ICI Australia Operations Pty Ltd v Dr Blewett, N. (who is sued in his capacity as Minister of State for Community Services & Health)

[1989] FCA 432

Re: ICI AUSTRALIA OPERATIONS PTY LIMITED; WELLCOME AUSTRALIA LIMITED;
PFIZER PTY LIMITED; HOECHST AUSTRALIA LIMITED; GLAXO AUSTRALIA PTY
LIMITED AND SMITH KLINE & FRENCH LABORATORIES AUSTRALIA LIMITED
And: DR NEAL BLEWETT (who is sued in his capacity as Minister of State
for Community Services and Health) AND IAN JAMES McNEIL
No. ACT G 26 of 1989
FED No. 432
Administrative Law

COURT

IN THE FEDERAL COURT OF AUSTRALIA

AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
Neaves J.(1)

CATCHWORDS

Administrative Law - judicial review - Pharmaceutical Benefits Scheme - Determination of brand or brands of drugs and medicinal preparations that may be supplied under Scheme - Adoption of generic pricing policy where more than one brand manufactured - Policy providing maximum differential of 20 cents in prices of alternate brands of same drug or medicinal preparation - Manufacturers failing to indicate willingness to conform to policy - Commitments to manufacturers of alternate brands for four months' notice of relisting of delisted brands subject to continuity of supply of the alternate brands - Determination delisting certain brands challenged - Whether giving of commitments compatible with statutory power - Whether decision giving effect to commitments valid - Whether decision one of an administrative character.

Administrative Decisions (Judicial Review) Act 1977 (Cth), s.5

National Health Act 1953 (Cth), ss.85, 85B, 98B

HEARING

CANBERRA

#DATE 9:8:1989

Counsel for the applicants :Mr S.P. Charles, Q.C. and Mr H. Jolson

Solicitors for the applicants:Macphillamy Cummins & Gibson

Counsel for the respondents :Mr A.R. Caston, Q.C. and Dr S.C. Kenny

Solicitor for the respondents:Australian Government Solicitor

ORDER

The application be dismissed.

The applicants pay the respondents' costs of the application.

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

JUDGE1

Six companies, ICI Australia Operations Pty Limited ("ICI"), Wellcome Australia Limited ("Wellcome"), Pfizer Pty Limited ("Pfizer"), Hoechst Australia Limited ("Hoechst"), Glaxo Australia Pty Limited ("Glaxo") and Smith Kline & French Laboratories Australia Limited ("Smith Kline") have joined in an application to the Court pursuant to s.5 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) ("the Judicial Review Act") for an order of review in respect of a determination under Part VII of the National Health Act 1953 (Cth) made on 16 March 1989 by Ian James McNeil, the second respondent, as delegate of the Minister of State for Community Services and Health, the first respondent. The determination was published in Commonwealth of Australia Gazette No.GN 11 of 29 March 1989. It was expressed to be made under ss.85, 85A and 88 of the National Health Act and to come into operation on 1 April 1989.

1. The applicants relied on a number of affidavits, the deponent of each affidavit being an officer of one or other of the applicants. No evidence was adduced on behalf of the respondents. In compliance with Order 54, rule 3 of the Federal Court Rules, the applicants filed statements with respect to the decision under review that had been furnished by the second respondent pursuant to s.13 of the Judicial Review Act. Six statements were filed, each applicant having received a separate statement dealing with the decision in so far as it concerned that applicant. In Minister for Immigration and Ethnic Affairs v. Arslan (1984) 4 FCR 73 at pp 75-6 a Full Court of this Court discussed the status and evidentiary value of a statement furnished pursuant to that section and, in particular, the extent to which it may be relied upon by a respondent who seeks to support the decision to which the statement relates. In considering this matter I have had regard to what was there said.

2. The evidence establishes that each applicant is the manufacturer of the drug or medicinal preparation set out opposite the name of the applicant in the table below. The table also shows, in respect of each drug or medicinal preparation, the brand name under which it is marketed by that applicant and the medical condition for the treatment of which it is primarily used.
   

Applicant Drug or medicinal Brand Medical condition preparation

ICI Propranolol Tablets B.P. Inderal Hypertension Wellcome Allopurinol Tablets B.P. Zyloprim Chronic gout " Trimethoprim Tablets B.P. Triprim Acute urinary tract infection Pfizer Doxepin Capsules B.P. Sinequan Psychiatric diseases Hoechst Frusemide Injection B.P. Lasix Heart and renal failure " Frusemide Tablets B.P. Lasix Heart and renal failure " Glibenclamide Tablets B.P. Daonil Diabetes Glaxo Labetalol Hydrochloride Trandate Hypertension Tablets B.P.

Smith Trifluoperazine Stelazine Severe Kline Hydro-chloride Tablets B.P. schizophrenia

1. As will appear, the determination the subject of review determines, in respect of each of those drugs or medicinal preparations, a brand or brands under which the drug or medicinal preparation may be supplied under Part VII of the National Health Act. Except as to the 20 mg form of the drug or medicinal preparation Fusemide Tablets B.P. and the 2 mg form of the drug or medicinal preparation Trifluoperazine Hydrochloride Tablets B.P., the brands so determined do not include the brand under which the drug or medicinal preparation is marketed by the relevant applicant. That situation is contrary to the situation that obtained under the determination which was in force immediately prior to 1 April 1989 and which was revoked by the determination under review. The earlier determination was made on 16 November 1988 and had effect from 1 December 1988. It was amended with effect from 1 March 1989. The consequence of the coming into operation of the determination under review is that Part VII of the Act does not apply to the supply on or after 1 April 1989 of the particular drug or medicinal preparation under the brand name of the applicant and an approved pharmacist who supplies the drug or medicinal preparation under that brand is not entitled to receive a payment from the Commonwealth in respect of such supply.
   The relevant legislation

