FEDERAL COURT OF AUSTRALIA

Australian Competition and Consumer Commission v ACN 117 372 915 Pty Limited (in liq) (formerly Advanced Medical Institute Pty Limited)

[2015] FCA 368

Citation:

Australian Competition and Consumer Commission v ACN 117 372 915 Pty Limited (in liq) (formerly Advanced Medical Institute Pty Limited) [2015] FCA 368

Parties:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v ACN 117 372 915 PTY LIMITED ACN 117 372 915 (IN LIQUIDATION), ACN 095 238 645 PTY LIMITED ACN 095 238 645 (IN LIQUIDATION), JACOV VAISMAN, BRIAN LONERGAN, JAMES VANDELEUR, NRM CORPORATION PTY LTD ACN 151 468 601 and NRM TRADING PTY LTD ACN 151 469 493

File number:

VID 1113 of 2010

Judge:

NORTH J

Date of judgment:

22 April 2015

Catchwords:

CONSUMER LAW – Unconscionable conduct prohibited by statute – unfair contract terms – medical clinic – doctors prescribing medications and treatment for male sexual dysfunction over the telephonestatutory unconscionability not limited to the unwritten lawinformed by equitable principles – not limited to circumstances where an individual is disadvantaged by the conduct – unconscionability involves degree of moral taintreference to morality not to be substituted for the words of the section – unconscionability is conduct against conscience – conduct will not be unconscionable only because it is unfair or unreasonable – relevance of community standards and industry codes finding of unconscionable conduct not to be based on personal morality of judicial officer – whether refund term was an unfair contract terms 23 and s 24 Australian Consumer Law – whether third respondent aided, abetted, counselled, or procured, or was knowingly concerned in or party to the alleged contraventions

Legislation:

Australian Consumer Law, Sch 2 to the Competition and Consumer Act 2010 (Cth) ss 21, 22, 23, 24, 25, 27, 232, 239, 240, 243, 246, 250

Evidence Act 1995 (Cth) s 97, s 140

Federal Court of Australia Act 1976 (Cth) s 21

Health Practitioner Regulation National Law Act 2009 (Qld) Sch, s 39, s 41

Trade Practices Act 1974 (Cth) s 51AB, 80

Trade Practices Amendment (Australian Consumer Law) Act (No 2) 2010 (Cth) Sch 7

Cases cited:

Attorney General (NSW) v World Best Holdings Limited (2005) 63 NSWLR 557

Australian Competition & Consumer Commission v 4WD Systems Pty Ltd [2003] FCA 850; (2003) 200 ALR 491

Australian Competition and Consumer Commission v Allphones Retail Pty Ltd (No. 2) [2009] FCA 17; (2009) 253 ALR 324

Australian Competition and Consumer Commission v CJ Berbatis Holdings Pty Ltd & Ors (No 2) (2000) 96 FCR 491

Australian Competition and Consumer Commission v Lux Distributors Pty Ltd [2013] FCAFC 90; [2013] ATPR 42-447

Australian Competition and Consumer Commission v MSY Technology Pty Ltd (2012) 201 FCR 378

Australian Competition and Consumer Commission v Radio Rentals Ltd (2005) 146 FCR 292

Australian Competition and Consumer Commission v Real Estate Institute of Western Australia Incorporated (1999) 95 FCR 114

Australian Competition and Consumer Commission v Simply No-Knead Franchising Pty Ltd (2000) 104 FCR 253

Australian Securities and Investments Commission v National Exchange Pty Ltd (2005) 148 FCR 132

BMW Australia Limited v Australian Competition and Consumer Commission [2004] FCAFC 167; (2004) 207 ALR 452

Briginshaw v Briginshaw (1938) 60 CLR 336

Canon Australia Pty Ltd v Patton [2007] NSWCA 246; (2007) 244 ALR 759

Coggin v Telstar Finance Company (Q) Pty Ltd [2006] FCA 191; [2006] ATPR 42-107

Director of Consumer Affairs Victoria v Scully & Anor (No. 3) [2013] VSCA 292; (2013) 303 ALR 168

Director General of Fair Trading v First National Bank Plc [2002] 1 AC 481; [2001] UKHL 52

Hurley v McDonalds Australia Limited [1999] FCA 1728; [2000] ATPR 41-74

IMF (Australia) Ltd v Sons of Gwalia Ltd (administrator appointed) [2004] FCA 1390; (2004) 211 ALR 231

Jacara Pty Ltd v Perpetual Trustees WA Ltd (2000) 106 FCR 51

Jenyns v Public Curator (Qld) (1953) 90 CLR 113

Jones v Dunkel (1959) 101 CLR 298

The Juliana [1822] EngR 235; (1822) 2 Dods 504; 165 ER 1560

Markarian v The Queen (2005) 228 CLR 357

Paciocco v Australia and New Zealand Banking Group Limited [2015] FCAFC 50

Qantas Airways Limited v Cameron (1996) 66 FCR 246

Rural Press Ltd v Australian Competition and Consumer Commission (2003) 216 CLR 53

Tonto Home Loans Australia Pty Ltd v Tavares [2011] NSWCA 389; [2011] ASC 155-107

Yorke v Lucas (1985) 158 CLR 661

Date of hearing:

18 – 21, 26 – 28 March, 3 – 5, 15 – 24 April, 22 – 26 July, 2 – 12 December 2013, 19 – 20 May 2014

Place:

Melbourne

Division:

GENERAL DIVISION

Category:

Catchwords

Number of paragraphs:

1026

Counsel for the Applicant:

Mr J Burnside QC with Ms L Nichols

Solicitor for the Applicant:

Corrs Chambers Westgarth

Counsel for the Third, Sixth and Seventh Respondents:

Mr M Green with Dr E M Peden

Solicitor for the Third, Sixth and Seventh Respondents:

Bruce & Stewart Lawyers

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

GENERAL DIVISION

VID 1113 of 2010

BETWEEN:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

Applicant

AND:

ACN 117 372 915 PTY LIMITED ACN 117 372 915 (IN LIQUIDATION)

First Respondent

ACN 095 238 645 PTY LIMITED ACN 095 238 645 (IN LIQUIDATION)

Second Respondent

JACOV VAISMAN

Third Respondent

BRIAN LONERGAN

Fourth Respondent

JAMES VANDELEUR

Fifth Respondent

NRM CORPORATION PTY LTD ACN 151 468 601

Sixth Respondent

NRM TRADING PTY LTD ACN 151 469 493

Seventh Respondent

JUDGE:

NORTH J

DATE OF ORDER:

22 ApRil 2015

WHERE MADE:

MELBOURNE

THE COURT DECLARES THAT:

1    Each of the first and second respondents (together, AMI) during the period 2008 to 2010, in connection with the supply and possible supply of medications (AMI medications) and medical services for the treatment of male sexual dysfunction (together, the AMI treatments), engaged in conduct that was unconscionable in contravention of s 51AB of the Trade Practices Act 1974 (Cth) (TPA) in the circumstances set out below:

(a)    AMI promoted its business as the “Advanced Medical Institute” and advertised extensively across the media, including television, radio, newspapers and billboards, with such advertisements containing statements encouraging men suffering from male sexual dysfunction to “call the doctors at Advanced Medical Institute and thereby represented to men seeking treatment for male sexual dysfunction (patients) that they would receive a proper and objective medical assessment of their condition by a qualified medical doctor and would only be prescribed medication if consistent with that assessment;

(b)    on contacting AMI, patients were offered the opportunity to be medically assessed in either a telephone consultation or a consultation at one of AMI’s clinics, and:

(i)    patients who chose a telephone consultation spoke initially with a salesperson who described themselves as a “Clinical Coordinator”, “Medical Coordinator” or “Administrative Assistant” (Clinical Coordinator), then spoke to an AMI doctor, and then spoke to the Clinical Coordinator again;

(ii)    patients who chose an in-clinic consultation met initially with a nurse at the clinic, then spoke to an AMI doctor by telephone, and then met with a Clinical Coordinator;

(c)    the AMI doctors:

(i)    in consultations with each of the patients identified in Annexure B to the Further Amended Statement of Claim (Annexure B patients):

(A)    did not offer or prescribe any medication other than the AMI medications, which the AMI doctors had not selected from the range of all medications available for prescription by Australian medical practitioners, and did not inform the patient that they prescribed only the AMI medications;

(B)    conducted a consultation by telephone only and did not see or conduct any physical examination of the patient;

(C)    recommended to the patient treatment plans, including plans of a length of 12 or 18 months; and

(D)    did not seek to diagnose whether it would have been medically appropriate to refer the patient to a specialist or other medical practitioner for treatment or diagnosis; and

(ii)     in consultations with 150 of the Annexure B patients, did not seek to diagnose any underlying cause for the presenting problem and only questioned the patient to ascertain whether the AMI medications were contraindicated;

(iii)    in consultations with most of the Annexure B patients, did not inform the patient about the common side-effects of the medications prescribed adequately or at all;

(d)    the Clinical Coordinators:

(i)    were salespeople who were not medically trained and were paid by AMI on a commission, calculated by reference to the cost of the treatment plans sold to patients (the longer the contract period, the greater the commission) but described themselves as “Clinical Coordinators”, Medical Coordinators” or “Administrative Assistants”;

(ii)    in conversations with:

(A)    each of the Annexure B patients, did not disclose to the patient that they were salespeople paid on a commission;

(B)    most of the Annexure B patients, made statements to the patient concerning the efficacy of the AMI treatments;

(C)    most of the Annexure B patients, made statements to the patient that he needed treatment or would suffer adverse medical and social consequences if he did not get treatment, including that his penis may shrink or he may become impotent; and

(D)    most of the Annexure B patients, represented to the patient that he would be entitled to a refund of money paid if the AMI treatment purchased was ineffective, and did not disclose the conditions on which a refund would be offered under AMI’s “satisfaction guarantee”;

(e)    AMI sold the AMI treatments to patients pursuant to contracts under which:

(i)    patients were bound to pay for the AMI treatments for a set period of time, whether or not the patients wished to continue with the AMI treatments, with payment either made upfront or by way of instalments;

(ii)    if the AMI treatments did not successfully treat the patient’s condition or the patient experienced adverse side effects, then pursuant to the terms of its “satisfaction guarantee” AMI refused to give the patient a refund or to cancel the contract unless the patient tried at least one option from each of the available delivery mechanisms for which the patient was not contraindicated (including injections into the base of the penis), after which AMI would deduct the cost of the medication supplied and a 15% administration fee from any refund given; and

(iii)    patients who had telephone consultations were only provided with a copy of the terms of the “satisfaction guarantee” after they had already agreed to purchase the AMI treatments; and

(f)    AMI knew that:

(i)    male sexual dysfunction is perceived by patients as embarrassing or humiliating; and

(ii)     patients would have trust in the AMI doctors and would expect that those doctors would act in the patients’ best interests consistent with a doctor and patient relationship.

2    The third respondent:

(a)    aided and abetted, counselled or procured; and

(b)    was directly or indirectly knowingly concerned in, and party to,

the contraventions by AMI of s 51AB of the TPA referred to in paragraph 1 of this order by reason that he:

(c)    was a director of each of the first and second respondents;

(d)    was the Chief Executive Officer of the first and second respondents;

(e)    had overall responsibility for the management of AMI;

(f)     made all critical decisions concerning the business practices of AMI; and

    

(g)    oversaw the business practices of AMI.

3    The fourth respondent was knowingly concerned in, party to, and aided and abetted, counselled and procured the contraventions by AMI of s 51AB of the TPA, during the period 2008 to 2010, in the course of or in relation to his consultation with AMI patients, by:

(a)    prescribing the AMI medications which he had not selected from the range of all medications available for prescription by Australian medical practitioners;

(b)    not disclosing to patients that he was required by AMI to recommend only the AMI treatments and to prescribe only the AMI medications; and

(c)    not seeing or conducting any physical examinations of all patients to whom he recommended the AMI treatments or prescribed the AMI medications.

4    Each of the sixth and seventh respondents (together, NRM) in 2011 and 2012, in connection with the supply and possible supply of medications (NRM medications) and medical services for the treatment of male sexual dysfunction (together, the NRM treatments), engaged in conduct that was unconscionable in contravention of s 21 of the Australian Consumer Law (ACL), in the following circumstances:

(a)    NRM promoted its business as the “Advanced Medical Institute” and advertised across the media, including radio, newspapers and billboards, with such advertisements containing statements encouraging men suffering from male sexual dysfunction to “call the doctors at Advanced Medical Institute and thereby represented to patients that they would receive a proper medical assessment of their condition by a qualified medical doctor and would only be prescribed medication if consistent with that assessment;

(b)    on contacting NRM, patients were offered the opportunity to be medically assessed in either a telephone consultation or a consultation at one of NRM’s clinics, and:

(i)    patients who chose a telephone consultation spoke initially with a salesperson who described themselves as an “Administrative Assistant”, then spoke to an NRM doctor, and then spoke to the Administrative Assistant again;

(ii)    patients who chose an in-clinic consultation met initially with a nurse at the clinic, then spoke to an NRM doctor by telephone, and then met with an Administrative Assistant;

(c)    the NRM doctors:

(i)    in consultations with each of the patients identified in Annexure C to the Further Amended Statement of Claim (Annexure C patients):

(A)    did not offer or prescribe any medication other than the NRM medications, which the NRM doctors had not selected from the range of all medications available for prescription by Australian medical practitioners, and did not inform the patient that they prescribed only the NRM medications;

(B)    only conducted the consultation by telephone;

(C)    recommended to the patient treatment plans, including plans of a length of 12 or 18 months;

(D)    did not seek to diagnose any underlying cause for the presenting problem but only questioned the patient to ascertain whether the NRM medications were contraindicated; and

(E)    did not adequately diagnose whether it would have been medically appropriate to refer the patient to a specialist or other medical practitioner for treatment or diagnosis; and

(ii)    in consultations with 14 of the Annexure C patients, did not adequately inform the patient about the common side-effects of the medications prescribed;

(d)    the Administrative Assistants:

(i)    were salespeople who were not medically trained and were paid on commission by NRM, calculated by reference to the cost of the treatment plans sold to patients (the longer the contract period, the greater the commission), but described themselves as “Administrative Assistants” thereby representing that they were acting impartially in relation to the patients’ medical interests in selling the NRM treatments;

(ii)    in conversations with:

(A)    each of the Annexure C patients, did not disclose to the patient that they were in fact salespeople paid on a commission; and

(B)    six of the Annexure C patients, made statements to the patient concerning the efficacy of the NRM treatments, the effect of which was to apply pressure to the patient to purchase the NRM treatments;

(e)    NRM sold the NRM treatments to patients pursuant to contracts which bound patients to pay for treatment for a set period of time, including terms ranging from 12 to 18 months, whether or not the patients wished to continue with the treatment, with payment either made upfront or by way of instalments;

(f)    The contracts which NRM entered into with patients between June 2011 and February 2012 contained a term (the refund term) which provided that, on giving notice of termination of their contract to NRM, patients were only entitled to receive a refund after NRM had deducted the following amounts:

(A)    an “administrative fee” of 15 per cent of the entire initial cost of the contract, regardless of when the contract was cancelled;

(B)    a pro-rated amount representing the “expired” period of the program prior to receipt of written notice (regardless of whether the patient used NRM’s services or medications during that period);

(C)    a pro-rated amount representing the next 30 days of the program after receipt of written notice (regardless of whether the patient used NRM’s services or medications during that period); and

(D)    the cost of any medication already provided to or prepared for the patient, at a price not specified in the contract but determined by NRM; and

the terms of the contract were played over the telephone to patients by the Administrative Assistants or provided to patients in NRM’s clinics; and

(g)    NRM knew that:

(i)    male sexual dysfunction is perceived by patients as embarrassing or humiliating; and

(ii)    patients would have trust in the NRM doctors and would expect that those doctors would act in the patient’s best interests consistent with a doctor and patient relationship.

5    The third respondent:

(a)    aided and abetted, counselled or procured; and

(b)    was directly or indirectly knowingly concerned in, and party to,

the contraventions by NRM of s 21 of the ACL referred to in paragraph 3 of this order by reason that he:

(c)    was a director of each of the sixth and seventh respondents;

(d)    was the Chief Executive Officer of the sixth and seventh respondents;

(e)    had overall responsibility for the management of the NRM business;

(f)    made or approved all critical decisions concerning the business practices of NRM; and

(g)    oversaw the business practices of NRM.

6    The refund term contained in the consumer contracts between NRM and its patients made during the NRM period, which provided that:

Termination. Sexual dysfunction is a chronic condition and treatment can take some time. For this reason we stipulate that your contract with us for [sic] the period decided in the first consultation with the AMI doctor. You may cancel your treatment program with AMI at any time by giving AMI not less than 30 days notice. Cancelling your treatment program you will be entitled to a refund for the unexpired period of your treatment program less an administration fee of 15% and less the cost of any medication already provided to or prepared for you. No refund will be provided for the expired period of the treatment program or the 30 day notice period. All cancellation must be communicated to AMI in writing signed by you. Oral cancellation will not be accepted in any circumstances.”

was an unfair term within the meaning of sections 24 and 250 of the ACL because:

(a)    the imposition of the administration fee was not reasonably necessary        to protect NRM’s legitimate interests;

(b)    the imposition of a charge for a pro-rated amount representing the expired portion of the treatment regardless of the quantity or effectiveness of the goods or services supplied by NRM to the patient during this period was not reasonably necessary to protect NRM’s legitimate interests;

(c)    the imposition of a charge for a pro-rated amount for the additional thirty-day notice period regardless of whether the patient desired to continue receiving goods or services for this period and whether any goods or services provided by NRM were effective was not reasonably necessary to protect NRM’s legitimate interests;

(d)    the imposition of a charge for an amount for the cost of any medication already provided by NRM when the method of calculation was not disclosed to the patient and regardless of the actual cost to NRM of providing the medication or whether the medication was effective was not reasonably necessary to protect NRM’s legitimate interests;

(e)    the imposition of the fees referred to in sub-paragraphs (a) to (d) was not transparent when delivered in a pre-recorded telephone message; and

(f)    the uncertainty and cost of terminating a contract would cause a financial and other detriment to a patient wishing to terminate,

and is void by operation of s 23 of the ACL.

THE COURT ORDERS THAT:

7    The fourth respondent be released from the undertaking given by him to the Court on 21 June 2012.

8    The fourth respondent be permanently restrained from being knowingly concerned in, party to, aiding and abetting, counselling or procuring the provision by a corporation of any medical treatment plan or medication for the treatment of male sexual dysfunction by contract which:

(a)    provides for the supply or possible supply of any treatment or medication prior to the patient having been seen and physically examined by a qualified medical practitioner in relation to the medical condition for which the patient is seeking treatment;

(b)    provides for the supply or possible supply for any treatment or medication which a qualified medical practitioner has not assessed as the most suitable or efficacious for the patient from the range of all appropriate medications available for prescription by Australian medical practitioners;

(c)    provides for the supply or possible supply of any treatment or medication which he or another qualified medical practitioner has not discussed with the patient prior to entering into the contract;

(d)    is for a period which exceeds the length of time which he or another qualified medical practitioner has determined the patient will necessarily require the treatment to entering into the contract;

(e)    requires the patient to pay for treatment or medication for a period of more than two months; or

(f)    provides for the supply of any treatment or medication, without prior consultation with a qualified medical practitioner who has provided information as to the efficacy, suitability, prior use and most common side effects of the treatment or medication.

9    Each of the sixth and seventh respondents be permanently restrained, whether by themselves, their servants or agents or otherwise, in trade or commerce, from:

(a)    making an agreement with a patient for or in respect of the supply of medications or medical services for the treatment of male sexual dysfunction, unless the patient for whom the medications or medical services are intended has had a consultation with a duly qualified medical practitioner either in person or by video-link;

(b)    making an agreement with a patient for the supply of medications or medical services for the treatment of male sexual dysfunction unless:

(i)    before the agreement is made:

(A)    the patient has been provided with a written statement by the sixth and seventh respondents by post, electronic mail, or in person:

a.    setting out in plain English the terms of the agreement including a description of the medication or medical services to be provided, the total cost of the agreement, the proposed payment plan (if any), the period of treatment, and a statement that the patient has a right to terminate the agreement during the period of five business days commencing on the date on which the agreement is made (Cooling-Off Period);

b.    stating that male sexual dysfunction may be a symptom of other medical conditions but NRM does not seek to diagnose those other medical conditions; and

c.    stating that NRM does not provide general medical advice and that NRM’s doctors only consider whether the patient is suitable for NRM medications; and

(B)    the sixth and seventh respondents receive from the patient a written acceptance of the terms of the agreement; and

(ii)    the agreement contains terms which:

(A)    give the patient a right to terminate the agreement, by notice in writing to the sixth and seventh respondents dispatched during the Cooling-Off Period; and

(B)    provide that if the patient exercises the right to terminate the agreement during the Cooling-Off Period, the agreement is taken to be rescinded by mutual consent with all payments made refunded; and

(C)    provide that the patient may at any time after the Cooling-Off Period terminate the agreement by giving 14 days’ notice, and that once this notice has been provided, the sixth and seventh respondents will cancel any direct debit arrangement referrable to the patient;

(c)    making any statement or representation to any patient or prospective patient as to:

(i)    the efficacy of NRM treatments;

(ii)    the efficacy of any medications or medical services offered by parties other than the sixth and seventh respondents; or

(iii)    the patient’s need for the NRM treatments and any adverse consequences that might result if the patient:

(A)    does not acquire the NRM treatments, or

(B)    does not receive NRM treatments for male sexual dysfunction.

except if that statement is made directly to a patient or potential patient by a duly qualified medical practitioner during a consultation either in person or by video-link;

(d)    making an agreement with a patient for the supply of NRM treatments, unless during pre-contractual negotiations, the patient is offered an agreement with a term of no more than two months; and

(e)    accepting in advance any payment or any other consideration from a patient in connection with the supply of NRM treatments for a future period of more than two months.

10    The third respondent be restrained, for a period of seven years from the date of this order (unless otherwise specified below), in trade or commerce, from:

(a)    being in any way, directly or indirectly, knowingly concerned in, or a party to, or aiding and abetting, counselling or procuring conduct of the kind restrained in order 6 above; and

(b)    from having a role in connection with training, supervising, counselling or terminating employees, agents or contractors of the sixth and seventh respondents and their related bodies corporate.

11    Pursuant to s 239 of the ACL, the sixth and seventh respondents refund the total amount of money paid by the Annexure C patients, except for patients NRM 7 and NRM 9, pursuant to their contract with NRM, less any refund already provided by NRM.

12    The sixth and seventh respondents cause to be published, at their own expense, within 21 days of the date of this order, a notice in the form contained in Annexure A to this order (website notice) on its website located at http://www.amiaustralia.com.au (AMI website) and, if the URL of such website is replaced, changed or redirected to another website, on the corresponding website, for a continuous period of 90 days and use its best endeavours to ensure that:

(a)    the website notice shall be viewable by clicking a “click-through” icon located on the AMI website;

(b)    the “click-through” icon referred to in (a) is located at the top of the homepage of the AMI website and any corresponding websites;

(c)    the “click-through” icon shall appear as follows, with the words printed prominently in bold red text, in a font size no smaller than 14-point, on a white background:

Unconscionable Conduct by Advanced Medical Institute (AMI) –

Notice Ordered by Federal Court of Australia.

Click Here

13    The third, sixth, and seventh respondents pay the applicant’s costs of the proceeding, except for the applicant’s costs of and incidental to the proceeding against the fourth and fifth respondents.

14    The applicant and the sixth and seventh respondents have liberty to apply in writing by 6 May 2015 in relation to the issues referred to in [975], [988], [989], [993], and [1026] of these reasons for judgment.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

ANNEXURE A

CORRECTIVE NOTICE ORDERED BY FEDERAL COURT OF AUSTRALIA

UNLAWFUL CONDUCT BY ADVANCED MEDICAL INSTITUTE

Following legal action by the Australian Competition and Consumer Commission, the Federal Court of Australia has ruled that NRM Corporation Pty Ltd and NRM Trading Pty Ltd, (together, NRM), engaged in unconscionable conduct in contravention of section 21 of the Australian Consumer Law in its dealings with men seeking treatment for male sexual dysfunction in 2011 and 2012.

NRM promoted its business as the “Advanced Medical Institute”. It represented that its patients would receive a proper medical assessment of their condition by a qualified medical doctor and would only be prescribed medication if consistent with that assessment. It knew that its patients were vulnerable by virtue of their condition, and that patients would expect NRM and its doctors to act in their best interests consistent with a doctor/patient relationship. In fact, a number of NRM’s patients:

    were not physically examined by NRM’s doctors;

    were only prescribed NRM’s treatments, which were not selected from all relevant and available treatments in Australia;

    were not informed that NRM’s doctors would only prescribe treatments from NRM’s limited range of treatments, or that other treatments were available;

    were not adequately informed of the side effects of NRM’s treatments;

    were not properly diagnosed with the underlying cause of their condition, but rather were only questioned as to whether NRM’s treatments were contraindicated;

    were not referred to specialists or advised to see their general practitioner;

    were misled by NRM’s salespeople, who described themselves as “Administrative Assistants” but in fact were paid on commission;

    were told that they would receive a refund under NRM’s refund policy if the NRM treatments were ineffective, when in fact any refund was subject to significant limitations and deductions that were not adequately disclosed to the patient when they entered into the contract; and

    were sold NRM treatments pursuant to contracts which bound the patients to pay for treatment for a set period of time, including terms ranging from 12 to 18 months, whether or not the patients wished to continue with the treatment.

The Court also found that NRM’s refund policy was an unfair term within the meaning of sections 24 and 250 of the ACL, because the imposition of fees and charges deducted from any refund to a patient was not transparent, was not necessary to protect NRM’s interests and would cause financial and other detriment to patients. The consequence of this declaration is that the refund policy is void.

The Court has also found that Jack Vaisman, Chief Executive Officer of NRM, was knowingly concerned in the unlawful conduct of NRM.

The Court has ordered declarations, injunctions and the refund of money to patients. A copy of the judgment, which details the Court’s findings and orders is located at [insert URL]

NRM purchased the AMI business from Advanced Medical Institute Pty Limited and AMI Australia Holdings Pty Ltd (together, AMI) in June 2011. The Court also declared that AMI had engaged in unconscionable conduct.

This notice has been placed because of an order of the Federal Court of Australia in a proceeding commenced by the Australian Competition and Consumer Commission.

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

GENERAL DIVISION

VID 1113 of 2010

BETWEEN:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

Applicant

AND:

ACN 117 372 915 PTY LIMITED ACN 117 372 915 (IN LIQUIDATION)

First Respondent

ACN 095 238 645 PTY LIMITED ACN 095 238 645 (IN LIQUIDATION)

Second Respondent

JACOV VAISMAN

Third Respondent

BRIAN LONERGAN

Fourth Respondent

JAMES VANDELEUR

Fifth Respondent

NRM CORPORATION PTY LTD ACN 151 468 601

Sixth Respondent

NRM TRADING PTY LTD ACN 151 469 493

Seventh Respondent

JUDGE:

NORTH J

DATE:

22 APRIL 2015

PLACE:

MELBOURNE

REASONS FOR JUDGMENT

1    INTRODUCTION

[1]

1.1    The claims

[12]

1.2    The relief sought by the ACCC

[16]

1.3    The hearing

[18]

1.4    The organisation of these reasons

[19]

2    APPLICABLE LEGAL PRINCIPLES

[20]

2.1    Unconscionable conduct

[20]

2.2    Unfair contract term

[62]

2.3    Accessorial liability

[66]

2.4    Standard of proof

[69]

3    THE SCOPE OF THE ACCC’S CASE

[71]

3.1    The Further Amended Statement of Claim

[71]

3.2    Is the ACCC’s case an individual-patients case or a business-system case?

[83]

4    FACT FINDINGS IN RESPECT OF AMI

[96]

4.1    Introduction

[96]

4.2    An overview of the AMI operation

[102]

4.3    Recordings of the consultations

[108]

4.4    Dr Vaisman’s evidence

[118]

4.5    The conduct alleged against AMI

[124]

4.5.1    Advertising medical treatment

[124]

4.5.2    The conduct of AMI salespeople

[134]

4.5.2.1    Introduction

[134]

4.5.2.2    Unqualified salespeople presenting as medically qualified

[136]

4.5.2.3    Failure of salespeople to disclose their remuneration by commission

[141]

4.5.2.4    High-Pressure sales techniques used by salespeople

[143]

4.5.2.4.1    Introduction

[143]

4.5.2.4.2    The sales scripts and materials

[145]

4.5.2.4.3    Targeting vulnerability

[156]

4.5.2.4.4    Emphasising adverse medical and social consequences of failing to treat

[171]

4.5.2.4.5    Statements about the efficacy of the AMI treatments

[202]

4.5.2.4.6    Downplaying side effects

[207]

4.5.2.4.7    Exaggerating dangers of alternative treatments

[208]

4.5.2.5    Recommending long-term contracts

[210]

4.5.2.6    Misleading patients about the refund term

[217]

4.5.3    Offering limited to AMI medications

[218]

4.5.3.1    Introduction

[218]

4.5.3.2    The conventional first-line treatment for ED and PE

[221]

4.5.3.3    The limitation by AMI on medications available for doctors to prescribe

[228]

4.5.3.4    The efficacy of apomorphine as a treatment for ED

[234]

4.5.3.5    The efficacy of clomipramine as a treatment for PE

[258]

4.5.3.6    The efficacy of alternative drug delivery systems

[279]

4.5.3.6.1    Dr Rowe’s first report

[281]

4.5.3.6.2    Dr Altman’s first report

[286]

4.5.3.6.3    Professor Pouton’s report

[290]

4.5.3.6.4    Dr Rowe and Dr Altman’s second reports

[301]

4.5.3.6.5    Cross-examination of Dr Rowe and Dr Altman

[312]

4.5.3.6.6    Conclusion

[321]

4.5.3.7    Standards applicable to off-label prescribing

[328]

4.5.3.8    Conclusion

[345]

4.5.4    The conduct of the doctors

[353]

4.5.4.1    Introduction

[353]

4.5.4.2    The evidence

[360]

4.5.4.2.1    Recordings and patients

[360]

4.5.4.2.2    Doctors

[366]

4.5.4.2.3    Expert evidence

[399]

4.5.4.3    The requirements for a reasonable standard of consultation for the treatment of ED and PE

[434]

4.5.4.4    Diagnosis of the underlying causes and referral of patients to specialists or other doctors for diagnosis or treatment

[460]

4.5.4.4.1    The standard of treatment required

[460]

4.5.4.4.2    The failure to diagnose underlying causes of ED and PE

[486]

4.5.4.4.3    The failure to refer patients to specialists or other doctors for diagnosis or treatment

[520]

4.5.4.5    The failure to warn of side effects

[522]

4.5.4.6    Consultation by phone

[559]

4.5.4.7    Recommending long-term contracts without medical basis

[600]

4.5.4.8    Prescribing only AMI medications

[601]

4.5.4.9    The failure to advise of the terms on which treatment would be provided

[607]

4.5.5    Contracts

[610]

4.5.5.1    Length of treatment

[610]

4.5.5.2    AMI refund term

[680]

4.5.6    Cost of medication

[737]

5    FACT FINDINGS IN RESPECT OF NRM

[742]

5.1    Introduction

[742]

5.2    Acquisition of the business by NRM

[743]

5.3    Continuation of the AMI business system

[759]

5.4    Continuity of personnel

[762]

5.5    The conduct alleged against NRM

[765]

5.5.1    Advertising medical treatment

[765]

5.5.2    The conduct of NRM salespeople

[766]

5.5.3    Offering limited to NRM medications

[782]

5.5.4    The conduct of the doctors

[783]

5.5.5    Contracts

[837]

5.5.5.1    Length of treatment

[837]

5.5.5.2    NRM Refund term

[840]

6    FACT FINDINGS IN RESPECT OF DR VAISMAN

[870]

6.1    Advertising

[873]

6.2    Selling methods

[874]

6.3    Contracts

[875]

6.4    Doctors’ consultations

[879]

7    WAS THE CONDUCT OF AMI, NRM, AND DR VAISMAN UNCONSCIONABLE?

[889]

7.1    Introduction

[889]

7.2    AMI and NRM

[890]

7.2.1    Targeting vulnerability

[891]

7.2.2    High-pressure sales techniques

[893]

7.2.3    Remuneration of salespeople by commission

[903]

7.2.4    The AMI refund term

[906]

7.2.5    Enforcement of the AMI refund term

[918]

7.2.6    The medications offered

[919]

7.2.7    Long-term contracts

[923]

7.2.8    The role of the doctors

[926]

7.2.9    The first NRM refund term

[936]

7.2.10    Conclusion

[939]

7.2.11    Liability of Dr Vaisman

[943]

8    WAS THE FIRST NRM REFUND TERM AN UNFAIR CONTRACT TERM?

[945]

9    A PLEADING POINT

[955]

10    RELIEF AGAINST AMI, NRM AND DR VAISMAN

[966]

10.1    Declarations

[966]

10.2    Injunctions

[982]

10.3    Refund to Annexure C patients

[1008]

10.4    Corrective notice

[1013]

11    RELIEF AGAINST DR LONERGAN

[1019]

12    COSTS

[1021]

1.    INTRODUCTION

1    On 21 December 2010, the applicant, the Australian Competition and Consumer Commission (ACCC) commenced this proceeding against five respondents.

2    The first respondent was ACN 117 372 915 Pty Limited (ACN 117 372 915) (in liquidation) and was formerly known as Advanced Medical Institute Pty Limited. The second respondent was ACN 095 238 645 Pty Limited (ACN 095 238 645) (in liquidation) and was formerly known as AMI Australia Holdings Pty Ltd. Together they are referred to as AMI in these reasons for judgment. AMI conducted a business of providing treatment to men for erectile dysfunction (ED) and premature ejaculation (PE).

3    The third respondent was Dr Jacov Vaisman, who was the sole director and Chief Executive Officer of AMI. The fourth respondent was Dr Brian Lonergan, and the fifth respondent was Dr James Vandeleur. Both were doctors engaged by AMI to treat patients with ED and PE.

4    On 22 December 2010, both of the companies constituting AMI were placed into voluntary administration.

5    On 17 June 2011, the business of AMI was sold to NRM Corporation Pty Ltd and NRM Trading Pty Ltd.

6    On 19 July 2011, both of the companies constituting AMI were placed into voluntary liquidation.

7    On 21 July 2011, the ACCC discontinued the proceeding against Dr Vandeleur in accordance with a settlement reached with him.

8    On 17 August 2011, AMI filed a submitting appearance seeking to be heard only in respect of costs.

9    On 2 September 2011, the ACCC was granted leave to proceed against AMI under s 500(2) of the Corporations Act 2001 (Cth) and to join NRM Corporation Pty Ltd and NRM Trading Pty Ltd as the sixth and seventh respondents respectively. They are together referred to as NRM in these reasons for judgment.

10    On 21 June 2012, the ACCC and Dr Lonergan made an agreement including that Dr Lonergan would take no further part in the proceeding except as a witness, that there would be no order for costs between them, and that if the Court determined to make declarations against AMI, then there would be similar agreed orders and an injunction against Dr Lonergan.

11    As the only respondents who participated in the trial were NRM and Dr Vaisman, they are together referred to in these reasons for judgment as the respondents.

1.1    The claims

12    The ACCC alleged that in the period from 2008 to 2010, which is referred to as the AMI period, AMI engaged in unconscionable conduct in contravention of s 51AB of the Trade Practices Act 1974 (Cth) (TPA).

13     The ACCC alleged that NRM continued the business of AMI and engaged in unconscionable conduct after the purchase of the business on 17 June 2011 and during 2012. At those times unconscionable conduct was prohibited by s 21 of the Australian Consumer Law (ACL), contained in Sch 2 to the Competition and Consumer Act 2010 (Cth), in almost identical terms to s 51AB of the TPA.

14    The ACCC also alleged that a term of the contract between NRM and its patients concerning termination was unfair within the meaning of s 24 and s 250 of the ACL, and consequently void under s 23(1) of the ACL.

15     The ACCC alleged that Dr Vaisman made all the critical decisions in relation to the business and aided, abetted, counselled or procured, or was knowingly concerned in or party to, the contraventions by AMI and NRM.

1.2    The relief sought by the ACCC

16    The ACCC sought declarations against AMI, NRM, and Dr Vaisman that specified conduct was unconscionable, and that the term of the NRM contract regarding termination was unfair. The ACCC sought injunctions against NRM and Dr Vaisman restraining them from engaging in further such conduct. Against NRM, the ACCC also sought the publication of corrective advertising and the refund to certain patients of monies paid under contracts with NRM. The ACCC also sought an order for costs against NRM and Dr Vaisman.

17    Although AMI entered a submitting appearance, considerable time was taken by the ACCC in establishing the conduct of AMI between 2008 and 2010. That attention was necessary because the Court needed to be satisfied by evidence that AMI had engaged in unconscionable conduct if declarations were to be made against AMI, and further, because the conduct of AMI was relevant to the establishment of the case against NRM, in that both AMI and NRM were operated by the same people and NRM was said to have continued to use the same business model previously employed by AMI.

1.3    The hearing

18    The proceeding was contested on almost every issue of fact and law. The hearing occupied 33 sitting days and the record of the hearing is contained in 2,828 pages of transcript. Thirty-two witnesses were called to give evidence including patients of AMI and NRM, doctors, medical and pharmacological experts, and employees and management of AMI and NRM. The documentary evidence was provided in both electronic and hard-copy form. In hard copy, the documentary evidence occupied about 40 large lever-arch folders. The case involved a highly detailed investigation of the business practices of AMI and NRM, and of the appropriate pharmacological and medical treatment of ED and PE. In view of the large amount of material before the Court, these reasons for judgment have, for ease of reference, included in the text of the judgment the source of much of the evidence.

1.4    The organisation of these reasons

19    These reasons for judgment first set out the legal principles to be applied. Then, in separate sections, the reasons for judgment address the factual allegations against AMI, NRM, and Dr Vaisman, and make relevant fact findings. Following the fact findings, the reasons for judgment examine whether the proved facts constitute unconscionable conduct and whether those facts establish that a term of the NRM contract regarding termination was an unfair contract term. The reasons for judgment then conclude with sections relating to a pleading point raised by the respondents, the form of relief, and costs.

2.    APPLICABLE LEGAL PRINCIPLES

2.1    Unconscionable conduct

20    The ACCC contended that the conduct of AMI was unconscionable and thereby infringed the prohibition on such conduct contained in s 51AB of the TPA, which relevantly provided as follows:

51AB     Unconscionable conduct

    

(1)    A corporation shall not, in trade or commerce, in connection with the supply or possible supply of goods or services to a person, engage in conduct that is, in all the circumstances, unconscionable.

    

(2)    Without in any way limiting the matters to which the court may have regard for the purpose of determining whether a corporation has contravened subsection (1) in connection with the supply or possible supply of goods or services to a person (in this subsection referred to as the consumer), the court may have regard to:

(a)    the relative strengths of the bargaining positions of the corporation and the consumer;

    

(b)    whether, as a result of conduct engaged in by the corporation, the consumer was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the corporation;

    

(c)    whether the consumer was able to understand any documents relating to the supply or possible supply of the goods or services;

(d)    whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the consumer or a person acting on behalf of the consumer by the corporation or a person acting on behalf of the corporation in relation to the supply or possible supply of the goods or services; and

    

(e)    the amount for which, and the circumstances under which, the consumer could have acquired identical or equivalent goods or services from a person other than the corporation.

(3)     A corporation shall not be taken for the purposes of this section to engage in unconscionable conduct in connection with the supply or possible supply of goods or services to a person by reason only that the corporation institutes legal proceedings in relation to that supply or possible supply or refers a dispute or claim in relation to that supply or possible supply to arbitration.

(4)    For the purpose of determining whether a corporation has contravened subsection (1) in connection with the supply or possible supply of goods or services to a person:

    

(a)    the court shall not have regard to any circumstances that were not reasonably forseeable at the time of the alleged contravention; and

    

(b)    the court may have regard to conduct engaged in, or circumstances existing, before the commencement of this section.

(5)    A reference in this section to goods or services is a reference to goods or services of a kind ordinarily acquired for personal, domestic or household use or consumption.

    

21    Section 51AB of the TPA was replaced by s 21 of the ACL. The ACCC contended that the conduct of NRM was unconscionable and thereby infringed s 21 of the ACL. Section 21 applied to the conduct of NRM between 1 January 2011 and 1 January 2012. At that time, it provided as follows:

(1)     A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services to another person, engage in conduct that is, in all the circumstances, unconscionable.

