The drug Paregoricon is a very effective drug for pain relief and is used extensively in palliative care. In high dosages only, however, it is very effective as a performance-enhancing drug in sports, although it carries a very high risk of serious side effects at high dosage. It is listed on the Australian Register of Therapeutic Goods and administered by the Therapeutic Goods Administration Board ["TGAB"] which was set up under valid Commonwealth legislation. Although 90% of the drug is produced in Australia, there were severe shortages in 2020-2021. An independent report commissioned by the Government and tabled in Parliament in February 2022 provides compelling evidence that these shortages were caused by professional sports clubs and institutes, as well as educational institutions with athletic programs, purchasing and stockpiling the drug for use as a performance-enhancing drug for its athletes despite the very considerable health risks involved. This also had a very significant negative impact on Australia's export trade in Paregoricon. This was also the case with other drugs which had both therapeutic and performance-enhancing effects. To prevent and overcome such problems, it recommends national legislation, and, in relation to maintaining the export trade, it recommends as necessary the regulation of intra-State aspects of the trade also be undertaken.

In response, the Commonwealth Parliament enacted the Therapeutic Goods (Anti-Doping) Act 2022 (Cth) ("the Cth Act") which specifically regulates only those drugs, including Paregoricon, which combine therapeutic with performance-enhancing qualities. In the Explanatory Memorandum, the aim is stated to be safeguarding against their dangerous use when used for performance enhancement, to protect the viability of, and enhance, Australia's developing export trade in these drugs and to ensure their availability for palliative care. The Act is both detailed and comprehensive in relation to these types of drugs, referred to as "stipulated drugs" in its definition section.

Section 10 of the Cth Act provides: "10 (1) It is prohibited for any person to enter into any contract in relation to the purchase or sale, whether intra-State, inter-State or overseas, of stipulated drugs manufactured in Australia unless the parties to the contract are registered pursuant to sub-section (2). Penalty: A fine of $100,000, or 50% of the value of the trade (whichever is greater) or imprisonment for one month, or both. Prohibited contracts are rendered void. (2) Applications for registration, including those made by foreign persons or entities, must be made to the Therapeutic Goods Administration Board. The Board will make its determination solely on the basis that to permit an applicant to sell or purchase stipulated drugs:

(a) will facilitate the improved economic efficiency of the inter-State and overseas trade in the drug for palliative care use only; and, (b) will support the maintenance of a reasonable price in their inter-State and overseas trade to protect the continuing economic viability of that trade and the continuing supply and affordability of such drugs."

Asclepius Pharmaceuticals Ltd ("Asclepius") manufactures Paregoricon in NSW. It is denied registration by the TGAB on the basis that its past sales (and related contracts) of that drug were almost exclusively to those entities associated with professional sport and not to hospitals and other like health care facilities for palliative care. Also, these sales had a considerable price impact on the upside which negatively impacted on the market in the drug, including in export, and its availability for palliative care at a reasonable price. Asclepius nevertheless has proceeded to enter into contracts for the sale of Paregoricon overseas and interstate. All these contracts also contain provisions relating to sales solely within NSW. Asclepius is prosecuted under s 10 of the Cth Act for entering into these contracts despite not being registered pursuant to s 10.

Asclepius argues that it cannot be prosecuted because s 10 of the Cth Act is invalid or, it otherwise cannot apply to these contracts. Is it correct? Why?

Answer rating: 100% (QA)

Asclepius argues that it cannot be prosecuted under Section 10 of the Therapeutic Goods AntiDoping Act 2022 Cth the Cth Act because the section is eit... View the full answer