Boehringer Ingelheim Pty Limited v Department of Health and Aging

BETWEEN: BOEHRINGER INGELHEIM PTY LIMITED

SECOND APPLICANT AND: DEPARTMENT OF HEALTH & AGEING

REASONS FOR JUDGMENT 1. The applicants are the producers and distributors of a non steriodal anti-inflammatory drug known as Meloxicam. The drug is sold under the trade names of Mobic and Movalis. The first applicant, Boehringer, produces and distributes Mobic, the second applicant, Arrow, produces and distributes Movalis. Meloxicam belongs to a class of pharmacueticals described as COX-2 inhibitors. There are two different types of drugs which fall within this class. One group belongs to what might be described at the Coxib group, the other belongs to the Oxicam group. Meloxicam belongs to the latter. 2. COX-2 inhibitors are an anti-inflammatory medicine commonly prescribed for the treatment of osteoarthritis and rheumatoid arthritis. Vioxx and Celebrex are COX-2 inhibitors but they fall within the Coxib group. 3. In late September 2004 Vioxx was voluntarily withdrawn from the market due to concerns about increased risk of cardiovascular adverse events from long term use. In October 2004, Boehringer received a request from the Therapeutic Goods Administration ("TGA") for a range of data relating to Meloxicam. A substantial amount of material was provided. 4. On 10 February 2005, the Therapeutic Goods Administration, in accordance with section 28 of the Therapeutic Goods Act 1989 (Cth) ("the Act") decided to impose a condition on the registration of Meloxicam, amending the text of the existing Australian Product Information (PI). The statement which is required to be added to the PI as a black boxed warning is as follows: - "Cardiovascular adverse effects Long term therapy with meloxicam increases the risk of cardiovascular and thrombotic adverse events. The exact size of the risk associated with long term use of meloxicam has not been determined. Meloxicam should not be prescribed for patients at high risk of cardiovascular adverse. Meloxicam should not be prescribed for any patient unless alternative therapy is contraindicated due to serious adverse effects." 5. There were two decisions, which are in identical terms for both Mobic and Movalis, and are stated to take effect on 11 March 2005, this being less than 28 days after receipt of the notice, in accordance with the provisions of section 28 of the Act. 6. The applicants seek interlocutory relief staying or suspending the operation of the decisions, pending the determination of the final hearing of the substantive application. 7. The docket Judge, Emmett J, has indicated that he would be able to give the parties an early hearing in May 2005, the exact date has not yet been fixed but is expected to be fixed very shortly. 8. In their application filed on 7 March 2005, the applicants seek judicial review of the decisions under the Administrative Decisions (Judicial Review) Act 1977 (Cth) ("ADJR Act"). The grounds of the application include a claim that a breach of the rules of natural justice occurred in connection with the making of the decisions. In particular it is said that in making the decisions the second respondent, Dr Pengilley, as a delegate of the first respondent, denied the applicants procedural fairness in relation to material taken into account in making the decisions. 9. The particulars of the claimed denial of procedural fairness are that Dr Pengilley took into account the expert advice of the Australian Drug Evaluation Committee ("ADEC") without giving the applicants an opportunity to comment on the ADEC data or upon extrapolations or conclusions based on the data in relation to Meloxicam. 10. On 24 January 2005, Dr Pengilley sought advice from ADEC as to whether the cardiovascular risk profile of Meloxicam was consistent with its safe use, given its current registered indications and instructions for use. 11. Dr Pengilley asked ADEC whether, if the cardiovascular risk profile of Meloxicam was not consistent with its safe use, could the registration be modified in such a way as to be consistent with safe use. A number of possible amendments were suggested including additional labelling or precaution statements such as PI amendments, boxed labels or black box warnings. Dr Pengilley concluded with a recommendation to ADEC as follows:- "Cardiovascular events COX-2 inhibitor drugs, of which meloxicam is one, have been associated with an increased risk of cardiovascular adverse events when taken long-term. Such events include an increased risk of cardiovascular death, stroke, or myocardial infarction. Long term safety data is not available for meloxicam and therefore the scale of cardiovascular risk associated with long term use of this drug is not known. Patients should commence therapy, and be titrated to, the lowest dose of meloxicam consistent with relief of symptoms. Meloxicam should not be prescribed for patients at high risk of cardiovascular adverse events (ie patients with diabetes, ischemic heart disease, cardiac failure, hypertension or smokers) unless alternate NSAID therapy is contraindicated on grounds of intolerance or lack of efficacy." 