Did the PBAC take into account irrelevant considerations?
56 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.
57 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.
58 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.
59 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.
60 The general rule, for which there is much authority, is that a discretion conferred without any express qualification is unconfined except insofar as limitations are to be implied from the context, scope and purpose of the statute which creates it: The Queen v The Australian Broadcasting Tribunal; Ex parte 2HD Pty Ltd (1979) 144 CLR 45; Murphyores Incorporated Pty Ltd v Commonwealth (1976) 136 CLR 1; Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24. Or, as the majority of the High Court put it in O'Sullivan v Farrer (1989) 168 CLR 210 at 216:
"Where a power to decide is conferred by statute, a general discretion, confined only by the scope and purposes of the legislation, will ordinarily be implied if the context (including the subject-matter to be decided) provides no positive indication of the considerations by reference to which a decision is to be made."
61 It is Pfizer's submission that the discretion to be exercised by the PBAC under s 101(3) of the Act is not unconfined. It is confined both by the express provisions of ss 101(3) and 101(3A), and by the scheme of the legislation. As to the latter, Mr Robertson points out that in each of the authorities referred to above, the decision under review was made by the ultimate decision-maker. The situation here, it is urged, is quite different. The PBAC's decision is merely the first step in a two-stage process. Using the particular expertise of its members, the PBAC makes a recommendation to the Minister as to medical issues in relation to drugs which are being considered for inclusion in the PBS. Other issues, including the financial consequences of including the drug in the Scheme, are for the Minister to take into account when deciding whether to make a declaration, pursuant to s 85(2)(a), that the drug in question is to be a "pharmaceutical benefit" under the Act. These issues, which are of a political or public interest nature, are, Mr Robertson urges, appropriate matters for consideration by the Minister. However the scheme of the legislation is such that, unless the PBAC makes a positive recommendation that a drug be included in the PBS, the Minister will be denied the opportunity of considering these matters. For under s 101(4) of the Act, the Minister may only make a declaration under s 85(2)(a) if the PBAC has recommended that this be done. The statutory scheme thus makes it clear, Mr Robertson urges, that there is to be a division of functions between the PBAC on the one hand and the Minister on the other. The PBAC is to consider medical issues relating to drugs which are being considered for inclusion in the Scheme. Pursuant to s 101(3A) this will include an assessment of the effectiveness and cost of the drug in question and a comparison with the effectiveness and cost of alternative therapies. The "cost of therapy" in this context is the cost of the individual therapy, rather than the overall cost to the PBS which might flow from the making of a declaration under s 85(2)(a). This last matter is, to repeat Mr Robertson's submission, appropriately a matter for consideration by the Minister after the PBAC has determined the matters required under subss 101(3) and (3A).
62 At first sight there is a beguiling simplicity and logic to the scheme posited by Mr Robertson. However when one explores the details of the situation, and particularly the tasks which the PBAC is obliged to undertake under s 101(3A), it becomes apparent that the respective roles of the committee and the Minister are not at all simple, and that the scheme proposed by Mr Robertson is not necessarily the most logical or efficient.
63 Mr Robertson suggests that several factors point to the construction of the legislation for which he urges. They are:
· the two-stage decision-making process imposed under the Act, whereby the Minister cannot consider the matters which should be relevant to his consideration unless he has received a positive recommendation from the PBAC;
· the legislative history of Part VII of the Act makes it clear, Mr Robertson says, that the PBAC's considerations were intended to be confined to the effectiveness and cost of individual treatment;
· similarly, the terms of s 101(3A) make it clear that the "cost of therapy" to be considered by the PBAC means the cost of individual therapy; and
· the highly specialised expertise of PBAC members indicates that the Committee's considerations were intended to be confined to matters within those fields of expertise.
64 Mr Robertson's submissions as to the effect of the two-stage decision making process have already been referred to. The second matter he points to, namely the legislative history of Part VII, merits some discussion, although, as will be seen, it provides no immediate answer to the issues under discussion here.
65 The Pharmaceutical Benefits Scheme had its origins in the Pharmaceutical Benefits Act 1944 (Cth) which was held to be unconstitutional in Attorney-General (Vic) v Commonwealth (1946) 71 CLR 237. The Constitution Alteration (Social Services) Act 1946 (Cth) inserted a new s 51(xxiiiA) into the Constitution giving the Commonwealth Parliament to make laws with respect to, amongst other things, "pharmaceutical, sickness and hospital benefits".