2. Part VII of the National Health Act, ss.83-105 inclusive, embodies a legislative scheme commonly known as the pharmaceutical benefits scheme (PBS). Under the scheme, a person who is receiving medical treatment by a medical practitioner or dental treatment by a participating dental practitioner is entitled, subject to the terms of Part VII, to receive pharmaceutical benefits under that Part (s.86). The pharmaceutical benefit may be supplied under that Part by an approved pharmacist at or from approved premises on presentation of a prescription of a medical practitioner or a participating dental practitioner, by an approvedmedical practitioner, or by an approved hospital authority (s.89). It is sufficient for present purposes to refer to the scheme in so far as it provides for the supply of pharmaceutical benefits by an approved pharmacist. In such cases, the approved pharmacist is not to demand or receive a payment (other than a payment from the Commonwealth) or other valuable consideration in respect of the supply of the pharmaceutical benefit except in accordance with s.87 (sub-s.87(1)). The amount of the payment which an approved pharmacist may receive from the person to whom the pharmaceutical benefit is provided depends upon whether there is in force in respect of that benefit a determination under s.85B to the text of which it will be necessary to refer later in these reasons. Where the pharmaceutical benefit is other than a pharmaceutical benefit in respect of which such a determination is in force, the approved pharmacist may, in accordance with sub-s.87(2), charge the person to whom the pharmaceutical benefit is supplied -
   

(a) upon a concessional benefit prescription as defined (see sub-s.84(1)) - $2.50;

(b) upon a general benefit prescription as defined (ibid.) - $11.00.

In the case of a pensioner benefit prescription as defined in that sub-section, the person to whom the pharmaceutical benefit is supplied may not be charged any amount. Where the pharmaceutical benefit is one in respect of which a determination under s.85B is in force, the approved pharmacist may, in accordance with sub-s.87(2A), charge the person to whom the pharmaceutical benefit is supplied -

(a) upon a pensioner benefit prescription - the amount determined under s.85B to be the special patient contribution in relation to the pharmaceutical benefit;

(b) upon a concessional benefit prescription - the sum of the special patient contribution and $2.50;

(c) upon a general benefit prescription - the sum of the special patient contribution and $11.00.

The approved pharmacist may be authorised to make an additional charge where delivery of the pharmaceutical benefit is made at premises other than the premises in respect of which he is approved (sub-s.87(4)). He may make an additional charge where the pharmaceutical benefit is supplied at a time outside normal trading hours (sub-s.87(6)).

1. An approved pharmacist who has supplied a pharmaceutical benefit under Part VII is, subject to certain conditions to which it is unnecesary to refer, entitled to be paid by the Commonwealth an amount ascertained in accordance with s.99. Speaking generally, the amount to be paid by the Commonwealth in respect of the supply of the pharmaceutical benefit is an amount equal to the amount by which what is referred to as the "Commonwealth price" of the pharmaceutical benefit as at the time of the supply exceeds the amount that the approved pharmacist is entitled to charge the person to whom the pharmaceutical benefit is supplied under sub-s.87(2) or (2A), as the case may be (sub-ss.99(2) and (2C)). In relation to a pharmaceutical benefit supplied by an approved pharmacist, the "Commonwealth price" (sub-s.99(1)) is an amount ascertained in accordance with a determination made by a Tribunal known as the Pharmaceutical Benefits Remuneration Tribunal and in force under sub-s.98B(1). Under that sub-section, the Tribunal is to determine the manner in which the Commonwealth price of a pharmaceutical benefit is to be ascertained for the purpose of payments to approved pharmacists in respect of the supply by them of that pharmaceutical benefit. In the case of a ready-prepared pharmaceutical benefit, an expression defined to mean a drug or medicinal preparation in respect of which there is in force a determination under sub-s.85(6), the manner so determined is to take as a basis the approved price to pharmacists of the pharmaceutical benefit concerned that was applicable on the first day of the month of the year in which the supply occurs and is to provide for the addition of such fees and other amounts as are determined by the Tribunal (sub-s.98B(2)). It may be accepted that the additional fees and amounts will include a reasonable amount to cover the pharmacist's "mark up", a dispensing fee and, where the manufacturer sells to the pharmacist through a wholesale distributor, a margin for the distributor. The expression "approved price to pharmacists" is defined in sub-s.98B(3), so far as material for present purposes, to mean -
   

(a) in relation to a pharmaceutical benefit that is not a special pharmaceutical benefit - the amount that the manufacturer of the pharmaceutical benefit and the Minister agree, from time to time, is to be taken to be, for the purposes of Part VII, the appropriate maximum price for sales of the pharmaceutical benefit to approved pharmacists; or

(b) in relation to a pharmaceutical benefit that is a special pharmaceutical benefit - the amount determined from time to time, under s.85B, to be the amount that is, for the purposes of Part VII, to be taken to be the manufacturer's price for sales of the pharmaceutical benefit to approved pharmacists.

"Special pharmaceutical benefit" is defined in that sub-section to mean a pharmaceutical benefit in respect of which there is in force a determination under s.85B.

1. Essential to the scheme is the list of drugs and medicinal preparations in relation to which, by virtue of s.85, Part VII is to apply.

2. Section 101 establishes a Committee called the Pharmaceutical Benefits Advisory Committee. The function of the Committee is to make recommendations to the Minister from time to time as to the drugs and medicinal preparations which it considers should be made available as pharmaceutical benefits under Part VII (sub-s.101(3)). For the purpose of deciding whether to recommend to the Minister that a drug or medicinal preparation, or a class of drugs and medicinal preparations, be made available as a pharmaceutical benefit under Part VII or as pharmaceutical benefits under that Part, the Committee is to give consideration to the effectiveness and cost of therapy involving the use of the drug, preparation or class. It is expressly provided that, in considering that matter, the Committee may compare the effectiveness and cost of that therapy with that of alternative therapies, whether or not involving the use of other drugs or preparations (sub-s.101(3A)). A declaration may not be made under par.85(2)(a) except in accordance with a recommendation of the Committee (sub-s.101(4)).

3. Section 85 provides:
   

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

(2)Subject to sub-section (3), the drugs and medicinal preparations in relation to which this Part applies are -

(a) drugs and medicinal preparations that are -

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

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

(b) medicinal preparations composed of -

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

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

(2A) The Minister may, in a declaration under sub-section (2) -

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

(b) specify the circumstances in which the writing of a prescription for the supply of the pharmaceutical benefit is to be authorised under this Part.

