The case arose out of a change in policy in 2014, when the APVMA decided to require applicants proposing to register generic products to obtain written consent to the use of confidential commercial information about reference products from the owners of that information.

We analysed the policy change in an article published last year, and expressed the view that the policy was anti-competitive, since innovator companies would be under no obligation to (and indeed would find it commercially beneficial not to) support generic companies’ registration applications. It was also our view that the policy seemed to misapply the Agricultural and Veterinary Chemicals Code Act 1994 (Cth) (Act).

That view has now been affirmed by the Federal Court in Abbey Laboratories Pty Ltd v Australian Pesticides and Veterinary Medicines Authority [2016] FCA 704.

Abbey Laboratories (Abbey) made applications to the APVMA in April and July 2015 for registration of two generic products: Apramax and Tetramax, which were generic versions of Bayer Australia Ltd (Bayer)’s products Aprapharm and Tetravet.

Abbey applied for registration under Item 6 – “registration of a chemical product similar to a registered chemical product requiring only chemistry and manufacture data” – which would allow them to rely on the efficacy and safety data for Bayer’s proprietary products.

However, shortly after receiving each application, the APVMA decided that they should be categorised under Item 10, which involves a higher application fee, the provision of additional (costly) evidence, and a longer period of assessment. The APVMA justified this decision on the basis that an assessment under Item 6, and the comparison with Bayer’s data which that would involve, would it them to disclose confidential commercial information in making its decision, which would give rise to an offence under section 162 of the Act.

Justice Rares rejected the APVMA’s arguments, finding that while the Act does prohibit the APVMA from disclosing confidential commercial information in some circumstances, the APVMA should still have assessed the applications in their original category, and is permitted to compare generic and reference products without consent from the earlier applicants.

In particular, Justice Rares made it clear that a simple finding by the APVMA that a generic product is or is not similar to another existing product is not, in itself, a disclosure of confidential commercial information. In each case, the APVMA must actually assess the application, determine specifically what confidential commercial information is relevant, and consider whether their decision or reasons can be given in a way that does not contravene section 162. Only in the “unusual situation” where disclosure of confidential commercial information would be inevitable would it be appropriate for the APVMA to re-categorise an application. Where an application is approved, no disclosure of any confidential commercial information can possibly occur, because a statement that a product has been registered does not convey the basis on which the product has been determined to be closely similar to the reference product.

In Abbey’s case, Rares J held that the APVMA decision-maker failed, “first, to perform the function of deciding each application under s 14 of the Code and, secondly, to take into account a relevant consideration – namely the need to examine the relevant information on the reference product files so as to ascertain what, if anything, might be confidential and then considering whether it was possible to proceed”.

This aligns with the view we expressed in our article last year that “internal use by the APVMA of [confidential commercial information] in the evaluation of an application for registration of another product (for example, in the assessment of similarity between generic and reference products) … would be consistent with “the performance of functions or duties, or the exercise of powers” under the AgVet Code”.

The decision in this case reflects the public policy behind the Act which has existed since its inception in 1994, and finds that the APVMA was mistaken in its application of the law when it changed its policy position in 2014. This decision has significant implications for other manufacturers of generic products that have had their registration applications re-categorised or refused on similar grounds, or have otherwise been adversely affected by the 2014 change in policy.

Justice Rares noted, as a shining example of the eloquence of the judiciary, the Code’s “overwhelming prescriptive nature and capacity to obscure rather than declare the legal rules governing a subject matter” and referred to the “intrepid imitators of Theseus who must penetrate the unfortunately typical Commonwealth legislative labyrinth that defies comprehension by mere mortals.”