FEDERAL COURT OF AUSTRALIA

 

Glaxosmithkline Australia Pty Ltd v Anderson [2003] FCA 617

ADMINISTRATIVE LAW - Administrative Decisions (Judicial Review) Act 1977 (Cth) - Judiciary Act 1903 (Cth) - judicial review - decision of Pharmaceutical Benefits Advisory Committee (PBAC) under s 101(3) of the National Health Act 1953 (Cth) to recommend to the Minister that bupropion hydrochloride should be prescribed under the pharmaceutical benefits scheme only in certain circumstances - where PBAC had already made a previous recommendation for listing of the drug without such restrictions - whether PBAC lacks power to vary its recommendations once made - whether Minister has power to vary a declaration once made under  s 85(4) - whether the PBAC can, in the absence of evidence, rely solely on its collective experience and expertise - whether the PBAC acted on no evidence - whether the PBAC breached the rules of natural justice - whether natural justice required that applicant be informed of details of potentially adverse information - whether applicant had real notice of the case it had to meet.

National Health Act 1953 (Cth) Part VII, ss 85, 88A, 101

Administrative Decisions (Judicial Review) Act 1977 (Cth) ss 5, 13

Judiciary Act 1903 (Cth) s 39B(1A)

Acts Interpretation Act 1901 (Cth) ss 33, 46

Pfizer Pty Ltd v Birkett (2001) 112 FCR 305

R v Ng [2002] VSCA 108 (2 August 2002)

Curragh Queensland Mining Ltd v Daniel (1992) 34 FCR 212

The Queen v Toohey;  Ex parte Northern Land Council (1981) 151 CLR 170

Romeo v Asher (1991) 29 FCR 343

Hackwell v Television New Zealand [2002] NZAR 11

Crofton Investment Trust Ltd v Greater London Rent Assessment Committee [1967] 2 QB 955

R v City of Westminster Assessment Committee; Ex parte Grosvenor House (Park Lane) Ltd [1941] 1 KB 53

Sun v Minister for Immigration and Ethnic Affairs (1997) 81 FCR 71

R v Watson; Ex parte Armstrong (1976) 136 CLR 248

McDonald v Director-General of Social Security (1984) 1 FCR 354

GLAXOSMITHKLINE AUSTRALIA PTY LTD (ACN 100 162 481)  v  NEIL ANDERSON & OTHERS (as named in the attached schedule) (in their capacity as members of the Pharmaceutical Benefits Advisory Committee)  and  THE MINISTER FOR HEALTH & AGEING

 

V 822 of 2002

 

RYAN J

20 JUNE 2003

MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 822 of 2002

 

BETWEEN:	GLAXOSMITHKLINE AUSTRALIA PTY LTD (ACN 100 162 481) Applicant
AND:	NEIL ANDERSON & OTHERS (as named in the attached schedule) (in their capacity as members of the Pharmaceutical Benefits Advisory Committee) First to Tenth Respondents       THE MINISTER FOR HEALTH & AGEING Eleventh Respondent

JUDGE:	RYAN J
DATE OF ORDER:	20 JUNE 2003
WHERE MADE:	MELBOURNE

 

 

 

THE COURT ORDERS THAT:

 

1.         The application be dismissed.

2.         The applicant pay the respondents’ costs, such costs to be taxed in default of agreement.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 822 of 2002

 

BETWEEN:	GLAXOSMITHKLINE AUSTRALIA PTY LTD (ACN 100 162 481) Applicant
AND:	NEIL ANDERSON & OTHERS (as named in the attached Schedule) (in their capacity as members of the Pharmaceutical Benefits Advisory Committee) First to Tenth Respondent   THE MINISTER FOR HEALTH & AGEING Eleventh Respondent

 

JUDGE:	RYAN J
DATE:	20 JUNE 2003
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

1                     Glaxosmithklein Australia Pty Ltd (“the applicant”) produces bupropion hydrochloride, under the brand name Zyban, for use as a drug to aid persons attempting to cease smoking.  In September 2000 the Pharmaceutical Benefits Advisory Committee (“PBAC” or “the Committee”) recommended to the Minister for Health and Aging (“the Minister”), under Part VII of the National Health Act 1953 (Cth) (“the Act”), that Zyban be what is commonly referred to as “listed” on the “pharmaceutical benefits scheme” for prescription in 120 tablet packets. As was observed in Pfizer Pty Ltd v Birkett (2001) 112 FCR 305 at 307–310 (“Pfizer”):

‘[3]     Although reference is frequently made to a drug being “listed” on the “pharmaceutical benefits scheme” (“the PBS”) the legal basis for “listing” is a declaration by the Minister under s 85(2) of the Act. It should also be mentioned that although the term “pharmaceutical benefits scheme” is a convenient one to describe, according to context, the legislative scheme contained in Pt VII of the Act or the funds provided for the operation of the legislative scheme, there appears to be no separate entity that is the pharmaceutical benefits scheme.  …

[4]      The pharmaceutical benefits scheme established under Pt VII enables the supply of drugs and medicinal preparations under Commonwealth subsidy. Members of the public can obtain a drug to which, by virtue of s 85, Pt VII of the Act applies (“a pharmaceutical benefit”) from approved pharmacists on presentation of prescriptions written by approved medical practitioners and on payment of a statutorily fixed charge. The pharmacist may then receive from the Commonwealth the difference, if any, between the fixed charge and the “Commonwealth price” for the pharmaceutical benefit. This Commonwealth price is determined by the Pharmaceutical Benefits Remuneration Tribunal (“the PBRT”), a body established under s 98A of the Act.

…

[6]      …  for a drug or medicinal preparation to become a “pharmaceutical benefit”, ie a drug to which Pt VII of the Act and the subsidy system it entails applies, it is necessary for the Minister to so “declare”. But the Minister may not declare that Pt VII applies to a drug or medicinal preparation unless the PBAC has recommended to the Minister that it be so declared (s 101(4)(b)).

[7]      The Minister can decline to make a declaration notwithstanding a recommendation by the PBAC and, further, even if the Minister does make a declaration it may be disallowed by the Parliament: s 85(2B), and see and compare s 85(2AC). This is to be contrasted with the position where the PBAC declines to make a recommendation to the Minister that the drug be declared; in such a case the matter does not reach the Minister for decision. A recommendation from the PBAC is thus critical to the making of a declaration but it does not guarantee that a declaration will be made, or if made, that it will withstand Parliamentary scrutiny.

[8]      Before turning to the provisions of the Act that are concerned with the PBAC and its functions, some other aspects of the legislative scheme should be noted. The subsidised supply may be limited to certain embodiments of the drug, such as particular strengths, types, sizes of units (s 85(3)), to certain brands (s 85(6)), to prescription by a certain class of persons (s 85A), or to prescription only in particular circumstances (s 88A). The Minister may also, in certain circumstances, specify that there shall be a “special patient contribution” such that the person obtaining the relevant drug or medicinal preparation on a PBS prescription will pay an amount greater than the usual “limited charges” (see s 87), which amount represents the difference between the sale price sought by the manufacturer and the extent to which the Commonwealth is prepared to subsidise the supply of that particular substance (“the Commonwealth price”) (s 85B). This is invoked when the manufacturer and the Minister have been unable to agree on the maximum price for sales of the drug as a pharmaceutical benefit.

[9]      The PBAC was established by s 101(1) of the Act which provides that the Committee shall consist of an officer, being a pharmacist, of the Department of Health, six medical practitioners appointed by the Minister from among ten medical practitioners nominated by Federal Council of the Australian Medical Association, a pharmacist appointed by the Minister from among three pharmacists nominated by the Pharmacy Guild of Australia and a person appointed by the Minister to represent consumers. By s 101(2) the Minister may also appoint as members of the Committee a pharmacologist and not more than three additional medical practitioners. The Minister must not, however, appoint a person under s 101(1)(d) to represent consumers unless the Minister is satisfied that the person has “such qualifications or experience as would enable the person to contribute meaningfully to the deliberations of the Committee”: s 101(2AAA).

…

[13]    … It is also important to note that the PBAC performs its functions within a context in which questions of the quality, safety, efficacy and availability of therapeutic goods are dealt with primarily by other legislation.

[14]    The question whether a drug should be made available as a pharmaceutical benefit, which the PBAC must consider under s 101(3), is likely to be considered in circumstances in which questions going to whether the drug should be on the market at all in Australia have been determined in favour of the drug under other legislation. Although the Actcontains provisions for the testing of drugs (s 102) and empowers the making of regulations concerning standards of purity (s 105), questions of quality and safety are primarily dealt with by the Therapeutic Goods Act 1989 (Cth) and complementary State legislation such as the Therapeutic Goods (Victoria) Act 1994 (Vic).’