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

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

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

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

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

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

(2E) Section 5 of the Evidence Act 1905 applies to declarations as that section applies to an order made by the Minister.

(3)The Minister may determine, by reference to strength, type of unit, size of unit or otherwise, the form or forms of a drug or medicinal preparation referred to in sub-section

(2) that is or are allowable for the purposes of this Part and, where such a determination is in force in relation to a drug or medicinal preparation -

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

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

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

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

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

The expression "brand" is defined in sub-s.84(1) to mean, in relation to a drug or medicinal preparation, a trade name under which a manufacturer sells that drug or medicinal preparation or the name of a manufacturer who sells that drug or medicinal preparation.

1. Sub-section 85B(1) - upon which the principal submission put on behalf of the applicants heavily relies - provides:
   

"(1) Where -

(a) either of the following sub-paragraphs apply in relation to a pharmaceutical benefit:

(i) in a case where the pharmaceutical benefit is a form of a drug or medicinal preparation to which a substance has, or substances have, been added in accordance with a determination in force under sub-section 85(3) relating to the drug or medicinal preparation - the Minister and the manufacturer of the form of the drug or medicinal preparation have been unable to agree on an amount that is, for the time being, to be taken to be, for the purposes of this Part, the appropriate maximum price for sales of the form of the drug or medicinal preparation to approved pharmacists;

(ii) in any other case - the Minister and the manufacturer of the pharmaceutical benefit have been unable to agree on an amount that is, for the time being, to be taken to be, for the purposes of this Part, the appropriate maximum price for sales of the pharmaceutical benefit to approved pharmacists; and

(b) the pharmaceutical benefit is a drug or medicinal preparation in respect of which a determination under sub-section 85(6) is in force, the Minister may, by notice in writing published in the Gazette, determine that this section applies in relation to the pharmaceutical benefit and, if the Minister does so, the Minister shall also, by notice in writing published in the Gazette, determine -

(c) the amount that is, for the purposes of this Part, to be taken to be the special patient contribution in relation to the pharmaceutical benefit; and

(d) the amount that is, for the purposes of this Part, to be taken to be -

(i) in a case to which sub-paragraph

(a)(i) applies - the manufacturer's price for sales of the form of the drug or medicinal preparation to approved pharmacists; or

(ii) in a case to which sub-paragraph

(a)(ii) applies - the manufacturer's price for sales of the pharmaceutical benefit to approved pharmacists."

Section 85B was inserted in the National Health Act by the National Health Amendment Act 1985 which came into operation on 1 July 1985. By the same amending Act, consequential amendments were made to ss.87, 98B and 99 to provide for the situation where there is in force a determination under s.85B.

1. Reference should also be made to the general power of delegation that is conferred on the Minister by sub-s.(1) of s.6. Sub-section (2) of that section provides that a power so delegated, when exercised by the delegate, is, for the purposes of the Act, to be deemed to have been exercised by the Minister. Sub-section (3) provides that a delegate under sub-s.(1) is, in the exercise of a power so delegated, subject to the directions (if any) of the Minister.
   Relevant history

2. On 13 September 1987 the Minister of State for Industry, Technology and Commerce and the Minister of State for Community Services and Health, in a joint statement, announced policies described as "policies to encourage the growth of the pharmaceutical products industry in Australia". The objective of those policies, so the Ministers said, was "to create an environment which would encourage a significant increase in research and development performance by the industry, together with increased investment, production and export performance, and strengthened employment opportunities". The Ministers further said that the three most important elements of the policies were to replace the Pharmaceutical Benefits Pricing Bureau, which had been part of the Department of Community Services and Health, with an independent non-statutory Authority, to require the Authority, when setting or making recommendations on prices, to take into account the level of an individual company's Australian pharmaceutical activity, including new investment, production and research and development, and to provide for extensions to patent life on pharmaceuticals for human use. It was envisaged that those pharmaceutical companies prepared to make a significant commitment to Australian manufacturing, product development and exports could expect to receive a price that better reflected efficient development and production costs. This more equitable treatment was, however, to be tempered by price comparisons with overseas products and similar products from other manufacturers. The Ministers announced that the revised pricing arrangements were to be introduced on 1 January 1988.

3. The Ministers also announced two measures that would, so it was said, go some way towards offsetting the additional cost of applying the new pricing guidelines. One of those measures was the re-introduction of what was referred to as a generic pricing policy under which "a maximum differential of 20 cents would apply between alternate brands of the same drug". The guidelines were to apply where the brand on which the lowest price would be based was "reasonably available in the market place". The reference to the re-introduction of this measure reflected the circumstance that at an earlier time such a measure had been proposed but not implemented.

4. A Pharmaceutical Benefits Pricing Authority ("the Authority") was established with the function of setting or recommending prices for products listed under the pharmaceutical benefits scheme. The Authority's terms of reference were to-
   reference were to -
   

"(a) maintain a continuous review of the prices for items listed as pharmaceutical benefits

(b) examine prices submitted by manufacturers and conduct negotiations with manufacturers, where necessary, on proposed price changes

(c) determine prices for items listed, or recommended for listing, as pharmaceutical benefits where annual expenditure on these items, either individually or as a group, falls within limits advised by the Minister; in other cases, recommend prices to the Minister

(d) examine and report on such matters in relation to prices of pharmaceutical benefits as the Minister may direct or request

(e) report on an annual basis to the Minister on its operations and on its interpretation of its guidelines."

The Authority was to take account of the following factors -

"(a) the prices of alternative brands of a drug

(b) comparative prices of drugs in the same therapeutic group

(c) costs information, when supplied by the manufacturer or estimated by the Authority

(d) prescription volumes, economies of scale and other factors such as expiry dating, storage requirements, product stability and special manufacturing requirements

(e) prices of the drug in reasonably comparable overseas countries

(f) the level of activity being undertaken by the company in Australia including new investment, production and research and development where the activity is oriented towards international competitiveness

(g) other relevant factors which the applicant company wishes the Authority to consider

(h) other directions as advised by the Minister."

A document outlining the Authority's procedures contained the following paragraph:

"With the exception of the effect of factor (f), the Authority should attempt to secure reliable supply of PBS items at the lowest possible cost to Australian taxpayers and patients, taking into account factors (a) - (e) and (g) as specified above."

