Disclosure to the general public is not subject to any restrictionsParty translation – legal authencity rests with the Norwegian decision

[Norwegian Coat of Arms]

OSLO DISTRICT COURT

JUDGMENT --- ---

Date rendered: 31 March 2011 by the Oslo District Court

Case no: 10-128688TVI-OTIR/06

Judge:Deputy Judge Henrik Holtan-Hartwig

Subject matter of the case:

The validity of a decision to include Neupogen on the pharmaceuticals substitution list for pharmacies

Amgen Europe B.V. Advocate Beret Luise Sundet

Amgen AB Norge Norsk Avdeling Av Utenlandsk Foretak

Advocate Beret Luise Sundet

The Association of the Pharmaceutical Industry in Norway

vs.

The State, represented by the Ministry of Health and Care Services

Advocate Christian Lund

- 2 - 10-128688TVI-OTIR/06

JUDGMENT

The case concerns the validity of the decision of the Norwegian Medicines Agency to include Neupogen on the pharmaceuticals substitution list.

Act No. 39 of 2 June 2000 relating to Pharmacies (the ”Pharmacy Act”) introduced, with effect from March 2001, an arrangement permitting pharmacies to substitute requisitioned pharmaceuticals by so-called generically equivalent medicinal products. The Norwegian Medicines Agency (hereinafter referred to as the ”NMA”) has been assigned responsibility for a list, the so-called the substitution list, specifying which medicinal products are deemed to be substitutable. The arrangement implies, in brief, that prescription pharmaceuticals are automatically substituted by another generic medicinal product without prior consultation of the requisitioner, i.e. the physician treating the patient.

Amgen Europe B.V and Amgen AB Norge NUF (hereinafter jointly referred to as the ”plaintiffs”) are subsidiaries of the US pharmaceuticals company Amgen Inc. Amgen AB Norge NUF was established in 2000 as a branch of the Swedish company Amgen AB. The Norwegian branch markets and sells, inter alia, the medicinal product Neupogen to Norwegian hospitals and pharmacies.

Neupogen is a biological medicinal product containing the active ingredient filgrastim. Filgrastim is a protein manufactured from live organisms by way of DNA technology, and is also featured naturally within the human body. Neupogen is used in the prevention of infections following cancer treatment by chemotherapy, or in the context of bone marrow transplants, as well as for patients with a serious and chronic deficiency in white blood cells, or to reduce the risk of infection in patients infected by HIV.

Neupogen was first marketed in Norway in 1997, and is currently marketed on the basis of a marketing authorisation dated 12 September 2005.

On 29 January 2007, Ratiopharm GmbH and Teva Generics GmbH filed applications for marketing authorisation with the European Medicines Agency (hereinafter referred to as the ”EMA”) in respect of the medicinal products Ratiograstim and Tevagrastim, respectively. Both of these medicinal products contain, like Neupogen, the protein filgrastim as an active ingredient, and they were granted marketing authorisation on the basis that they were medicinal products biosimilar to Neupogen. After the EU Commission had approved the products in July 2008, the Norwegian authorities shortly thereafter decided to pass a corresponding national decision.

On 25 January 2010, the NMA circulated a consultation letter, proposing that Neupogen and Ratiograstim/Tevagrastim be included on the substitution list for pharmacies, as generically equivalent medicinal products. On 16 June 2010, the NMA adopted an amendment to the Regulations on the Requisitioning and Delivery of Medicinal Products (Regulations No. 455 of 27 April 1998), pursuant to which the said three medicinal products were included on the substitution list.

On 25 June 2010, the plaintiffs filed a petition for a preliminary injunction against the implementation of the decision. The Oslo Court of Execution upheld the petition, and ordered the plaintiffs to bring legal

- 3 - 10-128688TVI-OTIR/06

action by 1 October 2010. The State refrained from appealing the court order, based on agreement between the parties to the effect that the dispute was best suited for deliberation in a main hearing.

The plaintiffs brought legal action against the State, represented by the Ministry of Health and Care Services, by filing a Writ of Summons of 16 August 2010 with the Oslo District Court, requesting that the decision of 16 June 2010 be declared invalid, and also requesting the reimbursement of its legal costs. The Association of the Pharmaceutical Industry in Norway joined the action as an intervenor for the plaintiffs, pursuant to Section 15-7, Sub-section 1, litra b, of the Civil Procedure Act.

On 17 September 2010, Advocate Christian Lund filed, on behalf of the State, represented by the Ministry of Health and Care Services, a timely Notice of Intention to Defend, requesting that the Court find in favour of the State and also requesting the reimbursement of its legal costs. The parties have submitted additional supplementary pleadings in the case prior to the main hearing.

The main hearing of the case was conducted at the Oslo Court House from 14 to 17 March 2011. The hearing was attended by counsel to the plaintiffs, Advocate Beret Sundet, as well as their of counsel Advocate Andreas Bjørnebye. General Manager Nils Skjæveland gave testimony on behalf of Amgen AB Norge NUF. The State was represented by Advocate Christian Lund as counsel, and Elisabeth Bryn, Head of Department, gave testimony on behalf of the State. 6 witnesses, hereunder 2 experts appointed by the parties, gave testimony at the hearing.

The main arguments invoked by the plaintiffs

The following arguments were invoked in support of their claims by counsel to the plaintiffs in her closing statement:

On 16 June 2010, the Norwegian Medicines Agency adopted an amendment to the Regulations on the Requisitioning and Delivery of Medicinal Products which resulted in the biosimilar medicinal products Ratiograstim and Tevagrastim being included on the substitution list for pharmacies together with the original pharmaceutical Neupogen, cf. Section 6-6, Sub-section 2, of the Pharmacy Act. The decision implies that the pharmacies may, if Neupogen is prescribed by a physician, replace Neupogen by Ratiograstim or Tevagrastim upon delivery, without contacting the physician who prescribed Neupogen.

The plaintiffs argue that Section 6-6, Sub-section 2, of the Pharmacy Act does not give the Norwegian Medicines Agency the legal power to pass such a decision.

Its power to make inclusions on the substitution list for pharmacies is limited to medicinal products that are generically equivalent and medically equivalent.

Neupogen and Tevagrastim/Ratiograstim are biological and biosimilar medicinal products. The plaintiffs argue that the biological and biosimilar medicinal products do not meet the requirement for generic equivalence within the meaning of Section 6-6, Sub-section 2, of the Pharmacy Act.