12. Dr Pengilley's request for advice from ADEC was provided to the applicants. Boehringer wrote to Dr Pengilley on 1 February 2005 proposing, in the interest of public safety, a modified form of precautionary statement as follows:- "COX-2 inhibitor drugs of the coxib class have been associated with an increased risk of cardiovascular adverse events when taken long term. Such events include an increased risk of cardiovascular death, stroke or myocardial infarction. While no increased risk has been observed with [Mobic}, comparable with long term safety data from controlled studies are not available; therefore it is not known whether there is a similar risk with long term use of [Mobic}. Patients should commence therapy, and be titrated to, the lowest dose of [Mobic] consistent with relief of symptoms. As with all NSAIDs, [Mobic] should be used with caution in patients with cardiovascular diseases as safety with long term use has not been fully established." 13. A meeting took place of ADEC on 3-4 February 2005. ADEC concluded that the same concerns that applied to other COX-2 inhibitors applied to Meloxicam. 14. ADEC's advice was that the PI should include certain information on cardiovascular events as follows:- "COX-2 inhibitor drugs, of which meloxicam is one, have been associated with an increased risk of cardiovascular and thrombotic adverse events when taken long-term. Such events include an increased risk of cardiovascular death, stroke, or myocardial infarction. Long term safety data is not available for meloxicam and therefore the scale of cardiovascular risk associated with long term use of this drug is not known. Patients should commence therapy, and be titrated to, the lowest dose of meloxicam consistent with relief of symptoms. Meloxicam should not be prescribed for patients at high risk of cardiovascular adverse events (including patients with diabetes, ischemic heart disease, cardiac failure, hyperlipidaemia, hypertension or smokers, and patients with a first degree relative with ischaemic heart disease) unless alternate therapy is contraindicated on grounds of severe adverse effects." 15. An extract of the minutes of the ADEC meeting was provided to Boehringer on 25 February 2005. That is, approximately 2 weeks after Dr Pengilley's decision. Apparently, Boehringer still does not have a full copy of the minutes. Boehringer was provided, prior to 10 February 2005, with a copy of a clinical evaluation report supplied to Dr Pengilley. Mr Basten QC, relied on a portion of the report to support his submission that there is no serious question to be tried on the procedural fairness ground of review. 16. The decision was supplied to the applicants on 11 February 2005. The reason for the decision are set out in brief terms. They include a statement based on information about Coxib, COX-2 inhibitors and state:- "It is therefore reasonable to conclude that such a risk [(increased risk of cardiovascular disease)] may exist with long term Meloxicam therapy." (emphasis added) 17. The decision states that Dr Pengilley has taken into consideration the expert advice of ADEC. The decision states that it is an initial decision within the meaning of section 60 of the Act. 18. Section 60 of the Act provides for internal review of the decision by the Minister. An appeal lies to the Administrative Appeals Tribunal under section 60(8) of the Act, if the applicants are dissatisfied with the Minister's decision. The applicants were notified of this in the concluding paragraph of the decision. 19. The penultimate paragraph of the decision stated that before embarking upon the process of internal review, the applicants were invited to contact Dr Pengilley to see whether the matter could be resolved informally. 20. The parties have endeavoured to resolve the matter in that way but without success. Nevertheless, it is to be noted that Dr Pengilley indicated that he may be prepared to make some changes to the black box warning. 21. The PI for a particular drug is a document which must be made available to all medical practitioners who prescribe it. Broadly, it contains the critical pharmacological information about the drug, its indicators, adverse events and contraindications and if applicable, appropriate safety warnings. There is an existing PI in effect for Meloxicam as a condition of its registration. I am satisfied on the evidence of Mr Cook that if the PI is amended in accordance with the decision taken by Dr Pengilley, it would have a substantial impact on the business of Boehringer. I am also satisfied on the evidence of Mr Duchen that there would be an adverse affect on the business, Arrow. The likely affect of the warning in those terms will be to discourage significant numbers of practitioners from prescribing Meloxicam at all. 22. I have evidence before me in a confidential exhibit of the likely reduction in the dollar value of the applicants' forecast revenues. It is sufficient to say that the forecast impact is substantial. There is also evidence that a reduction in revenue in the order of that referred to in one of the confidential exhibits would be likely to lead to a reduction in Boehringer's current staffing levels. 23. In my opinion, there is a serious question to be tried that Dr Pengilley took into account the advice of ADEC without giving the applicants an opportunity to comment on the data or upon extrapolations or conclusions based upon it. 24. In Pfizer Pty Limited v Birkett (2001) 112 FCR 305 ("Pfizer"), a Full Court held that the Pharmaceutical Benefits Advisory Committee ("PBAC") was under an obligation as a matter of procedural fairness to disclose to Pfizer that it proposed to attach significance to statistics relating to the usage of alternative treatments to Viagra and because the PBAC failed to disclose this information, Pfizer was deprived of the possibility of persuading the PBAC that the experience in respect of the alternative therapy would not be repeated with Viagra; see especially at [59] and [66]-[67]. 