iNova Pharmaceuticals (Australia) Pty Ltd and Secretary, Department of Health and Ageing
[2010] AATA 542
•22 July 2010
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2010] AATA 542
ADMINISTRATIVE APPEALS TRIBUNAL )
) No: 2010/0912 and 2010/1097
GENERAL ADMINISTRATIVE DIVISION )
ReiNova Pharmaceuticals (Australia) Pty Ltd
Applicant
AndSecretary, Department of Health and Ageing
Respondent
DECISION
TribunalMr R P Handley, Deputy President
Ms A K Britton, Senior Member
Date22 July 2010
PlaceSydney
DecisionThe decisions under review are set aside and the matters remitted to the respondent with directions to inform the applicant whether the documents sought in its freedom of information applications exist. If the documents do exist, it is open to the respondent to claim exemptions in respect of the whole or part of those documents in the usual way pursuant to the provisions of the Freedom of Information Act 1982.
......................[sgd]...................
Mr R P Handley
Deputy President
CATCHWORDS
FREEDOM OF INFORMATION – therapeutic goods – applications to register a therapeutic product - power to issue statement of reasons without revealing whether documents are in the agency’s possession – exemptions – breach of confidence – adverse effect on proper and efficient conduct of the operations of the agency – public interest - prejudice to proper administration of law
RELEVANT ACTS
Administrative Appeals Tribunal Act 1975 (Cth): s 42D
Freedom of Information Act 1982 (Cth): ss 24A, 25, 26, 37, 40, 43, 45, 61
Freedom of Information Act 1992 (Qld): s 25
National Health Act 1953 (Cth): ss 99ACB, 99ACH
Therapeutic Goods Act 1989 (Cth)
CITATIONS
Re Connolly and Department of Defence (1994) 34 ALD 655
Re Fox and Queensland Police Service [2001] QICmr 1; (2001) 6 QAR 1
Re EST and Department of Family Services and Aboriginal and Islander Affairs [1995] QICmr 20; (1995) 2 QAR 645
News Corporation Ltd v National Companies and Securities Commission (1984) 5 FCR 88; (1984) 7 ALN N164; (1984) 57 ALR 550
Anthony Horden and Sons Ltd v The Amalgamated Clothing and Allied Trades Union of Australia (1932) 47 CLR 1; [1932] ALR 355
R v Wallis; Ex Parte Employers Association of Wool Selling Brokers (1949) 78 CLR 529; [1949] ALR 689; (1949) 23 ALJR 299
Wyeth v Department of Health and Ageing (2009) 255 ALR 352; [2009] FCA 313
Alphapharm Pty Ltd v Wyeth and Ors (2009) 82 IPR 71; [2009] FCA 945
Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth and Ors (2009) 81 IPR 339; [2009] FCA 595
Attorney-General’s Department v Cockcroft (1986) 10 FCR 180; (1986) 12 ALD 468; (1986) 64 ALR 97
Searle Australia Pty Ltd v Public Interest Advocacy Centre (1992) 36 FCR 111; (1992) 108 ALR 163; (1992) 16 AAR 28
Re Murtagh and Commissioner of Taxation (1984) 6 ALD 112; (1984) 54 ALR 313; (1984) 1 AAR 419; (1984) 84 ATC 4516; (1984) 15 ATR 787
Re Altman and Family Court of Australia (1992) 27 ALD 369; (1992) 15 AAR 236
Re Petroulias and Commissioner of Taxation (2006) 62 ATR 1175; [2006] AATA 333
OTHER AUTHORITIES
DC Pearce and RS Geddes Statutory Interpretation in Australia, (6th ed, Butterworths, 2006)
Commonwealth, Attorney-General’s Department, Freedom of Information Memorandum No 26, June 1993
REASONS FOR DECISION
| 22 July 2010 | Mr R P Handley, Deputy President Ms A K Britton, Senior Member |
iNova Pharmaceuticals (Australia) Pty Ltd (iNova) seeks the review of decisions made by the Secretary of the Department of Health and Ageing under the Freedom of Information Act 1982 (Cth) (the FoI Act) to refuse access to documents fitting the description in iNova’s requests without informing iNova whether or not any such documents were in the Department’s possession.
Background
iNova states that it is an Australian owned and operated pharmaceutical company with leading consumer healthcare and specialty prescription brands that are sold in Australia and overseas.
