Bills Digest No. 151 2002-03
Therapeutic Goods
Amendment Bill (No. 2)
2002
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
Concluding Comments
Endnotes
Contact Officer & Copyright Details
Passage History
Therapeutic Goods
Amendment Bill (No. 2)
2002
Date Introduced:
27 June 2002
House: House of Representatives
Portfolio: Health and Ageing
Commencement:
The main provisions of the
Act commence on proclamation
The purpose of
the Therapeutic Goods Amendment Bill (No. 2)
2002 is to clarify the definition of therapeutic good and
consolidate and amend the laws that regulate advertisements about
therapeutic goods.
The Therapeutic Goods Act 1989 (TG
Act) creates a framework for the regulation of therapeutic goods
that are used in and exported from Australia.(1) The Act
imposes a number of controls on the advertising, manufacturing and
distribution of therapeutic goods. These controls relate to the
quality, safety, efficacy and timely availability of the goods.
Therapeutic good is defined in section 3 of
the TG Act as follows.
therapeutic goods means
goods:
(a) that are represented in any way to be, or
that are, whether because of the way in which the goods are
presented or for any other reason, likely to be taken to be:
(i) for therapeutic use; or
(ii) for use as an ingredient or component in
the manufacture of therapeutic goods; or
(iii) for use as a container or part of a
container for goods of the kind referred to in subparagraph (i) or
(ii); or
(b) included in a
class of goods the sole or principal use of which is, or ordinarily
is, a therapeutic use or a use of a kind referred to in
subparagraph (a)(ii) or (iii);
and includes medical devices and goods
declared to be therapeutic goods under an order in force under
section 7, but does not include:
(c) goods declared not to be therapeutic goods
under an order in force under section 7; or
(d) goods in respect of which such an order is
in force, being an order that declares the goods not to be
therapeutic goods when used, advertised, or presented for supply in
the way specified in the order where the goods are used,
advertised, or presented for supply in that way; or
(e) goods for which there is a prescribed standard in the Australia
New Zealand Food Standards Code as defined in subsection 3(1) of
the Food Standards Australia
New Zealand Act 1991; or
(f) goods which, in Australia or New Zealand, have a tradition of
use as foods for humans in the form in which they are
presented.
Under this definition, therapeutic goods
includes medicines, complementary medicines and therapeutic
devices.
Complementary medicines(2) include
products such as vitamins, minerals, aromatherapy and homeopathic
products. There is a growing trend for the increased use of
complementary medicines in Australia.(3) Whilst
statistics vary, research carried out by Adelaide University
suggests that income spent on alternative medicines and therapies
in 2000 was $2.3 billion.(4)
The supply and sale of complementary medicines
in Australia is regulated by both the TG Act and the Australia New
Zealand Food Standards Code (Food Standards Code). In December
1998, the then Parliamentary Secretary to the Minister for Health
and Aged Care, Senator Grant Tambling, announced the establishment
of a working party to oversee regulatory reform of the
complementary healthcare industry.(5) This was in
response to suggestions that there were inadequate mechanisms in
place to adequately regulate the complementary healthcare
industry.
Included in the Working Party s terms of
reference was an examination of;
the [Therapeutic Goods Advertising] Code and
associated guidelines in respect of all medicines which may be
advertised and recommend any changes to:
- The Therapeutic Goods Act 1989 and legislation; and/or
- The Code and related guidelines.(6)
As a consequence of the review, a range of
changes have been made to the regulation of complementary medicines
and therapeutic goods more broadly, including the establishment of
the Office of Complementary Medicines within the TGA and the
development of the revised Advertising Code of Practice which was
released in April 2000. Some of the legislative proposals contained
within the Therapeutic Goods Amendment Bill (No 2) 2002 were also
suggested as a result of the working parties findings.
Currently under the TG Act, section 3 provides
that a good is classified as a therapeutic good if it has the
characteristics that are set out in that section or if the
Secretary of the Department of Health and Ageing declares that it
is a therapeutic good under section 7 of the TG Act. Under this
current definition, if a good falls within one of the Food
Standards contained within the Food Standards Code, it cannot be
classified as a therapeutic good nor can the Secretary to the
Department declare it to be a therapeutic good .
