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Focus: A review of the exposure draft of the Therapeutic Products Bill 2007 (Cth)

30 April 2007

In brief: In late March 2007, the Federal Department of Health and Ageing released an exposure draft of the Therapeutic Products Bill 2007 (Cth). This is the first in a series of new laws that will significantly change the way therapeutic products are regulated in Australia and New Zealand by setting up a joint trans-Tasman scheme. Lawyer Przemek Kucharski summarises key aspects of the scheme and the Bill.

How does it affect you?

  • The joint trans-Tasman scheme will significantly change the way in which therapeutic products are regulated, both in Australia and New Zealand. In particular, a new product licensing system will be introduced with supporting sanctions to ensure compliance.
  • If you manufacture, supply, import, export or promote therapeutic products either in Australia or New Zealand, or intend to do so, you will have to comply with the scheme.
  • Current sponsors of therapeutic goods will not need to take any action for the moment. However, once it is clear when the scheme will commence, thought should be given to obtaining all necessary product licences so that full compliance is achieved before the expiry of the transitional period.
  • Prospective sponsors of therapeutic goods may want to consider whether delaying market entry is worthwhile to avoid duplicating regulatory compliance measures and to take full advantage of the benefits of the scheme once it comes into force.

The scheme

In Australia, therapeutic products are currently governed by the Therapeutic Goods Act 1989 (Cth), the Therapeutic Goods Regulations 1990 (Cth) and the Therapeutic Goods (Medical Devices) Regulations 2002 (Cth). The Therapeutic Goods Administration oversees these laws. In New Zealand, therapeutic products are governed by the Medicines Act 1981 and the Medicines Regulations 1984. The New Zealand Medicines and Medical Devices Safety Authority (Medsafe) administers these laws.

On 10 December 2003, the Agreement between the Government of Australia and the Government of New Zealand for the Establishment of a Joint Scheme for the Regulation of Therapeutic Products was signed. This agreement provides for the replacement of the current regime in each country with a joint trans-Tasman scheme (the scheme) regulating therapeutic products in both countries. The Ministerial Council (the Council) established by the agreement and the to-be-created Australia New Zealand Therapeutic Products Authority (ANZTPA) will oversee the scheme.

Implementing the scheme

The Therapeutic Products Bill 2007 (Cth) (the Bill) is the first in a package of laws that will outline the implementation of the scheme. (Guide to the exposure draft of the Bill.) Exposure drafts of other laws will be released soon and will include:

  • a law dealing with transitional arrangements. This will ensure that anyone who lawfully supplies therapeutic goods under the current regime can continue to do so for a transitional period after the commencement of the scheme; and
  • a law dealing with fees and charges.
Commencement of the scheme

At this stage, there is no set date for the commencement of the scheme. It is hoped, however, that ANZTPA will be established before the end of 2007. Also, it is expected that six months' notice will be given before the scheme comes into force.

Advantages of the scheme

The Federal Government has stated that the scheme will help industry and consumers in a number of ways. These include:

  • creating a single market for therapeutic products;
  • facilitating trade and reducing compliance costs by replacing dual regulatory processes with harmonised regulatory requirements;
  • strengthening each country's regulatory capacity to meet a new wave of innovative therapeutic products, which are being driven by emerging technologies and globalisation; and
  • ensuring consumers have early access to new therapeutic products entering the market.

The Bill

It should be noted that the Bill is still in draft form and is currently in the process of public consultation. Submissions are due by 4 May 2007. Accordingly, the Bill may yet be amended, superseding what is set out below.

The scope of the Bill

As with the current regime, the aim of the scheme is to safeguard the health and safety of consumers of therapeutic products.

This is achieved by regulating the manufacture, supply, importation, exportation and promotion of therapeutic products to ensure their pre-and post-market quality, safety and efficacy. Nearly all therapeutic products will be covered by the scheme, including:

  • complementary medicines;
  • over-the-counter medicines;
  • prescription medicines;
  • medical devices;
  • blood and blood products; and
  • tissues and cellular therapies.

Other therapeutic or health-related products that are governed by the current regime in Australia, such as tampons and some disinfectants, will not be covered by the scheme. The Bill provides, however, for the regulation of these products within Australia only in a manner similar to therapeutic products covered by the scheme.

The regulatory framework in the Bill

The operational details of the scheme will be contained in the Ministerial Council Rules (the Rules), which are made by the Council, and the Therapeutic Product Orders (the Orders), which are made by ANZTPA. The Bill gives these the force of law in Australia. Subject to some exceptions, no Rule or Order will be in force in Australia when it is not in force in New Zealand.

Drafts of some of the Rules and Orders have already been released for public comment. The scheme will, to varying degrees, require:

  • pre-market assessment of therapeutic product safety, quality and efficacy;
  • licensing of manufacturers to assure therapeutic product quality;
  • standard-setting to assure therapeutic product quality and performance;
  • post-market monitoring of therapeutic product safety and quality; and
  • surveillance to check for compliance.

The degree of these requirements will depend on the nature of the therapeutic product. Broadly speaking, a risk-based approach to regulating therapeutic products will be applied similar to the current regime. Therapeutic products posing a lesser risk to health, such as complementary medicines, will face a smaller degree of regulation. Therapeutic products posing a higher risk to health, such as prescription medicines, will face greater regulation.

In this way, the scheme will not diminish but will at least maintain, and in some cases raise, regulatory standards in Australia under the current regime.

Licensing and enforcing compliance

Of the above requirements, licensing and enforcing compliance are of particular interest.

The current regime in Australia usually requires therapeutic products to be included on the Australian Register of Therapeutic Goods, whether through the process of listing or registration. The scheme will replace this system with the requirement to obtain a product licence. Subject to some exceptions, anyone who wants to manufacture, supply, import or export therapeutic products in Australia or New Zealand will have to obtain a product licence.

To enforce this and other requirements, the Bill creates various civil offences and a tiered regime of criminal offences. These criminal offences tailor penalties to relevant conduct so that more serious transgressions that result in, or are likely to cause, harm will be met with heavier penalties. Specifically, there will be:

  • high-level, fault-based offences with an aggravating element (conduct that results or will result in harm or injury), which will generally attract a maximum penalty of 4000 penalty units and five years' imprisonment;
  • strict liability offences with an aggravating element (conduct likely to result in harm), which will generally attract a maximum penalty of 2000 penalty units; and
  • ordinary fault-based offences (with no aggravating element), which will generally attract a maximum penalty of 1000 penalty units and one year imprisonment.

Conclusion

The commencement of the Australia New Zealand Therapeutic Products Regulatory Scheme will signal a major change to the way in which therapeutic products are regulated both in Australia and New Zealand. The Bill is the first and most important step in implementing the scheme in Australia. While the transition to compliance with the scheme may initially involve some additional regulatory burden for industry, it is hoped that the scheme will ultimately prove advantageous to both the industry and consumers. 

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