(2)    Without in any way limiting the matters to which the court may have regard for the purpose of determining whether a person (the supplier) has contravened subsection (1) in connection with the supply or possible supply of goods or services to another person (the consumer), the court may have regard to:

(a)    the relative strengths of the bargaining positions of the supplier and the consumer; and

(b)    whether, as a result of conduct engaged in by the person, the consumer was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the supplier; and

(c)    whether the consumer was able to understand any documents relating to the supply or possible supply of the goods or services; and

(d)    whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the consumer or a person acting on behalf of the consumer by the supplier or a person acting on behalf of the supplier in relation to the supply or possible supply of the goods or services; and

(e)    the amount for which, and the circumstances under which, the consumer could have acquired identical or equivalent goods or services from a person other than the supplier.

(3)    A person is not to be taken for the purposes of this section to engage in unconscionable conduct in connection with the supply or possible supply of goods or services to a person by reason only that the person institutes legal proceedings in relation to that supply or possible supply or refers a dispute or claim in relation to that supply or possible supply to arbitration.

(4)    For the purpose of determining whether a person has contravened subsection (1) in connection with the supply or possible supply of goods or services to another person:

(a)    the court must not have regard to any circumstances that were not reasonably foreseeable at the time of the alleged contravention; and

(b)    the court may have regard to conduct engaged in, or circumstances existing, before the commencement of this section.

(5)    A reference in this section to goods or services is a reference to goods or services of a kind ordinarily acquired for personal, domestic or household use or consumption.

(6)    A reference in this section to the supply or possible supply of goods does not include a reference to the supply or possible supply of goods for the purpose of re-supply or for the purpose of using them up or transforming them in trade or commerce.

(7)    Section 4 applies for the purposes of this section in the same way as it applies for the purposes of Division 1 of Part 31.

22    Section 21 of the ACL was amended, taking effect from 1 January 2012. It governed the conduct of NRM in 2012. This new section is relevantly in the following terms:

(1)    A person must not, in trade or commerce, in connection with:

    

(a)    the supply or possible supply of goods or services to a person (other than a listed public company); or

    

(b)    the acquisition or possible acquisition of goods or services from a person (other than a listed public company);

engage in conduct that is, in all the circumstances, unconscionable.

    

(3)    For the purpose of determining whether a person has contravened subsection (1):

    

(a)    the court must not have regard to any circumstances that were not reasonably foreseeable at the time of the alleged contravention; and

(b)    the court may have regard to conduct engaged in, or circumstances existing, before the commencement of this section.

    (4)    It is the intention of the Parliament that:

    

(a)    this section is not limited by the unwritten law relating to unconscionable conduct; and

    

(b)    this section is capable of applying to a system of conduct or pattern of behaviour, whether or not a particular individual is identified as having been disadvantaged by the conduct or behaviour; and

(c)    in considering whether conduct to which a contract relates is unconscionable, a court’s consideration of the contract may include consideration of:

(i)    the terms of the contract; and

(ii)    the manner in which and the extent to which the contract is carried out;

and is not limited to consideration of the circumstances relating to formation of the contract.

23    Section 22 of the ACL, also taking effect from 1 January 2012, contains the considerations previously contained in s 51AB(2) of the TPA and s 21(2) of the ACL, but added some further considerations. It is relevantly in the following terms:

(1)    Without limiting the matters to which the court may have regard for the purpose of determining whether a person (the supplier) has contravened section 21 in connection with the supply or possible supply of goods or services to a person (the customer), the court may have regard to:

(a)    the relative strengths of the bargaining positions of the supplier and the customer; and

(b)    whether, as a result of conduct engaged in by the supplier, the customer was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the supplier; and

(c)    whether the customer was able to understand any documents relating to the supply or possible supply of the goods or services; and

(d)    whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the customer or a person acting on behalf of the customer by the supplier or a person acting on behalf of the supplier in relation to the supply or possible supply of the goods or services; and

(e)    the amount for which, and the circumstances under which, the customer could have acquired identical or equivalent goods or services from a person other than the supplier; and

(f)    the extent to which the supplier’s conduct towards the customer was consistent with the supplier’s conduct in similar transactions between the supplier and other like customers; and

(g)    the requirements of any applicable industry code; and

(h)    the requirements of any other industry code, if the customer acted on the reasonable belief that the supplier would comply with that code; and

(i)    the extent to which the supplier unreasonably failed to disclose to the customer:

(i)    any intended conduct of the supplier that might affect the interests of the customer; and

(ii)    any risks to the customer arising from the supplier’s intended conduct (being risks that the supplier should have foreseen would not be apparent to the customer); and

    

(j)    if there is a contract between the supplier and the customer for the supply of the goods or services:

(i)    the extent to which the supplier was willing to negotiate the terms and conditions of the contract with the customer; and

(ii)    the terms and conditions of the contract; and

(iii)    the conduct of the supplier and the customer in complying with the terms and conditions of the contract; and

(iv)    any conduct that the supplier or the customer engaged in, in connection with their commercial relationship, after they entered into the contract; and

(k)    without limiting paragraph (j), whether the supplier has a contractual right to vary unilaterally a term or condition of a contract between the supplier and the customer for the supply of the goods or services; and

(l)    the extent to which the supplier and the customer acted in good faith.

        

24    Section 51AB and s 21 in its two relevant forms prohibited unconscionable conduct, but the concept was not defined in the statute. However, other provisions shed light on what is meant by the concept.

25    For a start, it is clear that the assessment of unconscionable conduct involves a wide-ranging enquiry because the sections stipulate that the conduct be unconscionable in all the circumstances. Then, the provisions specify some matters which the Court may take into account in making the assessment. The specified matters are not exhaustive. They do not prevent the Court having regard to other matters if they are relevant.

26    Section 51AB(2), s 21(2) in the form applicable until 1 January 2012, and s 22(1) as applicable after 1 January 2012 all specify five matters to which the Court might have regard in determining whether the supplier engaged in unconscionable conduct. The considerations are:

1.    the reality of bargaining strength of the parties;

2.    whether the customers were required to comply with conditions that were not reasonably necessary to protect the supplier’s legitimate interests;

3.    whether the customer was able to understand the documents relating to the transaction;

4.    whether any undue influence or pressure was exerted on, or unfair tactics used against the customer; and

5.    the price of or conditions for the provision of alternative or identical goods or services.

27    It was also established, before s 21 was amended, that the concept of unconscionable conduct in s 51AB was not limited by equitable doctrines concerning unconscionable conduct: Australian Competition and Consumer Commission v CJ Berbatis Holdings Pty Ltd (No 2) (2000) 96 FCR 491; [2000] FCA 2 at [24]; Australian Competition and Consumer Commission v Radio Rentals Ltd (2005) 146 FCR 292; [2005] FCA 1133 at [24]. That was put beyond argument by the 2012 amendment to s 21(4), which provided at the relevant time and currently provides that the section is not limited by the unwritten law relating to unconscionable conduct.

28    Section 21(4)(b) also makes clear that the concept of unconscionability is wide enough to apply to a system of conduct or pattern of behaviour, even if no individual is identified as having been disadvantaged. And in contract cases, by s 21(4)(c), the Court can examine the terms of the contract and the manner and extent to which it was carried out. The Court is not limited to a consideration of the circumstances relating to the formation of the contract.

29    Then, the amendment to s 22 added seven further considerations to which the Court may have regard when determining whether conduct is unconscionable (s 22(1)(f) (l)). The width of the concept of unconscionability is further emphasised by these additional considerations which include, for instance, the requirements of an industry code, the extent to which the supplier was willing to negotiate the terms and conditions of the contract with the customer, whether the supplier has the right to vary unilaterally a term or condition of the contract, and the extent to which the supplier and the customer acted in good faith.

30    In order to explain how courts have understood the concept of unconscionable conduct, they have used alternative words and expressions which have tried to encapsulate the essence of the sections.

31    Most reviews commence with the judgment in Qantas Airways Limited v Cameron (1996) 66 FCR 246; [1996] FCA 1483 (Qantas) in which the Court relied on the dictionary definition of unconscionable conduct, that is to say, conduct which shows no regard for conscience, conduct which is irreconcilable with what is right or reasonable (at 262 per Davies J). In addition, Lindgren J, with whom Lehane J agreed at 298, said at 284 that victimisation, manipulation, exploitation, unfairness, unreasonableness, unscrupulous taking advantage and one person’s taking advantage of another’s special vulnerability or misadventure were all synonyms for unconscionable conduct, “all of them correctly imputing a pejorative moral judgment”. That approach was adopted by the Full Court of this Court in Hurley v McDonalds Australia Limited [1999] FCA 1728; [2000] ATPR 41-741 at [22] and was followed in a number judgments of single judges: Australian Competition and Consumer Commission v Simply No-Knead Franchising Pty Ltd (2000) 104 FCR 253; [2000] FCA 1365; Australian Competition & Consumer Commission v 4WD Systems Pty Ltd [2003] FCA 850; (2003) 200 ALR 491; and Australian Competition and Consumer Commission v Allphones Retail Pty Ltd (No. 2) [2009] FCA 17; (2009) 253 ALR 324.

32    The moral deficit involved in unconscionable conduct, mentioned in passing by Lindgren J in Qantas, was a vehicle used by Spigelman CJ in Attorney General (NSW) v World Best Holdings Limited (2005) 63 NSWLR 557; [2005] NSWCA 261 (World Best) as a means of imposing some limitation on the concept of unconscionable conduct as expressed in s 62B of the Retail Leases Act 1994 (NSW). His Honour said at [121]:

Unconscionability is a concept which requires a high level of moral obloquy. If it were to be applied as if it were equivalent to what was “fair” or “just”, it could transform commercial relationships in a manner which the Minister expressly stated was not the intention of the legislation. The principle of “unconscionability” would not be a doctrine of occasional application, when the circumstances are highly unethical, it would be transformed into the first and easiest port of call when any dispute about a retail lease arises.

33    In Tonto Home Loans Australia Pty Ltd v Tavares [2011] NSWCA 389; [2011] ASC 155 – 107 (Tonto), Allsop P, as he then was, said of the requirement of a high level of moral obloquy at [293]:

Whether that is too stringent and whether “significant” or “real” may be preferable need not be decided. What is required is some degree of moral tainting in the transaction of a kind that permits the opprobrium of unconscionability to characterise the conduct of the party.

34    In Australian Competition and Consumer Commission v Lux Distributors Pty Ltd [2013] FCAFC 90; [2013] ATPR 42-447 (Lux) at [41], the issue was revisited by the Full Court of this Court thus:

Notions of moral tainting have been said to be relevant, as often they no doubt are, as long as one recognises that it is conduct against conscience by reference to the norms of society that is in question.

35    The role of the element of moral taint was raised directly in Director of Consumer Affairs Victoria v Scully & Anor (No. 3) [2013] VSCA 292; (2013) 303 ALR 168 (Scully), in relation to the cognate provision of the Fair Trading Act 1999 (Vic). The Director of Consumer Affairs in Victoria argued on appeal that moral obloquy was not required to prove unconscionable conduct. The Director contended that the trial judge erred in rejecting this proposition. In dismissing the appeal, the Court of Appeal held at [58] that, “the trial judge understood statutory unconscionability as involving moral taint, and that absent such taint, conduct which might be thought otherwise to be unfair or unreasonable should not be held to be unconscionable.” The Court held that the trial judge applied the existing tests, which were not plainly wrong.

36    The Court of Appeal said at [48] that, “a distinctive quality of unconscionable conduct as against unreasonable or unfair conduct is that it is unethical.” It seems that this formulation was intended to parallel “some degree of moral tainting” referred to by Allsop P in Tonto. The Court of Appeal said at [18] that, “in every case in which there has been a holding of statutory unconscionability, there has been a finding that the conduct of the defendant showed a degree of moral taint: conduct which was unethical.”

37    At the same time the Court of Appeal cautioned against substituting the reference to the moral aspect of the unconscionable conduct for the words of the section. The Court referred to the judgment of Basten JA in Canon Australia Pty Ltd v Patton [2007] NSWCA 246; (2007) 244 ALR 759, in which his Honour said at [4]:

However, to treat the word “unconscionable” as having some larger meaning, derived from ordinary language, and then to seek to confine it by such concepts as high moral obloquy is to risk substituting for the statutory term language of no greater precision in an attempt to impose limits without which the Court may wander from well-trodden paths without clear criteria or guidance. That approach should not be adopted unless the statute clearly so requires.

38    This is the same point as made in Lux at [41], that the touchstone for the examination of evidence is the statutory concept of unconscionable conduct. And that means something against conscience or not done in good conscience: Lux at [41]; Australian Securities and Investments Commission v National Exchange Pty Ltd (2005) 148 FCR 132; [2005] FCAFC 226 (National Exchange) at [33].

39    Conduct which is unfair or unreasonable is not for those reasons alone unconscionable. By reference to what Spigelman CJ said in World Best to justify a requirement of a high moral obloquy, the Court of Appeal in Scully explained that such sections apply to conduct in trade and commerce and in that case, that factor had consequences for the interpretation of the relevant section. The Court of Appeal said at [46]:

That context is itself largely governed by existing legal principle. … The law of contract and that of property, and the principles that constitute them, are the very things which make trade and commerce possible. Without these legal principles, and the existence of institutions such as the courts that are constrained to apply them, the strong would prevail and the weak would go to the wall. It cannot have been the legislature’s intention to interfere with arm’s length commercial transactions by reference to loose notions of unreasonableness and unfairness. The contention favoured by the appellant that conduct may be found to be unconscionable within s 8(1) of the Act if it can be found to be irreconcilable with what was right and reasonable overlooks the force of the observation of Deane J in Muschinski v Dodds that judges in equity, whose jurisdiction was discretionary, had long since abandoned recourse to undefined notions of justice and what was fair.

[Footnotes omitted.]

40    In Lux, the Court identified the significance of community standards of conduct enacted in State consumer protection legislation in the evaluation of conduct for the purpose of the sections. The Court said at [23]:

The task of the Court is the evaluation of the facts by reference to a normative standard of conscience. That normative standard is permeated with accepted and acceptable community values. In some contexts, such values are contestable. Here, however, they can be seen to be honesty and fairness in the dealing with consumers. The content of those values is not solely governed by the legislature, but the legislature may illuminate, elaborate and develop those norms and values by the act of legislating, and thus standard setting. The existence of State legislation directed to elements of fairness is a fact to be taken into account. It assists the Court in appreciating some aspects of the publicly recognised content of fairness, without in any way constricting it. Values, norms and community expectations can develop and change over time. Customary morality develops “silently and unconsciously from one age to another”, shaping law and legal values: Cardozo, The Nature of the Judicial Process (Newhaven, Yale University Press, 1921) pp 104-105. These laws of the States and the operative provisions of the ACL reinforce the recognised societal values and expectations that consumers will be dealt with honestly, fairly and without deception or unfair pressure. These considerations are central to the evaluation of the facts by reference to the operative norm of required conscionable conduct.

41    After judgment was reserved in this case, the Full Court of this Court delivered judgment in Paciocco v Australia and New Zealand Banking Group Limited [2015] FCAFC 50 (ANZ). One claim made by the appellant was that certain fees charged by the ANZ Bank amounted to conduct which was unconscionable. This claim relied on provisions of the Australian Securities and Investment Commission Act 2001 (Cth) (ASIC Act) and the Fair Trading Act 1999 (Vic) which prohibited unconscionable conduct in similar terms to s 21 of the ACL. The terms of s 12CB of the ASIC Act, the central provision relied upon, were essentially the same as s 21 of the ACL, save that the section operated in the field of financial services.

42    The judgment of Allsop CJ, with whom Besanko and Middleton JJ agreed, added further to the learning concerning the proper approach to the construction of the statutory concept of unconscionability.

43    In a continuation of the debate about the relationship between the concepts of moral obloquy and unconscionability, there was a further warning concerning the substitution of synonyms for the words of the statute. At [262] the Chief Justice wrote:

That a degree of morality lies within the word “unconscionable is clear. Unconscionability is a value-laden concept. Obloquy is the condition of being spoken against; bad repute; reproach; disgrace; a cause of detraction or reproach,; obliquity is a deviation from moral rectitude, sound thinking or right practice; a delinquency; a fault or error.: The Shorter Oxford English Dictionary on Historical Principles (3rd Ed, Oxford, 1969) Vol 2 p 1428. That unconscionability contains an element of deviation from rectitude or right practice or of delinquency can be readily accepted, as long as the phrase moral obloquy is not taken to import into unconscionability a necessary conception of dishonesty. The statutory language is unconscionable: that is, against conscience. A sense of moral obloquy or moral obliquity can be accommodated within the meaning or conception of unconscientious or unconscionable conduct. That said, an understanding of the meaning conveyed by the word “unconscionable in the statute is not simply restated by substituting other words for those chosen by Parliament; danger easily lurks in the use of other words to capture the meaning of the statutory language.

44    And to similar effect, his Honour said at [305]:

The task is not limited to finding "moral obloquy"; such may only divert the normative inquiry from that required by the statute, to another, not tied to the words of the statute. The clearest example of the lack of need for dishonesty, at least in Equity in unconscionable conduct (in the unwritten law), is the lack of criticism of the bank manager in Amadio by Deane J: 151 CLR at 478. See also Johnson v Smith [2010] NSWCA 306 at [5] and Aboody v Ryan [2012] NSWCA 395 at [65]. Such is not to deny that, in many cases of unconscionable conduct in Equity, a degree of moral criticism may attend the evaluation that the relevant conduct was unconscionable.

45    Then, at [262] the judgment considered how the concept of unconscionability should be understood as follows:

The task involved is not the choice of synonyms; rather, it is to identify and apply the values and norms that Parliament must be taken to have considered relevant to the assessment of unconscionability: being the values and norms from the text and structure of the Act, and from the context of the provision. Parliament has given some guidance to its proper application (and to its meaning) by identifying in s 12CC [which is in relevantly the same terms as s 22 of the ACL] certain non-exhaustive factors that may be taken into account by a court in deciding whether conduct was unconscionable. Given the value-laden character of the word, it is necessary to ascertain and organise the relevant values and norms by reference to which the meaning of the word is to be ascertained, and by reference to which the application of the section is to be undertaken (the two tasks being distinct). It must, however, be emphasised at the outset that the values and norms that are relevant are those that Parliament has considered, or must be taken to have considered, as relevant. The following discussion should be understood as dealing with those matters, and not with any values or norms disembodied from, or unconnected with, the choice made by Parliament.

46    The judgment surveyed the values and the norms which have been recognised in the common law, equity, and in statutes. Reference was made to the comments on the difference in approach between equity and the common law by Lord Stowell in The Juliana [1822] EngR 235; (1822) 2 Dods 504 at 522; 165 ER 1560 at 1567, as cited by Dixon CJ, McTiernan and Kitto JJ in Jenyns v Public Curator (Qld) (1953) 90 CLR 113 at 119; [1953] HCA 2 at [3] as follows:

A court of law works its way to short issues, and confines its views to them. A court of equity takes a more comprehensive view, and looks to every connected circumstance that ought to influence its determination upon the real justice of the case.

47    Then, in a conclusion which applies equally to the consumer as to the business context, Allsop CJ said at [296]:

The working through of what a modern Australian commercial, business or trade conscience contains and requires, in both consumer and business contexts, will take its inspiration and formative direction from the nation's legal heritage in Equity and the common law, and from modern social and commercial legal values identified by Australian Parliaments and courts. The evaluation of conduct will be made by the judicial technique referred to in Jenyns. It does not involve personal intuitive assertion. It is an evaluation which must be reasoned and enunciated by reference to the values and norms recognised by the text, structure and context of the legislation, and made against an assessment of all connected circumstances. The evaluation includes a recognition of the deep and abiding requirement of honesty in behaviour; a rejection of trickery or sharp practice; fairness when dealing with consumers; the central importance of the faithful performance of bargains and promises freely made; the protection of those whose vulnerability as to the protection of their own interests places them in a position that calls for a just legal system to respond for their protection, especially from those who would victimise, predate or take advantage; a recognition that inequality of bargaining power can (but not always) be used in a way that is contrary to fair dealing or conscience; the importance of a reasonable degree of certainty in commercial transactions; the reversibility of enrichments unjustly received; the importance of behaviour in a business and consumer context that exhibits good faith and fair dealing; and the conduct of an equitable and certain judicial system that is not a harbour for idiosyncratic or personal moral judgment and exercise of power and discretion based thereon.

48    This collection of considerations taken from the review of the norms, values and principles applied in the common law, equity, and in statute is a helpful catalogue of the types of considerations which might illuminate the meaning of unconscionability. They reflect similar ideas to those expressed in the catalogue of synonyms referred to by Lindgren J in the early case of Qantas.

49    At [304] Allsop CJ referred to the margin allowable in the construction of the concept for differing views, and hence, differing outcomes in the assessment of what is or is not unconscionable conduct. His Honour said:

In any given case, the conclusion as to what is, or is not, against conscience may be contestable. That is inevitable given that the standard is based on a broad expression of values and norms. Thus, any agonised search for definition, for distilled epitomes or for shorthands of broad social norms and general principles will lead to disappointment, to a sense of futility, and to the likelihood of error. The evaluation is not a process of deductive reasoning predicated upon the presence or absence of fixed elements or fixed rules. It is an evaluation of business behaviour (conduct in trade or commerce) as to whether it warrants the characterisation of unconscionable, in the light of the values and norms recognised by the statute.

50    Two observations might be made about these issues addressed in ANZ.

51    The first relates to the purpose of statutory unconscionability provisions such as s 21 of the ACL. Whilst their construction is aided by reference to the values, principles, and norms applied in the development of the common law and equity, such provisions are designed to add to the protection already accorded by the law. They are not intended to codify existing law. Consequently, there is no case for restricting the scope of such provisions by reference to the existing law.

52    The second observation concerns the process by which the construction of such provisions occurs. Almost all of the judgment of Allsop CJ on this issue concerned what the process of construction does involve. Only at one point did he refer to what the process does not involve. On that matter his Honour said at [296]:

It does not involve personal intuitive assertion.

53    On the same subject Middleton J said:

402    On the issue of statutory unconscionability, a rationally based system of law needs to set out the limits of acceptable commercial behaviour in order that persons can order their commercial affairs in advance. Such a system cannot depend on the personal approach of a judge, based upon his or her view of commercial morality.

54    And continued:

405    Similarly, in the context of determining the content of statutory unconscionable conduct, as described by Allsop CJ, the task of a court is to make an evaluation of the facts and an ultimate determination by reference to a statutory standard of conduct, guided by the text and structure of the statute and its purpose. This task is a familiar one undertaken in the course of the judicial process.

406     This approach is not to be seen as any particular judge imposing his or her perception of desirable social goals as the basis for his or her ultimate determination. Nor does this process involve the court in determining policy. The legislature has enacted the law in pursuit of the community standard or expectation of commercial behaviour, which the court then applies in any given factual scenario.

55    These reflections were probably intended to say no more than that the process of construction and application cannot be the result of an individual judges idiosyncratic, capricious, or unreasoned preferences. So much would be uncontroversial, but leaves open the reason why the determination of what is, or is not, against conscience in particular fact situations may be contestable. It also leaves unexplained the process by which the values, norms, and principles of the common law and equity have developed and become accepted by judges. And it leaves unexplained how judges choose between competing values, norms, and principles where they conflict with each other. In the criminal law it is now orthodox that after taking account of the needs for punishment, deterrence, rehabilitation, and the totality principle, a sentencing judge must apply an instinctive or intuitive synthesis to arrive at the appropriate sentence: Markarian v The Queen (2005) 228 CLR 357; [2005] HCA 25 (Markarian). The following explanation by McHugh J in Markarian of the influences on the process of arriving at a sentence by instinctive synthesis has a similarity to the explanation given by Allsop CJ of the process by which unconscionability is determined:

84     … instinctive synthesis involves the exercise of a discretion controlled by judicial practice, appellate review, legislative indicators and public opinion. Statute, legal principle and community values all confine the scope in which instinct may operate.

Perhaps the unexplained reason for differences in the views of what constitutes unconscionable depends on a similar process.

56    The respondents appeared at times to suggest that the conduct of AMI or NRM was not unconscionable because the conduct had no disadvantageous consequences in that a particular patient did not enter into a contract at all, or if he did so, he had obtained a full refund of the cost of treatment.

57    In National Exchange the respondent at first instance argued that the conduct of National Exchange in sending out offers to purchase shares at well below value, in the expectation that some commercially naïve shareholders would sell as a result of ignorance was not unconscionable because the conduct was not directed to a particular person who had suffered any consequences. The trial judge upheld this argument. He said that it was not meaningful to speak of unconscionable conduct in the abstract. The Full Court disagreed, holding at [44] that the section:

[R]equires the Court to focus primarily on the unconscionable conduct of the offeror and to determine whether that conduct is contrary to the norm of conscientious behaviour.

[Emphasis in original.]

58    The view expressed in that judgment has statutory expression from 1 January 2012 in s 21(4)(b) of the ACL.

59    And in Lux, the Full Court held that the appellant had engaged in unconscionable conduct even though it had refunded the purchase price of the vacuum cleaners and replaced the old vacuum cleaners which had been taken from the customers. In other words, there was unconscionable conduct even though the disadvantageous consequences of it had been reversed.

60    In ANZ, Allsop CJ said at [299] that the assessment of unconscionability:

[M]ay involve behaviour that is best evaluated relationally in a transaction; they may involve conduct that can be evaluated against normative or ethical standards, apart from any particular transaction: see, for instance, National Exchange.

61    And his Honour explained at [309] that the particular case involved an assessment of:

… the transactions and contracts of Mr Paciocco and SDG, and ANZ’s conduct generally relating to the group as a whole. Section 12CB(4)(b) emphasises that, even if there are factors militating against a conclusion that there was any unconscionable conduct by ANZ in its dealing with Mr Paciocco and SDG, that does not mean the “system of conduct or pattern of behaviour” of ANZ cannot exhibit unconscionable conduct.

2.2    Unfair contract term

62    The ACCC contended that a term of the contracts offered to patients by NRM relating to termination was an unfair term and was void within the meaning of s 23 of the ACL. That section provides and provided at all relevant times:

Unfair terms of consumer contracts

(1)    A term of a consumer contract is void if:

(a)     the term is unfair; and

(b)     the contract is a standard form contract.

(2)    The contract continues to bind the parties if it is capable of operating without the unfair term.

(3)     A consumer contract is a contract for:

(a)     a supply of goods or services; or

(b)     a sale or grant of an interest in land;

to an individual whose acquisition of the goods, services or interest is wholly or predominantly for personal, domestic or household use or consumption.

63    Section 24 defines the meaning of unfair as follows:

Meaning of unfair

(1)    A term of a consumer contract is unfair if:

(a)    it would cause a significant imbalance in the parties' rights and obligations arising under the contract; and

(b)     it is not reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term; and

(c)     it would cause detriment (whether financial or otherwise) to a party if it were to be applied or relied on.

(2)    In determining whether a term of a consumer contract is unfair under subsection (1), a court may take into account such matters as it thinks relevant, but must take into account the following:

(a)    the extent to which the term is transparent;

(b)    the contract as a whole.

(3)    A term is transparent if the term is:

(a)    expressed in reasonably plain language; and

(b)    legible; and

(c)    presented clearly; and

(d)    readily available to any party affected by the term.

(4)    For the purposes of subsection (1)(b), a term of a consumer contract is presumed not to be reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term, unless that party proves otherwise.

64    Section 25 provides examples of unfair terms and relevantly includes the following:

Examples of unfair terms

(1)    Without limiting section 24, the following are examples of the kinds of terms of a consumer contract that may be unfair:

    

(c)    a term that penalises, or has the effect of penalising, one party (but not another party) for a breach or termination of the contract;

65    Section 27 deals with standard form contracts as follows:

Standard form contracts

(1)    If a party to a proceeding alleges that a contract is a standard form contract, it is presumed to be a standard form contract unless another party to the proceeding proves otherwise.

(2)    In determining whether a contract is a standard form contract, a court may take into account such matters as it thinks relevant, but must take into account the following:

(a)    whether one of the parties has all or most of the bargaining power relating to the transaction;

(b)    whether the contract was prepared by one party before any discussion relating to the transaction occurred between the parties;

(c)    whether another party was, in effect, required either to accept or reject the terms of the contract (other than the terms referred to in section 26(1)) in the form in which they were presented;

(d)    whether another party was given an effective opportunity to negotiate the terms of the contract that were not the terms referred to in section 26(1);

(e)     whether the terms of the contract (other than the terms referred to in section 26(1)) take into account the specific characteristics of another party or the particular transaction;

(f)    any other matter prescribed by the regulations.

2.3    Accessorial liability

66    The ACCC claimed that, whilst AMI contravened s 51AB of the TPA, and NRM contravened s 21 of the ACL, Dr Vaisman aided, abetted, counselled or procured or was knowingly concerned in or party to the respective contraventions. As a result, the Court possessed power to grant injunctions against Dr Vaisman under s 80(1)(c) and (1)(e) of the TPA and s 232(1)(c) and (1)(e) of the ACL. The relevant provisions provide as follows:

80     Injunctions

    

(1)    Subject to subsections (1A), (1AAA) and (1B), where, on the application of the Commission or any other person, the Court is satisfied that a person has engaged, or is proposing to engage, in conduct that constitutes or would constitute:

(a)    a contravention of any of the following provisions:

            

(i)    a provision of Part IV, IVA [in which s 51AB appears], IVB, V or VC;

            

        

(b)    attempting to contravene such a provision; or

    

(c)    aiding, abetting, counselling or procuring a person to contravene such a provision; or

    

(d)    inducing, or attempting to induce, whether by threats, promises or otherwise, a person to contravene such a provision; or

(e)    being in any way, directly or indirectly, knowingly concerned in, or party to, the contravention by a person of such a provision;

(f)    conspiring with others to contravene such a provision;

the Court may grant an injunction in such terms as the Court determines to be appropriate.

232    Injunctions

(1)    A court may grant an injunction, in such terms as the court considers appropriate, if the court is satisfied that a person has engaged, or is proposing to engage, in conduct that constitutes or would constitute:

    

(a)    a contravention of a provision of Chapter 2 [in which s 21 and s 23 appear], 3 or 4; or

(b)    attempting to contravene such a provision; or

(c)    aiding, abetting, counselling or procuring a person to contravene such a provision; or

(d)    inducing, or attempting to induce, whether by threats, promises or otherwise, a person to contravene such a provision; or

(e)    being in any way, directly or indirectly, knowingly concerned in, or party to, the contravention by a person of such a provision; or

(f)     conspiring with others to contravene such a provision.

67    The ACCC’s case was initially that the provisions relevant to the grant of injunctions against Dr Vaisman were s 75B and s 80 of the TPA, and s 232 of the ACL. In correspondence to the Court dated 2 March 2015, the solicitors for the ACCC clarified its position that the Court need only have regard to s 232 of the ACL. That is because of the effect of certain transitional provisions. The TPA continues to apply to proceedings commenced but not concluded before 1 January 2011. However, pursuant to item 7(2) of Schedule 7 of the Trade Practices Amendment (Australian Consumer Law) Act (No 2) 2010 (Cth), where the proceedings are proceedings for an injunction under s 80 of the TPA, the proceedings are taken to be proceedings for an injunction under s 232 of the ACL. Consequently, the Court need only have regard to s 232 in considering the claim for injunctions against Dr Vaisman and NRM.

68    In order to bring Dr Vaisman within s 232, the ACCC needed to show that Dr Vaisman knew of the essential elements which made up the contraventions: Yorke v Lucas (1985) 158 CLR 661 at 666668 and 669670; [1985] HCA 65 at [9]–[13] and [16]. In order to know the essential facts it is not necessary to know that those facts are capable of characterisation in the language of the statute: Rural Press Ltd v Australian Competition and Consumer Commission (2003) 216 CLR 53; [2003] HCA 75 at [48] per Gummow, Hayne and Heydon JJ. An example of these principles applied in a case of unconscionable conduct is Coggin v Telstar Finance Company (Q) Pty Ltd [2006] FCA 191; [2006] ATPR 42107.

2.4    Standard of proof

69    Section 140 of the Evidence Act 1995 (Cth) (the Evidence Act) provides:

(1)    In a civil proceeding, the court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities.

(2)    Without limiting the matters that the court may take into account in deciding whether it is so satisfied, it is to take into account:

(a)    the nature of the cause of action or defence; and

(b)    the nature of the subject-matter of the proceeding; and

(c)    the gravity of the matters alleged.

70    When assessing the evidence in the present case, the Court is required to take into account that the cause of action arises in the context of provisions designed to protect consumers. At the same time, the relief sought would, if granted, have a major impact on the way the respondents conduct their business. Further, some of the allegations made against the respondents are close to allegations of fraud and certainly include allegations of dishonest conduct. In the terms of the oft-quoted passage from the judgment of Dixon J in Briginshaw v Briginshaw (1938) 60 CLR 336 at 361; [1938] HCA 34, the Court must feel an “actual persuasion” of the occurrence before it can find that the occurrence has been established. The finding of facts in this case must therefore be approached particularly bearing in mind the seriousness of the allegations made against the respondents.

3.    THE SCOPE OF THE ACCC’S CASE

3.1    The Further Amended Statement of Claim

71    In order to understand the factual examination undertaken in these reasons for judgment, and to understand some of the criticisms made by the respondents of the structure of the ACCC’s case, it is necessary to set out the framework of the ACCC’s case. This is best done by a reference to parts of the ACCC’s further amended statement of claim dated 14 December 2011 (FASOC).

72    Paragraph 5 pleaded, inter alia, that AMI advertised its business extensively in newspapers, television, radio and other media under the name Advanced Medical Institute. The advertising emphasised that the treatment for ED and PE was by consultation with doctors.

73    Paragraph 6 pleaded that the consultations were by phone or by attendance at a clinic. When the consultations were by phone, patients spoke first to a clinical coordinator who obtained personal information, then to a doctor engaged by AMI, and finally patients spoke with the clinical coordinator again who organised payment by direct debit or credit card. When the consultations were in a clinic, patients first provided some personal information to a nurse, then spoke to a doctor by phone from the clinic, and finally spoke in person to a clinical coordinator who organised payment by direct debit or credit card.

74    Paragraph 7 pleaded that by publishing the advertisements referred to in [5] of the FASOC, by referring to itself as the Advanced Medical Institute, and by providing treatments only after a discussion with a doctor as referred to in [6], AMI represented that patients would receive a proper objective medical assessment, and treatment consistent with that assessment, by a qualified medical doctor.

75    Paragraph 8 pleaded that AMI sold or offered to sell treatments to consumers, including the patients listed in Annexure B to the FASOC (the Annexure B patients), on terms by which:

(a)     the cost of the AMI treatments to the patient was calculated by reference to a fixed period of use, the effect of which was that the longer the treatment period the greater was the total amount paid by the patient;

(b)     the patient was obliged to pay for the entire course of the AMI treatments purchased, regardless of how much or which of the AMI medications the patient actually used;

(c)     when a prescribed AMI medication did not successfully treat a patient's condition AMI:

(i)    refused to refund the cost incurred by the patient for the course of treatment unless the patient tried at least one option from each of the available delivery mechanisms for which the patient was not contraindicated by an AMI doctor, including intracavernous injections at the base of the penis, and

(ii)     if each of the available delivery mechanisms was unsuccessful, AMI would only refund the agreed price less an amount charged by AMI for supplying the medication and an administration fee.

AMI described this term to its patients as a "satisfaction guarantee"; and

(d)     the cost of the AMI treatments to the patient greatly exceeded the cost of treatment available during the period from general medical practitioners for the treatment of male sexual dysfunction.

76    Paragraph 10 pleaded that in the consultations with Annexure B patients, AMI doctors:

(a)     did not offer, prescribe or discuss with the patient any treatment or medication other than that offered by AMI;

(b)     did not advise the patient of the terms on which the AMI treatments they recommended and the AMI medications they prescribed would be provided by AMI as alleged in [8]

(c)     recommended the AMI treatments, which included AMI medications which they had not discussed with the patient;

(c1)     prescribed AMI Medications:

(i)     which the doctors had not selected from the range of all medications available for prescription by Australian medical practitioners; and

(ii)    in respect of which the doctors had not or had not adequately advised about side effects which included (in the case of intracavernous injections) the need to manage priapism if it occurred;

(d)    did not seek to diagnose any underlying cause for the presenting problem;

(e)     did not seek to diagnose whether it would have been medically appropriate to refer the patient to a specialist or other medical practitioner for treatment or diagnosis;

(f)     were required by AMI to recommend only the AMI treatments and to prescribe only the AMI medications but did not disclose that fact to the patient; and

(g)     did not see or conduct any physical examination of the patient;

77    Paragraph 11 pleaded that the conduct pleaded in [10] of the FASOC:

(a)     was contrary to the requirements and standards applicable to the proper, objective and appropriate diagnosis and medical treatment of male sexual dysfunction; and

(b)     involved the subordination of the patient's medical interests to the commercial interests of AMl.

78    Paragraph 13 pleaded that in consultations with the Annexure B patients clinical coordinators:

(a)     followed scripts which were provided by AMI, including some or all of the scripts extracted in [20] of the FASOC;

(b)     made statements to patients concerning:

(i)     the adverse medical and social consequences that the patient would suffer if he did not purchase and use the AMI treatments;

(ii)     the patient's need for the AMI treatments;

(iii)     the efficacy of the AMI treatments,

the effect of which was to apply pressure to the patient to purchase the AMI treatments;

(c)     represented to patients that they would be entitled to a refund of moneys paid for AMI treatments if the treatments were ineffective, without accurately or clearly disclosing the conditions on which the refund was offered, including the requirement that the patient use intracavernous injections at the base of the penis, as alleged in [8(c)]; and

(d)     by describing themselves as "Clinical Co-Ordinators", "Medical Co-Ordinators" and "Doctors' Assistants" and by not telling the patient that they were in fact sales agents paid on commission, conveyed the impression that they were acting in the patients' medical interests in selling the AMI treatments.

79    Paragraph 15 pleaded that men to whom AMI offered to sell and sold the AMI treatments were, to AMI's knowledge, vulnerable to AMI's attempts to sell AMI treatments to them in that:

(a)     the conditions from which they suffered were perceived as embarrassing or humiliating; and

(b)     they reasonably reposed trust in AMI's doctors and expected that those doctors were acting in their best interests.

80    Then, [17] of the FASOC brought together the preceding allegations in a pleading of unconscionable conduct as follows:

By:

(a)     AMI selling or offering to sell the AMI treatments on the terms described at each of sub-paragraphs 8(a)-(d), including to the patients identified at Annexure B;

(b)    AMI's doctors doing or failing to do the things alleged at each of sub-paragraphs 10(a)-(g) in the course of consulting with the patients identified at Annexure B; and/or

(c)     AMI's Clinical Co-ordinators doing or failing to do the things alleged at each of sub-paragraphs 13(a)-(d) in the course of sales consultations with the patients identified at Annexure B;

    in circumstances in which:

(d)     AMI promoted its business as described at sub-paragraph 5(c);

(e)     AMI sold AMI treatments or offered them for sale through the process described in sub-paragraphs 6(a)-(d);

(f)     AMI made the representations described in paragraph 7;

(g)     the manner in which AMI's doctors conducted medical consultations was:

(i)     contrary to the requirements and standards applicable to the proper, objective and appropriate diagnosis and medical treatment of male sexual dysfunction, and

(ii)     involved the subordination of the patient's medical interests to the commercial interest of AMl,

    

as alleged at paragraph 11; and/or

(h)         AMI knew that the men to whom it offered to sell and sold its treatments were vulnerable to its attempts to sell to them, as alleged at paragraph 15,

[AMI] has in trade or commerce in connection with the supply or possible supply of goods and services to consumers, engaged in conduct that is unconscionable within the meaning of, and in contravention of section 51AB of the Act.

81    Following a request from the respondents at an earlier stage of the proceedings, the ACCC added [17AA] to the FASOC to explain the way in which the conduct alleged was said to be unconscionable. Paragraph 17AA read as follows:

The conduct of AMI identified in paragraph 17 was unconscionable because, by this conduct:

(a)     AMI knowingly exploited its superior bargaining position as a provider of medical expertise and treatment in relation to men who sought medical treatment from it, who were vulnerable to it, in order to extract sales from them;

(b)     while holding itself out as a provider of medical expertise on which men who sought treatment for sexual dysfunction could rely, AMI:

(i)     subordinated the medical interests of its patients to AMI's commercial interests; and

(ii)     provided services in a manner which was contrary to the standards of proper, objective and appropriate medical treatment;

(c)     AMI used unfair tactics and undue pressure in seeking to sell its treatments to men who sought medical treatment from it;

(d)     in selling its treatments AMI required its patients to comply with terms that were not reasonably necessary to protect AMI's legitimate interests;

(e)     AMI sold its treatments for amounts greatly in excess of the cost at which its patients could have acquired treatment for male sexual dysfunction, from general medical practitioners;

(f)     AMI bound patients to contracts for supply of its treatments for periods far greater than its patients could, or normally would, have acquired medication and treatment from general medical practitioners for the treatment of male sexual dysfunction; and

(g)     AMI did not provide clear and accurate information to its patients about the terms on which its treatments and services were supplied.