All pharmaceutical products and therapeutic goods marketed in Australia must be listed on the Australian Register of Therapeutic Goods (ARTG) maintained by the Therapeutic Goods Administration (TGA). On the listing of a product on the ARTG, some details of the product are made public, including the company that applied for listing – the ‘sponsor’. Once a product is listed on the ARTG, the sponsor may apply for the product to be listed on the Pharmaceutical Benefits Scheme (PBS). PBS listed products are dispensed to patients at a fixed, government-subsidised price unless the actual price is less. PBS listing makes a product more attractive for doctors and patients because the consumer usually pays a lower price as a result. Where a product is not PBS listed, the consumer pays the full price.
There are two broad categories of product listed on the ARTG: ‘originator products’ (usually patented) — those for which the sponsor has to provide detailed evidence supporting its claims of quality, safety and efficacy for intended use, including, for example, the outcome of clinical and pre-clinical studies; and ‘generic products’ — those that contain the same amount of the same active pharmaceutical ingredient as the originator product, and where the medicine is absorbed, metabolised and excreted in the same way and at the same rate as the originator product. The term “bioequivalence” is used to describe a generic product that meets these criteria. Where the sponsor of the generic product can demonstrate the bioequivalence of the generic product to the originator product, then it can rely on the data supplied to the TGA by the sponsor of the originator product in support of its listing.
Among iNova’s products are those containing the active ingredients imiquimod and phentermine. The product name for iNova’s product containing imiquimod is Aldara which is listed on the ARTG. Aldara is also listed on the PBS for the primary treatment of superficial basal cell carcinoma, although not for the other uses for which it is prescribed, being the treatment of solar keratosis on the face and scalp and the treatment of external genital and perianal warts. iNova holds patents for imiquimod that expire in 2013.
The product names for iNova’s products containing phentermine are Duromine and Metermine. Duromine is an appetite suppressant which is listed on the ARTG but not on the PBS. iNova’s patents for phentermine have now expired.
By letter dated 22 October 2009, iNova requested:
a copy of any correspondence received by the Therapeutic Goods Administration and/or accepting into evaluation any Category 1 and/or Category 3 applications to register a therapeutic product containing the active ingredient phentermine made by sponsors other than iNova Pharmaceuticals in 2008-2009.
By a similar letter of the same date, access was sought to the same documents in relation to therapeutic products containing the active ingredient imiquimod.
On 17 November 2009, the Department refused access to any documents fitting those descriptions without confirming whether or not any such documents were in the TGA’s possession. iNova sought a review of these decisions. On 7 January 2010, the Department affirmed the decisions although relying on different exemptions in the FoI Act from those relied on in the original decisions. On 5 March 2010, iNova applied to the Tribunal for a further review of these decisions.
On 23 April 2010, the Tribunal heard submissions from the parties on a preliminary question, namely whether the Department has power to make a determination neither confirming nor denying the existence of documents in response to an application under the FoI Act. In the course of the hearing, it became clear that the Department relied in part on different grounds to justify its decision from those stated in its original and review determinations. The Tribunal therefore decided that given possible deficiencies in the original and review determinations, it was appropriate to remit the two decisions to the Department for further consideration pursuant to s 42D of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act).
By letters dated 7 May 2010, a delegate of the Secretary of the Department, Dr Ruth Lopert, the Principal Medical Adviser in the TGA, decided to refuse access to documents fitting the description in iNova’s requests without informing iNova whether or not any such documents were in the Department’s possession.
The Phentermine Decision
In the case of the request concerning phentermine, Dr Lopert stated that assuming the documents sought existed, they would be exempt under ss 43(1)(b) and 45 of the FoI Act. Section 43(1)(b) provides an exemption in respect of documents if their disclosure would disclose:
any other information [other than trade secrets] having a commercial value that would be, or could reasonably be expected to be, destroyed or diminished if the information were disclosed;
Dr Lopert said there is a reasonable likelihood that disclosure of the putative documents would result in the destruction or diminution of the value of the commercially valuable information provided to the Department about the business affairs of an applicant for registration of a medicine.
Section 45(1) provides an exemption in respect of documents if their disclosure under the FoI Act “would found an action, by a person (other than an agency or the Commonwealth), for breach of confidence”. An exception in s 45(2) is not relevant in this matter. Dr Lopert said that disclosure of the putative documents would found a successful action for breach of confidence by the putative business entity which provided the information to the Department.
Dr Lopert said in accordance with s 26(2) of the FoI Act, she had decided not to provide a document schedule or any other description of the putative documents as disclosure of the existence or non-existence of those documents would result in the disclosure of exempt material. Section 26(2) states that a statement of reasons for a decision to refuse access to requested documents (required to be given in accordance with s 26(1)) “is not required to contain any matter that is of such a nature that its inclusion in a document of an agency would cause the document to be an exempt document”.
