Bills Digest no. 65 2007–08
Therapeutic Goods Amendment (Poisons Standard) Bill
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Contact officer and copyright details
Therapeutic Goods Amendment (Poisons
Standard) Bill 2008
House: House of Representatives
Portfolio: Health and Ageing
relevant links to the Bill, Explanatory Memorandum and second
reading speech can be accessed via BillsNet, which is at http://www.aph.gov.au/bills/.
When Bills have been passed they can be found at ComLaw, which is
To amend the
Therapeutic Goods Act 1989 to address the decision of the
Federal Court in
Roche Products v National Drugs and Poisons Schedule
Committee  FCA 1352 (30 August 2007) (the Roche
Xenical (orlistat) was registered in the Australian Register of
Therapeutic Goods under the Therapeutic Goods Act 1989
(TGA) on 11 April 2000. Roche Products Pty Limited (Roche) is a
sponsor of orlistat within the meaning of the TGA, a sponsor being
a person who imports goods into Australia or manufactures or
arranges the manufacture of goods in Australia.
Since 1 May 2004 orlistat has been able to be supplied over the
counter to a consumer from a pharmacy without the need for a
prescription from a medical practitioner. In February 2006 the
National Drugs and Poisons Schedule Committee (the Committee)
decided to include orlistat into Appendix H of the Poisons
Standard, which meant in effect that orlistat could be advertised
According to the judgement of Branson J in the Roche Products
The decision to include orlistat in Appendix H was
confirmed by the Committee in June 2006 and took effect from 1
September 2006. On or about 12 October 2006, following its receipt
of complaints concerning the advertising of Xenical, the Committee
decided to reconsider orlistat s inclusion in Appendix H. On 22
February 2007, the Committee decided to remove orlistat from
Appendix H. On 26 June 2007 the Committee confirmed that decision
with effect from 1 October 2007.
At the time of the decision to ban the advertising of Xenical
Roche expressed disappointment and frustration:
We won t be able to advertise yet products with
dubious ingredients largely based on green tea extract, eye of
newt, wing of bat and guinea pig tails can, Mr Nadjarian said in a
veiled attack on leading complementary weight loss brand,
Fatblaster, which has under 3 per cent of the total market.
On 8 June 2007 Roche commenced proceedings to challenge the
decisions of the Committee 12 October 2006, 22 February 2007 and 26
June 2007 under the Administrative Decisions (Judicial Review)
Act 1977 (ADJR Act) and the Judiciary Act 1903.
The Court held that decisions of the Committee under the
relevant part of the TGA are legislative decisions, and as such are
not reviewable under the ADJR, which, as its name suggests,
provides for the review of administrative decisions. It is this
aspect of the decision that this Bill is addressing. The Court also
held, in relation to the challenge pursuant to the Judiciary Act
that the decisions of the Committee were valid and the application
by Roche Products was accordingly dismissed.
Part 6-3, sections 52A-52E of the TGA establish the Committee
and sets out the functions of the Committee. In particular section
52D provides for the Poisons Standard and gives the Committee power
to amend the Poisons Standard or prepare a new Poisons Standard and
the mechanisms of how to do this. Section 52E sets out the matters
the Committee must take into account when exercising its powers
under section 52D.
In reaching this decision the Court quoted a passage that
assists the sometimes difficult task of determining whether a
decision is of an administrative or legislative character, as
In Commonwealth v Grunseit, Latham CJ
expressed the distinction in these terms: The general distinction
between legislation and the execution of legislation is that
legislation determines the content of a law as a rule of conduct or
a declaration as to power, right or duty, whereas executive
authority applies the law in particular cases .
There is a list of matters which can be relevant in deciding the
character of decisions such as:
- Whether the decisions determined rules of general application
or whether there was an application of rules to particular
- Whether there was Parliamentary control of the decision.
- Whether there was public notification of the making of the
- Whether there has been public consultation and the extent of
any such consultation.
- Whether there were broad policy considerations imposed.
- Whether the regulations could be varied.
- Whether there was power of executive variation or control.
- Whether provision exists for merits review.
- Binding effect.
In a detailed consideration of these matters, Branson J. came to
the view that decisions of the Committee fell into the legislative
side of the equation.
