REASONS FOR JUDGMENT

THE COURT:

1                     Section 52F of the Therapeutic Goods Act 1989 (Cth)(the TG Act) deals with “complementary medicines”.  Sylvan Health Pty Ltd (Sylvan) has a product, Cholesen, which falls within the definition of a complementary medicine.

2                     Sylvan applied under s 23 of the TG Act to the Minister for Health and Ageing (the Minister) under the TG Act for the registration of Cholesen as a therapeutic good.  Section 25 deals with the evaluation and registration of therapeutic goods.  Only one provision of that section is relevant to the present proceeding.  Section 25(1)(d) requires that, where an application is made for the registration of therapeutic goods on the Australian Register of Therapeutic goods, the goods are to be evaluated for registration having regard to:

(d)               whether the quality, safety and efficacy of the goods for the purposes for which they are used have been satisfactorily established; …

3                     The present proceedings concern the safety of Cholesen.

4                     There was no issue as to the quality or efficacy of Cholesen. 

5                     The delegate of the Minister declined to register Cholesen because its safety had not been established satisfactorily.  The decision refusing the application was made on 10 October 2008.  That delegate said that the data provided for Cholesen “does not sufficiently address the degree of safety associated with the use of this product as a registered complementary medicine”.

6                     That decision was reviewed by the Administrative Appeals Tribunal (the Tribunal).  On 23 October 2009, the Tribunal affirmed the decision of the delegate.

7                     Pursuant to s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act), Sylvan has appealed from that decision.  Its right of appeal is confined to questions of law.  In addition, Sylvan applied under s 5 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (the ADJR Act) and under ss 39B(1) and 39B(1A) of the Judiciary Act 1903 (Cth) for orders setting aside the decision of the Minister and of the Tribunal, and remitting the matter to it for hearing and determination according to law.

8                     The two proceedings have been heard together by the Court.  The grounds for judicial review under the ADJR Act are the same as those set out in the notice of appeal from the Tribunal’s decision under the AAT Act. 

Cholesen

9                     There is no real dispute as to the inherent nature of Cholesen or what it is intended to do. 

10                  Cholesen capsules are manufactured as an extract of Red Yeast Rice (RYR).  RYR is fermented rice on which the fungus red yeast (Monascus purpureus) has been grown.  RYR is a naturally occurring substance that has traditionally been used in Asia for a very long time.  It is used as a food colouring, a food preservative and in traditional medicine.  It can be purchased in Australia from Asian food stores.  Sylvan has standardised the composition of RYR in Cholesen with respect to key constituents.  It is a typical complementary medicine in that it is a complex mixture of ingredients.  As the Tribunal noted, it is atypical in that it contains at least two clearly defined ingredients that have relatively well characterised pharmacological actions, one of which is also a prescription drug.

11                  The major active ingredient of Cholesen is Monacolin K, a prodrug that is activated in the body, for example by an enzyme.  This ingredient is chemically identical to Lovastatin, a prescription drug used to lower cholesterol.  Lovastatin is one of the family of drugs collectively called statins that are prescribed world-wide to treat excessive levels of cholesterol in the blood.  Another significant active ingredient in Cholesen is Monacolin KA (Monacolin K Acid) which is found at a level approximately one-third of Monacolin K and, unlike Monacolin K, does not need to be converted into an active form in the body.

12                  The cholesterol-lowering effects of Cholesen are appreciably higher than can be accounted for by the level of Monacolin K in Cholesen.  The Tribunal observed that the reason for this is not well understood; that it may be due to the presence in Cholesen of the already active Monacolin KA, or the influence of other ingredients in Cholesen that compete with Monacolin K and Monacolin KA for metabolising enzymes in the liver.

13                  Although statins are generally regarded as very safe drugs, in a small number of cases adverse effects have been recorded, for example, myopathy (muscle wastage) characterised by aches and pains.