The document also provided that, in relation to the generic pricing policy, the Authority was to advise on the form of market availability test that should apply to ensure that the brand on which the minimum price is based is reasonably available to consumers and to do so taking into account two factors, namely the proportion of prescriptions written generically or specifically for that brand and the geographic availability of the brand and the ability of the manufacturer to meet, if necessary, the full demand for the item within a reasonable time.

1. On 25 May 1988 the Minister of State for Industry, Technology and Commerce and the Minister of State for Community Services and Health, in a further joint statement, announced that they had accepted the recommendations of the Authority on how best to give effect "to the revised pricing guidelines for pharmaceutical products aimed at further developing the pharmaceuticals industry in Australia". The broad principles behind the guidelines were said to be "that companies prepared to meet, or commit themselves to meet, industry development criteria relating particularly to exports and product development would become eligible for improved prices". Prices, however, would, so it was said, be limited to ensure that they did not exceed world prices and were reasonable, having regard to new activities proposed by the companies. The Ministers also announced that the Authority "had also made recommendations on the implementation of pricing arrangements for out-of-patent products where there were lower priced brands available". The Ministers said that the Government had accepted these but, in the light of the time it had taken to develop the industry development guidelines, their implementation would be postponed to 1 December 1988.

2. A document headed "Guidelines on Pharmaceuticals Pricing Arrangements" was published at the same time. It set out in some detail the guidelines which the Authority would apply in determining whether to recommend higher prices for those companies prepared to make a significant commitment to Australian manufacturing, product development and exports. It provided, however:
   

"Where products are subject to competition from out of patent products, price increases will be limited by the Government's pricing policy for such products, which provides for a maximum price differential of 20 cents between brands."

Under the sub-heading "Pricing Differential for Out of Patent Products", the following appeared:

"The Government's pricing policy for out of patent products provides for a 20 cent maximum price differential between alternate brands of the same drug. This rule will be applied to those drugs where a cheaper alternative brand is reasonably available in the market place. Within this guideline a brand will be considered to be reasonably available if: . it is marketed in all States; and . the supplier has the capacity to meet, if necessary, the full PSB demand for it within four months of being notified that other manufacturers are withdrawing their brands.

In those cases where at least 10 per cent of the prescriptions for a drug are written for the lowest priced brand, the market test will generally be satisfied. Where at least 10 per cent of prescriptions are written in generic terms (i.e. no brand specified), the lowest priced brand will normally be accepted as meeting the availability criterion, unless evidence is available to suggest the supplier of that brand is unable to meet full demand if necessary.

In determining reasonable market availability, the Authority will seek information as required from suppliers.

Where two or more brands have the same lowest price, the market test will be applied as if the two brands were one."

1. The Authority, having considered the information available to it in respect of multi-brand products then listed under the pharmaceutical benefits scheme, including information provided in response to a questionnaire addressed to the manufacturers of the lower priced brands of those products, made certain recommendations to the Minister of State for Housing and Aged Care. Those recommendations were apparently agreed to by the Minister on 4 August 1988. Neither the recommendations nor the terms of the Minister's agreement are in evidence but it appears from the statements furnished under s.13 of the Judicial Review Act that a large number of items, including the drugs or medicinal preparations the subject of this proceeding "were recommended to be delisted (from supply under Part VII of the Act) if the manufacturer of the brand of the drug refused to lower the price to comply with the Generic Pricing Policy, whilst some items were not so recommended due to various problems relating to supply of the drug from alternative manufacturers".

2. By letters respectively dated 4 August 1988 and signed by the Acting Secretary of the Authority, one Alan Stevens, the applicants were informed as follows:
   

"The Pharmaceutical Benefits Pricing Authority has carried out a market availability test on the lower priced brands of items listed as benefits. In undertaking this test the Authority has taken into consideration the following information as supplied by the manufacturer of the lower priced brand: - current distribution - current production

- production capacity

- measures that could be introduced to meet demand in both the short and longer term

- product servicing

For the products listed in the attached PB11(a)s the Authority has decided that the manufacturers of the lower priced brands comply to the market test and a price reduction is therefore warranted. The revised price for your products is included on the attached forms and is to be implemented with effect from 1 December 1988. For the continued listing of your products as pharmaceutical benefits your endorsement and return of the attached forms is required by 26 August 1988.

Should you wish to discontinue the listing of any of your products your advice will be required by the same date."

The reference "PB11(a)" is a reference to a printed form headed "Request for price alteration". The form or forms attached to each letter had been completed to the extent of inserting the name and address of the particular applicant and details of the relevant drug or drugs, including the form and strength thereof, the type of pack and the proposed price when purchased by an approved pharmacist. That price was referred to as the "List Price" and was to be effective from 1 December 1988. There was provision for the form to be signed and dated and instructions were given for its return to the Authority upon completion.

1. The date specified as the date by which each applicant was to respond to the letter dated 4 August 1988 addressed to it was subsequently extended to 12 noon on 6 September 1988 and, in the case of Hoechst, the time was further extended to the close of business on 8 September 1988.

2. Between the date of the receipt of the letter dated 4 August 1988 and the date of the decision under review, each of the applicants entered into correspondence in relation to the subject-matter of that letter. The correspondence was in some cases addressed to the Authority and in other cases to one or other of the Ministers concerned. Those Ministers were the Minister of State for Industry, Technology and Commerce, the Minister of State for Community Services and Health and the Minister of State for Housing and Aged Care. It is unnecessary for present purposes to set out the whole of that correspondence in detail. Detailed reference must, however, be made to some parts of it.

3. The thrust of the correspondence emanating from each of the applicants during August and the early part of September 1988 was that -
   

. the time specified for the applicants to respond to the letter dated 4 August 1988 was too short and should be extended

. the generic pricing policy was inequitable and should be abandoned as its implementation would not contribute to the creation and provision of advances in health care . the applicants would suffer substantial loss of revenue and profit by the implementation of the policy . the Authority had exceeded its authority by applying a market availability test different from that for which the published guidelines provided.

