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Merck Sharp & Dohme (Australia) Pty Ltd v Peterson

Merck Sharp & Dohme (Australia) Pty Ltd v Peterson

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FEDERAL COURT OF AUSTRALIA
Merck Sharp & Dohme (Australia) Pty Ltd v Peterson [2011] FCAFC 128

Citation: Merck Sharp & Dohme (Australia) Pty Ltd v Peterson [2011] FCAFC 128

Appeal from:
Peterson v Merck Sharpe & Dohme (Aust) Pty Ltd (No 5) [2010] FCA 605

Application for leave to appeal: Peterson v Merck Sharpe & Dohme (Aust) Pty Ltd [2010] FCA 180

Parties:
MERCK SHARP & DOHME (AUSTRALIA) PTY LTD (ACN 000 173 508) v GRAEME ROBERT PETERSON

MERCK SHARP & DOHME (AUSTRALIA) PTY LTD (ACN 000 173 508) v GRAEME ROBERT PETERSON AS REPRESENTATIVE OF PERSONS WHO ALLEGE THEY ARE GROUP MEMBERS BY REASON OF THE CIRCUMSTANCE IN PARAGRAPH 2(c)(i) OF THE FURTHER AMENDED STATEMENT OF CLAIM IN VID 451 OF 2006

File numbers: VID 570 of 2010
VID 571 of 2010

Judges: KEANE CJ, BENNETT AND GORDON JJ

Date of judgment: 12 October 2011

Catchwords:
TORTS – negligence – product liability – prescription medicine for relief of inflammation – side-effects – whether medicine caused or contributed to cardiovascular disease – content of duty of care – state of scientific uncertainty as to side-effects of medicine – state of scientific uncertainty as to plausibility of scientific hypothesis

TORTS – negligence – product liability – causation – prescription medicine for relief of inflammation – side-effects – whether medicine materially contributed to respondent’s heart attack – whether respondent’s consumption of medicine was a necessary precondition for occurrence of heart attack – interpretation and application of epidemiological evidence as a strand in the cable of circumstantial proof of causation – whether respondent established a causative link between cardiovascular events and the consumption of medicine

TORTS – negligence – product liability – prescription medicine for relief of inflammation – side-effects – legislation establishing minimum safety standards for the availability and use of regulated medicines – whether legislation intended to abrogate the common law rights of individual consumers

TRADE PRACTICES – misleading or deceptive conduct – prescription medicine for relief of inflammation associated with doubling of risk of heart attack – side-effects – whether manufacturer knew or ought to have known of increased risk – whether manufacturer negligently failed to warn of risk and represented safety of medicine – whether manufacturer took reasonable steps to ensure medical practitioners were sufficiently informed of clinical trials presenting signal of cardiovascular risk – whether doctors, pharmacists, health care professionals and the public were adequately warned of risk – whether amendment to “Product Information” sufficient – whether manufacturer entitled to assume that a medical practitioner would rely on amended “Product Information” – whether respondent would have declined to take medicine if appropriately warned of risk – whether respondent’s doctor relied on conduct of corporation in prescribing medicine to him – whether respondent’s doctor would have chosen not to prescribe medicine – whether respondent’s doctor would have prescribed medicine in any event

TRADE PRACTICES – unsuitable goods – prescription medicine for relief of inflammation associated with doubling of risk of heart attack – whether respondent made purpose of acquiring…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2011] FCAFC 128
Decision Date: 12 October 2011

CaseChat Overview and Summary

Merck Sharp & Dohme (Australia) Pty Ltd v Peterson involved a dispute between a pharmaceutical company and a consumer regarding the alleged side-effects of a prescription medicine. The consumer, Mr Peterson, sued the pharmaceutical company for negligence, alleging that the medicine caused or contributed to his cardiovascular disease. The case was heard by the High Court of Australia.

The legal issues in the case centred around the duty of care owed by the pharmaceutical company to the consumer, the causation of the consumer’s heart attack, and the applicability of the statutory minimum safety standards for regulated medicines to the consumer’s common law rights. The court was required to determine whether the pharmaceutical company was negligent in failing to warn of the risks associated with the medicine, and whether the medicine was defective or unsuitable for its intended purpose.

The court found that the state of scientific knowledge at the time the medicine was supplied did not enable the discovery of a defect in the medicine. The court also held that the statutory minimum safety standards did not abrogate the common law rights of individual consumers. The court found that the consumer had not established a causative link between the consumption of the medicine and the occurrence of the heart attack. The court concluded that the pharmaceutical company was not negligent in failing to warn of the risks associated with the medicine, and that the medicine was not defective or unsuitable for its intended purpose.

The court allowed the appeal by the pharmaceutical company and dismissed the consumer’s action. The court also granted leave to appeal in respect of the determination of questions which affect other applicants, and directed the parties to confer and file minutes of orders and written submissions as to the contentions of the parties.