The Imiquimod Decision
In the case of the request concerning imiquimod, Dr Lopert said assuming the documents sought existed, they would be exempt under ss 37(1)(a), 40(1)(d), 43(1)(b) and 45 of the FoI Act. Relying on s 26(2), she had decided not to provide a document schedule or other description as, in her view, disclosure of the existence or non-existence of the requested documents would result in the disclosure of exempt material.
Section 37(1)(a) provides an exemption in respect of documents if their disclosure would prejudice “the proper administration of the law in a particular instance”. Dr Lopert said there is a real likelihood that disclosure of the information requested:
would be used to obtain a financial advantage against the Commonwealth in the sale of certain medicines under the PBS thereby prejudicing the administration of the National Health Act 1953.
Dr Lopert said she had reached the view that to inform iNova of the existence or non-existence of the documents requested would, of itself, cause the document informing iNova of this to be exempt by reason of s 25(1) of the FoI Act. Section 25 applies including where such a document would be exempt by virtue of s 37(1) of the FoI Act. Thus, relying on s 25(2), Dr Lopert gave notice to iNova neither confirming nor denying the existence of the documents but stating that if the documents existed they would be exempt under s 37(1)(a). This would result in s 26(2) applying, thereby excluding her from the requirement to include any matter in the statement of reasons that would cause the document to be exempt.
Dr Lopert also stated that the putative documents were exempt by reason of s 40(1)(d) of the FoI Act. Section 40(1)(d) provides an exemption in respect of documents if their disclosure would or could be reasonably expected to “have an adverse effect on the proper and efficient conduct of the operations of an agency”. Section 40(2) states that the section does not apply in respect of matter in the document the disclosure of which would, on balance, be in the public interest.
Dr Lopert stated that disclosure of the putative documents would have a substantial adverse effect on the proper and efficient conduct of the operations of the Department in the administration of the PBS. She said the public interest in the efficient and effective operation of the PBS at the least cost to the taxpayer outweighs any disclosure to iNova.
With regard to s 43(1)(b) of the FoI Act, Dr Lopert stated that there is a reasonable likelihood that disclosure of the putative documents would result in the destruction or diminution of the value of the commercially valuable information provided to the Department about the business affairs of an applicant for registration of a medicine. Finally, in relation to s 45(1), Dr Lopert said that disclosure of the putative documents could found a successful action for breach of confidence by the putative business entity, which provided the information to the Department.
Dr Lopert said in accordance with s 26(2) of the FoI Act, she had decided it was not possible to provide more details of the reasons for the exemptions or the nature or extent of the putative documents exempted under ss 40(1)(d), 43(1)(b) and 45 without causing the decision to contain exempt material. Additionally, she had decided not to provide a document schedule or other description and not to inform iNova of the existence or non-existence of the documents sought. To give information as to the existence or non-existence of the requested documents would, if included in the decision, cause the decision to be an exempt document by virtue of ss 37(1), 40(1)(d), 43(1)(b) and 45(1) of the FoI Act.
Issues
The first issue for the Tribunal to determine is whether the Department has power to refuse access to documents and issue a statement of reasons for that decision in accordance with ss 26(1) and (2) without revealing whether any of the documents requested are in the Department’s possession.
The second issue is whether information as to whether any documents fitting the description of the documents requested exist or do not exist would, if included in a Departmental document, cause the document to be exempt under ss 37(1)(a), 40(1)(d), 43(1)(b) or 45.
The third issue is whether any documents fitting the description of the documents requested are, in the case of imiquimod, exempt under s 37(1)(a), and ss 40(1)(d), 43(1)(b) or 45 in respect of both imiquimod and phentermine.
The Construction of s 26(2)
Section 26(1) of the FoI Act requires that where a decision is made to refuse or defer access to a requested document, the decision-maker must give the applicant written notice of the decision and a statement of reasons for the decision. Section 26(2) states:
A notice under this section is not required to contain any matter that is of such a nature that its inclusion in a document of an agency would cause that document to be an exempt document.
