They are brave and strong beyond belief and deserve to live out their lives with support and dignity, compensation and with an increased level of ongoing financial support because what they have received to date has been manifestly inadequate.
2.1
In its interim report, the committee concluded that Australia's thalidomide survivors require additional support to help alleviate the physical strain that their thalidomide injuries are placing on their bodies. However, it is unclear where this support will come from. The manufacturer, the distributor and the Australian and state governments all contributed to the thalidomide tragedy and have taken different steps to offer support to thalidomide survivors.
2.2
This chapter examines the role of each of these entities in responding to the needs of thalidomide survivors and considers who should be responsible for providing the support Australia's thalidomide survivors need to live out their lives with dignity.
Grünenthal's responsibility
2.3
Thalidomide was developed and manufactured by German pharmaceutical company Chemie Grünenthal, now Grünenthal GmbH (Grünenthal). Grünenthal licensed thalidomide for sale globally, including to the distributor of the drug in Australia, Distillers Company (Distillers) (now Diageo).
2.4
Since the damaging effects of thalidomide became known, Grünenthal has been subject to significant and ongoing criticism for its role in the thalidomide disaster. The committee heard that thalidomide survivors around the world are united by a 'profound sense of injustice over the lack of accountability of Chemie Grunenthal'.
Release of thalidomide
2.5
Grünenthal released thalidomide in West Germany in 1957 and marketed the drug as a 'sleep-inducing agent and sedative under the brand name Contergan'. The first known thalidomide-affected baby was born in West Germany to the spouse of a Grünenthal employee on 25 December 1956.
2.6
Mr Michael Magazanik, a lawyer who worked on behalf of Australian thalidomide survivors, noted that Grünenthal extensively marketed thalidomide during the late 1950s:
During 1958 alone, Grünenthal placed fifty advertisements for thalidomide in medical journals and sent more than 200,000 letters to doctors, plus further mail-outs to 50,000 doctors and pharmacists. Sales started slowly but Contergan would soon become the success story Grünenthal had been hoping for: by early 1960 it was the bestselling sleeping pill in Germany.
2.7
Grünenthal submitted to the inquiry that it had 'never marketed its thalidomide products for the treatment of morning sickness in pregnancy'.
2.8
The committee is aware of accounts which indicate Grünenthal did promote the use of thalidomide by women who were pregnant, and gave safety assurances to doctors to that effect.
Testing
2.9
Grünenthal has maintained that when it developed thalidomide, it tested the drug using the standards of that time. However, the appropriateness of the testing of thalidomide by Grünenthal has been contested.
2.10
The committee notes that when the United States (US) Food and Drug Administration (FDA) assessed whether thalidomide should be approved for sale in that country, it questioned the drug safety information presented by the US licensee, particularly following reports the drug had been associated with potential nerve damage overseas. The FDA's assessor, Dr Frances Kelsey, requested information from the licensee as to whether thalidomide was safe for foetuses when used by pregnant women. By the end of November 1961, the FDA received information that thalidomide was possibly associated with cases of a birth defect that caused malformation of the upper limbs, known as phocomelia, in Germany and the US licensee's thalidomide application became inactive. As a result, thalidomide was never commercially sold within the US and was only available through clinical trials.
Response to the thalidomide disaster
2.11
As the manufacturer, Grünenthal received early reports that thalidomide was causing nerve damage to the patients to whom it was prescribed. Mr Peter Gordon, Senior Partner, Gordon Legal, a personal injury lawyer who has been highly involved with thalidomide, argued that Grünenthal was aware of, and was in a unique position to recognise, the harmful effects of thalidomide when the drug was being distributed in Australia:
Within weeks of thalidomide’s first distribution of thalidomide in Australia, Grunenthal, and Grunenthal alone, knew of many hundreds of reports of side effects including many cases of peripheral neuritis associated with thalidomide and of several reports of birth defects. Grunenthal’s knowledge was unique because it received and dealt with (often suppressing) complaints from all over the world. It uniquely knew of its lack of research. It uniquely knew of its false claims of safety. It uniquely knew of both Governments’ and international pharmaceutical companies’ pushing back on Grunenthal about shoddy and inadequate research. It knew that it had heavied and threatened its licensees (including Distillers,) in various parts of the world, including Europe and North America, not to disclose its shoddy research, its reported side effects or adverse reactions relating to thalidomide (especially peripheral neuritis.)