The plaintiffs argue that the biological and biosimilar medicinal products Neupogen and Tevagrastim/Ratiograstim do not meet the medical equivalence requirement.

- 4 - 10-128688TVI-OTIR/06

Consequently, the plaintiffs argue that the 16 June 2010 decision of the Norwegian Medicines Agency to include the medicinal products Neupogen and Tevagrastim/Ratiograstim on the substitution list for pharmacies is invalid.

The arguments invoked in the closing statement were elaborated on during the main hearing. The following is a brief summary:

The Norwegian Medicines Agency has interpreted the term ”generic medicinal product” in Section 6-6, Sub-section 2, of the Pharmacy Act incorrectly, as only medicinal products with identical chemical substances (active ingredients) may be considered for inclusion on the substitution list.

The term “generic medicinal product” has an established linguistic meaning in a regulatory context, within the pharmaceuticals industry, as well as in the market. Reference is here made to the interpretation expressed in the Medicinal Products Act and in Section 3-8 of the Medicinal Products Regulations.

A standard interpretation of the term ”generic medicinal product” implies that it refers to a copy pharmaceutical whose active ingredient is identical to that of an original pharmaceutical. This is the interpretation adopted by the EU Commission, the Norwegian Medicines Agency, as well as authorities in other countries. Biosimilar medicinal products are not identical to their biological reference medicinal products. The identity of the active ingredients of a biological medicinal product and a biosimilar medicinal product will be determined by the production process. Since the processes will differ between a biological medicinal product and a biosimilar medicinal product, the active ingredient cannot be said to be identical, as can be documented in respect of chemical original pharmaceuticals and generic copies.

The active ingredients of Neupogen and Tevagrastim/Ratiograstim are not the same, but only similar. This is confirmed by the fact that the active ingredients are manufactured from different cell culture lines, and by the fact that there are unavoidable differences in the raw materials and in the production process between the biological original medicinal product Neupogen and the biosimilar medicinal products Tevagrastim and Ratiograstim.

Moreover, it is argued that the requirement that medicinal products included on the substitution list must be medically equivalent is not met either. As far as biological medicinal products and biosimilar medicinal products are concerned, there is no scope for determining whether the medicinal products are medically equivalent, as is the case in respect of chemical medicinal products. This is confirmed by the regulatory framework governing the processes for being granted marketing authorisation in respect of this type of medicinal products. Biosimilar medicinal products are similar to the reference product, but not identical.

There is no scientific justification for arguing that it is safe to replace biological by biosimilar medicinal products. It is argued, on the contrary, from a broad European perspective, that there is a consensus to the effect that it is not deemed to be safe to substitute biological/biosimilar medicinal products, on which grounds a number of countries prohibit such substitution. Potential risks associated with patient safety, especially the risk of immunological reactions, form an important part of the basis for such opposition against the automatic substitution between biological and biosimilar medicinal products. The plaintiffs

- 5 - 10-128688TVI-OTIR/06

refer, in this context, to a number of research reports, as well as statements from national authorities, in particular from Swedish health authorities.

Incidentally, the plaintiffs are not aware of any other country that permits automatic substitution between biological medicinal products and biosimilar medicinal products. This is in sharp contrast to the situation with regard to chemical original medicinal products and generic copies.

The State has in its presentation on the introduction of Neupogen on the substitution list stated that it follows from the basis for their approval as biosimilar medicinal products that Tevagrastim and Ratiograstim are therapeutically equivalent, and therefore medically equivalent, to Neupogen. The plaintiffs argue that this is incorrect, since no such conclusion can be inferred from this documentation. The documentation prepared in connection with the application for marketing authorisation contains no evaluations relating to the automatic substitution of the medicinal products. The relevant documents are clinical studies designed to document the safety and effects of Tevagrastim/Ratiograstim, and not to evaluate risk associated with substitution of the medicinal products in pharmacies.

Furthermore, the plaintiffs are of the view that the Norwegian Medicines Agency holds no special qualifications as far as the assessment of medical equivalence is concerned. It is noted that the NMA has not examined applications relating to marketing authorisation for biological/biosimilar medicinal products. Moreover, it is of relevance that the Substitution Group was not reinforced by additional professionals during its deliberations. No other information than EPAR and subsequent safety reports was gathered in respect of the relevant medicinal products.

The main arguments invoked by the State

The following arguments were invoked in support of its claims by counsel to the State in his closing statement:

The decision of the Norwegian Medicines Agency to include Neupogen on the substitution list together with Ratiograstim and Tevagrastim was made pursuant to Section 6-6, Sub-section 2, of the Pharmacy Act. The prerequisite under the said provision is that the medicinal products are ”generically equivalent”.

The plaintiffs have presented two invalidity objections with regard to the decision of the Norwegian Medicines Agency:

Firstly, it is argued that the relevant medicinal products are not generically equivalent. The plaintiffs premise their argument on the term ”generic medicinal product” as used in the Medicinal Products Regulations.

The State notes, in this regard, that there is no reason why the terminology used in the Medicinal Products Regulations should determine the interpretation of the provisions of the Pharmacy Acts concerning the substitution of medicinal products. The State notes, in particular, that the Medicinal Products Regulations are implemented EU regulations, with the relevant term (”generic medicinal product”) having beenintroduced long after the adoption of the Pharmacy Act. The provisions of the Pharmacy Act concerning

- 6 - 10-128688TVI-OTIR/06

the substitution of medicinal products represent national legislation, and Norway is at liberty to adopt whatever substitution provisions it may prefer.

Consequently, the State argue that the requirements under the Pharmacy Act imply that medicinal products on the substitution list need to have (1) the same active ingredient, (2) the same pharmaceutical form, (3) the same strength, and that they are (4) medically equivalent. The State will argue that all of these requirements are met. The State refers, in particular, to the wording of the statute, as read in the context of its legislative history.

Secondly, the plaintiffs argue that the relevant medicinal products are not medically equivalent.

This argument means that the plaintiffs are inviting the Court to review the discretionary medical assessment of the Norwegian Medicines Agency. The State will argue that the Court should exercise restraint in such regard, cf. the principle expressed in, for example, the ruling published in the 2010 volume of the Retstidende court reporter for the Supreme Court, p. 1555.

The State will, under any circumstance, argue that the medical equivalence requirement is met. The Norwegian Medicines Agency has in this context assessed all relevant factors in an adequate manner.

