Bills Digest No. 89  1999-2000 Therapeutic Goods Amendment Bill 1999


Numerical Index | Alphabetical Index

WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.

CONTENTS

Passage History
Purpose
Background
Main Provisions
Endnotes
Contact Officer and Copyright Details

Passage History

Therapeutic Goods Amendment Bill 1999

Date Introduced: 25 November 1999

House: House of Representatives

Portfolio: Health and Aged Care

Commencement: On Royal Assent

Purpose

To facilitate the implementation of a mutual recognition agreement between Australia and three members of the European Free Trade Association (EFTA). Under the agreement, the testing and certification of certain products including medical devices and pharmaceuticals can be carried out in the country of export rather than the country of destination. The Bill will allow the Secretary of the Department of Health and Aged Care to accept conformity assessment certificates in relation to therapeutic goods issued by conformity assessment bodies in Iceland, Liechtenstein and Norway.

Background

The Therapeutic Goods Act 1989 (the Principal Act) provides a uniform national system of controls for therapeutic goods.(1) The legislation provides for an Australian Register of Therapeutic Goods that are approved for import, export and supply.

In 1997 Australia entered into a mutual recognition agreement with the European Community.(2) In order to implement part of the agreement the Parliament passed the Therapeutic Goods Amendment Act 1997. In brief, the legislation allowed the Secretary of the Department of Health and Aged Care to accept conformity assessment certificates issued by conformity assessment bodies in the European Community (EC). These documents state that therapeutic goods manufactured in the EC member states to which the certificates apply meet all Australian regulatory requirements relating to good quality, safety and efficacy. Acceptance of these certificates precludes the need for further evaluation or assessment of the products before they are be included in the Australian Register of Therapeutic Goods and approved for general marketing.(3)

The Bill seeks to extend this regime to apply to Iceland, Liechtenstein and Norway.

The Mutual Recognition Agreement (MRA) between Australia and EFTA

EFTA was established in 1960 by the Stockholm Convention to eliminate tariffs and other restrictions on trade between EFTA members. The Member States of EFTA are Switzerland, Iceland, Liechtenstein and Norway.(4)

The last three nations are also members of the European Economic Area (EEA). The EEA was instituted by an agreement signed in 1992 by the EC and the EFTA States. Under the terms of that agreement where the EC negotiates an MRA with a third country, it does so on the proviso that the third country will conclude an equivalent agreement with Iceland, Liechtenstein and Norway.(5)

The proposed mutual recognition agreement with Iceland, Liechtenstein and Norway was tabled in May this year and examined by the Joint Standing Committee on Treaties (JSCT) in its Twenty-Second Report. The Committee recommended that binding action should be taken in relation to the Treaty.

The JSCT defined a MRA in the following terms:

A mutual recognition agreement is a treaty through which Australia and other Parties recognise that Conformity Assessment Bodies (CABs) designated by each other are competent to test and certify a specified range of products to meet their domestic regulatory requirements.(6)

In the case of therapeutic goods, the agreement covers medical devices and pharmaceuticals.(7)

By allowing testing, inspection and certification to occur in the country of origin, it is hoped that the MRA will help to reduce technical barriers to trade.

While the MRA is designed to promote Australian exports,(8) the focus of this Bill is to make it easier for manufacturers in Iceland, Liechtenstein and Norway to export to Australia. It will allow the Secretary of the Department of Health and Aged Care to accept conformity assessment certificates issued by conformity assessment bodies in these countries.

What about Switzerland?

Switzerland is a member of EFTA but is not a member of the EEA. As a consequence, Australia is not obliged by its MRA with the EC to conclude an agreement with Switzerland. The JSCT reported that Switzerland is yet to indicate formally any interest in negotiating such an agreement.

In evidence before the Committee, a representative of the Department of Industry, Science and Resources stated that the lack of an MRA with Switzerland would not present exporters with any difficulties because the Swiss will accept all goods marked CE (conformity European) regardless of their origin.(9) The Swiss may, however, wish to negotiate a treaty with Australia so as to obtain similar benefits.

Main Provisions

The amendments to the principal Act are essentially definitional changes to incorporate the new MRA within the framework that was developed to implement the treaty with the European Community.

Items 1 to 6 amend subsection 3(1) of the Act.