This current arrangement has the following
consequences:
- where the good falls within one of the Standards in the Food
Standards Code and hence cannot be declared a therapeutic good, the
manufacturer will be prevented from claiming any therapeutic
properties even where the product has such
properties.(7)
-
this poses a problem for industry, particularly the complementary
medicines industry. On occasions, a complementary medicine may fall
within one of the food standards under the Food Standards Code such
as the Formulated Supplementary Sports Foods Standard. These
medicines will have therapeutic properties but the manufacturer
will be unable to claim that the good has those properties. This
creates a marketing disadvantage for the industry;
- Goods that fall within a Food Standard and are prevented from
being regulated as therapeutic goods will not be subject to
pre-market assessment and post market regulatory surveillance even
though this level of regulatory intervention is needed in order to
avoid a threat to public health and safety.(8)
Legislative amendments are needed to rectify this
problem.
Pan Pharmaceuticals
Awareness of the regulatory issues regarding
the complementary medicines industry have recently been heightened
with the recall of products manufactured by Pan Pharmaceuticals
Limited (Pan). Pan reportedly manufactures and supplies 70 per cent
of complementary medicines in Australia.(9) Pan also
manufactures some over the counter medicines such as pain relievers
and cold and flu preparations. On 28 April 2003, the TGA suspended
Pan s manufacturing licence for six months due to serious quality
and safety breaches in the manufacture of therapeutic goods. The
TGA also ordered an urgent recall of 219 products manufactured and
supplied in Australia by Pan. By 6 May 2003, the number of products
subject to the recall had increased to 1546, the vast majority of
these product lines being complementary medicines.
The Parliamentary Secretary to the Minister for
Health and Ageing, the Hon Trish Worth has announced that the
Therapeutic Goods Act 1989 will be amended to change some
of the regulatory arrangements for therapeutic goods in Australia.
In particular the following changes have been mooted in the
media;
owners and executives of pharmaceutical companies will be required
to comply with fit and proper person laws before being eligible for
a manufacturer s licence,(10)
- existing maximum penalties for breaches of the Act will be
increased to $220,000,(11) and
- companies will be required to list on packets the name of the
manufacturer and where the product ingredients have been sourced
from.(12)
This bill was introduced into
Parliament on 27 June 2002. At this stage it does not contain any
of the amendments that have been subsequently flagged by the
Parliamentary Secretary.
Advertisements to
consumers(13) for therapeutic goods albeit
medicines, complementary medicines or therapeutic devices are
subject to a number of regulatory requirements including those
contained within the TG Act, Therapeutic Goods Regulations (TG
Regulations) and the Broadcasting Services Act 1992. In
summary, the advertising requirements in these pieces of
legislation state that:
- advertisements to consumers for therapeutic goods (other than
devices and goods listed in Schedule 4 and 8 of the Poisons
Schedule and most goods listed in Schedule 3 of the Poisons
Schedule - that is, prescription medicines) that:
-
appear in newspapers and magazines, cinematographic films and
displays such as billboards (otherwise known as specified media ),
must be approved by the Secretary of the Department of Health and
Ageing(14)
-
that are broadcast through the television or radio, must be
approved by the Secretary of the Department of Health and Ageing
under the arrangements in the Broadcasting Services Act
1992,(15) and
-
appear in any other media, such as over the internet or in
catalogues must comply with the general advertising provisions set
out in the TG regulations but do not need the approval of the
Secretary of the Department of Health and
Ageing.(16)
- advertisements relating to Schedule 4 and 8 of the Poisons
Schedule and most goods listed in Schedule 3 of the Poisons
Schedule (ie prescription medicines) are prohibited(17),
and
- advertisements for therapeutic devices must comply with the
general advertising provision set out in the TG
regulations.(18)
Where advertisements for therapeutic goods are
permitted they fall into two categories, namely those requiring a
formal approval and those that do not require and approval but
which have to comply with the rules set out in the regulations. The
abovementioned regulatory arrangements for approved and
non-approved advertisements are divided in a somewhat ad hoc manner
between the TG Act, the Broadcasting Services Act 1992 and
the TG Regulations. In particular:
- the offence provisions for advertisements that are published
and which do require an approval are contained within the TG Act
whereas relevant definitions, the approval process, revocation of
approval and right of appeal provisions are contained within the TG
Regulations
- requirements relating to advertisements that are broadcast
through mediums such as commercial television, commercial radio or
subscription television and hence which require approval are
contained within the Broadcasting Services Act 1992,
and
- the offence provisions and related provisions for
advertisements that are published and which do not need to be
approved are contained within the TG Regulations.