2                     Following a ministerial “declaration” implementing the Committee’s recommendation referred to in [1], Zyban was made available to the public from 1 February 2001 at a subsidised rate under the pharmaceutical benefits scheme.  Subsequently, on 5 September 2002, the Committee purported, under s 101(3) of the Act, to vary its recommendation to the Minister as to the circumstances under which the drug should be available for prescription and to recommend that it be prescribed first in a “starter pack” of 30 tablets, with the balance of 90 tablets only being available upon a second prescription being issued (“the second recommendation”).  The applicant now seeks review by this Court of the second recommendation under s 5 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (“the AD(JR) Act”) and s 39B(1A) of the Judiciary Act 1903 (Cth) (“the Judiciary Act”) and seeks orders by way of relief that the second recommendation be quashed and that each of the respondents, including the Minister, be permanently restrained from acting further upon the second recommendation.  The applicant seeks relief on, essentially, two grounds.  The first is that the Committee lacked power under s 101(3) of the Act to make the second recommendation.  The second is that the applicant was not accorded procedural fairness by the Committee in that it was denied the opportunity to comment upon information to which the Committee proposed to attach significance, or that the Committee otherwise fell into legal error in making the second recommendation.

The Facts

3                     The initial application was lodged on 15 June 2000.  The Committee at its meeting in September 2000 recommended, as summarised in the PBAC agenda papers for its June 2001 meeting;

‘…the authority listing of Zyban for use within a comprehensive treatment program, as a short-term adjunctive therapy for nicotine dependence with the goal of maintaining abstinence. Supply was limited to one application per year with no increased maximum quantity or repeats, and a maximum quantity of 120 tablets. … It [the recommendation] was implemented [by the Minister] on 1 February 2001.’

4                     The Committee’s initial written recommendation to the Minister is Exhibit PJL9.  The declarations and determinations by the Minister's delegate, as they appeared in the Government Gazette and commencing on 1 February 2001, are found in Exhibit PJL11.  The company holding the brand name is identified by the acronym GW in the Gazette, which was a predecessor of the present applicant. 

5                     The Committee secretariat received a letter from a general practitioner, apparently undated but presumably in the period between 1 February 2001 and the date when the Committee secretariat sent out the papers for its June 2001 meeting relating to the listing of Zyban.  That letter is Exhibit DKM13A.  The general practitioner, whose name is not relevant to these proceedings, made these suggestions regarding the listing of Zyban;

‘1)        a prescription for 120 tablets or [scil. “for”] nothing per year means we cannot force them [the patients] to return after 2-4 weeks to assess their progress and engage them properly in a “comprehensive program” aimed at quitting. Surely this option should be available to us.

2)                 Given that we give out scripts for 120 tablets at a time, it concerns me that those who do not tolerate the medication will be discarding over 100 tablets often enough to make the community’s subsidising of it a little hard to take, Once again – why not give two week’s worth or make samples easily available?’

6                     The Committee secretariat considered the letter and prepared an options paper for the Committee which was sent out to Committee members as part of the agenda papers for the  June 2001 meeting.  The options paper is Exhibit DKM13 which reads in part:

‘Current Situation

 

… a general practitioner, has written to the PBAC … in regard to the 120 pack size noting:

·         That in prescribing maximum quantity there was no mechanism to “force” the patient to return after 2-4 weeks to assess progress and engage them in a comprehensive program; and

·         Withdrawal due to intolerance will result in costly waste.

Further information:

 

…

3.      … pack sizes of 10, 30, 60, 90 and 120 have been registered for marketing in Australia.

4.      The PBS dispensed price for the maximum quantity of 120 is $255.73.

5.      The 120 pack is sufficient for a 9 week course.

6.      The TGA Clinical Evaluator noted that in the studies submitted for evaluation 9.3% of patients on bupropion compared to 5.2% patients on placebo prematurely discontinued due to adverse events.

Options available to PBAC

 

1.      Retain status quo.

2.      Recommend amending authority listing to allow an initial two week supply of 30 tablets and a continuing supply of 90 tablets. Such changes would require two visits to the doctor, two requests for an authority and a patient to make two copayments for 9 weeks supply. [“the 30/90 split option”]

3.      Recommend amending authority listing to a maximum quantity of 60 tablets with one repeat. Such a change would not ‘force’ the patient to return for [a] second consultation with the prescriber, but would have the potential to reduce costly waste. The patient would be required to make two copayments. [“the 60/60 split option”]’

7                     The Committee, as recorded in the minutes of its meeting on 14 and 15 June 2002, “deferred consideration [of the issue] pending receipt of further information and usage trends and the views of the sponsor” (Exhibit DKM14).  The Committee Secretary wrote to Glaxosmithklein on 22 June 2001, a letter which became Exhibit DKM15, informing it of the proposed, possible changes to the Committee’s recommendation.  The Secretary’s letter advised the applicant that the Committee intended to consider the issue again during its meeting on 6 and 7 September 2001 and that it would appreciate receiving, by 27 July 2001 for inclusion in the agenda papers, any comments that the applicant wished to make on the proposals.  The applicant responded in July 2001 with a “minor submission” (Exhibit PJL15), which reads in part;

‘GSK’s understanding of the PBAC’s view is that the potential advantage from a change in pack size [from 120 tablet packs to packs of either 60, or 30 and 60, tablets] is two-fold:

1.      To better allow prescribers to assess their patient’s progress and engage them properly  in a comprehensive treatment program; and

2.      To reduce PBS costs because of potential wastage due to non-completion of the course.

GSK recognises that these are important issues, however we do not agree that a change in pack size will address these issues. Our comments are as follows:

1.         Assessment of Patient Progress and Engagement in a Comprehensive Treatment Program

 

…

GSK believes that promotion of an extra physician visit during treatment can be best achieved through modification of the GSK Zyban Action Plan (ZAP) and GP education, rather than through a change in the listed pack size …The ZAP provides regular communication to encourage compliance and prevent relapse, thereby  providing an ideal avenue for encouraging a physician visit during the course of treatment.  GSK has modified two of the ZAP letters that patients receive during their treatment course to include a recommendation that the patient return to their physician for a thorough assessment of treatment progress.  Copies of these amended ZAP letters are attached for your information.  This initiative will continue to be complemented by GP education encouraging physicians to organise a return patient visit during treatment for progress review.

The promotion of a physician visit during treatment may also be achieved through modification of the Authority wording.  GSK is willing to discuss this option in further detail if considered viable by the PBAC.

3.      Wastage due to Non-Completion

 

Wastage due to non-completion is potentially an issue for all pharmaceutical products.  We believe that any wastage that may occur with bupropion would not be addressed by a change in pack size.  In addressing wastage, the reason(s) for non-completion need to be determined.  Potential reasons for non-completion with bupropion could include adverse events from treatment or a lack of motivation.

GSK’s experience shows that the estimated incidence and type of spontaneously reported adverse events are similar to that observed in our clinical trial program.  Therefore, these data suggest it is unlikely that adverse events would be the major driver of patents ceasing treatment prematurely.

Motivation is a major issue associated with smoking cessation and a lack of motivation may be the reason for possible non-completion and subsequent wastage with bupropion.  The 120 pack of bupropion was made available on the PBS specifically to encourage patients to complete the treatment course required for smoking cessation.  GSK believes that a change in pack size would intensify non-completion due to a lack of motivation, making it less likely a quitting smoker will return for the second course of treatment if initially only provided with a part course.

4.      Logistical issues

 

In considering a change in pack size, there are logistical issues that need to also be considered.  These include:

1.      A potential break in treatment due to a time lag between finishing the first prescription and filling the second one.  This may have ramifications on patient safety and increased relapse rates.

2.      Increased administration for the HIC as a result of policing two Authority prescriptions as opposed to one, due to the requirement that patients receive only one course of treatment per year.

3.      Insufficient numbers of initial tablets with either the 30/90 or 60/60 option.  An initial supply of 30 tablets would not be sufficient to get patients through the time required to actually quit smoking, as initially patients take bupropion and continue to smoke.  Furthermore, an initial supply of 30 or 60 tablets would not be sufficient to get patients through the first 3-4 weeks, which are the most important for treatment success due to the presence of acute withdrawal symptoms.

4.      Currently in Australia the 90s pack is registered, but not manufactured or marketed.

……… GSK believes that improved patient counselling and motivation resulting from a return physician visit during treatment is best promoted through the ZAP initiative and via GP education rather than through a change in listed pack size.  Furthermore, it is likely that a pack size change and a potential break in treatment will increase relapse rates due to the lingering presence of physical and psychological addiction.  These potential negative health outcomes resulting from a change in pack size could result in bupropion being less rather than more cost effective.’