The arguments invoked in the closing statement were elaborated on during the main hearing. The following is a brief summary:

The State argues that the requirement under the Pharmacy Act that the medicinal products shall be ”generically equivalent” does not represent a requirement that the medicinal products shall be ”generic” within the meaning of Section 3-8, Sub-section 1, litra b, and Section 3-9, Sub-section 7, of the Medicinal Products Regulations. It is the legislative history of the Pharmacy Act that may be of relevance to the assessment as to whether the prerequisites for qualifying as generically equivalent have been met. The terminology in subsequent EU-implemented legislation is of little relevance to the interpretation of the requirements under the Pharmacy Act. It is noted that the Pharmacy Act was drafted prior to the establishment of a definite meaning of the term generic medicinal product. It is of relevance in this context that Norwegian case law contains indications to the effect that the Pharmacy Act should not be interpreted in accordance with the Medicinal Products Act and its appurtenant regulations, as far as the interpretation of the term ”generically equivalent medicinal products” is concerned, cf. the judgment rendered by the Borgarting Court of Appeal on 15 August 2007.

It is argued that policy considerations and regard for the purpose of the legislation suggest that the term ”generically equivalent medicinal products” should be interpreted to also encompass biological and biosimilar medicinal products. It is noted, in this regard, that the considerations that motivate the substitution list apply in full to biological medicinal products as well. Besides, the lawmaker harbours an explicitly expressed desire to reduce expenditure on this type of medicinal product as well.

The State therefore argues that there is no reason to exclude biological medicinal products from the scope of the Pharmacy Act. A specific assessment needs to be performed as to whether the relevant medicinal product meets the requirements under the Pharmacy Act. The requirement under the Pharmacy Act that the active ingredient shall be the same has been met, since Neupogen, Tevagrastim and Ratiograstim all

- 7 - 10-128688TVI-OTIR/06

contain filgrastim as the active ingredient. It is noted that the marketing authorisation is granted on the exact basis that the active ingredients are the same. Moreover, it has not been contested that these have the same pharmaceutical form and strength.

As far as the assessment as to whether the filgrastim products are medically equivalent is concerned, the State argues that the Court needs to exercise restrained when it comes to reviewing the professional medical evaluations of the Norwegian Medicines Agency. This type of assessment requires a special degree of expert knowledge and experience. It is also of importance that the Norwegian Medicines Agency has performed an objective evaluation of documentation originating from a number of strong interest groups.

It is noted, in support of the argument that the State has performed a sound evaluation, that Tevagrastim and Ratiograstim have been approved on the basis of their similarity to Neupogen. The filgrastim products are amongst the simplest of biological medicinal products and represent, under any circumstance, a very limited risk of serious immunological reactions. There exists no documentation in support of the arguments of the plaintiffs to the effect that substitutions of medicinal products are problematic in themselves.

The State argues, moreover, that there are no grounds for criticising the handling of the matter on the part of the Norwegian Medicines Agency, or the evaluated documentation. All relevant documentation pertaining to the medicinal products has been evaluated.

Finally, it is argued that it cannot be accorded any weight for purposes of the assessment that practising physicians are more restrictive in their views on automatic substitution.

The assessment of the Court

Section 6-6 of the Pharmacy Act is worded as follows:

”Medicinal products shall be delivered exactly as prescribed and requisitioned.

The pharmacy may, irrespective of Sub-section 1, substitute a requisitioned medicinal product by a generically equivalent medicinal product and by a parallel imported medicinal product if the Ministry has approved the medicinal products as substitutable. Such substitution shall not take place against the explicit wish of the requisitioner or the customer. If requested by the requisitioner, the pharmacy shall inform the requisitioner that such substitution has taken place.

The Ministry may issue administrative regulations stipulating that the requisitioner shall in each individual case record the reason why generic substitution pursuant to Sub-section 2 is undesirable.

The pharmacy shall upon delivery against a prescription contribute to the customer receiving sufficient information about the medicinal product to enable it to be used correctly.”

- 8 - 10-128688TVI-OTIR/06

Responsibility for approving medicinal products as substitutable pursuant to Sub-section 2 of the provision has been delegated to the NMA. Which medicinal products are substitutable at any given time follows from the NMA substitution list, which has been incorporated into the Regulations on the Requisitioning and Delivery of Medicinal Products from Pharmacies (Regulations No. 455 of 27 April 1998), cf. Section 8-7, Sub-section 2, of the Regulations.

The plaintiffs argue that the NMA lacks the legal power to include Neupogen on the substitution list, and that the decision is therefore invalid. It is stated that Neupogen is not generically equivalent to the medicinal products Ratiograstim and Tevagrastim, and that automatic substitution of the medicinal products would be in conflict with the main rule that medicinal products shall be delivered in conformity with the prescription from the physician, cf. Section 11 of the Healthcare Personnel Act and Section 6-6, Sub-section 1, of the Pharmacy Act.

The Pharmacy Act does not provide a specific definition as to what constitute generically equivalent medicinal products. The legislative history of the Pharmacy Act include, on p. 150 of Proposition No. 29 (1998-1999) to the Odelsting, a definition as to what the Ministry means by a ”generically equivalent medicinal product”:

”By generically equivalent medicinal products are meant synonymous medicinal productions, i.e. medicinal products with the same active ingredient, the same pharmaceutical form and the same strength, but normally from different manufacturers.”

In the same paragraph, the Ministry has stipulated an additional requirement in relation to inclusion on the substitution list:

”However, it is a requirement for classifying a medicinal product as a synonymous medicinal product or parallel medicinal product for purposes of this provision that the Norwegian medicines authorities have evaluated and approved the relevant medicinal products as medically equivalent and thereby substitutable”

The following perspectives are outlined on p. 95 of the same document from the legislative history, under the heading ”Generic and parallel substitution”:

”Scope for generic substitution, or generic replacement, means that the pharmacy may deliver a medicinal product that is synonymous with the medicinal product requisitioned on the prescription. A medicinal product is synonymous with another if it contains the same chemical substance (active ingredient) in the same strength and pharmaceutical form, and the medicinal product authorities have found the two medicinal products to be medically equivalent. The medicinal products are normally manufactured by different pharmaceuticals manufacturers and have different names and packages. The appearance and taste of the medicinal products may also differ, but the therapeutic effect on the patient is the same. Synonymous medicinal products are in many cases less expensive than the original pharmaceutical. The same requirements as to quality, safety and effect apply to all synonymous medicinal products.”