Items 1 and 2 expand the definition of conformity assessment body and conformity assessment certificate. Whereas these terms were previously defined by reference to the mutual recognition agreement with the EC, they now also cover the MRA with EFTA.

Item 6 removes the definition of 'mutual recognition agreement' which specifically referred to the MRA between Australia and the EC. It is replaced by separate definitions that describe an EC mutual recognition agreement and an EFTA mutual recognition agreement (items 3 and 4).

Item 5 defines a 'member of EFTA' as a country declared to be so by the Minister. Item 7 inserts a new section 3A(1), which will allow the Minister to determine, for the purposes of the Act which countries are members of the EC and EFTA.

Section 25 of the Act deals with registrable medicines.(10) Where goods are manufactured outside Australia, the Secretary of the Department of Health and Aged Care must determine whether the manufacturing and quality control procedures used in the manufacture of the goods are acceptable. In making this determination under subparagraph 25(2)(a)(i) the Secretary must take into account a conformity assessment certificate if the goods were manufactured in the EC. Item 8 amends this subparagraph to provide that the Secretary must also take into account certificates issued in relation to goods emanating from EFTA countries.

The amendment proposed by item 9 is of similar effect. The item deals with section 26 2(a)(i). In determining whether procedures used in the manufacture of listable medicines such as vitamins, suncreens and herbal substances are acceptable the Secretary must, under the amendment, take into account a conformity assessment certificate if a step in the manufacture of the product took place in an EC or EFTA country.

Item 10 amends subparagraph 26(4)(a)(i). At present, in deciding whether to certify that procedures used in the manufacture of certain listable medicines(11) overseas are acceptable, the Secretary may take into account whether the applicant has provided a conformity assessment certificate if a step in the manufacture of the goods occurred in the EC. The amendment allows the Secretary to take account of a certificate if the goods were manufactured in an EFTA country.

Section 61(1) outlines circumstances in which the Secretary can release the information on Therapeutic Goods. Item 11 amends the section so that information that came into the possession of the Department in connection with the performance of the Department's functions under the EFTA MRA can be released.

Endnotes

  1. Therapeutic Goods are defined broadly to include items such as antibiotics, vaccines and herbal products as well as therapeutic devices such as pacemakers, heart valves and contraceptives.

  2. Agreement on Mutual Recognition in Relation to Conformity Assessment, Certificates and Markings between Australia and the European Community.

  3. Therapeutic Goods Amendment Bill 1997, Senator the Hon. Ian Campbell, Second Reading Speech, Senate Hansard 26/3/1997, p. 2465.

  4. More information on EFTA can be found on the Association's website http://www.eea.int/

  5. Joint Standing Committee on Treaties (JSCT), Twenty-Second Report, June 1999, p. 29.

  6. ibid, p. 25.

  7. The MRA also covers automotive products, electrical equipment and telecommunications equipment.

  8. The JSCT highlighted an estimate that assessment regimes can add between 2 and 10 percent to the cost of making and exporting a product. At present three tests would probably be required to export goods to Iceland, Liechtenstein and Norway but under the MRA, one test in Australia would suffice. JSCT, p. 26.

  9. Guy Wilmington (DISR), Transcript of Evidence before the Joint Standing Committee on Treaties, 7 June 1999, p. 33.

  10. This includes all prescription and over-the-counter drugs.

  11. This includes predominantly over-the-counter drugs, herbal preparations and vitamins that are described in schedule 4 of the Therapeutic Goods Regulations. Where such products are supplied for use in Australia s26A applies. Listable drugs that are exported from Australia must be processed under s26 along with listable therapeutic devices.

Contact Officer and Copyright Details

Mark Tapley
2 December 1999
Bills Digest Service
Information and Research Services

This paper has been prepared for general distribution to Senators and Members of the Australian Parliament. While great care is taken to ensure that the paper is accurate and balanced, the paper is written using information publicly available at the time of production. The views expressed are those of the author and should not be attributed to the Information and Research Services (IRS). Advice on legislation or legal policy issues contained in this paper is provided for use in parliamentary debate and for related parliamentary purposes. This paper is not professional legal opinion. Readers are reminded that the paper is not an official parliamentary or Australian government document.

IRS staff are available to discuss the paper's contents with Senators and Members
and their staff but not with members of the public.

ISSN 1328-8091
© Commonwealth of Australia 1999

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Published by the Department of the Parliamentary Library, 1999.

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