8                     The secretariat prepared another paper for the September meeting of the Committee: (Exhibit PJL16).  The minutes of the Committee’s meeting on 6 and 7 September 2001 are Exhibit DKM20.  The applicant’s submission was described in summary form, and consideration of the issue was again deferred.

9                     The Committee received another letter from a general practitioner dated 11 September 2001, which is Exhibit DMK24H.  That letter also raised concerns about a “high drop out rate”, being the number of patients who had ceased treatment before completing a full 120 tablet course of Zyban and raised a concern that “less than 2% of patients returned for follow up” and further counselling.  The correspondent, however, admitted that he had not conducted a formal trial and did not disclose how many actual  patients were represented by his figure of 2%, how that percentage was calculated or by what method.  The full text of that letter was as follows:

‘Dear Sir / Madam,

I am writing to express my concern about the recent experience with Zyban's marketing and listing. Whilst my experience is not based on a research trial I believe that it may be consistent with other doctor’s experience.

My concerns are:

1)         The way that demand for zyban was driven by industry marketing and the distortion thus created in demand and in the initial growth of demand

2)         That the conditions for supply with PBS subsidy were made ineffective by the automatic dispensing of a full course at the initial dispensing - more specifically I provided initial counselling and then contacted to provide counselling at 2 weeks after the initial consultation. The reasons for this were explained but an exact appointment time could not be given because of some delay in the ability of pharmacies to dispense the medication. Less than 2 % of patients returned for follow up and thus reduced any potentia1 for real counselling support.

3)         The cost to the PBS of the supply of Zyban was also increased by such full dispensing given the very high drop out rate from treatment - in my experience over 50%of patients dropped out ie ceased treatment before the end of the course, usually ostensibly because of side effects.

4)         The majority of those completing the course successfully have recommenced smoking – not surprising given that the drug only aids stopping and does not produce or maintain a long term smoke free state.

We hear that the PBS is in trouble because of high priced drugs and because doctors prescribe them. It is not only zyban that is blameworthy in this regard but also drugs such as the new Cox 2's etc. It is in my belief necessary to stop direct marketing ( even the marketing of xenical creates demand which is inappropriate despite its being very low key). I recognise that there are problems in the way that the medical profession opens itself to marketing, and this is an additional story which raises serious questions of dubious ethics and conflicts of interest - but based on my research into doctors and the industry may be a more difficult problem to control. At least we can start by baning (sic) marketing direct to patients.

The PBS is a valuable part of our health system and unless we protect its viability the Australian public will be adversely affected.’

10                  The minutes of the Committee meeting on 6 and 7 December 2001 (Exhibit PJL24) rehearsed the progress of the matter to the meeting of September 2001 and included the following entries from which references identifying the sources of information have been deleted;

‘4.3.1   The following responses were received.

·         ……

·         That anecdotal evidence indicated the calls to Quitline had not increased since the listing of Zyban, and that 4.5% recent smokers (approx 148,500 people) call for assistance.

·         There was clear evidence that individual counselling and pro-active telephone counselling were effective methods of increasing quit rates.

·         The National Expert Advisory Committee on Tobacco was in the process of preparing Australian clinical practice guidelines for smoking cessation which would include how to most effectively prescribe Zyban.

·         In summary, the most desirable system was one in which:  (a) more patients were given advice on smoking by their doctors;  (b) an assessment was made of the patient's readiness to quit according to the 'stages of change' model described in the cessation literature;  (c) an appropriate method was identified in each case; and (d) patients were given support in using pharmacotherapies.

4.3.3    GlaxoSmithKline advised that:

·         The Zyban Action plan was first developed in the United Kingdom and involved local experts and consists of information provided to GPs face to face, via newsletter, by forum and the medical media.

·         No data were available on the proportion of patients successfully completing a course of bupropion on the PBS, with or without enrolling in the Zyban Action Plan, compared to those enrolled in the clinical trials submitted when listing was sought.

·         Data on whether there was a correlation between access to the Zyban Action Plan, or indeed other smoking cessation programs with either improved compliance or effectiveness, were not available to the company.

4.3.4    ……. advised that:

·         International evidence suggested that people's chances of quitting smoking were enhanced by participation in moderate and high intensity behavioural programs.

·         The Zyban Action Plan was a medium intensity program, and agreement (with the doctor) to enrol in this program should be a minimum requirement for attracting the PBS subsidy.

·         The requirement for a second Zyban script may reduce the number of patients continuing treatment, however, it could be anticipated success rates would be improved due to increased opportunities for encouragement.

·         It was planning to undertake a study to provide definitive evidence about the effectiveness of Zyban in the Australian context.

4.3.5    ……

Recommendation and reasons:

4.3.6    The PBAC noted that the sponsor did not currently have either data on

the proportion of patients who successfully complete the course of bupropion on the PBS overall compared with those enrolled in the Zyban Action Plan (ZAP) and compared with those enrolled in the placebo-controlled, randomised trials, or whether access to the ZAP or other smoking cessation programs is correlated with either improved compliance or improved effectiveness overall.  Although there appeared to be good evidence that there would be less wastage and improved compliance with an additional opportunity for a medical practitioner to provide counselling, the PBAC decided to defer consideration of the application until such information becomes available. The sponsor was also requested toprovide what evidence it had that counselling in combination with bupropion is a treatment effect modifier in smoking cessation.

4.3.7    The PBAC was concerned that a significant proportion of patients may not be seeking      or getting the degree of counselling and support to achieve the optimum outcome. There was some discussion that PBS subsidy should be more conditional in that patients would have to be entered in a suitable smoking cessation program. For instance the restriction for nicotine replacement therapy under the RPBS was 'Patients who have indicated that they are ready to cease smoking and who have entered a support and counselling program'. The PBAC thought that this type of wording might be more suitable and it could even be reinforced by requiring the authority application to be in writing and for the treatment program in which the patient has been entered to be stated.

4.3.8    The PBAC considered that costs per patient to government, patients and society as a whole would increase as a consequence of a change to the wording or conditions of the restriction, as well as from the proposal to reduce the maximum quantity of bupropion, although there would be likely off-sets from and possible change in restriction reduced wastage. Further, the PBAC considered that people who were not prepared to accept such counselling as a pre-condition to bupropion were likely to be different to those who are prepared to accept this pre-condition. Moreover, any reduced effectiveness of bupropion may still be cost-effective, given the large potential for benefit in successful quitters and therefore still justify retaining the current restriction to enable access of bupropion to the current wider eligible population.

4.3.9    The application was therefore deferred.

Recommendation:      Defer’

11                  A copy of those minutes was not provided to the applicant until after 13 February 2002.  However, on 14 December 2001 the secretariat sent this letter (omitting formal parts) to the applicant:

‘As you know the Pharmaceutical Benefits Advisory Committee (PBAC) meeting last week (6‑7 December 2001) discussed amending the listing of Zybanâ.

The PBAC agreed the matter be deferred to the March 2002 meeting to allow for further information to be sought on matters arising from the discussion.

One matter of concern to the PBAC was that a significant number of patients taking Zyban may not be seeking or getting the degree of counselling to achieve the optimum outcome, and there was some discussion that the PBS subsidy should be more conditional in that patients would have to be entered in a suitable smoking cessation program prior to commencing treatment.

The PBAC noted that GlaxoSmithKline (GSK) does not currently have either data on the proportion of patients who successfully complete the course of bupropion on the PBS overall compared with those enrolled in the Zyban Action Plan (ZAP) and compared with those enrolled in the placebo‑controlled, randomised trials, or whether access to the ZAP or other smoking cessation programs is correlated with either improved compliance or improved effectiveness overall. The PBAC looks forward to receiving this information when it becomes available.

The PBAC also requested that GSK provide what evidence it has that counselling in combination with bupropion is a treatment effect modifier in smoking cessation.

1 understand GSK has been advised under separate cover that the Committee is also seeking information in regard to the price and costing of alternative pack sizes to the currently listed 120 tablet pack of Zybanâ.

It would be appreciated if the requested information could be provided by 25 January 2002 to allow for inclusion in the agenda papers for the forthcoming March meeting, or by 26 April, for inclusion in the June meeting agenda papers.’

12                  The applicant responded first by a holding letter and then a more detailed “minor submission” dated 19 April 2002.  The secretariat prepared a paper for the 6 and 7 June 2002 meeting of the Committee.  Papers before that meeting included the applicant’s “minor submission”.  The unratified minutes of that meeting were forwarded to the applicant on 12 August 2002.

