Pfizer Pty Ltd v Birkett

Case [2000] FCA 303

FEDERAL COURT OF AUSTRALIA

Pfizer Pty Ltd v Birkett [2000] FCA 303

ADMINISTRATIVE REVIEW – Administrative Decisions (Judicial Review) Act 1977 (Cth) – National Health Act 1953 (Cth) – role of the Pharmaceutical Benefits Advisory Committee (PBAC) - Pharmaceutical Benefits Scheme (PBS) – PBAC declined to recommend to the Minister that Viagra (sildenifil) should be made available as a pharmaceutical benefit – whether the PBAC took irrelevant considerations into account – whether the PBAC is limited to considering medical factors when deciding whether to make a recommendation – whether the PBAC can take into account the overall cost to the Government – whether the PBAC failed to take relevant considerations into account – whether the PBAC breached the rules of natural justice – the extent to which the person affected by a decision needs to be informed of the details of the matters being considered – Wednesbury unreasonableness

Administrative Decisions (Judicial Review) Act 1977 (Cth) ss 5 and 13
National Health Act 1953 (Cth), ss 85, 85B, 88A, 101 and 101A

The Queen v The Australian Broadcasting Tribunal; Ex parte 2HD Pty Ltd (1979) 144 CLR 45, followed
Murphyores Incorporated Pty Ltd v Commonwealth (1976) 136 CLR 1, followed
Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24, followed
O’Sullivan v Farrer (1989) 168 CLR 210, followed
Ansett Transport Industries Ltd v Minister for Aviation (1987) 72 ALR 469, followed
Kioa v West [1985] 159 CLR 550, followed
Telstra Corporation Ltd v Kendall (1995) 55 FCR 221, followed
Minister for Health v Thomson (1985) 8 FCR 213, followed

PFIZER PROPRIETARY LIMITED v DONALD JOHN BIRKETT, MERVYN JOHN EADIE, TERESA RITA O’ROURKE CRAMOND, GORDON JOHNSON, ROSEMARY MUNRO, SIAN MARY HUGHES, DAVID ALEXANDER HENRY, EDWARD KEITH GRAVER, JOHN FARQUHAR MACDONALD, AUBREY PITT, and ERICA MARY COHN, EACH IN THEIR CAPACITY AS MEMBERS OF THE PHARMACEUTICAL BENEFITS ADVISORY COMMITTEE

MATHEWS J
20 MARCH 2000
SYDNEY


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N1120 of 1999

BETWEEN:

PFIZER PTY LIMITED
APPLICANT

AND:

DONALD JOHN BIRKETT
FIRST RESPONDENT

MERVYN JOHN EADIE
SECOND RESPONDENT

TERESA RITA O’ROURKE CRAMOND
THIRD RESPONDENT

GORDON JOHNSON
FOURTH RESPONDENT

ROSEMARY MUNRO
FIFTH RESPONDENT

SIAN MARY HUGHES
SIXTH RESPONDENT

DAVID ALEXANDER HENRY
SEVENTH RESPONDENT

EDWARD KEITH GRAVER
EIGHTH RESPONDENT

JOHN FARQUHAR MACDONALD
NINTH RESPONDENT

AUBREY PITT
TENTH RESPONDENT

ERICA MARY COHN
ELEVENTH RESPONDENT

EACH IN THEIR CAPACITY AS MEMBERS OF THE PHARMACEUTICAL BENEFITS ADVISORY COMMITTEE

JUDGE:

MATHEWS J

DATE OF ORDER:

20 MARCH 2000

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.   The application be dismissed.

2.   The applicant pay the respondents’ costs.

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


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N1120 of 1999

BETWEEN:

PFIZER PTY LIMITED
APPLICANT

AND:

DONALD JOHN BIRKETT
FIRST RESPONDENT

MERVYN JOHN EADIE
SECOND RESPONDENT

TERESA RITA O’ROURKE CRAMOND
THIRD RESPONDENT

GORDON JOHNSON
FOURTH RESPONDENT

ROSEMARY MUNRO
FIFTH RESPONDENT

SIAN MARY HUGHES
SIXTH…

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AGLC
Pfizer Pty Ltd v Birkett [2000] FCA 303
Case
[2000] FCA 303
Decision Date

CaseChat Overview and Summary

The case of Pfizer Pty Ltd v Birkett involves a dispute between Pfizer, an applicant for a pharmaceutical benefit, and the Pharmaceutical Benefits Advisory Committee (PBAC) over the listing of sildenafil on the Pharmaceutical Benefits Scheme (PBS). The primary issue in the case is whether the PBAC's decision to reject Pfizer's application was unreasonable and whether the PBAC took into account irrelevant considerations. The court examines whether the PBAC's decision was so unreasonable that no reasonable person could have reached it and whether the PBAC considered matters outside the scope of its authority under the legislation.