66 When the current Act was first passed in 1953, the PBS provided subsidies for life-saving drugs to the whole of Australian community. Pensioners received subsidies for all drugs listed in the British Pharmacopoeia. The role of the PBAC, which was established under the 1953 Act, was generally to provide advice as to which drugs should be classified as life-saving.
67 The PBAC as established under the 1953 Act had a slightly different membership from the present Committee. It consisted of four medical experts, one pharmacologist and two chemists, one of whom was to be a departmental officer. As to the PBAC's function, s 101(3) (quoted earlier) was enacted in its present form in the original enactment. Section 101(4) has changed in form but not in substance. In 1953, as now, the Minister could only prescribe a drug or medicinal preparation as a pharmaceutical benefit "in accordance with a recommendation of the PBAC". The second reading speech of the then Minister, Sir Earle Page (12 November 1953 at p161) described the role of the Committee as follows:
"Determination of appropriate items of free life-saving drugs is a specialized technical and expert matter. The drugs to be recommended for inclusion must be decided on medical grounds alone. A specialist advisory committee, therefore, has been appointed by regulation and will now be endorsed by statute to carry out this function. The bill provides, in clause 100, that additional drugs or medicines shall not be prescribed as general pharmaceutical benefits, except in accordance with a recommendation of the committee to the Minister. It must be the experts who decide the proper drugs to be used. This specialist advisory drug committee, officially called the Pharmaceutical Benefits Advisory Committee, consists of four medical experts, one chemist from the Department of Health, one chemist chosen from a panel nominated by the Pharmaceutical Service Guild of Australia, and one pharmacologist."
68 Mr Robertson relies upon this statement as emphasising the limited role of the PBAC as a body which was intended to consider only medical issues in relation to the inclusion of drugs in the PBS. Mr Downes QC, for the PBAC, points out that nearly half a century has passed since then. In the meantime, the role of the PBAC has changed significantly, as the subsequent legislative history shows.
69 In 1959 the Act was amended so as to alter the basis upon which pharmaceutical benefits were to be made available to the public. The pensioner scheme, whereby pensioners received a full range of drugs without charge, was continued unchanged. The range of pharmaceutical benefits under the general scheme was substantially widened but made subject to a charge of five shillings for all persons, other than pensioners, obtaining drugs from this general list. The PBAC maintained its role of advising which drugs should be included in the expanded list.
70 It is clear from the second reading speech that these changes were largely occasioned by cost concerns. The Minister pointed out that the cost of operating the PBS had increased from Ł7,600,000 in 1951/52 to Ł21,000,000 in 1958/59. At this rate, the Minister commented, the cost of providing pharmaceutical benefits would soon dominate the entire national health service, leaving correspondingly less room for manoeuvre or improvements in other directions.
71 In 1961 the constitution of the PBAC was enlarged so as to consist of six rather than four medical practitioners. The basis for the amendment was described by the then Minister, Mr Cameron, in the following terms (13 April 1961):
"The bill also provides for an amendment of the constitution of the Pharmaceutical Benefits Advisory Committee. This is the expert committee which advises the Government on what drugs and medicines are to be listed as pharmaceutical benefits. The committee has done valuable work for the government in a difficult field. The work of the committee has become extremely onerous, more particularly since the range of pharmaceutical benefits was considerably widened a year or so ago. With a view to strengthening the committee, it is proposed to increase by two the representation of medical practitioners nominated by the Federal Council of the British Medical Association. The panel of names to be submitted by the association for this purpose is to be increased from six to ten."
72 In 1986 s 85(2) and s 101(4) were enacted in their present form. These amendments affected the form rather than the substance of the provisions. The scheme under which the Minister was empowered to make a declaration under s 85(2)(a) remained essentially unchanged. The major alteration brought about by the 1986 amendments was to increase the level of patient contributions for pharmaceutical benefits.
73 In 1987 there were a number of significant amendments to the Act. Section 101(2) was enacted in its present form and a new subs (2AA) was inserted. The combined effect of these provisions was to enable the Minister to appoint, as additional members of the PBAC, a pharmacologist and up to three medical practitioners, one of whom was to be a nominee of the Doctors' Reform Society. In addition, s 101A was inserted, enabling the PBAC to establish sub-committees to assist it in performing its functions. Very significantly, subss (3A), (3B) and (3C) were inserted into the Act.