13                  On 1 August 2002 GSK sent another “minor submission” to the Committee, and on 19 August 2002 the secretariat forwarded to the applicant for comment other papers for inclusion with agenda material for the September 2002 meeting and a copy of an “overview” prepared by the secretariat which included reference to the applicant’s submission.

14                  The decision taken by the Committee at its September 2002 meeting was advised to the applicant on 27 September 2002 in these terms:

‘CHANGES TO PRESENT (OR RECOMMENDED) PBS AVAILABILITY

The PBAC decided at its meeting between 5 – 6 September 2002 to change the specified certain circumstances relating to its previous recommendation to the Minister (under section 101(3) of the National Health Act 1953) that the following drug/medicinal preparation be made available as a pharmaceutical benefit under Part VII of the National Health Act 1953 (“the Act”).

When the PBAC makes a recommendation as to a drug/medicinal preparation which it considers should be made available under Part VII of the Act section 101(3), it is also required to consider whether it should be made available only in certain circumstances:  section 101(3C).  The PBAC specifies these circumstances in its recommendations under section 101(3).

A brief note of the PBAC’s decision follows:

BUPROPION HYDROCHLORIDE tablet 150 mg, Zybanâ -- GlaxoSmithKline Australia (3.7)

Amend the authority required listing and the ‘NOTE’ and change to differential maximum quantities as follows:

Commencement of treatment as short-term adjunctive therapy for nicotine dependence with the goal of maintaining abstinence in patients who have indicated that they are ready to cease smoking and have entered a comprehensive support and counselling program.  Details of the program must be specified in the authority application.

Maximum quantity:    30

Completion of treatment as short-term adjunctive therapy for nicotine dependence with the goal of maintaining abstinence in patients who have indicated that they are ready to cease smoking and who have entered a comprehensive support and counselling program.

Maximum quantity:    90

NOTE:                        Only one treatment course per year with no increased maximum quantities or repeats will be authorised.

The PBAC considered that the submission had not addressed the question of whether an extra doctor’s consultation would improve compliance, nor did it address the problem of wastage.  The telephone survey which indicated a patient preference for a single visit to the general practitioner was not considered helpful, particularly as only 11% of subjects had used bupropion.  Although prescribing appears to have reached a steady state, it is still more than treble that predicted by the sponsor in its original submission.  Thus, overall, the PBAC remained of the view that an extra doctor consultation after about two weeks of therapy would help enhance compliance, reduce wastage and thus improve the cost-effectiveness of bupropion, particularly that this consultation would provide this additional support at about the time that the patient would actually be attempting to quit smoking.’

15                  At the applicant’s request reasons for that decision were provided under s 13 of the AD(JR) Act on 28 October 2002.  After the applicant’s solicitors had clarified the decision in respect of which reasons were sought as “the Committee’s decision to change its previous recommendations to the Minister that the GSK product Zyban (bupropion hydrochloride) be made available as a pharmaceutical benefit under Part VII of the NHA”, a further set of reasons was provided on 14 November 2002 but those reasons largely reproduced the material contained in the earlier reasons of 28 October 2002.

The statutory scheme

16                  I was taken, in the course of argument, in some detail to the relevant statutory provisions and legislative history.  It is useful to set out in full the relevant provisions of Part VII of the Act.   Section 101 of the Act provides:

“Functions of Pharmaceutical Benefits Advisory Committee

(3)       The Pharmaceutical Benefits Advisory Committee shall make recommendations to the Minister from time to time as to the drugs and medicinal preparations which it considers should be made available as pharmaceutical benefits under this Part and shall advise the Minister upon any other matter concerning the operation of this Part referred to it by the Minister.

 

(3A)     For the purpose of deciding whether to recommend to the Minister that a drug or medicinal preparation, or a class of drugs and medicinal preparations, be made available as pharmaceutical benefits under this Part, the Committee shall give consideration to the effectiveness and cost of therapy involving the use of the drug, preparation or class, including by comparing the effectiveness and cost of that therapy with that of alternative therapies, whether or not involving the use of other drugs or preparations.

 

(3B)     Without limiting the generality of subsection (3A), where therapy involving the use of a particular drug or medicinal preparation, or a class of drugs and medicinal preparations, is substantially more costly than an alternative therapy or alternative therapies, whether or not involving the use of other drugs or preparations, the Committee:

 

(a)   shall not recommend to the Minister that the drug, preparation or class be made available as pharmaceutical benefits under this Part unless the Committee is satisfied that the first-mentioned therapy, for some patients, provides a significant improvement in efficacy or reduction of toxicity over the alternative therapy or therapies; and

 

(b)   if the Committee does recommend to the Minister that the drug, preparation or class be made available as pharmaceutical benefits under this Part, the Committee shall include in its recommendation a statement that the Committee is satisfied as mentioned in paragraph (a).

 

(3C)     Where the Committee is of the opinion that a drug or medicinal preparation, or a class of drugs and medicinal preparations, should be made available as pharmaceutical benefits under this Part, but only in certain circumstances, the Committee shall, in its recommendation under subsection (3), specify those circumstances.

 

(4)       A drug or medicinal preparation shall not be declared, pursuant to paragraph 85(2)(a), to be a drug or medicinal preparation in relation to which this Part applies unless:

 

(a)   the drug or medicinal preparation was, immediately before the commencement of this subsection, a pharmaceutical benefit; or

 

(b)   the Committee has recommended to the Minister that it be so declared.

 

 

(4A)     A class of drugs or medicinal preparations, or of drugs and medicinal preparations, shall not be declared, pursuant to paragraph 85(2)(a), to be a class of drugs or medicinal preparations, or of drugs and medicinal preparations, in relation to which this Part applies unless:

 

(a)   each member of that class was, immediately before the commencement of this subsection, a pharmaceutical benefit; or

 

(b)    the Committee has recommended to the Minister that the class be so declared.’

 

17                  Section 85 of the Act provides as follows:

‘Pharmaceutical benefits

(1)       Benefits shall be provided by the Commonwealth, in accordance with this Part, in respect of the drugs and medicinal preparations in relation to which this Part applies.

 

(2)       Subject to subsection (3), the drugs and medicinal preparations in relation to which this Part applies are:

 

(a)   drugs and medicinal preparations that are:

 

(i)                 declared by the Minister, in writing, to be drugs and medicinal preparations to which this Part applies; or

 

(ii)                included in a class of drugs and medicinal preparations declared by the Minister, in writing, to be a class of drugs and medicinal preparations to which this Part applies; and

 

(b)   medicinal preparations composed of:

 

(i)                 one or more of the drugs and medicinal preparations referred to in paragraph (a), being a drug or medicinal preparation that is, or drugs and medicinal preparations that are, included in a class of drugs and medicinal preparations declared by the Minister, in writing, to be a class of drugs and medicinal preparations to which this paragraph applies; and

 

(ii)               one or more of such additives as are declared by the Minister, in writing, to be additives to which this paragraph applies.

 

(2A)     The Minister may, in a declaration under subsection (2):

 

(a)     declare that a particular pharmaceutical benefit is to be a relevant pharmaceutical benefit for the purposes of section 88A; and

 

(b)      specify the circumstances in which a prescription for the supply of the pharmaceutical benefit may be written.

 

 

(2AA)  The Minister may, by instrument in writing, declare that a drug or medicinal preparation, or a class of drugs and medicinal preparations, shall cease to be a drug or medicinal preparation, or a class of drugs and medicinal preparations, to which this Part applies.

 

(2AB)   Before making a declaration under subsection (2AA), the Minister shall obtain the advice in writing of the Pharmaceutical Benefits Advisory Committee in relation to the proposed declaration.

 

(2AC)  An advice under subsection (2AB) shall be laid before each House of the Parliament with the declaration under subsection (2AA) to which the advice relates.

 

(2B)     Sections 48, 48A, 48B, 49, 49A and 50 of the Acts Interpretation Act 1901 apply to declarations made under subsection (2) or (2AA) as if in those provisions, references to regulations were references to declarations, references to a regulation were references to a provision of a declaration and references to repeal were references to revocation.

 

(2C)     Declarations shall not be taken to be statutory rules within the meaning of the Statutory Rules Publication Act 1903, but subsections 5(3) to (3C) (inclusive) of that Act apply in relation to declarations as they apply to statutory rules.

 

(2D)     For the purposes of the application of subsection 5(3B) of the Statutory Rules Publication Act 1903 in accordance with subsection (2C) of this section, the reference in the first-mentioned subsection to the Minister of State for Sport, Recreation and Tourism shall be read as a reference to the Minister administering this Act.

