Should a Regulatory Body Consult when Changing a Pricing or Subsidisation Policy?
Authority exists for the proposition that a regulatory body should consult the pharmaceutical industry when changing a pricing, profit control or subsidisation policy. In SmithKline Beecham (NZ) Ltd v Minister of Health (18) SmithKline Beecham (“SKB”) sought to review the decision of the Minister of Health to reduce the subsidy payable for the antibiotic Augmentin to an amount based on the payment made for the cheaper generic antibiotic Amoxycillan. Prior to that decision SKB, in reliance on a policy no longer in force, had been attempting to persuade the Department of Health that Augmentin was superior to Amoxycillan and therefore entitled to a higher subsidy. However, unknown to SKB, those particular pharmaceuticals were being grouped in accordance with a different policy which was then being introduced, the uniform pricing policy. The High Court set aside the Minister’s decision. The cumulative effect of SKB’s absence of knowledge of the policy on which the Minister was to act and t