The court found that the PBAC's primary concern was not the absence of head-to-head trials between sildenafil and alprostadil, but rather the lack of data that enabled direct comparisons between the effectiveness and cost of the two therapies. The court noted that the PBAC had communicated this concern to Pfizer on numerous occasions. Regarding the complaint that the PBAC failed to make similar inquiries to limit the use of sildenafil, the court found that the PBAC's inquiries into the use of alprostadil were reasonable and did not unfairly treat Pfizer.

The court concluded that there was no substance in Pfizer's complaint that the PBAC failed to take relevant considerations into account. The court found that the PBAC's concerns about the overall cost to government of listing sildenafil on the PBS and the potential for "misuse" or "overuse" of the drug were legitimate considerations under the statutory framework. The court dismissed Pfizer's application and ordered that the applicant pay the respondents' costs.

Orders

Orders of the court

1. The application be dismissed.

2. The applicant pay the respondents’ costs.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

In “An Addendum on Interpretation”, at the front of the Guidelines, the following passage appears:“The place of head-to-head randomised trials that directly compare a proposed drug with its main comparator in relation to other forms of evidence (see Section 2.2)There is no absolute requirement for head-to-head randomised trials. Where no head-to-head trials are available, other forms of evidence will be accepted and given full and proper consideration. There is a clear preference for evidence from head-to-head trials where these are available. There is no expectation that companies will carry out a head-to-head trial in Australia or elsewhere solely for the purpose of an economic evaluation for submission to the PBAC.” (emphasis in original) In my view there is no substance in Pfizer’s complaint under this head. As the reasons for the PBAC’s decision make clear, it was not the absence of head-to-head trials between sildenafil and alprostadil which primarily concerned the PBAC. The absence of such trials was perfectly explicable, given that sildenafil is an oral therapy and alprostadil is injected. The PBAC’s major concern, which was communicated to Pfizer on numerous occasions, was that the data which was made available to it did not enable direct comparisons to be drawn between the effectiveness and cost of the two therapies. It was this concern which was expressed in the PBAC’s decision. I refer in this regard to the various communications between the PBAC and Pfizer on this issue which I discussed in relation to Pfizer’s complaint that the PBAC failed to take a relevant consideration into account. I think I need do no more than refer to the fact of that correspondence as establishing that this complaint cannot be made out.Was the PBAC’s decision so unreasonable that no reasonable person could have reach it? Pfizer claims that the PBAC’s decision was so unreasonable that no reasonable person, acting within jurisdiction and according to law, could have come to such a conclusion. This is generally known as “Wednesbury unreasonableness”. Pfizer relies on three matters, which it says are both independent and cumulative, to establish Wednesbury unreasonableness. I shall discuss each of them in turn. The first matter arises out of inquiries made by the PBAC as to the possibility of tightening the indication for the use of alprostadil in an endeavour to restrict its use to people for whom it is medically necessary. It will be recalled that Mr Threlfall wrote to the Urological Society of Australasia on this issue. Similar inquiries were made of other organisations such as the Australian Association of Neurologists and the Cardiac Society of Australia and New Zealand. Pfizer’s complaint, as I understand it, is that the PBAC could have made similar inquiries in an endeavour to limit the use of sildenafil, and that its failure to do so was unreasonable in the circumstances. I find it difficult to see how this head of complaint relates to the issue of Wednesbury unreasonableness. Alprostadil had been available as a pharmaceutical benefit under Part VII of the Act since 1996. It seems that Pfizer’s submission relating to sildenafil brought the situation regarding alprostadil to the PBAC’s notice, and triggered the PBAC’s concern as to the probable overuse of alprostadil. It therefore made inquiries in an endeavour to ascertain whether the position could be rectified. This matter was discussed at the PBAC meeting in March 1999. In the event it was decided that the indication for alprostadil should remain unchanged. Accordingly, the PBAC’s inquiries came to nothing.