- 9 - 10-128688TVI-OTIR/06

A corresponding definition can be found in the NOU 1997:6 Green Paper, which also forms part of the legislative history of the Pharmacy Act. The following is quoted from p. 154 thereof:

”Generic medicinal products are in many cases less expensive than original pharmaceuticals. The same requirements as to quality, safety and effect apply to all generic medicinal products.”

It is not disputed between the parties that the Pharmacy Act, in referring to generic equivalence, stipulates a requirement that the medicinal products must, in order to be substitutable, have the same active ingredient, the same pharmaceutical form, the same pharmaceutical strength, and that the medicinal products must also be medically/therapeutically equivalent. For purposes of assessing whether the NMA lacked the requisite substantive power when it chose to include Neupogen and Ratiograstim/Tevagrastim on the substitution list, the Court must primarily take a view on what is implied by the requirement that the medicinal products must have the ”same active ingredient[s]”, secondarily on whether the NMA has performed an incorrect evaluation of the medical/therapeutic equivalence of the medicinal products. It is not disputed that Neupogen and the two other medicinal products have the same strength or the same pharmaceutical form.

Both assessments relate to the NMA’s exercise of discretion in its application of law, all aspects of which are subject to review by the District Court.

The plaintiffs have argued that the term ”generically equivalent medicinal products” in Section 6-6, Sub-section 2, of the Pharmacy Act must be interpreted as stipulating a requirement that the medicinal products shall have identical active ingredients, and that it is not sufficient for the medicinal products to have equivalent/similar active ingredients. It is stated, in particular, that this follows from a natural linguistic interpretation of the term, but also that the legislative history – both prior and subsequent to the adoption of the Pharmacy Act – as well as the purpose of the Act and policy considerations, suggest that this is the appropriate interpretation. The State has denied that such an interpretation of the term is justified, and has in the main referred to the same sources of law, as well as to case law.

The Court concludes, based on the presentation of extensive evidence, that it has been demonstrated to be probable that the word ”generic” is within the pharmaceuticals area at present usually used about synthetic medicinal products whose chemical composition is identical to that of the original pharmaceutical. Likewise, it would appear that biosimilar medicinal products are not, in general language use, referred to as generic medicinal products. The Court refers, in this context, to witness testimony from Nils G. Skjæveland, Willard Dere, Reina Heikila and Professor Jo Klavenes, who all use the term in this sense. Furthermore, it follows from the bulk of the written evidence submitted in the case that the pharmaceuticals industry, practising clinicians, as well as Norwegian and foreign pharmaceuticals authorities, primarily refer to synthetic copy pharmaceutics when using the term ”generic medicinal product”. In this regard, the Court refers, in particular, to the EMA Guidelines on Similar Biological Medicinal Products, as well as to a statement from the EU Commission (Nicolas Rossignol) to US Committee HELP. Reference is also made to a set of minutes from the NMA Substitution Group, dated 5 January 2010, in which the Norwegian pharmaceuticals authorities would appear, contrary to what has been argued by the State in the case, to make a linguistic distinction between ”generics” on the one hand and ”biosimilars” on the other hand. The conclusion that the term biosimilar medicinal products, linguistically speaking, is not used in reference to generically equivalent medicinal products is further

- 10 - 10-128688TVI-OTIR/06

supported by the definition of generic medicinal products in Section 3-8, Sub-section 1, litra b, of the Medicinal Products Regulations, cf. Article 10, second paragraph, of Directive 2004/27/EC. It must therefore be concluded that the term generic medicinal product does not, based on a natural linguistic interpretation, include biological and biosimilar medicinal products.

Furthermore, the plaintiffs have argued that the legislative history and purpose of the Pharmacy Act suggest that the word “generic” should not be interpreted liberally, such as to also enable biosimilar medicinal products with equivalent/similar active ingredients to be classified as substitutable. The State has argued that the legislative history does not merit such a conclusion, and argues that the considerations that form the reason for the establishment of the substitution list will apply correspondingly to biological medicinal products as well.

The Court has concluded, for purposes of this assessment, that the purpose of the lawmaker in drafting the provisions of the Pharmacy Act concerning a substitution list in the late 1990s was to regulate to scope of the public administration for including the chemical medicinal products existing at that time on the substitution list for pharmacies. At the time of the drafting of the Act there did not exist, according to the information presented to the Court during the proceedings, approved biosimilar medicinal products in Norway or elsewhere in Europe. Such medicinal products were only introduced on the medicinal product market several years later. This is confirmed by the fact that the Ministry, in the legislative history of the Pharmacy Act, makes no distinction whatsoever between chemical and biological medicinal products – a distinction than has been commented extensively on in subsequent EU implemented legislation. It would appear that the drafting of the regulatory framework did not cater for issues relating to the substitution of other medicinal products than those manufactured through purely chemical technology. The Court refers, in this context, to the testimony from the expert witness Steinar Madsen, Head Senior Consultant, to the effect that the pharmaceuticals authorities did not, at the time of drafting the Pharmacy Act, harbour any expectations that biological medicinal products would develop as currently manifested.

It is not disputed that the specific purpose of the provisions on the automatic substitution of medicinal products in pharmacies is for the State to save expenditure on medicinal products, by way of the introduction of generic medicinal products resulting in enhanced price competition between the various pharmaceuticals manufacturers. The witness Bryn from the NMA testified that the annual savings of the State as a result of the substitution list and the step price system are in excess of NOK 1 billion a year. The considerations that have to be balanced against each other in drafting this regulatory framework follow from the legislative history of the Pharmacy Act, cf. Proposition No. 29 (1998-1999) to the Odelsting, p. 236:

”The scope for parallel and generic substitution of requisitioned medicinal products belong to a relatively limited set of policy tools that are likely to encourage price competition between pharmaceuticals manufacturers and pharmaceuticals importers. Consequently, such measures are of considerable interest in relation to the objective of curtailing the growth in medicinal product reimbursements under the National Insurance system. However, such arrangements may have negative implications for patients. The measures must therefore be designed and practised in such a manner as to attend to the interests of patients and to promote the realisation of health policy objectives”.