2.12
Mr Magazanik told the committee that Grünenthal's and Distillers' first response to the thalidomide disaster was to avoid accountability:
Their chief tactic was to pour all of their considerable resources and efforts into ensuring that the disaster was seen as regrettable and sad and tragic and shocking, and an act of God and utterly unavoidable. That was the key: they wanted it to be seen as something that was completely unavoidable. The argument went that nothing—the best science in the world, the best testing, the smartest researchers, the most conscientious companies—could have stopped it, and that the companies were blameless.
2.13
Mr Magazanik told the committee that the perception that the thalidomide disaster was unforeseeable, rather than the product of inadequate testing, 'completely shaped' the view of the thalidomide disaster. Mr Magazanik considered that this has had an adverse impact for survivors in obtaining compensation and addressing the failings associated with the tragedy.
Grünenthal's assistance to survivors
2.14
Grünenthal has provided some assistance in countries where it directly marketed thalidomide, in particular, Germany. Following the conclusion of the German trial against Grünenthal in the early 1970s, the German Government announced the establishment of the Contergan Foundation to provide support for Germany's thalidomide survivors. The German Government and Grünenthal equally funded the Contergan Foundation and in 2009 Grünenthal made a further voluntary contribution to the foundation.
2.15
Separate to the Contergan Foundation, Grünenthal operates the Grünenthal Foundation which provides non-cash benefits and project financing to support thalidomide-affected people. Grünenthal provided examples of the supports available through the foundation, which include: financial support of up to €25 000 for car modifications; financial support of up to €15 000 for home modifications; support for hospitals to develop expertise in treating those affected by thalidomide; and support for the use of voice controlled technology.
2.16
Grünenthal told the committee that thalidomide survivors' access to the Grünenthal Foundation is subject to eligibility criteria and 'is subject to further discussion with representatives of those affected in Australia'.
2.17
Grünenthal Foundation notes that to access support survivors need to have already been recognised and be able to demonstrate why they require support and that it could not have been funded by other means.
2.18
The committee did not receive evidence that any Australian thalidomide survivor has received support through the Grünenthal Foundation.
2.19
The Thalidomide Group Australia submitted that Grünenthal has not recognised or paid compensation to any Australian thalidomide survivor. Submitters told the committee that, in their view, Grünenthal has a responsibility to provide ongoing assistance for thalidomide survivors.
2.20
At the conclusion of the 2014 class action brought against Grünenthal and Diageo, Grünenthal had the opportunity to provide support to Australia's thalidomide survivors by contributing to the settlement. However, the case was settled by Diageo, without any contribution being made by Grünenthal.
2.21
Mr Magazanik told the committee that despite being central to the thalidomide disaster, Grünenthal has not compensated Australian thalidomide survivors:
…Grunenthal is the key wrongdoer in all of this, and yet it's never paid a single cent to any Australian woman or survivor damaged by the drug. In relation to Australia, Grunenthal is really the culpable driver who absconds from the scene.
2.22
Mr Gordon suggested that Grünenthal could be compelled to pay if the Australian Government commenced and won cost recovery litigation against Grünenthal. Mr Gordon commented that there was international precedent that suggested that the Australian Government could establish legislation to support cost recovery litigation.
Committee view
2.23
Grünenthal developed, manufactured and licensed thalidomide, the drug that was consumed by the mothers of Australia's thalidomide survivors and caused their children to be born with severe malformations. It is clear to the committee that Grünenthal's actions are central to the harm thalidomide has caused countless survivors and their families across the world. From the evidence before the committee, Grünenthal appears to have done nothing to assist Australia's thalidomide survivors.