The regulatory arrangements for therapeutic
goods includes compliance with the Therapeutic Goods Advertising
Code (TGAC). TGAC is a set of principles and guidelines that
ensures socially responsible marketing and advertising of
therapeutic goods.(19) TGAC forms the basis for
determining whether advertisements for therapeutic goods directed
to consumers are acceptable.
All advertisements for therapeutic goods that
are directed to consumers (other than those distributed through the
broadcast media) must comply with the TGAC.
In relation to advertisements requiring
approval, the TG Regulations specify a list of requirements
that an advertisement must meet before it is approved by the
Secretary. Included in this list is the requirement that the
advertisement complies with the TGAC.
If the advertisement does not meet the
requirements in the TGAC and is published, the person who publishes
the advertisement commits an offence under section 42C of
publishing an advertisement that is not an approved
advertisement.
In relation to non-approved
advertisements, the TG regulations contains a specific provision
that requires that all non-approved advertisement subject to Part 2
of the regulations be in compliance with the TG Advertising Code.
Where an advertisement is published and it does not meet the
requirements of the TG Advertising Code the maximum penalty
currently imposed for a breach of the requirement is 10 penalty
units.
The Bill amends the definition of therapeutic
good so that products that fall within a Food Standard under the
Food Standards Code can be declared therapeutic goods .
The Bill also contains significant amendments
to the advertising provisions contained within the Act. The primary
affect of the amendments are threefold;
- the definition of TGAC is moved from the TG regulations to the
TG Act and provision is made so that changes to the advertising
Code will be notified in the Gazette,
- regulation of advertisements for therapeutic goods in the
broadcast media is moved from the Broadcasting Services Act
1992 into the TG Act,
- the regulatory obligations for non-approved advertisements is
transferred from the TG regulations across to the TG Act and the
penalties imposed for breaches of the general advertising offences
is increased.
Item 1 of Schedule 1 amends
paragraph 3(1)(e) of the definition of therapeutic good in the TG
Act. The Explanatory Memorandum to the Bill states that;
once a good has been or is declared to be, a
therapeutic good, no matter when this occurs, it will be regarded
as a therapeutic good, despite the fact that it is a good for which
there is also a prescribed food standard .
Therefore, this amendment intends to amend the
definition of therapeutic good so that the Secretary to the
Department of Health and Ageing may declare the food to be a
therapeutic good under section 7 of the TG Act. Whilst it is likely
that the proposed amendment will achieves this end, it would appear
that the provision could have been more clearly drafted to clearly
state that the Secretary can declare foods under the Food Standards
Code to be therapeutic goods.
As noted above, all advertisements for
therapeutic goods that are directed to consumers, other than those
distributed through the broadcast media, must comply with the TGAC.
TGAC is currently defined in the TG Regulations. From time to time
the TGAC is amended. Item 2 inserts a definition
for the TGAC into the TG Act making it clear that amendments to the
Code will be notified in the Gazette.
The regulatory arrangements for approved and
non-approved advertisements are divided between the TG Act, the
Broadcasting Services Act 1992 and the TG regulations. The
amendments contained within the Bill consolidate the current
regulatory arrangements for therapeutic goods advertising.
Currently regulations 4, 5 and 5A
state that the following advertisements are not captured by the
regulations;
- Advertisements directed to health
professionals such as medical practitioners, psychologists,
dentists, pharmacists, homeopathic practitioners, nutritionists,
and persons who engage in the wholesale selling of therapeutic
goods
- Advertisements in respect of goods
that are not for use in humans, and
- Advertisements for therapeutic
goods that have been exported or are intended exclusively for
export.