25. The denial of procedural fairness to which the applicants point in the present case seems to me on the materials before me at this early stage to be analogous to that which was found by the Full Court in Pfizer. 26. I do not think that the material put before me on this application enables me to distinguish Pfizer, or to say that no serious question arises. Nor did the material to which Mr Basten took me in evidence persuade me that the applicants have failed to establish a serious question in the terms to which I have averted. 27. The balance of convenience in my view favours the granting of interlocutory relief. I have power under section 15(1) of the ADJR Act and section 23 of the Federal Court Act 1976 (Cth) to suspend the operation of a decision on such conditions as I may think fit. 28. The applicants sought to meet the public health concerns arising from an unconditional suspension of the operation of the decision. Initially, they proposed a condition that they would amend the text of the PI by inserting a precautionary statement containing a warning in similar terms to that which was recommended by Dr Pengilley in his request for advice from ADEC on 24 January 2005. 29. The amendment was along the lines of the modification that was proposed by Boehringer on 1 February 2005. However, after discussions and debate about this in Court and bearing in mind certain concerns expressed by Mr Basten about the terms of the warning, the frequency of its distribution and its provenance, the applicants submitted an undertaking to the Court in place of the proposed condition. In my view, the terms of the proposed undertaking address all of the concerns raised by Mr Basten about the initial terms of the proposed warning. 30. Mr Basten submitted that in any event, I ought not to grant interlocutory relief because of the provisions of section 10(2)(b) of the ADJR Act. He pointed to the availability of internal review of the decision under section 60 of the Act, in particular, the availability of full merits review in the Administrative Appeals Tribunal ("AAT"). 31. Mr Basten relied on the decisions in McGowan v Migration Agents Registration Authority (2003) 129 FCR 118 at [57]-[59] and [71] per Branson J; Wyeth v Minister for Health and Aged Care [2000] FCA 330 at [44] to [47] per Finn J; and NAUV v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCA 1319 at [49]-[50] per Hely J, affirmed on appeal [2004] FCAFC 124 per Beaumont, Conti and Crennan JJ ("NAUV"). 32. The affect of Mr Basten's submissions was that save in exceptional circumstances, prerogative relief or relief under the ADJR Act will be withheld on discretionary grounds where other suitable remedies are available and have not been used. He submitted that it was for the applicants to elect between internal review under section 60 of the Act, with the right of full merits review to the AAT, and the pursuit of the present proceedings under the ADJR Act. Mr Basten said that since it was unlikely that final relief would be granted by reason of the availability of merits review in the AAT, I ought not to exercise my discretion to grant interlocutory relief. 33. However, it is plain that the internal review process and any review of this in the AAT would take some considerable period. Mr Robertson SC, submitted that it was unlikely that the matter could commence in the AAT before a period of about 3 to 4 months. The position in NAUV was quite different because there, the applicant sought review of a delegate's decision notwithstanding the availability of full merits review in the Refugee Review Tribunal. 34. In my opinion, a Court exercising the judicial power of the Commonwealth under Chapter III of the Constitution ought not refuse interlocutory relief where an arguable case has been demonstrated that the decision maker committed jurisdictional error such that his decision was no decision at all. Of course, I express no view on a final basis, but it is appropriate that I exercise my powers to suspend the operation of the decision which has been shown to raise a prima facie case of denial of procedural fairness in circumstances which will, if it is allowed to operate, from 11 March 2005 cause substantial damage to the applicant's business. 35. I am satisfied that the undertaking proffered by the applicants sufficiently meets the legitimate concerns of the respondents about the safety of public health in the interim. An early final hearing is to be held and the precautionary statements which will be distributed to relevant persons are in similar terms to those which were proposed initially by Dr Pengilley and indeed in the formulation suggested in APEC advice of 3-4 February 2005. 36. I propose accordingly to make orders in terms of the short minutes of order which have been submitted by the applicants. The orders include order 4, which is to be made upon the applicant's undertaking in the terms set out in the schedule. 37. I will make orders in terms of paragraphs 1, 3 and 4 upon the undertaking which counsel has given on behalf of the applicants as set out in the schedule. I certify that the preceding thirty seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson.

Counsel for the Applicant: Mr A Robertson SC with Ms K Morgan

Solicitor for the Respondent: Australian Government Solictor