 

(3)       The Minister may determine, by reference to strength, type of unit, size of unit or otherwise, the form or forms of a drug or medicinal preparation referred to in subsection (2) that is or are allowable for the purposes of this Part and, where such a determination is in force in relation to a drug or medicinal preparation:

 

(a)   the drug or medicinal preparation in the form, or in each of the forms, so determined is a drug or medicinal preparation in relation to which this Part applies; and

(b)   this Part does not apply in relation to the drug or medicinal preparation in any other form.

 

(4)       A form of a drug or medicinal preparation as determined by the Minister under subsection (3) may be such as to require the addition of a substance or substances to the drug or medicinal preparation so that it will be suitable for administration in a particular manner or at a particular strength.

 

(6)       The Minister may determine, in respect of a drug or medicinal preparation in relation to which this Part applies, a brand or brands under which the drug or medicinal preparation may be supplied under this Part, and where such a determination is in force in relation to a drug or medicinal preparation, this Part does not apply in relation to the drug or medicinal preparation as marketed under any other brand.

 

(8)       A copy of each determination made by the Minister in pursuance of this section shall be published in the Gazette.’

18                  For the sake of completeness, s 88A reads:

‘Where a pharmaceutical benefit is declared, in a declaration made under subsection 85(2), to be a relevant pharmaceutical benefit for the purposes of this section, the writing of a prescription for the supply of the benefit is authorised under this Part only in circumstances specified in the declaration pursuant to subsection 85(2A).’

19                  Broadly speaking, the Act contemplates a relatively simple process whereby a drug is made available to the public at a subsidised rate under the pharmaceutical benefits scheme.  Where the Committee, either of its own knowledge or as the result of an application to it by a “sponsor” (usually a pharmaceutical manufacturer), becomes aware of a therapeutic drug which it considers should be made available as a pharmaceutical benefit, it is required to make a recommendation to that effect to the Minister.  The Committee may also recommend the circumstances under which a general practitioner should be allowed to prescribe the drug.  The Minister is under no obligation to follow the recommendation of the Committee, but may only declare in writing that the drug is a pharmaceutical benefit if the Committee has made a positive recommendation to that effect: s 101(4)(b).  The Minister may also, in writing, “determine, by reference to strength, type of unit, size of unit or otherwise, the form or forms of a drug or medicinal preparation referred to in subs (2) that is or are allowable for the purposes [of the scheme]”: s 85(4).  Counsel for the applicant referred to this further power of the Minister as being to make a “determination”, by contrast with the power under s 101(4)(b) to make a “declaration” that a drug is a pharmaceutical benefit.  I shall use the same terms to reflect the distinction.  The Minister, acting on the advice of the Committee may thus by “declaration” cause a drug to be included as a part of the scheme or under subs (2AA), and may also on the advice of the Committee, make a “declaration” that the drug is to cease to be a part of the scheme.  For both a declaration of a drug as a pharmaceutical benefit under s 85(2) and a “cessation declaration” under s 85(2AA), the instrument containing the declaration must be laid before both houses of Parliament and is a disallowable instrument.  An instrument containing a “cessation declaration” under s 85(2AA) must, when laid before Parliament, be accompanied by the Committee’s written advice: s 85(2AC).

20                  The first question in the present case is whether, once the Committee has made its recommendation to the Minister in respect of a particular drug, it has, in respect of that drug, once and for all discharged its statutory function and rendered itself without power to revisit the issue.  Put another way, is the Committee then functus officio or does the Act allow it some continuing role in relation to matters within its expertise?

When may the Committee make a recommendation?

21                  The applicant submits that, under the Act, the Committee is empowered to consider applications to the effect that it recommend to the Minister that a drug be made available as a pharmaceutical benefit, or to make such a recommendation of its own motion.  The Committee may also, at the request of the Minister, provide advice on other matters within its competence.  The applicant contends that the Committee’s power is correctly characterised as one to make recommendations upon which certain exercises of the Minister’s statutory power are predicated.  If the Committee decides not to make a recommendation in respect of a drug, then the Minister cannot make a declaration under s 85(2A), given the presence of par (b) in that subsection.  This much is unexceptionable and accords with what the Full Court held in Pfizer.

22                  The applicant submits that what has happened in the instant case is that the Committee has purported to recommend changes to a recommendation which it has already made and which the Minister has already accepted.  It is further submitted that at the time when the Committee decides to make a recommendation to the Minister, it can qualify that recommendation to specify that it is of the opinion that a drug should be made available only in specified circumstances, but it may not later qualify its recommendation.  In the applicant’s submission, it is only at the time when an initial recommendation is made that the Committee can exercise its power under s 101(3C).  In the words of Counsel for the applicant, it is “not a free-standing power”.  On this view, once made, a recommendation is beyond the Committee’s power of recall and it may not revisit the issue of the circumstances for prescription of a drug which it has already recommended to the Minister be declared available as a pharmaceutical benefit.  This argument turns entirely on a construction of the Committee’s power under s 101(3).  The construction for which the applicant contends derives some support from the presence in s 101(3C) of the words “…the Committee shall, in its recommendation under subsection (3), specify those circumstances” (emphasis added).

23                  The critical words in s 101(3) are “The Pharmaceutical Benefits Advisory Committee shall make recommendations to the Minister from time to time as to the drugs and medicinal preparations which it considers should be made available as pharmaceutical benefits under this Part …..”.  As the Full Court observed in Pfizer at p 314:

‘[33]   Section 101(3) in terms imposes a duty on the PBAC to make recommendations to the Minister "as to the drugs and medical preparations which it considers should be made available as pharmaceutical benefits under [Pt VII]".

[34]    The duty imposed on the PBAC by s 101(3) to make recommendations to the Minister is a duty to be performed "from time to time". It is appropriate to construe s 101(3) in the light of s 33(1) of the Acts Interpretation Act 1901 (Cth) which relevantly provides that where an Act imposes a duty, then, unless the contrary intention appears, the duty shall be performed "from time to time as occasion requires" (emphasis added). When a person calls on the PBAC to perform the duty imposed on it by s 101(3), the PBAC is obliged to consider whether the occasion requires the performance of the duty. However, the PBAC is, of course, not obliged to perform the duty unless it concludes that the occasion does require its performance. An analogy may be found in the approach to the construction of the power to grant an approval for exportation of goods taken by Mason J in Murphyores Incorporated Pty Ltd v Commonwealth (1976) 136 CLR 1 at 17-18. See also Hicks v Aboriginal Legal Service of Western Australia (Inc) (FC) [2001] FCA 483 at [11].’

24                  Quite simply, the only element of s 101(3c) which might require that the Committee’s powers are to be exercised only once and for all in respect of a particular drug or medicinal preparation is the stipulation that the specification of the circumstances in which the Committee considers the drug should be made available as a pharmaceutical benefit is to be in its recommendation under s 101(3).  The applicant’s construction derives no support from the fact that, on its face, the duty imposed is to act “from time to time”, as occasion requires, although the words “from time to time” are not of themselves inconsistent with the conferral of a power which can only be exercised once in respect of a given subject matter.  The Full Court considered the words expressing the Committee’s duty and power under s 101(3) to be words of wide scope (Pfizer at pp.314-315, [36]), an observation which I regard as equally applicable, prima facie, to when the Committee may make its recommendations, including recommendations as to circumstances pursuant to the subsidiary power conferred by s 101(3C).

25                  The applicant submits, however, that to allow the Committee to vary its recommendations could conceivably allow circumvention of the parliamentary scrutiny which is required before a cessation declaration can take effect.  On this argument, if a drug were initially made available under Part VII with few conditions imposed, access to it could then later be significantly reduced by the imposition of conditions.  Indeed, a set of preconditions for the prescription of a drug could be imposed that was so onerous that the likelihood of its being prescribed would be reduced virtually to nil – even if that drug had been initially available for prescription without relevant restrictions or preconditions.  This, it is contended, could effectively result in a cessation declaration being made without the instrument of cessation having been laid before Parliament as a disallowable instrument.  This consideration is said to entail that the Act, on its proper construction, does not permit any variation to a Committee recommendation or to a subsidiary Ministerial declaration under s 85(2A) once made.  Indeed, Counsel for the applicant went so far in response to a question in the course of argument, to contend that there is no mechanism at all for the Minister to change the declared circumstances in which a drug may be prescribed without first determining under s 85(2AA) that the drug should cease to be one to which Part VII applies.  Only by the Minister making a cessation declaration  under s 85(2AA), followed by a completely new declaration predicated upon a new recommendation from the Committee, could new or additional conditions or restrictions be attached to a drug which had been the subject of an earlier declaration specifying different circumstances in which a prescription for it might be written.  This construction likens the legislation to a sequence of one-way doors or gates, with the effect that, once through one door, one must proceed to the end and only then, if necessary, begin again.  It is true that the Act ordains that certain irrevocable consequences follow from the taking of particular steps.  Clearly, the declaration by the Minister of a drug for the purposes of Part VII of the Act can only be reversed by a disallowance of an instrument which has been laid before Parliament or a “cessation declaration” under s 85(2AA).  However, that does not entail that a declaration once made with or without a specification of the circumstances in which it can be prescribed, remains immutable in all respects until it ceases to have effect pursuant to s 85(2AA).