82    The case against NRM was pleaded in generally similar terms.

3.2    Is the ACCC’s case an individual-patients case or a business-system case?

83    In their final written submissions the respondents argued

80.    The ACCC brought forward a case based on particular patients, not a business practice or tendency case. For that reason, the case must be determined in relation to each transaction. There can be no elision or inferences drawn or tendency reasoning. The respondents repeatedly asked that the ACCC make its case clear, and a tendency or business practice case was expressly disavowed. It is the particularized case that the respondents are meeting. Therefore, while it is possible for there to be a finding of unconscionable conduct where no particular consumers are identified, that is not the case brought and is not the relief sought by the ACCC. Instead, the ACCC seeks relief in relation to particular transactions with particular patients identified in Annexures B and C. Only those transactions are relevant.

84    This submission repeated an argument which was raised by the respondents on several occasions in directions hearings and in a strike-out application filed by the respondents on 12 October 2011 in the pre-trial management process. On each occasion the ACCC explained that its case was not limited in the way submitted by the respondents.

85    As early as 29 November 2011, in written submissions filed in opposition to the respondent’s strike-out application, the ACCC explained:

27.     AMI’s conduct in dealing directly with consumers is described in paragraphs 10 and 13 of the claim and is, in summary, that:

AMI’s doctors consulted with the [then] 159 identified patients and in those consultations did or failed to do the things specifically described in subparagraphs 10(a)-(f);

AMI’s sales staff made statements to them the effect of which was to apply pressure to purchase AMI’s treatments; they did not accurately describe the terms of AMI’s refund policy to them; and they described themselves as “doctors’ assistants” or “clinical co-ordinators” rather than as sales agents paid on commission (paragraph 13).

28.     Conduct engaged in by AMI to attract and manage patients seeking treatment, which was conduct directed to as a class of consumers generally, is also the subject of the claim. It comprises specifically:

(i)     the fact that AMI advertised its business and promoted its expertise in the manner alleged in paragraphs 5(C) and 7 of the claim;

(ii)     the fact that AMI structured the way in which it consulted with its patients, as alleged in paragraph 6 of the claim;

(iii)     the fact that AMI sold or offered to sell its treatments (including to the [then] 159 identified patients) on the terms set out at paragraph 8 of the claim. The terms concern the cost of the treatment to the patient, the way the cost was calculated and the refund policy.

29     The claim does not, as the respondents contend, concern “each and every aspect of the way in which AMI conducted its business operations, in an unlimited way”. Rather, it concerns the specific aspects of the business alleged.

30     The claim identifies the reasons why the pleaded conduct is unconscionable (paragraphs 17 and 17AA of the proposed amended pleading). Given that unconscionability invokes notions of fairness and moral judgment, it is appropriate that the character of the conduct be described in the pleading. Plainly, the function of paragraph 17 is to do this, and not to allege separate and different conduct by AMI.

[Footnotes omitted.]

86    Then, in its Outline of Opening Submissions filed in Court on 18 March 2013, the ACCC again drew the distinction between evidence of the general business system operated by AMI and the evidence of the consultations with the Annexure B patients. For instance, the submissions stated:

3.     Each aspect of the conduct is evidenced by particular patient transactions on which the ACCC relies, very often but not always, all in the same transaction.

4.     It is not realistic or feasible for the ACCC to present a case dealing with every instance of conduct, every transaction or even a substantial proportion of those transactions in the given period (2 years for AMI, about 2 years for NRM). The case is brought in relation to a number of particular transactions about which the ACCC has evidence. The transactions are not put forward as representative of all transactions, but as being sufficiently numerous to deserve the intervention of the Court. That is to say, they are sufficiently numerous that they cannot be regarded as isolated failings by individuals who work for AMI, particularly given that they occurred within the business system established and operated by AMI, in a manner consistent with directions from AMI management.

5.     Elements of the evidence, necessarily, are directed at the general way the AMI business was conducted. The advertising, by its nature, was of general application. The fact that prescription records show no prescriptions of non-AMI medications such as Viagra or Cialis supports the proposition that AMI doctors did not suggest or prescribe non-AMI medications…

    

[Footnotes omitted.]

87    The point was reiterated in the oral opening of the trial on 18 March 2013 when senior counsel for the ACCC said:

MR BURNSIDE:     Well, your Honour, perhaps if I could start, and try and acquaint you with the geography of what has turned into a fairly sprawling case. The first broad proposition, your Honour, is the way AMI does business, and I think it’s important so as to forestall complaints about things that aren’t – or people that aren’t referred to in annexure B or annexure C is this: what we put forward, as is apparent from the pleadings, is that there are some allegations about the general way in which the AMI business is conducted, and then there are a particular instances of dealing with customers which build on the background of the general pattern, and they are to be the focus of any orders your Honour might ultimately make

[TS 2]

88    The opening of the ACCC repeated that certain elements of the case were not specific to the Annexure B or Annexure C patients, but were alleged as part of the way AMI and NRM conducted their business, namely, the following elements:

    advertising;

    nature of a patient’s interaction with AMI and NRM;

    role of salespeople and their commission payments;

    contract terms and refund policy used during the AMI and NRM periods;

    cost of treatment programs;

    long-term contracts; and

    vulnerability of patients.

This was the way in which the ACCC conducted its case.

89    Despite the exposition by the ACCC of the case it was propounding, the respondents continued to assert that the ACCC pleading did not articulate a case that the business system of AMI and NRM involved unconscionable conduct directed to a class of people. Thus, for instance, in their final written submissions the respondents contended:

128.     In order to determine whether each transaction was unconscionable an analysis is required of:

(a)    The subjective state of the particular patient at the relevant time, including intelligence, age, ability to negotiate, relevant ‘vulnerability’, ability to afford the service, prior dealings with doctors in relation to the medical condition etc;

(b)    Whether at the time of the transaction AMI intended to exploit the known weakness of the particular patient;

(c)    All the ‘circumstances’ as pleaded by the ACCC.

    

[Footnotes omitted.]

90    By seeking to characterise the ACCC’s case as one only about individual cases, the respondents felt able to defend themselves by arguing that the ACCC had not established that particular patients had experienced unconscionable conduct. Thus, for instance, the respondents said in their final written submissions that the ACCC had not established that individual patients had a relevant vulnerability. At [141] the respondents contended:

It is only in those cases where a person has come forward and had the opportunity of giving evidence and that evidence being tested that the Court can make any conclusion about ‘vulnerability’. It cannot be done for a whole ‘class’.

91    This analysis also led the respondents to argue that evidence about how AMI operated generally was tendency evidence. That is to say, the respondents seem to have contended that such evidence was used by the ACCC to establish that because AMI operated in a particular way in the individual instances, it was the general tendency of AMI to act in this way. The respondents contended that such evidence was not admissible because the requirements of s 97 of the Evidence Act had not been complied with.

92    The evidence however is not tendency evidence subject to the Evidence Act. It is evidence of a system of operating which the ACCC sought to establish was itself unconscionable conduct. A similar situation was referred to Sackville J in Jacara Pty Ltd v Perpetual Trustees WA Ltd (2000) 106 FCR 51; [2000] FCA 1886 at [67] as follows:

If, for example, the evidence in a shopping centre misrepresentation case shows that the lessor’s agent gave instructions that particular representations should be communicated to prospective tenants, that evidence would [not be tendency evidence]. The evidence, if accepted, would go beyond proving that the agent had a propensity to make representations of the kind alleged. Rather, it would establish that the agent had set in place a system which, if implemented in the particular case, would have resulted in the representation being made to the applicant. The existence of the system, in the absence of evidence to the contrary, readily supports an in inference that it was implemented in the particular case. The evidence of the system makes it more likely that the fact in issue (the making of the representation to the applicant) occurred, independently of the agent’s propensity to act in a particular way.

93    The respondents continued attempt to define the ACCC’s case as a case based only on individual patient transactions was a strategy perhaps designed to allow the respondents to raise defences which were not available as answers to a business-system case. The strategy was based on a misconstruction of the ACCC’s case. That case was properly summarised in the ACCC’s written submissions in reply as follows:

8.    As a matter of law a person may, by implementing a business model or strategy or by engaging in conduct directed towards a class of people, contravene s.51AB of the Trade Practices Act. Unconscionability under s.51AB is not confined to individual dealings in which one party exploits another who is found, subjectively, to be vulnerable or at special disadvantage (ACCC submissions, [459]-[467]).

9.    As the ACCC’s submissions explain, the claim concerns several aspects of the respondents’ conduct, which is a product of the way that the respondents dealt with their patients. Two aspects of AMI’s dealings with its patients (conversations between salespeople and patients and consultations between doctors and patients) were individual to the particular patients, doctors and salespeople. Those aspects (and the other aspects of the conduct the subject of the claim) were expressions of AMI’s business strategy (ACCC submissions, [8-12]).

94    The ACCC explained the reasons for choosing to put before the Court 168 consultations. Having determined to prove, in part, that AMI and NRM had a system of operating which involved unconscionable conduct, the ACCC considered what would be necessary to persuade the Court to grant relief, including injunctions. It reasoned that the Court may need to be persuaded that the system of operating was not merely theoretical but was implemented.

95    In its written submission dated 10 July 2013 regarding the scope of its case, the ACCC sought to justify selecting the 168 cases as follows:

By saying “AMI/NRM had, and implemented a business model” we are not suggesting, nor do we need to say or prove, that AMI or NRM engaged in this conduct (implementation of a plan) all or most of the time. To conclude that AMI and NRM implemented a business model does not, of necessity, require or imply reliance on tendency (similar fact) evidence.

We do not mean, nor do we say, that “this is how AMI/NRM usually or typically acted”, or “these examples are typical of what you would find if you sampled any instance or time during the period”. We simply say, and mean, that AMI and NRM did certain things generically and certain things 170 times, and that those things, taken together (or separately or in more limited combination) reflected their intention – their ‘model’, and therefore their attitude towards consumers.

4.    FACT FINDINGS IN RESPECT OF AMI

4.1    Introduction

96    This section of the reasons for judgment addresses the following matters.

97    First, there is an explanation of the process by which patients were dealt with by AMI in the treatment of ED and PE.

98    Then, there is a description of how the recordings of the phone consultations with Annexure B patients were selected by the ACCC from a much larger number of recordings of consultations, and how the Annexure B recordings were utilised in evidence by the ACCC.

99    Then, there is a general consideration of the evidence of Dr Vaisman.

100    Finally, the reasons for judgment examine the conduct of AMI in six categories. The first is the advertising used by AMI to attract patients to use its services. The second is the techniques used by the salespeople to persuade patients to agree to treatment. The third is the practice by which AMI offered only a limited range of medications to patients. The fourth reviews the conduct of the doctors engaged by AMI. That discussion considers the standards applicable in the medical profession to the proper treatment of patients suffering from ED and PE, and examines whether the doctors engaged by AMI complied with those professional standards. The fifth considers the contracts terms on which treatments were provided to patients. The sixth examines the cost of the medications.

101    Although the primary focus of this section relates to AMI, there are some issues which are common to AMI and NRM. They are also dealt with in this section and, where necessary, reference is made to the relevance to NRM.

4.2    An overview of the AMI operation

102    AMI advertised its treatment for male sexual dysfunction extensively on radio, television, online, and on billboards. Patients who responded were able to consult by phone or at clinics. The majority of consultations were undertaken by phone. Thus, in the AMI period between 2008 and 2010, 111,954 patients dealt with AMI by phone and 49,566 patients attended clinics. In the financial year 2007 / 2008, AMI’s financial accounts reported that it received nearly $49 million from customers, in 2008 / 2009, it reported that it received nearly $55 million from customers, and in 2009 / 2010, it reported revenue of almost $40 million.

103    Where the interaction with AMI was by phone the patient first spoke to a salesperson, called a clinical coordinator by AMI, who then transferred the call to a doctor. If the doctor decided to prescribe medication the patient was transferred back to the salesperson who concluded the contractual and payment arrangements.

104    Where the interaction with AMI occurred at a clinic, the patient first met with a nurse. Then, the nurse contacted the doctor by phone and the patient consulted over the phone. Where the doctor decided to prescribe medication the patient dealt with a salesperson at the clinic to finalise the contractual and payment arrangements.

105    AMI advertising emphasised treatment by use of a nasal spray. This method of delivery of the medication was conceived by AMI. The medication was formulated by it and dispensed for it by a compounding pharmacy. Doctors engaged by AMI also prescribed troches, tablets, capsules, and gels made to AMI’s specifications. As a last resort, AMI doctors could prescribe intracavernosal injections which were self-administered by the patient into the base of the penis.

106    The treatment programs recommended to patients by AMI were generally for 12 to 18 months. The price increased with the length of the contracts. Thus, the cost of a 12 month contract was generally about $2,500, and the cost of an 18 month contract was generally about $3,500.

107    AMI had a refund policy in case the treatment did not work. That policy required the patient to try one option from each of the delivery systems of medication offered by AMI, including intracavernosal injections into the base of the penis for both ED and PE.

4.3    Recordings of the consultations

108    Before addressing the alleged conduct of AMI, it is necessary to refer to the evidence on which the ACCC relied to establish what occurred in the patient consultations.

109    On 17 February 2010, the ACCC executed a search warrant at the premises of AMI in Sydney and seized around 66 small cassette tapes. The tapes contained recordings of phone calls over the period from March 2006 to December 2009. Each tape contained 50,000 to 60,000 recordings, and related to a period noted on the tapes of between three to five weeks.

110    Gary Neil Franklin was a senior project officer employed by the ACCC. He was engaged in the investigation of AMI. He affirmed an affidavit on 14 October 2011 [ACCC 1.43], and also gave oral evidence. He estimated that the tapes contained over 3 million calls. It was therefore impractical for the ACCC to rely on all of the recordings, and it was necessary to reduce the number tendered in evidence to a manageable selection.

111    Mr Franklin and other employees of the ACCC listened to a large number of recordings and gained an understanding of their nature. In the end, the ACCC relied on 145 recordings.

112    Mr Franklin described how he went about selecting those recordings. He chose recordings in 2009 because they were the most recent. He then selected recordings on particular days by allowing for a spread of months and days within the week. In that way he ended up with recordings on about 80 days in 2009. He excluded calls which were outside the hours of 7 am to 7 pm because he ascertained that they generally originated from outside Australia and were consequently beyond the scope of the search warrant. As his aim was to capture calls which involved an initial patient contact and followed the salesperson / doctor / salesperson format. He excluded calls that were incomplete, any outgoing calls, and calls made by women. It became clear that initial calls were conducted on particular extension numbers so that the search was filtered by reference to those extension numbers. Mr Franklin also noticed that initial consultation calls usually took more than 12 minutes, so the duration was used as a further filter. Mr Franklin also tried to get a spread of doctors and a spread of salespeople in the selection. By this process Mr Franklin gathered 174 recordings. Of these, 145 recordings were ultimately used in the proceeding. Of the 145 recordings about 100 calls resulted in a sale and about 45 did not.

113    The ACCC tendered the 145 audio recordings and transcripts made from the recordings. It also produced an aide memoire (the aide memoire) which identified and extracted passages or identified omissions from each transcript and which it said supported the particular allegations made in the FASOC.

114    In addition to the 145 consultations evidenced by the recordings, eight AMI patients made witness statements relied on by the ACCC. It transpired that one of the audio recordings was of the consultation with one of the patients who made a statement. Thus, in total, the ACCC relied on consultations by AMI with 152 patients. The patients are listed in Annexure B to the FASOC and are together referred to as the Annexure B patients.

115    Each of the patients was given an identifying number in the proceeding. In order to protect the privacy of the patients whose consultations are in question, those identifying numbers rather than the names of the patients are used in these reasons for judgment. On 17 December 2012, the Court made an order which is still in effect and which prohibits the publication of the names of the Annexure B and C patients.

116    In the period 2008 to 2010, 111,954 patients dealt with AMI by phone. In that context 152 consultations is a small number. That circumstance caused counsel for the respondents to express concern that the Court may be asked to draw an inference that what occurred in the 152 consultations was representative of unconscionable dealing by AMI in the conduct of its business generally. This issue is addressed at [83] – [95] of these reasons for judgment in the section dealing with the scope of the ACCC’s case.

117    In final written submissions the respondents also said that the selection of recordings by Mr Franklin resulted in the omission of consultations that did not result in medications being prescribed. They said that this gave a picture of the prescribing practices of the doctors which did not reflect those instances where medications were not prescribed. The omission of these consultations, however, does not affect the claims in relation to the particular consultations which were in issue. And the omitted consultations would be relevant only if the ACCC was running a tendency case and alleging that the unconscionable conduct evident in the 152 instances demonstrated that such unconscionable conduct occurred in other consultations with AMI patients. This was not the case the ACCC was propounding.

4.4    Dr Vaisman’s evidence

118    Dr Vaisman is a central figure in this proceeding. He made 2 comprehensive witness statements and was cross-examined at length by senior counsel for the ACCC. His evidence addressed most of the major issues agitated in the proceeding. That evidence is dealt with when those particular issues are considered in these reasons for judgment. In view of his centrality to the operations of AMI and NRM and the scope of his evidence, it is timely to set out some background details concerning Dr Vaisman and some general observations about his evidence.

119    Dr Vaisman was born in 1945 in the Ukraine when it was part of the USSR. He qualified as a doctor of medicine in 1968 at the State University of Ukraine in Donetsk. He obtained a post-graduate qualification in obstetrics and gynaecology from that university in about 1974. In his examination in response to the ACCC’s notice to him under s 155 of the TPA, he said that this qualification was regarded by Australian authorities as equivalent to a PhD in Australia [ACCC 4.398]. He signed welcome letters to patients as Dr Jack Vaisman, PhD Medical Science. In 1975 he was appointed an Associate Professor of obstetrics and gynaecology at the same university. Later he was appointed head of the gynaecology department at the State University of Advanced Medical Training in Moldova. He applied for an exit visa in about 1974. He was regarded as a dissident and was imprisoned for 6 years as a result. He said that in 1989 he was among those allowed to leave the USSR following an intervention of Prime Minister Hawke with President Gorbachev.

120    In Australia, Dr Vaisman spent four years working and learning English. He wanted to undertake examinations at a university in Australia so that his medical qualifications would be recognised. However, financial pressures and the illnesses of his wife and daughter prevented this. In 1993 he opened his first male sexual dysfunction clinic and has operated the business since then.

121    Dr Vaisman’s personal circumstances have been challenging in major respects. He has an adult daughter who has advanced multiple sclerosis. She is confined to a wheelchair or to bed and depends on Dr Vaisman for daily attention. She requires regular intensive medical treatment. At one point in the course of the hearing Dr Vaisman was absent because he was required to take his daughter to hospital for such treatment. Although the proceeding was filed in Melbourne, much of the hearing took place in Sydney. That was the result of an application by Dr Vaisman, who lives in Sydney, supported by an affidavit sworn by his solicitor explaining that Dr Vaisman’s wife suffers from chronic depression and that he is her primary carer. She is often confined to bed as a result of her condition. Dr Vaisman must care for both his wife and daughter and his two grandchildren.

122    Dr Vaisman has himself had health issues. He has Type 2 Diabetes. Then, in January 2013 he was admitted to the Prince of Wales Hospital suffering from pneumonia. In evidence he said that since that time he has experienced memory problems. He said that there were some investigations under way to determine whether he might have suffered a small stroke. No evidence of the outcome of those investigations was provided to the Court.

123    There were times when Dr Vaisman’s evidence was confused and his memory was obviously faulty. It would not be surprising if these features could be explained by his health issues and also by the attention he needed to give to the medical conditions of his wife and daughter. However the difficulties with his evidence went deeper than those matters would explain. For instance, on major issues of medical science, which are examined later in these reasons for judgment, Dr Vaisman insisted that his views were supported by scientific publications produced by him. In fact, those publications simply did not support his views. Then, there were instances of internal inconsistences in his evidence and attempts to explain the inconsistences in a way which lacked credibility. Finally, there were occasions when Dr Vaisman tailored his evidence to suit his purposes in the litigation. This was especially apparent when he said that the prescribing practices of doctors were entirely the result of independent clinical decisions made by doctors, when in fact those practices were largely governed by the dictates of Dr Vaisman. Even allowing for the pressures on Dr Vaisman from the exigencies of his life, his evidence was largely unreliable and, on significant issues, untruthful. Whatever effect his health and other circumstances had on him, they did not dull his strong sense of self-interest.

4.5    The conduct alleged against AMI

4.5.1    Advertising medical treatment

124    AMI advertised its business in newspapers, in magazines, on television, on radio, online on its website, on YouTube, and on shopping dockets.

125    The advertising was extensive. In the 2008 and 2009 financial years, AMI spent $19.87 million and $29.9 million on advertising respectively. That expenditure amounted to about 35 per cent of its revenue.

126    Dilip Kumar Shrestha, the Chief Financial Officer of AMI, said in cross-examination that Dr Vaisman was responsible for the content of advertisements placed by AMI [TS 1935]. Dr Vaisman said that he made the decisions about whether the advertising which had been placed by AMI was effective to attract patients, [TS 1690] and that to increase the number of calls made to AMI he would increase the amount of advertising [TS 1625–1626]. This was supported, for instance, by advice from AMI’s advertising agent in November 2009 that advertising in the Sunday Telegraph produced an immediate increase in the number of calls to AMI [ACCC 4.393].

127    The advertising was effective in the case of the eight AMI patients who made statements relied on by the ACCC. In each case they said that they contacted AMI as a result of advertisements. Most heard about AMI through radio advertisements, but some also through television advertisements and billboards.

128    A typical example of the content of the many advertisements can been seen from the following newspaper advertisement placed in the New South Wales Suburban Press in January 2008:

[Annexure A to the FASOC, p 7]

129    Another example is the newspaper advertisement placed in the Adelaide Advertiser in February 2009:

130    There were two predominant themes in AMI advertising. One was that the treatment was by a nasal spray delivery technology. The other was that the treatment was provided by doctors. The second advertisement emphasised the anxiety and lack of confidence associated with sexual dysfunction. The name Advanced Medical Institute conveyed the message that the treatment was based on scientific medical knowledge.

131    Evidence from the AMI patients showed that they responded to these themes. For instance, patient 40 said:

Prior to calling AMI it was my expectation from their ads that I would see one of their doctors about my problems.

[ACCC 1.7, [10]]

132    Patient 30 said:

In about late March 2008 I was driving a vehicle at work and listening to the radio when I heard an ad for a treatment for premature ejaculation. I recall I had heard the ad or similar ads many times before. The ad claimed that a business called AMI had a nasal spray treatment for premature ejaculation. I recall the ad included phrases to the effect of 'want longer lasting sex?' and 'up your nose and away it goes' and I recall that the ad claimed that all it took was a phone call. I understood this to mean that I would not have to attend at a medical clinic and meet with a doctor in person but rather that it could all be done over the phone.

[ACCC 1.3, [7]]

133    In respect of the 145 consultations with AMI patients evidenced by the recordings, it should be inferred that the patients generally contacted AMI as a result of advertising by AMI, and responded to the messages that treatment was by nasal spray, was by doctors committed to their welfare in accordance with accepted standards of medical practice, and had a scientific foundation.

4.5.2    The conduct of AMI salespeople

4.5.2.1    Introduction

134    The ACCC alleged that features of the conduct of the salespeople, in relation to their contact with Annexure B patients, were unconscionable. It was alleged that the salespeople were:

    put forward by AMI as a part of medical consultation during which they proffered medical views when they had no medical training;

    trained by AMI to and did conceal from patients that they were paid on commission, so that the longer the contract term the more commission they earned;

    trained by AMI and used high-pressure selling techniques designed to exploit the shame, embarrassment, guilt and inadequacy which AMI believed patients felt about suffering from ED or PE;

    trained by AMI to and did persuade patients to enter into long-term treatment contracts when there was no proper medical basis for the length of the medical treatment offered; and

    trained by AMI to and did tell patients that they would be entitled to a refund if they were not satisfied with the treatment without disclosing that, in order to obtain a refund, patients were required to try all of the treatment methods offered by AMI including intracavernosal injections into the base of the penis.

135     In each instance the ACCC said that the interests of patients were subordinated to the commercial interests of AMI.

4.5.2.2    Unqualified salespeople presenting as medically qualified

136    A patient who contacted AMI was channelled through a process which first required the patient to speak to a salesperson. In almost all of the 145 recorded consultations, the salespeople introduced themselves by name and then described their role as clinical coordinators. One salesperson, Hanspeter, sometimes described himself as a doctor’s assistant. This introduction was often followed by the explanation that their role was to assist the doctors or work with the doctors. The salesperson then usually asked about the problem which the patient was experiencing. In the course of the ensuing conversation, the salesperson often responded by offering a medical opinion. That process can be seen in the following exchanges with patients.

137    The exchange between patient 27 and salesperson Lori was as follows:

LORI:     Okay, great. Now, [Patient], what is your main concern? I just need to gather some brief information, firstly.

PATIENT:     Oh, it’s just lasting longer, because it’s like a premature thing. I’ve never – it’s just sort of all of a sudden – it’s been going on for probably, probably four or five months, right - - -

LORI:     Mm.

PATIENT:     - - - it was – but I had another – it happened to me one time before too, but then it, sort of, like, it went away. It didn’t go away for a long time, but then it come back again.

LORI:     Okay, yeah, look, [Patient] that’s what happens. Premature ejaculation: it is a psychological impotence, and what happens, because it’s an enforcement of a bad habit it may be there on and off - - -

PATIENT:     Yeah.

LORI:     - - - but it’s going to get progressively worse unless you do something about it…

[Emphasis added.]

[ACCC 4.260, p 3]

138    The exchange with patient 32 was as follows:

BRIAN:    All right. Now a lot of men are in the dark, so I just have to give you a few facts, okay?

PATIENT:    Yeah.

BRIAN:    Roughly 20 per cent of all men have premature ejaculation, which means after they penetrate they’re five or 10 minutes or under most times. Okay?

PATIENT:    Yeah.

BRIAN:    The other 80 per cent of men don’t have the problem. They can penetrate, thrust, go 20, 30 minutes, 40. No matter how good it feels, they can ejaculate when it suits them. All right?

PATIENT:    Yeah.

BRIAN:    That’s what you want. Have you had that control at all or not?

PATIENT:    Not really.

BRIAN:    Okay. We need to sort that out. Are you on any medicines at all?

PATIENT:    No.

[ACCC 4.269, pp 2-3]

139    The exchange with patient 111 included the following:

IGOR:    But you can still sometimes get a good, strong 100 per cent [erection]?

PATIENT:    Oh, yeah. Yeah.

IGOR:    That’s a very good sign. Okay. It is quite common, [Patient], for men who basically have been out of action for some time to develop erectile dysfunction, especially once you’re over 50.

PATIENT:    Okay, yeah.

IGOR:    It’s quite common, because your body starts to go into a decline, stuff going backwards, rather than forwards and your blood vessels - - -

PATIENT:    So the theory of use it or lose it is quite correct?

IGOR:        That's correct.

PATIENT:    Okay.

IGOR:    Basically your blood vessels start to atrophy or lose elasticity and start hardening up and the same, you know, like the rest of your body.

PATIENT:    Yeah.

IGOR:    That’s why we start getting wrinkles and all that and the same with the blood vessels in the penis.

PATIENT:    Sure, yeah.

IGOR:     It’s a natural aging process basically, but when you don’t use it, it starts happening a lot quicker - - -

PATIENT:     Okay, yeah.

IGOR:     - - - than what it normally would. So it is quite straightforward to get this problem treated, just a matter of exercising sort of thing over period of time - - -

PATIENT:     Okay, yeah.

IGOR:         - - - until you get to the point where - - -

PATIENT:     Is it a confidence thing? Is it anything to do with confidence?

IGOR:     Well, it’s a combination of things. It’s a combination of physical, as well as psychological.

PATIENT:     Yeah, because that’s sort of the way I - you know, I feel awkward in

those situations now when you sort of - - -

IGOR:         Of course.

PATIENT:     Yeah.

IGOR:     The more you worry about your performance, the more things go wrong.

PATIENT:     Exactly, yeah.

IGOR:    But the fact that most of the time you aren’t getting the - the automatic erections are around the same strength shows that there is some physical decline as well.

PATIENT:     Okay.

IGOR:         Which can make the problem even worse when you do have trouble.

PATIENT:     Yeah. Yep.

IGOR:     So, you know, when you’re sort of worrying about your performance, things go wrong and, when things go wrong, you worry about your performance.

PATIENT:    Oh, that's right, yeah …..

IGOR:     So it’s quite straightforward. Yeah, it is quite easy to treat this problem. It’s just a matter of sticking - you know, treating it over a period of time, getting yourself back to normal and then you should be right by yourself. Quite important though, after, you know, the treatment is completed, to keep yourself active regardless.

PATIENT:     Yeah. Yeah, sure.

IGOR:         You know, either with sex or at least masturbation because - - -

PATIENT:     Yeah. Okay.

IGOR:     - - - firstly, they say that - they’ve found that if you ejaculate regularly it cuts the chance of developing prostate cancer, about 50 per cent, so it’s quite important.

PATIENT:     Oh, okay.

IGOR:        Things like that.

PATIENT:     Okay. I didn’t know that. I wasn’t aware of that.

IGOR:         What I’ll do is basically - - -

PATIENT:    That’s very important.

IGOR:         It is very important because, well, all around it’s important.

PATIENT:     It is.

IGOR:     It gets your endorphins going and, you know, gets the blood flowing, gets everything working properly, gets the heart pumping, you know.

PATIENT:     Yeah. Yeah. No, that's right. Oh, yeah, you just sort of lose the plot sometimes and, you know, as I say, I throw myself into work and, yeah, you know, just got completely out of the scene of meeting people and, yeah, that’s what happens.

IGOR:     It is quite common, you know, and it is quite easy to treat, just a matter of time, just basically getting you to the point where you are getting consistently good, strong erections, so you’re over the psychological aspect and, with regular intercourse, basically your - the blood vessels become elastic again.

PATIENT:     Okay, yeah. Yeah.

IGOR:     So in fact, as you get older, you need to keep yourself more active than when you were younger, if you want everything to work well.

PATIENT:     Oh, okay, yeah. Yeah.

[Emphasis added.]

[ACCC 4.340, pp 4-6]

140    Although the descriptions of their title and role used by the salespeople and the nature of their exchanges with the patients gave an impression that they had some medical knowledge to contribute to the consultation, in fact they were salespeople paid on commission with no medical training. Their remuneration did not depend on any exercise of medical expertise, but on the amount of, and method of payment for, the contract made between AMI and the patient.

4.5.2.3    Failure of salespeople to disclose their remuneration by commission

141    The salespeople were paid on a commission basis. They received higher commission for upfront payments by patients. They were generally paid seven per cent commission on daily totals of upfront payments of up to $10,000, 10 per cent for daily totals between $10,000 and $15,000, and 15 percent on daily totals of $15,000 or more. Where the patient paid by direct debit, the rate of commission was 6 per cent. If a contract was later cancelled and part of the price refunded to the patient, the commission previously paid to the salesperson was deducted from later earnings.

142    In none of the 145 recordings were the patients told that the clinical coordinators or doctors’ assistants were salespeople paid on commission. The respondents called Ms Maria Gabriel who was as salesperson for AMI. She confirmed that she did not tell patients that she was paid commission by AMI. She identified the document from AMI entitled “Instructions to Clinical Coordinators – Male Sexual Dysfunction” which included the following:

OBJECTION

A RELATED OBJECTION TO YOUR BEING PUSHY MAY BE AN ENQUIRY AS TO WHETHER YOU ARE ON A COMMISSION

If this question arises you should respond by advising the enquirer that as with most working Australians your income is based on results (without going into further details) but that your greatest reward is having a satisfied patient of AMI.

[ACCC 4.9, pp 8 -9]

4.5.2.4    High-Pressure sales techniques used by salespeople

4.5.2.4.1    Introduction

143    In this section, these reasons for judgment first explain the source of the training provided to salespeople by AMI, and then how the sales techniques were designed to target the vulnerability of men who phoned AMI.

144    Then, the reasons for judgment examine the high-pressure sales techniques used by salespeople, namely, by emphasising the adverse consequences of the failure to agree to treatment, by making statements about the efficacy of the AMI medications and offering a cure for the conditions, by downplaying the side effects of the AMI medications, and by exaggerating the dangers of alternative medications not available through AMI.

4.5.2.4.2    The sales scripts and materials

145    The approach which salespeople should take in the consultations was set out in sales scripts and materials developed by Dr Vaisman, at times with input from external consultants. Mr Shrestha also met with Dr Vaisman in discussions about the development of the materials.

146    Numerous sales scripts were tendered and received in evidence, including those entitled, “Instructions to Clinical Co-ordinators – Male Sexual Dysfunction” (Instructions to Clinical Coordinators), “Comprehensive Treatment Program for Clinical Coordinator”, “Suggested Brainstorm in Patients Mind After Hearing Quotation on the Cost of the Treatment and How to Prevent Arising Objections” (Suggested Brainstorm), and “Four Pillars of AMI”. The document “Think Like a Patient” (Think Like a Patient) [ACCC 4.409.1 and ACCC 4.555] was the basis of a lecture given by Dr Vaisman to the salespeople in February 2008.

147    In final written submissions, the respondents contended that all but one of the sales scripts and materials were not particularised in the pleadings and could not be relied upon by the ACCC. However, this is to confuse the function of evidence and pleadings. In any case, most had been particularised. The pleadings were elaborate in the detail in which the critical representations were forecast to the respondents. For example, extracts from seven of the sales scripts and materials were set out verbatim in the FASOC. Then, in further and better particulars filed by the ACCC on 14 December 2011, the ACCC detailed over 40 sales scripts and materials on which it intended to rely. A copy of each had previously been provided to the respondents.

148    Mr Shrestha was in charge of the supervision and training of salespeople. When a new script was finalised he would disseminate it to the sales staff and conduct group training sessions and also regular one-on-one meetings to explain the use of the scripts. Dr Vaisman attended some of the training sessions.

149    Dr Vaisman also conducted sales conferences and lectures for the sales staff.

150    Dr Vaisman said in in cross-examination that some of the sales scripts and materials were not distributed to the salespeople. He also said that he had drafted the scripts from literature, that some of the statements were excerpts from that literature and not his own words, and that he agreed or had previously agreed with some of the statements but not others. However, it is not necessary to find whether each of the sales scripts was provided to the salespeople. On the balance of probabilities, some materials covering the sales ideas expressed by Dr Vaisman were provided to the salespeople, even if some of the particular materials relied upon by the ACCC were not. And Dr Vaisman acknowledged that he and Mr Shrestha had encouraged the salespeople to use the ideas found in the scripts as part of their sales routine. He also acknowledged that he had presented to the salespeople on the topics addressed in the materials.

151    Dr Vaisman and Mr Shrestha intended the salespeople to use the scripts and the training material in their interactions with patients. Dr Vaisman said that Mr Shrestha “hammered” the staff to stick to the scripts. That occurred in sales meetings held every month or six weeks. Dr Vaisman attended some of those meetings and told sales staff that if they did not stick to the scripts they could lose their jobs [TS 1638]. Dr Vaisman said that no salesperson actually lost their job for not sticking to the scripts, but that what he said was a way of putting pressure on them to do so [TS 1639].

152    That Dr Vaisman and Mr Shrestha were successful in training salespeople was evident in the recordings of the Annexure B consultations. The ideas, if not the words, which the salespeople were instructed to impart appear in virtually all cases.

153    The ACCC prepared attachment 6 to its final written submissions which tabulated the occurrence of certain phrases taken from specified training materials in the interactions between salespeople and patients as follows:

1.    “untreated PE can lead to psychological impotence” was used in 34 consultations;

2.    “untreated PE/ED can (lead to) shrinkage of the penis” was used in 11 consultations;

3.    “use it or lose it” was used in four consultations;

4.    “prevention of prostate cancer with frequent ejaculating” was used in seven consultations;

5.    “men who have regular sex are 50% less likely to have a heart attack or stroke” was used in three consultations;

6.    “… a significant number of our patients, who commit to a 12 month program, do not require ongoing treatment at the end of their program” was used in 35 consultations;

7.    “our programs have been specifically designed to be undertaken over a standard 12 months period with the objective of having a patient complete the program, sexually rehabilitated, and without the need for ongoing program” was used in 61 consultations;

8.    “benefit includes return of sexual confidence” was used in 25 consultations;

9.    “a benefit includes to be able (most likely) in the end of the treatment program to perform (to control ejaculation in PE case) without medications” was used in 12 consultations;

10.    “PE becomes a habit and that in order to break this habit the brain needs to be retrained” was used in 24 consultations;

11.    “having treated some 500,000 patients with sexual dysfunction concerns over the last 16 years, you can be confident of AMI’s substantial experience and understanding of this complex area” was used in 46 consultations;

12.    “we are receiving more than [x] inquiries per day/week from men Australia wide” was used in 29 consultations;

13.    “you are not alone” was used in 27 consultations;

14.    “most of our patients get excellent results from the start” was used in three consultations; and

15.    “it costs 2 cups of coffee per day, can you afford 2 cups of coffee per day?” was used in three consultations.

154    In a corresponding schedule, the respondents sought to qualify the effect of that analysis, in particular, by adding information to show whether the patient in question proceeded to a purchase, sought a refund, or was given a refund.

155    These factors, however, do not detract from the force of the ACCC’s point, namely, that the training provided by AMI was translated into practice by the salespeople. The evidence established that the training given by Dr Vaisman and Mr Shrestha to salespeople in the techniques of selling were taken up and used by the salespeople.

4.5.2.4.3    Targeting vulnerability

156    In February 2008, Dr Vaisman conducted a sales conference which was attended by salespeople including seven salespeople who, between them, dealt with 120 of the Annexure B patients. Dr Vaisman set out his technique in Think Like a Patient, on which he based a lecture he gave to the salespeople. He explained the way he saw the state of a patient who rang AMI as follows:

He is frustrated, ashamed, dissatisfied, distressed and anxious about sex and decreased sexual self confidence. He is anxious with interruption of intimacy (which often results from his or her reaction to the short latency of sex. This anxiety subsequently affects the quality of both the sexual and nonsexual relationship.

[ACCC 4.555, p 3]

157    In an accompanying Power Point presentation “ABC of Sales – Think Like a Patient” (the Power Point presentation), the matter was emphasised where the state of a patient phoning AMI was described as:

Frustrated, ashamed, dissatisfied, distressed and anxious and decreased sexual self confidence.

[ACCC 4.403, p 3]

158    Dr Vaisman called this state, State A of the ABC of Selling. In cross-examination Dr Vaisman confirmed that the presentation reflected his own views and that their source was “taken from the books” [TS 1841]. A summary of the ABC of Selling was found on the wall of the office of Hanspeter, one of the salespeople. Under the heading ABC the following appeared:

A B C

A    STAGE

    WHERE ARE YOU NOW?

C    RESULTS

    WHERE YOU WANT TO BE?

B    TREATMENT PROCESS

    (AT LEAST 4 TREATMENT OPTIONS)

[ACCC 4.37]

159    Dr Vaisman admitted in cross-examination that he had written a number of times about the fact that men coming to AMI for treatment were likely to have low self-esteem and that that was his view. The following exchange occurred in cross-examination:

MR BURNSIDE:    It’s something that you’ve written a number of times, isn’t it?

DR VAISMAN:    Yes. I know that people may have low self esteem. So what.

MR BURNSIDE:    Yes?

DR VAISMAN:    Yes. They are talking to the doctor.

MR BURNSIDE:    May have or likely to?

DR VAISMAN:    Maybe. I don’t know. The – the literature says sometimes yes.

MR BURNSIDE:    Yes. It’s your view, isn’t it, that they are likely to have low self esteem and likely to be anxious?

DR VAISMAN:    Yes.

        

[TS 1755]

160    And Dr Vaisman said the following about the views expressed in the document Think Like a Patient:

MR BURNSIDE:     “When a man rings us” – do you see that?

DR VAISMAN:    Yes.

MR BURNSIDE:    He is then so-called state A.

His current state (he has a problem with getting or maintaining an erection, or suffers from premature ejaculation. He is frustrated, ashamed, dissatisfied, distressed and anxious about sex and decreased self-confidence. He is anxious with interruption of intimacy).?

DR VAISMAN:    Yes

MR BURNSIDE:    Those were all views which you held when you sent that document, weren’t they?

DR VAISMAN:    It’s all taken from the books. Yes, if you want my opinion. Yes.

MR BURNSIDE:    Those were views you held?