2.24
The committee notes Grünenthal appears to be operating as a highly profitable company. According to its corporate publications, in 2017 Grünenthal achieved global revenues of approximately €1.3 billion.
2.25
The committee considers that there is a wide scope for Grünenthal to support Australia's thalidomide survivors and the committee encourages Grünenthal to engage with survivors and the Australian Government in this regard.
Diageo's support for thalidomide survivors
2.26
Compared to other entities involved in the thalidomide tragedy, Diageo has acted constructively to provide financial assistance to thalidomide survivors both in Australia and in the United Kingdom, though it had no legal obligation to do so.
2.27
In the interim report, it was noted that the Distillers was responsible for distributing products containing thalidomide in Australia. Distillers made products containing thalidomide available for sale in Australia from 1 August 1960 and it withdrew the drug from sale on 29 November 1961. In 1997 Diageo purchased the Distillers and inherited its thalidomide legacy.
2.28
There are two differently compensated groups of thalidomide survivors in Australia: the group recognised in the 1970s and the group recognised through the class action that concluded in 2014.
2.29
In the 1970s, Distillers reached a settlement with the parents of the 40 Australian and nine New Zealand survivors whom Distillers recognised as having been injured by thalidomide. The compensation that these survivors received from Distillers is detailed in the interim report. However, as part of this process, the survivors' parents signed an agreement that precluded these survivors from taking any further legal action against Distillers, Grünenthal or its successors. This meant that Diageo owed no legal obligation to assist the Australian thalidomide survivors who were recognised in the 1970s.
2.30
In October 2008, Mr Ken Youdale, a retired senior executive whose daughter died from her thalidomide injuries, approached Diageo to request that it provide the Australian thalidomide survivors who had been recognised by Distillers in the 1970s with additional compensation.
2.31
Mr Youdale's request was highly unorthodox. Mr Gordon told the committee that he had 'never heard of anyone reopening and getting more compensation for anyone'.
2.32
In particular, Mr Gordon thought that the prospect of Diageo providing additional compensation was unlikely because of the legal circumstances surrounding the cases, namely:
…because further legal claims against Distillers were legally barred by the 1970s settlement deeds and accompanying court orders, and the claims had also been statute-barred for decades.
2.33
However, in August 2009 Diageo agreed to pay an ex gratia payment of $50 million to fund payments to the survivors who had entered into settlements with Distillers. The ex gratia scheme was structured to pay amounts out to survivors for at least 18 years from 1 April 2010.
2010 assessment process
2.34
All of the thalidomide survivors who were recognised in the 1970s were assessed at Diageo's expense before the ex gratia payments commenced. As noted in the interim report, the assessment process took place over a three week period in January 2010.
2.35
The assessment process was undertaken by a panel of three experts, Professor Janet McCredie, Professor Earl Owen and Mr Peter Semmler QC. Members of the 2010 assessment team apparently arrived at their conclusions by different methods. How the members of the panel arrived at their decisions may be important if other currently unrecognised survivors need to be assessed at a point in the future and integrated into the group of thalidomide survivors. Professor McCredie arrived at her conclusions by converting every disability into a number of points that added up to a numerical score, while Mr Semmler advised that he took a more holistic approach.
2.36
Professor McCredie explained that she used maps of the 'peripheral sensory nerve supply' and provided a score of one to three depending upon whether the nerve damage was mild, moderate or severe. Professor McCredie also used this method for cranial nerves (for which a score of between one and six was provided) and additional damage, such as internal injuries such as a missing gallbladder (one point) or a heart defect (six points). Professor McCredie submitted that a similar scoring system was used two years later by the North-Rhine Westphalen group and that this method was objective and 'fair to all parties'.