The effect of regulations 4, 5 and
5A is to provide that the advertising requirements within the
regulations only apply to advertisements directed to consumers.
Currently the TG Act refers to regulations 4, 5 and 5A to limit the
scope of the advertising provisions in the Act to advertisements
directed to consumers.
Proposed item 4
of the bill replicates regulations 4, 5 and 5A in the TG Act
therefore making it clear on the face of the TG Act that the
advertising provisions in the Act apply to advertisements directed
at consumers.
The
Bill makes amendments to the
requirements for approved advertisements.
Item 3 and 5 are
consequential amendments that give effect to the changes to the
advertising provisions listed below.
As discussed above, regulation of
therapeutic goods advertisements in the broadcast media currently
falls within the requirements in the Broadcasting Services Act
1992. The
Bill, in proposed
item 17, amends section 42C of the TG Act to
expand its application to advertisements that are published or
broadcast. Item 17 therefore makes it an offence
to publish or broadcast an advertisement if an approval is
needed and has not been obtained. The maximum penalty is set at 60
penalty units (reduced from the current level of 100 penalty
units). Item 17 also lists other offences related
to publishing or broadcasting advertisements that require
approval.
Items 6, 7 and 15
are consequential to this amendment and define the terms
broadcaster , broadcast media and visual broadcast media . The bill
redefines publisher and inserts a definition of publishing into the
Act in proposed items 10 and 11. The inclusion of
a definition of publishing makes it clear that the process of
publishing includes inserting material within the pages of an item
of mainstream media. Item 14 inserts a definition
of specified media into the TG Act. Specified media is currently
defined in the TG Regulations. The definition is amended to include
broadcast media .
Item 16 creates a
separate Division for that part of the Act dealing with approved
advertisements. Item 16 also inserts a new
section 42BA into the Act which limits the
application of the Division to advertisements to which Part 2 of
the TG Regulations applies. It would seem that the inclusion of
this proposed section in the Act is unnecessary. As discussed
above, item 4 of the
Bill replicates the
provisions in Part 2 of the TG Regulations that set out the types
of advertisements that are captured by the regulatory arrangement.
Referring to Part 2 of the TG Regulations section
42BA therefore only duplicates what is achieved by
item 4 of the
Bill.
Schedule 2 of
the Bill makes
consequential amendments to the Broadcasting Services Act
1992 to provide that approvals for therapeutic goods
advertisements that are broadcast need to be approved in accordance
with the provisions of the TG Act rather than under the
Broadcasting Services Act 1992.
The offences for a breach of the
therapeutic goods advertising requirements that apply to
advertisements that do not require an approval are currently
contained within the therapeutic goods
regulations.
The Explanatory Memorandum to
the Bill states
that;
Some of the offences relating to
advertising [that is advertisements that do not require an
approval] still remain in the Therapeutics Goods Regulations, where
the penalty for breaches of the advertising requirements is set at
10 penalty units. Other comparable advertising offences have been
included in the Act, where the penalty for breaches of advertising
offences is 50-100 penalty points.
It has been suggested that the
penalties imposed for a breach of the advertising provisions for
non-approved advertisements (currently set at 10 penalty units)
should be increased so that they are on a par with penalties for a
breach of provisions that relate to advertisements that require an
approval. To achieve this, the offence provisions must be
transferred across to the TG Act due to the requirements which are
set out in the Legislation Handbook.
The Legislation Handbook sets out
the matters that should be included within legislation rather than
regulations.
The Legislation Handbook states
that
Matters of the following kind should
be implemented only through Acts of Parliament .
(f) provisions creating offences which
impose significant criminal penalties (imprisonment or fines equal
to more than 10 penalty units for individuals or more than 50
penalty units for corporations).(20)
The
Bill, in item
18, gives effect to the proposal to increase the penalties
for a breach of the therapeutic goods advertising provisions by
replicating all of the advertising requirements for non-approved
advertisements that are currently contained within the TG
Regulations in the TG Act. Item 18 increases the
maximum penalty for a contravention of the non-approved advertising
provisions (as set out in proposed section 42DL)
from 10 to 60 penalty units. To give effect to this change,
items 9, 12 and 13 make consequential amendments
to the Act.