- 11 - 10-128688TVI-OTIR/06

A key issue in the case has been particularly focused on how far the NMA is entitled to go to promote health policy objectives, given the powers currently conferred on it under Section 6-6, Sub-section 2, of the Pharmacy Act. The statutory provision gives the NMA the power to balance patent safety considerations against economic considerations in specific cases, by introducing new medicinal products on the substitution list. However, the lawmaker has in the legislative history – both prior and subsequent to the adoption of the Pharmacy Act – stipulated clear guidelines, which define limits to the NMA’s exercise of its powers.

The Court is of the view that there is good reason to conclude that the NMA, and the District Court in the present action, cannot adopt a liberal interpretation of the powers granted. It is noted, in this regard, that the relevant area is subject to strict statutory regulation, and that the NMA manages a narrow exemption from the exclusive right of physicians to requisition medicines for their patients. Furthermore, the fact that the limits to these powers that are defined in the legislative history must – clearly – be concluded to be insufficient in the face of emerging new medical technology, suggests a need for a restrictive interpretation of the term contested in these proceedings. Specifically, a liberal interpretation of the exemption provision in Section 6-6, Sub-section 2, of the Pharmacy Act might affect patient safety in a manner that would require prior discussions at the political level. Consequently, the Court agrees with the views of the plaintiffs in this regard.

Moreover, the Court has noted the clear opposition against the automatic substitution of biological medicinal products against medical professionals, as expressed through the witness testimony and documentation of opposition from health professionals and the health authorities in other countries. The said circumstances indicate that the NMA should in this case not be permitted to embark on bold interpretations of the powers conferred on it under Section 6-6, Sub-section 2, of the Pharmacy Act. In this regard, the Court refers, in particular, to the evaluation of the Swedish Medical Products Agency, which has reached the following conclusion in relation to substitutability between biological and biosimilar medicinal products:

”In summary, it is the current opinion of the Swedish Medical Products Agency that biological medicinal products are not held to be substitutable even if they are approved on the basis of demonstrated biosimilarity”

Reference is also made to the testimony from the witnesses Lehne and Stensvoll, who are both physicians involved in the treatment of patients, and who clearly state that they would object to substitution if different medicinal products with filgrastim as the active ingredient are included on the substitution list for pharmacies. The Court is of the view that the above confirms, together with other evidence presented in the case, that there is clear and broad-based professional scepticism against the automatic substitution of biological medicinal products in general and the substitution of Neupogen by Ratiograstim/Tevagrastim in particular. The Court is of the view that this represents, in itself, an argument against a liberal interpretation of the term ”generically equivalent medicinal products” in relation to this type of medicinal products.

Finally, the plaintiffs have argued that technical legal considerations suggest that the interpretation of the term should be in conformity with that in Sections 3-8 and 3-9 of the Medicinal Products Regulations.

- 12 - 10-128688TVI-OTIR/06

The State has contested this, and has referred, inter alia, to the Borgarting Court of Appeal judgment designated as LB-2006-25275.

The Court of Appeal states, when presenting the reasoning behind its conclusion, that the Pharmacy Act shall not be interpreted in conformity with the Medicinal Products Act with appurtenant regulations. The parties have referred, in particular, to the following statement from the Court of Appeal:

”The Court of Appeal is unable to conclude – whether from the wording of Section 6-6, Sub-section 2, of the Pharmacy Act or from the legislative history of the said statutory provision – that weight shall be attached to the approval process for various medicinal products in Norway, for purposes of the assessment as to what constitutes a ”generically equivalent” medicinal product. There is nothing to suggest that the basis for granting marketing authorisation in respect of each individual medicinal product shall have any impact on such assessment. The statutory wording does not refer to the criteria for obtaining marketing authorisation, and neither does the legislative history include any reference to the Medicinal Products Act and the Medicinal Products Regulations in this context. The Court of Appeal is also of the view that there is no natural link between the substitutability of medicinal products and the basis for granting marketing authorisation in respect of each individual medicinal product. These regulatory frameworks originate from two different statutes; the Pharmacy Act and the Medicinal Products Act. The fact that a medicinal product must have marketing authorisation and must have entered such authorisation into use to be included on the substitution list, does not imply that Section 6-6, Sub-section 2, of the Pharmacy Act must be interpreted in conformity with the Medicinal Products Act with appurtenant regulations.”

This dispute concerned, as follows from the above quote, the correct interpretation of the term ”generically equivalent medicinal product”. The Court’s understanding of the said judgment implies that the subject matter of the present case differs, in decisive respects, from the said case before the Court of Appeal, which impacts on the assessment as to the relevance of such judgment to the Court’s interpretation of the provisions of the Pharmacy Act. The Court does not agree with the State that the reasoning in the Court of Appeal judgment implies that the District Court cannot, in interpreting the said term in the Pharmacy Act, find relevance in other legislation within the area, despite the Court of Appeal having adopted such a view in the said proceedings.

In such proceedings, the Court of Appeal did not agree that the Court should, under reference to the Medicinal Products Act with appurtenant regulations, add, by way of interpretation, an additional requirement (separate application process) for substitutability under the Pharmacy Act, on top of the requirements already evident from the legislative history – i.e. that the medicinal products shall have the same active ingredient, the same strength, the same pharmaceutical form, and also be medically equivalent. In the present case, on the other hand, it is argued that the Medicinal Products Act with appurtenant regulations is relevant for purposes of clarifying the meaning of one of the requirements for substitutability – specifically the requirement that the products have the same active ingredient – and the Court is of the view that this puts the matter into a different perspective.

More specifically, the present case does not involve sources of law that offer much guidance as to the interpretation of the term “active ingredient”, which indicates that the Court must adopt a somewhat broader approach to the various sources of law in its interpretation than did the Court of Appeal in LB-

- 13 - 10-128688TVI-OTIR/06

2006-25275. Besides, the present case differs inasmuch as it must be said to feature a closer link between the substitutability of the medicinal products (which is governed by the Pharmacy Act) and the specific active ingredient of the various medicinal products (which is governed by both the Pharmacy Act and the Medicinal Products Regulations), than was the case in the proceedings where the Court of Appeal stated that there is no natural link ”between the substitutability of medicinal products and the basis for granting marketing authorisation in respect of each individual medicinal product”.