14                  At a meeting of the National Drugs and Poisons Schedule Committee (NDPSC) in June 2009, the NDPSC decided to include statins in Schedule 4 to the “Poisons Standard” except where separately specified in the schedules, with effect from 1 January 2010.  The “Poisons Standard” is the “Standard for the Uniform Scheduling of Drugs and Poisons” published by the Australian Health Ministers Advisory Council pursuant to s 52A and 52D of the TG Act.  The scheduling of substances (poisons) in the Poisons Standard takes into account various factors related principally to their safety and toxicity as set out in s 52E of the TG Act.  The NDPSC also publishes administrative guidelines setting out criteria relevant to the inclusion of a poison in a particular schedule.  Schedule 2 poisons are those which are essentially safe for therapeutic use for minor medical ailments or symptoms not requiring medical diagnosis or management.  Schedule 3 poisons are those which are substantially safe in use, but require professional advice or counselling by a pharmacist.  Schedule 4 poisons are those requiring professional, medical, veterinary or dental management or monitoring.

The Tribunal’s Reasons

15                  The Tribunal referred to the relevant legislation and relevant guidelines provided by the Therapeutic Goods Administration (TGA).  Guidelines have been provided to assist in the process of evaluating medicines.  The Complementary Medicines Evaluation Committee (CMEC) was established under s 52G of the TG Act (after the Tribunal’s decision was made s 52G has been repealed).  The CMEC had the functions prescribed by the Therapeutic Goods Regulations 1990 (Cth) including evaluating and reporting to the Minister or the Secretary on complementary medicines and whether or not a complementary medicine should be included in the Register.

16                  The CMEC considered the evaluation of Cholesen at its meeting on 22 February 2008 and recommended that Cholesen was not suitable for registration on the Australian Register of Therapeutic Goods.  It considered there was not sufficient data to establish a positive benefit-to-risk so as to enable it and to recommend that Cholesen was suitable for registration.  It gave Sylvan the opportunity to make submissions before it, but Sylvan declined to do so.  It subsequently reaffirmed its view.

17                  The Tribunal received seven expert witness reports.  Six of those experts gave evidence, five concurrently. Their evidence was summarised by the Tribunal in its reasons.  To the extent necessary, it will be referred to below.  The Tribunal then addressed the issue which it identified, namely whether the safety of Cholesen for the purpose for which it is to be used has been satisfactorily established, as required by s 25(1)(d) of the TG Act.  It noted the safety issues contended for by the Minister.  They were that Cholesen contains clinically significant levels of Monacolin K, known to cause adverse reactions in some people and, because of this, its use should be supervised by a clinician.  Secondly, the Minister asserted that there was a lack of data as to the long-term safety of the use of RYR (which has also caused adverse effects), including in particular its effect on the presence of other common prescription medicines.  It noted the assertion that Cholesen differs from traditional RYR in ways that increase rather than decrease the risk to safety.  Thirdly, the Minister contended, there is a lack of pharmacokinetic studies, particularly given the possible synergystic effects of other components of Cholesen, and also a lack of pharmacodynamic studies. 

18                  The Tribunal also noted Sylvan’s contentions that statins are the most closely studied, most therapeutically successful and most widely used medications in modern medical practice, and also among the safest.  Sylvan proposed that Cholesen be used for the reduction of cholesterol and for assistance in maintaining healthy blood/cholesterol concentration.  It had told the TGA that it was prepared to negotiate over the indication or claim to be made in respect of Cholesen that would be attached to the product.  It asserted that both RYR and Cholesen have been shown to be safe in clinical trials and in real world usage and identified a number of matters upon which that assertion was made.  They included its long-term traditional use, an RYR trial in China, adverse reaction data in the United States, a study undertaken by Sylvan called the Lismore trial, and certain United Kingdom data about the use of a close analogue of Lovastatin.  The Tribunal then summarised at some length the respective contentions made on behalf of Sylvan and the Minister in the light of that evidentiary material.

19                  The Tribunal also noted that Cholesen differs in some important respects from traditional RYR, and that its cholesterol-lowering properties were not accounted for simply by the level of Monacolin K.

20                  It accepted that statins are generally considered a very safe class of drugs, but it said at [49]:

… it is the unaccounted for properties of Cholesen that give rise to concerns regarding the long-term safety of its use, particularly in relation to myopathy (muscle wastage) and, ultimately, in a serious case, possibly liver and kidney damage and even rhabdomyolysis (rapid breakdown of skeletal muscle), albeit that this is likely to be extremely rare.