2.37
Mr Semmler advised the committee that he took a very different approach. Mr Semmler advised the committee that he expressed concern about the categorisation of survivors based solely on nerve damage. Instead, he advised the committee that he took a more holistic approach to the assessment of survivors' disabilities. Mr Semmler explained that as a barrister specialising in the assessment of damages in personal injury cases, he approached the task in the same way as he would the assessment of any other personal injury matter:
My assessment of the entitlement to compensation… was based purely upon the disability of each person, in the same way in which a common law assessment of the ongoing consequences of injuries, whatever their cause, is customarily undertaken.
2.38
The third member of the panel, Professor Owen, has since passed away. However, Mr Semmler advised that his recollection of their conversations was that Professor Owen appeared to adopt a broader approach to considering survivors' injuries. Mr Semmler advised that the scale of payments was based on an overall assessment of thalidomide survivors' disabilities.
Records from 2010 assessment process
2.39
Ultimately, survivors were not informed as to how the panel arrived at their decision and they were not provided with a copy of the assessment about their disabilities. As a result, the thalidomide survivors who were assessed do not have any of the documentation that explains what their level of functionality was at that time.
2.40
That information is important because survivors' bodies are deteriorating and their function is being limited by their thalidomide injuries. It would be helpful for survivors to have access to those documents as a form of baseline assessment.
2.41
Copies of the assessments still exist. Mr Semmler confirmed that he retained copies of:
a copy of the 'Thalidomide Case Gradings';
a copy of the classification of survivors listed according to the severity of their disability;
a copy of the classification of survivors according to damage by neurological segments; and
documents 'summarising the problems encountered by 43 of the beneficiaries and recording my assessment of the degree of disability of each'.
2.42
Mr Semmler described the content of these documents as 'exquisitely personal' to survivors and raised significant privacy concerns about making the documents available.
2.43
Diageo advised that it was prepared to investigate whether it held copies of the assessments and whether it may be able to be provide access to the assessments, if it was considered necessary.
Class actions
2.44
As noted above and in the interim report, Diageo made two substantial settlements to thalidomide survivors who participated in a class action that was approved by the Victorian Supreme Court in 2014: one to Ms Lynette Rowe, the lead plaintiff, for an undisclosed multi-million dollar sum and $89 million to another group of 106 survivors (94 Australians and 12 survivors from New Zealand) who had not previously been compensated. In total the matter was settled for just over $100 million.
Diageo's possible future support
2.45
Early in the committee's inquiry the Department of Health advised the committee that the Minister for Health, the Hon. Greg Hunt MP, had written to Diageo on two occasions urging Diageo to consider further compensation for Australia's thalidomide survivors. In October 2017, the Minister for Health wrote to Diageo in the following terms:
The Government is considering options to formally recognise those affected by thalidomide. I request that in conjunction with this action by the Government, Diageo urgently consider the case for further compensation to be paid to thalidomide survivors to enhance their quality of life in the coming years.
2.46
Diageo responded to the letter from the Minister for Health advising of the support it had already provided to Australia's thalidomide survivors.
2.47
In April 2018, the Minister for Health wrote to Diageo again to ask the company to consider further compensation and requested a meeting to discuss such a 'complex and sensitive' matter.
2.48
Diageo Australia's Managing Director, Mr David Smith, advised the committee that he met with the Minister for Health on 15 August 2018 to discuss the contributions Diageo had made to the Thalidomide Australia Fixed Trust and the possible future supports for Australia's thalidomide survivors that might be provided by either the Australian Government or Diageo.
2.49
Diageo advised the committee that it is prepared to consider what further support it can provide Australia's thalidomide survivors. However, Diageo noted that any future contribution was likely to be smaller than the contributions that have been provided to date.
2.50
Diageo noted that the Australian Government is yet to provide financial support to its thalidomide survivors:
Diageo has taken its responsibilities in relation to the distribution of thalidomide extremely seriously and has given substantial financial support to the thalidomide survivors...It is worth noting that in other countries, governments have also made significant financial contributions to thalidomide survivors.
2.51
Diageo also clarified that it would only consider providing additional support after it understood what the Australian Government was proposing:
Any further contribution by Diageo would be considered after we understood the government’s plan.