DR VAISMAN:    Yes.

MR BURNSIDE:    About the nature of the people who rang with male sexual dysfunction?

DR VAISMAN:    Yes.

    

[TS 1840 – 1841]

161    At other times he denied that this was his view and said that by ringing AMI men had overcome their shame or embarrassment as soon as they rang, or that the men who were ashamed and embarrassed did not ring AMI at all [TS 1831]. His scripts and materials for salespeople, in particular Think Like a Patient, established that his actual view was that patients were vulnerable. Where he sought to resile from that view, his evidence was contrived to advance his case in this proceeding, but did not reflect his view or the reality.

162    Some patients told the salesperson or the doctor that they experienced a lack of confidence. For example, patient 60 stated in his interaction with salesperson Csaba that, “[I] [d]efinitely don’t have much confidence at the moment.” [ACCC 4.312, p 4]

163    Ms Gabriel said that she would have read through the document Instructions to Clinical Coordinators. It included the following assessment of the mindset of patients:

PSYCHOLOGICAL OBJECTION – CHANGING THE MINDSET OF THE PATIENT WHO MAY WELL FEEL NOT WORTHY OF THE PROGRAMME.

Fundamental to your dealings with objections must be an understanding of the psychology of a man calling us in the first place with a PE or ED problem.

Given the nature of this condition such a man would be likely to have quite low self esteem.

His inability to perform sexually whether as a result of PE or ED, would over time, have had a profound emasculating impact on his male psyche or spirit.

In short he would feel less of a man and his low self worth as a consequence results in a lack of independence and decisiveness to make a decision that is rightfully his alone to make.

[ACCC 4.9, p 6]

164    The circumstances at a sales lecture given by Dr Vaisman on 7 January 2010 are particularly revealing. The purpose of the event was for Dr Vaisman to get the salespeople to change their approach. He regarded the practice which had developed as wasting selling time with issues which would be addressed by the doctors in any event, and that it was of concern that some salespeople were presenting to the patients as doctors Dr Vaisman said:

That’s why today – the role what we are going to do today is to come to the new level of the sales technique. I don’t want you sell the medication. Absolutely not. So, number one, stop taking details history. Okay. You can ask, “How long the problem?” and that’s it. “What kind of medications?” and all other things which doctor ask him – doctor – doctors tell me that very often when they start to ask the history of the patient, patient tell, “Listen, I just told all this thing to another doctor. What is going on?” Very unhappy. And when he says, “No. It wasn’t a doctor. It was a clinical coordinator,” people confuse. So, please – please – please, stop taking details history. Please – please stop about what kind of medications you are using. It doesn’t help you to – to sell – a different technique to sell.

[Emphasis added.]

[ACCC 4.415, pp 2-3]

165    In the January 2010 lecture Dr Vaisman circulated to the salespeople a document outlining the new approach. It was probably the Suggested Brainstorm script found by the ACCC in Dr Vaisman’s office [ACCC 4.27]. Dr Vaisman said he most likely worked from the document during the lecture [TS 1777]. The document included a series of questions which the salespeople were to ask as follows:

Do you experience?

(3)    Sexual Dissatisfaction                [ ] Yes    [ ] No

(4)    Anxiety                        [ ] Yes    [ ] No

(5)    Lack of Self-Confidence            [ ] Yes    [ ] No

(6)    Diminished Quality of Life            [ ] Yes    [ ] No

(7)    Relationship Tension                [ ] Yes    [ ] No

(8)    Sexual Relationship Tension            [ ] Yes    [ ] No

(9)    Some Sort of Guilt                [ ] Yes    [ ] No

[ACCC 4.27, p 1]

166    Following the introduction to the lecture, Dr Vaisman engaged in role plays which were designed to demonstrate to the salespeople how the questions should be asked in a way which encouraged patients to answer them. Dr Vaisman explained to the salespeople:

MR VAISMAN:     And by the – and by the way, all these questions will be on computer which you really have to tick - - -

MR ..........:         Okay.

MR VAISMAN:     - - - and doctor really will see all these questions what you tick. It really – it will help him in social analysis of the mentality of the patients.

[ACCC 4.415.1, p 7]

167    Dr Vaisman explained the reason for asking patients about their psychological state as follows:

Why these questions I want? We know in seven minutes it won’t happen. Why I’m telling seven minutes, only for one reason. If you start to talk, “You have to use this medication with sex, without sex. Medication will be delivered to your door,” and all this, it’s not so important. He doesn’t want to hear this one.

It’s not what the question which will help him to make the decision to buy or not to buy. You have to talk only about psychological introduction to him such a way that he really have – will help make the decision to – to buy. With asking medication to the door and all these things, believe me, it won’t help him - - -

--- to make this decision.

But I want you change because it’s – believe me – it won’t help to sell. Be delivered to the – to the door and all other things.

[Emphasis added.]

[ACCC 4.415.1, pp 8-9]

168    An audio recording of this sales lecture is in evidence. What it reveals, which is not evident from the transcript of the lecture, is the force of delivery given by Dr Vaisman and the intense response which he drew from the salespeople.

169    Dr Andrew David Pattison, a general practitioner with a particular interest and experience in the area of sexual dysfunction was called as a witness for the ACCC. He shared the view of AMI and Dr Vaisman about the feelings of men suffering sexual dysfunction. In a report dated 15 November 2011 [ACCC 3.29] (Pattison Report 2), Dr Pattison stated “patients who present with sexual dysfunction problems such as ED and PE are frequently very embarrassed and lacking in self-esteem. They are often willing to try any treatment that might alleviate their problem.” [ACCC 3.29, p 303]

170    The evidence established that patients phoning AMI for treatment of ED or PE were likely to feel embarrassed and lack self-confidence as a result of their condition. The evidence also established that AMI was aware of this and tailored its sales techniques to take advantage of these feelings in order to make sales.

4.5.2.4.4    Emphasising adverse medical and social consequences of failing to treat

171    In many of the Annexure B patient’s interactions with salespeople, the salespeople emphasised adverse medical and social consequences which they said the patient would suffer without AMI’s treatments and medications. This technique followed the instructions and scripts given to salespeople by AMI.

172    For instance, the Power Point presentation found in the office of Hanspeter included the following:

SEX IS NOT JUST FOR ENJOYMENT OR FUN – IT’S A BIG HEALTH ISSUE – LET ME EXPLAIN TO YOU WHY:

E.D.

    50%     LESS CHANCE TO HAVE HEART ATTACK AND STROKE

    LESS CHANCE TO DEVELOP PROSTATE CANCER

    MEN WHO HAVE SEX AFTER 60 LIVE 10 YEARS LONGER

    30% OF MEN WITH E.D. PARTNERS SUFFER FROM DEPRESSION

P.E.

POSSIBILITY OF BECOMING IMPOTENT AND SUFFER SHRINKAGE OF THE PENIS

[ACCC 4.37]

173    This reflected the Power Point of the ABC of Sales – Think like a Patient” that stated:

What is the consequences fir [sic] staying at the point “A” (Penile shrinkage, heart attack, stroke, wife’s depression)

[ACCC 4.403, p 6]

174    A longer version of the ABC of Sales instructed the sales staff as follows:

Expand and repeat the benefits he will receive and the emotional relief you’ll provide.

2.    To remove by 50% chance of developing heart attack or stroke.

3.    If not increase than at least not to lose the size of the penis.

4.    To remove the possibility to develop psychological impotence (PE patient).

[ACCC 4.51, p 3]

175    In the Instructions to Clinical Coordinators script, the same message was conveyed in the context of the salesperson seeking to overcome the patient’s objection that the patient needed to talk to his partner:

Never forget the serious potential flow on effects from untreated PE (possible psychological impotence, shrinkage of the penis – “use it or lose it” and continued low self esteem/diminished quality of life) OR for untreated ED (i.e. men who are not sexually active) (50% less change of a heart attack or stroke, your partner has less change of developing depression, as a result of your ED (30% of partners of men with ED develop depression), shrinkage of the penis – “use it or lose it” and continued low self esteem/diminished quality of life.)

[Emphasis in original.]

[ACCC 4.9, p 9]

176    The ACCC relied upon interactions between 137 Annexure B patients and salespeople to support the claim that salespeople told patients of adverse consequences which would follow if patients did not take the treatment.

177    A number of the interactions relied on amounted to no more than ordinary sales chatter which did not rise to a level to be relevant to a consideration of unconscionable conduct whether alone or in combination with other parts of the interaction. A typical example is a passage relied on by the ACCC in the interaction between patient 141 and salesperson Gary as follows:

GARY:        … And are you in a relationship or single, what’s the story there?

PATIENT:     I’m single.

GARY:     Single, okay. So, yeah, quite important then to obviously last longer. Once you get them on the hook you want them to stay there, buddy.

PATIENT:     Yes.

GARY:     And have a lot more fun. That’s all right. Excellent.

[ACCC 3.306, pp 2–3]

178    An examination of the transcripts of the interactions with the 152 AMI patients disclosed that about 74 interactions exhibited circumstances in which the salesperson spoke of adverse medical consequences flowing from not taking the treatment which might be of sufficient seriousness to be relevant to a case of unconscionable conduct. These include patients 2, 3, 4, 6, 7, 10, 11, 17, 22, 23, 27, 28, 31, 32, 35, 38, 43, 44, 45, 47, 49, 52, 54, 57, 58, 59, 61, 62, 64, 69, 72, 74, 83, 88, 91, 94, 97, 98, 107, 108, 111, 113, 116, 121, 123, 124, 125, 127, 128, 131, 136, 140, 141, 145, 150, 154, 156.

179    The adverse medical consequences mentioned in many of these interactions included psychological impotence. A typical example was the interaction between the salesperson Hanspeter and patient 64 which included the following:

HANS:    So it could be – see premature ejaculation is – first of all, you’re very young; we have patients up to 109 years, okay, and premature ejaculation is a condition. There’s a lot of people have the same problem, at least 20 to 30 per cent from all the male population, okay. That means you can’t control the ejaculation so you come very quickly, okay.

PATIENT:     Yeah.

HANS:     If that’s the case over years, if it’s not sorted out, it turns into impotence. That means you can’t get an erection any more.

PATIENT:     Oh, okay.

HANS:     But that does not happen straight away; that takes years. What will happen is - what you get first is the erections sometimes are not so strong any more. Yeah, so that’s what you’ve got, a bit of ED, okay.

PATIENT:     Okay, yeah.

HANS:     But the main problem, what you call this premature because if you can last longer, that means if you can pump away for 15, 20 minutes, the erection will be rock hard, because it’s like running a choke for so long; your muscles get really hard, yeah.

PATIENT:     Yeah, sure.

HANS:     So when we sort it out, most of the time the other problem will be gone anyway.

PATIENT:     Oh, okay, yeah.

HANS:     And we measure things like that. This generation - the last 10, 15 years has been much better because when you go in the gym, for instance, okay, and we look at these old guys in the sauna with their little willies, it’s not because they have a little willy, it’s just they didn’t fix a problem like that because that was always – they had this problem; it just hasn’t been treated before, okay. And when you don’t treat premature ejaculation – see, the penis is ..... The woman takes about 15 minutes to climax with penetration, okay. So if you penetrate her to make her climax, it takes about 10 to 15 minutes. That is normally how long you should control your ejaculation to, as a man, okay.

PATIENT:     Yep.

HANS:     If you don’t do that, then you short change yourself, obviously, with the woman, okay.

PATIENT:     Yeah.

HANS:     Now, this is like the – the penis is a muscle like every other. Now, if you don’t train it properly, it will start shrinking, because it doesn’t fill up with blood any more, and that’s why there’s little willies in the gym, because the arteries get hard; no blood gets in there, so the penis starts shrinking, yeah.

PATIENT:     Yeah.

HANS:     It’s exactly the same as blocked pipes. The reason why men don’t get so hard an erection any more as when they were younger is they haven’t treated premature ejaculation or it ends up with – what’s it called – psychologically impotence. When the arteries are hard, the blood can’t go into the penis. The penis is still the same size; it doesn’t fill up that much any more. And that way, it’s smaller, and that way, it doesn’t get hard any more, and it gets worse and worse, obviously, by the years, yeah. Does it all make sense?

PATIENT:     Yeah.

[ACCC 4.317, pp 34, 13]

180    Each salesperson had an individual way of conveying that message. Thus, salesperson Brian told patient 59:

BRIAN:     Long-term premature ejaculation does lead to impotence. A lot of young blokes don’t understand that but that’s what happens.

[ACCC 4.311, p 10]

181    And salesperson Vincent said to patient 145:

[Th]e – the longer you leave it the quicker it’s going to get, and if you keep leaving it, mate, it can lead to erection problems as well, besides the fact that, you know, you’re getting less and less sex, which means you’re getting less practice, so it’s going to start to compound itself and become a real problem, and certainly if you leave it, mate, you might end up having your penis stopping to work altogether. You don’t want that?

[ACCC 4.280, p 7]

182    Salesperson Lori told patient 94:

LORI:     Yes. Look, that actually develops into an anxiety, you know, because you want to go the distance, but the more you think about it, the worse it actually gets.

PATIENT:     Okay, that’s probably what it is then, because - - -

LORI:     Yes. Look, it develops into what is called a “psychological impotence.”

PATIENT:     Yes.

LORI:     And you know, you put that anxiety on yourself, it – you know you’re not, perhaps, providing satisfaction for yourself, your partner. All these things play a part, and it’s a compounding effect. This problem, even though it may be there a short time, unless you treat it, premature ejaculation is something that isn’t just going to go away.

[ACCC 4.368, p 3]

183    There are examples of references to prostate cancer in the interactions between salespeople and patients, for instance, patients 31, 44, 57, 83, 111, 131. Salesperson Hanspeter said to patient 57:

HANS:     The other thing is, the money is wise spent, that's for sure, because I don't know if you know, but if you have a good sex life, less likely to get a heart attack, less likely to get a stroke, and the most important thing is less likely to get prostate cancer which is in Australia the biggest killer in men.

PATIENT:     Yeah. Yeah, that's for sure, yeah.

[ACCC 4.308, p 22]

184    There were also references by the salespeople to penis shrinkage. For example, salesperson Vincent said to patient 107:

VINCENT:     Now when this problem is left untreated usually nothing changes or

there is chances of it getting worse and quicker over the years.

PATIENT:     Okay.

VINCENT:     Eventually when it’s left untreated altogether it can lead to erection

problems and shrinkage of the penis.

[ACCC 4.298, p 3]

185    There were references to heart attack or stroke, for instance, to patients 57, 83, 131. Salesperson Hanspeter told patient 83:

PATIENT:     And it’s [the medication] not harmful to you?

HANS:     No, no no. It’s good for you. Sex is good for you okay? The more sex you have, so - the better it will be for you in the long run to avoid prostate cancer, to avoid a stroke. To avoid a heart attack, you know?

PATIENT:     Yeah.

HANS:     It’s – when you only last a minute or two, that’s not long enough for all the blood to stay in the penis you see. The penis has to be like your legs or your hands, to be used all the time. And you using incorrectly, then obviously the arteries get hard. That also means that there’s more chance that there’s no blood pressure in there so that means you don’t get any erection anymore. So that’s why so many people with premature ejaculation, eventually it ends up in impotence. Yeah? So you losing your erection, yeah?

PATIENT:     Okay, yep.

HANS:     Makes sense, yeah?

PATIENT:     Yep.

HANS:     And you have full control of this, less likely to get prostate cancer, less likely to get a stroke. It’s a very small investment, it’s two cups of coffee a day.

PATIENT:     Yep, and how much is it a month, sorry?

HANS:     Sorry?

PATIENT:     How much is it again, a month?

HANS:     198.

PATIENT:     198. Yep.

[ACCC 4.349, pp 9-10, 12]

186    In cross-examination Dr Vaisman conceded that treatment of ED does not reduce the risk of heart attack or stroke. The following exchange occurred:

MR BURNSIDE:    And treating erectile dysfunction doesn’t alter the existence of cardiovascular disease, does it?

DR VAISMAN:     Correct.

MR BURNSIDE:     And so, whether or not a person has a heart attack as an associated condition is unrelated to whether or not they have the treatment?

DR VAISMAN:    Correct.

MR BURNSIDE:    Because the treatment is for erectile dysfunction?

DR VAISMAN:    Correct.

MR BURNSIDE:    Not for cardiovascular disease?

DR VAISMAN:    Correct.

MR BURNSIDE:    So that taking the treatment doesn’t reduce your chance of having a heart attack, does it?

DR VAISMAN:    Correct.

MR BURNSIDE:    And it doesn’t reduce your chance of having a stroke for the same reasons?

DR VAISMAN:    Correct.

[TS 1753]

187    Patients were therefore given incorrect information when they were told by the salespeople that treatment would prevent stroke or heart attack. The salespeople were incorrectly trained when they were told by Dr Vaisman himself in the ABC of Sales and Instructions to Clinical Coordinators that they should tell patients that they would avoid heart attacks or strokes by taking the AMI medications.

188     Dr Vaisman was asked in cross-examination about his claim that failure to treat ED or PE would lead to shrinkage of the penis. The following exchange occurred in cross-examination:

MR BURNSIDE:    And I suggest to you that there is no article which demonstrates that failing to take the treatment causes the penis to shrink.

DR VAISMAN:     There is a scientific articles.

MR BURNSIDE:     Yes?

DR VAISMAN:    The three articles done by scientists and published in the International Journal of Impotence which says that people with – who suffer from impotence erectile dysfunction they have shorter penises, penises, yes. Absolutely prominent factor.

MR BURNSIDE:    But the article doesn’t say that correcting erectile dysfunction causes the penis to grow longer and neither does it say that having, leaving it untreated causes the penis to shrink. They don’t say that, do they?

DR VAISMAN:    I don’t understand. I don’t know. There is an article which says that people who stop to be sexually active is a signs of the penis shrinkage – shrinking. That’s what the scientific article says.

MR BURNSIDE:    But again, it’s a matter of distinguishing between conditions that are associated and conditions that are causally connected, do you follow that?

DR VAISMAN:    No.

MR BURNSIDE:     Right. Do you know the difference between correlation and cause?

DR VAISMAN :    Correlation, yes.

MR BURNSIDE:    Yes?

DR VAISMAN:    And cause, yes.

MR BURNSIDE:    Right. So that if a person who is not sexually active is found on average to have a smaller penis, it does not mean that not being sexually active caused that?

DR VAISMAN:    Absolutely. It says if person stopped to be sexually active, the size of the penis decrease. That’s exactly the conclusion of these articles.

[TS 1753 - 1754]

189    Then, the issue of penis shrinkage in patients with PE arose and the following exchange occurred:

MR BURNSIDE:    But people who present with premature ejaculation are also told that they risk their penis shrinking if they don’t take the treatment, aren’t they?

DR VAISMAN:    Absolutely wrong.

MR BURNSIDE:    Pardon?

DR VAISMAN:    Only for people with erectile dysfunction.

MR BURNSIDE:    Okay. And you would agree that people who present with premature ejaculation should never be told that their penis will shrink if they don’t - - - ?

DR VAISMAN:     Correct.

[TS 1757]

190    Dr Vaisman addressed the question of impotence as a consequence of failing to treat PE in the following exchange:

MR BURNSIDE:    And they [men who suffer from PE] should never be told that they will become impotent if they don’t get the treatment?

DR VAISMAN:     They – no, they can become impotent, that’s for sure.

MR BURNSIDE:    They can become impotent from premature - - - ?

DR VAISMAN:    Absolutely.

MR BURNSIDE:    - - - ejaculation?

DR VAISMAN:    Absolutely.

MR BURNSIDE:    And have you got any article that suggests that?

DR VAISMAN:    Yes, and I will explain why. It’s – coming the time when person – man understands he cannot satisfy the woman he try to avoid sex altogether and become psychological impotent.

MR BURNSIDE:    So that’s psychological impotence, not actual impotence?

DR VAISMAN:    What do you mean? It’s impotence, but psychological, he cannot get it up.

MR BURNSIDE:    Yes. I want to suggest to you that the following annexure B patients who presented with PE were told of the risk of their penis shrinking. They’re Mr [B], Mr [B], Mr [C], Mr [C], Mr [L], Mr [M], Mr [O] and Mr [V]. So you would say that all of those people should not have been told of that risk, do you agree?

DR VAISMAN:    You misunderstood.

MR BURNSIDE:    Pardon?

DR VAISMAN:    You misunderstood me. We explain to the patient untreated premature ejaculation can lead to psychological impotence, and as soon as he develops psychological impotence he can develop the shrinkage of the penis, correct.

MR BURNSIDE:    So contrary to what you said a few minutes ago, it’s okay to tell them if they present with PE that their penis might shrink?

DR VAISMAN:    Only in the context they will stop to be sexually active.

MR BURNSIDE:    And you’re aware that the articles that talk about penis shrinkage say that even partial erections during sleep are sufficient to prevent any change in the size of the penis?

DR VAISMAN:    No. Article says that the study of impotent men shows that the size of the penis decrease significantly.

MR BURNSIDE:    I want to suggest to you that first of all that you do encourage the clinical coordinators to refer to the adverse effects of not using your treatments, do you agree with that?

DR VAISMAN:    Yes, that’s their duty, to tell the consequences of not having treatment, continue to be impotent.

[TS 1757]

191    Dr Vaisman said that ED and PE robbed men of their confidence so that they avoided sexual intercourse. That process was described by Dr Vaisman as leading to “psychological impotence”. He claimed that psychological impotence had a physical consequence, namely, that there was shrinkage of the penis [TS 1757]. Dr Vaisman said that it was the responsibility of salespeople to tell patients of this consequence. He also agreed that he wanted the salespeople to use the suggestion of psychological impotence and shrinkage of the penis as part of their sales routine [TS 1750]. They did so.

192    The ACCC argued that the transcripts provided evidence that salespeople followed the training scripts produced by or for Dr Vaisman which made reference to psychological impotence and shrinkage of the penis as a consequence of ED and PE. The ACCC also argued that the information was medical information and should not have been imparted by salespeople. When the salespeople addressed medical issues, they gave an impression to patients that they had medical knowledge and that the advice was part of a professional medical program. In fact they were simply repeating information, of which they had no technical or expert understanding, designed to assist in the selling process.

193    When challenged about the correctness of the claim that ED and PE led to shrinkage of the penis, Dr Vaisman said there was an article about a study of impotent men that showed that “the size of the penis decreased significantly” [TS 1757]. In the course of final oral submissions, counsel for the respondents handed up a document to be read as part of the final written submissions which addressed scientific material relied on by the respondents generally (respondents’ additional reference to scientific evidence). In this document, the respondents referred to one article on this subject.

194    The article by Z. Awwad and others entitled, “Penile measurements in normal adult Jordanians and in patients with erectile dysfunction” (2005) 17 International Journal of Impotence Research 191, reported on a study which aimed to determine the penile size in an adult normal group of 271 and impotent group of 109 Jordanian men [R13.14, p 868]. The results of the study were aimed to assist patients in deciding whether to undertake penile lengthening procedures. The study of penile size was also thought to be possibly useful for the process of manufacturing condoms. In the normal group the mean flaccid length was 9.3 centimetres and in the impotent group the mean flaccid length was 7.7 centimetres. In the normal group the mean stretched length was 13.5 centimetres and the impotent group the mean stretched length was 11.6 centimetres.

195    The investigation undertaken by the study was to ascertain penile size. It was not designed to draw conclusions about the cause of any differences in size.

196    A number of speculative remarks were made about the cause of the difference in penile size between normal Jordanian men and Jordanian men suffering from erectile dysfunction. The respondents relied on part of a passage as follows:

The cause of impotence in our patients was mainly psychogenic, neurology, medication, and anxiety. Iacono et al reported the presence of structural disorders in the tunica albuginea of patients suffering from psychogenic, arteriogenic, and venogenic impotence with significant decrease in the elastic fibers in the tunica albuginea of impotent men compared to a control group. The decrease in length in impotent men in this study could be explained by the loss of elastic fibers, and the lack of intermittent stretching in the tunica albuginea, confirming the common saying (if you do not use it you lose it).

[Emphasis added.]

197    Immediately following that speculation was another potential reason for the difference in penile size, and that other reason was not related to continuing to engage in sexual intercourse. Rather it speculated that the cause could be related to the aging process as follows:

Organic impotence in aging men could be due to a venous leakage factor through veins that are situated normally on the distal third of the ventral penile surface. The impaired veno-occlusive function of the tunica albuginea is contributed to by the decrease in elastic fibers concentration found in impotent men.

198    This article, therefore, did not validate Dr Vaisman’s claim that by failing to treat ED or PE men will suffer shrinkage of the penis.

199    There were also instances of the salespeople emphasising that the patient would suffer adverse social consequences if he did not treat his ED or PE, such as that the patient’s partner may become depressed or that a patient would not satisfy his partner if he did not last longer. These exchanges played on the guilt and embarrassment of patients. For example, the following exchange occurred between salesperson Vincent and patient 28:

VINCENT:     And you’ve had the problem almost the whole time you’ve been with this lady?

PATIENT:     Yes. Yes.

VINCENT:     Oh, no. I hope not many funny things go through her head. I mean, a lot of ladies who stay with men who have these sort of problems they get a bit depressed. They start to think maybe this guy doesn’t find me attractive anymore or, you know, or maybe he’s doing it with someone else, and things like that go through their head.

PATIENT:     Yes.

VINCENT:     Your wife, she’s not depressed?

PATIENT:     She’s – it didn’t worry her for a while, but it’s starting to now, I think.

VINCENT:     Yes.

PATIENT:     Like she’s not all that interested in sex anyway.

VINCENT:     Well, you know why that is, [Patient].

PATIENT:     Yes.

VINCENT:     Because of this problem. See men who have this problem – and they try to shy away from sex – the wife, after a while, maybe her libido goes down and they’re not going to want to have sex, mate.

PATIENT:     Yes.

VINCENT:     Because they don’t want to keep facing the disappointment every – imagine your wife – she tries to get it on with you, it doesn’t go hard and then, if it goes hard it goes soft again. It’s frustrating for them as well as you, [Patient].

VINCENT:     The more – and your problem is the worse it gets, the more you think about it. The more you think about it, the worse it’s going to get, [Patient].

PATIENT:     Yes.

VINCENT:     And it doesn’t help the situation that your wife’s trying to avoid it. It’s going to really start to compound and, before you know it, mate, sex is going to stop. Is that what you want?

[ACCC 4.262, pp 5 – 7]

200    Salesperson Hanspeter said to patient 4:

HANS:     Yeah. Have you got a girlfriend?

PATIENT:     Yeah, I just started seeing a girl just not long ago.

HANS:     That’s why you want to fix the problem?

PATIENT:     Yeah, pretty much.

HANS:     Smart move.

PATIENT:     Yeah.

HANS:     Smart move. It takes a woman about 10 to 15 minutes to penetrate, like plain, not like oral, just penetration, okay. It takes a woman about 10 to 15 minutes to climax, yeah.

PATIENT:     After penetration?

HANS:     No, just with penetration. Let’s say you just do intercourse with her, no oral sex, okay, no foreplay.

PATIENT:     Yeah.

HANS:     It will take her about 15 minutes to climax, so with one or two we are a bit shorter, aren’t we?

PATIENT:     Yeah.

HANS:     Yeah. So it’s good that you fix that problem, yeah?

PATIENT:     Yeah, definitely.

HANS:     Otherwise we don’t look very good and we don’t like that, do we? We want to look good.

PATIENT:     No, it’s pretty embarrassing.

HANS:     Yeah, and also you will never get the woman reacting. Like, you can never get out of her, like to really move, man, to how she really is because she can’t open up in that short time, you know. It’s just not possible, yeah?

    

[ACCC 4.231, pp 3 – 4]

201    And salesperson Csaba said to patient 100:

CSABA:     Premature - you know, it's all about control.

PATIENT:     Yes.

CSABA:     Normal guys - they can control how long they last. They can just keep going on and on and on for 10, 15, 20 minutes or even longer. They decide when they ejaculate, yes.

PATIENT:     Yes, yes.

CSABA:     If it happens within few minutes, without you wanting to, it does happen prematurely, that's why it’s called premature ejaculation and so on.

PATIENT:     Yes.

CSABA:     Do you have a girl or are you married, [Patient]?

PATIENT:     Yes, no, I'm married.

CSABA:     Have you spoken to your missus about this at all?

PATIENT:     Yes, yes look, it's a - yes, yes - yes, I have. It's - you know, we both sort of think that it would be good to do something about it, so here I am.

CSABA:     Yes, no. It's much more fun for those guys who last, you know, 10-15 minutes or longer, as opposed to a few minutes only.

PATIENT:     Yes.

CSABA:     And that's how long it generally takes, you know, for a girl, for a woman, to get there and reach an orgasm, so important to keep her happy in the bedroom as well.

    [ACCC 4.378, pp 3–4]

4.5.2.4.5    Statements about the efficacy of the AMI treatments

202    The training materials repeatedly instructed salespeople to tell patients that the treatment programs would cure their problems. Thus, in the Suggested Brainstorm script, salespeople were instructed to tell patients who asked why they needed a 12 to 18 month program that:

Our unpublished and international studies have confirmed that regular use of these medications during 12-18 months have a curative (rehabilitation) effect with the possibility by the end of this period to perform without medications.

[ACCC 4.27, p 2]

203    Most of the Annexure B patients were told by salespeople that the treatment would cure their problem or that the medication would be effective. Some examples include the following exchanges with patients.

204    Salesperson Hanspeter said to patient 57:

Yeah. We will, don't worry, you'll be fine. You'll be fine. Yeah. People up to 108/109 years, we treating. They have prostate cancer or their prostate cut out. That's worse than diabetic. They … anymore and we get them doing, so you'll be fine.

[ACCC 4.308, p 3]

205    Salesperson Kris told patient 135 who consulted for PE:

KRIS:     Not a problem. All right, if – I mean, it’s not too late, [Patient]. If you started this medication last time you already fix your condition for good, permanently, but it’s never too late, isn’t it, right?

PATIENT:     So this medication, does it actually – is it something that you need to then take for the rest of your life?

KRIS:     No. That’s what I’m saying. If you started the medication last time, 2006, you already overcome your condition, [Patient].

PATIENT:     Right.

KRIS:     It’s like a retrain your body and brain, make sure you can come away from this medication after a certain period of time.

PATIENT:     I see, yep.

KRIS:     That’s why this is so popular, has been proven in the last 16 years, [Patient], but you could be one of them anyway. Well, it’s not too late. Okay. So let’s do it again, [Patient], okay?

And if you just keep, you know, practising over a period of time on a regular basis usually about 12, 18, 24 months later you don’t need it any more, [Patient].

[ACCC 4.323, pp 3 – 4]

206    And Salesperson Lori told patient 43:

LORI:     We do find most of our patients start to notice some dramatic improvements in about two weeks. It’s a – it’s a medication that actually works better the more you use it.

PATIENT:     Okay.

LORI:     So week in week out you will find that you will last a little longer and longer each time.

PATIENT:     Yep.

LORI:     Because it delays ejaculation. So you’ll be able to penetrate, [Patient]. I have one of my colleagues here. He said to me, “You know, Lori, once you’ve gone in, no matter how good if feels, this medication helps you to hold back.”

PATIENT:     Yeah. Right.

LORI:     Even – you know – even when it does feel really good you’ll still be able to hold back. Okay.

PATIENT:     Cool. Yeah.

LORI:     Now, once you achieve these things, of course, your confidence is going to increase.

PATIENT:     Yep.

LORI:     Okay. So – which is all great ‘cause that will certainly – you know – make you go the distance…

    

LORI:     You see, it’s quite simple. The short term goal – there’s a short term goal and there’s a long term goal. The short term goal is to bring you back to normal and the long term goal is to keep you there.

PATIENT:     Yeah.

LORI:     So that at the end of the treatment that’s it. You’re on your own and you won’t need to use medication anymore. Okay?

    

[ACCC 4.286, pp 12 – 13]

4.5.2.4.6    Downplaying side effects

207    Whilst the training materials instructed salespeople to tell patients that the medications had minimal side effects [see ACCC 4.403, p 9], in practice, information about side effects was conveyed to patients by the doctors. This is dealt with in [522] – [558] of these reasons for judgment.

4.5.2.4.7    Exaggerating dangers of alternative treatments

208    The training materials instructed salespeople to tell patients that other treatments for ED, namely, Viagra, Cialis, and Levitra, have common side effects of flushing, headache and indigestion, and may cause deafness or blindness without seeking to indicate how common or otherwise the severe side effects were [ACCC 4.551, p 3].

209    However, it was not usual in the Annexure B patient transcripts for the salespeople to mention Viagra, Cialis, and Levitra. On the few occasions where they did, the remarks denigrated these medications, although not in exaggerated terms. The only express example of this claim in the ACCC’s submissions was the consultation with ED patient 28, during which the following exchange occurred:

VINCENT:     .... Have you tried anything for it at all?

PATIENT:    I’ve tried Viagra and Cialis.

VINCENT:     Yes. How did you go with those two?

PATIENT:     They tend to work but they make me sick. They give me a headache and hot in the face.

VINCENT:     Yes. They do, mate. They’ve got so many side-effects those medications and – I mean, in fact, we don’t use those two here in the Institute. And, [Patient], I don’t know whether you’re aware or not, mate – Viagra and Cialis – mate, they’re there to facilitate sex. But you’ve noticed – you’ve been using it but you still haven’t gotten over the problem. It’s designed so that you have to use it forever and ever.

PATIENT:     Okay. Yes.

VINCENT:     Whereas our treatment – what we do here is we actually work with our patients to help them to get rehabilitated so that we can get you to a stage where you can perform with or without the medication later down the track.

    [ACCC 4.262, p 4]

    

4.5.2.5    Recommending long-term contracts

210    The ACCC alleged that salespeople and doctors were, in effect, required by AMI and NRM to recommend to patients that treatment was required for 12 to 18 months. It further alleged that there was no scientific basis for such a period of treatment. Consequently, the salespeople and the doctors, acting on behalf of AMI and NRM, acted unconscionably by recommending treatment periods of 12 to 18 months.

211    The discussion at [610] – [679] of these reasons for judgment concludes that there was no scientific basis for a treatment period of 12 to 18 months.

212    As to the role of the salespeople, the training materials repeatedly emphasised that they should tell patients that the treatment was required for 12 to 18 months. Thus, the Instructions to Clinical Coordinators stated:

Our programmes have been specifically designed to be undertaken over a standard 12 months period with the objective of having a patient complete the programme, sexually rehabilitated, and without the need for ongoing programme intervention.

[ACCC 4.9, p 2]

213    The ACCC claimed that in 62 cases of the Annexure B patients, it was the salesperson who suggested the treatment period to the patient, not the doctor.

214    The ACCC also claimed that the doctors were sometimes asked by salespeople to recommend a certain period of treatment, and that they did so. This occurred, for example, during the consultation with patient 28 salesperson when Vincent asked the following of Dr Vandeleur:

VINCENT:     A very good patient, mate. I told him he’s probably going to need about four to 18 months to fix the problem.

DR VANDELEUR:     Yes.

VINCENT:         If you could just reiterate.

    

DR VANDELEUR:     Yes.

VINCENT:         Thank you, James.

DR VANDELEUR:     Okay.

[ACCC 4.262, p 8]

215    Before Dr De Sayrah’s consultation with patient 38, salesperson Lori mentioned to her, “I just thought maybe if you – if you’re okay with 12 to 18 months.” [ACCC 4.277, p 6] And before Dr Berry’s consultation with patient 121, Vincent raised the subject of the length of treatment with her:

VINCENT:     I told him he would probably be looking at 12 to 18 months - - -

DR BERRY:     Yes.

VINCENT:     - - - maybe 18 months, maybe more - - -

DR BERRY:     Yes.

VINCENT:     - - - because it's such a longstanding problem…

[ACCC 4.240, p 10]

In both of these cases Dr De Sayrah and Dr Berry prescribed treatment periods as indicated by the salespeople.

216    The recordings substantiated the claims of the ACCC that the salespeople often recommended a 12-to-18 month treatment period, and on other occasions, asked the doctors to do so.

4.5.2.6    Misleading patients about the refund term

217    It was regular and usual practice for salespeople to tell patients that there was a guarantee in place so that if they did not achieve the desired result they could obtain a refund. Patients were not told that they were required to try all methods of treatment offered by AMI, including self-administered intracavernosal injections in the base of the penis, to obtain a refund. This aspect is separately examined later in these reasons for judgment at [680] – [736] when dealing with the contractual terms of the treatments offered to patients.

4.5.3    Offering limited to AMI medications

4.5.3.1    Introduction

218    The ACCC contended that AMI engaged in unconscionable conduct in relation to the Annexure B patients by limiting the choice of medications which doctors could prescribe to those medications which AMI formulated and had compounded for it. The ACCC further alleged that those medications were not the first-line treatments for ED and PE generally recognised by the medical profession, and that there was no proper evidence of the efficacy of those medications or of the alternative delivery routes used by AMI. Further, patients were not told that the doctors were limited in the choice of medications they could prescribe. The same allegations were made in relation to NRM in respect of the medications prescribed during the NRM period.

219    The respondents argued that the material they exhibited demonstrated that there was evidence of the efficacy of the AMI and NRM medications. They said that the efficacy of the drugs AMI and NRM used to treat ED and PE had been known for a long time. The respondents said that drug delivery systems are a means of improving patients’ adherence to medical therapy regimes. The respondents said their evidence showed that the alternative delivery routes used by AMI and NRM were effective. They relied on the evidence of Dr James Stephen Rowe and Dr Phillip Altman.

220    In this section, these reasons for judgment first address the evidence concerning the conventional medications used for the treatment of ED and PE. Then, the reasons for judgment explain that the medications available to AMI and NRM doctors to prescribe were not the conventional medications, but were limited in the main to apomorphine-based medications for the treatment of ED and to clomipramine-based medications for the treatment of PE. These reasons for judgment then examine the evidence concerning the efficacy of each of those medications. Finally, the reasons for judgment examine the standards applicable to prescribing those medications off-label, that is, for a use other than the use for which the medications were registered, and whether AMI and NRM’s practice conformed with those standards.

4.5.3.2    The conventional first-line treatment for ED and PE

221    The ACCC relied on Dr Pattison to give expert evidence on a number of matters, including the issues presently under consideration. Dr Pattison has been in general practice in East Ivanhoe in Melbourne since 1978. In 1998 and again in 2001, he published a book on men’s health. He has developed a large men’s health practice within his clinic. Between 1996 and 2004 Dr Pattison lectured undergraduate students at Melbourne, Monash, and Swinburne Universities on men’s health issues. He has also presented lectures to other general practitioners on the subject. He is regularly asked to address community groups on men’s health issues.

222    Dr Pattison wrote five reports which were tendered in evidence. His report dated 27 July 2011 [ACCC 3.28] (Pattison Report 1) answered specific questions about a number of issues raised in this proceeding, including the proper professional requirements for a medical practitioner treating ED and PE. That report also identified the medications accepted by the medical profession for the treatment of ED and PE and explained how they worked. Pattison Report 2 commented on the treatment of 14 Annexure B patients, including on the suitability of the medications which were prescribed for them. The third report dated 25 April 2012 (Pattison Report 3) commented on three NRM patients and on the suitability of the medications prescribed for them. The fourth report dated 3 March 2013 (Pattison Report 4) commented on the treatment by Dr Catherine Nora Berry, a doctor engaged by AMI and NRM, of six patients, including the suitability of the medications prescribed for them. Dr Berry responded to Dr Pattison’s comments in her second statement dated 18 July 2013 (Berry Statement 2). In his report dated 31 October 2013 (Pattison Report 5), Dr Pattison responded to Dr Berry’s explanations of her consultations.

223    Dr Pattison also gave oral evidence. His evidence inspired confidence. He presented as a doctor who is very knowledgeable in the area of male sexual dysfunction. His responses were direct, unhesitating, and obviously drawn from a considerable reservoir of experience and understanding. He articulated his responses clearly and rationally. Importantly, his approach was independent of the parties and disclosed no hint of partisanship. Dr Pattison’s approach in his reports and in his oral evidence demonstrated a doctor concerned with professional integrity, a focus on patient care, and a commitment to high professional standards. I have no hesitation in accepting his evidence, as outlined below.

224    Dr Pattison explained that the first-line treatment for ED is by using the oral phosphodiesterase 5 (PDE5) inhibitors such as Viagra, the main constituent of which is sildenafil, Levitra, the main constituent of which is vardenafil, and Cialis, the main constituent of which is tadalafil. Viagra and Levitra have a short half-life, that is to say, they remain effective for six to eight hours. They are therefore suited to men in stable relationships who are likely to know when sexual intercourse is likely to occur. Cialis has a half-life of 36 hours. Many men find this allows for greater spontaneity with their partner. It is particularly suitable for men in a new relationship when the timing of intercourse may be more uncertain. Dr Pattison stated that PDE5 inhibitors are well tolerated and very effective. Each has an excellent safety profile and a clinical success rate of 65 to 70 per cent. Some men experience facial flushing, nasal congestion, or headaches. Cialis can cause occasional muscular back pain. Less than two per cent of patients discontinue PDE5 inhibitors because of adverse side effects.