The issue in dispute is whether s 26(2) permits an agency to refuse access to documents and issue a written notice stating its decision and the reasons for its decision without revealing whether any of the documents requested are in the agency’s possession. iNova submits that it is not open to the Department to issue a notice under s 26 without revealing this. The Department disagrees.
iNova points to the available responses open to an agency in responding to a request for access to documents under the FoI Act. Pursuant to s 24A of the FoI Act, an agency or Minister may refuse access to a document if all reasonable steps have been taken to find the document and the agency or Minister is satisfied that the document does not exist (s 24A(b)(ii)). Section 25 of the FoI Act provides an agency or Minister with a specific power not to provide information as to the existence of documents, but limiting the circumstances in which the power can be exercised to where an exemption might be claimed under s 33 (documents affecting national security, defence or international relations), s 33A (documents affecting relations with States) and s 37(1) (documents the disclosure of which could reasonably be expected to, amongst other things and relevant in this matter, prejudice the proper administration of the law in a particular instance).
Section 25 states:
(1)Nothing in this Act shall be taken to require an agency or Minister to give information as to the existence or non‑existence of a document where information as to the existence or non‑existence of that document, if included in a document of an agency, would cause the last‑mentioned document to be an exempt document by virtue of section 33 or 33A or subsection 37(1).
(2)Where a request relates to a document that is, or if it existed would be, of a kind referred to in subsection (1), the agency or Minister dealing with the request may give notice in writing to the applicant that the agency or the Minister, as the case may be, neither confirms nor denies the existence, as a document of the agency or an official document of the Minister, of such a document but that, assuming the existence of such a document, it would be an exempt document under section 33 or 33A or subsection 37(1) and, where such a notice is given:
(a)section 26 applies as if the decision to give such a notice were a decision referred to in that section; and
(b)the decision shall, for the purposes of Part VI, be deemed to be a decision refusing to grant access to the document in accordance with the request for the reason that the document would, if it existed, be an exempt document under section 33 or 33A or subsection 37(1), as the case may be.
In these proceedings, the Department relies on s 26(2) of the FoI Act in responding to the request concerning phentermine without reference to s 25 and without relying on the exemptions specifically referred to in that section.
iNova submits that it is implicit in s 26(1) that the agency holds the document and that access is refused in whole or in part. If the document does not exist, a notice should be issued under s 24A(b)(ii). A ‘neither confirm nor deny’ response is only available under s 25 where the specific preconditions set out therein are met.
Ms Allars, for iNova, noted that according to the principle of statutory interpretation known by the maxim expressum facit cessare tacitum, “where a particular procedure is designated to achieve something, other procedures are thereby excluded”: DC Pearce and RS Geddes, Statutory Interpretation in Australia, 6th ed 2006, p 142. Thus, because specific provision is made for a ‘neither confirm nor deny’ response in s 25, such a response is not available under more general provisions such as s 26(2).
Ms Allars referred to the decision in Re Connolly and Department of Defence (1994) 34 ALD 655, where Deputy President McMahon held, at [7], there was no basis in ss 39 or 43 of the FoI Act “which would justify a response of refusing to confirm or deny the existence of a document”. Ms Allars contended that it is apparent from his decision that DP McMahon was not prepared to contemplate the giving of a ‘neither confirm nor deny’ response under s 26(2) — such a response was only available under s 25(2). Ms Allars noted that a similar approach has been followed by the Queensland Information Commissioner: Re Fox and Queensland Police Service [2001] QICmr 1; Re EST and Department of Family Services and Aboriginal and Islander Affairs [1995] QICmr 20. In the latter decision, Commissioner Albeitz, at [16], referred to the potential for misuse of the provision of a ‘neither confirm nor deny’ response to the equivalent of s 25 of the FoI Act in the Freedom of Information Act 1992 (Qld).
Ms Allars submitted that the Government Policy on the FoI Act, Freedom of Information Memorandum No 26, issued June 1993 — relied on by the Department in support of its contention that a s 26(2) notice could be issued in relation to a document for which an exemption under ss 33, 33A or 37(1) is not available — does not govern the proper construction of the FoI Act. Notwithstanding this, she noted that the policy states, at [89], that one can only utilise s 25(1) where the preconditions are met (and see also [95], example 2).
Ms Campbell, for the Department, referred to the Full Federal Court decision in News Corporation Ltd v National Companies and Securities Commission (1984) 5 FCR 88 (News Corporation Ltd) in support of its contention that ss 25 and 26 of the FoI Act can work together. However in the Tribunal’s view, this decision, which was concerned with the applicability of s 37(1)(a) of the FoI Act, was factually different — the agency having disclosed the existence of relevant documents — and did not address the issue in the present matter, that is, whether a ‘neither confirm nor deny’ response can be made pursuant to s 26(2) where one of the three exemptions specified in s 25(2) is not being relied upon.
