FEDERAL COURT OF AUSTRALIA

PFIZER PTY LTD v BIRKETT

[2000] FCA 303

N1120 of 1999

Mathews J

20 March 2000

SUMMARY OF REASONS FOR JUDGMENT GIVEN ON 20 MARCH 2000

In accordance with the practice of the Federal Court in certain cases of public interest, I have prepared a brief summary to accompany the reasons for judgment which are to be delivered today.  But the only authoritative pronouncement of my reasons is that contained in the full reasons for judgment.  This summary is necessarily incomplete and deals only with certain aspects of the judgment.

I should commence by emphasising the limited role of this Court in reviewing the decisions of administrative decision-makers.  It is not the function of the Court to review the merits of these decisions.  Its role is to ensure that administrative decisions are reached according to law, that proper procedures are followed and that appropriate considerations are taken into account.  Unless a decision is so manifestly unreasonable that no reasonable decision-maker could have made it, the Court will not intervene in the fact-finding process or otherwise explore the merits of the case.

In this case Pfizer Pty Limited, the importer of the drug Viagra, is challenging the decision of the Pharmaceutical Benefits Advisory Committee not to recommend to the Minister for Health and Aged Care that Viagra be included in the Pharmaceutical Benefits Scheme.  This decision meant that Viagra (which I refer to in the judgment by its scientific name, sildenafil) cannot be made available to the public under Commonwealth subsidy.  It remains available upon prescription, but on payment of the full price.  Under the National Health Act 1953 (Cth), a drug attracts Commonwealth subsidy only if the Minister has declared it to be a pharmaceutical benefit under the Scheme.  The Minister cannot make this declaration unless the Pharmaceutical Benefits Advisory Committee has recommended that he do so.  Accordingly, the Committee’s decision not to recommend that Viagra be included in the Scheme meant that it did not reach the stage of Ministerial consideration.

There were a number of challenges to the manner in which the Committee reached its decision in this case.  The most significant of these was that the Committee based its decision on irrelevant considerations.  This directly raised an issue as to the role of the Committee and the type of matters which it is entitled to take into account when deciding whether to recommend to the Minister that a drug be included in the Pharmaceutical Benefits Scheme.

The Committee’s decision not to recommend that Viagra be included in the Pharmaceutical Benefits Scheme was essentially based upon three considerations:

·        First, that the cost to Government of subsidising Viagra under the Scheme was likely to be unacceptably high, particularly as there was a risk that the usage of the drug could not effectively be limited to people for whom it was medically indicated, namely to people suffering from “organic impotence of neurogenic or vasculogenic origin”.

·        Secondly, that an alternative preparation, alprostadil (commonly known as Caverject) was already available under the Pharmaceutical Benefits Scheme for treatment of the same condition.  Caverject is a substance which promotes erection when injected at the base of the penis.  The Committee considered that Caverject remained effective and available and appeared to be meeting the needs of patients for whom it was clinically indicated.

·        Thirdly, that in the absence of material enabling direct comparisons to be drawn between Viagra and Caverject, it had not been established that Viagra was as effective as Caverject.

All these findings were challenged by Pfizer.  The most far-reaching of its challenges was that the Committee improperly exercised its powers when it took into account the cost to Government of including Viagra in the Pharmaceutical Benefits Scheme.  This was a matter for consideration by the Minister, not the Committee, it was urged.

Pfizer’s submission, put simply, is that a division of functions is to be implied between the Committee on the one hand and the Minister on the other.  The Committee consists almost entirely of medical and pharmaceutical experts, and Pfizer submits that its considerations should therefore be confined to medical and pharmacological issues.  The Committee is bound to consider and compare the effectiveness and cost of individual items of therapy.  But other ‘political’ considerations, including the overall cost to Government of including a drug in the Pharmaceutical Benefits Scheme are, according to this submission, for the Minister, not the Committee, to take into account.

In my finding, the Committee’s considerations cannot be restricted in the manner suggested.  The Committee will often need to consider overall costs issues when assessing and comparing the effectiveness and cost of individual items of therapy, a task it is obliged to undertake.  More importantly, the Committee, in spite of its name, is a recommendatory rather than an advisory body.  Its function is to recommend to the Minister that a particular drug or medicinal preparation should be declared to be part of the Pharmaceutical Benefits Scheme.  Subject to one matter, which is immaterial here, the Committee has no power to qualify its recommendations.  If the Committee is to make unqualified recommendations that drugs or medicinal preparations be subsidised under the Pharmaceutical Benefits Scheme, it must have regard to all considerations which are relevant to the taking of that course. Its considerations cannot be limited to medical or associated matters.  The financial consequences to the Commonwealth of including a drug in the Scheme is clearly a relevant consideration, and the Pharmaceutical Benefits Advisory Committee was entitled to have regard to it in this case.

A number of other challenges were made to the Committee’s findings.  In general, they do not raise issues of any great significance.  Rather they criticise the manner in which the Committee reached its decision in this particular case.  I think it unnecessary to enumerate these grounds here.  Suffice it to say that in my view none of the grounds of complaint has been substantiated.  No basis has been shown for setting aside the Committee’s decision.

The full text of this judgment and this summary is available at www.fedcourt.gov.au