In addition, Glaxo, by letter dated 22 August 1988 addressed to the Authority, suggested that the Minister should use his powers partially to subsidise out of patent products to the extent that generically equivalent products were subsidised under the pharmaceutical benefits scheme and allow the consumer to pay the difference if he or she wished to have the originator's brand. The Authority replied, by letter dated 25 August 1988:

"Your comments and proposals of a patient part payment system for out of patent products have been duly noted and will be taken into consideration in any review of the arrangements. However, this is not Government policy at the present time."

By letter dated 26 August 1988 addressed to the Minister of State for Community Services and Health, Glaxo sought to convince the Minister that the patient part payment system previously proposed in which the patient would be responsible for the payment of the difference between the manufacturer's price and the Government's reimbursement level should be adopted as policy "as a satisfactory resolution to the conflicting interests of the research-based industry and the cost containment of the Pharmaceutical Benefits Scheme". Reference to the introduction of a patient part payment system was also made by Hoechst in its letter to the Authority dated 5 September 1988. The other applicants did not advance any similar proposal.

1. The Minister of State for Housing and Aged Care, by letter dated 5 September 1988, replied to Glaxo's letter dated 26 August 1988. The Minister's letter read, in part:
   

"I note your proposed alternative policy to the generic pricing policy. Your proposal as I understand it would mean that all patients, including pensioners, would pay any difference between the manufacturer's price and the Government's reimbursement level. Under current legislation such conditions can only apply for unique single-branded items where the manufacturer and the Government cannot agree on price. This does not apply in respect of those items where the Government is applying the twenty cent differential between alternate brands. While the Government is prepared to consider such an option, it would require fundamental changes to the PBS and major amendments to the legislation."

1. In subsequent correspondence, in particular in letters dated 21 September and 23 November 1988 to the Minister of State for Housing and Aged Care and in letters dated 10 October 1988 and 19 January 1989 to the Authority, Glaxo continued to press for the patient part payment system it had previously advocated. In the letter dated 10 October 1988 the company said:
   

"Glaxo does not prefer to have the products delisted rather than have the prices reduced. Glaxo would prefer to have its products remain listed and to compete in the market place with copy products in a situation which permits a special patient contribution, somewhat along the lines of the Ralph inquiry recommendations or the existing Special Pharmaceutical Benefits mechanism.

We understand this is currently not government policy however we would like to reiterate our request for a review of the current scheme in the expectation that it can be considerably improved."

The letter dated 23 November 1988 included the following:

"During a discussion on 15 November on the subject of Trandate delisting with the Secretary of the Department of Community Services and Health, I gained the impression that legislation prevented the application of the 'Special Pharmaceutical Benefit' principle being applied because an alternative drug is available. However perusal of the Explanatory Memorandum relating to the National Health Amendment Bill 1985 indicates that the new legislation would apply where 'no suitable alternatives exist'. We maintain that many doctors will not accept, in this instance, that the generic product is a suitable alternative and as indicated above, in all probability will prescribe the more expensive ACE inhibitor with a considerable increase in cost to government."

1. The Minister of State for Housing and Aged Care replied to Glaxo by letter dated 15 February 1989. After referring to the company's letter dated 21 September 1988 and the Government's pricing policy, the Minister said:
   

"However, your proposal for a 'Patient Part Payment' is not a policy option within the context of the current industry package. The Government firmly believes that consumers and taxpayers should not be expected to pay significantly more for a brand name when the same drug is available at a lower price. If the reduction to the price of Trandate is untenable to Glaxo then it is faced with a commercial decision as to whether or not to delist that product from the Pharmaceutical Benefits Scheme (PBS)."

1. On 5 September 1988, the Acting Secretary of the Authority had written to each of the applicants in the following terms:
   

"As advised previously by telephone, a revised deadline of noon Tuesday 6 September has been set for responses in relation to my letter of 4 August. Printing deadlines preclude further extensions. If a response has not been received by this time it will be taken to mean that you are refusing to agree to reduce the price of your brand of the products concerned and would prefer your brands to be delisted rather than the prices reduced. Section 98B of the National Health Act requires agreement on price between the Minister (or his delegate) and the manufacturer for a brand to continue to be listed as a pharmaceutical benefit. If a company decides not to reduce the price of its brand and that brand is therefore to be delisted due to the generic pricing policy, 4 months notice will be given. This means that doctors and pharmacists would be advised in the December edition of the Pharmaceutical Benefits Schedule that the brand will be delisted with effect from 1 April 1989. Similar notice would be given if a company subsequently sought to have its brand relisted. The earliest opportunity for relisting would therefore be 1 August 1989."

1. On 7 September 1988, Hoechst was, as a special consideration, given a further extension of time until the close of business on 8 September 1988 to respond to the letter of 4 August 1988. On 9 September 1988, Hoechst was informed by letter of that date that, as no response had been received, action was being undertaken to delist its products.

1. On 9 September 1988, the Minister of State for Housing and Aged Care wrote to ICI and Wellcome re-stating the policy guidelines concerning the market availability test and, in effect, saying that those companies had misunderstood the guidelines in that regard. Each letter included the following paragraph:
   

"As you know, the implementation of this policy package has been postponed a number of times already. I believe it would be unfair to delay its introduction any longer - unfair to the majority of manufacturers who have already agreed to price reductions within the deadlines set by the Authority, unfair to those companies who have made investment plans on the basis of the Government's pharmaceutical industry policy, and unfair to taxpayers and consumers who should no longer be required to pay substantially higher prices for equivalent brands."

1. By letters dated 19 September 1988 the Authority informed the various manufacturers of the lower priced brands of the drugs in question that the Minister had agreed to the delisting with effect from 1 April 1989 of the brands of those drugs manufactured by the respective applicants. A commitment was made to those manufacturers that they would be given 4 months' notice of any decision to relist a brand which was to be delisted, the commitment being subject to review if there was not "a satisfactory supply of bioequivalent products". The alternative manufacturers were also informed that they would be required to supply the full demand under the pharmaceutical benefits scheme for the particular drugs.