26                  There are several reasons why I have not been persuaded to adopt the construction for which the applicant contended.  In the first place, it would achieve a curious effect if s 101(3), viewing it for the moment in isolation from the rest of the Act, were construed as conferring a power exercisable only once in respect of a given drug for medicinal preparation.  The Committee’s power is purely recommendatory even though its exercise may lead to the Minister’s making a declaration under s 85(2) and, if appropriate, a subsidiary declaration under s 85(2A).  Moreover, the Committee is under a duty to exercise the power from time to time as the occasion arises. 

27                  The strongest argument for subjecting the Committee to the restriction for which the applicant contends is founded on the premise that the Minister’s power to make declarations is similarly restricted.  If the Minister cannot vary a declaration in relation to a particular drug once made, there would be no point in the Committee’s having a facility to recommend variations to an existing declaration.  However, for the reasons explained at [24] above, I am not persuaded that the Act links the power of the Minister so closely to the extant declaration in respect of a given drug.  The only indication in the relevant sections that the Minister’s power to make declarations of the circumstances in which a prescription for a declared pharmaceutical benefit might be written is exercisable once and for all is the presence in the prefatory words of s 85(2A) of the phrase “in a declaration under subsection (2).”  That phrase mirrors the expression “in its recommendation under subsection (3)” in s 101(3C) to which I have added emphasis at [22] above.  The suggestion that the Minister’s power to specify circumstances in which a prescription for the supply of a declared drug can be written must be exercised, if at all, contemporaneously with the making of the original declaration is counteracted by other indications in the language, arrangement and subject-matter of relevant provisions in Part VII of the Act.  It is contemplated that the provision of pharmaceutical benefits will continue indefinitely into the future; they shall be provided by the Commonwealth in respect of drugs in relation to which Part VII applies [s 85(1)];  and the Committee’s duty is to make recommendations from time to time as to the drugs which it considers “should be made available” as pharmaceutical benefits under Part VII [s 101(3)].  As well, drugs and medicinal preparations with which the legislation is concerned are notoriously subject to continuing evaluation and review in the light of new discoveries and further research, clinical experience or observation.  Indeed, s 102 of the Act expressly empowers the Secretary to the Health Department to make such arrangements as he or she considers necessary for the testing or analysis of pharmaceutical benefits or of drugs which may be used as pharmaceutical benefits.  If the legislature intended that effect could only be given to a review or fresh assessment of that kind by a declaration of cessation under s 85(2AA), it entrusted the Minister and the Committee with an excessively blunt instrument for shaping pharmaceutical benefits in the public interest which Part VII is manifestly concerned to advance.  I would only be prepared to impute such an intention to Parliament if the language of the legislation intractably compelled that course. 

28                  I also consider that s 33(3) of the Acts Interpretation Act 1901 (Cth) (“the Interpretation Act”) is applicable to the Minister’s power to make declarations under s 85(2) and s 85(2A) of the Act.  Subsection 33(3) of the Interpretation Act provides that;

‘Where an Act confers a power to make, grant or issue any instrument (including rules, regulations or by-laws) the power shall, unless the contrary intention appears, be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument.’

That statutory provision raises the issue of whether Ministerial declarations are capable of amendment or variation.  A declaration under s 85(2) of the Act, including one that contains the subsidiary declarations contemplated by s 85(2A) is, I consider, an “instrument” which the Minister is empowered to make or issue within the meaning of s 33(3) of the Interpretation Act;  see R v Ng [2002] VSCA 108 (2 August 2002) where the Victorian Court of Appeal held that a search warrant issued by a Judge of this Court was an “instrument” for the purposes of s 46(1) of the Interpretation Act.  Prima facie, therefore, the power to make or issue a declaration under s 85(2) of the Act, with or without specifying circumstances in which a prescription for the supply of the drug may be written, includes a power to revoke, amend or vary a declaration so made.  I do not regard the express grant of power by s 85(2AA) to declare that a drug shall cease to be one to which Part VII applies as evincing a contrary intention within the meaning of s 33(3) of the Interpretation Act.  All that s 85(2AA) does is make express the power of revocation implied by s 33(3) of the Interpretation Act, while s 85(2AB) imposes the additional requirement that the Minister, before making a cessation declaration, shall obtain the advice in writing of the Committee in relation to the proposed declaration.  By force of s 85(2B) both declarations under s 85(2) and cessation declarations under s 85(2AA) are disallowable instruments which have to be laid before both Houses of Parliament with the superadded requirement that cessation declarations have to be accompanied by the written advice of the Committee.  By contrast, a declaration under s 85(2) may be made by the Minister with the support of a bare recommendation by the Committee;  s 101(4)(b).  On this analysis, the relevant provisions of s 85, although attaching a condition to the power to revoke or rescind a declaration made under s 85(2), do not take away that power and are completely silent as to the power to amend or vary implied by s 33(3) of the Interpretation Act. 

29                  The applicant’s argument that a power to recommend different circumstances in which a prescription for a drug already declared to be a pharmaceutical benefit can be exercised so as to circumvent the need to lay a “cessation declaration” before both Houses of Parliament can be answered in two ways.  In the first place, the power to make recommendations conferred on the Committee and that conferred on the Minister to make declarations under s 85(2)(a) are both subject to the implied limitation that they are to be exercised only for the purposes for which they are conferred; see eg The Queen v Toohey;  Ex parte Northern Land Council (1981) 151 CLR 170 per Gibbs CJ at 186.  Secondly, it is clear from the terms of s 85(2B) that the obligation to lay it before Parliament attaches no less to a declaration under s 85(2)(a) (including, on the construction I prefer, a declaration varying an original declaration under that paragraph) than to a “cessation declaration” under s 85(2AA).

30                  It follows from the view which I take of the legislation that the Minister has the power to vary both a general declaration under s 85(2)(a) of a drug as one to which Part VII applies and a subsidiary declaration under s 85(2A) specifying the circumstances in which a prescription for the supply of a declared drug may be written.  Such a power entails, in the absence of express statutory exclusion, a corresponding power in the Committee to recommend the variation.  That is because, in respect of drugs which became pharmaceutical benefits after the commencement of s 101(4), that subsection makes the Committee’s recommendation a condition precedent to the making of a declaration under s 85(2)(a) including a declaration by way of variation of a first or original declaration. 

31                  Issues of practicality, as well as the language of the Act, also favour the Committee being able to furnish recommendations and advice within the area of its expertise on its own motion after an initial recommendation has been made.  I have already referred at [27] of these reasons to the likelihood that new developments or further research or clinical experience will warrant the Committee from time to time making a fresh or revised recommendation in respect of a drug already declared and made available as a pharmaceutical benefit.  Support for the view that the Act contemplates the discharge of that duty is provided by the fact that the duty imposed on the Committee by s 101(3) is to make recommendations “from time to time as to the drugs ….. which it considers should be made available as pharmaceutical benefits …..” (emphasis added).  That form of words imports a power that is wider than one simply to recommend “the drugs which should be made available”.  It embraces, in my view, a power to recommend that a presently declared drug no longer be made available as a pharmaceutical benefit or that the specified circumstances in which a prescription for the supply of a presently declared drug may be written should be varied.

Failure to accord procedural fairness and other alleged errors of law

32                  Counsel for the applicant also made several submissions to the effect that the applicant had been denied procedural fairness by the Committee in the course of its deliberations leading to its revised recommendation as to the circumstances in which Zyban should be prescribed.  These issues were raised by contending that the Committee had inappropriately placed an onus upon the applicant, and by complaining that the Committee had acted upon no evidence or failed to disclose to the applicant the evidence on which it did act.  The other issue that the applicant agitates is, in essence, whether the Committee, in the absence of much information one way or another, could draw on its collective experience and expertise to support a hypothesis as to the utility of a second visit to a general practitioner.