The
Bill also contains a
provision (proposed section 42DM) increasing the
maximum penalty, where a non-approved advertisement breaches the
TAGC, from 10 penalty units to 60 penalty units.
Materials used in the formulation
or construction of therapeutic goods also need to comply with the
requirements of the TG Code. Currently this requirement is
contained within the regulations. It was also considered
appropriate to increase the penalty levels for failure to comply
with the TG Code in relation to generic information. Therefore
this Bill
through item 8 and item 18 (proposed sections
42DN, DO and DP) includes the generic information
requirements as they relate to the TG Code in the TG Act and
increases the penalties for contravening the sections to 60 penalty
units.
This Bill
contains a number of uncontroversial measures in regard to
advertising requirements for therapeutic goods and regulation of
products that fall at the food/drug interface. In particular
the Bill;
Many of the amendments simply replicate
provisions that are currently contained within the TG Regulations.
As a result, the TG Act as amended will contain provisions that are
drafted in regulation language rather than language that is
entirely consistent with other provisions in the TG Act. It is
hoped that this drafting style will not create interpretational
difficulties.
-
Therapeutic Goods Act 1989, section 4.
-
Complementary medicine is defined in section 52F Therapeutic
Goods Act 1989.
-
AMA Position Paper: Complementary Medicine, 2002, p.
1.
- Alastair H MacLennan MD et al, The Escalating
Cost and Prevalence of Alternative Medicine , Preventive
Medicine, No 35, 2002, p. 166 173.
- Senator Tambling Foreshadows Revised Approach
to Complementary Medicines Regulation , Media Release,
Senator Grant Tambling, Parliamentary Secretary to the Minister for
Health and Aged Care, 2 December 1998, [http://www.health.gov.au/archive/mediarel/1998/gt198.htm],
(12 May 2003).
- Review of the Advertising of Therapeutic
Goods: Report of the Therapeutic Goods Advertising Code Council, 4
November 1999, p. 2.
- Australia New Zealand
Food Standards Code (the Code) Standard 1.1A.2, paragraph
3(a).
- Explanatory Memorandum, Therapeutic Goods
Amendment Bill (No.2) 2002, p. 1.
- Largest Ever Drug Recall , Daily Telegraph,
29 April 2003.
- Promise Of Tough New Laws On Labels ,
Australian, 30 April 2003.
- ibid
- Promise Of Tough New Laws On Labels ,
Australian, 30 April 2003; List Debacle Prompts A Change To
Medicine Labelling Laws , The Age, 1 May 2003.
- Advertisements may also be directed to health
care professions. These advertisements are subject to different
regulatory requirements.
- Therapeutic Goods Act 1989, section
42C and 42D, Therapeutic Goods Regulations Part 2 Division 2.
- Broadcasting Services Act 1992,
Schedule 2, section 6.
- Therapeutic Goods Regulations 1990, Part 2
Division 3 and Division 4.
- Therapeutic Goods Regulations 1990, Part 2
Division 3 and Division 4. Advertisements for Schedule 3 products
that are listed in Appendix H of the Poisons Standard are not
prohibited. They must however comply with the general requirements
set out in the TG Act, TG Regulations and the Broadcasting
Services Act 1992.
- Therapeutic Goods Regulations 1990, Part 2
Division 3 and Division 4.
- A copy of the Therapeutic Goods
Advertising Code may be obtained at: [http://www.tgacc.com.au/code_gloss_files/ACF897F.pdf],
(12 May 2003).
- Department of the Prime Minister and Cabinet,
Legislation Handbook, 1999, Canberra, 1999, p. 3, at:
[http://www.pmc.gov.au/pdfs/LegislationHandbookMay00.pdf],
12 May 2003.
Susan Dudley
13 May 2003
Bills Digest Service
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ISSN 1328-8091
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