Glaxosmithkline Australia Pty Ltd v Anderson

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FEDERAL COURT OF AUSTRALIA

Glaxosmithkline Australia Pty Ltd v Anderson [2003] FCA 617

ADMINISTRATIVE LAW - Administrative Decisions (Judicial Review) Act 1977 (Cth) - Judiciary Act1903 (Cth) - judicial review - decision of Pharmaceutical Benefits Advisory Committee (PBAC) under s 101(3) of the National Health Act 1953 (Cth) to recommend to the Minister that bupropion hydrochloride should be prescribed under the pharmaceutical benefits scheme only in certain circumstances - where PBAC had already made a previous recommendation for listing of the drug without such restrictions - whether PBAC lacks power to vary its recommendations once made - whether Minister has power to vary a declaration once made under s 85(4) - whether the PBAC can, in the absence of evidence, rely solely on its collective experience and expertise - whether the PBAC acted on no evidence - whether the PBAC breached the rules of natural justice - whether natural justice required that applicant be informed of details of potentially adverse information - whether applicant had real notice of the case it had to meet.

National Health Act1953 (Cth) Part VII, ss 85, 88A, 101
Administrative Decisions (Judicial Review) Act1977 (Cth) ss 5, 13
Judiciary Act1903 (Cth) s 39B(1A)
Acts Interpretation Act 1901 (Cth) ss 33, 46

Pfizer Pty Ltd v Birkett (2001) 112 FCR 305
R v Ng [2002] VSCA 108 (2 August 2002)
Curragh Queensland Mining Ltd v Daniel (1992) 34 FCR 212
The Queen v Toohey;  Ex parte Northern Land Council (1981) 151 CLR 170
Romeo v Asher (1991) 29 FCR 343
Hackwell v Television New Zealand [2002] NZAR 11

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

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

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

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

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

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

V 822 of 2002

RYAN J
20 JUNE 2003
MELBOURNE


IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

V 822 of 2002

BETWEEN:

GLAXOSMITHKLINE AUSTRALIA PTY LTD (ACN 100 162 481)
Applicant

AND:

NEIL ANDERSON & OTHERS (as named in the attached schedule) (in their capacity as members of the Pharmaceutical Benefits Advisory Committee)
First to Tenth Respondents

THE MINISTER FOR HEALTH & AGEING
Eleventh Respondent

JUDGE:

RYAN J

DATE OF ORDER:

20 JUNE 2003

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:

1.        The application be dismissed.

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

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


IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

V 822 of 2002

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Details
Case
[2003] FCA 617
Decision Date

CaseChat Overview and Summary

The case of Glaxosmithkline Australia Pty Ltd v Anderson involves a challenge by Glaxosmithkline, the manufacturer of Zyban, to a decision made by the Pharmaceutical Benefits Advisory Committee (PBAC). The dispute concerns the availability and prescription conditions for Zyban, a drug used to aid smoking cessation, under the Pharmaceutical Benefits Scheme (PBS). The case was heard by the Federal Court of Australia, which was asked to review the second recommendation made by the PBAC regarding the prescription conditions for Zyban.

The primary legal issues the court had to address were whether the PBAC had the authority under section 101(3) of the National Health Act 1953 to make the second recommendation and whether Glaxosmithkline was denied procedural fairness. Glaxosmithkline argued that the PBAC did not have the power to alter its recommendation regarding the prescription conditions for Zyban and that it was not given a fair opportunity to comment on information the PBAC intended to use in making its decision.

The court examined the statutory framework governing the PBAC and found that the Committee had the discretion to make recommendations based on the information available to it at the time. The court also determined that the PBAC's process of soliciting information from Glaxosmithkline did not impose a burden of proof on the company, nor did it indicate that the PBAC was unable to change its position based on new information. The court held that the PBAC's decision to make the second recommendation was within its powers and that Glaxosmithkline was not deprived of procedural fairness. The court further noted that the "no evidence" ground of review under the Administrative Decisions (Judicial Review) Act 1977 was not applicable because the applicant failed to demonstrate that the facts the PBAC relied upon did not exist.

The court concluded that the PBAC's decision was a permissible exercise of its discretion and that the applicant had not shown any valid grounds for overturning the decision. The court dismissed the application and ordered that the applicant pay the respondents' costs.