74 The explanatory memorandum in relation to these amendments included the following passages at p4:
"The Bill will also amend the National Health Act 1953 to tighten procedures followed in the process of listing new drugs as Pharmaceutical Benefits for the purposes of the Act. The Pharmaceutical Benefits Advisory Committee, which recommends to the Minister which drugs should be listed as Pharmaceutical Benefits, will be required, when deciding whether to recommend that a new drug be so listed, to take the relative cost-effectiveness of the drug when compared with other available drugs and therapies into account and to state if recommended drugs or medicinal preparations are more costly that it is satisfied there are advantages in their use for some patients. Such amendments are aimed at discouraging the prescription of expensive drugs where more cost-effective alternatives are available.
……
The Bill will also provide for an increased membership of the Pharmaceutical Benefits Advisory committee by allowing the Minister to appoint up to three extra medical practitioners, and provide for the establishment of specialist sub-committees of the above Committee. Such amendments are broadly aimed at allowing the Committee to perform its functions in a more efficient and detailed manner."
75 The explanatory memorandum had this to say about the new subs 101(3A) at pp13-14:
"Sub-section 101(3A) requires the Pharmaceutical Benefits Advisory Committee to consider the effectiveness and cost of therapy involving the use of any drug or medicinal preparation or class thereof when deciding whether to recommend to the Minister that that drug, preparation or class should be made available as a pharmaceutical benefit. The Committee, in considering effectiveness and cost must have regard not only to the use of therapies involving other drugs but also to therapies which do not necessarily involve the use of drugs at all."
76 In his second reading speech in relation to these amendments on 8 October 1987 the then Minister, Mr Humphries, expressed the Government's concern about the increasing cost of the Pharmaceutical Benefits Scheme over previous years. He proceeded to make the following observations:
"This Bill includes amendments that will require the PBAC to take account of comparative effectiveness and cost in recommending drugs as pharmaceutical benefits and in considering any change to prescribing restrictions applying to pharmaceutical benefits. In the past the PBAC has not been required by its statutory charter to take costs into account when making its recommendations. In practice it has taken price into account when considering drugs of similar efficacy and toxicity, but only as a secondary consideration. The obligation to consider comparative effectiveness and cost will require the PBAC to give consideration to alternative forms of treatment, for example, surgery, in making recommendations. The Committee will not be allowed to recommend the listing of a particular drug which is substantially more costly, unless it is satisfied that, at least for some patients, the drug provides significant therapeutic advantages over alternative therapy.
The Government has no objection to paying high prices for new drugs that offer significant therapeutic advances over existing drugs or other forms of treatment. But it does not believe the taxpayer should foot the bill for very expensive drugs that offer only minimal advantages over much cheaper alternatives. To assist the Committee to take account of these wider considerations, the Government intends to upgrade significantly secretariat support for the PBAC, with greater utilisation of specialist consultants to advise on selected areas of drug therapy.
Together with the upgrading of the PBAC secretariat, the Minister will be empowered to increase membership of the Committee by up to three; all of the additional members must be medical practitioners. This enlarged membership, additional secretariat support and greater resources to engage consultants complement the provisions in the Bill for the PBAC to appoint sub-committees to provide the best available advice in this technical area."
77 The last relevant amendment was in 1998 when paragraph (d) was added to s 101(1) of the Act. The effect of this was to add a community representative as a member of the PBAC, so long as "the Minister is satisfied that the person has such qualifications or experience as would enable the person to contribute meaningfully to the deliberations of the Committee" (s 101(2AAA)).
78 Both Mr Robertson for Pfizer and Mr Downes for the PBAC rely on the legislative history of Part VII as supporting the construction of the legislation for which they contend. Mr Robertson says that it was clear from the outset that the PBAC's considerations were intended to be confined to medical matters. Nothing that has happened since has altered this, except for the requirement, pursuant to s 101(3A), that the PBAC consider the cost of therapy and compare this with the cost of alternative therapies or procedures. Mr Downes on the other hand says that there are many factors to indicate that the role of the PBAC has expanded well beyond that which might have been intended back in 1953. He refers to the second reading speech when the Minister introduced the 1987 amendments. In particular Mr Downes seeks to distinguish between the meaning of the words "price" and "cost" in this speech as showing that s 101(3A) was intended to require that the PBAC consider not only the price of individual therapy but also more general cost issues relating to the therapy.
