenge. Justice Downes emphasised that it is the purpose of a substance that determines whether it is a ‘pharmaceutical substance’. In this case, the purpose of the freeze-dried formulations (treating schizophrenia and related disorders) rendered them a pharmaceutical substance, irrespective of the fact that they would require reconstitution before being put to that purpose.
Substances with ‘process features’
In Sun Pharma, the patent also included claims for formulations with ‘process features’, such as a formulation ‘which upon injection releases aripiprazole over a period of at least one week’.
Sun Pharma challenged the term extension on the basis that these process features meant that the claims were not to a ‘pharmaceutical substance per se’.
The Court disagreed. Justice Downes found that, while the claims referred incidentally to process features, they did so merely to better describe the relevant pharmaceutical substance. They were still properly characterised as claims to a pharmaceutical substance per se.
Which approved goods can be relied on?
In Sun Pharma, the Federal Court also endorsed a ‘substance over form’ approach to assessing whether goods containing or comprising the pharmaceutical substance have regulatory approval in Australia.
In that decision, the Court found that certain claims for ready-to-use formulations were eligible for term extension based on regulatory approval for a freeze-dried product. Justice Downes emphasised that what is required is a simple comparison between (a) the pharmaceutical substance disclosed and claimed in the patent, and (b) the ingredients of the approved product.
Key takeaways
These decisions confirm that patent term extensions are available in a broad range of circumstances, including:
- for pharmaceutical formulations
- for non-ready-to-use (eg freeze-dried) preparations
- for substances with process features (eg specified release profiles)
- based on an approved product in a different form.
In light of these decisions, pharmaceutical originators should consider whether any patents in their Australian portfolio may be eligible for term extension (noting that short deadlines apply).
Generics should be aware that challenging term extensions can be a powerful strategy to supplement traditional revocation tactics (despite the outcomes in these two cases).
While the time has now passed for an appeal in Cipla, there is still time for an appeal of the decision in Sun Pharma – and, in fact, Sun Pharma foreshadowed to the Court that it may contend in any appeal that Cipla was wrongly decided. We will report on any updates.
[1] Alternatively, the patent may disclose and claim one or more pharmaceutical substances produced by a process involving recombinant DNA technology.