21                  Despite accepting that complementary medicines do have unaccounted for properties, the Tribunal acknowledged that mostly they have a long history of widespread traditional use, a feature applicable to traditional preparations of RYR.  However, it observed that Cholesen was clearly different from those traditional preparations and did not have a history of long-term use or adequate reporting of any adverse effects.  It considered that the enhanced cholesterol-lowering properties of Cholesen over and above those attributable to its known Monacolin K content raised significant concerns regarding interactions with other drugs and other ingested products.  It referred to certain of the expert evidence to that effect.  It referred to the recommendation of CMEC referred to above, and to the expertise of CMEC.  It noted that Cholesen, if registered, was likely to prove an attractive alternative to pharmaceutical medicines and be extensively used.

22                  All five experts who gave concurrent evidence agreed that Cholesen should have a product warning label to the effect that it should not be taken with other prescription medicines except under supervision, and all but one of those experts agreed that the supervision should be by a medical practitioner as distinct from a pharmacist.  They also agreed that the products should include patient information advising that, if on taking Cholesen a person experienced muscle pain, the person should immediately consult a medical practitioner.  The Tribunal concluded however that warning labels and product information would be insufficient to meet the safety concerns relating to Cholesen.

23                  Whilst it accepted that no medicine will ever be entirely safe, and that it is necessary to have regard to the potential adverse effects of particular medicine for consumers in the community in the context of their intended use and potential benefits, the Tribunal’s concern about the safety of Cholesen was not sufficiently allayed by Sylvan’s preparedness to conduct extensive testing and review of the anticipated extensive use of Cholesen following its registration.  It noted that Sylvan had already produced a significant amount of data and addressed many of the issues raised concerning the composition and use of Cholesen.  However, it concluded at [58] that:

… further data is required to satisfactorily establish the safety of Cholesen for the purpose for which it is to be used.  What is required prior to registration is further data on the composition of Cholesen, the synergistic effects of its ingredients, and the interaction of its ingredients with other substances, in particular:

(a)        pharmacokinetic data on Cholesen by equivalence against Lovastatin and the identification of additional metabolites;

(b)               the pharmacodynamics of components of Cholesen, in particular in vivo studies of the bioavailability of Monacolin K and Monacolin KA, including whether Monacolin KA has synergistic effects with Monacolin K increasing the retention time of Monacolin K in the bloodstream;

(c)               data on interactions of Cholesen with other substances; and

(d)               toxicology of known active ingredients of Cholesen.

24                  For those reasons, the Tribunal affirmed the decision of the Minister under review.

The Grounds of Appeal

25                  The notice of appeal from the Tribunal’s reasons asserts eight questions of law, but some are demonstrably not matters of law.  Apart from an asserted misconstruction of s 52F of the TG Act, and s 25(1)(d) of the TG Act, the asserted questions of law appear more to be in the nature of grounds of judicial review (if made out) under the ADJR Act.  They asserted denial of procedural fairness, a failure to take into account relevant considerations, the taking into account of irrelevant considerations, the making of a finding of fact for which there was no evidence, and a misunderstanding or misconstruction of the evidence.  They also complain that the Tribunal’s reasons were inadequate, having regard to s 43(2B) of the AAT Act.  Those grounds are sequentially developed at some length in the following several pages of the notice of appeal.  It will be necessary to return to those details, to the extent to which they were maintained in the oral submissions.

26                  The amended outline of written argument of Sylvan has a series of headings with accompanying text.  First there is a lengthy section under the heading “What is Cholesen”.  Next is the heading “The relevant principles of interpretation”, then “Section 25(1)(d) ‘safety’ generally”, “Complementary medicines generally”, “The Applicant’s principle (sic) case before the Tribunal concerning the ‘safety’ of Cholesen”, and finally a section dealing with the adequacy of the statement of reasons.  It is difficult to discern a question of law in that outline of contentions.