Against this background, where the definition of ”generically equivalent medicinal product” is not specified in any further detail in the Pharmacy Act, and the legislative history leaves the interpretation of the requirement ”same active ingredient” open to doubt, the Court is of the view that it will be entirely appropriate to look at how the term is used in other legislation. In other words, it can be assumed, in the absence of any indications to the opposite effect, that the interpretation of terminology between the key statutes and administrative regulations within the pharmaceuticals area will be characterised by a certain conformity. Moreover, the Court deems it appropriate to point out that there is a natural link between these regulatory frameworks, although such regulatory frameworks have their origins in two different statutes. In this regard, it is noted, inter alia, that the pricing of products that are included on the substitution list pursuant to Section 6-6, Sub-section 2, of the Pharmacy Act; the so-called step price system, which is of key importance to realising the objectives reflected in the legislative history of the Pharmacy Acts, is in fact governed by Section 12-14 of the Medicinal Products Regulations.

Section 3-8 of the Medicinal Products Act stipulates the following definition of the term ”generic medicinal product”, under the heading ”special definitions” in the chapter ”Basic requirements applicable to an application for marketing authorisation”:

”generic medicinal product: a medicinal product with the same qualitative and quantitative composition of active ingredients and the same pharmaceutical form as the reference medicinal product, and which bioequivalence with the reference medicinal product is demonstrated through relevant bioavailability studies. Different pharmaceutical forms with immediate release for oral use are considered to be one and the same pharmaceutical form. The various salts, esters, ethers, isomers, isomer mixtures, complexes or derivatives of an active ingredient are considered to be the same active ingredient unless the difference results in a significant discrepancy in characteristics with regard to safety and/or effect.” (emphasis added by the Court.)

Reference is also made to Section 3-9, Sub-section 7, of the same Regulations, which stipulates the following:

”If a biological medicinal product does not fall within the scope of the definition of a generic medicinal product due to differences resulting from the raw materials, or because the production processes of the biological medicinal product and the biological reference medicinal product differ, findings from relevant toxicological, pharmacological and clinical studies shall be submitted. The documentation shall be in compliance with the requirements in Annex I to Directive 2001/83/EC, as amended by Directive 2003/63/EC, Directive 2004/24/EC and Directive 2004/27/EC or, if the medicinal product is for animal use, Annex I to Directive 2001/82/EC, as amended by Directive 2004/28/EC and Directive 2009/9/EC.”

- 14 - 10-128688TVI-OTIR/06

The Court finds, given the above circumstances, that Section 6-6, Sub-section 2, of the Pharmacy Act must be interpreted, under reference to the term ”generically equivalent medicinal products”, as stipulating a requirement that the medicinal products must have identical active ingredients.

The Court must therefore determine whether Neupogen and Ratiograstim/Tevagrastim have identical active ingredients, based on the Court’s interpretation of the requirements under the Pharmacy Act.

The plaintiffs have argued that biological and biosimilar medicinal products cannot have identical active ingredients, and that this has to do with the process used in the production of the protein filgrastim varying from manufacturer to manufacturer. The State has contested this, and has stated that it has not been demonstrated to be probable that there are differences between the active ingredients of Neupogen and Ratiograstim/Tevagrastim.

Each of the parties has presented testimony from an expert witness in the case, both of which witnesses testified about, inter alia, this issue.

In relation to the assessment of the similarities and differences between the active ingredients, the expert witness called by the plaintiffs, Professor Jo Klaveness, started out by explaining that biological medicinal products have, in general, a highly complex structure, and that such structure is normally divided into four different structures; primary structure, secondary structure, tertiary structure and quaternary structure, respectively. He described that available instruments are only able to fully categorise the primary structure of the active ingredient, and that it will consequently not be practicable to document the exact similarity between biological active ingredients as far as the three other structures are concerned. Moreover, he described how the production process for biological medicinal products, hereunder the fact that the manufacturers use different cell cultures, implies that the active ingredients of the various medicinal products cannot be identical. Furthermore, Professor Klaveness stated that products with the same primary structure may have completely different functionalities as the result of differences in their secondary, tertiary and quaternary structures. Finally, Professor Klaveness stated that biosimilar medicinal products are intended to be ”copy pharmaceuticals” of biological medicinal products, but will in practice not have active ingredients that are identical to the original biological medicinal product.

The expert witness called by the State, Steinar Madsen, Head Senior Consultant, described, with regard to the similarity between the active ingredients, that there is no difference between Neupogen and Ratiograstim/Tevagrastim, whether in terms of biochemistry (amino acid chain, structure), contamination, the formation of antibodies or in terms of clinical safety and effect. He further described that the effect of filgrastim in the said medicinal products is the same on the relevant receptor in the bone marrow cells. Moreover, he testified that no other product-specific side effects have been reported in patients that have used Ratiograstim/Tevagrastim, compared to those using Neupogen. Finally, he stated that the active ingredients of the medicines are not completely identical, but as similar as possible.

The witness Willard Dere, who works for the US parent company of the plaintiffs, also gave testimony in this regard. He confirmed, in the main, the information submitted through Professor Klaveness’ testimony.

- 15 - 10-128688TVI-OTIR/06

The Court is of the view that Section 3-9, Sub-section 7, of the Medicinal Products Regulations, when read in conjunction with Section 3-8, Sub-section 1, litra b, of the same Regulations, will be of relevance to the assessment as to whether or not the active ingredients of the two medicinal products are identical. The provisions stipulate a simplified requirement for marketing authorisation in respect of chemical copy pharmaceuticals, whilst stipulating somewhat stricter requirements in respect of biological medicinal products, due to ”differences resulting from the raw materials, or because the production processes of the biological medicinal product and the biological reference medicinal product differ”. The Court is of the view that the Regulations describe exactly the fact emphasised by the witnesses Klaveness and Dere before the Court, i.e. that biological medicinal products and their biosimilar copy pharmaceuticals are not sufficiently similar to enable them to be approved for marketing in the same manner as chemical generic medicinal products. The differences between the biological and the biosimilar medicinal products have occasioned a requirement for mandatory toxicological, pharmacological and clinical tests. The Court notes, however, that the wording of the Regulations is not as categorical as was the testimony from the said witnesses, inasmuch as Section 3-9, Sub-section 7, allows for the possibility that some biosimilars may also fall within the scope of the definition of generic medicinal products.

It is not disputed that Ratiograstim and Tevagrastim, as biosimilar medicinal products, fall within the scope of the definition in Section 3-8, Sub-section 1, litra b, of the Regulations. The medicinal products have been subjected to a requirement, when applying for marketing authorisation, to document the said toxicological, pharmacological and clinical tests, cf. Section 3-9, Sub-section 7, of the Regulations and Article 10, second paragraph, of Directive 2004/27/EC.

