Bills Digest no. 8 2009–10
Therapeutic Goods Amendment (2009 Measures No. 2) Bill
2009
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
Financial implications
Main provisions
Concluding comments
Contact officer & copyright details
Passage history
Date
introduced: 24 June
2009
House: House of Representatives
Portfolio: Health and Ageing
Commencement:
Sections 1 to 3: on Royal Assent
Schedule 1: 1 July
2010
Schedules 2 and 3
(Part 1): day after Royal Assent
Schedule 3 (Part 2):
whichever is the earlier of: on a day to be fixed by Proclamation
or six months after Royal Assent
Links: The
relevant links to the Bill, Explanatory Memorandum and second
reading speech can be accessed via BillsNet, which is at http://www.aph.gov.au/bills/.
When Bills have been passed they can be found at ComLaw, which is
at http://www.comlaw.gov.au/.
The Therapeutic Goods Amendment
(2009 Measures No. 2) Bill 2009 (the Bill) contains amendments
proposed as part of a series of bills amending the Therapeutic
Goods Act 1989 (the Act) to ensure the safety and
effectiveness of therapeutic goods in Australia, as well as
reducing the regulatory burdens on the therapeutic goods
industry.[1]
The Bill, in particular, proposes to:
- change arrangements for the scheduling of medicines and poisons
so that there would be separate scheduling of medicines and
poisons
- enable the Secretary of the Department of Health and Ageing
(DoHA) to declare the purpose for which particular kinds of medical
devices cannot be included in the Australian Register of
Therapeutic Goods (ARTG)
- extend the circumstances when consultation with, and advice
sought from, the Gene Technology Regulator can take place,
regarding applications for listing or registration of therapeutic
goods, to those goods that either are or contain genetically
modified organisms
- extending advertising offence provisions to anyone, not only
sponsors, who inappropriately advertises therapeutic goods
- amend provisions regarding the delegation of the Secretary s
powers, and
- enable the Minister to specify advisory statements to be
included on labels of particular medicines.[2]
The Act and the Therapeutic Goods Administration Regulations
1990 (the Regulations) are the primary means by which
therapeutic goods, medical devices and poisons are regulated in
Australia.[3]
The Therapeutic Goods Administration (TGA) is the principal
regulator of therapeutic goods in Australia and is responsible for
administering the provisions of the Act.[4]
Before a product can be marketed in Australia it must be
registered on the ARTG. For therapeutic goods such as medicines and
medical devices, the TGA makes an assessment of the quality, safety
and efficacy of the product. The TGA also has a post-marketing
surveillance role and monitors adverse reactions to therapeutic
goods. It operates on principles of risk management, balancing the
maintenance of public health and safety with reducing regulatory
burden.
The proposed amendments in this Bill reflect the Government s
regulatory reform program that was outlined by the TGA in 2008. The
regulatory reform program largely reflects what was agreed as part
of the establishment of the Australia New Zealand Therapeutic
Products Authority (ANZTPA), which has subsequently not been
proceeded with.[5]
The proposed changes to the scheduling arrangements for
medicines and chemicals reflect one of the key recommendations made
by the Council of Australian Governments (COAG) Review of Drugs,
Poisons and Controlled Substances completed by Ms Rhonda Galbally
in 2001 (the Galbally Review).[6] The Galbally Review recommended that there be
separate committees to provide advice on the scheduling
arrangements for medicines and chemicals.[7]
The final report of the Galbally Review was given to the
Australian Health Ministers Conference (AHMC) in January 2001. The
Working Party of the Australian Health Ministers Advisory Council
(the Working Party) prepared a response to the recommendations made
in that report in April 2003, taking into account matters such as
the proposed establishment of the Australia New Zealand Therapeutic
Products Authority (ANZTPA). While the Working Party recommended
that those recommendations be implemented in the trans-Tasman
context ,[8]
implementation of recommendation 7 of the Galbally Review report
was delayed following the decision to postpone the ANZTPA project
in July 2007.[9]
The National Co-ordinating Committee on Therapeutic Goods
(NCCTG), originally charged with the task of overseeing the
implementation of the Galbally Review recommendations, is now
looking to implement the remaining recommendations in an
Australia-only context.[10]
It is noted that in its most recent review on chemicals and
plastics regulation in 2008, the Productivity Commission (PC)
recommended that recommendations relating to the scheduling of
chemicals be implemented as soon as feasible.[11]
In Australia, products that can be harmful (for example, when
not used correctly) are grouped together in Schedules . These
Schedules form the Poisons Standard. Each State and Territory has
laws governing the supply, availability and oversight of use to
ensure safe and effective use.[12] Each Schedule has different requirements, for
example, medicines listed on Schedule 2 can only be sold in
pharmacies.