27                  Ultimately, senior counsel for Sylvan in oral submissions identified three asserted errors of law:

(1)               that the Tribunal failed to provide adequate reasons for its decision as required by s 43(2B) of the AAT Act, in particular that it did not explain satisfactorily or at all why it accepted certain evidence from one medical expert and did not accept the medical evidence of four medical experts to the contrary, so the reasons fail to explain why it was not satisfied that Cholesen was safe for use in terms of s 25(1)(d) of the TG Act;

(2)               that the Tribunal misconstrued s 25(1)(d) and s 52F of the TG Act by basing its decision on the safety of Cholesen on considerations related to its efficacy; and

(3)               that the Tribunal misconstrued or misapplied s 25(1)(d) of the TG Act by failing to take into account when assessing Cholesen’s safety that it would only be used when prescribed by a medical practitioner and under the supervision of a medical practitioner and with appropriate warnings on its packaging.

28                  Underlying Sylvan’s submissions, the Court discerned a consistent pattern of asserting either that there was no evidence at all for particular findings made by the Tribunal concerning Cholesen, or that its findings concerning Cholesen were not sufficiently supported by the evidence.  Sylvan’s extensive written submissions, and certain of its oral submissions, repeatedly returned to a theme of failure on the part of the Tribunal to take into account some or all of the evidence advanced in the course of the hearing on certain topics, including (it contended) some uncontentious facts.  Sometimes, it is difficult to discern the line between a “no evidence” case which may involve an error of law on the one hand, and a case in which the complaining party, confronted with adverse findings of fact for which there is some supporting evidence, contends that evidence was not sufficient.  To the extent to which the “no evidence” line of attack underlies, and may expose, an error of law, the Court will of course need to address those matters.

Consideration

29                  It is convenient first to address the specific complaints about the Tribunal’s reasons before reviewing overall the reasons for its decision to see if the general complaint about the adequacy of those reasons is made out.

30                  In our view, the Tribunal did not misconstrue s 25(1)(d) or s 52F of the TG Act as asserted.  Section 52F defines a number of terms, including traditional use.  Counsel, in our view, simply did not point to any way in which the Tribunal misunderstood or misapplied that expression, or s 25(1)(d).  There is nothing in the Tribunal’s reasons which indicates that it was diverted from considering whether it had been satisfactorily established that the use of Cholesen for the purposes for which it was to be used was safe.  Its reasons are clear.  It did not substitute, for considerations of its safety, considerations relating to its efficacy.  It was entitled, as it did, to note the potential or claimed efficacy of Cholesen.  Indeed, that is what Sylvan asserted on its behalf.  As the Tribunal’s reasons indicate, its efficacy was unexplained.  It was, in our view, appropriate for the Tribunal to look to what explanation there was for its efficacious properties, compared with those of other complementary medicines which comprise statins or are partly comprised of statins, to decide whether it was established to the Tribunal’s satisfaction that Cholesen was safe for the purpose for which it was to be used.  That was an obvious step to address.

31                  Nor is the Tribunal shown to have misapplied s 25(1)(d) by failing to take into account when assessing its safety that it would only be used when prescribed by a medical practitioner and under the supervision of a medical practitioner and with appropriate warnings on its packaging.  The Tribunal specifically recognised that starting point.  It recognised that all five experts who had given concurrent evidence agreed that Cholesen should have a product warning label to the effect that it should not be taken with other prescription medicines except under supervision.  It noted that four of those five experts considered that the supervision should be by a medical practitioner.  It obviously accepted that majority view.  It also noted that the experts agreed that Cholesen should include patient information advising that if, on taking Cholesen, a person experienced muscle pain, he or she should immediately consult a medical practitioner.  It did not overlook those circumstances.  Immediately following its recognition of that context in which Cholesen might be prescribed, if it were registered, the Tribunal proceeded to consider whether, notwithstanding that context, it had been established to its satisfaction that it was safe for the purposes for which it was to be used.

32                  The Tribunal’s subsequent comments indicate that it was aware that its task was not to require satisfaction that Cholesen would be “entirely safe”.  It recognised that it is necessary to have regard to the potential adverse effects of a particular medicine for consumers and the community and to its intended use and potential benefits.  It accepted that Cholesen had significant cholesterol-lowering benefits.

33                  It is necessary to turn to some specific factual matters.

34                  Sylvan put, albeit as a broad assertion, that Cholesen did not involve the introduction of anything beyond the use of RYR, a traditional herbal medication used for a very lengthy period of time, so there should have been no safety concerns about it.  It also contended that Cholesen had the same composition and characteristics as products long used in the United States and elsewhere, with a similar efficacious effect, and with no safety concerns.  Sylvan asserted that the Tribunal had failed to take those matters into account.