79 I accept that the word "cost" will often be of broader application than the word "price". However to use this as a basis for extrapolating the proposition urged by Mr Downes is to attribute to the Minister very subtle nuances of meaning which may not have been intended. It could equally have been argued, against Mr Downes' proposition, that the Minister's reference to "this technical area", at the end of the comments quoted earlier, was a reference to the type of analysis which would be required in order to undertake a comparison of costs and benefits of individual units of therapy. It must also be remembered that each of the three additional members appointed to the PBAC under the 1987 amendments were to be medical practitioners.
80 In the result, the legislative history of Part VII does little to clarify the matters raised in this case. One needs to go elsewhere for this purpose. In this context it is instructive to consider the provisions of subss (3A), (3B) and (3C) of s 101, which were, as mentioned, introduced by the 1987 amendments.
81 Mr Downes urges, with considerable force, that in considering the matters required by s 101(3A), the PBAC will need to have regard to overall costs issues. It will be recalled that s 101(3A) requires the Committee to give consideration to the effectiveness and cost of therapy involving the use of the drug under consideration, including by comparing it with the effectiveness and cost of alternate therapies. As Mr Downes points out, the effectiveness of a drug cannot be assessed on a single unit basis. A particular drug might in some cases be entirely successful in treating the condition for which it is indicated. In those cases the drug is 100% effective. In other cases it might have no effect upon the patient's condition and thus be entirely ineffective. In many cases there will be shades of effectiveness between these extremes. In order to assess the overall effectiveness of a drug it is necessary to examine its efficacy over a broad range of people for whom it is medically indicated. This means that account must be taken of the overall effectiveness of a drug, together with its overall cost. A particular drug might be highly effective in relation to a small proportion of persons suffering the condition for which it is indicated. In this event the drug, although individually reasonably priced, might become extremely costly for each successfully treated patient. In this situation it is clearly relevant for the PBAC to consider, pursuant to s 101(3A), the overall cost of the drug in question, having regard to the benefits to be derived from it, and comparing this with the effectiveness and cost of alternative therapies. In other words, it is impossible to consider the effectiveness and cost of individual units of therapy without having regard to over-all costs issues.
82 Mr Downes's argument on this aspect of the matter is closely linked with his submissions on the "overuse" or "leakage" issue. There are some drugs which, for any number of reasons, are likely to be sought and used by members of the community other than those for whom the drug is medically indicated. Sildenafil is such a drug. I do not take Pfizer to be disputing this proposition. What it says is that this was not a relevant issue for consideration by the PBAC. But what should the PBAC do, given this situation? It has two choices. It can ignore the "overuse" issue, and assess the cost and effectiveness of sildenafil upon the assumption that it will be used only by those for whom it is medically indicated. Alternatively, it can make these assessments having regard to the total group of people by whom the drug is likely to be used. Pfizer says that the PBAC should have adopted the first approach. But the difficulty here is that the "overuse" or "leakage" issue impacts upon the medical effectiveness of the drug as well as its cost. The effectiveness of sildenafil is to be measured having regard to its success in treating the condition for which it is indicated, namely erectile dysfunction of neurogenic or vasculogenic origin. It follows that the drug is ineffective when used outside this group. It also follows that the proportion of users for whom sildenafil will be effective cannot be assessed without having regard to the extent to which it is likely to be overused. Similarly, the cost of each successful unit of treatment cannot be ascertained without assessing the proportion of successful users to unsuccessful users. In drugs that are vulnerable to overuse, "unsuccessful users" must include users outside the group for which the drug is indicated.
83 Mr Robertson says, as I understand it, that these factors (overall costs and the potential for misuse) might be necessary for the PBAC to consider in order to determine the true cost and effectiveness of individual units of therapy, but they can only be used for this purpose. The PBAC, having reached its assessment as to the effectiveness and cost of the individual therapy, and having compared it with the effectiveness and cost of alternative therapies, makes its recommendation to the Minister only on the basis of that assessment and that comparison.
84 Mr Robertson's approach, if adopted, would lead to a very inefficient allocation of responsibilities between the PBAC and the Minister. The PBAC, having taken overall costs into account in determining the effectiveness and cost of individual therapy, would then have to treat this issue as irrelevant to the making of a recommendation under s 101(3). The Minister would then have to separately consider this issue in determining whether to make a declaration under s 85(2)(a). In many cases the fact that roles are duplicated or that inefficiency might occur may not be a particularly material consideration. However here the issue is whether an apparently unconfined discretion is to be taken to be limited by the context, scope or purpose of the empowering legislation. If the purposes of the legislation are more efficiently served by the discretion being exercised in an unconfined manner, then this must be a relevant consideration.