2. By letters respectively dated 19 September 1988, also signed by the Acting Secretary, the Authority informed each of the applicants that, as the time set for the receipt of a response to the letter dated 4 August 1988 had expired without a response having been received, the writer had "no alternative but to assume that you prefer your products to be delisted rather than have the price reduced". Accordingly, so the letter stated, "action has been undertaken to implement the delisting" of the products in question with effect from 1 April 1989. Each letter continued:
   

"Advice of this will be provided to doctors and pharmacists through the December 1988 edition of the Schedule of Benefits.

Alternative suppliers are being advised of the decision to delist these products. It is necessary to give such a commitment to alternative suppliers at this stage to enable them to prepare to meet the full PBS demand for the products and thereby ensure continuity of supply."

1. On 24 January 1989, the Authority held a meeting attended by representatives of each of the applicants. Oral and written submissions were presented on behalf of the applicants and a number of matters was discussed. Amongst the matters raised by one or other of the applicants was a proposal that the price reductions sought be agreed to if the drugs or medicinal preparations of the applicants' manufacture could remain listed under the pharmaceutical benefits scheme from 1 April 1989. The evidence shows that Wellcome, by letter dated 24 January 1989, informed the Authority that, "in order to support the concept of working with Government in a cooperative way to improve the Pharmaceutical Benefits Scheme, Wellcome is now prepared to accept the proposed price reductions". The letter went on: "The lower prices could apply from April 1 and avoid the need to delist the product". The evidence does not clearly establish the attitude the other applicants adopted at that time.

2. Following consideration of the representations made on behalf of the applicants, letters dated 6 February 1989 were addressed by the Authority to each applicant, containing the following paragraph:
   

"As previously advised, the Government has already made commitments to the alternative suppliers in order to ensure continuity in PBS supply of these drugs. This means that it will not be possible for the relevant products to be relisted before 1 August unless there are significant safety or supply problems. The alternative suppliers have advised that plans to meet the full PBS demand from 1 April are well advanced, in most cases with actual manufacture well underway."

1. On various dates between 3 and 24 February 1989 each of the applicants informed the Authority that it wished to have the relevant drug or drugs relisted with effect from 1 August 1989 and that, for this purpose, it would agree to the price reductions sought. ICI went further. By letter dated 6 March 1989, it informed the Authority of its intention to reduce the price to wholesalers of the drug Propranolol with effect from 14 March 1989. It may be noted that Hoechst subsequently informed the Authority that it did not wish to have relisted Frusemide Tablets B.P., 500 mg., marketed by it under the brand "Lasix".

2. At the conclusion of the hearing on 14 June 1989, the Court was informed by counsel for the respondents that the delisted drugs or medicinal preparations of the applicants' manufacture were to be relisted under the pharmaceutical benefits scheme from 1 August 1989, agreement having been reached on price.
   The relevant decision

3. The determination under review is to be read in conjunction with a declaration (No.PB 1 of 1989) under sub-s.85(2) of the National Health Act also made on 16 March 1989 by the second respondent as delegate of the first respondent. That declaration revoked a declaration under that sub-section made on 16 November 1988 with effect from 1 December 1988 and provides, inter alia, that Part VII of the Act applies, on and from 1 April 1989, to each of the drugs and medicinal preparations specified in Schedule 1 to the declaration. That schedule lists a large number of drugs and medicinal preparations described in the heading to the schedule as being ready-prepared pharmaceutical benefits, an expression defined in par.3 of the declaration to mean a drug or medicinal preparation in respect of which there is in force a determination under sub-s.85(6) of the National Health Act.

4. Part 1 of the First Schedule to the determination under review lists, in column 1, the names of the pharmaceutical benefits, being drugs or medicinal preparations declared under sub-s.85(2) to be drugs or medicinal preparations to which Part VII of the Act applies. Column 2 specifies, in respect of each pharmaceutical benefit, the strength, type of unit, size of unit or other particulars of form allowable for the purposes of Part VII. Column 3 specifies the manner in which the pharmaceutical benefit is to be administered. Columns 4 and 5 respectively specify the maximum quantity or number of units of the pharmaceutical benefit that may, in one prescription, be directed to be supplied on any one occasion and the number of occasions on which the supply of the pharmaceutical benefit may, in one prescription, be directed by a medical practitioner to be repeated. Column 6 headed "Brand" denotes by a combination of letters the name of the manufacturer, or the names of the manufacturers, of the particular drug or medicinal preparation. Each name so specified indicates a brand (as defined) under which the drug or medicinal preparation may be supplied under Part VII of the Act as a pharmaceutical benefit. Set out hereunder is a series of extracts from Part 1 of the First Schedule to the determination relevant to the issues which arise in the present application:
   Allopurinol 100 mg Oral 200 2 DH, PT Tablets B.P. 300 mg Oral 60 2 DH, PT Doxepin 10 mg (base) Oral 50 2 AF
   Capsules B.P. 25 mg (base) Oral 50 2 AF
   Frusemide Ampoule, 20 mg Injection 5 .. AF
   Injection B.P. in 2 mL
   Frusemide 20 mg Oral 100 1 FM, HP Tablets B.P. 40 mg Oral 100 1 FM, PT
   

500 mg Oral 50 3 FM

Glibenclamide 5 mg Oral 100 5 AF

Tablets B.P

Labetalol 100 mg Oral 100 5 AF

Hydro-chloride Tablets 200 mg Oral 100 5 AF

B.P.

Propranolol 10 mg Oral 100 5 AF

Tablets B.P. 40 mg Oral 100 5 AF, PT

160 mg Oral 50 5 AF, PT

Trifluoperazine 1 mg Oral 100 1 PT

Hydrochloride 2 mg Oral 100 1 PT, SK Tablets B.P. 5 mg Oral 100 1 PT

Trimethoprim 300 mg Oral 7 1 AF

Tablets B.P.