Another proposed amendment seeks to ensure greater public
safety, in that consideration will also be given to the intended
use of a medical device to be listed on the ARTG, so that devices
are used for the purpose for which they were intended and not
unduly pose a risk to patients. These measures are designed to
protect consumers and the broader public health. For example, the
self-testing of diseases such as HIV can have serious implications
for individuals as there is the possibility of a false positive or
a false negative and there is no pre or post counselling.
Furthermore, there is no incentive for an individual to notify
appropriate health authorities of the results, if positive.
Proposed amendments also seek to ensure uniformity of consumer
warnings to be included on medicines. These are general statements
such as If symptoms persist beyond 5 days consult a doctor ,
designed to provide general advice. The intention of these
amendments is to promote consistent information and understanding
among consumers.[13]
The Bill has been referred to the Senate Community Affairs
Legislation Committee (the Committee) for inquiry and report by 7
August 2009.[14]
Stakeholder
positions
Stakeholder commentary has largely been restricted to
submissions and public hearings made to the Committee s
inquiry.
In general, although there was broad support for the intent of
the Bill, stakeholders raised concerns about issues such as
accountability, the consultation process and the lack of detail
regarding implementation, particularly with respect to cost
recovery. Concern was also raised about the legality of the TGA
having responsibility for the regulation of chemicals.[15] In response to the
various claims and concerns raised by stakeholders, the TGA argued
that the legislation had the support of the state and territory
governments, and was the best model for national approach to
medicines and poisons scheduling. The TGA did not consider the
concerns about the legality of the legislation to be valid.[16] This particular issue
is further explored elsewhere in the Digest.
It is noted that the Tasmanian, West Australian and Northern
Territory governments have all made submissions to the Inquiry,
indicating their support for the legislation as it currently
stands.
This section of the Digest will focus on the main issues raised
during the public hearings and in the submissions.
One of the dominant themes of the public hearing and the
submissions was the consultation process. The Australian Self
Medication Industry (ASMI) suggested that they were not consulted
in a meaningful way .[17] Similarly, in the hearing, ACCORD suggested that the
consultation process has been poor .[18] The Complementary Healthcare Council
(CHC) suggested that as the amendments were first developed in the
context of the ANZTPA, further consultation is required for them to
be implemented in the Australian only context.[19]
In response, the TGA tabled a detailed account of the
consultation process. It noted that consultation began in 1996 with
the Industry Commission (now PC) Report on the Pharmaceutical
Industry. Extensive consultation was also part of the Galbally
Review in 2001.[20]
There was further stakeholder consultation on the proposed
scheduling models in 2005 and the consultation on the final model
in 2006. The proposed arrangements for scheduling under ANZTPA were
released for public consultation in June 2007. As part of the
development of the PC s report on Chemicals and Plastics Regulation
in 2008, there was further consultation with industry.[21] This Report also
recommended that separate arrangements for scheduling should be
implemented as soon as is feasible. The recommendations of the PC s
Report were adopted by the Council of Australian Governments (COAG)
in 2008. The most recent consultation on the proposed arrangements
(as reflected in the proposed amendments) occurred in April-May
2009.
It appears that the proposed amendments do not differ materially
from what has already been generally agreed to by Commonwealth,
state and territory governments, for some time. Perhaps some of the
concerns raised by industry about the lack of consultation relate
to the substance of the amendments and their preference for an
alternative approach.