85 Also relevant here is s 101(3C), which was quoted in paragraph 12 of this judgment. This provision needs to be read in conjunction with s 85(2A) and s 88A which are as follows:
"85 Pharmaceutical benefits
(2A) The Minister may, in a declaration under subsection (2):
(a) declare that a particular pharmaceutical benefit is to be a relevant pharmaceutical benefit for the purposes of section 88A; and
(b) specify the circumstances in which a prescription of the supply of the pharmaceutical benefit may be written.
……
88A Prescription of certain pharmaceutical benefits authorised only in certain circumstances
Where a pharmaceutical benefit is declared, in a declaration made under subsection 85(2), to be a relelvant pharmaceutical benefit for the purposes of this section, the writing of a prescription for the supply of the benefit is authorised under this Part only in circumstances specified in the declaration pursuant to subsection 85(2A)."
86 Pfizer sought to invoke these provisions in its re-submission to the PBAC in March 1999. The submission suggested that the number of prescriptions for sildenafil to be authorised in any six month period be limited to five. This was designed to meet the PBAC's concerns as to the potential overuse or misuse of sildenafil. If this issue - the "leakage" issue - is a relevant issue for the PBAC to consider when determining whether to make a specification under s 101(3C), then it must also be relevant in determining whether to make a recommendation under s 101(3).
87 The strongest argument in favour of the proposition that a limitation is to be implied from the legislative context derives, in my opinion, from the fact that the Minister does not come to consider the issues involved in making a declaration under s 85(2)(a) unless the PBAC has already made a positive recommendation under s 101(3). But there are other aspects of the legislative context which point in the opposite direction. The plain wording of the relevant sections fall into this category. Section 101(3) is, as already noted, unconfined in its terms: the Committee is to make recommendations to the Minister as to the drugs or medicinal preparations which it considers should be made available as pharmaceutical benefits. Under s 101(4) the Minister is precluded from declaring a drug or medicinal preparation to be a pharmaceutical benefit under s 85(2)(a) unless "the Committee has recommended to the Minister that it be so declared".(emphasis added)
88 To "recommend" is to "present a course of action as desirable or advisable" (New Shorter Oxford Dictionary). The "course of action" in this case is the making of a declaration under s 85(2)(a). And it is difficult to see how the PBAC can recommend that this course be adopted without first having regard to all relevant considerations, whether they be medical, financial or otherwise.
89 There may be any number of non-medical considerations which will come to the PBAC's notice during the course of its legitimate enquiries. If Mr Robertson's submission were correct, the PBAC would be obliged to ignore these considerations. But what if these included such substantial adverse considerations as to offset any medical advantage of including the drug in the PBS? It would be absurd to suggest that the PBAC should nevertheless make a positive recommendation under s 101(3) in relation to that drug. It must be remembered that, apart from s 101(3C), the PBAC has no power to place qualifications upon its recommendations. In other words, there is no provision for the PBAC to say, in effect, "we consider that drug x is a very effective drug in treating condition y, and that medical considerations favour its being declared a pharmaceutical benefit under s 85(2)(a). However, we must advise you of the following countervailing considerations ….".
90 The difference is between an advisory body and a recommendatory one. Restrictions upon the former are commonplace and workable. But it is difficult to see how the considerations of a body whose functions are to make recommendations which are, on their face, unqualified, can be restricted to some only of the matters which are relevant to the ultimate decision.
91 One final matter merits consideration under this head, namely the constitution of the PBAC itself. Mr Robertson relies upon the fact that, until recently, all members of the PBAC were medical, pharmaceutical or pharmacological experts. But the fact is that the most recently added member is a community representative. One might ask what function this member would serve if the Committee's considerations were to be confined to medical matters. Moreover, the PBAC has, since 1987, had power to appoint sub-committees to assist it in performing its functions. As Mr Robertson rightly points out, an organisation cannot enlarge its powers by appointing sub-committees to deal with matters which are beyond its own powers. But the fact that the PBAC can, through its sub-committees, obtain assistance from people with a broad range of expertise and experience, reduces the force of any argument that the Committee's considerations must be limited by the expertise of its members.
92 It follows that the PBAC did not err in taking into consideration the total cost to the Commonwealth of including sildenafil on the PBS, or the potential for misuse or "leakage" as a result of sildenafil being prescribed in circumstances where its use was not clinically necessary.