33                  In the present case, it is important to bear in mind the context in which the Committee makes its decisions.  The decision presently under review was not relevantly governed by a statutory formula or test as, for example, in Curragh Queensland Mining Ltd v Daniel (1992) 34 FCR 212.  The legislation does not enumerate matters of which the Committee must be satisfied in arriving at a decision.  It is an expert Committee which has been established to advise the Minister.  It has been entrusted with broad recommendatory powers and it is contemplated that it will take account of  policy considerations.  It is not, as in Romeo v Asher (1991) 29 FCR 343, a peer review tribunal with an inquisitorial function the decisions of which may have serious disciplinary consequences for persons affected by them.  Nor is the interest which the applicant has in the present proceeding akin to that of a drug manufacturer faced with the prospective de-listing of a pharmaceutical benefit.  The difference at stake here is between an expensive drug being available at a publicly subsidised rate in one large 120-tablet packet, which will be more profitable for the applicant, and the same drug being made available in two smaller packets occasioning some repackaging costs and a possible loss of sales to patients who do not persevere with the treatment after purchasing the initial 30-tablet pack.  Although I accept that the Committee was bound to accord procedural fairness to the applicant, the content of that obligation has to be determined in the light of the issues which the Committee was examining and the way in which any recommendation it might make could impinge on the applicant.

34                  That the precise content of natural justice will vary according to the circumstances and relevant statutory scheme is a truism.  The essential question in this case is whether there was factual material relevant to the Committee’s decision, which it used to draw conclusions adverse to the applicant, on which the applicant had no real opportunity to comment.

35                  The Committee concluded, at 7.1 and 7.2 in its reasons for decision;

‘The PBAC found that the [applicant’s] submissions had not addressed the question of whether an extra doctor’s consultation would improve compliance, nor did it address the problem of wastage. …

Based on its combined experience and expertise, the PBAC found that the opportunity afforded for the extra consultation with the doctor at about two weeks of bupropion therapy arising form the maximum quantity of a single pack of 120 tablets to a 30-table pack and a 90-tablet pack would be beneficial to the patient in therms of enhanced compliance and in terms of providing additional support at about the time that the patient would be attempting complete abstinence. In addition it would also help to reduce wastage and thus improve the cost effectiveness of the drug. Therefore, the PBAC made its decision to amend the maximum listed quantity from a single pack of 120 tablets to differential pack sizes of 30 (for commencement of therapy) and 90 (for completion of therapy).’

As it said, the Committee based those findings on its combined experience and expertise.  It, in effect, adopted an initial hypothesis which it felt entitled to maintain on the basis of its finding that there was no persuasive evidence to the contrary.  That much is apparent from the following comments under the heading “background” at pars 3.3 to 3.10 of its reasons for decision;

‘… the PBAC considered correspondence from a general practitioner (GP) who noted that in prescribing the maximum quantity there was no mechanism to “force” the patient to return after 2-4 weeks to assess progress and engage them in a comprehensive program. He also noted that withdrawal due to intolerance will result in costly waste. The GP thus requested the introduction of a differential maximum quantity to ensure patients return for counselling.

… …

The PBAC considered, based on its expertise, that there appeared to be good evidence that there would be less wastage and improved compliance with an additional opportunity for a medical practitioner to provide counselling.

……

The PBAC was concerned that a substantial proportion of patients may not have been seeking or getting the degree of counselling and support to achieve the optimum outcome.

……

The submission provided little information on the extent of wastage and a range of anecdotal reports suggested that this was considerable.

……

Despite arguments in the submissions that an extra doctor’s consultation did not result in a higher quit rate, the PBAC was of the view that an extra consultation would promote the quality use of medicines, would minimise the potential for toxicity, and could only be helpful to the patient.’

36                  The Committee’s concerns seem sustainable as a matter of logic based on ordinary human experience, even without resort to professional expertise like that possessed by the Committee.  It is apparent, as a matter of ordinary human experience, that with any drug a percentage of patients will fail to complete the prescribed course.  It is also apparent, from the applicant’s own material, that Zyban is effective as an aid in giving up smoking and is designed as an adjunct to a comprehensive program including counselling.  Each of these considerations, on its face, supports the thesis that splitting the prescribed dose to require the patient to return to a general practitioner for a further prescription and counselling might reduce waste and improve the outcome.  The Committee was obviously required to weigh the perceived benefits of reduced waste and improved counselling against the cost to the patient and the community of a second consultation.  To my mind, it would have been open to the Committee to have made a recommendation in its present form when it first recommended the listing of Zyban, even in the absence of clinical evidence or anecdotal observations by medical practitioners.  The “anecdotal evidence” later received by the Committee did no more, I consider, than provide an occasion for the evaluation of arguments which had been exposed from the outset by the known facts.

37                  A Committee of experts is entitled to draw upon its own expert knowledge provided that it has properly considered the evidence before it; see eg Hackwell v Television New Zealand [2002] NZAR 11 and Crofton Investment Trust Ltd v Greater London Rent Assessment Committee [1967] 2 QB 955.  Nor need the content of its expert knowledge necessarily be exposed to a person affected although such a person must have an opportunity to contradict relevant material before the Committee which is prejudicial to that person’s interests:  R v City of Westminster Assessment Committee; Ex parte Grosvenor House (Park Lane) Ltd [1941] 1 KB 53.

38                  The present Committee was clearly obliged to give the applicant an opportunity to respond to its concerns, however they may have arisen, and to suggest that despite the superficial attraction of the Committee’s initial hypothesis as a matter of ordinary logic, there were matters which weighed against its being correct.  For example, it would have been open to the applicant to adduce evidence that there was a very high participation rate in its own Zyban Action Plan counselling service, or to adduce anecdotal or statistical evidence to the effect that the wastage rate for the product in the 120-tablet packs was not significant.  That those courses were open to the applicant was evident as a matter of common sense.

39                  Realistically, the only factual matter on which it appears that a conclusion adverse to the applicant was drawn about which complaint could be made, and indeed, was made in the course of argument, was the “range of anecdotal reports” suggesting that wastage was “considerable”.  That evidence, the applicant contends, was either not disclosed, or was so tenuous as to lack any probative value.

Procedural fairness: did the applicant understand the case it had to meet, or was it denied an adequate chance to make that case?

40                  The applicant for its part complains that the following documents were not provided to it, or were not provided in the form of a fair and complete summary, with an opportunity to comment on the matters which they raised;

·           the first letter from a general practitioner (Exhibit DKM 13A);

·          the letter from a second general practitioner of 11 September 2001 (Exhibit DKM 24H);

·          an October 2001 minute of Leanne Wells of the Tobacco Control and Drug Prevention Strategies Section of the Department of Health and Ageing (“the Wells minute”) (Exhibit DKM 24A);

·          the 22 October 2001 submission to the Committee from the VicHealth Centre of Tobacco Control, including a letter from David Hill, Director of the Centre for Behavioural Research in Cancer, Ant-Cancer Council of Victoria (“the VicHealth submission”) (Exhibit DKM 24D);

·          the 21 November 2001 submission of the National Drug and Alcohol Research Centre (“the NDARC submission”) (Exhibit DKM 25A).

41                  In the course of the applicant’s argument few of those documents were pressed as significant.  No attempt was made in respect of any of them to say “if only we had known that the Committee had those criticisms in mind we could have met them by the calling of further evidence or the making of further submissions”: see Romeo v Asher (supra) at 347.  Nor has the applicant shown what evidence it would, or could, have called had it had such an opportunity.  The applicant’s contention that it was entitled to copies of each of these documents is entirely without foundation.  The test formulated by Morling and Neaves JJ in Romeo v Asher (at 349) is much more general;

‘It may generally be accepted, however, that a Committee will fail to satisfy those requirements [of procedural fairness] if, having regard to the manner in which the hearing is conducted, a Court is satisfied, upon a perusal of the Committee's report, that it has made findings adverse to a practitioner on factual matters of which it can be said, upon a fair examination of what has occurred, that the practitioner has had no real notice, that his attention was not specifically directed to those matters at the hearing and that he has, in consequence, had no real opportunity to comment.’