The majority of stakeholders raised concerns about the
implementation of cost recovery arrangements.[22] ASMI noted that it was not
possible to comment in significant detail as the proposed
arrangements have not been made available.[23] The ACCORD submission also raised
questions about how the proposed cost recovery arrangements would
work. The submission from the TGA to the Senate Committee notes
that costs of scheduling will be fully cost recovered from the
industry but no detail is provided.[24]
Both ACCORD and the CHC raise questions about the
appropriateness of the TGA to regulate chemicals. While supportive
of the intent to separate medicines and scheduling arrangements,
CHC questioned whether the TGA was the most appropriate body to
administer the Advisory Committee on Chemicals Scheduling as the
role of the TGA was to assess and monitor therapeutic
goods.[25] It
suggested that a more appropriate body would be the Department of
Health and Ageing, Office of Chemical Safety and Environmental
Health.[26] ACCORD
also argued that the primary role of the TGA was to regulate
therapeutic goods, not chemicals.[27]
In response, the TGA noted that the agreed AHMC model does not
support two committees under different Acts.[28] It was also argued that having two
separate Acts amending the one Poisons Standard would not be a
useful way to proceed.[29] Further, the TGA noted that the states and territories
have indicated strong support for a single scheduling standard to
allow for appropriate reference to their respective legislation and
that ACCORD had previously been advised of this.[30]
As noted previously, ACCORD argued, during the hearings and in
its written submission, that the TGA did not have the
constitutional power to regulate chemicals. On request from the
Committee, ACCORD submitted the legal opinion which formed the
basis of its argument. The main arguments can be summarised as
follows:
- there are inherent weaknesses in the constitutional
underpinnings of the Act and these will be further highlighted by
extending the scope of the TGA to chemical regulation
- the Australian Constitution does not give the Commonwealth
Parliament power to make laws with respect to chemicals[31]
- establishment of the Advisory Committee on Chemical Scheduling
and empowering the Secretary may not be constitutionally valid,
especially in light of the reasons articulated in Pape v
Commissioner of Taxation, particularly the following:
- a key consideration in this case was the limitations on the
executive power of the Commonwealth.[32]
The legal opinion put forward in the ACCORD supplementary
submission also criticises the lack of parliamentary scrutiny of
provisions in the regulations to which the proposed amendments will
give effect. That legal opinion suggests that it is generally
undesirable for Parliament to delegate the substance of the law to
regulations.[33]
It is noted that one of the issues of concern to the Senate
Standing Committee for the Scrutiny of Bills is the inappropriate
delegation of legislative power, such as determination of important
matters in regulations.[34]
The lack of detail about the regulations and wording of
legislative instruments was also criticised by ASMI and CHC. ASMI
had specific concerns about the constitution of the expert
committee; merits and judicial review; arrangements for delegated
legislative instruments (item 11 section 52A(2),
item 2 section 52E(2)); and directions from AHMAC
or its sub-committees.[35] It is important to note that the recommendations of an
expert committee are not binding on the Secretary and that it is
possible for alternate views not listed in the legislative
framework to be taken into account when making decisions about
scheduling.
In essence, many of the issues raised by stakeholders reflect
different approaches to regulation. For example, the TGA argues for
a consensual approach in partnership with the states and
territories; whereas ACCORD and, to a lesser extent ASMI and CHF,
suggest a more rigorous approach with greater Commonwealth
involvement and control. The TGA has cited the support of the
states and territories as justification for its approach, but
questions about the best approach to poisons scheduling remain
open.
In its review of chemicals and plastics regulation, the PC
advocated for the implementation of AHMAC arrangements with a
strong intergovernmental agreement and that each state and
territory should have uniform frameworks by adopting template
legislation.[36] In
addition, the PC recommended implementation of the proposed reforms
to separate the poisons and medicines scheduling processes and that
the Secretary should be the decision maker.[37] The PC further recommended that the
arrangements be reviewed after two years to ensure consistency of
decision making and determine the impact on industry. State and
territory governments were recommended to adopt all poison
scheduling decisions under the new arrangements by reference and to
adopt a consistent framework through either a template or model
approach.[38]
The proposed amendments do not fully address the issues raised
by the PC. There is insufficient information available to make an
assessment of the proposed amendments vis a vis the recommendations
of the PC. Despite this, it would appear that there would be
significant benefits in adopting a nationally consistent approach
with identical legislative framework in each state and
territory.
It is widely accepted that the Commonwealth has little actual
power to make laws relating to poisons/chemicals.[39]
Commonwealth s power to make laws in relation to poisons under
the Act is generally limited, under subsection 6(1) of the Act
to:
- things done by corporations; and
- things done by natural persons or corporations in so far as
those things are done:
- in the course of, or in preparation for, trade or commerce
between Australia and a place outside Australia, among the States,
between a State and a Territory or between 2 Territories; or
- under a law of the Commonwealth relating to the provision of
pharmaceutical or repatriation benefits; or
- in relation to the Commonwealth or in relation to an authority
of the Commonwealth.