The Court is inclined to conclude, against this background, that Professor Klaveness has provided a correct description as to how the specific structure of the protein used in Ratiograstim and Tevagrastim differs from the protein used in Neupogen. Consequently, the Court concludes that the active ingredient, i.e. the protein filgrastim, is not identical in the three medicinal products.

It will not be relevant, given the interpretation of Section 6-6, Sub-section 2, of the Pharmacy Act adopted by the Court, whether the active ingredients are similar, or ”as similar as possible”, as testified by the witness Steinar Madsen. Neither is it of importance that the WHO has allocated a separate so-called INN to filgrastim as an active ingredient, as it has been demonstrated to be probable that INN designation only documents that the proteins belong to the same molecular family – with identical primary structure – but not that the other relevant parts of the proteins are the same. It will not, for the same reason, be of relevance to the assessment of substitutability that the biosimilar medicinal products (Ratiograstim/Tevagrastim) have been granted marketing authorisation on the basis of them having the same active ingredient as Neupogen. Also in this respect is the primary structure the decisive factor, and not the secondary, tertiary and quaternary structures of the medicinal product.

It follows from this that Neupogen is not a medicinal product that is generically equivalent to Ratiograstim/Tevagrastim, and that the NMA has acted outside its substantive powers in its substitutability evaluation.

The NMA did not have the requisite power to decide, as it did on 16 June 2010, to include the medicinal products Neupogen, Tevagrastim and Ratiograstim on the substitution list for pharmacies. The said decision involved an amendment to the Regulations on the Requisitioning and Delivery of Medicinal

- 16 - 10-128688TVI-OTIR/06

Products from Pharmacies, and Section 41 of the Public Administration Act shall consequently not apply directly. However, it follows from established case law, as well as from legal theory, that administrative regulations may also be deemed invalid due to a lack of substantive power. Consequently, the request of the plaintiffs for the 16 June 2010 decision of the State, represented by the Ministry of Health and Care Services, to include Neupogen/filgrastim on the substitution list for pharmacies to be declared invalid is upheld.

Since the plaintiffs have prevailed with their argument that the medicinal products are not generically equivalent, the issue associated with the medical equivalence of the medicinal products will not be addressed in the following.

Legal costs

It follows from the preliminary injunction order of the Oslo Court of Execution, dated 29 June 2010, in Case 10-102446TVI-OBYF/2, that the awarding of legal costs in relation to the petition filed by the plaintiffs should be postponed until the rendering of a judgment, if any, by the District Court. The plaintiffs’ petition for a preliminary injunction was upheld in full, without any oral hearing being conducted, cf. Section 32-7, Sub-section 2, of the Civil Procedure Act.

Likewise, the plaintiffs’ request for the decision of the Norwegian Medicines Agency to be declared invalid as the result of insufficient substantive powers has been upheld in the present proceedings.Consequently, the District Court has also found in favour of the plaintiffs in all respects. The issue of legal costs relating to both proceedings will therefore be deliberated jointly, pursuant to the provisions of Section 20-2, cf. Section 20-5, of the Civil Procedure Act.

Advocate Beret Sundet has in a supplementary pleading of 25 March 2011 filed a legal cost specification. The specification requests the reimbursement, on behalf of Amgen Europe B.V and Amgen AB Norge NUF, of legal fees in the total amount of NOK 1,400,000, exclusive of VAT. NOK 275,200 of this is allocated to the drafting and filing of the petition for a preliminary injunction. Furthermore, the Association of the Pharmaceutical Industry in Norway has requested the reimbursement of legal fees in the total amount of NOK 225,375.

In addition, the specification requests the reimbursement of additional legal costs in the amount of NOK 722,182, inclusive of VAT, which primarily concern expenses on the expert privately appointed by the plaintiffs, Jo Klaveness (NOK 466,400, exclusive of VAT) and disbursements relating to the translation of supplementary pleadings and interpretation before the Court (NOK 87,192, exclusive of VAT). The remainder of the claim concerns disbursements relating to travel and subsistence for the witness Willard Dere and the representative of Amgen Europe B.V., Alexandre Mencik, as well as miscellaneous disbursements in connection with the case.

In comparison, the State submitted a legal cost specification in the amount of NOK 130,000, comprised entirely of legal fees. Advocate Lund objected, during the main hearing, to the amount of the legal costs of the plaintiffs and stated, in particular, that the filing of a petition for a preliminary injunction should to a larger extent have been reflected in the form of savings with regard to the time spent on filing a Writ of Summons in the case.

- 17 - 10-128688TVI-OTIR/06

The Court takes the view that the case has required extensive preparation, and that there has been a special need for expert assistance to shed sufficient light on the facts of the case. Expenses associated with the report and testimony from the witness Klaveness have therefore undoubtedly been necessary, cf. Section 20-5 (1) of the Civil Procedure Act. Neither has this been contested by the State. As far as the legal fee claim from Advocates Sundet and Bjørnebye is concerned, the immediate perception of the Court is that the claim is somewhat high, based on the fact that the court hearing lasted for four court days. A more detailed review leads to the conclusion that the number of hours – given the hourly rate –for work subsequent to the filing of the Writ of Summon on behalf of the companies Amgen Europe B.V and Amgen AB Norge NUF is excessive. The magnitude of the case does not suggest that it has been necessary to incur costs in the form of legal fees for 136 hours, at an hourly rate of NOK 3,300, from the filling of the Writ of Summons and until the main hearing. Moreover, the time spent under the other items also seems to be somewhat in excess of what can be accepted as necessary expenses. The legal fee claim relating to the said companies is therefore reduced, on a discretionary basis, by NOK 320,000 to NOK 800,000, exclusive of VAT. The claim submitted on behalf of the intervenor, the Association of the Pharmaceutical Industry in Norway, is deemed to be reasonable, given the magnitude and complexity of the case, and is accepted in accordance with the specification.

The Court has no further comments in respect of the legal costs, thus implying that the additional costs are accepted in accordance with the legal cost specification, hereunder the expenses associated with court fees.

The Court assumes, as stated in the legal cost specification, that Amgen Europe B.V, as a foreign company, and the Association of the Pharmaceutical Industry in Norway are not entitled to the refund of Value Added Tax, and that such tax qualifies as legal costs for purposes of the statutory liability for legal costs. Correspondingly, the Court operates on the assumption that the claim will be reduced if Value Added Tax is refunded.