2.52
Any further contribution Diageo may provide would come on top of the substantial contribution it has already made. In his submission, Mr Gordon calculated that Diageo has already provided over $150 million to Australian thalidomide survivors:
As stated, the principal outcomes of our work in Australia and New Zealand, were to assist Mr Ken Youdale in the 2010 ex gratia scheme, (for a total capped value of $50,000,000;) and the settlements of class actions for 105 newly recognized [Australian and New Zealand] thalidomiders for total damages of just over $100,000,000. The combined financial outcomes for the two groups therefore amounted to just over $150,000,000.
Committee view
2.53
The committee understands that Diageo had no legal obligation to provide the ex gratia scheme to the group of thalidomide survivors who were recognised in the 1970s and has acted as a very good corporate citizen in providing the additional payments out to 2028.
2.54
The committee notes that Diageo has already provided a substantial contribution to Australia's thalidomide survivors. The committee welcomes Diageo's offer to consider providing a further contribution and notes that governments in other places Diageo operates have provided some financial support to their thalidomide survivors.
2.55
The committee notes that Diageo has offered to make enquiries about whether it holds copies of the individual assessments and whether it could make copies available if they were required to assist survivors. The committee thanks Diageo for its offer and notes that copies of the assessments could greatly assist survivors.
Responsibility of Australian governments
2.56
Many of the submitters to the inquiry consider that Australian governments have a moral obligation to provide further direct support, including financial compensation to thalidomide survivors. They consider that Australian governments have a moral obligation because they allowed thalidomide products to be sold in Australia without proper testing and because when Australian governments were informed about the risks of thalidomide they did not do enough to ensure that the products were removed and destroyed.
Importation, testing and sale
2.57
In the early 1960s, the importation and sale of therapeutic drugs was regulated at different levels. Importation was regulated at the national level while distribution and sale was regulated at the state and territory level.
2.58
At the national level, therapeutic substances were regulated under the Therapeutic Substances Act 1953 (Cth) as amended by the Therapeutic Substances Act 1959 (Cth). This legislation was largely concerned with labelling and ensuring that the drugs were manufactured to an appropriate standard of purity and consistency. However, the drugs were not tested to see whether they would affect human health.
2.59
Thalidomide survivors suggested that allowing a product to be imported for sale without testing whether it was harmful to human health was a significant failing. For some survivors, the failure to test thalidomide prior to its distribution was unforgivable:
The fact that Thalidomide made its way into my mother's hands over 55 years ago is repugnant and inexcusable.
2.60
Some survivors noted that the Australian Drug Evaluation Committee was established in 1963 in direct response to the thalidomide tragedy. Brett, one of the thalidomide survivors, told the committee that the establishment of this committee in the aftermath of the tragedy demonstrated that there was a deficiency in the system at the time thalidomide was available:
[Thalidomide] resulted in the establishment of the Therapeutic Goods Administration, and it highlighted a major deficiency in the Australian government's duty of care. Our mothers took thalidomide because they had trust, complete faith, in the medical system that operated under the protective guidelines of the Australian government.
2.61
Brett provided the committee with excerpts of Dr John McEwen's A History of Therapeutic Goods Regulation in Australia to demonstrate that the Australian Government had been advised as early as 1907 by the Royal Commission on Secret Drugs and Cures that it was important to know the nature and composition of drugs that entered Australia:
As it is of national importance to prevent the introduction into Australia of epidemic diseases of men and animals, so it is of higher importance to prevent the introduction of deleterious, demoralising, and homicidal drugs, when the nature and composition are not fully known… it is of urgent necessity to provide a Bureau of chemistry, which would be of inestimable service in the preservation of health and life from frauds and mistakes...