93 Pfizer submits that the PBAC's decision was tainted by its taking into account other "political" considerations which should not have been relevant to its inquiry. These are:
· that sildenafil can be categorised as a "lifestyle" drug;
· that the condition for which sildenafil is indicated is not a life-threatening one; and
· that any decision to declare sildenafil under the PBS would need to be defended in Parliament
94 I am unable to find a description of sildenafil as a lifestyle drug. No doubt this reference is to be found somewhere in the extensive papers which were made available to PBAC members for the June 1999 meeting. There was certainly a reference to the fact that the condition to be treated by sildenafil is not life-threatening. The minutes of the June 1999 meeting, under the heading "Background", set out the reasons for the PBAC's previous rejection of Pfizer's submission, in December 1998, in terms which included the following statement:
"The Committee did not accept the claim that sildenafil is more effective than alprostadil and was concerned at the high predicted cost to the PBS, even it a Special Patient Contribution was applied (as suggested by the sponsor), particularly considering that the condition to be treated is not life-threatening."
95 There is no suggestion that either of these considerations, namely that sildenafil is a lifestyle drug, or that the condition that it treats is not life-threatening, constituted a ground upon which the PBAC rejected Pfizer's re-submission in June 1999. In any event, they were clearly relevant matters. Any consideration as to whether a drug should be declared a pharmaceutical benefit must have regard to the type of condition for which it is indicated. It goes without saying that funds will more readily be directed towards subsidising drugs which treat serious, debilitating or life-threatening conditions over those which treat minor conditions only.
96 The third matter which Pfizer says the PBAC wrongly took into account was that if sildenafil were declared a pharmaceutical benefit, its price would need to be defended in Parliament.
97 This issue is mentioned twice in the material relating to the June 1999 meeting. Amongst the agenda papers for that meeting was a copy of a letter dated 19 February 1999 from Mr Threlfall to Andrew Mitchell, describing a meeting the previous week between Mr Threlfall and representatives of Pfizer. The letter listed a number of matters which Mr Threlfall said he had told Pfizer's representatives would need to be addressed in their re-submission. These included the following matters:
"5. The concerns at the overall cost to the PBS. I indicated that both the PBAC and the Government (due to the likely cost the approval would need to come from 'Cabinet') would have problem with a drug for this indication to cost $100 million or so.
6. The Co again persisted with the idea (as raised in the pre-PBAC comments) of a patient part charge along the lines of a 'special pharmaceutical benefit'. I raised two major problems with this, and there[sic] were that the major use of the special pharmaceutical benefit provisions related to situations where the Gov and Co disagreed over the margins on cost of goods. This was not the case here. The second problem was what would be the Governments price? In effect the Gov would need to set a price that it thought reasonable for a patient to be able to have sexual intercourse. I did not think the Gov would see this as a reasonable scenario, particularly at[sic] the figure would need to be defeneded[sic] in Parliament."
98 This communication was referred to in the minutes of the June 1999 meeting under the heading "Background", in the following terms:
"7.2.3 With regard to the Special Patient Contribution proposal, in between- meeting discussions with the Secretary to the PBAC, the company was advised that the major use of special pharmaceutical benefit provisions relate to situations where the Government and the company disagree over the margins on cost of goods and this is not the case with sildenafil. In addition, the price set by the Government would need to reflect what the Government considers reasonable for a patient to have sexual intercourse. The company was advised that this would be difficult for the Government as the figure would need to be defended in Parliament."
99 Neither the minutes nor the s 13 Statement contain any further reference to this matter. It does not appear to have been mentioned in the Committee's discussion which led to the rejection of Pfizer's re-submission.
100 This consideration, namely that the price of sildenafil would need to be justified in Parliament if a declaration were to be made under s 85(2), was, as Mr Robertson submits, essentially a political one. As such, it was more appropriately a matter for the Minister to consider. But it does not necessarily follow that it was outside the purview of relevant considerations for the PBAC. More importantly, there is nothing to indicate that this matter was taken into account by the PBAC when it reached its decision to reject Pfizer's submission. The matter had been the subject of discussion between Mr Threlfall and representatives of Pfizer, as the material before the Committee made clear. But there was no reference to it, either in the minutes or in the s 13 statement, as having played any part in the Committee's deliberations. The decision to reject Pfizer's submission appears from those documents to have been based on entirely different considerations. It therefore cannot be said that this consideration was taken into account by the PBAC as an element leading to the formation of its decision.
101 It follows from all I have that the first ground of review urged by Pfizer, namely that the PBAC took irrelevant considerations into account, has not been made out.