225    Dr Pattison explained that primary or lifelong PE is usually managed with selective serotonin re-uptake inhibitor medications (SSRIs), such as Aropax, the main constituent of which is paroxetine, 20 mg daily or Zoloft, the main constituent of which is sertraline, 50 mg daily. Most men with primary PE require ongoing therapy with SSRIs to give them satisfactory ejaculatory control. They usually require medication for six to twelve months before considering tapering off. SSRIs are generally well tolerated and side effects are usually mild. However, nausea, drowsiness, headaches, malaise or agitation may occur. The product information for paroxetine states that 13 per cent of patients using SSRIs for depression had to discontinue treatment due to adverse side effects. The treatment for secondary or acquired PE is more focused on counselling and behavioural techniques. However, if there is underlying ED, the use of PDE5 inhibitors would be helpful. At times, an SSRI might be warranted to reduce penile sensation.

226    The first-line medications for the treatment of ED and PE described by Dr Pattison follow Andrology Australia’s Clinical Summary Guide 8 “Premature Ejaculation and Other Ejaculatory Disorders – Diagnosis and Management” (Andrology Australia PE Guide) and Clinical Summary Guide 9 “Erectile Dysfunction – Diagnosis and Management” (Andrology Australia ED Guide). These guides, which were appended to the first affidavit of Dr Pattison dated 29 July 2011 and tendered in evidence by the ACCC, appear to date from May 2010. However, I infer from Dr Pattison’s evidence that they had not changed since the 2008 version relevant to this proceeding. Dr Pattison explained that Andrology Australia is the peak medical body in Australia formed to advise on men’s health issues. The guides are accepted by doctors generally as establishing best practice management for the conditions.

227    In his first report Dr Pattison also listed fourteen sources, including articles from medical journals dealing with the treatment of ED and PE, which he said supported his evidence as to the accepted first-line medications.

4.5.3.3    The limitation by AMI on medications available for doctors to prescribe

228    Despite the fact that it was accepted medical practice that the first-line medications for ED were PDE5 inhibitors and the first-line medication for PE were SSRIs, these medications were not usually offered to the Annexure B patients. Rather, doctors engaged by AMI mostly prescribed various nasal sprays compounded for AMI using apomorphine for treating ED, and using clomipramine for treating PE.

229    For practical purposes the choice of medications available to the AMI doctors to prescribe was limited. The prescriptions which they wrote were computer-generated. The system was governed by a drop-down menu which allowed only for the prescription of the medications compounded for AMI. The generally accepted first-line medications for ED, namely, sildenafil, vardenafil, and tadalafil in tablet form, were not available through the computer system. For some time vardenafil in troche form was available on the drop-down menu. Although doctors had prescribing pads available, Mr Shrestha said that, over time, as all the business processes became automated, the use of doctors prescribing pads became almost non-existent.

230    The choice of medication available to the doctors to prescribe was, in a practical sense, restricted. Both Dr Lonergan and Dr Vandeleur said that they preferred to prescribe vardenafil rather than apomorphine for the treatment of ED, and did so in the troche form which was the only form it was available through AMI. They both gave evidence that Dr Vaisman told them that he preferred them to prescribe apomorphine, because the vardenafil they were prescribing was costing AMI a fortune [ACCC 1.39, p 9; ACCC 1.37, p 11]. Dr Vaisman denied the conversation. However, it was independently corroborated in a recording when Dr De Sayrah, another doctor engaged by AMI, said in a conversation on 12 May 2009 with salesperson Lori, in relation to the possible prescription of vardenafil to a patient on the line, “I heard that Jack [Dr Vaisman] has called two other doctors who were giving it regularly and asked them not to prescribe it as the first line treatment.” [ACCC 4.277, p 6]

231    I accept that there was pressure from the management of AMI for doctors to prescribe apomorphine rather than vardenafil troches as the first-line treatment for ED. Indeed, that is consistent with the case of the respondents that apomorphine is an effective and accepted medication for PE, and, according to Dr Vaisman, preferable to PDE5 inhibitors. It is also consistent with a recurrent theme of AMI’s advertising, namely, that it was using a new type of medication.

232    There was also pressure from the management of AMI for doctors to prescribe clomipramine as a first-line treatment for PE and this is discussed at [883] of these reasons for judgment.

233    The respondents argued that the limitation on the medications available from AMI and NRM was justified because medications prescribed by AMI and NRM doctors were effective and were made up of well-known and studied drugs that are or have been widely used throughout the world in the treatment of male sexual dysfunction. There are two questions implicit in the issue of the efficacy of AMI and NRM medications. The first is whether the drugs used in the AMI and NRM medications have been shown to be effective for the treatment of ED and PE. The second question is whether the alternative delivery routes used in AMI and NRM’s medications were effective. These issues will now be addressed.

4.5.3.4    The efficacy of apomorphine as a treatment for ED

234    Apomorphine as the main ingredient delivered by nasal spray was prescribed by AMI doctors for the treatment of ED for about 28 of the Annexure B patients. The nasal spray was prescribed for regular daily or every few days’ usage. It was not usually prescribed for on-demand usage [R13.12, p 194; ACCC 4.249, p 11].

235    At [33] of their written submissions, the respondents claimed that, “[a]pomorphine is as effective as PDE5 inhibitors for the treatment of ED.”

236    The evidence relied on by the respondents demonstrated that apomorphine taken sublingually (SL) was used to treat ED before PDE5 inhibitors were developed in the late 1990s. Thus, in an article by J. Buvat and F. Montorsi entitled, “Safety and tolerability of apomorphine SL in patients with erectile dysfunction” (2001) 88 BJU International 30, the authors stated “a sublingual formulation of apomorphine received regulatory approval in European Union member states as a first-line oral therapy for erectile dysfunction” [R 1.43, p 1].

237    However the scientific literature relied on by the respondents also showed that it is now recognised by the medical profession that PDE5 inhibitors are more effective than apomorphine SLs. In some scientific publications, apomorphine SLs were referred to as a second-line treatment, for instance, where patients are not able to tolerate PDE5 inhibitors. In others, apomorphine was not referred to at all.

238    Thus, for instance, in their written submissions the respondents relied on an article published in early 2010, in European Urology, the journal of the European Association of Urology (EAU). The article written by Konstantinos Hatzimouratidis and others entitled, “Guidelines of Male Sexual Dysfunction: Erectile Dysfunction and Premature Ejaculation” (2010) 57 European Urology 804 (Hatzimouratidis 2010) [R1.10] aimed to summarise and present an updated version of the 2009 guidelines of the EAU on ED and PE. The authors undertook a review of the recent literature of the epidemiology, diagnosis, and treatment of ED and PE. The EAU assigned levels of evidence and grades of recommendation to treatment. The abstract of the article summarised the treatment options for ED thus:

Treatment is based on phosphodiesterase type 5 inhibitors (PDE5-Is), including sildenafil, tadalafil, and vardenafil. PDE5-Is have efficacy and safety rates, even in difficult-to-treat populations such as patients with diabetes mellitus. Treatment options for patients who do not respond to PDE5-Is or for whom PDE5-Is are contraindicated include intracavernous injections, intraurethral alprostadil, vacuum constriction devices, or implantation of a penile prosthesis.

239    In what the article described as first-line therapy it described the operation and efficacy of PDE5 inhibitors as follows:

Sildenafil (Viagra), launched in 1998, was the first PDE5-I available. It is effective 30–60 min from administration. A heavy fatty meal may reduce or prolong absorption. It is administered in 25-, 50-, and 100-mg doses. The recommended starting dose is 50 mg, which is adapted according to patient response and side-effects. Efficacy may last for up to 12 h. In premarketing studies, after 24 wk of treatment in a dose-response study, improved erections were reported by 56%, 77%, and 84% of men taking 25, 50, and 100 mg of sildenafil, respectively, compared with 25% of men taking placebo. The efficacy of sildenafil in almost every subgroup of patients with ED has been well established in pre- and postmarketing studies.

Tadalafil (Cialis) was licensed for ED in 2003. It is effective from 30 min after administration, but its peak efficacy occurs after about 2 h. Efficacy is maintained for up to 36 h. Its efficacy is not affected by food. It is administered in 10- and 20-mg doses. The recommended starting dose is 10 mg, which is adapted according to patient response and side-effects. In premarketing dose-response studies, improved erections were reported after 12 wk of treatment by 67% and 81% of men taking 10 mg and 20 mg of tadalafil, respectively, compared with 35% of men taking placebo. The results were confirmed in postmarketing studies. Tadalafil also improved erections in difficult-to-treat subgroups.

Vardenafil (Levitra) was licensed for ED in 2003. It is effective 30 min from administration. A fatty meal (>57% in fat) reduces its effect. It is administered in 5-, 10-, and 20-mg doses. The recommended starting dose is 10 mg, which is adapted according to the response and side-effects. In vitro, it is 10-fold more potent than sildenafil; however, this does not necessarily mean greater clinical efficacy. In premarketing dose-response studies, improved erections after 12 wk of treatment were reported by 66%, 76%, and 80% of men taking 5 mg, 10 mg, and 20 mg of vardenafil, respectively, compared with 30% of men taking placebo. Efficacy was confirmed in postmarketing studies. Vardenafil also improved erections in difficult-to-treat subgroups.

240    Treatment using apomorphine was not discussed in the article, even as a possible second-line treatment. However, one line in table 4 in a list of treatment recommendations stated that, “apomorphine can be used in mild to moderate ED, psychogenic ED, or in patients with contraindications to PDE5-Is. The recommendation was assessed at a 1b level of evidence and B grade of recommendation. In the same table, PDE5 inhibitors were recommended as first-line therapy and assessed at a 1a level of evidence and at an A grade of recommendation. There was also mention of apomorphine in the article at figure 2, a flow chart of the treatment path for ED. It pointed to apomorphine as a second-line treatment after PDE5 inhibitors.

241     The respondents also referred to an article by Dr Francesco Montorsi and others entitled, “Summary of the Recommendations on Sexual Dysfunction in Men” (2010) 7 Journal of Sexual Medicine 3572 (Montorsi 2010) [R 1.1]. The article set out a summary of the guidelines for the treatment of male sexual dysfunction formulated at an international consultation held in Paris in 2009, where 190 multidisciplinary experts from 33 countries were assembled into 25 consultation committees. Each committee undertook an extensive review of the available data and publications to develop evidence-based guidelines in each area. The summary stated that the treatment of ED has been revolutionised by PDE5 inhibitors, which represent a unique form of oral treatment for ED. There was no reference to the use of apomorphine for the treatment of ED.

242    An article published in the same journal by Ian Eardley and others entitled, “Pharmacotherapy for Erectile Dysfunction” (2010) 7 Journal of Sexual Medicine 524 [R 1.42] focused on the use of drugs for the treatment of ED. The article was a critical review of literature relating to the use of pharmacotheraputic agents undertaken by a committee of eight experts from five countries. The article reported that PDE5 inhibitors are “the initial form of pharmacotherapy for men with ED. Three such drugs, sildenafil, tadalafil, and vardenafil are licensed for use around the world. They act locally by penetrating the smooth muscles of the penis allowing for an increased blood flow. There are multiple level one studies with consistent outcomes for each demonstrating the efficacy of the three drugs. The article also addressed apomorphine. It explained that apomorphine is a centrally acting drug, which has a grade A recommendation, and concluded that “[o]verall there is evidence that apomorphine is efficacious in the treatment of erectile dysfunction in the broad population at doses of 2 and 3 mg taken sublingually in an on demand fashion”. As to the comparative efficiency of sildenafil and apomorphine, the article concluded:

The authors consider that several trials comparing the efficacy and tolerability of apomorphine and sildenafil could be considered level 1 trials. All were all open-label studies, but were otherwise well designed trials, with adequate numbers of patients randomized. Overall there was clear evidence that sildenafil has greater efficacy in the treatment of men with ED than apomorphine.

[Emphasis added.]

243    The respondents’ expert Professor Jon Nicolas Currie expressed the opinion in his report dated 6 February 2013 (Currie Report 1) that “[a]ll medications used in the AMI program in their original formulations do have an evidence base in the treatment of male sexual dysfunction, including the use of apomorphine” [R 13.31, p 9]. He relied on an article by Amar Mohee and others, “The evaluation of apomorphine for the treatment of erectile dysfunction” (2012) 8(11) Expert Opinion on Drug Metabolism Toxicology 1447 (Mohee 2012), to support this view. The authors reviewed the evidence available for the use of apomorphine in the management of ED from both randomised placebo-controlled trials, and randomised non-placebo-controlled prospective trials. They found that apomorphine was an effective drug in the management of ED and was generally well tolerated over time. However, they said that that the trials showed that PDE5 inhibitors had better efficacy than apomorphine and that, “[a]pomorphine is a second-line treatment for ED at best.” They said:

Current evidence supporting the use of apomorphine as an ED drug is however limited due to the small number of RCTs [randomised controlled trials], and the small number of participants in each of these. The main barrier to apomorphine becoming a drug widely used in the treatment of ED is however its lack of efficacy compared with other drugs already marketed for the treatment of ED, namely PDE-5 inhibitors. Non-placebo controlled prospective studies show a higher success rate of successful sexual attempts for sildenafil compared with apomorphine with few side effects. The main asset of apomorphine is its high safety profile; its main side effects, namely headache, nausea and dizziness, are generally mild and self-limited.

Further research is, however, needed in this field as the absence of large head-to-head trials directly comparing the efficacy of apomorphine and other PDE5-Is limits the interpretation of these results. Current guidelines on the use of apomorphine in the treatment of ED limit its role to the management of mild to moderate ED in patients who fail treatment with the first-line PDE-5 inhibitors, or in those in whom PDE-5 inhibitors are contraindicated (European Association of Urology Guidelines).

[Emphasis added.]

244    In Pattison Report 2, Dr Pattison reviewed the treatment of five Annexure B patients who had been prescribed an apomorphine nasal spray as first-line treatment for ED. He said:

Apomorphine is a centrally-acting medication that increases the level of a chemical called dopamine in the body with the intention of indirectly enhancing erectile function. It was used several years ago as a sublingual tablet for ED but was not effective and was withdrawn from the market. Apomorphine has recently been used again in injection form for patients with severe Parkinson’s disease. The medication is not recommended in any of the accepted clinical guidelines for the management of ED.

[ACCC 3.29, p 304]

245    The reference to accepted guidelines is probably meant as a reference to the Andrology Australia ED Guide, which did not mention apomorphine as a treatment for ED. Further, where Dr Pattison stated that apomorphine was not effective, he should be taken to mean that apomorphine was not as effective as the first-line treatment using PDE5 inhibitors. So understood, Dr Pattison’s opinion accurately reflected the scientific literature relied on by the respondents in their submissions.

246    Dr Vaisman said in his first witness statement dated 13 September 2012:

38    I hold the view, based upon the scientific literature I have read that apomorphine is as effective as 5-PDE (of which Vardenafil is one) in treating erectile dysfunction. For patients with heart conditions who are receiving treatment using nitrates, the use of 5-PDE-based medication can be fatal. There is no such complication with the use of apomorphine in those conditions. I provided this medical literature to doctors as part of the education meetings. I discussed contraindications at education meetings and I provided up-to-date copies of pages from MIMS in relation to each of the medical formulations provided for the treatment of sexual dysfunction.

[R 13.1]

247    Further, in cross-examination, Dr Vaisman admitted that he believed apomorphine was as effective as PDE5 inhibitors, but that the substances acted in different ways [TS 1701].

248    Then, also in cross-examination, Dr Vaisman was asked if he had a preference for apomorphine over PDE5 inhibitors for the treatment of ED. He argued that it was a matter for the doctors not for him, but that there had been 500 deaths reported from the use of PDE5 inhibitors. Whilst Dr Vaisman was not initially prepared to accept that he preferred the use of apomorphine for the treatment of ED, he admitted, when asked by the Court, that he had told the AMI doctors that he preferred apomorphine to PDE5 inhibitors [TS 1703]. He said that he had provided information to the doctors that,5PDE have the same action like apomorphine, but apomorphine is more safer. [TS 1646] Despite his initial reluctance to concede that he preferred the use of apomorphine for the treatment of ED, that was the inevitable conclusion to be drawn from his evidence as a whole. Indeed, as discussed at [883] – [888], Dr Vaisman, in effect, insisted that doctors prescribe apomorphine as the first-line treatment for ED.

249    Dr Vaisman’s view about apomorphine as a treatment for ED was not only inconsistent with the specific scientific material relied on by the respondents in written submissions, but was also inconsistent with the scientific material on the subject exhibited to his first witness statement dated 13 September 2012.

250    Written materials which Dr Vaisman said he gave to the AMI doctors were contained in two exhibits to his first witness statement, exhibits JV-1 and JV-2. This material was not referred to by the respondents in closing submissions to support Dr Vaisman’s view about the efficacy and safety of apomorphine in treating ED. An examination of that material showed that it supported the opposite view, namely, that PDE5 inhibitors are the primary treatment for ED.

251    The material covered a wide variety of topics concerning male sexual dysfunction and came from diverse sources, mostly from scientific journals, but from some internet sources. The references to drug treatment for ED generally explained that PDE5 inhibitors are the first-line treatment. Thus, Luke Fazio and Gerald Brock wrote in their article entitled, “Erectile dysfunction: management update” (2004) 170(9) Canadian Medical Association Journal 1429 (Fazio and Brock 2004) that:

Dramatic advances in the management of erectile dysfunction have occurred over the past decade … Oral therapy with a PDE-5 inhibitor (sildenafil, vardenafil, or tadalafil) should be considered for first-line treatment of erectile dysfunction.

[R 13.3, p 97]

252    Although not referred to by the respondents, there were other references to apomorphine in that material. One was in an article published by Raymond Rosen and Sandra Leiblum entitled, “Treatment of Sexual Disorders in the 1990s – An Integrated Approach” (1995) 63(6) Journal of Consulting and Clinical Psychology 877). The authors wrote:

Dopaminergic and serotonergic drugs have similarly been evaluated as possible treatment agents for erectile disorder. For example, apomorphine is a short-acting dopamine agonist which has been shown to facilitate erectile responses in both control patients and patients with psychogenic or organic erectile dysfunction. Regrettably, significant side effects (e.g., nausea, drowsiness) have limited the clinical usefulness of this drug.

[References omitted.]

[R13.3, p 170]

This article predated the development of PDE5 inhibitors and hence had nothing to say about their comparative efficacy and safety.

253    Apomorphine was also discussed in an article included in the exhibits JV-1 and JV-2 by Geoffrey Hackett entitled, “What Do Patients Expect From Erectile Dysfunction Therapy?” (2002) 1(8) European Urology Supplements 4 (Hackett 2002) [R 13.2, p 35]. Hackett acknowledged that in circumstances where men wish to keep the fact of their ED from a new sexual partner:

[A] rapidly acting therapy, such as sublingual apomorphine, may be more appropriate than a drug such as sildenafil, as these men are more likely to complain about the need for premeditation associated with taking the therapy 1 hour before planned sexual intercourse.

254    Furthermore, in discussing the side effects of sildenafil (headache, dyspepsia and flushing), and the fact that some patients may wish to try alternatives, the author stated that:

[T]he centrally acting dopamine agonist apomorphine has a different mechanism of action and side-effect profile than those of PDE5 inhibitors. Nausea, headache and dizziness were among the predominant side effects seen in clinical trials with sublingual apomorphine.

255    However, in terms of the effectiveness of the two drugs, the author recognised that, “[a]mong patients with severe ED, a PDE5 inhibitor is more likely to be effective than sublingual apomorphine.”

256    In JV-2, Dr Vaisman exhibited an article by Dr Irwin Goldstein and Dr Robert Krane entitled “Diagnosis and Therapy of Erectile Dysfunction”. The article was undated and the copy in evidence did not disclose the publication in which it was published. The authors stated:

Attempts at neuropharmacologic therapy of erectile dysfunction have largely involved dopaminergic and serotoninergic agonists. The positive erectile effects of dopaminergic agonists was [sic] first noted in patients treated with L-dopa. In addition, subcutaneously administered apomorphine, a dopaminergic agonist, has been shown to enhance erectile responses in men. Laboratory investigations in rats and monkeys have corroborated this observation.

[References omitted.]

[R 13.3, p 148]

257    Another reference to apomorphine in exhibit JV-2 was in an article by Dr Stanley Brosman, “Erectile Dysfunction” (May 2004) published online at www.emedicine.com. Dr Brosman reported first that sildenafil is “the first oral agent to be well documented as an effective form of treatment for men experiencing ED” [R 13.3, p 188]. Dr Brosman then referred to apomorphine as not yet approved by the US Federal Drug Administration and that, “the administration of apomorphine by subcutaneous, oral and intranasal routes results in variable effects on erectile function [including] nausea and vomiting.

4.5.3.5    The efficacy of clomipramine as a treatment for PE

258    Clomipramine as the main ingredient delivered by nasal spray was prescribed by AMI doctors for the treatment of PE for about 76 of the Annexure B patients. The clomipramine nasal spray was prescribed for use every day or every second day with or without sex. It was generally not prescribed for on-demand usage alone.

259    In Pattison Report 1, Dr Pattison said that the mainstay of treatment for primary PE was the SSRI Aropax (paroxetine) at 20 mg once daily or Zoloft (sertraline) at 50 mg once daily. He said that on-demand treatments for use just before intercourse had been investigated extensively overseas and were likely to become available in the near future.

260    In Pattison Report 2 Dr Pattison reviewed the treatment of 14 Annexure B patients. He noticed that clomipramine was prescribed as a first-line treatment for PE in seven instances. He expressed his view thus:

Clomipramine nasal spray was prescribed in transcripts 1, 2, 4, 5, 8, 9 and 12 as first line treatment for the management of PE. The use of this medication in a nasal spray formulation is not evidence-based. Although the medication might have some effect, I am unaware of any significant clinical trials to support its use. The drug is a tricyclic antidepressant and is sometimes still used orally in the treatment of narcolepsy, depression and obsessive compulsive disorder. Because it can be sedating and interfere with concentration it is usually advised to be taken at night and should be avoided when driving or operating machinery. It can also interact with a number of medications as well as alcohol and other drugs. For these reasons it is used very infrequently these days. Oral Clomipramine is mentioned in the Andrology Australia Guidelines as an alternative treatment for PE. However SSRI medications such as Aropax and Zoloft are better tolerated, safer and far more commonly used. Clomipramine capsules were prescribed for PE in transcript 14. Clomipramine nasal spray can cause quite significant nasal irritation. This was referred to in several of the transcripts. I have no personal experience in using Clomipramine nasal spray for PE and I know of no other doctor who prescribes it for this condition.

261    Dr Pattison noted in his oral evidence that clomipramine, in oral form, was recommended by Andrology Australia in the Andrology Australia PE Guide for patients with particularly resistant PE [TS 1055].

262    Patient 13 saw his GP after having taken clomipramine nasal spray prescribed for him by an AMI doctor and after developing unwanted side effects [ACCC 1.4]. His GP told him to stop using the nasal spray and that the medication was an old treatment which had been replaced by newer treatments. This is consistent with Dr Pattison’s view that clomipramine is not the first-line treatment for PE and is infrequently prescribed by doctors.

263    In closing submissions, the respondents said that Dr Vaisman had indicated his preference for clomipramine over SSRIs for the reason that withdrawal syndrome is associated with SSRIs and not clomipramine, and that using clomipramine on-demand caused less drowsiness than paroxetine [TS 2766]. The respondents sought to establish that clomipramine was an accepted and effective medication for the treatment of PE. They referred to guidelines published by professional bodies and to scientific articles relating to the treatment of PE. It is useful to consider this material in chronological order because such a consideration discloses a shift in medical consensus about the use of clomipramine for the treatment of PE.

264    In about 2004, the American Urological Association (AUA) published itsGuideline on the Pharmacological Management of Premature Ejaculation (AUA Guideline 2004), which reviewed the scientific literature on the subject published between 1966 and October 2002 [R 13.3, p 1]. It claimed to be the first guideline to address the pharmacologic treatment of PE. The guideline recognised the SSRIs fluoxetine at 5 20 mg per day, paroxetine at 10, 20 or 40 mg per day, and sertraline at 20 200 mg per day, and the tricyclic antidepressant clomipramine at 25 50 mg per day, as options for the treatment of PE. The guideline indicated that there was some limited testing which suggested that on-demand dosing may be of some use, although the medications were designed for continuous usage, and that, “whether continuous or on-demand dosing is more effective in the management of PE is unclear.” [R 13.3, p 12]

265    In 2004 Marcel Waldinger and others published the article, “On-Demand Treatment of Premature Ejaculation with Clomipramine and Paroxetine: A Randomized, Double-Blind Fixed-Dose Study with Stopwatch Assessment” (2004) 46(4) European Urology 510 (Waldinger 2004) [R 13.6, p 2]. The authors reported that on-demand treatment with 25 mg of clomipramine led to clinically relevant ejaculation delay, whilst on-demand treatment with 20 mg of paroxetine led to no clinically relevant ejaculation delay. The study discussed by the authors involved 30 men with primary PE over a four-week drug treatment period. Both drugs had a high incidence of non-sexual side effects on the day of intercourse or the next day. On the day of intercourse, paroxetine led to significant sleepiness and yawning compared to clomipramine. On the day after intercourse, clomipramine induced significant nausea compared to paroxetine.

266    The respondents then referred to a further article by Marcel Waldinger entitled, “Premature Ejaculation, Definition and Drug Treatment” (2007) 67(4) Drugs 547 (Waldinger 2007) [R 1.11]. The respondents appeared particularly to rely on the conclusion that the daily use of clomipramine was effective for the treatment of PE. Whilst this is so, it is a selective reading of the conclusions.

267    The author described the medical history of the daily use of clomipramine thus:

3.3. 1 Clomipramine

In 1973, Eaton published the first report on the efficacy of clomipramine, the tricyclic antidepressant with the greatest effect on the serotonergic system, in the treatment of PE. Particularly in the 1970-80s, various studies demonstrated the efficacy of clomipramine in delaying ejaculation. However, its use was not very popular in those years, when it was still generally believed that genuine treatment of PE should consist of merely behavioural psychotherapy. Over the last decade, a number of studies have repeatedly confirmed that daily treatment with clomipramine at dosages ranging from 20 to 50 mg/day is efficacious in the treatment of PE.

268    Then the author explained that the first publication on the efficacy of daily treatment with paroxetine was in 1994. After this, various other studies confirmed paroxetine’s strong ejaculation delaying effects at doses of 20 – 40 mg per day, and that other SSRIs exerted clinically relevant ejaculation-delaying effects. He continued:

Currently, daily treatment with SSRIs or combined daily treatment with on-demand use has become the first-line treatment of PE.

269    The article, at table II, indicated that daily medication with an SSRI, such as paroxetine, was more effective for the treatment of PE than daily medication with clomipramine. Further, whilst nausea was a major adverse effect of clomipramine when taken daily, it was not a major adverse effect of SSRIs when taken daily, although fatigue, yawning and loose stools were [R 1.11, p 556]. These matters primarily explained why SSRIs were the first-line treatment for PE. And, as the article demonstrated, whilst clomipramine was more effective as an on-demand medication than SSRIs taken on-demand, clomipramine taken on-demand was not as effective as daily treatment with either SSRIs or clomipramine.

270    To the same effect was an article by Carlo Bettocchi and others entitled, “Ejaculatory disorders: pathophysiology and management” (2008) 5(2) Nature Clinical Practice 93 (Bettocchi 2008) [R1.2]. Again, the respondents highlighted the conclusion:

On-demand clomipramine use has yielded greater increases in IELT [Intravaginal Ejaculation Latency Time] than commonly used SSRIs.

271    But, the article also explained:

On-demand administration of SSRIs 4-6 h before sexual intercourse is reported to be efficacious and well tolerated, but it is associated with a smaller delay in IELT than seen with daily administration.

272    The article also explained that, compared with other medications, including clomipramine, “[a]bove all, daily use of paroxetine has been demonstrated to yield the strongest ejaculatory delay within 5 – 10 days.

273    The respondents referred to the Andrology Australia PE Guide [R 13.3, p 20]. It seems that the version to which they referred was published in 2009. The guide recognised clomipramine taken daily or on-demand as an available oral treatment for PE. The guide noted that “SSRIs are now commonly prescribed for PE. However, it did not include clomipramine in that remark. It also acknowledged that the guide was based on the EAU Guidelines published in 2001 and 2009.

274    The 2009 EAU Guidelines were updated in early 2010. The respondents again relied on Hatzimouratidis 2010, which presented the updated guidelines [R 1.10]. The 2010 EAU Guidelines did not recommend the use of clomipramine for the treatment of PE. Rather they stated that SSRIs were the first choice of treatment for PE. They said that daily treatment with paroxetine was superior to other SSRIs, and also superior to clomipramine. By the time of this article, dapoxetine had been approved in seven European countries for on-demand treatment of PE. The guidelines recommended the use of dapoxetine on-demand, without any reference to the use of clomipramine for on-demand use.

275    Finally, the respondents referred to another article by Stanley Althof and others, “International Society for Sexual Medicine’s Guidelines for the Diagnosis and Treatment of Premature Ejaculation” (2010) 7 Journal of Sexual Medicine 2947 (Althof 2010). The authors aimed to publish guidelines which were more comprehensive and dealt with essential new evidence not referred to in the existing guidelines. The International Society for Sexual Medicine identified three sets of clinical guidelines for the treatment of PE then in existence, namely, the AUA Guideline 2004, the European Association of Urology Guidelines on Male Sexual Dysfunction: Erectile Dysfunction and Premature Ejaculation, updated 2009, and the Practice Guidelines for the Pan Arab Society of Sexual Medicine (Disorders of Ejaculation). The International Society for Sexual Medicine’s guidelines were based on a review of the scientific literature. The respondents relied on table 3, which included clomipramine as one of the recommended daily or on-demand treatments. However, the article explained that paroxetine taken daily produced the greatest ejaculatory delay among the medications taken daily, and that the medications taken daily produced a much greater ejaculatory delay than the medications taken on-demand.

276    The evidence referred to by the respondents established that clomipramine used on-label as an antidepressant was found to have an ejaculatory delaying effect, both daily and on-demand. It was, however, only used in a limited way off-label to treat PE. When the ejaculation-delaying effects of SSRIs were discovered in the 1990s, they became the first-line of treatment for primary PE. Paroxetine had the greatest ejaculatory delaying effect if taken daily. Clomipramine taken on-demand produced the best ejaculatory delaying effect of the on-demand medications, but produced less ejaculatory delaying effect than a daily dosage of paroxetine.

277    Thus, whilst clomipramine had a limited role in the treatment of PE, it was displaced when the ejaculation-delaying effects of SSRIs were discovered. The value which the respondents sought to place on clomipramine as a treatment for PE was exaggerated. The opinion of Dr Pattison that SSRIs were the accepted first-line treatment for primary PE reflects that fact.

278    The final step in the assessment of the AMI and NRM medications, however, requires an examination of the role of the delivery systems of the medications. This is so because the evidence and materials just discussed relate to the oral dosages of clomipramine and apomorphine, that is to say, the medications taken in the form of tablets and also SLs in the case of apomorphine. That was not the way most of the AMI and NRM medications were delivered. Rather, clomipramine and apomorphine were mainly prescribed in the form of a nasal spray in the AMI period and in the form of oral strips in the NRM period. The next section of these reasons considers the experts’ opinions on whether the alternative delivery systems used by AMI and NRM affected the efficacy of the medications.

4.5.3.6    The efficacy of alternative drug delivery systems

279    Evidence on this issue was given for the respondents by two experts, Dr James Rowe, and Dr Phillip Altman.

280    Evidence on the issue was given for the ACCC by Professor Colin Pouton.

4.5.3.6.1    Dr Rowe’s first report

281    Dr Rowe is a pharmacist and formulation chemist. He graduated with a Bachelor of Pharmacy from the University of Sydney in 1966. For most of his career, he has been employed in both Australia and the UK by pharmaceutical companies in the development of drugs. Whilst in the UK he completed a PhD in pharmaceutics and taught at the School of Pharmacy at the University of London. For a brief period between 1983 and 1986, he operated a community pharmacy and for another brief period between 2004 and 2008, he operated a compounding pharmacy. Between 2003 and 2008 he has also lectured undergraduates at the Pharmacy School, University of Sydney on dosage form, design and evaluation. From 1990, he was a director of companies engaged in consulting on the development, formulation and stability testing in the pharmaceutical, veterinary and personal care industries. Since December 2011, Dr Rowe has undertaken independent consulting work.

282    From 2000, Dr Rowe performed consulting work of a technical nature for AMI. The work related to the formulation of products, stability work on formulations, and the feasibility of the introduction of new products. He was paid for these services. From July 2012 to December 2013 he earned about $30,000 from this work. He agreed in cross-examination that prior to that year, possibly in 2009, he could have earned over $100,000 in consulting fees from AMI in one year. In 2009, Dr Rowe co-authored an article with Dr Vaisman, Dr Altman, and Brooke Berry comparing the performance of vardenafil delivered by a 10 mg oral tablet with a solution of vardenafil delivered by a nebuliser devised by AMI entitled, “Comparison of Pharmacokinetics of Vardenafil Administered Using an Ultrasonic Nebulizer for Inhalation vs. a Single 10-mg Oral Tablet” (2009) Journal of Sex Medicine [R 13.3, p 31].

283    In his first report dated 25 October 2012, Dr Rowe expressed the view that nasal and oral-strip delivery of medications have advantages over oral delivery by tablet. He said:

These delivery systems usually enable the use of a smaller amount of the active drug to be administered for the equivalent therapeutic effect and usually a reduction in side effects.

[R 13.29, p 8]

284    And he explained further:

30.    Nasal Spray dosage forms for systemic effect (which means that they are intended to be absorbed into the blood stream as distinct from acting locally) have the advantage over oral medications in that they are absorbed through the nasal mucosa and thus bypass the acidic conditions encountered in the stomach. The acidic conditions encountered in the stomach may cause many drugs to degrade if they are sensitive to acid. They also do not undergo the first pass effect [which is the result of metabolism of the drug in the liver resulting in a reduced amount of the drug reaching the intestine and hence available for absorption into the circulatory system] … and thus the bioavailability of a drug given by the nasal route can often result in a much higher concentration in the plasma than an equivalent amount given as an oral dosage form. This often enables a reduction in the dose of the drug to achieve an equivalent (or higher) therapeutic effect but resulting in fewer side effects to the patient.

31.    Another significant advantage of the nasal route is a more favourable time course of drug action. For a drug given orally, to be effective, the dosage form must firstly disintegrate from the tablet or capsule into its primary particles. These particles must then dissolve to form a solution before any absorption process may occur. In the nasal spray technology employed by AMI the process of disintegration and dissolution has already taken place as the drug is administered as a nasal solution. The effect of this is a rapid onset of action (compared to an oral tablet or capsule) which time effect I understand is very desirable from a patient viewpoint in the area of assisting sexual dysfunction.

    [R 13.29, p 9]

285    Dr Rowe said that there were the same advantages by the use of troches and oral strips. Oral strips were added to the delivery methods available in the NRM period. Of AMI and NRM’s medications, he said:

48.    I am of the opinion that AMI’s drug dosage forms use novel delivery systems which entail extensive product development prior to deployment of these systems and which require development work on the selection of excipients [inactive substances added to the active ingredients to provide bulk or to add to the therapeutic effect of medication] which are suitable in terms of ensuring the dosage form is non-toxic, stable, and delivers the drug effectively to the right place at the right time. This gives a patient convenience of use, rapid onset of action, better bioavailability, and fewer side effects…

49.     AMI has taken existing drugs which have been available in tablet and capsule form and formulated those drugs (and others) in such a way as to produce formulations which have a faster onset of action, lower incidence of side effects and a better absorption profile than conventional tablets and capsules.

    [R 13.29, p 12]

4.5.3.6.2    Dr Altman’s first report

286    Dr Phillip Altman is a pharmacologist with expertise in designing and conducting clinical trials and in obtaining regulatory approval for new drugs in different dosage forms. He graduated with a Bachelor of Pharmacy (Honours) from the University of Sydney in 1970 and obtained a PhD from that University in 1981. Initially he was employed by several major pharmaceutical companies. In 1986 he started the first contract research organisation in Australia to provide a full consulting service to multinational pharmaceutical companies concerning clinical trials and regulatory requirements. In the course of his career he has conducted studies of absorption, metabolism, and excretion of drugs by several different routes of administration. In his work he has assisted companies to develop and test new formulations of drugs to improve their efficacy or safety.

287    Dr Altman has provided advice to Dr Vaisman over about ten years. The largest project concerned the investigation of the use of a nebuliser for the delivery of vardenafil. Dr Altman’s role was to coordinate the clinical trial. This trial is referred to in [282] of these reasons for judgment.

288    In his first report dated 26 November 2012 [R 13.28], in response to questions asked of him, Dr Altman explained that drugs may be administered by different routes, and gave various examples. He then explained the means of delivery adopted in the AMI and NRM medications, and explained why he thought the particular delivery systems may have been chosen. He said:

I notice that AMI lists a number of sublingual sprays, nasal sprays and oral strips as delivery mechanisms for various drugs. Whilst I have no specific knowledge of the pharmaceutical performance of these individual products, it does appear to me that the drugs chosen for delivery using sublingual sprays, nasal sprays and oral strips were probably chosen on the basis that either they may be delivered into the systemic blood circulation faster or more efficiently (because they suffer from first-past metabolism following oral administration) or both. Speed of absorption (and consequently pharmacological action) appears to be a theme for other products marketed by AMI including fast dissolving APQ [apomorphine, phentolamine, vardenafil] and Clom tablets. The speed of action of drugs is an important characteristic of a medication.

[R 13.28, p 20]

289    At the end of the report Dr Altman summarised his views thus:

52.    The dose form, formulation and route of administration of a drug are important characteristics of a medication and each can affect the Therapeutic Quality of a medication (including the speed of onset of action, the duration of action, the reliability of action, the clinical effectiveness and the incidence, type or severity of any adverse effects associated with a medication). Drugs administered by different dosage forms are not necessarily therapeutically equivalent in terms of clinical efficacy or safety.

53.     The administration of drugs via the buccal route (gum or troche) or via the nasal route using a spray are routes of administration which are known to avoid hepatic first pass metabolism of drugs significantly metabolised on first pass through the liver prior to entering the systemic blood circulatory system. The bioavailability of drugs can be improved by avoiding first-pass metabolism.

54.     Improving the bioavailability of a drug delivered by a medication which has relatively low bioavailability is advantageous in that dosage forms with higher bioavailability generally have a more predictable pattern of absorption and, therefore, should produce more reliable clinical responses.

55.     The administration of drugs in medications designed for buccal (gum or troche) or nasal administration can have a faster onset of action as compared to the same drug administered orally.

    

[R 13.28, pp 21 – 22]

4.5.3.6.3    Professor Pouton’s report

290    Professor Pouton is a professor of pharmaceutical biology at the Monash Institute of Pharmaceutical Sciences at Monash University. He graduated with a Bachelor of Pharmacy from the University of Bath in the UK in 1976. He completed a PhD in London in 1982 on the subject of certain drug delivery systems. He then held teaching positions at the University of Bath until 2001 when he was appointed to head the Department of Pharmaceutical Biology at Monash University. Professor Pouton has taught courses on pharmacy and pharmacology, including on drug formulation and delivery, and has supervised the research of many PhD students on this topic. He has served as a consultant to major international pharmaceutical companies and patent attorneys over the last ten years. He has conducted research and published widely in the field of drug discovery, delivery and development. His work integrates studies of the physical chemistry of drugs with their impact on biological systems. His research began in drug delivery and absorption, and has continued in that area.

291    Professor Pouton was asked by the solicitors for the ACCC to prepare a report commenting on particular parts of each of the first reports of Dr Rowe and Dr Altman. Professor Pouton’s report is dated 22 January 2013

292    In relation to the first report of Dr Rowe, Professor Pouton wrote on the critical issue of the therapeutic effect of alternative delivery systems as follows:

I do not agree with Dr Rowe's statement that nasal delivery systems and strip formulations (paragraphs 24-25) "usually enable the use of a smaller amount of the active drug to be administered for the equivalent therapeutic effect and usually a reduction in side effects." There is no reason to expect that a smaller dose will have an equivalent therapeutic effect. The drug may not be completely absorbed from the mouth or nasal cavity, and in practice much of the drug is often swallowed in both cases. Typically if the drug acts after absorption into the blood circulation one would need to deliver an equivalent dose to result in a similar therapeutic effect. It is true that avoidance of first-pass metabolism could in theory reduce the dose required, but the low mass of drug that can be absorbed from the mouth or nasal cavity means that these approaches are not usually practical. The doses required for most drugs would be too high. In circumstances where the effect is a local action in the mouth or nasal cavity, one might expect to reduce the overall dose, but this is not the case for drugs acting by way of the systemic blood circulation. In relation to side effects: again if the drug is intended to act systemically there is no reason to expect that side-effects will be reduced by buccal or nasal delivery. Indeed the argument that the drug might be absorbed rapidly implies a higher peak plasma concentration which is normally associated with more pronounced side-effects.