2.62
The document further noted that other countries had already taken more proactive steps to protect public health than Australia had. In May 1949, a researcher addressed the National Health and Medical Research Council (NHMRC) following a research trip. Commenting on Australia's policy on regulating medicines he told the NHMRC:
One receives the impression...that as long as...the manufacturer does not overstep the bounds the policy is “we shall let be.” That is in marked contrast to the positive policy in Canada and in the (United) States that no stone must be left unturned to protect the public…my visit overseas has convinced me more than ever that we in Australia have insufficient control over our own manufactures and over imported products, especially those from the Continent about whose origin and testing we know nothing whatever.
2.63
The Department of Health advised the committee that the implementation of such recommendations was hampered by a lack of clarity about whether the Australian Government had the constitutional authority to implement such regulation and by a view of federalism that reserved the power to regulate the sale and distribution of drugs to the states.
2.64
The committee wrote to the states and territories to obtain further information about how the sale and distribution of therapeutic drugs were regulated during this period. The states advised the committee that therapeutic substances were generally regulated under the jurisdiction's poisons controls. The committee understands that thalidomide required prescriptions in Queensland and, potentially, in Western Australia, but thalidomide does not appear to have been legally restricted until at least 1962.
Recall and prohibition of sale
2.65
Submitters to the inquiry were particularly critical of Australian governments' responses to recalling and destroying products containing thalidomide that were still in Australia.
2.66
Thalidomide survivors were critical of Australian governments' responses because if governments had acted more quickly they potentially could have made a significant difference. Mr Peter Gordon estimated that approximately 20 per cent of thalidomide survivors would not be disabled if Australian governments had taken appropriate steps to recall and destroy the thalidomide products that were still in Australia at the time:
Our estimate is that 20 per cent of the entire thalidomide cohort as is known in Australia today had their mums be exposed to thalidomide after the government actually knew about the 'Dear doctor' letter, after they knew there were concerns about the adequacy of the recall project.
2.67
The 'Dear doctor' letter was distributed by Distillers to announce that it would withdraw the products containing thalidomide from sale. Mr Gordon provided the committee with a copy of the letter from the National Archives of Australia that was stamped by the Department of Health to indicate that it received the letter on 4 December 1961.
2.68
Thalidomide survivors and their family members who submitted to the inquiry were upset by the response of Australian governments because it was both slow and lacklustre by comparison to other countries. These submitters asked the committee to consider the difference between the responses in Australia, the United States and New Zealand. In the United States, President John F Kennedy made a televised address and sent 200 public servants out to ensure that thalidomide tablets were collected and destroyed. According to the Thalidomide Group Australia, warnings about the dangers of thalidomide were flashed on television screens and were broadcast over the radio encouraging citizens to search their medicine cabinets and to dispose of the drug.
2.69
In New Zealand, a directive was issued to seize thalidomide from chemists and hospital shelves. In Australia, neither the Australian Government nor the state governments took immediate action.
2.70
On 9 August 1962 Australia declared thalidomide to be a prohibited import. On that same day, the Australian Government's Minister for Health, Senator the Hon. Harrie Wade, told the media that no further action was necessary because the drug had been withdrawn from sale. However, Senator Wade noted that the states had not formally prohibited the remaining supplies of the drug from being sold again at a later time.
2.71
State governments advised the committee that the following actions were taken to withdraw thalidomide from sale:
Tasmania listed thalidomide as a poison in July 1962;
the New South Wales Government advised the committee that thalidomide was restricted to require a prescription in August 1962 and further legislative amendments were contemplated to strengthen the Poisons Act 1952;
the sale of thalidomide was prohibited in the Australian Capital Territory and Western Australia October 1962; and
in Queensland, additional legislation was required which led to thalidomide being prohibited from being sold or supplied on 24 August 1967.
2.72
No State was able to inform the committee whether any action was taken to remove thalidomide products from the shelves of medical practices or pharmacies.
Support provided
2.73
As noted in the interim report, Australian governments have done relatively little to directly assist Australia's thalidomide survivors.
2.74
The Australian Government has primarily provided support to thalidomide survivors in the form of an exemption of compensation payments from the social security income test and income tax exemptions. As noted above, Australia has two differently compensated groups of thalidomide survivors, but they have received similar treatment from the Australian Government.