35                  We do not accept that the Tribunal overlooked evidence to that effect, or erred in law in its consideration of that evidence.  Indeed, the Tribunal’s reasons indicate not simply that it did not make those errors, but that the assertions underlying the alleged errors were not made out.

36                  The accepted information about the use of statins generally is not necessarily or routinely to be applied to the particular product, Cholesen, for the reasons which the Tribunal identified.  That is, first, that it was commonly accepted, and indeed asserted by Sylvan, that the cholesterol-lowering effects of Cholesen are appreciably higher than can be accounted for by the levels of Monacolin K in Cholesen.  As noted above, it is a preparation containing Monacolin K, Monacolin KA and various other ingredients.  It is a product in which the concentration of the principal ingredients has been standardised, and in which the level of Monacolin K and Monacolin KA is “appreciably higher than in most preparations of traditional RYR”.  It was open to the Tribunal to reason that the enhanced efficacy of Cholesen compared to other Monacolin K products gave reason to question whether the cause or causes of that enhanced efficacy, either on its own account, or by synergistic effects with other elements, and also having regard to its possible interactions with other drugs or other ingested products might affect its safety.  For instance, it noted that consuming grapefruit juice could apparently increase the levels of statins (Lovastatin) by ten to fifteen times.

37                  The Tribunal did have regard to the use of similar products in other countries.  It noted the use of Simvastatin in the United Kingdom as an over-the-counter medicine, but containing significantly lower levels of statins than Cholesen, and data on the use of RYR products similar to Cholesen, but used as a dietary supplement in the United States until December 2007.  It clearly accepted the medical evidence of Professor Nestel that data as to adverse effects from the use of those products was unreliable because it was not comprehensive.  It referred to evidence of Professor Le Couteur that there had been some recent reports of adverse reactions to the United States’ version of the product affecting the muscles and liver.  Whilst it accepted that it is not unusual for complementary medicines to have unaccounted for properties, and of course to have a long history of widespread traditional use, the fact that Cholesen differed in the respects identified from traditional RYR meant that the long-term use of RYR, and the absence of adequate reporting systems of any adverse effects of products closer to Cholesen, meant that the Tribunal had, to a degree, to consider the question of safety independently of that material. 

38                  The Tribunal then specifically addressed the possibility that the enhanced cholesterol-lowering properties of Cholesen over and above its known Monacolin K content raised concerns regarding interaction with other drugs and other ingested products.  It referred to the evidence of Professor Le Couteur on that topic, together with the recommendation of CMEC.  It referred to the investigation undertaken by Sylvan and the outcome of that study.  It referred to the evidence of Professor Le Couteur that additional testing before registration would be an available option, a view apparently supported by Professor Nestel.  In submissions, counsel for Sylvan asserted that such an investigation could not be undertaken, but that is contrary to the evidence available to support such a conclusion.  We were taken to the evidence to support the conclusion, which is expressed in the concluding paragraph of the Tribunal’s reasons and set out above at [23].

39                  In our judgment, there was sufficient material before the Tribunal to support its findings in the respects in which they were challenged.

40                  The Tribunal noted that there was a lack of reliable information about the actual levels of monacolins or statins in traditional RYR.  It did so on the basis of evidence about the level of monacolins in traditional RYR being very low or, on the other hand, being very much higher in Cholesen (see [47] of its reasons).  It concluded that traditional preparations of RYR contained highly variable amounts of monacolins.  On the other hand, the Tribunal noted that in Cholesen the levels of Monacolin K and Monacolin KA were appreciably higher than in most traditional preparations of RYR (see [47]).  Therefore, it was open to the Tribunal to have regard to those differences (between the lower levels of monacolins in most traditional preparations of RYR and the higher and standardised levels in Cholesen) and to conclude that further data was required to establish, to its satisfaction, the safety of Cholesen for the purpose for which it was to be used (see [58]).