The Court has therefore concluded that the State shall reimburse the legal costs of Amgen Europe B.V.and Amgen AB Norge NUF in the amount of NOK 1,722,182, including Value Added Tax. Furthermore, the State shall reimburse the legal costs of the Association of the Pharmaceutical Industry in Norway in the amount of NOK 225,375. Finally, the State is ordered to pay the court fee with regard to the case.

- 18 - 10-128688TVI-OTIR/06

CONCLUSION

1. The decision of the State, represented by the Ministry of Health and Care Services, of 16 June 2010 to introduce Neupogen/filgrastim on the substitution list for pharmacies is invalid.

2. The State, represented by the Ministry of Health and Care Services, is ordered to pay the legal costs of Amgen Europe B.V. and Amgen AB Norge NUF in the amount of 1,722,182 – one million seven hundred and twenty two thousand one hundred and eighty two – Norwegian kroner, which included Value Added Tax and legal costs in relation to Case No. 10-102446TVI-OBYF/2 of the Oslo Court of Execution.

3. The State, represented by the Ministry of Health and Care Services, is ordered to pay the legal costs of the Association of the Pharmaceutical Industry in Norway in the amount of 225 375 – two hundred and twenty five thousand three hundred and seventy five – Norwegian kroner, which included Value Added Tax.

Court adjourned

Henrik Holtan-Hartwig

Guidance notes on the right of appeal in civil actions are appended.

- 19 - 10-128688TVI-OTIR/06

Guidance notes on the right of appeal in civil actions

The provisions of Chapters 29 and 30 of the Civil Procedure Act on appeal to the Court of Appeal and the Supreme Court govern the right of the parties to have judicial rulings reviewed by the courts above. There are certain differences between the provisions of the Civil Procedure Act in relation to appeals over judgments, appeals over court orders and appeals over decisions, respectively.

The time limit for filing an appeal is one month from the date on which the ruling was served or communicated, unless otherwise explicitly specified by the court.

The appellant must pay a processing fee. The court that gave the ruling can provide more detailed information about the amount of the fee and how to pay it.

Appeal to the Court of Appeal over a judgment rendered by the District CourtThe Court of Appeal is the appellate court for the rulings of the District Court. A judgment from the District Court may be appealed on the grounds of errors in the assessment of the facts of the case, in the application of law, or in the procedural handling of the case.

The Civil Procedure Act stipulates certain limitations to the right of appeal. An appeal over a judgment in a case concerning economic interests will not be heard without the consent of the Court of Appeal if the value of the subject-matter of the appeal is less than NOK 125,000. In determining whether to grant consent, the court shall take into consideration, inter alia, the nature of the case, the parties' need for judicial review, and whether there would appear to be weaknesses associated with the ruling that has been appealed or in the handling of the case.

In addition, the Court of Appeal may refuse to hear an appeal – irrespective of the value of the subject-matter of the appeal – when it finds it evident that the appeal will not be upheld. Such refusal may be limited to individual claims or individual grounds for appeal.

An appeal shall be filed in the form of a written notice of appeal to the District Court that rendered the ruling. Parties representing themselves may file an appeal orally by appearing personally before the District Court. The Court may also permit a counsel who is not an advocate to file an oral appeal.

The notice of appeal shall specify, in particular, what one objects to in the appealed ruling and what, if any, are the new factual or legal grounds or new evidence invoked.The notice of appeal shall specify:

- the appellate court;- the names and addresses of parties, representatives and counsel;- what ruling is appealed;- whether the appeal concerns the ruling in its entirety, or only parts thereof;- the claim with which the appeal is concerned, and a pleading specifying the findings requested by the

appellant;- the errors that are alleged to exist in the appealed ruling;- the factual and legal grounds on which it is argued that errors exist;- the evidence that will be presented;- the basis on which the court may hear the appeal, if there has been any doubt in relation thereto;- the views of the appellant as to the further handling of the appeal.

An appeal over a judgment will normally be resolved by judgement following an oral hearing before the Court of Appeal. The deliberation of the appeal shall be concentrated on those parts of the ruling of the District Courts that are disputed and open to doubt when the case is brought before the Court of Appeal.

Appeal to the Court of Appeal over court orders and decisions rendered by the District CourtA court order may, as a main rule, be appealed on the grounds of errors in the assessment of the evidence, in the application of law, or in the procedural handling of the case. However, if the court order concerns a procedural ruling that shall, according to statute, be rendered on the basis of a discretionary assessment as to what is the appropriate and sensible approach, the ruling may only be contested, as far as the discretionary assessment is concerned, on the grounds that the ruling is unsound or clearly unreasonable.

- 20 - 10-128688TVI-OTIR/06

A decision may only be appealed on the grounds that the court has applied an incorrect general interpretation of the law as to what rulings the court may render under the applied provision, or on the grounds that the ruling is obviously unsound or unreasonable.

The requirements as to the contents of the notice of appeal are, as a main rule, the same as for an appeal over a judgment.

After the District Court has resolved the case through a judgment, the rulings of the District Court as to the procedural handling of the case cannot be appealed separately. In such case the judgment may instead be appealed on the grounds of errors in the procedural handling of the case.

An appeal over a court order or a decision shall be filed with the District Court that rendered the ruling. An appeal over a court order or a decision will normally be resolved by court order following only a written deliberation before the Court of Appeal.

Appeal to the Supreme CourtThe Supreme Court is the appellate court for the rulings of the Court of Appeal.

An appeal to the Supreme Court over a judgement will always require the consent of the Appeals Selection Committee of the Supreme Court. Such consent shall only be granted when the appeal concerns matters that are of relevance outside the present case, or when it is, for other reasons, of particular importance that the case be heard before the Supreme Court. – An appeal over a judgment will normally be resolved following an oral hearing.

The Appeals Selection Committee of the Supreme Court may refuse to accept appeals over court orders and decisions for deliberation if these do not raise matters that are of relevance outside the present case, and no other considerations suggest that the appeal should be heard, or if these primarily raise complex evidential matters.

When an appeal over a court order or a decision of the District Court has been resolved by a court order rendered by the Court of Appeal, the ruling cannot, as a main rule, be appealed on to the Supreme Court.

An appeal over a court order or a decision of the Court of Appeal will normally be resolved following a written deliberation before the Appeals Selection Committee of the Supreme Court.