2.75
Thalidomide survivors who were recognised in the 1970s receive payments through the Thalidomide Australia Fixed Trust. Payments from The Thalidomide Australia Fixed Trust are exempt from income tax and the social security income tests. In 2014, the class action payments were exempt from the social security income test and income tax on the payment.
2.76
As noted in the interim report, the Australian Government also offers to all Australians the benefits of income support, the health system (including Medicare and the Pharmaceutical Benefits Scheme) and, most recently, the National Disability Insurance Scheme (NDIS).
2.77
The Australian Government provided some support for thalidomide-affected children by facilitating the fitment of prosthetic limbs. In 1964, the Hon. Reginald Swartz told the House of Representatives that the then Repatriation Department was responsible for administering a scheme for thalidomide-affected children with malformed limbs to be fitted with, and receive early training in the use of, prosthetic limbs. The Australian Government paid half of the cost of the scheme, with the other half paid by state governments. The Department of Veterans' Affairs told the committee its facilities were used for the fitment of prosthetic limbs and that it actively participated in the Australian Government's programme to assist thalidomide-affected children.
2.78
State and territory governments advised the committee that they have some disability supports available that can be accessed by thalidomide survivors. In some jurisdictions, the NDIS was considered to be the major component of their disability service provision. For example, the Western Australian Government advised the committee that the NDIS constituted the core of its disability support, though individuals could be supported by the Department of Communities until they receive an NDIS plan.
2.79
New South Wales and Queensland noted that they provide comprehensive disability support services. The Queensland Government explained that thalidomide survivors who live in Queensland may be eligible for 'Accommodation Support, Community Access Support, Case Management, Life Skills Development, Goods and Equipment, Multidisciplinary Services, Early Childhood Intervention Services, and/or Respite Services'.
2.80
The New South Wales Government reported that thalidomide survivors may be eligible for supports under its Prosthetic Limb Program and/or the Aids and Education Program. If a thalidomide survivor was considered to be ineligible for the NDIS, the New South Wales Government said that its Safe and Supported At Home program could help provide non-clinical support services. However, the New South Wales Government noted that the Safe and Supported At Home program is time-limited.
2.81
However, thalidomide survivors who live in these states have advised the committee that they have experienced significant difficulties in accessing these programs.
2.82
The committee has received evidence that State governments consider that it is the Australian Government's responsibility to assist thalidomide survivors. The committee received a letter from the Queensland Government to advise that it does not consider this matter to be a 'State responsibility' and that it is the Australian Government's responsibility to provide compensation or any financial support. The committee also received a copy of a letter from the Premier of Queensland, the Hon. Annastacia Palaszczuk MP, addressed to the former Prime Minister, the Hon. Tony Abbott MP, advising of the same and requesting that the Australian Government provide support for Australia's thalidomide survivors.
Australian Government as the 'funder of last resort'
2.83
In its submission, the Department of Health noted that the Australian Government would be the 'funder of last resort', but it considered that the manufacturer and the distributor should consider providing additional compensation.
2.84
The Department of Finance advised that the Australian Government would step in as the 'funder of last resort' in circumstances where all other possible avenues for providing financial support have been exhausted.
2.85
In its submission, Grünenthal was clear that it had contributed to the Contergan Foundation which supports thalidomide survivors in the 37 countries where Grünenthal directly marketed thalidomide products or where Grünenthal products were 'marketed through an independent company operating as Grünenthal's direct distributor'. Grünenthal submitted that when Distillers had entered into an exclusive distribution arrangement to distribute products, it became exclusively responsible for the distribution and marketing of thalidomide products. According to Grünenthal, Diageo, as the legal successor to Distillers, is therefore responsible for providing any support to Australian thalidomide survivors.
2.86
Submitters in this inquiry have noted that, between the two groups of recognised Australian thalidomide survivors, Diageo has provided just over $150 million in compensation. Diageo also notes that it provides a similar level of support to thalidomide survivors in the United Kingdom and it expects that the Australian Government should provide a level of financial support before asking it to contribute additional compensation.