1. The extracted provisions set out above are to be compared with what appeared, in relation to the same pharmaceutical benefits, in the determination which took effect on 1 December 1988 and which was revoked by the determination under review. The relevant extracts from the earlier determination are as follows:
   Name of Form (strength, Manner of Maximum Maximum Brand
   Pharmaceutical (type, size, administration quantity number of
   Benefit etc.) repeats
   Allopurinol 100 mg Oral 200 2 BW,DH,PT
   Tablets B.P. 300 mg Oral 60 2 BW,DH,PT
   Doxepin 10 mg (base) Oral 50 2 AF,PF
   Capsules B.P. 25 mg (base) Oral 50 2 AF,PF
   Frusemide Ampoule, 20 Injection 5 .. AF,HP
   Injection B.P. mg in 2 mL
   Frusemide 20 mg Oral 100 1 FM,HP
   Tablets B.P. 40 mg Oral 100 1 FM,HP,PT
   

500 mg Oral 50 3 FM,HP

Glibenclamide 5 mg Oral 100 5 AF,HP,RC

Tablets B.P.

Labetalol 100 mg Oral 100 5 AF,GL

Hydro-chloride 200 mg Oral 100 5 AF,GL

Tablets B.P.

Propranolol 10 mg Oral 100 5 AF,IC

Tablets B.P. 40 mg Oral 100 5 AF,IC,PT

160 mg Oral 50 5 AF,IC,PT

Trifluoperazine 1 mg Oral 200 .. PT,SK

Hydro-chloride 2 mg Oral 200 .. PT,SK

Tablets B.P. 5 mg Oral 100 1 PT,SK

Trimethoprim 300 mg Oral 7 1 AF,BW

Tablets B.P.

1. As appears from the relevant determinations, the names of the manufacturers denoted by the letters referred to in column 6 of each of the tables set out above are:
   

Letters Manufacturer's Name AF Alphapharm Pty Ltd BW Wellcome Australia Limited DH Drug Houses of Australia Pty Ltd FM Fawns and McAllan Pty Ltd GL Glaxo (Australia Pty Ltd) HP Hoechst Australia Ltd IC ICI Australia Operations Pty Ltd PF Pfizer Pty Ltd PT CP Protea RC Reckitts Pty Ltd SK Smith Kline & French Laboratories

(Aust.) Ltd

1. A comparison of the tables shows that the letters denoting the applicants other than Hoechst and Smith Kline have been deleted from the determination under review in respect of the pharmaceutical benefits listed; that the letters denoting Hoechst have been deleted except in relation to the 20 mg form of the pharmaceutical benefit Frusemide Tablets B.P.; and that the letters denoting Smith Kline have been deleted except in relation to the 2 mg form of the pharmaceutical benefit Trifluoperazine Hydrochloride Tablets B.P.
   Reasons for the decision

2. Each of the statements furnished by the second respondent under s.13 of the Judicial Review Act sets out reasons for the decision. The reasons set out in the statement concerning the decision relating to Propranolol Tablets B.P. manufactured by ICI are as follows:
   

"4.1 On 16 March 1989 I declared that the drug Propranolol was a drug or medicinal preparation to which Part VII of the Act applies and determined the brands under which that drug may be supplied under Part VII of the Act which determination did not include the brand Inderal manufactured by ICI. I considered the Government's Generic Pricing Policy as it was on 29 July 1988 the day on which the PBPA's (Pharmaceutical Benefits Pricing Authority's) recommendation was forwarded to the Minister to delist brands whose manufacturer would not comply with the policy. I noted that the Minister had agreed with this recommendation on 4 August 1988. I noted also the representations of ICI on this made in their letters and in oral representations. By the deadline of 6 September 1988, ICI had failed to agree with the price reduction to comply with the Generic Pricing Policy. In my opinion ICI did not give any reasons which would justify an exemption from this Policy in the case of Inderal. The concerns raised by ICI were either directly answered by the PBPA or were, of themselves, insufficient to justify Inderal remaining on the PBS at a price above the 20 cent maximum price differential. I did not consider any of the matters raised by ICI warranted seeking the Minister's reappraisal of his acceptance of the PBPA recommendation. Furthermore I saw no reason to seek that the Minister take the matter back to Cabinet.

4.2 I decided that alternative manufacturers of Propranolol were available, with a bioequivalent product, who were able to supply the PBS demand and satisfy the "market availability" test. I reached the view that the delisting of Inderal would lead to a substantial savings (sic) of Commonwealth Revenue from the PBS. The agreement of ICI to lower the price was not received until 23 February 1989. It would have been practically impossible to provide advance notice to doctors and pharmacists of the late retention of Inderal on the PBS list for 1 April

1989. Given that alternative manufacturers of suitable equivalent drugs were available, I decided that there was no justification for the exercise of the discretion in section 85B. 4.3 The alternative manufacturers of Inderal sought and were given a commitment from the Commonwealth to provide at least 4 months notice of the intention to relist the delisted brand of the above drug. I believe that such a commitment was necessary to ensure that supplies of Inderal continued to be available. The alternative suppliers were concerned that they might be entering into commercial arrangements to meet the extra demand only to find that the Commonwealth might then refuse to proceed with the delisting action. Accordingly, a 4-month commitment was given so as to ensure continuity of supplies.

4.4 I formed the view that based on the above considerations I should exercise the discretion in sub-section 85(6) of the Act to remove Inderal from the PBS."

The relevant parts of the other statements, though differing in some details, are to the same effect and are couched in substantially similar terms.

The issues

1. The principal argument advanced on behalf of the applicants denies that, in exercising the discretion conferred by sub-s.85(6) to determine the brand or brands under which a drug or medicinal preparation may be supplied under Part VII, a consideration relevant to be taken into account is, where there is only one manufacturer of that drug or medicinal preparation, the price at which that manufacturer is prepared to make sales of his product to approved pharmacists or, where that drug or medicinal preparation is manufactured by more than one manufacturer, the comparative prices at which those manufacturers are prepared to make such sales. According to the submission, the situation is the same where a determination is already in force under sub-s.85(6) listing a particular brand or particular brands of a drug or medicinal preparation and what is being considered is the making of a new determination having the effect of removing one or more of those brands from those that may be supplied under Part VII. It was submitted that the considerations relevant to be taken into account in exercising the discretion under sub-s.85(6) are limited to such matters as the nature of the drug or medicinal preparation, its use in medicine, its safety and efficacy and the circumstances under which it is produced, including the level of quality control.