In our view, the approach outlined by Ms Allars is correct. The clear wording of s 25 indicates that a ‘neither confirm nor deny’ response can only be made in the limited circumstances outlined in that section: where, assuming the document exists, it would be an exempt document under ss 33, 33A or 37(1) of the FoI Act. If the Department’s submissions on this were correct and s 26(2) of itself empowered a ‘neither confirm nor deny’ response, it would mean that s 25 would be otiose – it would have no practical function. This would be contrary to the principle of statutory interpretation reflected in the maxim expressum facit cessare tacitum, and which was summed up by Gavan Duffy CJ and Dixon J in a joint judgment in Anthony Horden and Sons Ltd v The Amalgamated Clothing and Allied Trades Union of Australia (1932) 47 CLR 1, at 7:
When the Legislature explicitly gives a power by a particular provision which prescribes the mode in which it shall be exercised and the conditions and restrictions which must be observed, it excludes the operation of general expressions in the same instrument which might otherwise have been relied upon for the same power.
(See also R v Wallis; Ex Parte Employers Association of Wool Selling Brokers (1949) 78 CLR 529, at 550 (per Dixon J).)
In terms of the two decisions under review in this matter, the effect of our determination of this first issue on the construction of s 26(2) is that the Department’s decision concerning phentermine must be set aside. This is because there was no power to give a ‘neither confirm nor deny’ response to iNova’s request for access to documents concerning phentermine on the ground that assuming the documents existed they would be exempt under ss 43(1)(b) and 45.
In relation to imiquimod, the Department contends that if the documents sought by iNova existed, they would be exempt from disclosure on a number of grounds, including under s 37(1)(a) of the FoI Act. Dr Lopert, relying on the s 37(1)(a) exemption, issued a ‘neither confirm nor deny’ response to iNova under s 25(2). It is therefore necessary for the Tribunal to determine whether the putative documents would be exempt pursuant to s 37(1)(a) and, if so, whether the disclosure of their existence by the Department would cause that document to be exempt.
Does s 37(1)(a) apply?
In her decision, Dr Lopert determined that the documents were exempt from release pursuant to s 37(1)(a) because disclosure would be reasonably likely to prejudice the proper administration of the law, namely the National Health Act 1953 as it relates to the PBS. She said the administration of law and policy for the Commonwealth’s subsidy for the cost of medicines and for the introduction of generic medicines into the Australian market with consequent savings for Government, falls within the term ‘administration of the law’ in s 37(1)(a).
The parties agree that iNova’s request for access to documents concerning imiquimod would include applications for the listing of medicines (containing imiquimod) on the ARTG. Such documents would provide iNova with the name of the sponsor of any bioequivalent generic product to Aldara.
As stated above, once a generic product is listed on the ARTG, the sponsor of that product can apply for listing on the PBS. The Department contends that if action can be taken by the sponsor of the originator product to delay the market entry of the generic medicine and its PBS listing, this could have a significant impact on the cost to the Commonwealth of subsidising the cost of imiquimod because of the delay in a reduction of the Commonwealth subsidy. Section 99ACB of the National Health Act provides that once a bioequivalent generic medicine is listed on the PBS, there will be a 12.5 per cent reduction in the subsidised manufacturer’s price for the originator product and all bioequivalent medicines listed on the PBS. This reduction will increase to 16 per cent from 1 February 2011.
In oral evidence, Dr Lopert said that according to the Pharmaceutical Benefits Pricing Authority, $7.6 billion is spent annually on 181 million prescriptions. In the calendar year 2009, approximately 23,000 PBS prescriptions for imiquimod were dispensed at a cost to the Government of $3.3 million. She estimated that a 16 per cent reduction in the price of imiquimod would result in savings to the Government of about $400,000 a year. There are no generic brands of imiquimod currently registered.
Since April 2009, iNova has made regular requests for access to documents concerning imiquimod to establish if relevant applications have been received by the TGA. At first, the TGA response was that relevant documents could not be found or did not exist. However, in October 2009, the TGA responded by neither confirming nor denying the existence of the documents.
Dr Lopert said that apart from providing an opportunity to delay the market listing of a bioequivalent generic product, knowledge of the existence of an application for listing also has commercial value to other potential competitors who would pay to obtain such information either directly from the sponsor or from commercial intelligence gathering services such as IMS or Dun & Bradstreet.
Dr Lopert gave as an example of how the market entry of a bioequivalent generic product could be delayed, the sponsor of an originator product commencing breach of patent or copyright proceedings. She asserted that this has occurred on the Australian market. She referred to the case of Wyeth v Department of Health and Ageing [2009] FCA 313 (Wyeth), where Wyeth had originally sought information about applications to list bioequivalent generic products to venlafaxine in an FoI application. Dr Lopert said Wyeth could have sought injunctions to prevent the registration of generic venlafaxine products on the ARTG and listing on the PBS.