Orders

Orders of the court

1. The appellant’s appeal be allowed.

2. The judgment in favour of the respondent be set aside and the respondent’s action be dismissed.

3. Time be extended to allow the respondent to file the notice of cross-appeal but that the cross-appeal be dismissed.

4. The parties confer and thereafter by 4:00pm on 26 October 2011 file minutes of orders (including as to costs), and in the event of disagreement file and serve written submissions as to the contentions of the parties.

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

1. The respondent’s application for leave to appeal be granted.

2. The appeal be allowed to the extent indicated in the reasons for judgment.

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

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

As recorded at [205]-[206] above, the state of scientific knowledge at the time Mr Peterson took Vioxx was such that it was not demonstrated that Vioxx caused an increased risk of MI. As the primary judge said at [929]:Section 75AK(l)(c) contemplates the existence of a defect capable of being discovered by reference to the current state of scientific or technical knowledge. It is not concerned with the kind of contextual circumstances referred to in s 75AC(2). … The defect was something inherent in Vioxx as a matter of composition. I consider that the intent of s 75AK(1)(c) is that if that defect could not be discovered according to the state of scientific or technical knowledge, the defence should be available, notwithstanding that enough was suspected about the product to activate an implied obligation to give warnings of the kind mentioned in s 75AC(2)(d).That is, the state of scientific or technical knowledge at the time when Vioxx was supplied by MSDA to Mr Peterson was not such as to enable the defect to be discovered. We refer to [35] to [46] above. We agree with these conclusions.CONCLUSION We would allow MSDA’s appeal and set aside the judgment in favour of Mr Peterson and dismiss his action. As to MSDA’s application for leave to appeal in respect of the determination of questions which affect the other applicants, we would grant leave to appeal, and allow the appeal to the extent indicated in our reasons. We extend time to allow Mr Peterson to file a notice of cross-appeal but dismiss the cross-appeal. We direct that the parties confer and thereafter by 4:00pm on 26 October 2011 file minutes of orders (including as to costs), and in the event of disagreement file and serve written submissions as to the contentions of the parties.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Citation:		Merck Sharp & Dohme (Australia) Pty Ltd v Peterson [2011] FCAFC 128
Appeal from:		Peterson v Merck Sharpe & Dohme (Aust) Pty Ltd (No 5) [2010] FCA 605 Application for leave to appeal: Peterson v Merck Sharpe & Dohme (Aust) Pty Ltd [2010] FCA 180
Parties:		MERCK SHARP & DOHME (AUSTRALIA) PTY LTD (ACN 000 173 508) v GRAEME ROBERT PETERSON MERCK SHARP & DOHME (AUSTRALIA) PTY LTD (ACN 000 173 508) v GRAEME ROBERT PETERSON AS REPRESENTATIVE OF PERSONS WHO ALLEGE THEY ARE GROUP MEMBERS BY REASON OF THE CIRCUMSTANCE IN PARAGRAPH 2(c)(i) OF THE FURTHER AMENDED STATEMENT OF CLAIM IN VID 451 OF 2006
File numbers:		VID 570 of 2010 VID 571 of 2010
Judges:		KEANE CJ, BENNETT AND GORDON JJ
Date of judgment:		12 October 2011
Catchwords:		TORTS – negligence – product liability – prescription medicine for relief of inflammation – side-effects – whether medicine caused or contributed to cardiovascular disease – content of duty of care – state of scientific uncertainty as to side-effects of medicine – state of scientific uncertainty as to plausibility of scientific hypothesis TORTS – negligence – product liability – causation – prescription medicine for relief of inflammation – side-effects – whether medicine materially contributed to respondent’s heart attack – whether respondent’s consumption of medicine was a necessary precondition for occurrence of heart attack – interpretation and application of epidemiological evidence as a strand in the cable of circumstantial proof of causation – whether respondent established a causative link between cardiovascular events and the consumption of medicine TORTS – negligence – product liability – prescription medicine for relief of inflammation – side-effects – legislation establishing minimum safety standards for the availability and use of regulated medicines – whether legislation intended to abrogate the common law rights of individual consumers TRADE PRACTICES – misleading or deceptive conduct – prescription medicine for relief of inflammation associated with doubling of risk of heart attack – side-effects – whether manufacturer knew or ought to have known of increased risk – whether manufacturer negligently failed to warn of risk and represented safety of medicine – whether manufacturer took reasonable steps to ensure medical practitioners were sufficiently informed of clinical trials presenting signal of cardiovascular risk – whether doctors, pharmacists, health care professionals and the public were adequately warned of risk – whether amendment to “Product Information” sufficient – whether manufacturer entitled to assume that a medical practitioner would rely on amended “Product Information” – whether respondent would have declined to take medicine if appropriately warned of risk – whether respondent’s doctor relied on conduct of corporation in prescribing medicine to him – whether respondent’s doctor would have chosen not to prescribe medicine – whether respondent’s doctor would have prescribed medicine in any event TRADE PRACTICES – unsuitable goods – prescription medicine for relief of inflammation associated with doubling of risk of heart attack – whether respondent made purpose of acquiring…