42                  The complaint made by the applicant is, essentially, that it was not apprised of the nature of the anecdotal reports.  The point, however, is whether those anecdotal reports contained material or raised issues to which the applicant was denied an opportunity to respond.  It is hard to see the merit of the applicant’s claim.  The issues of concern to the Committee raised by these reports were aptly summarised by the applicant itself as early as its “minor submission” of July 2001, which is quoted above at [7];

‘GSK’s understanding of the PBAC’s view is that the potential advantage from a change in pack size [from 120 tablet packs to packs of either 60, or 30 and 60, tablets] is two-fold:

1.      To better allow prescribers to assess their patient’s progress and engage them properly in a comprehensive treatment program; and

2.      To reduce PBS costs because of potential wastage due to non-completion of the course.’

In my view, knowledge of the letter’s precise contents would not have made any difference to the applicant’s submissions.  It was armed with a knowledge of the issues which the Committee thought relevant, and, from at least the time when it received copies of the minutes of the Committee’s meeting on 6 and 7 September 2001, it knew that “anecdotal reports” were of concern to the Committee.  That knowledge should reasonably have alerted the applicant that the occasion had arisen for it to adduce, if it wished, its own anecdotal evidence.  It is true that the Committee did not specify the number of general practitioners from whom it had heard, or that the anecdotal reports had come from general practitioners – but it is difficult to conceive that anecdotal information about the incidents of prescribing Zyban would have been received from persons other than general practitioners.

43                  As far as I can discern, there were no factual matters relevant to the Committee’s finding against the applicant upon which the applicant was denied an opportunity to comment.

Procedural fairness:  did the Committee place an onus on the applicants?

44                  The applicant also complains that the Committee’s reasoning entailed the adoption of a view and thereafter imposing an onus upon the applicant to displace that view.  I am not persuaded that such an analysis correctly characterises what happened.  In coming to an administrative decision, the Committee is entitled to express a preliminary view, provided that it remains open to be persuaded otherwise: Sun v Minister for Immigration and Ethnic Affairs (1997) 81 FCR 71 per Wilcox J at 122;  R v Watson; Ex parte Armstrong (1976) 136 CLR 248 at 264.

45                  Overlaying this submission is the applicant’s characterisation of the Committee’s processes.  It contends that, at least in part, the Committee fell into error because of the manner in which it treated the proposal to change Zyban’s availability to a “30/60 split” prescription.  It is clear that this arose as a suggestion formulated by the secretariat in response to at least one complaint by a general practitioner that the single 120-tablet prescription was potentially wasteful.  The applicant draws attention to the secretariat’s consistent reference in its letters to “your proposal”, whereas in fact, the proposal had been generated by the Committee.  The applicant submits that, throughout the chain of correspondence, the expectation can be discerned that the applicant would make out a case, as if it were a fresh application and as if the applicant had not already been successful in having Zyban listed as a pharmaceutical benefit.

46                  The references to “your proposal” are possibly confusing, but I do not think they reflect more than a general use of pro forma documents and that a standard form of document had not been created by the secretariat to accommodate circumstances in which the Committee was acting of its own motion.  I am not prepared to infer solely from the use of “your proposal” that the Committee had misunderstood or misdirected itself as to the task upon which it had embarked.  I understand, however, the applicant’s concern to correct any misapprehension that might have arisen from the formulary use of “your proposal” in the secretariat’s correspondence.

47                  The applicant further complains that the Committee’s view had “mysteriously” hardened over time.  While it had deferred for a considerable period final consideration of the proposed “30/90 split” because there was insufficient evidence on which to form a view, there had been no change in the evidence before the Committee when it came to make its final decision on the issue.  In effect, the Court was invited to find that, as the Committee had found itself unable to be satisfied at various earlier dates of the need for a changed recommendation, that inability must be presumed to have continued at the date of the decision as the Committee had before it no relevant new evidence. However, this Court is primarily concerned with the Committee’s final decision, and will not usually engage in a minute examination of intermediate reasoning processes or procedural steps.  As the Full Court said in Romeo v Asher (supra) at 349;

‘… … the Court will not, unless compelling circumstances are shown, examine the material before a Committee at any particular stage of a hearing which it is conducting in order to determine, in the abstract, whether, if a particular finding is made, the making of that finding may vitiate the Committee's report because of an absence of procedural fairness. It is only after the findings of the Committee are known that such an inquiry can profitably be undertaken.’

48                  In the present case it is apparent that the Committee formed a view that the specification of the circumstances in which a prescription for the supply of Zyban could be written was capable of improvement.  It sought further information from the applicant, which was, at least in part, provided.  I note that, despite the lapse of a year, some of the information requested of the applicant was still not provided because, the applicant claims, there had not been sufficient time to conduct a proper survey.

49                  An administrative body like the Committee is not bound by rules of evidence applying generally to courts.  Whether a party appearing before such a body carries an onus of persuading it to a particular view or of going forward with evidence, is, like other evidentiary questions, to be resolved by reference to the statute from which the Committee derives its powers and functions; McDonald v Director-General of Social Security (1984) 1 FCR 354 per Woodward J at 357.  It has not been suggested on either side in the present case that there were procedural requirements which the Committee was bound to observe other than those which might arise from the general obligation to accord procedural fairness.  The Committee is under an obligation to make recommendations to the Minister, and it may inform itself in the course of its deliberations in whatever manner it sees fit.  The fact that it sought information of the applicant and gave it repeated opportunities to produce further and better information does not entail that it regarded the applicant as sustaining a burden of proof or that it had closed its mind to the view that the existing specification of the circumstances for prescribing Zyban remained appropriate.  In the course of submissions, Counsel for the applicant acknowledged that the Committee’s view had, in fact, changed over time.  The mere use in correspondence from the secretariat of forms of expression which called on the applicant to make out or support its case, is not indicative of improper imposition of an onus or that the Committee’s tentative views were so inflexible as to render it incapable of persuasion to the contrary.  It was for the Committee to inform itself as it thought fit and make a decision on the totality of the information before it.  As far as I have been able to discern, its discharge of those functions was unexceptionable.

Procedural fairness:  no evidence

50                  This ground which is made available by s 5(1)(h) of the AD(JR) Act was not strongly pressed at trial.  That paragraph appears to have no application in the circumstances of this case in the light of what was said in Curragh Queensland Mining Limited v Daniel (supra) at 223 per Black CJ (with whom Spender and Gummow JJ agreed) about the relationship between the “no evidence” ground afforded by s 5(1)(h) and the additional requirement under s 5(3)(b) that the fact relied upon by the decision maker “did not exist”.  The effect of s 5(3)(b) is quite clearly that to succeed on the “no evidence” ground, an applicant under the AD(JR) Act must establish that the particular fact, upon the existence of which the impugned decision was based, did not actually exist.  Here, if there were factual matters upon which the Committee’s decision was based, they were that there was some wastage of Zyban where prescriptions were written for patients who did not complete the course, and that further counselling in the course of a second visit to a general practitioner would enhance patient treatment.  Neither proposition, so generally put, is disputed.  It is not clear to me that the Committee relied on these factual matters at any lower level of generality.  Unsurprisingly, the applicant has not sought to disprove either presumed fact.

51                  The applicant’s submission is that there was either no probative evidence or that the decision was against the weight of the evidence.  It is not for this Court in circumstances like the present to go behind the Committee’s evaluation of the preferable policy recommendation for it to make to the Minister.  If, contrary to the clear conclusion to which I have come, there were some grounds for an order under s 39B(1A) of the Judiciary Act, I would be disposed to exercise the Court’s discretion against making such an order.  As indicated at [36] of these reasons the recommendation made by the Committee would have been open to it as a matter of ordinary logic and expert experience at the time of its first recommendation if at that time there had not been any persuasive evidence one way or another.  That being so, I cannot see why the same course was not also open to it when it came to consider varying a recommendation at a later time even if the available evidence remained similarly inconclusive.

Conclusion

52                  For these reasons the applicant has not sustained any of its attacks on the Committee’s decision.  The application must be dismissed with costs.

I certify that the preceding fifty-two (52) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Ryan.

Associate:

Dated:              20 June 2003

Counsel for the Applicant:	Mr R R S Tracey QC with Mr R M Niall
Solicitor for the Applicant:	Deacons
Counsel for the Respondents:	Mr P Hanks QC with Ms R Orr
Solicitor for the Respondents:	Australian Government Solicitor
Dates of Hearing:	31 March and 1 April 2003
Date of Judgment:	20 June 2003

SCHEDULE OF PARTIES

 

GLAXOSMITHKLINE AUSTRALIA LTD (ACN 100 162 481)
	Applicant
NEIL ANDERSON
	First Respondent
TERRY CAMPBELL
	Second Respondent
ROBERT CARTER
	Third Respondent
ANDREA MANT
	Fourth Respondent
ALASDAIR MILLAR
	Fifth Respondent
STEPHEN PHILIPS
	Sixth Respondent
LLOYD SANSOM
	Seventh Respondent
ANNE TONKIN
	Eighth Respondent
ROBYN WARD
	Ninth Respondent
DAVID WILKINSON
	Tenth Respondent
THE MINISTER FOR HEALTH & AGEING
	Eleventh Respondent