In cross-examination, Dr Lopert was asked whether she was aware that iNova’s previous FoI requests had been treated differently to the ones under consideration in the present proceedings (the TGA response having previously been that relevant documents could not be found or did not exist). She said it was departmental policy that a ‘neither confirm nor deny’ response be given to such FoI applications although she acknowledged that this had not been the response to iNova’s earlier FoI applications and this was not the response to similar applications in Wyeth.
Dr Lopert was referred to the decisions in Alphapharm Pty Ltd v Wyeth and Ors [2009] FCA 945 and Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth and Ors [2009] FCA 595. In each of these cases, a generics company filed an application for revocation of Wyeth’s patent and Wyeth then made a cross-claim for injunctive relief. Ms Allars said that the delays caused were the result of very complex proceedings. (The Tribunal notes that in both cases, the generics company was unaware of a ‘method’ (of manufacture) patent in relation to an extended release formulation of Wyeth’s product.)
Dr Lopert said the mere disclosure of the existence of an application for listing without providing access to documents associated with the application could lead to identification of the applicant because in Australia the market is relatively small. She pointed out that there are five members of the Generic Medicines Association, although not all companies producing generic medicines belong to this association. There are approximately 80 members of Medicines Australia, of which about 40 are manufacturers and sponsors of originators. Companies producing generics often have 30 or 40 different products. Dr Lopert conceded that many originator sponsors also manufacture generic medicines. In his affidavit dated 22 June 2010, Christiaan van Niekerk, the Chief Operating Officer of iNova, disagreed with Dr Lopert’s assertion about the ease of identifying a new applicant. He estimated that there are about 120 locally and overseas owned companies in the Australian pharmaceutical industry.
In her affidavit dated 10 June 2010, at [27], Dr Lopert also referred to other strategies used around the world that might be used to delay the entry of generic competitors on to the market. These include taking injunctive action against regulators, changing the originator product to make the demonstration of bio-equivalence more difficult (for example, developing a long acting preparation to avoid bioequivalence), entering into covert arrangements with generics companies and offering inducements to delay market entry, and registering and marketing one or more pseudo-generic brands.
Mr van Niekerk said iNova would use information obtained from documents accessed under FoI for business strategy purposes. He claims not to be aware of how iNova could delay an application for listing by the TGA once accepted. Even if an application is lodged, it does not mean that iNova would have grounds for a breach of patent application in respect of imiquimod. Moreover, if a bioequivalent generic product were listed on the PBS, this would only affect one‑third of Aldara sales because Aldara is only PBS listed for treating superficial basal cell carcinoma and not for the other uses for which it is prescribed.
Mr van Niekerk denied that iNova would withdraw an originator product from the market if it discovered that an application for listing of a generic product on the ARTG had been made. He said that in the European Union, registration of a generic product would be permitted even if the originator were withdrawn from the market.
Discussion
Section 37(1) provides relevantly that:
A document is an exempt document if its disclosure under this Act would, or could reasonably be expected to:
(a) … prejudice the … proper administration of the law in a particular instance; …
Pursuant to s 61 of the FoI Act, the Minister bears the onus of proof in establishing that the decisions made were justified.
The Federal Court has made clear that the words “could reasonably be expected to” should be given their ordinary meaning, requiring a judgement that must be reasonably based as distinct from something that is ‘irrational, absurd or ridiculous’: Attorney-General’s Department v Cockcroft (1986) 10 FCR 180, at 190, approved in Searle Australia Pty Ltd v Public Interest Advocacy Centre (1992) 36 FCR 11, at 123.
Section 37(3) of the FoI Act states that the word ‘law’ in the phrase ‘proper administration of the law’ “means law of the Commonwealth or of a State or Territory”. The reference to “a particular instance” directs the decision-maker to disclosure in the particular circumstances of the case rather than more generally: Re Murtagh and Commissioner of Taxation (1984) 6 ALD 112, at 129; News Corporation Ltd at 118 (per Beaumont J).