Orders

Orders of the court

1. The application be dismissed.

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

Background

Background to the litigation

Following a ministerial “declaration” implementing the Committee’s recommendation referred to in [1], Zyban was made available to the public from 1 February 2001 at a subsidised rate under the pharmaceutical benefits scheme. Subsequently, on 5 September 2002, the Committee purported, under s 101(3) of the Act, to vary its recommendation to the Minister as to the circumstances under which the drug should be available for prescription and to recommend that it be prescribed first in a “starter pack” of 30 tablets, with the balance of 90 tablets only being available upon a second prescription being issued (“the second recommendation”). The applicant now seeks review by this Court of the second recommendation under s 5 of the Administrative Decisions (Judicial Review) Act1977 (Cth) (“the AD(JR) Act”) and s 39B(1A) of the Judiciary Act1903 (Cth) (“the Judiciary Act”) and seeks orders by way of relief that the second recommendation be quashed and that each of the respondents, including the Minister, be permanently restrained from acting further upon the second recommendation. The applicant seeks relief on, essentially, two grounds. The first is that the Committee lacked power under s 101(3) of the Act to make the second recommendation. The second is that the applicant was not accorded procedural fairness by the Committee in that it was denied the opportunity to comment upon information to which the Committee proposed to attach significance, or that the Committee otherwise fell into legal error in making the second recommendation. The Facts The initial application was lodged on 15 June 2000. The Committee at its meeting in September 2000 recommended, as summarised in the PBAC agenda papers for its June 2001 meeting;‘…the authority listing of Zyban for use within a comprehensive treatment program, as a short-term adjunctive therapy for nicotine dependence with the goal of maintaining abstinence. Supply was limited to one application per year with no increased maximum quantity or repeats, and a maximum quantity of 120 tablets. … It [the recommendation] was implemented [by the Minister] on 1 February 2001.’ The Committee’s initial written recommendation to the Minister is Exhibit PJL9. The declarations and determinations by the Minister's delegate, as they appeared in the Government Gazette and commencing on 1 February 2001, are found in Exhibit PJL11. The company holding the brand name is identified by the acronym GW in the Gazette, which was a predecessor of the present applicant. The Committee secretariat received a letter from a general practitioner, apparently undated but presumably in the period between 1 February 2001 and the date when the Committee secretariat sent out the papers for its June 2001 meeting relating to the listing of Zyban. That letter is Exhibit DKM13A. The general practitioner, whose name is not relevant to these proceedings, made these suggestions regarding the listing of Zyban;‘1)a prescription for 120 tablets or [scil. “for”] nothing per year means we cannot force them [the patients] to return after 2-4 weeks to assess their progress and engage them properly in a “comprehensive program” aimed at quitting. Surely this option should be available to us.2)Given that we give out scripts for 120 tablets at a time, it concerns me that those who do not tolerate the medication will be discarding over 100 tablets often enough to make the community’s subsidising of it a little hard to take, Once again – why not give two week’s worth or make samples easily available?’

Evidence

Evidence Before The Court

An administrative body like the Committee is not bound by rules of evidence applying generally to courts. Whether a party appearing before such a body carries an onus of persuading it to a particular view or of going forward with evidence, is, like other evidentiary questions, to be resolved by reference to the statute from which the Committee derives its powers and functions; McDonald v Director-General of Social Security (1984) 1 FCR 354 per Woodward J at 357. It has not been suggested on either side in the present case that there were procedural requirements which the Committee was bound to observe other than those which might arise from the general obligation to accord procedural fairness. The Committee is under an obligation to make recommendations to the Minister, and it may inform itself in the course of its deliberations in whatever manner it sees fit. The fact that it sought information of the applicant and gave it repeated opportunities to produce further and better information does not entail that it regarded the applicant as sustaining a burden of proof or that it had closed its mind to the view that the existing specification of the circumstances for prescribing Zyban remained appropriate. In the course of submissions, Counsel for the applicant acknowledged that the Committee’s view had, in fact, changed over time. The mere use in correspondence from the secretariat of forms of expression which called on the applicant to make out or support its case, is not indicative of improper imposition of an onus or that the Committee’s tentative views were so inflexible as to render it incapable of persuasion to the contrary. It was for the Committee to inform itself as it thought fit and make a decision on the totality of the information before it. As far as I have been able to discern, its discharge of those functions was unexceptionable.Procedural fairness: no evidence This ground which is made available by s 5(1)(h) of the AD(JR) Act was not strongly pressed at trial. That paragraph appears to have no application in the circumstances of this case in the light of what was said in Curragh Queensland Mining Limited v Daniel (supra) at 223 per Black CJ (with whom Spender and Gummow JJ agreed) about the relationship between the “no evidence” ground afforded by s 5(1)(h) and the additional requirement under s 5(3)(b) that the fact relied upon by the decision maker “did not exist”. The effect of s 5(3)(b) is quite clearly that to succeed on the “no evidence” ground, an applicant under the AD(JR) Act must establish that the particular fact, upon the existence of which the impugned decision was based, did not actually exist. Here, if there were factual matters upon which the Committee’s decision was based, they were that there was some wastage of Zyban where prescriptions were written for patients who did not complete the course, and that further counselling in the course of a second visit to a general practitioner would enhance patient treatment. Neither proposition, so generally put, is disputed. It is not clear to me that the Committee relied on these factual matters at any lower level of generality. Unsurprisingly, the applicant has not sought to disprove either presumed fact.

Decision

Reasons for decision

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

Ratio Decidendi

Legal Principle Established

Established by: RYAN J

Full text does not contain this section.