New Zealand Health Trust v Attorney-General
[2020] NZCA 166
•15 May 2020 at 11.00 am
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA132/2020 [2020] NZCA 166 |
| BETWEEN | NEW ZEALAND HEALTH TRUST |
| AND | PROMISIA INTEGRATIVE LIMITED |
| AND | ATTORNEY-GENERAL |
| Court: | Miller and Goddard JJ |
Counsel: | L Hansen for Applicants |
Judgment: | 15 May 2020 at 11.00 am |
JUDGMENT OF THE COURT
AWe decline the application for leave to appeal.
BThe applicants must pay the respondent costs for a standard appeal on a band B basis plus usual disbursements.
____________________________________________________________________
REASONS OF THE COURT
(Given by Miller J)
This is an application for leave to appeal from an interlocutory judgment of the High Court refusing the applicants, whom we will call NZ Health Trust and Promisia, an interim order on judicial review.[1] The decision under attack is that of the Minister of Health, who intends to Gazette a plant extract, artemisia annua extract (AAE), as a prescription-only medicine.[2] The decision was made by the Minister’s delegate, Christopher James, who is the Group Manager of Medsafe, the New Zealand Medicines and Medical Devices Safety Authority.[3]
[1]Senior Courts Act 2016, s 56(5).
[2]The decision was made under s 106 of the Medicines Act 1981, which allows the Minister to declare any medicine a prescription medicine by notice in the Gazette.
[3]Medsafe is a business unit of the Ministry of Health responsible for the regulation of therapeutic products in New Zealand.
Promisia has for some six years sold called a product called Arthrem through pharmacies and an online sales channel. Arthrem contains AAE. Until now it has been sold as a dietary supplement that is not a medicine and does not require a prescription. NZ Health Trust is a charitable trust with, as we understand it, no position to preserve that need be taken into account for present purposes.
The applicants say that AAE is not a medicine, and as such cannot be classified as a prescription medicine. They also say that Medsafe did not undertake the necessary process of describing known undesirable effects and risks associated with AAE before the decision was made to Gazette it as a prescription-only medicine.[4] Rather, Medsafe focused only on Arthrem and used data that did not justify its conclusion that AAE may cause liver damage. In fact, they say, there are no known liver toxicity effects associated with any form of AAE and any risk that there is can be managed via the warning label on Arthrem, as it is with other products such as paracetamol, which is sold without prescription but has known liver toxicity risks. For these reasons, there are no compelling public safety risks to justify the haste with which Medsafe has acted; rather, it could continue to wait until the application for judicial review is finally determined.
[4]See Medsafe How to change the legal classification of a medicine in New Zealand (Ministry of Health, guidance document, March 2019) at 8.
In the High Court Doogue J declined interim relief and further declined leave to appeal.[5] She reasoned that the application for review is not strong; the evidence does justify the inference that AAE causes liver damage; the risk to public health and safety is material; and the balance of convenience or fairness clearly favours the respondent,[6] partly because Promisia, a listed company, has advised shareholders that it has exited the natural products market and the decision to classify Arthrem as a prescription medicine will have “minimal impact” on the company.[7]
[5]New Zealand Health Trust v Attorney-General [2020] NZHC 433 [Interlocutory judgment]; and New Zealand Health Trust v Attorney-General [2020] NZHC 500 [Leave decision].
[6]Interlocutory judgment, above n 5, at [79]–[81].
[7]At [23].
Arthrem remains on sale in the meantime. Medsafe has urged haste, both below and in this Court, on the ground that gazetting is necessary to mitigate risks to public health and safety.
The central question concerns the merits. It is whether Arthrem is a medicine as defined. Section 3(1) of the Medicines Act 1981 provides that:
3Meaning of medicine, new medicine, prescription medicine, and restricted medicine
(1) In this Act, unless the context otherwise requires, medicine—
(a) means any substance or article that—
(i)is manufactured, imported, sold, or supplied wholly or principally for administering to 1 or more human beings for a therapeutic purpose; and
(ii)achieves, or is likely to achieve, its principal intended action in or on the human body by pharmacological, immunological, or metabolic means; and
(b) includes any substance or article—
(i)that is manufactured, imported, sold, or supplied wholly or principally for use as a therapeutically active ingredient in the preparation of any substance or article that falls within paragraph (a); or
(ii)of a kind or belonging to a class that is declared by regulations to be a medicine for the purposes of this Act; but
(c) does not include—
(i) a medical device; or
(ii)any food within the meaning of section 2 of the Food Act 1981;[8] or
(iii)any radioactive material within the meaning of section 5(1) of the Radiation Safety Act 2016; or
(iv)any animal food in which a medicine (within the meaning of paragraph (a) or (b)) is incorporated; or
(v) any animal remedy; or
(vi)any substance or article of a kind or belonging to a class that is declared by regulations not to be a medicine for the purposes of this Act.