Legal advice regarding Australia's obligations
2.87
Early in the inquiry the committee was advised that the former Minister for Health, the Hon. Sussan Ley MP, commissioned advice from Maddocks Lawyers about Australia's obligations to its thalidomide survivors.
2.88
On 19 June 2018, the Senate agreed that a copy of the document should be provided to the Senate by 20 June 2018. On 16 August 2018, Senator the Hon. Bridget McKenzie, representing the Minister for Health in the Senate, made a public interest immunity claim over the document. Senator McKenzie's public interest immunity claim was based on the fact that the document was legal advice to government:
It has been the long-standing practice of successive Australian Governments to not disclose privileged legal advice, including advice that canvasses possible constitutional issues.
2.89
In the interim report the committee requested that a copy of the advice be made available to the committee to help it to understand the options available to the Australian Government.
2.90
The Maddocks Lawyers' advice was not made available to the committee and the committee was unable to verify or consider the contents of the advice. This is important as the advice could have provided the committee with a better understanding of the legal context in which the Australian Government is being asked to respond to the Thalidomide Group Australia's requests. The advice could have also provided the committee with important information regarding the current options available to the Australian Government for supporting thalidomide survivors.
2.91
Instead, the only evidence the committee has about the advice comes to it indirectly. The committee received some evidence that a ministerial adviser revealed some of the content of that advice to the Director of the Thalidomide Group Australia, Ms Lisa McManus. According to Ms McManus, the adviser provided her with the following information about the advice:
the advice is 23 pages long;
it provided five possible options;
one of the options was to 'do nothing'; and
it concluded that the Australian Government had no legal obligation, but that the Australian Government has a 'moral responsibility' to assist thalidomide survivors.
Committee view
2.92
The committee considers that Australian governments have a moral obligation to Australia's thalidomide survivors. The committee notes that both the Australian Government and the state governments failed to monitor drug safety at a time when other governments around the world did so. Documents provided to the committee demonstrate that the Australian Government was aware that more could be done to safeguard public health from dangerous drugs. The committee notes that the formation of the Therapeutic Goods Administration was a direct result of the thalidomide disaster and notes evidence to the inquiry that suggests such a body could have been, and should have been, established earlier.
2.93
When it was revealed that thalidomide was toxic, Australian governments did not immediately react. Evidence provided to the committee indicates that neither state governments nor the Australian Government took any steps to immediately remove thalidomide from sale in Australia. The committee finds it deeply concerning to consider that the number of Australians affected by thalidomide could have been 20 per cent smaller if more had been done to recall and destroy the drug in a timely manner.
2.94
The committee notes that the Australian Government has offered to act as the 'funder of last resort'. However, the committee considers that thalidomide survivors have waited long enough and the Australian Government needs to take a more active role. The committee notes that Grünenthal does not consider that providing support is its responsibility and that Diageo has already provided a very substantial sum of compensation to Australia's thalidomide survivors and has indicated a willingness to consider some further compensation after the government's plans to support survivors are made clear.
2.95
The committee notes that other governments around the world have provided significant financial support to their thalidomide survivors and the committee considers that the Australian Government should provide some form of assistance. Further consideration about the forms of assistance that could be provided will be considered in the next chapter.
2.96
The committee considers that it would have been in a better position to make recommendations regarding the Australian Government's response to providing support to thalidomide survivors, and to the Thalidomide Group Australia's requests, if the committee had been permitted to review the Maddocks Lawyers' advice.
2.97
The committee notes the Minister's public interest immunity claim in relation to the advice and questions whether this claim satisfies the process the Senate has prescribed for such claims. In particular, the committee notes that the fact that information consists of advice to government does not establish a basis for a public interest immunity claim. The Senate's expectation is that the Minister should establish the harm to the public interest that would result from disclosure on this occasion, particularly as legal advice to government has been disclosed by governments on numerous occasions.