2. To accept the applicants' principal argument was not, so it was submitted, to deprive the Minister of power to control, for the purposes of the pharmaceutical benefits scheme, the manufacturer's price for sales of a particular drug or medicinal preparation to approved pharmacists. That power, according to the submission, was to be found, but only to be found, in s.85B. That provision was said to operate, in the case of a drug or medicinal preparation in respect of which a determination is in force under sub-s.85(6) and in respect of which there is an absence of agreement with the manufacturer as to price, to enable the Minister to determine the amount that is, for the purposes of Part VII, to be taken to be the manufacturer's price for sales of its product to approved pharmacists. It was conceded that, where the Minister under s.85B determines an amount to be taken to be, for the purposes of Part VII, the manufacturer's price for sales of its product to approved pharmacists, the section also requires the Minister to determine the amount that is, for the purposes of Part VII, to be taken to be the special patient contribution in relation to that product. But, it was said, the Minister was entitled to fix the amount of the special patient contribution at zero or at a nominal amount, thus exercising the power under s.85B without disadvantage to the persons to whom the pharmaceutical benefit is supplied by the approved pharmacist.

3. I am unable to accept the applicants' principal submission. Sub-section 85(6) confers a wide discretion on the Minister. The factors to be taken into account in exercising that discretion are not expressly stated in the statute. Those factors must, therefore, be determined by implication from the subject-matter, scope and purpose of the Act. As was said in Minister for Aboriginal Affairs v. Peko-Wallsend Ltd (1986) 162 CLR 24 at pp 39-40 per Mason J.:
   

"In the context of judicial review on the ground of taking into account irrelevant considerations, this Court has held that, where a statute confers a discretion which in its terms is unconfined, the factors that may be taken into account in the exercise of the discretion are similarly unconfined, except in so far as there may be found in the subject-matter, scope and purpose of the statute some implied limitation on the factors to which the decision-maker may legitimately have regard."

1. As the purpose of Part VII of the National Health Act is to enact a scheme regulating the provision of pharmaceutical benefits to the public largely at the expense of the Commonwealth, I can see no basis for concluding that, in determining the drugs and medicinal preparations which may be supplied under the scheme, the Minister is required to ignore the cost to the revenue of providing a particular drug or medicinal preparation or a particular brand of that drug or medicinal preparation. So to conclude would, in my view, be an extraordinary result, a result that is not required by the language of the provisions. It would, in effect, deny to the Minister an effective power to regulate and control the circumstances in which the funds made available by the Parliament for the purposes of the pharmaceutical benefits scheme are expended. It can hardly be supposed that the Parliament intended that the Minister should be denied such a power. The logical place to find that power is in the provision enabling the Minister to identify and prescribe the drugs and medicinal preparations that may be supplied under the scheme. Sub-section 85(6) provides an essential part of the process by which such identification is to take place. It must also be borne well in mind that, whatever may be their practical effect upon the volume of a manufacturer's business in relation to a particular drug or medicinal preparation, the provisions of Part VII of the National Health Act do not preclude the manufacturer of a drug or medicinal preparation whose product is not listed as one to which Part VII applies from marketing or distributing its product or from fixing the price at which it will sell that product to a wholesaler or a pharmacist. The circumstance that a particular brand of drug or medicinal preparation is not included in a determination under sub-s.85(6) means only that that brand of the drug or medicinal preparation cannot be supplied as a pharmaceutical benefit under Part VII, with the consequence that the pharmacist who supplies it cannot receive from the Commonwealth a payment under Part VII in respect of that supply.

2. The cost to the revenue, so it seems to me, was clearly a factor which might be taken into account under sub-s.85(6) in the context of the statutory provisions that were in force prior to the coming into operation of the amendments made to the scheme by the National Health Amendment Act 1985. The enactment by that Act of s.85B did not, in my opinion, operate to remove that factor as one of those to be considered in exercising the discretion conferred by sub-s.85(6). The insertion of section 85B was clearly designed for a different purpose - to fill perceived deficiencies in the operation of the scheme and thus introduce greater flexibility in its administration. Any doubt one might have as to its true purpose is dispelled by reference to the second-reading speech made to the House of Representatives on 14 May 1985 upon the National Health Amendment Bill 1985 by the Minister of State for Health. The Minister said, in part:
   

1. What has been written so far is sufficient to dispose of the matter. However, before parting with the case, some further matters should be mentioned.

2. It should be recorded that the applicants did not challenge the decision under review on the ground that there had been a denial of procedural fairness in the course of the decision-making process. Although counsel for the applicants drew attention to the absence from the Ministerial statements concerning the generic pricing policy and its implementation of any reference to the consequences which might follow in the case of a manufacturer who failed to indicate a willingness to comply with it, I am unable to accept that the applicants were under any misapprehension in that regard.

3. Nor was any attempt made by the applicants to show that the prices which the Minister sought to have them accept for sales of their products to approved pharmacists were so inadequate or unfair as to sustain an argument that there had been no bona fide exercise of the discretionary power.

4. It should also be noted that the respondents did not challenge the standing of the applicants to institute the present proceeding, it being conceded that each of the applicants was a person aggrieved by the decision under review within the meaning of s.3(4) of the Judicial Review Act.

5. I have considered this matter on the assumed basis that the decision evidenced by the determination made on 16 March 1989 is "a decision of an administrative character" so as to be a reviewable decision under the Judicial Review Act. In the light of the conclusions to which I have come, it is unnecessary to express a definitive opinion whether that assumption is justified but there is, in my opinion, much to be said for the view that the decision sufficiently partakes of a legislative character to take it outside the purview of the Judicial Review Act. Resolution of the question would require consideration to be given to what was said in The Commonwealth v. Grunseit (1943) 67 CLR 58 per Latham C.J. at pp 82-3; Arnold v. Hunt (1943) 67 CLR 429; Hamblin v. Duffy (1981) 34 ALR 333; Evans v. Friemann (1981) 35 ALR 428 at pp 432-5; Minister for Industry and Commerce v. Tooheys Ltd (1981) 36 ALR 64: (1982) 42 ALR 260; and Queensland Medical Laboratory v. Blewett (1988) 84 ALR 615 at pp 633-6.
   Conclusion

6. For the reasons set out above, the application is dismissed. The applicants must pay the respondents' costs of the application.