[8]The more recent Food Act 2014 should be read in here.
Promisia says that Arthrem is plant material intended for human consumption and is not marketed as having any therapeutic purpose; rather, it is a food as defined by the Food Act 2014:
9 Meaning of food
(1) In this Act, unless the context otherwise requires, food—
(a)means anything that is used, capable of being used, or represented as being for use, for human consumption (whether raw, prepared, or partly prepared); and
(b) includes—
(i)seeds, plants, or plant material intended for human consumption, including seeds that are intended to be sprouted and consumed as sprouts, but not other seeds, plants, or plant material intended for planting; and
…
(c) does not include—
…
(iii) any substance that—
(A) is used only as a medicine or is a controlled drug or psychoactive substance; …
Medsafe responds that Arthrem is a medicine because it is sold for administering to people for a therapeutic purpose and achieves its intended action on the human body by pharmacological means. A therapeutic purpose is defined as including a purpose of, or connected with, “preventing, diagnosing, monitoring, alleviating, treating, curing, or compensating for, a disease, ailment, defect, or injury”.[9] It appears to be common ground that artemisia annua has been used in Chinese medical practice for many centuries.
[9]Medicines Act, s 4(a).
Doogue J considered the evidence and concluded that Arthrem is sold for therapeutic purposes — maintenance of joint health and mobility, and Promisia’s marketing materials seem to imply that Arthrem is a “medication”.[10] She concluded that there is a strongly arguable case that Arthrem is a medicine.[11]
[10]Interlocutory judgment, above n 5, at [33]–[37].
[11]At [38].
We accept that the case involves private and public interests of some importance. There is an arguable case that Arthrem is a food as defined, and not a medicine. However, a decision on that point must await a substantive hearing. The material before us at this preliminary stage does not support the applicants’ contention that their case is strong. The statutory definitions have a purposive component; food means things for human consumption, while medicines are administered for therapeutic purposes. There is prima facie evidence that Arthrem is sold for therapeutic purposes and otherwise meets the statutory definition of a medicine. AAE is a plant extract, rather than the plant itself, and as Doogue J noted that may detract from the applicants’ argument that it is a food.[12]
[12]At [39]–[40].
There is a vigorous dispute about the claimed causal connection between AAE and liver damage. Promisia maintains that no such connection exists. Its Chief Executive Officer, Rene de Wit, characterises Medsafe’s claim as reckless and untrue. He maintains that Medsafe has had a closed mind throughout and has not conducted a fair process. These criticisms may prove valid, but it is not currently possible to say that the evidence Medsafe relied on is unreliable. Mr James appears to have followed established processes, which included recommendations from the Medicines Classification Committee, which advises on classification, and the Medicines Adverse Reactions Committee, which advises on the safety of medicines. Both are expert committees. They relied on data from the Centre for Adverse Reactions Monitoring, which collects voluntary reports on adverse reactions to medicines. Further, it may suffice in law if there is evidence to justify a precautionary approach to risk. It is not for the court to say whether product labelling that references the risk of liver damage will suffice to manage any risk.
Doogue J found that the balance of convenience or fairness clearly favoured Medsafe.[13] The key consideration was the evidence of liver damage, which is plainly a serious public health concern if correct.[14] Against that, if relief is declined consumers will not be able to buy Arthrem, which may have modest therapeutic benefits, without a prescription and Promisia risks immediate losses of perhaps $1.3 million if it cannot process raw materials and must compensate pharmacists holding stocks of Arthrem.[15] Mr de Wit says that sales dropped to 10 per cent of their former level when the Director-General of Health published an alert. He claims that losses may exceed $50 million, without detailing how that figure is calculated.
[13]At [80].
[14]At [72]–[74].
[15]At [22].
We accept for present purposes that classification will likely cause Promisia financial loss. The loss should not be discounted merely because it may not much affect Promisia’s overall financial performance. But it does not outweigh the public health risk which, as we have said, cannot be discounted at this stage.
We are not persuaded that the Judge erred in the balancing exercise.
For these reasons, we decline the application for leave to appeal.
The applicants must pay costs to the respondent for a standard application on a band B basis plus usual disbursements.
Solicitors:
Bartlett Law, Wellington for Applicants
Crown Law Office, Wellington for Respondent
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