Court ruling on APVMA backs farmers

Last week, the Federal Court in Sydney decided the APVMA wasn’t adhering to the law when its attitude towards generic chemical product registrations changed two years ago, due to fears it would create a criminal offence by disclosing commercial in confidence information (CCI).

Abbey Laboratories pursued the landmark legal case against the APVMA which focussed on two veterinary chemical product applications made last year which sought the use of CCI, by the APVMA, of products registered to Bayer Australia.

On Friday, the Court ruled the APVMA’s decisions to re-categorise the two generic product applications should be quashed, in agreeing with Abbey’s argument that the Authority misconceived its powers and committed a jurisdictional error.

Abbey also argued they’d been denied procedural fairness by having no opportunity to be heard on the re-categorising of the applications, before the APVMA made its determination.

Speaking to Fairfax Media, Abbey managing director Mick Findlay said in August 2014 the APVMA changed its policy on the use and disclosure of CCI to register generic chemical products, despite the law not changing.

Mr Findlay said by deciding to not use internally held product information and data to evaluate generic product registrations, the APVMA had effectively imposed added costs on smaller players, like Abbey, and all others.

He said the cost of conducting a residue trial for a new generic animal health product was about $200,000 and about the same amount for an efficacy study.

Mr Findlay said for smaller players like Abbey, generating that data required the same amount of work that’s needed to initially register proprietary products, which defeated the purpose of having generic products, in the ag-vet chemical market.

“The effect of the APVMA’s policy change was to extend the life of patents indefinitely because there was just no business case to register a generic product; it just cost too much money given the amount of financial return you’re meant to receive,” he said.

“But the Federal Court result last week means the APVMA can use the information that they hold, on any product that’s been registered with them, to evaluate generic products.

Mr Findlay said before the 2014 policy change, the APVMA had routinely used CCI of existing products to evaluate new applications, which was a practice followed since the legislation was first enacted in 1994.

He said the APVMA could appeal the Court’s decision but the lengthy written judgment handed down last week was “pretty extensive” and did not allow much “wriggle room”.

Mr Findlay said the ruling meant it would be less expensive and complicated for smaller companies like his to register generic ag-vet-chemical products for sale to farmers, although the process may still require chemistry work and so forth, to formulate a product.

“If we can show the APVMA our applications are ‘similar’ or ‘closely similar’ it negates the need to do work like residue and efficacy testing and that sort of stuff, so we can register generic products more quickly and more cost effectively,” he said.

“For farmers, it means more generic products will be registered and greater competition in the market which creates lower prices for farm inputs.

“But the effect of the APVMA’s policy position was anti-competitive and reduced the number of generic products on the market.”

“And when the APVMA registers a generic product, they’re not directly or indirectly disclosing any confidential information of the referenced product.”

Mr Findlay said the APVMA made the sudden policy shift without consulting the federal Agriculture and Water Resources Minister Barnaby Joyce or core industry stakeholders.

He said APVMA CEO Kareena Arthy had obtained legal advice which said if the Authority registered a generic chemical product it would constitute a disclosure of CCI and was therefore a breach of the Ag-Vet-Chem legislation.

But Mr Findlay said the judgment handed down by Justice Steven Rares had ruled “the exact opposite” of the APVMA’s legal advice on the matter.

“This is a great result for our industry but an even better result for Australia’s farmers who will now access generic animal health products in a timely and more cost effective manner,” he said.

Ms Arthy said the APVMA would release a statement tomorrow on the Court’s decision but was currently considering its options, including rights to appeal within the prescribed 21 day period.

She said the APVMA was also considering broader administrative implications for how applications nominating reference products are assessed into the future, including what, if any, changes may be needed to how the APVMA handles confidential commercial information.

“Any potential changes to APVMA processes will be discussed with industry once the appeal period is over,” she said.

Mr Findlay said the company had spent about $100,000 on the legal challenge but had also been awarded costs in Friday’s judgment and expected some monies to be returned.

He said since 2013, his animal health company had registered and sold animal health products throughout Australia and were a small company trying to expand and grow.

“At the moment our product range is generic but my past experience is, as we get bigger, we’ll have more product innovation, like most companies do,” he said.

Mr Findlay said he was also a director of the Veterinary Manufacturers and Distributors Association which represented smaller market players while Animal Medicines Australia (AMA) represented “the big guys”.

He said both of those groups had differing views on the court action over the APVMA’s use of CCI but he believed the final judgment was “clear cut” which would benefit some AMA members.

Mr Findlay was also critical of Mr Joyce for not supporting the legal action and supporting the APVMA saying he “should have stepped in”.

Mr Joyce said he would request a briefing from his Department on the implications of the Federal Court’s ruling, after the election.

He said the Coalition was committed to cutting unnecessary regulation and had delivered a $9.1m reduction in ag-vet-chemical red tape.

Importantly, that included abolition of the former Labor government’s destructive and duplicative re-registration laws which would have seen many common farm chemicals lost to the Australian market, he said.

Mr Findlay said his company shared the AMA’s view about the APVMA being relocated from Canberra to Armidale through a government policy position promised and pushed by Mr Joyce.

He said moving the APVMA from its current location was a “poor decision” which meant the Agency’s current poor performance would be extended for another three to five years.

“The excuse that will be given now will be the relocation,” he said.

“They’ll find it hard to find staff and they’ll be further away from core stakeholders who are not farmers - they’re industry members and the Department of Agriculture and so forth that they deal with on a day to day basis.

“The APVMA have very little contact with farmers in their day to day work.”

Ms Arthy said the APVMA had no comment about relocation.

Mr Findlay said since the APVMA’s policy switch on CCI in 2014, his company had suffered about $2 million dollars in estimated lost sales and could have employed up to three more staff.

“The government regulator, the APVMA, has been the biggest impediment to the growth of our business,” he said.

“This is a sad situation when the government of the day is running on a “jobs and growth” platform for its re-election.

“There is significantly more government red tape now than there was three years ago.”

VDMA President Jim Adams said virtually all of his group’s members large and small -and those in service roles like regulatory consultants and laboratories - had been suffering unnecessarily for almost two years due to the APVMA’s policy stand.

Mr Adams said the estimated total direct cost could be measured in millions of dollars and would be multiplied by the loss of future earnings which would continue for several years.

“Farmers are the most adversely affected group and will have several years more of not seeing the savings that could have been generated by products that did not achieve registration in this period,” he said.

Like Mr Findlay, he said he could not understand the APVMA’s “intransigence” on the matter despite the VDMA repeatedly trying to achieve a resolution.

“Hopefully now the APVMA will see and the Minister will ensure that an immediate return to the status quo will be the only fair outcome for all parties, including our Australian industry and farmers,” he said.