Ms Allars said that her searches have not identified any case where s 37(1)(a) of the FoI Act has been established on the basis of prejudice to the ‘proper administration of the law’. Nor do the cases referred to by Ms Campbell assist because, while there has been reference to ‘proper administration of the law’ in cases such as Re Altman and Family Court of Australia (1992) 27 ALD 369, at 376-377 (where President O’Connor rejected the Respondent’s contention that the disclosure of a transcript of an ex tempore decision of a judge would prejudice the proper administration of the law by discouraging judges from giving ex tempore judgments), and Re Petroulias and Commissioner of Taxation [2006] AATA 333 (a case in which an exemption under s 37(1)(b) was claimed), there was no analysis of the meaning of ‘proper administration of the law’. These decisions do indicate, however, that the reference to law is not limited to the criminal law.
In our view, the words ‘proper administration’ in the context of the law of the Commonwealth or a State or Territory, must be given their ordinary meaning, which is the proper management of the application of the law.
Ms Campbell submitted that, in this case, disclosure to iNova of the existence of an application to list a bioequivalent generic product would prejudice the operations of the Department in administering the Therapeutic Goods Act 1989 and the National Health Act as a result of iNova using the information to take action to delay the lawful registration of a medicine which is a bioequivalent to imiquimod. Central to this submission is the Department’s contention that disclosure of the fact of an application having been made would disclose the identity of the applicant sponsor.
Ms Campbell contended that the delay consequent upon action taken by iNova would flow through to the listing of the medicine on the PBS and would have an adverse effect on the Department’s ability to obtain value for Australian taxpayers’ money. Section 99ACH of the National Health Act provides that when a new bioequivalent generic product is listed on the PBS, the already listed brand name bioequivalent has applied to it a 12.5 per cent price reduction. As noted above, this price reduction will increase to 16 per cent from 1 February 2011.
Ms Allars contended that there is no evidence of any prejudice to the proper administration of any law. Provisions such as s 99ACH of the National Health Act operate of their own force. The Department has provided no evidence of a ‘particular instance’ of prejudice or to explain how the claimed delay in the reduction of PBS funding would result. The actions Dr Lopert claims that originator sponsors might take to preserve their market position are entirely speculative: there is no basis for an originator sponsor to take injunctive action against the regulators; changing the originator product would require an application for listing of a new medicine because this would be a different therapeutic good for the purposes of the Therapeutic Goods Act; patent infringement action cannot delay the TGA’s evaluation of an application for registration of a generic product; even if covert agreements and inducements were to exist, this would not delay the TGA’s evaluation of a generic product since no application would have been lodged; and the registering of and marketing by the originator of its own bioequivalent product, which is not prohibited by the Therapeutic Goods Act, would not delay the operation of the 12.5 percent price reduction. By contrast, Ms Allars said Mr van Niekerk has given evidence that he does not know of any way in which action taken by an originator can affect the operation of the law.
Ms Allars submitted that Dr Lopert’s comments about the practices of originator sponsors appear to be an expression of her personal opinions about competition in the pharmaceutical industry. These opinions lack relevance or probative value in relation to the issue of prejudice to the proper administration of the law. Her opinions about the use of patents suggest disapproval of reliance on the law of patents by originator sponsors. With regard to whether disclosure of the existence of an application would of itself lead to identification of the applicant, Ms Allars said Mr van Niekerk’s evidence, which was to estimate that there are about 120 locally and overseas owned companies in the Australian pharmaceutical industry, indicates that this could be difficult.
Ms Allars submitted that the Department has not discharged the onus of establishing that disclosure of information as to the existence or not of the documents sought would or could reasonably be expected to prejudice the proper administration of the law.
In our view, the application of s 25 of the FoI Act in this case requires that the following questions be answered. First, would the putative documents be exempt under s 37(1)(a)? If an application for registration of a bioequivalent generic product has been lodged with the TGA, disclosure of this document to iNova would provide iNova with details of the generic sponsor and other information. We accept, in this instance, that it can be argued that such a disclosure could be reasonably be expected to prejudice the proper administration of the law if iNova were to take action to delay listing of the generic product on the PBS. However, we make no finding on this question because even if the putative documents are exempt under s 37(1)(a), the second question, posed below, must be answered in the negative.
The second question is whether the disclosure of the existence or non-existence of documents falling within the scope of iNova’s FoI request, if included in the TGA’s response, would of itself cause the agency’s response to be exempt by virtue of s 37(1)(a). We note that s 25(1) only goes to the existence or non-existence of documents falling within the scope of the request and does not go to a description of the documents, the author or contents of the documents. For the reasons explained below, we are not satisfied in this instance that a response by the TGA disclosing the existence or non-existence of documents falling within the scope of FoI iNova’s request would of itself be exempt under s 37(1)(a).