[Emphasis added.]

[ACCC 3.36, p 278]

293    Professor Pouton rejected some of the advantages claimed by Dr Rowe for alternative delivery systems via the oral route as follows:

Paragraph 30 [of Dr Rowe’s report] refers to acid degradation in the stomach and first-pass metabolism and suggests that the absence of these phenomena allow lower doses to be administered by the nasal route. Acid degradation is rarely a problem and is not a factor with the drugs used in AMI medications (as detailed above). In each case it is likely that the proportion of drug lost by first pass would be reduced after nasal administration but that the mass of drug that can be absorbed for most drugs from the nasal cavity is limited by surface area. As a result the bioavailability from nasal sprays rarely reaches 90-100% and much of the spray is likely to be swallowed in practice. The absolute bioavailability of the AMI drugs from nasal sprays cannot be adequately predicted. Even though the doses of the drugs used in AMI sprays are low, which works in favour of adequate absorption from the nasal cavity, without supporting human bioavailability data it is impossible to estimate how much drug will be absorbed in each case.

[ACCC 3.36, p 280]

294    Professor Pouton also questioned whether the alternative routes of delivery would lead to more rapid effect of the drug as follows:

The time course of action is discussed in paragraph 31. Dr Rowe suggests that there is specific advantage to be gained by using the nasal route, ie. “the effect of this is a rapid onset of action….”. The implication of this paragraph is that rapid onset can always be achieved. In fact onset of action will depend on many factors and is really only a possibility. It is conceivable that rapid initial rate of absorption could be achieved by nasal administration but whether this results in rapid onset depends on whether sufficient dose is absorbed and on the pharmacokinetics of each drug. Without access to clinical studies the statements in paragraph 31 of Dr Rowe’s report are simply speculative. The doses of clomipramine used in AMI formulations could well be sub-therapeutic.

[ACCC 3.36, p 280]

295    Then, Professor Pouton addressed the way troches and oral strips worked, and said:

Troches and oral strips are the subjects of paragraphs 33-34 and 35-39. These delivery systems are designed to release drug in the mouth so that absorption can take place through the mucosal surfaces in the oral cavity. This route has a low capacity and is only useful for absorption of small masses of drugs. Thus troches or oral strips would be expected to be unsuitable for normal doses of clomipramine or tramadol. Very small doses, perhaps below 5mg, could be absorbed. Otherwise the dose is likely to be absorbed in the intestine after the patient has swallowed the drug.

[ACCC 3.36, p 280]

296    Professor Pouton outlined the limitations of the delivery of medication through absorption in the mouth and nose:

The sub-lingual and buccal routes refer to routes of absorption within the mouth (relevant to oral sprays, oral strip formulations and troches). The surface area available in the mouth is very limited but can be used to achieve systemic absorption and rapid onset of action for highly potent lipophilic drugs. The limitations of sub-lingual and buccal routes relate to the low capacity for mass transfer that results directly from the limited surface area available. In contrast the effective surface area of the small intestine has been estimated to be equivalent to that of a tennis court, and this explains why most drugs are administered orally to take advantage of the large surface area of the small intestine. Given the limited surface area in the mouth, the most common applications of this route are to administer the traditional drugs used to treat angina attacks (glyceryl trinitrate (GTN) and isosorbide dintrate). Both of these drugs are very low molecular weight compounds, and they are used in low doses. GTN is usually used at a dose of 0.5 mg. The limited mass of drug that can be absorbed in the mouth normally precludes its use as a means of achieving rapid onset for the majority of drugs, and there is no reason to expect that the same therapeutic effect can be achieved with a lower dose. This depends on whether sufficient drug can be absorbed from the mouth and on the pharmacokinetics of the drug after absorption. The proportion of drug absorbed from the mouth is frequently less than 100% and the remainder of the dose is likely to be swallowed. Similar limitations apply to the nasal route, and as a result it is largely used to administer medication for relief of symptoms of colds direct to the nasal cavity, rather than as a means for systemic administration of drugs.

The perceived advantage of delivery to the mouth or nasal cavity gained by avoidance of the first pass effect may in fact be negligible. If the proportion of drug removed by first pass was limited, as it is for clomipramine, tramadol and paroxetine, the advantage would be limited even if the drug was fully absorbed after administration. Given that the fraction absorbed is likely to be less than unity, the advantage gained by avoidance of first-pass effect is likely to be negligible.

It is implied in the Rowe report that the case for use of delivery to the the [sic] mouth or nasal cavity includes a likely improvement in therapy by way of early onset and shorter direction of response. Absorption of small masses of lipophilic drugs may be more rapid from the nasal cavity than by the oral route, but whether this leads to rapid onset and short duration depends on the drugs specific pharmacokinetic properties. Rapid absorption does not necessarily lead to short duration of action. A drug with a long systemic half-life will not be rendered short acting by nasal administration. Once the dose is absorbed it will be subject to the same kinetics of elimination, thus nasal administration may not significantly affect the plasma profile if the drug has a long elimination half-life.

[Emphasis added.]

[ACCC 3.36, p 281]

297    Next, Professor Pouton responded to questions asked of him by the ACCC in relation to Dr Altman’s first report. As to Dr Altman’s central thesis, Professor Pouton said:

Paragraph 46 makes the case that the AMI sublingual spays, nasal sprays and oral strips seem to be used to achieve faster or more efficient availability of the drug to the blood circulation. Dr Altman states that he has no specific knowledge of the pharmaceutical performance of these individual products. Herein lies the key problem with the AMI products: there is no data available at this stage on their performance and with respect to specific drugs it is not clear whether sufficient drug can be absorbed by these low capacity routes (sub-lingual, nasal) to achieve a therapeutic effect.

[Emphasis added.]

[ACCC 3.36, p 283]

298    Professor Pouton commented on some further aspects of Dr Altman’s report as follows:

In paragraph 53 Dr Altman states that the buccal and nasal routes of drug administration can be used to avoid hepatic first-pass effects, resulting in improved bioavailability. The use of the word 'can' again is critical and as a result this statement is correct. However, in practice very few drugs can be effectively administered by these routes, due to the low surface area of the buccal and nasal mucosa.

In Paragraph 55 Dr Altman states that medications designed for buccal or nasal administration can have a faster onset of action. I agree with this statement but reiterate that this advantage cannot be realised for most drugs due to the limited masses of drug that can be absorbed from these sites.

[ACCC 3.36, p 284]

299    Professor Pouton concluded thus:

To a large extent the Altman report makes generally [sic] statements that are factually correct with regard to the possible advantages of buccal and nasal drug delivery. However, the statements lack practical perspective, in that clinically useful doses of most drugs could not be absorbed from these sites of administration. Furthermore there is no evidence presented in the report that the needs of patients suffering from erectile dysfunction or premature ejaculation cannot be met by existing proprietary products.

[ACCC 3.36, p 284]

300    Professor Pouton’s report elicited responses from Dr Rowe and Dr Altman.

4.5.3.6.4    Dr Rowe and Dr Altman’s second reports

301    In a second report dated 27 November 2013, Dr Rowe responded to Professor Pouton’s report. He disagreed with Professor Pouton’s view that without clinical data, it was not possible to determine if the alternative delivery forms could achieve therapeutic effect with lower dosages than those used in the oral administration of the drugs, or whether they would result in a reduction in side effects. Dr Rowe gave a number of reasons for this disagreement. One reason involved reference to the practice of off-label prescribing. This occurs when a medication is prescribed for a use other than the use for which it was approved by the Therapeutic Goods Administration. Clomipramine and apomorphine were used off-label in the AMI and NRM medications.

302    He said that compounding with off-label medications was common in relation to pain treatment and was well accepted. He gave examples of the use of off-label prescribing. He said that compounding was used, for instance, where no suitable dosage form was available, such as for medication of infants who could not swallow medication in tablet form, where the dosage required by a particular patient was not commercially available, where production of a medication had been discontinued but was still necessary for some patients, or where a doctor considered a novel combination of drugs useful for some patients. He said that a major factor in the use of off-label compounds was the cost of obtaining Therapeutic Goods Administration approval for new therapeutic uses.

303    He then said:

23.    Compounding is based upon a physician's experience. I disagree that clinical trials are the only way in which it possible [sic] to prove efficacy. In the context of compounding, one would be very unlikely to find clinical trials undertaken for the same dosage and pharmaceutical presentation.

24.     In my practice, and in my experience, a particular dosage is chosen by the physician in the light of that doctor's previous experience including what that person's peers may have experienced. Should the dose be either too low to be effective or so high as to produce side effects then the dosage is adjusted to suit the patient.

[R13.37, pp 4 – 5]

304    In a second report dated 28 November 2013, Dr Altman also responded to Professor Pouton’s report. Dr Altman rejected Professor Pouton’s view of the extent of the first-pass effect on clomipramine and vardenafil taken in tablet form, and relied on further material to demonstrate that there was a problem which could be addressed by an alternative delivery system. He again referred to the recently approved orodispersible [orally disintegrating] tablet of vardenafil marketed as Staxyn, which resulted in a higher systemic exposure than the 10 mg tablet of vardenafil, as an example of the advantage to be obtained from changing the delivery system. He said that, if Professor Pouton intended to argue that the advantage in this case was not significant, he disagreed.

305    Dr Altman agreed with Professor Pouton that the buccal route would be suitable for relatively few drugs, but said that it had a definite place as a legitimate route of pharmaceutical delivery. He referred to two scientific articles which examined the use of buccal delivery for a number of drugs.

306    Dr Altman then elaborated on his argument, articulated in his first report, that off-label prescribing is legitimate by referring to an article published by Dr Madlen Gazarian and others entitled, “Off-label use of medicines: consensus recommendations for evaluating appropriateness,” (2006) 185 (10) Medical Journal of Australia 105 (Gazarian 2006) [R 13.38, p 105]. The article, written by a working group of the NSW Therapeutic Advisory Group described the development of a guide for clinicians in evaluating the appropriateness of medicines for off-label use. Dr Altman quoted from the article that, “off-label prescribing is not illegal and may sometimes be clinically appropriate”. The article cited surveys in which “the extent of off-label prescribing is reported to be between 7.5 and 40 per cent in adults and may be up to 90 per cent in some hospitalised paediatric patients”.

307    Dr Altman said that Professor Pouton’s views could be summed up by saying that in order to reliably determine whether a drug is safe and efficacious, clinical trials of a high international standard would need to be conducted. However, he said that whilst this is the usual pathway, the cost of developing a drug in this way was extremely high. He emphasised his view that it has been a long-standing practice for doctors to prescribe medications which are not available commercially and which need to be compounded [R 13.38, p 11].

308    Dr Altman noted that the widespread use of off-label prescribing had prompted the NSW Therapeutic Advisory Group to develop recommendations to guide and improve off-label prescribing, and the US Federal Food and Drug Administration to consider guidelines for the appropriate off-label use of drugs.

309    Dr Altman then referred to circumstances in which off-label prescribing has a valuable role to play. In view of the difficulty of conducting research on children, registered medications which are specifically and commercially produced for them are often not available so doctors are forced to prescribe off-label. In other cases the market is not large enough to justify the commercial extension of the drug to other uses or age groups. Then there are cases where a patient has a serious illness, where there is no therapeutic alternative, and where the benefits outweigh the risks in the particular case. Individual circumstances then justify the use of off-label medications.

310    Dr Altman relied on the following view, expressed in an article by Dr Randall Stafford entitled, “Regulating Off-Label Drug Use – Rethinking the role of the FDA” (2008) 358(14) New England Journal of Medicine 1427, that:

Physicians' freedom to prescribe drugs off-label carries important advantages. It permits innovation in clinical practice, particularly when approved treatments have failed. It offers patients and physicians earlier access to potentially valuable medications and allows physicians to adopt new practices based on emerging evidence.

[R13.38, p 9]

311    This article however continued by stating that, “[a]t the same time, off-label use has potentially negative consequences. It undercuts expectations that drug safety and efficacy have been fully evaluated.”

4.5.3.6.5    Cross-examination of Dr Rowe and Dr Altman

312    In cross-examination Dr Rowe explained that when he compounded prescriptions for AMI the original dosages were modified when Dr Vaisman told him about feedback from patients, for instance, about side effects. The following exchange occurred during cross-examination:

MS NICHOLS:    [Y]ou’re not aware of any clinical data to support any of AMIs compounded products, are you?

DR ROWE:    I’m certainly aware of clinical data based on years of these products being available to patients.

MS NICHOLS:    Well, that data is in the form of anecdotal reports to [sic] you have about what AMIs patient group – or how AMIs patient group is responding to the drugs, isn’t it?

DR ROWE:    Yes, that’s correct.

    

    [TS 2511]

313    Dr Rowe told the Court that he had been informed by Dr Vaisman that the repeat prescriptions were at about 67 to 70 per cent of patients [TS 2510]. There was no direct evidence from the respondents that this was the case, or the reason for it, and without further detail of the basis of the reports, this evidence does not assist. For example, other evidence seems to suggest that repeat deliveries of the AMI medications were made automatically, without any request from the patient. If this is what was meant by repeats, then it does not establish that patients necessarily wished to take more of the AMI medications.

314    Dr Rowe also provided further details about the collaboration with Dr Vaisman on the vardenafil nebuliser trial referred to at [282] of these reasons. He said the trial was a phase-one clinical trial intended as the first step in the possible registration of the medication delivered by nebuliser. The trial cost of $200,000 was paid for by AMI. It involved 12 subjects and was a double-blind, double cross-over (involving the same patients on both placebo and medication) study done according to good clinical practice.

315    In cross-examination, Dr Rowe explained his view about the therapeutic effect of an alternative delivery system in terms which were less emphatic than in his written reports. The following exchanges highlight the point:

DR ROWE:     [T]hese [alternative] systems are generally designed to have a quicker onset of action, reduce side effects, avoid the first-pass effect, avoid gastric acid and so forth. They don’t work in every case. What I’m saying here is that it would be reasonable – given the fact that these are known and this is how they work it would [be] reasonable to use existing drugs in these delivery systems and see how they work from a compounding viewpoint.

MS NICHOLS:    When you deal with compounding you’re necessarily relying upon, as you say, the physician’s experience and his or her relationship with the particular patient to form a view about efficacy in a particular case?

DR ROWE:    In that instance that’s correct, yes.

    

    [TS 2513]

            

316    Dr Rowe confirmed that it would not be possible to know how much of a dose of a drug reached systemic circulation in the body unless the patient’s blood plasma levels were tested [TS 2501]. He also confirmed that:

As far as I’m aware, and I certainly haven’t conducted it, that there are no plasma studies done on the amount of the drug which was delivered to the circulatory system via the – a nasal delivery system. The only thing I can say is that when, for example, we were developing clomipramine, based on clinical response of 5 patients, we were able to reduce the dose to about 20 per cent of what was given – what was given previously by the oral route. That was based on clinical response and not plasma levels.

[TS 2502]

317    Further, Dr Rowe said that because off-label prescribing depended on the doctor’s clinical judgment, it was important for the doctor to monitor the efficacy of the medication and its side effects. He was not, however, involved in any such process, as was revealed in the following exchange:

MS NICHOLS:    And you’re not in a position to say what AMI doctors did or didn’t do in relation to questioning patients about side effects, or the efficacy of the drugs with which they were administered?

DR ROWE:    I’m not in a position to comment on that, no.

    

[TS 2516]

318    In cross-examination, Dr Altman accepted that he was not aware of the formulations of the AMI or NRM medications or of their performance. He explained less emphatically than in his report the basis of his views as follows:

MS NICHOLS:    Doctor, to be clear, leaving aside the nebuliser study concerning vardenafil, you can’t say one way or the other whether any of the compounds discussed in your report, or mentioned in your report, has any particular therapeutic effect, can you?

DR ALTMAN:    I have no knowledge of the clinical performance. I’m not a clinician, and I’m not a prescriber, so I’ve never prescribed any of these formulations. I don’t know how patients react to them. All I can say is that, from the list, it appears as if AMI have used fundamental pharmacokinetic principles. They’ve chosen drugs often that have high first pass effect, and they’ve chosen to formulate these drugs in unique dosage forms, which have the potential to have a clinical effect.

MS NICHOLS:    So it’s a potential, but it’s – to be clear – not to your knowledge, tested?

DR ALTMAN:    I have no knowledge of the clinical data, or the patient response rates to these drugs. I have no knowledge of that at all.

[TS 2540]

319    Dr Altman reiterated his agreement with Professor Pouton that few drugs would reach therapeutic level, or have a faster onset than oral administration, by using the buccal route, because of the limited amount of drug which can be absorbed at that site [TS 2540 – 2541]. Dr Altman agreed with the following extract from an article annexed to his second report by Amir Shojaei entitled, “Buccal Mucosa As A Route For Systemic Drug Delivery: A Review” (1998) 1(1) Journal of Pharmacy and Pharmaceutical Sciences 15:

The nasal cavity as a site for systemic drug delivery has been investigated by many research groups and the route has already reached commercial status with several drugs including LHRH and calcitonin. However, the potential irritation and the irreversible damage to the ciliary action of the nasal cavity from chronic application of nasal dosage forms, as well as the large intra- and inter-subject variability in mucus secretion in the nasal mucosa, could significantly affect drug absorption from this site.

[R 13.38, p 79]

320    He also stated that he would assume that a doctor prescribing medication off-label would monitor the patient to see how the patient was going, and would change the dose depending on the clinical results seen in the patient reports [TS 2551].

4.5.3.6.6    Conclusion

321    The first reports of Dr Rowe and Dr Altman were written at a fairly high level of generality. At that level, it was possible for them to say that there was a theoretical pharmacological basis to support the efficacy of apomorphine and clomipramine delivered by the nasal route, the buccal route, or sublingually.

322    Both Dr Rowe and Dr Altman had previously had business relationships with AMI. Where it was possible to support the interests of the respondents in the course of their evidence, they were inclined to do so. It is not suggested that they compromised their professional integrity in the way they gave their evidence. For instance, Dr Altman made it clear in his first report that he had “no specific knowledge of the pharmaceutical performance of” the AMI and NRM nasal sprays or oral strips. In the end, the limitations on their evidence, which they accepted, rendered that evidence less useful than the evidence of Professor Pouton.

323    Professor Pouton was correct in his view that Dr Altman’s first report generally made statements which were factually correct, but related only to the possible effects of sublingual, buccal, or nasal delivery of the medications.

324    Professor Pouton’s report brought the issues down to a more particular level of discussion. Of central importance was his doubt that a sufficient quantity of the medications could be delivered by the nasal, sublingual, or buccal routes to have a therapeutic effect.

325    On this issue, Dr Altman, in his second report, agreed with Dr Pouton’s theoretical assessment. And again in cross-examination Dr Altman accepted this view. The following exchange demonstrates the point:

MS NICHOLS:    In relation to the drugs that are delivered by the buccal route, Professor Pouton, whose report you’ve seen, states that medications designed for the buccal or oral administration – sorry, the buccal administration route can have a faster onset of action, but that advantage can’t be realised for most drugs due to the limited mass of drug that can be absorbed from that site. And that’s something you agree with in your report, isn’t it?

DR ALTMAN:     I do, yes.

MS NICHOLS:    And Professor Pouton says that, in fact, very few drugs would reach therapeutic levels using that delivery route, and that’s something with which you agree?

DR ALTMAN:     Not many drugs, no.

MS NICHOLS:    Yes. And you indicate that in your second report?

DR ALTMAN:     Yes.

[TS 2540 – 2541]

326    Dr Rowe and Dr Altman had no clinical evidence of the efficacy of the AMI and NRM medications. In cross-examination, Dr Altman stated his opinion that:

[I]t appears to me that they’ve [AMI] gone through the literature, and they’ve picked a number of drugs that make sense to deliver via the routes that they’ve chosen. And that’s not to say that they would work by those routes, because I, as a pharmacologist, would say, well, I would like to prove that.”

[TS 2540]

When Dr Rowe altered the formulations of AMI medications for Dr Vaisman, he relied on the anecdotal evidence provided by Dr Vaisman to change the compounds. Dr Rowe said that there were no plasma studies done on the amount of medication delivered to the circulatory system by the nasal route. Excipients were added to the active ingredients of the AMI medications to provide bulk or to add to the therapeutic effect by facilitating absorption or solubility. This may have had an effect on the working of the active ingredient. Dr Altman had no knowledge of the excipients used by AMI and NRM in the medications.

327    In the end, Professor Pouton’s evidence that there is no scientific basis on which it can be concluded that the delivery of AMI and NRM medications through the nasal and buccal routes by nasal sprays, troches, or oral strips is effective should be accepted. A conclusion that the medications delivered in these ways were effective would be speculative.

4.5.3.7    Standards applicable to off-label prescribing

328    In this section, the standards applicable to off-label prescribing are examined. Then, these reasons for judgment consider whether AMI and NRM complied with these standards when doctors prescribed nasal spray, troches, and oral strips.

329    As discussed in the previous section, although Dr Rowe and Dr Altman had no knowledge of the clinical efficacy of AMI and NRM medications, they considered that the underlying pharmacology of the alternative delivery systems used in the AMI and NRM medications, and the assumptions that could be made about the medications because of this pharmacology, justified AMI and NRM prescribing those medications. The pharmacology suggested that the AMI and NRM delivery systems were chosen because they would have a therapeutic effect, would have the advantage of rapid onset of effect, and, because a lower dosage could be used, there would be an advantage of reduced side effects. Both doctors suggested that it was not necessary to have high-level clinical evidence for a doctor to be justified in prescribing a medication off-label.

330    Professor Pouton regarded the suggested advantages of the alternative delivery systems as less certain and expressed the view that AMI and NRM were not justified, in the state of existing knowledge, to prescribe the medications without some demonstrated evidence of efficacy and safety. This was so particularly he said, when the AMI and NRM medications were prescribed to patients off-label, to a large number of patients without consideration of their individual medical needs in an organised clinical way and without any real way of judging whether the medications were effective or not [TS 1210].

331    The respondents’ case was that off-label prescribing was widespread, accepted, legal, and justified when based on a doctor’s expertise and judgment. When AMI and NRM doctors prescribed registered medications delivered by novel delivery systems they were legally prescribing off-label, compounded products. The respondents criticised Professor Pouton’s standard that expensive clinical trials would need to be conducted in order to demonstrate efficacy [TS 2766 – 2767].

332    The respondents relied on the evidence of Dr Altman, who referred to Gazarian 2006, although he disagreed with the standards discussed in the article [R 13.38, p 105]. The article referred to a US survey of 150 million off-label prescriptions which found that 73 per cent of the prescriptions had little or no scientific support. The article then referred to a working group of a NSW government-funded body, the Therapeutic Advisory Group, which addressed the problems involved in off-label prescribing and made recommendations. The working group of ten included hospital-based doctors, pharmacists, and a representative from the Department of Health. The recommendations were implemented in 90 per cent of NSW public hospitals. The main recommendation was that off-label prescriptions should be limited to circumstances where there is high-quality evidence supporting the use of the drug. Whether there is high-quality evidence requires rigorous evaluation of the best available patient-based research, similar to that employed by the Therapeutic Goods Administration in evaluating a medication for registration. Where there is not high-quality evidence supporting the off-label use, the working group said that exceptional off-label use of a medication may be justified in individual circumstances, provided the following are satisfied:

    there is a serious underlying disease or condition; AND

    there is some evidence to support potential beneficial effect; AND

    potential benefits outweigh potential risks; AND

    standard therapy has been trialled or is inappropriate; AND

    written informed consent obtained.

333     The article explained the approach of the working group where there is extensive clinical experience to support off-label prescribing thus:

In some instances, high-quality research evidence supporting the use of a particular medicine (eg, older off-patent medicines) may not be available and may be unlikely ever to become available. However, there may be extensive experience supporting the efficacy and safety of such medicines. Although such data or “expert opinion” is considered to be of lower quality than high-quality research evidence, there are examples where it may be used to inform decisions about off-label use of a medicine. There are several authoritative medicines compendia that make recommendations for appropriate use supported either by research evidence and/or consensus opinion based on extensive experience with various medicines. These include the Australian medicines handbook, Therapeutic guidelines (Australia) and the British national formulary for children (UK). Other “authoritative” sources may include recommendations from professional societies, although the quality and validity of some of these can be quite variable. Less formal sources of support based on “experience” or “opinion” are less acceptable, and caution is recommended when considering this level of support for off-label use.

[R 13.38, p 107]

334    The working group recognised that some off-label prescribing may be justified by extensive experience or opinion, although a cautious approach needed to be taken.

335    In the present case, the respondents did not seek to justify the use of AMI and NRM medications on the basis of clinical experience. Rather, they relied on the opinions of Dr Rowe and Dr Altman who had no direct experience of the clinical effects of AMI or NRM medications. In the course of cross-examination Dr Vandeleur accepted that apomorphine and clomipramine nasal sprays were effective in some cases, but the source of this conclusion was not explored [TS 731]. His view cannot be regarded as the type of clinical evidence necessary to provide validation of the medication.

336    One is led to the inevitable conclusion that the respondents were not able to demonstrate from clinical experience that the medications did work. The respondents were in a position to demonstrate the efficacy of the medications if the medications were effective and safe, but they did not do so. Dr Vaisman referred in his evidence to his long experience with a very large number of patients of AMI and NRM. For instance, he said when pressed about a contrary view expressed in a published article about the need for a physical examination to treat ED or PE properly:

MR BURNSIDE:    You disregard that or regard it as wrong, do you?

DR VAISMAN:    I have big experience. I have big experience at any of this of others in the world.

MR BURNSIDE:    I’m sorry, I can’t understand what you’re saying?

DR VAISMAN:    I have bigger experience, my clinics have bigger experience in treating premature ejaculation, bigger than anybody in the world. I don’t publish.

[TS 1742]

337    There was evidence which is referred to in [528] – [529] and [533] – [534] of these reasons for judgment that AMI conducted surveys of its patients to ascertain the nature and frequency of side effects of the medications.

338    Further, AMI funded the trial of the delivery of vardenafil by nebuliser at a cost of $200,000.

339    There was also evidence of a survey done in 2008 by a salesperson, Wolfgang Rohr, which sought to establish why patients were dropping out of their treatment programs. The survey stated that it was based on a database presumably constituted from the records of AMI. The survey referred to reasons given by patients for giving up the treatment. It stated:

About 50% of dropouts claim they left because the treatment hadn’t worked.

[ACCC 4.383]

The survey also indicated that 50 per cent dropped out because the treatment was too costly for them. Although Dr Vaisman commissioned the survey, he sought to belittle its significance by saying that Mr Rohr was not a specialist in the area, and that he could have made up the figures. Dr Vaisman said that he paid no attention to the survey. Dr Vaisman’s evidence on this issue is improbable and should not be accepted. The survey demonstrated that AMI had data available which recorded what patients thought of the efficacy of the medications.

340    Further, in the response he provided to the ACCC following service on him of a notice under s 155 of the TPA to provide information, Mr Shrestha referred to a “patient feedback surveyconducted in 2003 to 2004 when AMI first introduced nasal-delivery medications into the market. He attached about 120 patient replies to his s 155 response [R13.12, p 127].

341    Mr Shrestha also referred to a clinical study conducted by AMI into the effectiveness of nasal spray from 1 May to 3 December 2003 from data relating to 12,558 patients. The survey and study were provided by Mr Shrestha in his first witness statement dated 7 September 2012 [R 13.14, p 1021], but no evidence was given about the substance of the testing. The material is not proof of the efficacy of the nasal spray, but it does demonstrate that the respondents were in a position to provide clinical material if they chose to do so.

342    Despite the capacity of the respondents to provide data demonstrating that the AMI and NRM medications did work, the respondents did not produce evidence of clinical experience that the medications were effective and safe.

343    Once it is accepted that there was no clinical evidence of the efficacy of the AMI and NRM medications, and that the theoretical claim for efficacy was speculative, there is no basis upon which to justify the prescribing of the AMI and NRM medications off-label. And, in accordance with Professor Pouton’s view, that is especially the case where AMI and NRM intended to prescribe the medications to a mass market without careful investigation of individual patients’ circumstances.

344    Although off-label prescribing is justified in some instances, such circumstances did not exist in the case of the apomorphine and clomipramine delivery forms used by AMI and NRM doctors because there was no evidence of the safety and efficacy over existing alternatives.

4.5.3.8    Conclusion

345    The following conclusions are based on the discussion in this section.

346    In practical terms, doctors engaged by AMI were required to prescribe apomorphine-based nasal spray for the treatment of ED, and clomipramine-based nasal spray for the treatment of PE.

347    About 28 of the Annexure B patients treated for ED were prescribed apomorphine-based nasal spray. About 76 of the Annexure B patients treated for PE were prescribed clomipramine-based nasal spray.

348    The accepted approach in the medical profession for the treatment of ED and PE, which was reflected in published treatment guidelines from authoritative bodies, was to use PDE5 inhibitors taken on-demand as the first-line treatment for ED, and SSRIs taken daily as the first-line treatment for primary PE.

349    Before the introduction of PDE5 inhibitors, apomorphine was used in the treatment of ED. Apomorphine was replaced as a first-line treatment because PDE5 inhibitors are more effective than apomorphine. When used in the past for the treatment of ED, apomorphine was taken on-demand and sublingually.

350    Clomipramine was used on-label as a treatment for depression. In the course of that use it was found to assist in the treatment of PE, and was used off-label for that purpose. However, when SSRIs were developed they replaced clomipramine as a first-line treatment for PE because, when paroxetine was taken daily, it proved more effective than clomipramine taken both daily or on-demand.

351    Whatever the effectiveness of apomorphine taken sublingually on-demand in the treatment of ED, or the effectiveness of clomipramine taken daily by tablet for the treatment of PE, there is no evidence that these medications administered by nasal spray or oral strip in much smaller doses is effective in the treatment of those conditions. Any potential effect of using the nasal, oral, or buccal routes for these medications is speculative.

352    The use of apomorphine and clomipramine in nasal sprays, troches, lozenges, and oral strips for ED and PE are off-label uses of those medications. Off-label use may be justified in certain circumstances. Those circumstances are recognised by the medical profession. The only potential circumstance relevant to the situation of AMI and NRM is where there is clinical evidence or a body of medical opinion recognising the efficacy and safety of the off-label use. A cautious approach is necessary in these circumstances. However, there is no body of clinical experience or medical opinion based on the scientific foundation which supports the off-label use of small doses of apomorphine or clomipramine in nasal spray or oral strips for the treatment of ED or PE respectively.

4.5.4    The conduct of the doctors

4.5.4.1    Introduction

353    The ACCC alleged that the doctors engaged by AMI failed to treat patients in accordance with the professional requirements and standards applicable to the treatment of ED and PE. Much of this discussion is also relevant to the doctor consultations in the NRM period. That relevance is referred to in [783] – [836] of these reasons for judgment. Some elements of the doctor consultations in the NRM period are also dealt with in this section, because all of the NRM doctors conducting consultations with the Annexure C patients also consulted with Annexure B patients in the AMI period.

354    In particular the ACCC alleged that in consultations with Annexure B patients AMI doctors:

    did not diagnose the underlying cause of the condition;

    did not refer patients to a specialist or GP for the treatment of conditions disclosed in consultations;

    did not, or did not adequately, explain the side effects of AMI medications to patients;

    did not physically examine the patients, but consulted only by phone;

    recommended long-term contracts without a proper medical basis for doing so; and

    did not prescribe medications other than those formulated by and compounded for AMI, and did not disclose this fact to patients;

    did not advise the patients of the terms on which the treatment programs were provided.

355    In each instance, the ACCC said that the conduct of the doctors failed to meet the standard of accepted medical practice, and preferred the commercial interests of AMI over the welfare of patients. The ACCC contended that these failures constituted unconscionable conduct.

356    Each of these alleged failures in the conduct of the doctors is addressed after first examining the source of the evidence concerning the conduct of the doctors, namely, the recordings of consultations, the statements of patients, the evidence of the doctors, and the expert medical evidence. Then, the reasons for judgment explain the general requirements accepted by the medical profession as reasonable for the professional treatment of ED and PE, before considering whether the doctors acted in accordance with those requirements.

357    In the respondent’s final written submissions they argued that the Court should not consider the conduct of the doctors as if it were a quasi-medical tribunal investigating the quality of medical services.

358    The task of the Court is to determine whether AMI and NRM engaged in unconscionable conduct arising, inter alia, from the way the doctors conducted consultations acting as consultants for AMI and NRM. That is a different question from questions which medical disciplinary tribunals are called upon to determine.

359    However, in the course of this very detailed consideration of the work of the AMI and NRM doctors it has become clear that the doctors did not meet professional medical standards. As the issues exposed in this case reveal there is a case for investigation by the medical regulatory body in view of the serious failings in the conduct of the AMI and NRM doctors it is appropriate that the Court bring these reasons for judgment to the attention of the appropriate regulatory agency.

4.5.4.2    The evidence

4.5.4.2.1    Recordings and patients

360    In the AMI period phone calls with patients were recorded. Part of each of those phone calls recorded the consultation between the patient and the doctor. The ACCC selected 145 recordings of phone calls in the process described at [108] – [117] of these reasons for judgment. The audio recordings and transcripts of those 145 phone calls were tendered in evidence.

361    The ACCC also relied on witness statements or affidavits made by eight AMI patients. The phone call with one of those patients was also evidenced by one of the 145 recordings.

362    Thus, the ACCC relied on consultations by AMI doctors with the 152 Annexure B patients in total.

363    Four of those patients were cross-examined by counsel for the respondents.

364    In respect of the NRM period, the ACCC relied on written statements made by 16 patients of NRM. These patients are listed in Annexure C to the FASOC and hence are together referred to as the Annexure C patients. NRM did not record the phone calls with patients.

365    Seven of the NRM patients were cross-examined by counsel for the respondents.

4.5.4.2.2    Doctors

366    There were 13 doctors involved in the consultations with Annexure B and C patients as follows:

Dr Balafas – 2 consultations;

Dr Berry – 32 consultations;

Dr Biswas – 1 consultation;

Dr Chan – 3 consultations;

Dr Condoleon – 2 consultations;

Dr Daood – 6 consultations;

Dr De Sayrah – 20 consultations;

Dr Durrani – 13 consultations;

Dr Goyer – 8 consultations;

Dr Lonergan – 51 consultations;

Dr Omar – 17 consultations;

Dr Quinney – 4 consultations;

Dr Vandeleur – 9 consultations.

367    Dr Lonergan and Dr Vandeleur affirmed affidavits and were called as witnesses for the ACCC. Dr Berry, Dr Paul George Condoleon and Dr Thomas Clement Goyer made statements and were called as witnesses for the respondents. The remaining eight doctors did not give evidence. Dr Gulpan Sarajsada, who was not involved in any of the consultations but is now engaged by NRM, made a witness statement which was filed on behalf of the respondents and was cross-examined. Her evidence was so general and unconnected to any of the consultations as to be of no particular relevance to this proceeding and is not referred to further in these reasons.

368    Counsel for the respondents asked that the names of the doctors involved in the consultations not be disclosed in these reasons for judgment. Counsel for the ACCC submitted that it was not necessary for the Court to name each of the doctors.

369    The Court must balance the value of open public scrutiny of professional conduct against the personal embarrassment and potential professional consequences to the doctors whose conduct has been criticised. There is a distinction to be drawn between the doctors who gave evidence, and who were thus given a full opportunity to explain their conduct, and the doctors who did not give evidence and thus did not explain their conduct.

370    In relation to the former category, there is no good reason to keep the names of the doctors confidential. Whilst their professional conduct has come under scrutiny, that scrutiny has occurred in a process that is public, and they have been able to defend their conduct in that public forum. Their points of view are recorded in these reasons for judgment. There is a greater value in public scrutiny of professional conduct, provided that the process is fair, than protection from personal embarrassment which may result from the public disclosure of the doctors’ conduct.

371    In relation to the latter category there is no explanation, except perhaps in the cases of Dr De Sayrah and Dr Durrani where it was said that sickness prevented them from attending Court, why the other doctors did not give evidence and whether they were invited to do so. It is unlikely that the doctors, including Dr Durrani and Dr De Sayrah, did not know of the proceeding and, hence, could have made any concern about publicity known to the Court. Whilst it would have been reassuring to know that each of these doctors had been invited to put their side of the story to the Court, their conduct is of sufficient public concern that their names should not be suppressed.

372    It is necessary to say something about each of the doctors who each gave evidence: Dr Berry, Dr Goyer, Dr Condoleon, Dr Lonergan, and Dr Vandeleur. The doctors were engaged by AMI and NRM pursuant to written agreements which designated them as consultants. The impression which they made in the witness box was one of the elements which has formed my views about what happened during, and the quality of, the consultations with patients by them.

373    Dr Berry qualified as a doctor at the University of Sydney in 1977 and has practised continuously since then. From mid-2006 until mid-2009, Dr Berry consulted for AMI full-time, five days per week. She did occasional other GP and hospital work in that period. At that time she worked from AMI’s premises. From mid-2009 until March 2012, Dr Berry consulted for AMI or NRM for two to three days per week. She worked from home where she now conducts a small homeopathic practice.

374    Dr Berry was involved in 32 of the 168 consultations in issue in the proceeding. From the recordings of her consultations, and from her oral evidence, it was plain that Dr Berry had care and concern for her patients. She also expressed a view that the work she did for AMI and NRM was worthwhile and professionally justified. That view is honestly held even though, as these reasons for judgment explain, it is misguided in most respects. Her talents deserved a better environment than the AMI or NRM operations and it is unfortunate that she did not appreciate that she was cooperating in a system which involved unprofessional practices. Dr Berry conceded that her conduct in a number of consultations was below the standard which she set for herself and which was generally accepted as appropriate in the medical profession. She recognised that her witness statements in some respects presented a picture of greater attention to the standards than was the fact. She also gave evidence that, since 2009 when the last recordings were made, she had changed some of the criticised deficiencies in her consultations in some cases as a result of the criticism, and in some cases as a result of her ever-developing knowledge of medicine. In part explanation for the examples of suboptimal conduct, Dr Berry maintained that the selection of consultations by the ACCC was not typical of her conduct at the time. However, the respondents did not provide any alternative selection from the many more recordings made at the time to support this claim.

375    Dr Berry was defensive in the witness box. In part that is explained by the uncomfortable experience of a longstanding professional whose conduct is under close critical evaluation in a public forum. But it is also explained by Dr Berry’s belief that her conduct could be explained, but that it was difficult to convey to non-medical people the multitude of factors which went into her consulting practices.

376    Dr Goyer qualified as a doctor at the University of Queensland in 2004. He had worked for AMI or NRM since 2008. In 2008 and 2009 he worked from the premises of AMI. Since 2010 he worked from his own premises four days a week. On the other day he worked in a clinic in the field of cosmetic, anti-aging, and wellness medicine. Unlike Dr Berry, Dr Goyer’s experience was relatively short and very narrow. Further, unlike Dr Berry, Dr Goyer displayed a limited degree of care or concern for his patients. For instance, in explaining his work for AMI he said in cross-examination:

[A]s a medical practitioner dealing in something which is not going to be a life threatening situation, no one dies of premature ejaculation. No one dies of erectile dysfunction. So this is a very different paradigm of medicine. What we’re dealing with here is lifestyle optimisation. Now, when it comes to lifestyle optimisation, we really have to adjust the way that we speak to people, as I do in cosmetic medicine. No one needs botox. No one dies of a wrinkle. So when I’m speaking about this medication to treat erectile dysfunction, we suggest medications. But we never tell people they will need it as I might if I were speaking to someone in emergency, who would have a heart attack, and I was telling them they would need a particular medication or they would die.

[TS 2320 - 2321]

377    He gave his evidence in an arrogant, obstructive, uncooperative and defensive way. When asked about his experience as a doctor, he was asked whether he practised as a GP outside of AMI. He replied “No. God, no. … Well, sorry, it’s a terrible job. I shouldn’t have said that, but no” [TS 2299]. He claimed to be “one of the most experienced clinicians, not just in Australia, but in the world, of speaking to people with these concerns” [TS 2360]. Yet his own colleagues at AMI, Dr Berry, Dr Condoleon, Dr Lonergan and Dr Vandeleur all had significantly more experience with AMI than he did. That is to say nothing of their much greater experience as doctors than Dr Goyer.