According to the Explanatory Memorandum to the Bill the Therapeutic Goods
Administration had been relying on:
an earlier external legal advice and statements
made by the Federal Court in Pro Health Products Pty Limited v
McEwen  FCA 1790 (11 October 2004)(Pro Health), which
categorised and treated decisions of the Committee as
administrative in character.
Roche also relied on this judgement in its submissions to the
Court but Branson J. was of the view that the question of the
character of a scheduling decision of the Committee was not
squarely before the court, and that the decision was decided under
significant time restraints so he expressly rejected the
The finding that the decisions were legislative, not
administrative, means that because they had not met the
requirements of the Legislative Instruments Act 2003 (the
LIA), the Poisons Standard, and any amendments, may have been
unenforceable. The Bill seeks to address this problem.
This is not the only legislative
amendment resulting from the Federal court s decision in
Roche. In 13 February, the Trade Practices Amendment
(Access Declarations) Bill 2008 was introduced into Parliament.
That Bill proposes to make similar retrospective amendments to the
Part XIC into the Trade Practices Act 1974 (TPA) in order
to ensure past declarations by the Australian Competition and
Consumer Commission regarding the access regime for the
telecommunications industry remain enforceable. More detail is
avilable in the relevant Bills
Digest no.59, 2007 08. It is possible that more Bills across a
potentially wide range of Commonwealth regulation might be
introduced in the near future in reaction to the Roche
The Bill has a retrospective aspect in that it validates all
previous decisions that have been made and reschedules decisions
that may have been repealed. According to the Second Reading
retrospective element will not add any new regulatory requirement
Rather, the retrospective effect of the amendments
is necessary to preserve the status quo of the Poisons Standard,
and amendments made to it, before the Roche decision.
This explanation is also present in the Explanatory Memorandum
and so the Scrutiny of Bills Committee will have these matters
before it at the time it considers the Bill.
Pharma in Focus
has reported on the Bill, outlining aspects of the Federal Court
decision which has led the Government to make the amendments and
The irony of the situation is that it was the
NDPSC s (the Committee s) argument in court that caused
the anomaly to arise, undermining the legal standing of its own
decisions and forcing the government to step in.
It reports that the decision created a legal nightmare that cut
the ground from under most committee decisions since 2000 and may
have made the Poisons Standard itself unenforceable.
It would appear that the first Poisons Standard was inserted
into the TGA in 1999 and the only Poisons Standard prepared by the
Committee under paragraph 52D(2)(b) was the Poisons Standard
registered on 19 December 2007. All other instruments before that
date were amendments to the First Poisons Standard.
Item 2 adds new subsection
52D(4A) to specify that an instrument amending the Poisons
Standard or creating any new Poisons Standard is a legislative
instrument but that the Poisons Standard (the instrument) is not
disallowable by Parliament.
Item 3 adds two new provisions
to Part 6-3 of the TGA. New section 52EA is to
validate past registration of the Poisons Standard and instruments
made amending the Poisons Standard in the past ( the instruments ),
and to ensure that such instruments were not and are not
disallowable by Parliament (new subsections 52EA (1) and
(2)). It also provides that the instruments are deemed to
be registered under the Legislative Instruments Act 2003
(LIA) if they were required to be registered but were not
(new subsection 52EA(3)) and instruments that were
not lodged for registration on or before the last lodgement day
under the LIA are deemed to be lodged and registered in accordance
with the requirements of the LIA (new subsection
52EA(4)). One of the effects of failing to lodge an
instrument for registration is that such an instrument is not only
unenforceable it is repealed by subsection 32(2) of the LIA. The
effect of the latter subsections is to make all such instruments
registered and enforceable.
New section 52EB provides that if the effect of
new section 52EA is to acquire property from a
person otherwise than on just terms, the Commonwealth is liable to
pay a reasonable amount of compensation to that person. In the
event of disagreement as to quantum, proceedings can be commenced
in the Federal Court. This provision is a constitutional safety
net, and adopts the meaning of acquisition of property and just
terms in section 51(xxxi) of the Constitution.
21 February 2008
Bills Digest Service
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