41                  One general assertion on behalf of Sylvan was that the proposed further investigation referred to by the Tribunal in the passage quoted at [23] above could not be carried out.  It is sufficient to note that there was evidence to the contrary, to which the Tribunal specifically referred, namely the evidence of Professors Le Couteur and Nestel.

42                  In our view, the Tribunal did not fall into an error of law in its factual findings or in the process by which they were made.  The very detailed written submissions of Sylvan urge that alternative factual findings might have been made, and refer to the evidence it relied upon.  But that does not demonstrate error on a matter of law: Corporation of the City of Enfield v Development Assessment Commission (2000) 199 CLR 135 at 154 [44].  It simply shows that it was open to the Tribunal to have made a different set of factual findings. 

43                  Here, the primary issue was whether the Tribunal was of the view that the safety of Cholesen for the purpose for which it was to be used had been satisfactorily established.  It was not so satisfied, for the reasons it gave, based upon the findings of fact it made and there was evidence to support them.  It did not need to address specifically every piece of evidence which might have supported a different finding of fact:  Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 at 346 [68].  However, for the reasons given, we are not persuaded that the Tribunal did overlook any significant piece of evidence.  Rather, it recognised that evidence and indicated the role it played in its conclusion.

44                  Finally, to return to the principal point argued on behalf of Sylvan, namely that the Tribunal’s reasons are simply inadequate, the considerations outlined above as to particular complaints made about the Tribunal’s reasons in our view demonstrate the adequacy of its reasons.  The Tribunal’s reasons should be measured in a reasonable and realistic way, rather than with an eye keenly attuned to the perception of error: Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 272.  The Tribunal identified the issue which it was required to address.  It identified the evidence and the arguments and it reached its conclusions.  The question for it was whether it had been satisfactorily established that the safety of Cholesen for the purpose for which it was to be used was made out.  For that purpose, it had regard to all of the medical evidence.  The Tribunal recognised that some of the medical experts had said that, in the context in which it was to be supplied, it would be safe for Cholesen to be used.  But, it did not accept that evidence, for reasons which it explained. 

45                  It was the Tribunal’s satisfaction that had to be established.  Here, the function of the Tribunal was to evaluate the material before it for the purpose of forming its view as to whether the safety of Cholesen had been satisfactorily established for the purpose for which it was intended to be used.  A decision as to whether a matter has been satisfactorily established inherently involves the formation of an opinion by the decision-maker.  While such a decision is capable of being made the subject of judicial review, the decision itself is subjective in nature:  Wu Shan Liang 185 CLR at 275-277, 281-282.

46                  There was medical evidence upon which the Tribunal could have reached, and did reach a view different from that of some of the medical witnesses.  The Tribunal clearly accepted and acted upon particular medical evidence because, as it said, Cholesen had unexplained efficacious qualities.  That evidence responded to the common sense of the Tribunal in seeking an explanation for those qualities of Cholesen:  cf Yusuf 206 CLR 323.  It was not satisfied on the material that Sylvan adduced, some of which was relied upon by some medical witnesses, and some of which was criticised by other medical witnesses, that usage of either Monacolin K products, or Cholesen-like products, overseas sufficiently demonstrated the safety of Cholesen.  It explained why.  It was able to reach that conclusion as a matter of fact.  This was an appropriate step for the Tribunal to take in considering whether it was satisfied as to the safety of Cholesen.  Having reached that conclusion as a matter of fact, and having reached its finding as to the relatively unique composition of Cholesen, and having rejected the assertion that there was sufficient evidence of a reliable nature as to the safety of Cholesen in its particular combination of herbal materials to be satisfied as to its safety, the Tribunal was entitled to, and did, prefer certain medical evidence to other medical evidence. 

47                  In our view, the Tribunal’s reasons clearly demonstrated sufficiently for the requirements of s 43(2B) of the AAT Act why it reached the decision which it did.

48                  For these reasons, the appeal under s 44 of the AAT Act should be dismissed.s

49                  As we noted above, there were no separate grounds developed in respect of the application under the ADJR Act.  In the course of considering the matters raised under s 44 of the AAT Act, the matters raised in support of the ADJR application have also been addressed.  That application should also be dismissed.

50                  Sylvan should pay the costs of the Minister of each of the proceedings.

Associate:

Dated:         17 September 2010