378    Early in his evidence Dr Goyer resisted giving a simple answer to junior counsel for the ACCC. I explained the Court process and how re-examination allowed for elaboration on some answers if necessary. Shortly afterwards he wound into a simple answer about the recordings of consultations an observation that the ACCC had “stolen” the recordings of the consultations from AMI. In fact, the recordings were obtained by the ACCC pursuant to a search warrant. The Court was adjourned so that counsel for the respondents could explain to Dr Goyer the need for decorum. On resumption, Dr Goyer appropriately apologised and explained, “I am not able to be comfortable … my legs are shaking under the table here. I am just trying to settle and I will promise to be more civil.” [TS 2311] A consideration of his oral evidence as a whole suggests that his discomfort in the witness box arose from a recognition that his practices were not readily defensible.

379    Dr Goyer understood that the job at AMI was not particularly demanding for a doctor because “no one dies of erectile dysfunction” and it was not as “terrible” as it would be to practice as a GP. The work was repetitious but paid him $1000 a day. Dr Goyer did not present as a doctor committed to patient care. He was involved in eight consultations in issue in this proceeding.

380    Dr Condoleon graduated as a doctor at the University of Sydney in 1987 and has practised continuously since 1988. He worked as a consultant for AMI full-time, five days per week from 1994 until 2000. At times between 2000 and 2008 he worked as a GP in a heart clinic in which Dr Vaisman had a commercial interest. From 2008 he has worked again as a consultant to AMI and NRM. In this period Dr Condoleon consulted by phone with patients who attended clinics, and with patients phoning in for reassessments of their treatment.

381    Dr Condoleon was responsive, straightforward, and business-like in giving his evidence. He held clear views which were generally expressed briefly and courteously with an assurance which came from of long experience. He provided treatment of ED and PE at AMI and NRM because he believed, on grounds he thought rational and valid, that there was a value to patients in the treatment provided.

382    Dr Condoleon was involved in two consultations in issue in this proceeding.

383    Dr Lonergan qualified as a doctor at the University of Sydney in 1974. From 1976 until 2002 he practised medicine for periods overseas as a GP and for 15 years in the casualty department at Johannesburg General Hospital. In 2002 Dr Lonergan returned to Australia to be near his daughter. Because he had let his Australian registration lapse, he did not qualify for Vocational Registration (VR) under a new system which had been introduced whilst he was away. As a result, his employment prospects were limited because the Medicare rebate for consultations with non-VR registered doctors was less than for VR-registered doctors. Dr Lonergan started working for AMI in 2002 and at that time consulted with patients face-to-face. From early 2003 he consulted almost exclusively by phone. He became dissatisfied with work for AMI, but continued because his non-VR status restricted his options and his flexible schedule allowed him to support his ex-wife, who had been diagnosed with breast cancer, and his daughter. His engagement with AMI was terminated by AMI on 14 December 2011.

384    Dr Lonergan was the fourth respondent in this proceeding. However, he settled the proceeding against him on 21 June 2012 and agreed to orders restraining him from engaging in the type of conduct which was alleged against him, and to declarations to the effect that such conduct was unconscionable. On the same day he affirmed his first affidavit in the proceeding. By this time Pattison Report 2 and McRae Report 2 had been filed. They contained detailed criticisms of five consultations conducted by Dr Lonergan. Further, the FASOC made allegations against Dr Lonergan in respect of 51 consultations. Dr Lonergan did not defend these consultations in detail in either of his two affidavits, the second of which was affirmed on 14 December 2012.

385    Counsel for the respondents cross-examined Dr Lonergan. Dr Lonergan said that he had prepared an explanation for each of the 51 consultations, but had concentrated on other matters which he thought were more important to the case. These were issues referred to in his affidavits about his disagreement with the conduct of the management of AMI. The Court invited counsel for the respondents to seek explanations from Dr Lonergan concerning each or some of the consultations. That invitation was not taken up. Instead, the respondents contended in final written submissions at [79]:

He [Dr Lonergan] did not give that evidence in chief. There is no onus on the respondent to elicit information from the ACCC’s witness to prove the ACCC’s case. The relevant Jones v Dunkel inference is that the evidence Dr Lonergan would have given would not have assisted the ACCC to prove unconscionability for these patients.

386    Senior counsel for the ACCC correctly submitted in final oral submissions that the principle in Jones v Dunkel (1959) 101 CLR 298 does not apply where, as in this case, a person is called as a witness. It applies where a person is not called as a witness.

387    Dr Vandeleur qualified as a doctor in 1996 and was registered with the NSW Medical Board in 1997. Since 2005 he has been a fellow of the Royal Australian College of General Practitioners. Before commencing to consult for AMI, Dr Vandeleur spent four years in Japan and then worked in hospitals and as a GP in Australia. In 2005 he worked for three days a week for AMI. Then, Dr Vandeleur worked for AMI for four days a week between September and December 2006. After that he worked full-time for AMI until 17 September 2009.

388    Dr Vandeleur resigned from AMI when he was served with a notice under s 155 of the TPA by the ACCC. When this proceeding was filed Dr Vandeleur was named as the fifth respondent. On 21 July 2011, the ACCC discontinued the proceeding against Dr Vandeleur in accordance with an agreement reached between them. The agreement provided that Dr Vandeleur would execute an enforceable undertaking under s 87B of the TPA and the ACL not to engage in the type of conduct alleged in this proceeding, and that he would affirm an affidavit in the proceeding prepared by the ACCC setting out the evidence he would give on behalf of the ACCC in terms acceptable to it.

389    Dr Vandeleur was involved in nine consultations in issue in this proceeding, one of which, the consultation with ED patient 28, was criticised in detail in McRae Report 2 and Pattison Report 2. His affidavits did not respond to this criticism but, like Dr Lonergan’s, focused on his disagreements with the management of AMI.

390    Dr Vandeleur gave evidence concerning the extent to which he was pressured or bound to prescribe the AMI medications, and to recommend to patients that treatment should be for 12 months or more. There were three sources of Dr Vandeleur’s evidence on these issues. First, his response to the s 155 notice, which was annexed to his first affidavit. Second, there was the evidence contained in his two affidavits affirmed on 27 October 2011 and 17 November 2012. And third, there was cross-examination of Dr Vandeleur by counsel for the respondents.

391    In relation to both issues Dr Vaisman contradicted the evidence of Dr Vandeleur and said that at all times these issues were matters for the independent clinical judgment of the doctors.

392    Several questions arose as to how Dr Vandeleur’s evidence should be viewed, and whether it should be preferred over the evidence of Dr Vaisman on these issues. The question of the recommended period of treatment provides a relevant vehicle to examine the question.

393    In his response to the s 155 notice served on him, Dr Vandeleur stated:

The management of AMI made it clear to me that they would prefer that I recommend at least 12 month treatment plans where possible; however, it remained open to me to recommend shorter programs or a short trial period, or no program or period, if I deemed it appropriate. I recommended 12 month treatment periods only where I felt that it was clinically appropriate; where I believed, based on my experience and clinical judgment that the patient would benefit from at least 12 months of treatment.

[ACCC 1.39, p 122]

394    In his first affidavit affirmed on 27 October 2011, Dr Vandeleur said:

41    AMI management made it clear to me that it was AMI's strong preference that I recommend that all patients should try the treatment for at least an initial period of at least 12 and preferably 18 months. That preference was communicated to me in several ways. During the course of doctors' meetings Jack Vaisman said that it was his preference for the doctors to recommend a 12 to 18 month treatment period. Separately, Dilip Shrestha told me that it was important that I mention "at least 12 months" during consultations with patients.    

44    While it remained technically open to me to recommend shorter programs or no program or period at all, I concluded because of what had been communicated to me about management's preference, that I could not realistically work at AMI if I was not prepared to recommend at least 12 months to the patients I consulted.

47    I did not think that there was anything unsafe in the 12 month timeframe as such and accordingly reasoned at the time that I could make the recommendation. The only reason I recommended 12 months of medication was to comply with AMI's practices.

[ACCC 1.39, pp 11–12]

395    And in cross-examination, Dr Vandeleur said:

DR VANDELEUR:     When it came to the 12 months, I had – the clinical coordinators were at me before Dilip, when I guess eventually it was – I really felt like I had to.

MR GREEN:    Well, you only recommended 12 months, didn’t you, because that was what you thought was appropriate?

DR VANDELEUR:     No, it was not the reason. I would never have mentioned 12 months if I hadn’t have been asked to mention 12 months.

[TS 740; TS 709]

396    There was a shift in Dr Vandeleur’s evidence from the position which he took in his response to the s 155 notice to the position that he took in cross-examination. The position in his response to the s 155 notice was closer to the evidence given by Dr Vaisman that the doctors had a free hand to decide the length of treatment and the medications to be prescribed.

397    However, when carefully examined, Dr Vandeleur’s evidence was in each instance consistent. The differences were a result of emphasising different aspects of the issue. Dr Vandeleur’s oral evidence of the practical pressure placed on him by Dr Vaisman and the management of AMI was persuasive. In some aspects it was supported by the evidence of other doctors. Whilst Dr Vaisman denied that, in practical terms, he directed the doctors to use apomorphine and clomipramine as first-line treatments for ED and PE respectively, and to recommend a 12-to-18 month treatment period, he did hold the view that those medications should be used as the first-line treatment and that they should be prescribed for 12-to-18 month periods. Dr Vaisman presented as a CEO who would enforce his views vigorously. When Dr Vandeleur provided his response to the s 155 notice, it was in his interest to emphasise to the ACCC that he had acted professionally and independently. Both his response to the s 155 notice and his affidavits were drafted by others. His oral evidence was his own authentic explanation. Furthermore, by the time he came to give evidence he had arrived at an agreement to settle the proceeding with the ACCC. It might reasonably be supposed that he then felt freer to emphasise the extent of control exercised by AMI over his prescribing conduct. I do not accept the suggestion made by the respondents that Dr Vandeleur’s oral evidence was inconsistent on these matters and that the earlier evidence was modified in his oral evidence as a result of the agreement reached between the ACCC and himself. Whilst the emphasis in the oral evidence was different, that evidence was credible and should be preferred over the contrary evidence of Dr Vaisman and Mr Shrestha on these issues.

398    In his response to the s 155 notice, Dr Vandeleur explained his process of conducting consultations with AMI patients. The explanation reflected proper professional standards in line with the requirements articulated by the expert medical evidence led by the ACCC. In his first affidavit Dr Vandeleur acknowledged that, on reflection, his consultations with Annexure B patients did not comply with those standards. Again, that acknowledgement, repeated in cross-examination, should be accepted as a truthful concession rather than a result of any agreement with the ACCC as a condition of resolving the proceeding with Dr Vandeleur.

4.5.4.2.3    Expert evidence

399    Dr Pattison, Dr Roderick John McRae, and Dr Lester Walton were called as expert witnesses by the ACCC. Dr Pattison and Dr McRae each provided five written reports. Dr Walton provided one report.

400    Professor Currie was called as an expert witness by the respondents and provided two expert reports.

401    The expert evidence is best understood by following the development of that evidence in chronological order.

402    On 27 July 2011, Dr Pattison provided Pattison Report 1, which outlined the requirements for a proper medical consultation and for appropriate treatment of ED and PE. This has been referred to earlier in these reasons for judgment.

403    On 12 September 2011, Dr McRae provided his first report (McRae Report 1) [ACCC 3.31] which, inter alia, proffered his views on the standards, guidelines, or best-practice recommendations which govern medical practice.

404    On 15 November 2011 in Pattison Report 2, Dr Pattison considered the transcripts of 14 consultations and provided an opinion on the adequacy of each of them. Five of the consultations were by Dr Lonergan, and one each was by Dr Chan, Dr De Sayrah, Dr Vandeleur, Dr Daood, Dr Berry, Dr Goyer, Dr Quinney, Dr Durrani, and Dr Omar.

405    In his second report also dated 15 November 2011 (McRae Report 2) [ACCC 3.32], Dr McRae reviewed the transcripts of the 14 consultations also reviewed by Dr Pattison in Pattison Report 2.

406    On 25 April 2012 in Pattison Report 3 [ACCC 3.30], Dr Pattison, inter alia, reviewed four statements of NRM patients concerning one consultation each conducted by Dr Biswas, Dr Durrani, Dr Goyer, and Dr Omar.

407    In his third report dated 29 April 2012 (McRae Report 3) [ACCC 3.33], Dr McRae reviewed the statements of the consultations with three of the four NRM patients which were reviewed by Dr Pattison in Pattison Report 3, being those consultations by Dr Biswas, Dr Goyer, and Dr Omar.

408    In a report dated 26 April 2012 (Walton Report) [ACCC 3.35], Dr Walton addressed a number of issues including the appropriate steps that should be taken by a doctor in consulting with and prescribing medication to a patient.

409    In a statement dated 20 September 2012 (Berry Statement 1) [R 13.18], Dr Berry explained her consulting practices at AMI.

410    In Currie Report 1, Professor Currie expressed the view that Berry Statement 1 demonstrated that Dr Berry had generally complied with the requirements of good medical practice.

411    On 3 March 2013 in Pattison Report 4 [ACCC 3.44], Dr Pattison reviewed Berry Statement 1 and Currie Report 1, and provided his opinion on the audio and transcript records of six further consultations with patients by Dr Berry.

412    In his fourth report dated 19 March 2013 (McRae Report 4) [ACCC 3.45], Dr McRae reviewed Berry Statement 1 and Currie Report 1, and provided his opinion on the audio and transcript records of 27 consultations with patients by Dr Berry. Six of those consultations were the six consultations reviewed by Dr Pattison in Pattison Report 4.

413    In Berry Statement 2 dated 18 July 2013 [R 13.32], Dr Berry responded to Pattison Report 4 and McRae Report 4 and commented on the criticisms of each of the 27 consultations examined by Dr McRae in McRae Report 4.

414    On 31 October 2013 in Pattison Report 5 [ACCC 3.46], Dr Pattison responded to Berry Statement 2 both in respect of some general matters and to Dr Berry’s explanation of the six specific consultations which Dr Pattison had previously considered in Pattison Report 4.

415    In his fifth report dated 19 November 2013 (McRae Report 5) [ACCC 3. 47], Dr McRae responded to Berry Statement 2, including to Dr Berry’s explanations of the individual consultations previously criticised by Dr McRae in McRae Report 4.

416    In his second report dated 10 December 2013 (Currie Report 2) [R 13.39], Professor Currie responded to Pattison Reports 4 and 5, McRae Reports 4 and 5, and Berry Statement 2 in general terms. He did not deal with the individual consultations referred to by Dr Pattison and Dr McRae.

417    The qualifications of Dr Pattison have been set out earlier in these reasons for judgment at [221].

418    Dr McRae is a senior consultant anaesthetist and intensive care physician at Southern Health in Melbourne. He graduated as a doctor from Monash University in 1984. He has been the Chairman of the Council of the Federal Australian Medical Association (AMA) since 2009, and served in that position previously from 1999 until 2001. He is also a director of the Victorian Branch of the AMA. The objects of the AMA include:

[T]o advance good professional conduct and efficiency, to promote fair and honourable practice, to suppress, discourage or prevent malpractice or professional misconduct and to ensure the highest clinical, ethical and scientific standards in the delivery of health care to the community.

[ACCC 3.31, p 21]

419    Dr McRae has been a member of the AMA Ethics and Medico-legal Standing Committee since 1996. He was also a member of the writing group for the publication, “Good Medical Practice: A Code of Conduct for Doctors in Australia” (the Code). This Code was approved by the Medical Board of Australia under s 39 of the Schedule to the Health Practitioner Regulation National Law Act 2009 (Qld). The Schedule to the Queensland Act sets out the uniform national law regulating health practitioners (the National Law), which has been enacted in each State and Territory in substantially mirror terms. Section 39 of the National Law allows for National Boards, including the Medical Board of Australia, to develop and approve codes to provide guidance to registered health practitioners. The Code is also admissible in proceedings against such practitioners “as evidence of what constitutes appropriate professional conduct or practice for the health profession”: s 41 of the National Law. One aspect of the questions on which Dr McRae was asked to express views was the application of standards, guidelines, and best-practice recommendations relating to practice by medical practitioners to the conduct of AMI and NRM doctors. Dr McRae is also an admitted legal practitioner and part-time member of the Administrative Appeals Tribunal.

420    Dr McRae did not claim to be an expert in the treatment of ED and PE [TS 1349], but when challenged in cross-examination with the proposition that his long experience on ethics committees at hospitals at which he had worked was different to the expertise asked of him in this case he disagreed and said:

… I’ve regularly contemplated issues such as those that you’re describing [referring to the questions asked by the ACCC solicitors on which his views were sought]. And as a course [sic] of my studies and experience, I have above average knowledge in the area.

[TS 1341]

421    Dr McRae’s evidence supported his claim. Further, there was no challenge in the final submissions made by the respondents to his expertise in the areas on which he gave evidence. Needless to say, there were challenges by the respondents to the views he expressed.

422    Dr Walton is a forensic and general psychiatrist in private practice in Melbourne. He graduated in medicine in 1975 from the University of Otago in New Zealand. Since 1984 he has been a fellow of the Royal Australian and New Zealand College of Psychiatrists. In 1985 he completed a Diploma of Criminology at the University of Melbourne.

423    Professor Currie graduated as a doctor from the University of Melbourne in 1974. He practises as a specialist in neurology, behavioural neurology, addiction medicine, and psychiatry. He is a fellow of the Royal Australian College of Physicians and a fellow of the Australian Chapter of Addiction Medicine. He is the director of Addiction Medicine at St Vincent’s Hospital and a Professor of Medicine at the University of Melbourne. He has worked in the field of addiction medicine for 25 years. He is a member of the Australian National Council on Drugs, the principal advisory body to the Commonwealth Government on drug policy. Professor Currie is an active and expert clinician in the treatment of all aspects of addiction and drug abuse. He has particular expertise in off-label prescribing and the use of compounded alternative forms of medication. Because of the nature of the effects of drugs of addiction and the medication used to treat it, Professor Currie also has experience in the treatment of male and female sexual dysfunction. Professor Currie’s expertise was not challenged, save that the ACCC observed that he had never practised as a general practitioner.

424    A general observation should be made about the expert evidence of Dr Pattison and Dr McRae concerning the quality of the AMI and NRM doctors’ consultations on the one hand, and the evidence of Professor Currie on the other hand. The evidence of Dr Pattison and Dr McRae was based on reading the transcripts and listening to a significant number of recordings of consultations. Their witness statements provided a detailed critique of the consultations. Professor Currie approached the evidence at a higher level of generality. In that respect his evidence was of less assistance than that of Dr Pattison and Dr McRae.

425    More importantly, Professor Currie was not accurately briefed on some crucial matters. For instance, he wrongly believed that AMI and NRM doctors had available all medications used for the treatment of ED and PE and were not restricted in practice to prescribing medications developed by AMI and NRM containing apomorphine or clomipramine.

426    Professor Currie also accepted at face value some of the broad defences offered by Dr Berry concerning the quality of her consultations, and concluded that the consultations were generally acceptable. However, in cross-examination Dr Berry conceded that her witness statements were prepared before she had been given the recordings of the consultations and did not accurately reflect what actually occurred. Professor Currie had the transcripts of the consultations with Dr Berry, but seemed not to pick up the discrepancy between Dr Berry’s justification of the practices recorded in her witness statements and the events which occurred. Professor Currie extracted in Currie Report 1 passages from Berry Statement 1, for instance, concerning her practice of referring patients for treatment to their GP. Professor Currie approved of this aspect of the consultation. But Dr Berry resiled from her witness statement when asked in examination-in-chief whether it was correct in relation to referrals to GPs.

427    Although Professor Currie’s witness statement read as if he disagreed with Dr Pattison and Dr McRae on most issues, the final position was much less exactly defined. For example, whereas Professor Currie argued in his witness statement that physical examinations were not necessary for the diagnosis and treatment of ED and PE, in oral evidence his position was that although there were alternative methods of diagnosing and treating ED and PE, such as over the internet, he would not favour them himself. Rather, he saw them as possible rather than preferable alternatives. That said, the evidence of Dr Pattison and Dr McRae demonstrated a greater focus and deeper consideration of the issues which the Court needs to consider, and thus persuaded me to place greater weight on their opinions.

428    In final written submissions, the respondents submitted that the doctors engaged by AMI and NRM were experts in prescribing for the treatment of ED and PE, and suggested that their evidence on the subject should be preferred to the evidence of Dr Pattison who had only rare consultations with patients for ED and PE in his general practice.

429    Dr Pattison gave evidence that he saw about six to ten men each week on average for male sexual dysfunction. One of two of them would be new patients [TS 1007 and 2123]. He is well known for his interest in male sexual dysfunction and, consequently, other doctors often refer patients to him from areas outside the geographical area of his practice. The high quality of his evidence was referred to in [223] of these reasons for judgment.

430    The evidence of Dr Berry, Dr Condoleon, Dr Goyer, Dr Vandeleur, and Dr Lonergan did not compare favourably to the evidence of Dr Pattison. They each had a vested personal interest, to some extent, in the subject matter of the case. That made it unrealistic to expect them to engage with the issues in as objective and professional a way as Dr Pattison. They were to varying degrees required to defend their own conduct, whereas Dr Pattison was not. To a greater or lesser extent they were each defensive in the way they gave their evidence such that it did not have such an independent character which Dr Pattison’s evidence displayed. Coupled with his independence was Dr Pattison’s over 35 years of experience as a general practitioner, and his particular interest, reputation, and expertise in the area of male sexual dysfunction.

431    Counsel for the respondents did not differentiate among the AMI and NRM doctors whose expertise was said to eclipse Dr Pattison’s. However, the quality of their consultations and their evidence varied. For various reasons none of them created a favourable impression in the witness box. Dr Goyer created a particularly poor impression as mentioned earlier in these reasons. When faced with the views expressed in an article by Dr Waldinger, who is a recognised expert in the area, Dr Goyer said:

Well, put it this way, as I said initially, I would have spoken overall to over – over 10,000 people for these concerns. Now, at the age 35, that makes me one of the most experienced clinicians, not just in Australia, but in the world, of speaking to people with these concerns.

[TS 2360]

432    Dr Goyer graduated in 2004 and has worked for AMI and NRM since 2008. Compared with Dr Pattison, his experience of medicine is short and limited. His training came from Dr Vaisman, who, as will be seen, did not equip Dr Goyer with a proper education about ED and PE. Whilst Dr Berry, Dr Condoleon, Dr Lonergan, and Dr Vandeleur did not make claims to expertise as outlandish as Dr Goyer, Dr Pattison’s evidence generally provided a much firmer foundation of reliability than the evidence of those doctors.

433    Dr Pattison had 35 years’ experience as a GP and a particular interest and reputation in treating male sexual dysfunction. There is no basis for doubting his expertise.

4.5.4.3    The requirements for a reasonable standard of consultation for the treatment of ED and PE

434    The principles of good medical practice are set out in the Code. The Code was developed by the Australian Medical Council and the Medical Board of Australia. Since 2010, when the national scheme for the regulation of health professionals was implemented, the Medical Board of Australia has been responsible for the registration of medical practitioners and students and for the supervision of their professional conduct. The Code was a joint project of the Australian Medical Council and the former State and Territory medical boards. It brought together the standards which had been operating in each jurisdiction before the publication of the Code, and therefore reflects the standards applicable in the AMI period. The Code drew on similar documents formulated in the United States, the United Kingdom, Canada, and New Zealand. Dr McRae described the Code as:

[A] single nationally applicable guideline document representing the collective consideration from all Australian jurisdictions of the expected ethical conduct of registered medical practitioners by their then operating jurisdictional medical boards that had existed in the years prior to its publication.

[ACCC 3.31, p 23]

435    The Code was approved by the Medical Board of Australia in 2010 under s 39 of the National Law, with the consequence that it is admissible in disciplinary proceedings against doctors “as evidence of what constitutes appropriate professional conduct or practice for the health profession”: s 41 of the National Law. The Code outlines this aspect of its purpose thus:

To assist medical boards in their role of protecting the public, by setting and maintaining standards of medical practice. If your professional conduct varies significantly from this standard, you should be prepared to explain and justify your decisions and actions. Serious or repeated failure to meet these standards may have consequences for your medical registration.

[ACCC 3.31, p 62]

436    But the Code also outlined that it was to be used:

To support individual doctors in the challenging task of providing good medical care and fulfilling their professional roles, and to provide a framework to guide professional judgment.

[ACCC 3.31, p 62]

437    Whilst the Code addressed a wide variety of aspects of medical practice, the obligations most relevant to this proceeding were as follows:

1.4 Professional values and qualities of doctors

While individual doctors have their own personal beliefs and values, there are certain professional values on which all doctors are expected to base their practice.

Doctors have a duty to make the care of patients their first concern and to practise medicine safely and effectively. They must be ethical and trustworthy.

Patients trust their doctors because they believe that, in addition to being competent, their doctor will not take advantage of them and will display qualities such as integrity, truthfulness, dependability and compassion. Patients also rely on their doctors to protect their confidentiality.

Doctors have a responsibility to protect and promote the health of individuals and the community.

Good communication underpins every aspect of good medical practice.

Professionalism embodies all the qualities described here, and includes self-awareness and self-reflection. Doctors are expected to reflect regularly on whether they are practising effectively, on what is happening in their relationships with patients and colleagues, and on their own health and wellbeing. They have a duty to keep their skills and knowledge up to date, refine and develop their clinical judgment as they gain experience, and contribute to their profession.

2 Providing good care

2.1 Introduction

In clinical practice, the care of your patient is your primary concern. Providing good patient care includes:

2.1.1    Assessing the patient, taking into account the history, the patient’s views, and an appropriate physical examination. The history includes relevant psychological, social and cultural aspects.

2.1.2    Formulating and implementing a suitable management plan (including arranging investigations and providing treatment and advice).

2.1.3    Facilitating coordination and continuity of care.

2.1.4    Referring a patient to another practitioner when this is in the patient's best interests.

2.1.5    Recognising and respecting patients' rights to make their own decisions.

2.2 Good patient care

Maintaining a high level of medical competence and professional conduct is essential for good patient care. Good medical practice involves:

2.2.1    Recognising and working within the limits of your competence and scope of practice.

2.2.2     Ensuring that you have adequate knowledge and skills to provide safe clinical care.

2.2.3     Maintaining adequate records (see Section 8.4).

2.2.4    Considering the balance of benefit and    harm in all clinical-management decisions.

2.2.5    Communicating effectively with patients (see Section 3.3).

2.2.6     Providing treatment options based on the best available information.

2.2.7    Taking steps to alleviate patient symptoms and distress, whether or not a cure is possible.

2.2.8    Supporting the patient's right to seek a second opinion.

2.2.9     Consulting and taking advice from colleagues, when appropriate.

2.2.10     Making responsible and effective use of the resources available to you (see Section 5.2).

2.2.11    Encouraging patients to take interest in, and responsibility for, the management of their health, and supporting them in this.

2.2.12    Ensuring that your personal views do not adversely affect the care of your patient.

3 Working with Patients

3.1 Introduction

Relationships based on openness, trust and good communication will enable you to work in partnership with your patients.

3.2 Doctor-patient partnership

A good doctor-patient partnership requires high standards of professional conduct. This involves:

3.2.1     Being courteous, respectful, compassionate and honest

3.2.2     Treating each patient as an individual.

3.2.3     Protecting patients' privacy and right to confidentiality, unless release of information is required by law or by public-interest considerations.

3.2.4     Encouraging and supporting patients and when relevant, their carer or family, in caring for themselves and managing their health.

3.2.5     Encouraging and supporting patients to be well informed about their health and to use this information wisely when they are making decisions.

3.2.6     Recognising that there is a power imbalance in the doctor-patient relationship, and not exploiting patients physically, emotionally, sexually or financially.

3.3 Effective communication

An important part of the doctor-patient relationship is effective communication. This involves:

3.3.1    Listening to patients, asking for and respecting their views about their health, and responding to their concerns and preferences.

3.3.2     Encouraging patients to tell you about their condition and how they are currently managing it, including any alternative or complementary therapies they are using.

3.3.3     Informing patients of the nature of, and need for, all aspects of their clinical management, including examination and investigations, and giving them adequate opportunity to question or refuse intervention and treatment.

3.3.4     Discussing with patients their condition and the available management options, including their potential benefit and harm.

3.3.5     Endeavouring to confirm that your patient understands what you have said.

3.3.6     Ensuring that patients are informed of the material risks associated with any part of the proposed management plan.

3.3.7     Responding to patients' questions and keeping them informed about their clinical progress.

[ACCC 3.31, pp 62 – 66]

438    It is immediately obvious that these principles are expressed in general terms. They are each capable of accommodating a spectrum of conduct. The Code applied to the AMI and NRM doctors involved in this proceeding, as acknowledged by Dr Berry in Berry Statement 1 [R 13.18, [64]]. The value to the Court of the expert opinions expressed in the evidence was to give a practical content to the general guidelines. As in many professions the boundaries of good conduct are identifiable by practitioners, even if difficult to articulate in the form of a set of concrete rules. The importance of the Code is underscored by the function provided to it by the National Law. At the same time, the foundational nature of the Code to the practice of medicine confers an obvious significance to it in the assessment of the conduct of the doctors in this case.

439    The way in which the general obligations of the Code translate into the proper way of treating ED and PE is demonstrated in the explanation of treatment provided by Dr Pattison in Pattison Report 1.

440    In common with medical treatment generally, Dr Pattison explained that there are five recognised steps in the treatment of ED and PE, namely, history, medical examination, diagnosis, treatment and follow-up.

441    ED and PE must be viewed separately because they raise different issues at each step. Dr Pattison defined each condition and then described what constituted reasonable professional conduct at each step.

442    ED, Dr Pattison said, can be defined as the inability to achieve an erection of sufficient rigidity for satisfactory sexual activity and intercourse.

443    Taking a history involves identifying the problems. For ED the doctor must make enquiries such as:

What has the patient or client actually noticed? Is the problem actually ED? Is it present all the time? Is he having difficulty achieving an erection or is it subsiding during intercourse? How long has the ED been present? Did the ED appear suddenly or has it gradually evolved? How severe is the condition? Does it make it impossible for him to have satisfactory sex? What impact is the ED having on him and his sexual partner(s)? Is he able to achieve a satisfactory erection with self-stimulation? Is he having early morning erections as previously? Are there any relationship issues that could be contributing to the ED? Are there any major stresses at work or at home? What is the state of his general health? Is he a smoker or does he drink alcohol to excess? Has he ever been treated for ED before? Has he ever had treatment for any prostate problems? Are there any co-existent health problems such as hypertension, diabetes or heart disease? What medications is he taking? What about other drugs eg over-the-counter medications from the chemist?

[ACCC 3.28, p 19]

444    Dr Pattison said that a proper medical examination is essential in assessing a patient with ED. He said:

A brief general examination should be undertaken with calculation of weight, waist circumference or other measure of obesity such as BMI (Body Mass Index). The arterial circulation and peripheral pulses should be checked. The genitalia (penis and testicles) should also be examined and a DRE (digital rectal examination) and prostate check might also be performed, particularly in men over 40 years.

[ACCC 3.28, p 20]

445    For ED, Dr Pattinson said that investigation should include a fasting blood sugar test to exclude diabetes, and a fasting cholesterol test to exclude underlying elevated cholesterol, a risk factor for arterial vascular disease. Other tests on the same blood sample might be done to test liver function, kidney function, thyroid function, a full blood examination, and a prostate specific antigen test for men over 40 – 50 to exclude prostate cancer.

446    As to treatment for ED, lifestyle changes to address risk factors such as being overweight, excessive consumption of alcohol, and stress can be discussed. Psychological counselling should also be considered. But it is unlikely that these measures alone would successfully treat ED without medication. First-line treatment with PDE5 inhibitors, Viagra, Levitra, and Cialis, have been discussed earlier in these reasons. Dr Pattison then addressed second-line treatment by vacuum devices and constriction rings, third-line treatment by self-administered intracavernosal injection with vasoactive agents, and fourth-line treatment by surgery. How each treatment works and the side effects should be discussed with the patient.

447    Finally, Dr Pattison said there should be a follow-up review to discuss the patient’s response to treatment. A review of about a month after prescribing a PDE5 inhibitor is fairly standard.

448    Dr Pattison defined PE as ejaculation that occurs within one minute or so of the penis being inserted into the vagina. The time from the penis being inserted into the vagina until ejaculation is called the intra-vaginal ejaculatory latency time or IELT. However, its significance depends on the degree of distress it causes to one or both partners. Dr Pattison referred to the American Urology Association, which now recommends that PE be diagnosed on the man’s reported reduced control of ejaculation, in association with patient and partner dissatisfaction and also the reduced IELT [ACCC 3.28, p 25].

449    The world range of average IELT times is three to seven minutes. Dr Pattison said:

[T]here are limitations in defining PE with a stopwatch approach. Some couples are quite content with ejaculation occurring after 1-2 minutes. Other couples might not be satisfied if ejaculation occurs after 4-5 minutes. In general terms however an IELT of less than 1 or 2 minutes can be quite distressing for one or both partners. The American Urology Association now recommends that PE be diagnosed on the man's reported reduced control of ejaculation in association with patient and partner dissatisfaction and also the reduced IELT. According to these criteria PE affects 25-30% of men, with about 5-10% men having the more severe form of PE.

PE can be diagnosed on a subjective basis in the grey areas between obvious PE and obvious normality. For instance a man who ejaculates after 30 seconds has PE and both he and his partner are likely to be distressed by the situation. A man who ejaculates within 2-3 minutes may or may not be concerned. However if the condition is distressing him and his partner it is worthy of treatment. On the other hand, if a man ejaculates after 10 minutes of penetrative sex he clearly does not have PE, regardless of whether he or his partner would prefer a longer time for ejaculation to occur.

PE can be classified as primary PE when the patient has had this problem all his life and secondary or acquired PE when the patient was previously able to control ejaculation. Men with primary PE tend to be younger and might present in their twenties. Secondary PE is commonly associated with ED and sometimes it can difficult to clarify whether the patient has PE, ED or both conditions together.

[Emphasis added.]

[ACCC 3.28, p 25]

450    There were differences between the definition of PE adopted by Dr Pattison and the definition adopted by AMI and NRM doctors. In Berry Statement 2, Dr Berry set out the definition of PE which she provided to patients. She said in relation to her consultation with Annexure B patient 27:

126.    I believe that this is an effective way in which to efficiently and appropriately diagnose a patient:

“Defining premature ejaculation is coming before you want to and usually entailing you needing to withdraw, think of England, or change position in order to maintain the time of your performance”...

127.     Rather than characterising PE solely by reference to a period of time, I consider that a more useful (and widely accepted) way in which to define PE is by reference to “ejaculation that occurs sooner than desired, either before or shortly after penetration, causing distress to either one or both partners.”

    

    [Emphasis added.]

[R 13.32, p 26]

451    In Pattison Report 5, Dr Pattison commented on the definition of PE adopted by Dr Berry, which was also the definition adopted by the American Urological Association in the AUA Guideline 2004. Dr Pattison said:

9.     At paragraph 126 Dr Berry says that she tells patients that "premature ejaculation is coming before you want to." There are risks in conveying this definition to patients. Some men have the notion that the normal time between penetration and ejaculation might be 10-15 minutes or longer, as popularized by the media and erotic movies. Considerable worldwide research has been done to get a clearer assessment of what is a normal time between vaginal penetration and ejaculation. As stated in my earlier reports, the range of intravaginal ejaculatory latency times (IELT) in various world studies is between 3-7 minutes, with a median time of about 5.4 minutes. Although there are limitations in defining PE with a stopwatch approach, in general terms an ejaculation time of less than 1 minute can be regarded as PE, less than 2 minutes is possible PE, and beyond that is probably normal. Some men may prefer not to ejaculate for 15 minutes but that would hardly constitute PE and it would not be appropriate to treat these patients with medication. If one relied solely on the patient self-report of "coming before you want to" many more patients would be treated with medications than would be appropriate. In paragraph 127 Dr Berry states that a more useful definition of PE is "ejaculation that occurs sooner than desired, either before or shortly after penetration, causing distress to either one or both partners." This is the position statement of the American Urological Society [the AUA Guideline 2004]. I would accept this definition as long as "ejaculation before or shortly after penetration" is understood to mean ejaculation that occurs prior to, or within 1 minute of penetration.

    

[Emphasis added.]

[ACCC 3.46, p 14]

452    In cross-examination, Dr Pattison explained that there are disagreements about the definition of PE in the medical community. And he explained his preference for the definition of PE involving a temporal aspect as follows:

MR GREEN     But here there are two elements. There is the shortly after, which is a vague chronological or time judged element, but then there’s the additional causing distress to either, so it means that as a qualifying element, there has to be not only the time element but also some judgment by the parties about the affect [sic] on them?

DR PATTISON:    Yes. Consideration needs to be given to that, although in the papers that we discussed yesterday, people weren’t even talking about medication in cases that went beyond three minutes, for instance. I mean, I’ve had people coming to see me and say that they’ve got premature ejaculation and then they will state that they ejaculate after minutes and I think we need to be very wary about accepting that premature ejaculation is ejaculation that occurs sooner than desired.

MR GREEN:    But doctor, what I’m putting to you is that a body of experts has promulgated a definition. It may be in dispute with you. You certainly don’t agree with it?

DR PATTISON:    No, I don’t agree with it.

MR GREEN:    Yes. And doctor, the reason that there is a dispute in the literature is, is it not, that without a stop watch or some sort of formal measure of timing, it is hard to compare clinical studies and it’s hard to compare the efficacy of different kinds of medication?

DR PATTISON:    No.

MR GREEN:    Do you accept that?

DR PATTISON:    No, I don’t believe that. No. I think that when you ask a patient, do you – give me an idea of the time that you might – most people would say, well, pretty quickly or sometimes I’m not even to manage penetration. Then a starting point is to say, well, is it – would it be a minute and people will say, much less than that. Well then you’ve cut to the chase already and you know where you are but if somebody says, well, it could be five, it could be 10 minutes, it could be longer, then to me the likelihood is that we’re not dealing with premature ejaculation and I take except [sic] to that. In fact, as I said, I was at the meeting where Waldinger disputed this and it went on for quite some time and now, this is the difficulty we have and we haven’t even got agreement on definitions. That’s the whole point. We don’t have agreement and that makes the discussion rather difficult.

HIS HONOUR:     I think what Mr Green is trying to explore is the reason why you prefer, or why it is preferred in the trade, the stop watch definition as distinct from this one?

DR PATTISON: Well, I think it’s because you can at least put a figure on something. You can get some measure and even at that first consultation or the second consultation after we’ve had the discussion with a patient, we will get a better idea of what we’re talking about. Patient satisfaction; I find that – and partner satisfaction. I find that that’s fraught with difficulties because, as I said, it will increase depending upon which ..... you’re looking at; the incidence of premature ejaculation up to 40 per cent.

MR GREEN:    But doesn’t that, doctor, reflect the premise of medicine that you’re endeavouring to assist a patient, if you’re able to assist a patient in attending to a condition which they feel they have?

DR PATTISON: Quite frankly, Mr Green, most of the time when I’m talking to patients - people will actually come and they may say, look, I’ve got premature ejaculation and we have a discussion and it turns out that it’s 10 minutes. Often times a person is just totally relieved when I say that’s pretty normal, so reassurance can sometimes be – and quite frequently, when patients come to see me, particularly, some distressed young man with PE, I may just reassure them and send them on their way without any consideration of medication at all, so it’s a very disputed area.

    

[TS 1120]

453    The difference in the views of Dr Pattison and Dr Berry is reflected in some of the assessments made by Dr Pattison that particular patients who reported an IELT of more than two minutes may not have PE. The existence of the differing views at the least required the AMI and NRM doctors to consider the significance of a patient’s IELT.

454    PE is likely to be seen in younger patients and to have a degree of associated anxiety either as contributing to the problem or as a result of the PE.

455    In taking the history of a PE patient questions such as the following should be asked:

What has the patient or client noticed? Is the problem actually PE or is it within the realms of normal? Is there any associated ED? Approximately how long after insertion of the penis does ejaculation occur? When was the PE first noticed? Did it appear suddenly or has it gradually evolved? Have there been any previous sexual relationships? Was the PE a problem in those relationships? Does the PE cause the patient or partner any distress? Are there any pressures within the relationship? Are there any fertility problems? What is the state of his general health? Are there any psychological issues such as anxiety or depression? Are there any religious or cultural beliefs contributing to the problem?

[ACCC 3.28, p 26]

456    Dr Pattison then explained that:

A brief general examination is required and then a genitourinary check with examination of the penis and testicles.

Usually there is no abnormality to find clinically.