We note that pursuant to s 26(2) of the FoI Act, for the TGA to comply with the obligation under s 26(1), the written notice of its decision is not required to contain any matter that is of such a nature that its inclusion in the agency’s response would cause the response to be an exempt document.
Turning to our reasons for not being satisfied from the evidence that the proper administration of the law, in terms of the way in which the application of the law is managed, could reasonably be expected to be prejudiced by disclosing to iNova whether or not the documents requested in respect of imiquimod exist (the second question posed above), we are mindful of the fact that one of the objects of the FoI Act is to provide a legally enforceable right of access to documents held by government. This is limited only by exceptions and exemptions necessary for the protection of essential public interests and the private and business affairs of persons in respect of whom information is collected and held by government (s 3(a) of the FoI Act). Moreover, it is the stated intention of the Parliament that the provisions of the FoI Act shall be interpreted so as to further the objects of the FoI Act (s 3(2)).
In our view, for the Department to establish its contention that the delay consequent upon action taken by iNova would flow through to the listing of the medicine on the PBS, and would have an adverse effect on the Department’s ability to obtain value for Australian taxpayers’ money, involves establishing five steps sequentially:
(1)that disclosure of the existence of an application for ARTG listing of a bioequivalent generic product would lead to iNova being able to identify the sponsor of the generic product;
(2)that iNova would take consequent action on discovering the identity of the sponsor of the generic product;
(3)that such action by iNova would delay the ARTG listing of the generic product;
(4)that a delay in ARTG listing would result in a delay in PBS listing; and
(5)that a delay in PBS listing would delay a reduction in the subsidy provided by the Government for the originator product.
First, we are not satisfied, as Dr Lopert contends, that iNova would be able to identify the sponsor of a bioequivalent generic product from the mere fact of knowing of an application for listing on the ARTG having been lodged. The evidence does not support the factual assumption on which Dr Lopert’s belief is based — namely that only a handful of pharmaceutical companies operating in Australia are involved in the sponsoring of generic products. Dr Lopert conceded that many pharmaceutical companies based in Australia sponsor both generic and originator products. Thus, her contention that by a process of deduction and the application of industry knowledge the generic sponsor can be identified with reasonable ease is not, in our view, established.
Second, even if iNova were able to identify the sponsor of the generic product, we are not persuaded by Dr Lopert’s evidence that iNova could take action to delay listing and thereby prejudice the proper administration of the law. We note Mr van Niekerk’s evidence that he is not aware of what action iNova could take in this instance. We also note that where a person holds a patent for a product or the copyright in a publication, the person is entitled to bring legal action to protect the patent or copyright. In our view, instituting proceedings to protect a legal right cannot be said to prejudice the proper administration of the law since such proceedings are themselves brought in pursuit of the application of the law.
Third, because, according to Dr Lopert’s evidence, the TGA has a specific time frame for the handling of applications for listing on the ARTG (for example, applications for the listing of new medicines must generally be processed within 255 working days from acceptance of the application), we are not satisfied that any action taken by iNova would delay the ARTG listing of a generic product.
Nevertheless, fourth, we accept that a delay in ARTG listing would result in a delay in PBS listing.
Finally, fifth, we accept that a delay in PBS listing could result in a delay in reducing the subsidy provided by the Government for the originator product. However, as Ms Allars pointed out, the price reduction on listing of a generic product is effected by operation of law rather than as a consequence of how the law is administered in a particular instance.
Thus, because the five steps identified above have not been established sequentially, the Department has not discharged the onus of establishing, in this instance, that the disclosure of the existence of the documents sought by iNova could reasonably be expected to prejudice the proper administration of the law.
The effect of our so concluding is that the Department is required to disclose to iNova whether or not the documents sought in respect of imiquimod exist. Our decision does not preclude the Department from seeking to rely on the exemptions in the Act to deny access to the whole or part of any relevant documents in its possession.
Decision
The decision under review is set aside and the matter is remitted to the Department with directions to inform iNova whether the documents sought in its FoI applications exist. If the documents do exist, it is open to the Department to claim exemptions in respect of the whole or part of those documents in the usual way pursuant to the provisions of the FoI Act.
I certify that the 73 preceding paragraphs are a true copy of the reasons for the decision herein of Mr RP Handley, Deputy President and Ms AK Britton, Senior Member.
Signed: ........[sgd]................................................................
Associate
Dates of Hearing: 24 and 25 June 2010
Date of Decision: 22 July 2010
Applicant representative: Middletons Lawyers
Applicant counsel: Ms M Allars
Respondent representative: Australian Government Solicitor
Respondent counsel: Ms M Campbell
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