Discussion: Merger of Australian and New Zealand therapeutic goods regulators
In brief: After several years of negotiation and consultation with the therapeutic goods industry, the Australian and New Zealand Governments have formally agreed to establish a single trans-Tasman therapeutic goods agency, following the model of Food Standards Australia New Zealand. Partner Annette Hughes and Articled Clerk Susannah Downie look at the new regime and its likely impact.
- The current regulatory landscape
- The Treaty
- Why establish the Scheme and the Joint Agency?
- The impact of the Scheme and the Joint Agency for business
- What does the Scheme involve?
- What is the role of the Joint Agency?
- Overview
The current regulatory landscape
Therapeutic goods, including medicines and medical devices, are currently regulated under separate regimes by the Therapeutic Goods Administration (TGA) in Australia and the Medicines and Medical Devices Safety Authority (Medsafe) in New Zealand. The TGA is responsible for administering the Therapeutic Goods Act 1989 (Cth) (the Act), which provides a framework for the regulation of therapeutic goods in Australia. Under the Act, any product for which therapeutic claims are made must be entered in the Australian Register of Therapeutic Goods before it can be supplied to the public. The TGA carries out assessment of products and monitoring activities to ensure that therapeutic goods are of an acceptable standard. Medsafe is responsible for regulating products used for a therapeutic purpose in New Zealand, and administers the Medicines Act 1981 (NZ) and parts of the Misuse of Drugs Act 1975 (NZ).
The Treaty
The Government of Australia and the Government of New Zealand signed the Agreement for the Establishment of a Joint Scheme for the Regulation of Therapeutic Products (Treaty) on 10 December 2003. The Treaty requires Australia and New Zealand to adopt a Joint Scheme (Scheme) for the regulation of the quality, safety and efficacy or performance of therapeutic products. It is expected that the Scheme, which will be administered by a new Joint Agency (Joint Agency), will begin operating in July 2005.
Why establish the Scheme and the Joint Agency?
The motivations for the Scheme and the Joint Agency relate to both consumer welfare and trade. The primary objective of the Treaty is 'to safeguard public health and safety in Australia and New Zealand by establishing and maintaining a joint scheme consistent with international best practice for the regulation of the quality, safety and efficacy or performance of therapeutic products, and of their manufacture, supply, import, export and promotion'. The assessment of new and increasingly complex therapeutic products requires a high level of expertise, and places considerable strain on the resources of both Australia and New Zealand. The pooling of resources to create the Scheme and the Joint Agency will allow each country to deal more effectively with such products, ensuring that high standards are maintained and that consumers have faster access to new products.
Another key motivation is the push to enhance the Closer Economic Relations Agreement between Australia and New Zealand. Due to differences between the regulatory regimes of each country, therapeutic goods are currently exempt from the Trans-Tasman Mutual Recognition Arrangement (the TTMRA), which aims to remove regulatory barriers and facilitate trade between Australia and New Zealand. The Scheme and the Joint Agency will promote the objective of further integrating the Australian and New Zealand economies. Indeed, New Zealand Health Minister, Annette King, has noted that the signing of the Treaty 'demonstrates a strong commitment by both countries to the continuation of our long-standing relationship and is a further step in the development of a more integrated trans-Tasman economy'.
The impact of the Scheme and the Joint Agency for business
By harmonising regulatory requirements and standards, the Scheme should reduce compliance costs for businesses. Under the present regime, companies must comply with separate processes and deal with separate bodies in each country. This affects many aspects of their business, including bringing products to the market, labelling and packaging, and promotion. Complementary medicines, in particular, are subjected to different treatment in Australia and New Zealand. The implementation of consistent rules will allow businesses to operate more effectively. Businesses will also benefit from increased administrative efficiency and a greater depth of technical expertise. The increased resources of the Joint Agency should result in the faster evaluation of products, ensuring the consistent and timely availability of therapeutic goods on the market.
Businesses will continue to pay fees and charges to the Joint Agency, as they are currently required to do pursuant to the Act. Whilst initial funding is to be provided by the Australian and New Zealand Governments, the Joint Agency's ongoing funding cost will be recovered from industry.
What does the Scheme involve?
The Scheme will be implemented through:
- legislation in both countries;
- a set of Rules developed by the Ministerial Council (comprising the Health Ministers of Australia and New Zealand); and
- technical Orders made by the Managing Director of the Joint Agency.
Either country will be able to depart from the Scheme in extraordinary circumstances, or where it is considered desirable in light of the public health, safety, environmental or cultural circumstances of each country.
What is the role of the Joint Agency?
The Joint Agency administering the Scheme will be accountable to both Governments. The Joint Agency's functions will include:
- setting standards for the manufacture, supply, import, export and promotion of therapeutic products;
- pre-market evaluation and assessment;
- product licensing;
- post-market monitoring and surveillance; and
- providing information to the public in relation to therapeutic products.
The Joint Agency's decisions will also be subject to common regulatory review and appeal processes that will be accessible to industry in both Australia and New Zealand.
Overview
The therapeutic products industry should benefit from the implementation of a single trans-Tasman therapeutic goods regulatory regime. The elimination of duplication will reduce compliance costs for businesses, allowing companies to effectively take advantage of the broader trans-Tasman market. Whilst the Treaty has been finalised following years of collaboration and consultation with key players in the industry, stakeholder consultation will continue as the Joint Agency is implemented and legislation is developed.