A digital rectal examination and prostate check might also be performed, particularly in cases of secondary PE.

As part of this general assessment, a brief evaluation of the patient's mood and mental state can be made by simple observation and engaging him in conversation.

This is quite relevant if a prescription for medication is likely to be required.

[ACCC 3.28, p 26]

457    Dr Pattison said that for PE few investigations are required. Some basic investigation should be arranged for secondary PE, or if ED is also present.

458    The appropriate treatment will depend on whether the condition is primary or secondary PE. In the mid-20th century, secondary PE was regarded as a purely psychological problem. Dr Pattison was of the opinion that nowadays:

PE can be regarded as a physical or physiological problem but one where there is frequently a strong psychological component, either contributing to the condition or resulting from it.

[ACCC 3.28, p 25]

Thus, it is recognised that there is a significant physiological element of learned behaviour. As discussed earlier in these reasons, SSRIs are the first-line and mainstay of treatment for primary PE. Although the treatment of PE can simply involve counselling, most men with primary PE require ongoing treatment with an SSRI. Secondary PE can be helped with counselling and behavioural techniques, without the need for medication. As a result, Dr Pattison was of the view that doctors should not limit the treatments for PE to pharmaceutical treatments. Focusing on the same issue, but with an emphasis applicable from his own speciality, Dr Walton said in his statement that “a thorough psychological assessment is required because many of the sexual dysfunctions are psychological in origin and therefore command psychological treatment rather than medication” [ACCC 3.35, p 15].

459    Finally, a follow-up is an essential part of the treatment for PE.

4.5.4.4    Diagnosis of the underlying causes and referral of patients to specialists or other doctors for diagnosis or treatment

4.5.4.4.1    The standard of treatment required

460    The proper treatment of ED or PE in the manner described by Dr Pattison required the AMI and NRM doctors to take a patient’s history and investigate the cause of the presenting condition.

461    Dr McRae held the same view. He said there was:

[A] requirement and expectation for the medical practitioner to determine the root cause of any presenting symptom, rather than dealing with the symptom per se itself. This may require additional investigations for an organic cause of a symptom, or assessment for a psychological component of illness.

It is my opinion that it is difficult to contemplate a circumstance when it would be appropriate for a medical practitioner to conduct a medical consultation (whether telephone based or face-to-face, or the first consultation or a subsequent consultation) with a patient on the basis that the medical practitioner will not seek to diagnose and treat (or refer for diagnosis or treatment) any underlying cause for the presenting condition. Should this set of circumstances arise, it is my opinion that the medical practitioner ought to state this to the patient and ensure that the patient comprehended that that set of circumstances is the basis of the consultation.

[ACCC 3.31, p 43]

462    Relying on these views, the ACCC contended that the AMI and NRM doctors were bound by a professional standard to diagnose and treat the underlying causes of ED or PE for which they were consulted. The ACCC contended that even if this were not so, the doctors were bound to determine whether to refer patients to a specialist or to another doctor for those causes or other presenting conditions of which they became aware.

463    The need to diagnose the underlying cause of the condition is especially important in the treatment of ED because, as was accepted by all parties, ED is often associated with cardiovascular disease and diabetes.

464    Thus, Dr Vaisman gave evidence as follows:

MR BURNSIDE:     Yes. And you’re aware that erectile dysfunction and cardiovascular disease and coronary artery disease, for that matter, are associated with erectile dysfunction?

DR VAISMAN:     Correct.

MR BURNSIDE:     And erectile dysfunction can be an early marker of those other conditions?

DR VAISMAN:     Correct.

MR BURNSIDE:     Which makes it important, doesn’t it, for people with ED to be diagnosed to see whether they might have cardiovascular disease?

DR VAISMAN:     Correct.

[TS 1716]

465    Dr Vaisman’s evidence in this respect was consistent with numerous scientific articles on which he relied as relevant to various issues in the case. On the present issue the relevant articles span the period from 1988 until 2010. For instance, in Fazio and Brock 2004, the authors wrote:

The most important component of diagnosing erectile dysfunction is obtaining a complete medical and sexual history. … Concurrent medical illnesses and any medications the patient may be taking should be reviewed. Erectile dysfunction is often a component of generalized medical illness and may represent the initial presentation of cardiovascular disease or diabetes. The history may also reveal certain reversible or modifiable risk factors, such as tobacco use or inadequate diabetes control.

[R 13.3, p 92]

See also: Montorsi and others “Can Phosphodiesterase Type 5 Inhibitors Cure Erectile Dysfunction?” (2006) 29 European Urology 979 (Montorsi 2006) [R13.5, p 33]; and Montorsi 2010 [R 1.1, p 3575].

466    In 1998, Dr Ridwan Shabsigh and others wrote an article entitled, “Evaluation of erectile impotence” (1998) 32(2) Journal of Urology 83 [R 1.3, p 261], in which they estimated that 50 per cent of ED cases had an organic origin, namely, diabetes, vascular disease, radical surgery, trauma, endocrine disease, multiple sclerosis, alcoholism, medications or renal failure.

467    In Hackett 2002, the author wrote:

A number of studies have clearly demonstrated an association between ischemic heart disease (IHD) and ED, and the likelihood that a newly presenting ED patient has undiagnosed IHD has been estimated at 40%.

[R 13.2, p 39]

468    Professor Currie also gave evidence of the correlation between ED and cardiovascular disease, but said that much evidence of the strength of the connection had arisen since 2009 [R13.39, p 7].

469    Dr Condoleon also agreed that ED is associated with cardiovascular disease.

470    Viewed as a whole, this evidence should be taken to support the conclusion that prior to 2009, and throughout the AMI period, the correlation between ED and cardiovascular disease was well known and a doctor treating a patient for ED should investigate whether there is an underlying cardiovascular disease.

471    In relation to PE, Dr Pattison said that PE has a strong psychological component which either contributes to the condition or results from it. His opinion was that counselling could be used as a treatment for secondary PE, and, in combination with medication, for primary PE. Although Dr Pattison said that there were few co-morbidities in relation to PE, he suggested that there may be prostate problems involved when a patient presented with PE [TS 2162].

472    The respondents’ case was that notwithstanding the link between ED and PE and other conditions, the AMI and NRM doctors did not have any professional responsibility to treat the underlying causes of the ED or PE. They had a limited role, namely, to ensure that it was safe to treat ED or PE for that patient with the AMI and NRM medications. It was for the patient’s GP or other specialists to treat the underlying causes and any other associated conditions.

473    Dr Berry explained her position in cross-examination thus:

MR BURNSIDE:     Yes. But let’s deal with the often is associated with other conditions which AMI doesn’t treat. You would agree that cardiovascular problems generally are a comorbid condition seen with erectile dysfunction in a number of instances?

DR BERRY:     Yes.

MR BURNSIDE:     And so if a person presents with, for example, erectile dysfunction, obesity and smoking, it’s a fair bet they might also have cardiovascular problems?

DR BERRY:     Yes.

MR BURNSIDE:     They might also be diabetic?

DR BERRY:     Yes.

MR BURNSIDE:    And you’re not going to be doing anything to help their cardiovascular problem?

DR BERRY:     No.

MR BURNSIDE:    No. Or their diabetes?

DR BERRY:    No. But those patients are being – I would be recommending to see their doctor.

MR BURNSIDE:    Yes. Okay. And it would be poor practice on your part not to recommend that they see their doctor?

DR BERRY:    Yes.

[TS 2410]

474    And addressing a slightly different question in cross-examination she elaborated on her role in the following way:

MR BURNSIDE:    … Has it ever occurred to you that any of the patients who you’ve consulted on the telephone might have other medical problems which you’re not detecting and not treating?

DR BERRY:    My main purpose in my consultation is to make sure that I’m safely prescribing and supporting a patient for what they’ve been – for what they’re ringing me to see. I’m not doing a general medical consult. As long as their condition is appropriate to be treated medically, according to what I’m doing, I do not have a problem with that. I’m not treating them for their full medical profile. I’m not a general practitioner.

MR BURNSIDE:    All right. And it’s not your purpose, then, to warn them that they may have other medical problems which you will not be dealing with?

DR BERRY:    No.

[TS 2396]

475     Emphasising that she was not responsible for treating underlying causes or other presenting conditions, Dr Berry responded in cross-examination as follows:

MR BURNSIDE:    And, of course, as a doctor, if you saw a patient and realised that they had a condition which – or might have a condition which you were not proposing to treat – you would tell them to have it looked at by their GP?

DR BERRY:    Yes.

MR BURNSIDE:    And that way the risk of that condition is reduced, if they do, in fact, get it looked at by their GP?

DR BERRY:    Yes. That’s not actually the role that I’m playing. But, yes, that’s correct. That’s what GPs do.

[TS 2456]

476    Dr Condoleon explained his view in cross-examination as follows:

MR BURNSIDE:    And if those two things [being overweight and having a florid complexion] together presenting with ED come to you then you would think it’s at least possible that they have an underlying cardiovascular condition?

DR CONDOLEON:    Well, it’s up to their GP to determine whether they have cardiovascular disease. That’s not my ---

MR BURNSIDE:    Yes?

DR CONDOLEON:    It’s in the same way if a person went to see a dermatologist or a – you know, a – any other sort of doctor, they – it’s the GPs domain to look after the – the weight and the health of their patient and give advice about that.

[TS 2266 - 2267]

477    Later, Dr Condoleon elaborated in cross-examination thus:

MR BURNSIDE:    If a patient came to you and he presented a seriously overweight, a heavy smoker, with a blood pressure of 220 over 150, would you think it desirable to suggest that he see a GP about other possible conditions?

DR CONDOLEON:    Absolutely, yes. Absolutely, yes.

MR BURNSIDE:    And would you agree that it would be bad medical practice to overlook the real likelihood of other conditions which you’re not going to treat?

DR CONDOLEON:    Some patients come in, we pick up if they’ve got medical conditions

MR BURNSIDE:    Can you listen to the question? Would you agree it would be bad medical practice not to pay attention to the other conditions which you are not going to treat?

DR CONDOLEON:    Yes. Yes, definitely, we pay – or I pay attention to the other medical conditions

MR BURNSIDE:    And it would be bad medical practice ---?

DR CONDOLEON:    --- and often as a consequence

MR BURNSIDE:    Would be bad medical practice ---?

DR CONDOLEON:    --- I don’t prescribe the medication. Sorry?

MR BURNSIDE:    It would be bad medical practice not to tell the person to see their GP about what you suspect might lie beneath the surface?

DR CONDOLEON:    There are certainly patients that I don’t prescribe medication to, that I tell to go and see their GP, because there’s concerns in their history that I think need to be dealt with, yes.

MR BURNSIDE:    Yes. And when you say “concerns in the history”, that includes concerns that come about from obesity or high blood pressure?

DR CONDOLEON:    Obesity is very, very low in the scheme of things, and – and so is blood pressure. It’s more to do with other medications that they’re on, or whether they’re – there’s complications, or they’ve got an infection, or whether they’ve got – some people come in and then they report they’ve got, you know, pain or they’ve got bleeding or they’ve got some other medical condition that I think warrants attention before they would consider sexual treatment. But being overweight is not as – is not a major issue in any sense.

MR BURNSIDE:    It may not mean that you can’t prescribe, but it may indicate an underlying condition which you’re not going to treat, do you agree – do you agree?

DR CONDOLEON:    Well, that’s what – that would be for the – that would be for the GP – the person has obviously seen their GP at some time, and they’ve been identified as being overweight, and there’s, you know, it’s not something that’s not apparent to a GP, and it’s up to the GP whether they do something about it.

MR BURNSIDE:    Yes. Now, you say the person has seen their GP, but you don’t know that unless you ask them, do you?

DR CONDOLEON:    Yes, we generally, it’s part of the form, is the last – when they’ve seen a GP, or, you know, if they’re on prescriptions. If they’re on medications, then they’ve obviously seen their GP recently, because how do you get a prescription?

[TS 2282]

478    On the nature of his role, Dr Goyer responded in cross-examination in the following way:

MS NICHOLS:    And is it correct that your role at AMI is not to diagnose any comorbid diseases or to treat?

DR GOYER:    It’s not that we’re not to diagnose them so much, Ms Nichols. It’s more that we’re not there to treat their heart problems or high blood pressure.

MS NICHOLS:    Well, it’s not your role at AMI as you conceive it to completely – to do any form of diagnosis that can’t be done over the telephone?

DR GOYER:    No. That’s not quite correct. We ask – it’s a very specialised area of practice, Ms Nichols. I mean, if you go to see an orthopaedic surgeon, he’s not going to ask you about your worst childhood memory, you know. Medicine is specialised, and we ask questions which are salient specifically for sexual dysfunction. Now, given that information that we get there are a lot of people given the fact that they do have comorbidities who are not appropriate for treatment, and they are referred back to specialists and GPs.

MS NICHOLS:        So you don’t treat them if they’re not appropriate to be treated?

DR GOYER:    Correct.

MS NICHOLS:    But it’s not your role at AMI, is it, to fully diagnose any comorbid diseases?

DR GOYER:    Not to fully diagnose, but to refer back to specialists and GPs who will take care of that, yes.

[TS 2337]

479    Even though the AMI and NRM doctors who gave evidence did not regard it as their responsibility to diagnose or treat underlying causes or other presenting conditions, Dr Berry said that she referred patients to a GP in certain circumstances. In Berry Statement 1, she said:

28.    When I conduct patient histories and assessments, if I become aware of a condition that is not within the remit of AMI, I advise patients to consult their general practitioner.

30.    During the consultations I have provided to patients while at AMI, I have always asked patients how long it has been since they last saw their doctor for a general check-up. If a patient has not had a general check-up in the last 12 months then, depending upon their medical history, medical condition, and age, I may require that they see their doctor for a physical consultation before I prescribe any medication.

31.     If a patient has not seen their doctor for a general check-up in the last 12 months and they have a history of alcohol abuse, smoking, obesity or mental illness, then I frequently require that they see their doctor for a physical consultation before I am prepared to prescribe any medication.

[ACCC 3.45, pp 13-14]

480    In her oral evidence she corrected [30] of her first statement by adding the words “intended to” after the word “always” in the first sentence. It is likely that the correction became necessary in view of the evidence of the recordings which Dr Berry had not heard when she made her first statement. The recordings demonstrated that it was not Dr Berry’s invariable practice to ask patients how long it had been since their last check-up.

481    In the end it was the respondent’s evidence from Professor Currie which established that it was, at least, necessary for the AMI and NRM doctors to advise patients if the doctors detected symptoms of underlying causes or presenting conditions. Professor Currie gave the following evidence in cross-examination:

MR BURNSIDE:    … But if you’re not going to treat it and you recognise it may be there, the very least you should do is say, “There’s a risk, and you should see a doctor”?

DR CURRIE:    Yes.

MR BURNSIDE:    And it would be bad practice not to say that?

DR CURRIE:    It would be – again, I don’t say that it would be bad practice. That’s your phrasing not my phrasing.

MR BURNSIDE:    Because the patient otherwise may not be aware at all that they’ve got a condition that could be dangerous?

DR CURRIE:    Yes. And that is – exactly – and that is something which, as I’ve said in my second report, is suboptimal, but the concept that it is bad practice is not what I’ve said.

[TS 2596]

482    Professor Currie’s reference to his second report concerns his assessment in Currie Report 2 after reviewing the recordings of 28 patient consultations that, “some of the patient case transcripts certainly illustrate several areas of Dr Berry’s clinical practice, as it was undertaken in 2009, that were less than optimal and could be (and may now have been) improved” [R13.39, p 7]. Professor Currie said that, “current practice now would warrant the association of erectile dysfunction and cardiovascular risk being discusses [sic] with patients and advice given as to further referral or investigation” [R13.39, p 7]. Professor Currie based the requirement for current practice on the scientific literature which has been published since 2009. However, in view of his explanation in cross-examination that the link between ED and cardiovascular disease was well known before 2009, and the common ground in all the other evidence that this was so, the responsibility to advise patients on the link and to refer them to their GP, which Professor Currie articulated, applied throughout the AMI and NRM periods.

483    The view expressed by Dr Vandeleur of the obligations of the consulting doctors is also revealing. He described his practice during the consultations for AMI in the response he provided to the ACCC following service on him of the notice under s 155 of the TPA as follows:

If I was unable to provide, over the telephone, the care required by the patient, I advised the patient to consult a treating doctor (a general practitioner or a specialist not associated with AMI or its treatments, depending upon the situation) for further assessment and management.

I might use the example of patients who presented with ED and who had a medical history and/or symptomatology suggestive of significant cardiovascular disease. In cases like this, I felt that a history taken via telephone consultation would not be sufficient to ascertain the patient's cardiovascular status and that it would, therefore, be unsafe to prescribe any form of treatment which might put undue strain on the heart. In cases like this I explained to the patient why it would be unsafe for me to prescribe treatment based on his medical history and advised him to consult his treating doctor, usually a cardiologist, for further assessment.

Another common example was patients presenting with PE who had a history of epilepsy or was currently taking antidepressants. In both these instances the use of seretonergic [sic] medications (which are the standard treatment for PE) would generally be contraindicated. In such a case I advised the patient to consult a treating doctor, usually a specialist such as a psychiatrist or neurologist, for further assessment and treatment.

[ACCC 1.39, p 106 – 107]

484    These practices reflect what Dr Vandeleur regarded as the proper approach to be taken.

485    The obligation of doctors laid down by the Code “to make the care of patients their first concern” and to refer a patient to another practitioner when this is in the patient’s interest confirm the views of Dr Pattison, Dr McRae, Dr Vaisman, Professor Currie and Dr Vandeleur that the doctors had a duty to diagnose underlying causes of ED and PE or refer a patient to a specialist or a GP for diagnosis or treatment of those and other presenting conditions. The evidence of Dr Berry, Dr Condoleon, and Dr Goyer, to the extent to which it denied such a duty, should not be accepted.

4.5.4.4.2    The failure to diagnose underlying causes of ED and PE

486    The next issue is to examine how the AMI doctors actually discharged this responsibility concerning underlying causes in the consultations with Annexure B patients. The comments made in this section apply equally to the consultations with Annexure C patients by the same doctors who were then engaged by NRM, although transcripts of those recordings were not available. Those consultations are specifically discussed at [783] – [836] of these reasons for judgment.

487    The task is formidable because of the volume of material which constitutes the record of the 168 consultations put forward in the proceeding. It is also formidable because of the variety of circumstances which are presented in the consultations, and the divergences in approach among the 13 doctors involved.

488    The task was made easier by the assistance provided by the experts and in particular, by the detailed critique of 44 consultations by Dr McRae, and of 24 of those consultations by Dr Pattison. The detailed critiques allowed Dr Berry, Dr Condoleon, and Dr Goyer to respond by explaining their approaches in detail, and by reference to actual consultations.

489    Whilst the existence of the recordings allowed an unusual opportunity to assess both the content and the nuances in expression and approach of the doctors in the consultations, there was valuable independent expert input from Dr McRae and Dr Pattison arising from their experience in the practice of conducting consultations with patients. Professor Currie’s reports did not descend into the detail of each consultation and did not directly respond to the detailed, consultation-specific criticisms made by Dr McRae and Dr Pattison. As a result there was no independent assessment provided to the Court of the quality of the 168 consultations from the point of view of the respondents.

490    Throughout the course of the management of the pre-trial phases of the proceeding, and during the trial, I asked the parties to limit the number of consultations under review to a manageable selection. Despite those efforts, the parties were not able to propose some reduced number of examples to make their points. The ACCC provided the aide memoire, which selected passages from the transcript of each consultation with AMI patients relevant to a specified deficiency in the consultation and upon which it relied to establish its case of unconscionability. By organising the records of the consultations in this way the ACCC sought to assist the Court by confining the exercise of reviewing the consultations to the material in the aide memoire. Whilst the aide memoire was a useful document, it had some limitations because the selection of what was relevant to the assessment of a deficiency in a consultation is a matter of judgment. In some important areas the judgment adopted in the aide memoire was open to contention. Thus, for instance, there were a number of cases in which the aide memoire correctly stated that the doctor did not refer a patient to a GP for treatment of an underlying cause. However, the aide memoire did not reveal that the patient had indicated in the course of the consultation that he had already seen a GP for that condition or for relevant tests.

491    The scope and pattern of history taking and the style by which it was taken in the 152 consultations with Annexure B patients varied to some degree between different doctors. On the other hand, there was a high degree of uniformity in the way each doctor went about history taking in all of the consultations in which that doctor was involved. That was particularly evident in respect of doctors involved in larger numbers of the selected consultations such as Dr Lonergan and Dr Berry who were respectively involved in 51 and 32 consultations of the 168 put forward in the proceeding. The same trends were not discernible in respect of doctors involved in only a few selected consultations, such as Dr Chan and Dr Balafas who were involved in three and two consultations respectively. Where the volume of consultations disclosed a pattern, particularly from the records of the AMI period, there was a greater assurance that the particular consultation was not just one bad example.

492    The overwhelming impression gained from an examination of the records of the doctor consultations during the AMI period was the brevity and limited nature of the history taking.

493    An extraordinary example is the consultation of patient 46 with Dr Daood. The patient sought treatment for PE. The only information provided by the salesperson to Dr Daood was the patient’s name, date of birth, and that the patient sought treatment for PE. The patient was 45 years old. Dr Daood did not enquire into the nature of the problem, but went directly to the patient’s medical history. That took about 45 seconds before Dr Daood prescribed an unnamed nasal spray. The transcript of the history taking reveals the following:

DR DAOOD:    Yeah. Hi, how are you?

PATIENT:     Good, thank you.

DR DAOOD:     So, yeah, you have that problem for a while now, huh?

PATIENT:     Yeah, yeah.

DR DAOOD:     Okay. And have you tried any medication before or first time?

PATIENT:     I tried before.

DR DAOOD:     Mm.

PATIENT:     Yeah, but not long time.

DR DAOOD:     Mm.

PATIENT:     But for a short time.

DR DAOOD:     Short time. What's your health like? Do you have any health problems?

PATIENT:     I don't have any health problem.

DR DAOOD:     So you don't take any medication for any reason?

PATIENT:     No, no.

DR DAOOD:     No. And, okay, we give you some spray you put in the nose about

            half an hour before, two / three times a week.

[ACCC 4.289, pp 5 - 6]

494    It is noteworthy that the patient volunteered that he had tried medication. The doctor did not follow up this lead to ask what medication and whether it was successful.

495    In straightforward PE cases, Dr Berry typically commenced the consultation by establishing the problem. She then ran through a series of questions taking a history of illnesses or conditions for about one minute before agreeing to prescribe an AMI medication immediately afterwards. This process is seen, for example, in consultations with patient 47 and patient 133. The consultation with patient 94 was another PE patient consultation by Dr Berry, but the history taking took slightly longer. Dr Chan took just over two minutes with patient 6 and Dr De Sayrah took about two minutes with patient 22.

496    In ED cases the history taking tended to take longer. Dr Vandeleur took two minutes to obtain the medical history of 45-year-old ED patient 28 before prescribing medication. Dr Berry spent about three minutes taking a medical history before prescribing medication for ED patient 138, but spent about four minutes taking a medical history before prescribing medication to patient 110, a 43-year-old complex ED and PE patient.

497    The method of questioning by doctors was revealing. Not only were the medical histories taken in a short time, but some of the doctors left it to the patient to volunteer their history by asking general, open-ended questions. Thus, Dr Daood asked patient 45, “Do you have any health problems?” Dr Chan enquired about illnesses and conditions by asking the question “are you physically fit?” The consultation with PE patient 6 is an example, and the consultation with ED patient 16 is a similar example. Whilst Dr Chan followed up with more focused questions, the open-ended question was criticised by Dr McRae as an inadequate method for history taking. That is presumably because it does not focus on issues relevant to the particular situation. It supports the argument that the consultation was just going through the motions.

498    Dr Vandeleur asked two open-ended questions of patient 28, “Do you have any medical conditions at all?” and “You don’t have any abnormalities of the penis, do you, like bending or scarring or Peyronie’s disease?” He then asked whether the patient was a smoker. The only other medical questions asked by Dr Vandeleur related to the prescription of the AMI medications, such as whether the patient had allergies or intolerances.

499    Other doctors asked questions about a number of specific conditions. Thus, Dr De Sayrah asked PE patient 22 about prostate, thyroid, eye conditions, asthma, diabetes, epilepsy, blood pressure, heart problems, liver or kidney problems and hepatitis. She asked these questions in short phrases allowing the patient to consider several illnesses and to respond to each group separately. However, some other doctors strung together half a dozen conditions with no connection to each other and asked a number of questions in a series. Thus, an example is when Dr Omar asked PE patient 116, “Do you have any problem with the cholesterol, blood pressure, heart, lung, liver, kidney?” On the other hand Dr Lonergan made enquiries about a large number of conditions and asked about one or two at a time, allowing the patient time to respond to each question. Then, he asked whether the patient could think of any he had missed. Examples of Dr Lonergan’s approach are seen in ED patients 21 and 85.

500    In more than a few cases, enquiries which would be relevant to establishing underlying diseases were omitted. For instance, height and weight are relevant to risk factors for diseases underlying or related to ED, yet these matters were not obtained by Dr De Sayrah in consultation with ED patient 15. And Dr Vandeleur did not establish the height and weight of 45-year-old ED patient 28. Similarly in the case of PE patient 63 in a consultation with Dr Berry.

501    Then there were instances where patients raised issues which pointed to an underlying cause, but which the doctor did not pursue. Rather, the doctor moved on to prescribe an AMI medication. One example is 36-year-old ED patient 113 who also had secondary PE. When asked by Dr Goyer what was his primary problem he replied, “it’s actually more of an anxiety thing”. In his second report Dr McRae said of the consultation that Dr Goyer:

[F]ails to pursue psychiatric history of symptoms or potential treatments. It is my opinion that it would be good medical practice to further explore the possibility of psychiatric illness and possibly seek appropriate psychological or psychiatric assistance prior to commencing a line of treatment that is known to effect brain function.

[ACCC 3.32, p 321.1]

502    Dr McRae expressed the same view in relation to the consultation for PE with patient 151 by Dr Quinney. When asked about the problem, the patient said, “sometimes it happens, sometimes it doesn’t…I’m not sure if it’s more of a psychological thing” [ACCC 4.261, p 6].

503    ED patient 6 told Dr Lonergan that he woke with erections, and that, “I don’t think it’s physical to a degree.” Dr Lonergan replied, “You see it doesn’t matter why, what it proves is that the physical mechanisms necessary to get an erection… are well intact. So once you know that you, basically, already ruled out any major physical issues.” The doctor did not go on to explore any possible psychological causes of the problem. Then, patient 128 consulted Dr Berry for ED. He was 35 years old with mild ED over the past two to three years. He smoked 20 to 25 cigarettes a day and had a binge drinking habit of drinking 10 or more Red Bull and vodkas on Friday and Saturday nights. Dr Berry prescribed him apomorphine nasal spray and a gel. Dr Pattison would not have prescribed any medication until he had discussed with the patient the effect his heavy cigarette smoking and binge drinking would have on his ED. [ACCC 3.44, p 309]

504    Patient 98 consulted Dr Berry for longstanding PE and more recently developed ED [ACCC 4.376]. He was 38 years old. Dr Berry took his medical history in about one minute and then prescribed medication for PE. In the course of that history taking Dr Berry asked whether the patient had blood pressure problems. He answered in the positive and later indicated the medication he was taking. Dr Berry did not respond to his answer, but kept on with the checklist of medical conditions. Dr McRae suggested that Dr Berry did not register the patient’s answer [ACCC 3.45, p 715]. Dr Pattison said:

This patient is a smoker and has hypertension. Both these conditions can be associated with ED. The possibility of other underlying health problems such as diabetes, vascular disease and coronary artery disease should also be kept in mind.

I feel that this patient requires a detailed history and physical examination. He should also have some basic investigations such as a serum cholesterol and glucose level. Lifestyle issues such as his smoking and alcohol intake need to be addressed. I would probably not prescribe any medication at all until his basic investigations have been completed.

[ACCC 3.44, p 311]

505    In Berry Statement 2, Dr Berry said that she assumed that the patient had been fully assessed by his doctor and would have regular check-ups for re-prescription of his medications, and that the medication for PE would not affect blood pressure [R 13.32, para 217].

506    Patient 63 consulted Dr Berry for PE. Dr Berry asked him five short questions about his medical history and then prescribed clomipramine nasal spray. The patient stopped using the nasal spray within a few weeks as a result of soreness and bleeding. The Patient History Record kept by AMI shows that the patient had nasal surgery in 2008 [ACCC 13]. Dr Berry did not ascertain this when obtaining the medical history. Dr Berry responded in cross-examination in the following terms:

MR BURNSIDE:    Now, would you agree that a person who had had nasal surgery the year before probably shouldn’t be prescribed a nasal spray?

DR BERRY:    Yes.

MR BURNSIDE:    And discovering that they had had nasal surgery would be part of a proper history taking?

DR BERRY:    Yes.

MR BURNSIDE:    Are you aware that this was a patient who dealt with you?

DR BERRY:    Yes, you’ve told me that. Yes. So that was remiss.

MR BURNSIDE:    Do you regard that as a thorough and appropriate medical history?

DR BERRY:    Well, obviously I missed his nasal problem there, but as far as the actual medication goes he probably would be fine with it in an oral form. I’m just sorry I didn’t ask about the nasal approach.

[TS 2441 – 2442]

507    Patient 110 consulted Dr Berry for ED and PE. He was 43 years old, weighed 129 kg, was 194 cm tall, was a long-term smoker of 20 to 30 cigarettes per day, and was pre-diabetic. Before prescribing apomorphine nasal spray for 18 months, Dr Berry informed the patient of the following:

There’s no reason why you can’t use our medication, [Patient], and I seriously think, despite your diabetes, there’s a good chance we can actually turn this around because your figures are really good, because you have got the long term premature there, aggravating, or certainly as a predisposing factor to erection difficulties and you’re 43. So you’re [sic] weight is obviously, you know, not something that’s helping. While you’re working with your diet and getting fit, that’s going to be helping everything as well, okay, and the cigarettes long term won’t be helping either, but there’s no reason why we can’t use this medication and actually turn this around at this point, [Patient].

As I say, the things you’ve got that may make it more difficult is your cigarettes, certainly the alcohol on the nights you drink more, your weight. You know, you are obviously a bit overweight there and the tendency to diabetes… If you work with your fitness, the chances of you getting back to, you know, pre - how you were with this medication are good… with the figures that you’ve given me here today.

[ACCC 4.319, pp 10 -11]

508     The patient did not inform Dr Berry that he was consulting a GP or that he was working on his diet and fitness. Dr McRae noted that Dr Berry was not concerned by the caller’s high body mass index [ACCC 3.45, p 709]. Dr Pattison said that the patient being at least 30 kg overweight, a heavy smoker, and pre-diabetic were all possible underlying causes of his ED. He said that the patient was a high-risk cardiovascular patient whose ED symptoms were likely to get worse, even with optimum treatment. The onset of ED in a patient such as this ought to alert a doctor to the possibility of coronary artery disease. Dr Pattison said that this should have been specifically enquired about and that a number of basic medical investigations ought to have been undertaken before medication was prescribed. He also noted that this was a good opportunity to discuss ongoing lifestyle advice, and that increasing the patient’s fitness should be an important part of his management of ED [ACCC 3.44, p 308].

509    In more than a few instances doctors ignored important factors in the medical history of the patient and prescribed medication regardless. A stark example is the not isolated instances where a patient with PE complained of ejaculating too soon when the IELT was well beyond the normal. The proper diagnosis in such a situation was, according to the ACCC’s experts, to advise that the patient did not suffer PE.

510    Patient 6 consulted Dr Chan for PE. In Pattison Report 2, Dr Pattison expressed the following view about that consultation:

This 30 year old patient presented with the concern that he had PE. In fact, he is probably completely normal. He stated that he usually ejaculates 5-10 minutes after penetration. From data the world over this is in the normal range.

It was quite clear from the history that he was under a great deal of stress comparing his sexual performance to other people who stated that they could last 30-60 minutes. This patient really needed a discussion about what was normal and what was not normal. Reassurance and encouragement might have been all that was required in this particular case.

[ACCC 3.29, p 305]

511    Dr McRae said “[i]t is my opinion that the majority of medical practitioners would deem such a person to not require any intervention, and should be just reassured that he is normal” [ACCC 3.32, p 314].

512    Patient NRM 2 consulted Dr Goyer for PE. He told Dr Goyer that he lasted “generally no more than five minutes”. In Pattison Report 3, Dr Pattison said that:

It is quite possible that this patient does not actually have PE at all. His estimated time to ejaculation was generally less than five minutes. By any accepted criteria for PE this is within the normal range. Interestingly, his girlfriend later reassured him that he was normal and needed no treatment.

[ACCC 3.30, p 82]

513    Finally, although it is accepted that there is often a psychological element in the origin of PE, particularly secondary PE, there is no case which I could find in the 152 Annexure B consultations where that issue was raised and pursued with a suggestion that a patient be treated with counselling or other psychological attention, whether alone or in conjunction with medication.

514    Dr Berry, Dr Condoleon, and Dr Goyer each explained how history taking involves making judgments about what factors should be explored in each case. So the lack of enquiry about a particular matter may be explained by answers given in respect of other matters. For instance, it was not necessary to ask the question whether a person was seeing a GP regularly if the answers to questions about specific conditions such as blood pressure disclosed that the patient was receiving regular treatment. There are examples of such cases in the consultations with patients 6, 15, 16, 85, and 138.

515    A clear picture emerged from an examination of the consultations with the Annexure B patients. The brevity of the consultations, the very short time between history taking and prescribing, the open-ended way of asking questions about medical history, the failure to pursue issues raised by patients relevant to the cause of ED or PE, the omission to obtain relevant details of medical history, and prescribing medication where it was questionable that the patient had PE are all features which appeared very often. Indeed, the brevity of history taking and speed with which medications were prescribed existed in most of the consultations in question.

516    From the evidence of the consultations themselves and the analyses of Dr Pattison and Dr McRae, and taking into account the evidence of Dr Berry, Dr Goyer, and Dr Condoleon, including the impressions they made in the witness box, it should be concluded that the doctor consultations with Annexure B patients were undertaken only for the purpose of determining whether to prescribe medication. Dr McRae came to the conclusion in McRae Report 4 after his review of the 27 consultations of Dr Berry as follows:

I have obtained an overwhelming impression that the arrangement is constructed to ensure a medication that requires a registered medical practitioner's prescription receives sufficient attention to permit the prescription to be written. Much of the process, such as the rapid reading of pre-prepared side-effect profiles leaves the impression of "going through the motions", particularly as it is my view that some of the clinical circumstances are dubious.

[ACCC 3.45, p 693]

517    He reached a similar conclusion in relation to the doctors’ consultations he assessed in McRae Report 2, stating:

My opinion is that the arrangement was to expeditiously overcome the regulatory requirement for prescription of medication by a registered medical practitioner and little else… It is my opinion that there is a standard format for the approach to the management of any caller irrespective of their past history. It involves the same hierarchy of medications provided there is no profound contraindication noted following specific direct questioning seeking their existence, and all recommended medications appear to be able to be provided by the organisation with which the several medical practitioners are associated.

[ACCC 3.32, p 310]

518    The evidence justifies this conclusion. The overriding purpose of the consultations was to prescribe a medication. The enquiries made by the AMI doctors were directed only to whether it was safe to do so.

519    I accept the contention of the ACCC that in 150 of the Annexure B patient consultations, the doctor did not seek to diagnose any underlying cause for the patient’s presenting problem.

4.5.4.4.3    The failure to refer patients to specialists or other doctors for diagnosis or treatment

520    The ACCC also contended that in no Annexure B cases did the doctor seek to determine whether it would be medically appropriate to refer the patient to a specialist or other medical practitioner for diagnosis or treatment of underlying causes or presenting conditions, and in none were they so referred. It may be accurate that no patient was referred to his GP or specialist in so many words. But there are a few examples in which it was unnecessary for the doctor to make the explicit referral because the patient had indicated in the course of the consultation that he had had a regular check-up with his GP.

521    This said, the sense of the ACCC’s contention is accurate for most of the consultations. There were many examples of ED patients presenting with risk factors such as obesity, excessive smoking, excessive drinking, or cardiovascular disease who were prescribed medication without reference by the doctors of the need to seek help from other doctors for important health issues. Further, there were PE patients suitable for psychological or behavioural treatment who were prescribed medication and were not directed to other doctors for that treatment.

4.5.4.5    The failure to warn of side effects

522    The ACCC alleged that the AMI and NRM doctors did not warn patients of the common side effects of the medications prescribed in consultations with 133 of the Annexure B patients and in consultations with 14 of the Annexure C patients. The ACCC alleged that this conduct alone, or in combination with other conduct, amounted to unconscionable conduct. The conduct of the NRM doctors is discussed at [783] – [836] of these reasons for judgment.

523    There was no dispute between the experts Dr Pattison, Dr McRae, and Dr Walton, who were called by the ACCC, and Professor Currie and the AMI and NRM doctors, Dr Berry, Dr Goyer, and Dr Condoleon, who were called by the respondents, that the doctors had a responsibility to warn patients of common side effects of the medications.

524    Dr McRae said that the obligation was reflected in provisions of the Code as follows:

‘Good Medical Practice: A Code of Conduct for Doctors in Australia’ refers to the doctor-patient partnership involving “Encouraging and supporting patients to be well informed about their health and to use this information wisely when they are making [their health] decisions.” It refers to “Informing patients of the nature of, and need for, all aspects of their clinical management, including examination and investigations, and giving them adequate opportunity to question or refuse intervention and treatment.” It states that part of effective communications includes “Discussing with patients their condition and the available management options, including their potential benefit and harm”. It states that part of effective communication includes “Ensuring that patients are informed of the material risks associated with any part of the proposed management plan.” It is my opinion that the expression “material risk” embraces the concept of ‘possible side effects’ and also adverse events, as well as the notion of not being informed of a potentially available treatment option from which the patient may derive benefit. ‘Good Medical Practice: A Code of Conduct for Doctors in Australia’, states that part of effective communication includes "Responding to patient's questions and keeping them informed about their clinical progress.

[ACCC 3.31, p 36]

525    He drew the following conclusions from the provisions of the Code:

Thus, in my opinion, it is not possible to point to a mandatory rule stating something like "You must / are required to discuss with a patient each of the medications that the medical practitioner prescribes for a patient", or "You must/ are required to inform a patient of the possible side effects of any prescribed medication". The entire notion of the doctor-patient relationship is underpinned by a trust relationship with the medical practitioner respecting the patient's autonomy, by providing sufficient information to permit the patient to make an informed choice and provide informed consent to a proposed course of treatment. This necessitates the communication that would cause the discussion about medications, their benefits, risks, side effects and adverse effects. Similarly, the patient respects the superior knowledge of the medical practitioner, and trusts that they will provide a full disclosure of the diagnosis and possible treatments, which may involve medications, clinical interventions or both.

[ACCC 3.31, pp 36 – 37]

526    Dr Walton observed that precisely what information is conveyed to an individual patient depends on the level of interest of the patient in relation to side effects [ACCC 3.35 p 16.7]. Professor Currie said the same thing in cross-examination [TS 2609]. Professor Currie explained a rationale for the provision of information about side effects which underscored the importance of the issue to patients. He said that a purpose of explaining major side effects was so that “patients may elect not to have a treatment. Which is their right.” [TS 2610]

527    The evidence of the side effects of the use of apomorphine came from AMI itself and from the Mohee 2012 article referred to by Professor Currie and annexed to Currie Report 1.

528    AMI conducted an internal clinical trial for the whole of the year 2008. The trial involved 20,530 patients treated with apomorphine together with phentolamine in nasal spray and lozenges. Phentolamine is a vasodilating agent which opens up blood vessels in the body to increase blood flow. The trial revealed the following local side effects:

[Nasal Spray]

Irritation

33%

Crustiness

27%

Burning

9%

Bleeding

8%

Congestion

5%

Pain

1%

[Lozenge]

Numbness of Mouth

1%

[ACCC 4.385, p1]

529    And the following systemic side effects:

Headache

3%

Ulceration

2%

Swollen mouth

2%

Dizziness

0.34%

Nausea

1%

Vomiting

0%

[ACCC 4.385, p 1]

530    Mohee 2012 reported on the results of three randomised placebo-controlled trials of the use of apomorphine SL in the treatment of ED. The trial by Dula and others involved 569 men, by Von Keitz and others 507 men, and another by Dula and others 296 men. The tolerability issues were reported as follows:

Tolerability issues

Dula et al.

Von Keitz et al.

Dula et al

Nausea and vomiting (%)

25

13.4

7.0

Hypotension (%)

-

8.0

2.2

Yawning (%)

10

-

8.1

Headache (%)

16