Decision

Reasons for decision

MATHEWS J
In my view there is no substance in Pfizer’s complaint under this head. As the reasons for the PBAC’s decision make clear, it was not the absence of head-to-head trials between sildenafil and alprostadil which primarily concerned the PBAC. The absence of such trials was perfectly explicable, given that sildenafil is an oral therapy and alprostadil is injected. The PBAC’s major concern, which was communicated to Pfizer on numerous occasions, was that the data which was made available to it did not enable direct comparisons to be drawn between the effectiveness and cost of the two therapies. It was this concern which was expressed in the PBAC’s decision. I refer in this regard to the various communications between the PBAC and Pfizer on this issue which I discussed in relation to Pfizer’s complaint that the PBAC failed to take a relevant consideration into account. I think I need do no more than refer to the fact of that correspondence as establishing that this complaint cannot be made out.Was the PBAC’s decision so unreasonable that no reasonable person could have reach it? Pfizer claims that the PBAC’s decision was so unreasonable that no reasonable person, acting within jurisdiction and according to law, could have come to such a conclusion. This is generally known as “Wednesbury unreasonableness”. Pfizer relies on three matters, which it says are both independent and cumulative, to establish Wednesbury unreasonableness. I shall discuss each of them in turn. The first matter arises out of inquiries made by the PBAC as to the possibility of tightening the indication for the use of alprostadil in an endeavour to restrict its use to people for whom it is medically necessary. It will be recalled that Mr Threlfall wrote to the Urological Society of Australasia on this issue. Similar inquiries were made of other organisations such as the Australian Association of Neurologists and the Cardiac Society of Australia and New Zealand. Pfizer’s complaint, as I understand it, is that the PBAC could have made similar inquiries in an endeavour to limit the use of sildenafil, and that its failure to do so was unreasonable in the circumstances. I find it difficult to see how this head of complaint relates to the issue of Wednesbury unreasonableness. Alprostadil had been available as a pharmaceutical benefit under Part VII of the Act since 1996. It seems that Pfizer’s submission relating to sildenafil brought the situation regarding alprostadil to the PBAC’s notice, and triggered the PBAC’s concern as to the probable overuse of alprostadil. It therefore made inquiries in an endeavour to ascertain whether the position could be rectified. This matter was discussed at the PBAC meeting in March 1999. In the event it was decided that the indication for alprostadil should remain unchanged. Accordingly, the PBAC’s inquiries came to nothing. In my view the requests made by the PBAC were entirely reasonable in the circumstances. I can find no basis for Pfizer’s complaint that it was unfairly treated as a result of this sequence of events.

Ratio Decidendi

Legal Principle Established

Established by: MATHEWS J

I shall deal with each of these in turn.Did the PBAC take into account irrelevant considerations? It is submitted on behalf of Pfizer that the considerations to which the PBAC may have regard when deciding whether or not to make a recommendation under s 101(3) are confined to the following matters:· Matters contained in s 101(3), as extended by s 101(3A) and/or· Matters within the technical expertise of PBAC members. Mr Robertson, on behalf of Pfizer points out that the PBAC, as a committee of experts, was established to advise the Minister as to the drugs which should appropriately be included in the PBS. Its considerations at that time were confined to medical issues, as the legislative history (discussed later) shows. The scope of the Committee’s brief was expanded in 1987, with the enactment of subsections 101(3A), (3B) and (3C). These provisions enabled the Committee to consider not only the efficacy of the drug under consideration, but also obliged it to consider the cost of the drug, including a comparison of its cost with that of alternative therapies. “Cost” in this context means the cost of the individual therapy, according to Mr Robertson’s submission. The PBAC failed in this case to confine its considerations to these issues, the submission proceeds. In particular the Committee erred in taking the following matters into consideration:(1)the total cost to the Commonwealth of including sildenafil on the PBS;(2)the potential for “misuse” or “overuse” or “leakage” as a result of sildenafil being prescribed in circumstances where its use was not clinically necessary; and(3)other “political” considerations, such as the characterisation of sildenafil as a “lifestyle” treatment; and that the price of sildenafil, if it were declared, would need to be defended in Parliament. It is difficult to separate the issues relating to the first two considerations mentioned above. This is because the PBAC’s concerns relating to the likely use of sildenafil by people for whom it was not medically indicated (variously described as the “misuse” or “overuse” or “leakage” issue) were inextricably linked with its concern about the overall cost to government of the listing of sildenafil on the PBS. If it was legitimate for the PBAC to have regard to the overall cost of listing sildenafil, then the “overuse” issue, being integral to the Committee’s considerations on the cost issue, must also have been legitimate. Conversely, as I shall discuss later, any consideration of the “leakage” issue will inevitably lead into considerations relating to the overall cost to the PBAC of the listing of the drug in question. There is no dispute that the PBAC took into account the overall cost to Government of the listing of sildenafil on the PBS. Indeed it was one of the decisive issues which led to the rejection of Pfizer’s application. Moreover the Committee’s concerns on this issue were communicated to Pfizer from the outset, and Pfizer attempted to meet these concerns in its submissions. The real question is whether this was a legitimate concern of the PBAC’s, given the statutory framework under which the Committee operated.