In effect, the regulation of poisons/chemicals in Australia is
multi-jurisdictional and achieved by a national co-ordinated
approach, with the Commonwealth involved in policy, as well as
legislating on frameworks and national standards; and the states
and territories directly regulating the use of such substances
within their own jurisdictions.
It is worth noting that, as the PC has stated in its report,
chemical regulation in Australia:
has traditionally been organised around
distinct end uses. Thus separate regimes are in place for
industrial chemicals, agricultural chemicals and veterinary
medicines, pharmaceutical and therapeutic goods, and food. Similar
institutional arrangements apply in other countries. Merging some
or all of these regimes, just to harmonise chemical regulation,
could compromise the purpose of these different streams of
regulation. For example, chemical contamination of food is an
important public health issue, but it is only one among many
relevant regulatory issues concerning food, and hence is best
considered through that particular regulatory lens.[40]
is grafted onto, generic regulatory frameworks
that govern public health, occupational health and safety (OHS),
transport safety, agriculture, the environment and national
security. Chemicals regulation is a means to an end; it manages the
risks that chemicals might pose to the achievement of broad social
and economic objectives such as achieving a safe workplace, safe
disposal of waste, or achieving effective and efficient transport
but it is managing only one source of risk. Thus while there are
genuine reasons for regulating chemicals at various stages of their
lifecycle, chemical regulation is not of itself a strong unifying
influence in an institutional sense.[41]
Hence, there is a variety of regulatory frameworks relating to
the use of chemical and poisons.[42]
It is also important to note that, currently, although the
National Drugs and Poisons Schedule Committee (NDPSC) makes
national scheduling and regulatory decisions in relation to
poisons:
Poisons scheduling and controls set at the
national level have little legal authority in Commonwealth law, but
play an important role in advising state and territory governments
on how poisons should be scheduled and regulated within their
jurisdictions. State and territory governments maintain full
control over the manufacture, sale and use of poisons in their
jurisdictions, and there is no obligation on them to adopt NDPSC
recommendations.[43]
The Bill does not propose an entirely new area of
poisons/chemicals regulation by the Commonwealth. It simply
proposes to rearrange existing scheduling arrangements.
In addition, as Mr Maskell-Knight, Principal Adviser, TGA,
pointed out during the Committee s Inquiry:
there seems to be a misconception that because
something is in the Therapeutic Goods Act it means the Therapeutic
Goods Administration is going to be solely responsible for it. That
is not so. The act confers power on the secretary of the
department; the Therapeutic Goods Administration is a division
within the department. We are the secretary s arms and legs in
relation to medicines. The proposal is not that we suddenly become
the secretary s arms and legs in relation to chemicals. The idea is
that the Office of Chemical Safety and Environmental Health will
continue to support the secretary in that role. The secretary can
delegate their scheduling decision-making powers to any officer
within the department. The expectation is the medicine scheduling
power will be devolved to the TGA and the chemical scheduling power
will be devolved to the office of chemical safety. The intention is
to have a common secretariat for the advisory committees within the
TGA. The reason for that is to facilitate exchange of information
between the two committees and also, frankly, it will be cheaper
for the industry if we have one committee rather than two.[44]
It may also be worth pointing out that Schedule 1 of the Bill
does not contain any enforcement provisions. The Advisory Committee
on Chemicals Scheduling may make recommendations and provide advice
to the Secretary in relation to matters such as the classification
and scheduling of chemicals; other changes to the Poisons Standard;
and restrictions to be imposed with respect to particular
substances (see item 8 - proposed section
52C). The Secretary must simply have regard to such
recommendations and advice (see item 12 -
proposed section 52E).
The actual enforcement of the Poisons Standard is undertaken by
states and territories.
The question of whether the Commonwealth has constitutional
power to take on a stronger, more coercive role in relation to the
regulation of poisons/chemical use, as advocated by some, remains
open. The Bill does not propose such a role for the
Commonwealth.
The Government states that there will be no financial impact to
the Commonwealth as the TGA operates on a cost recovery
basis.[45]
The Bill contains three Schedules, which contain proposed
provisions relating to:
- scheduling substances
- precluding medical devices from being included in ARTG where
the intended use of the device would pose a health risk, and
- miscellaneous matters, such as consultation between the
Secretary and the Gene Technology Regulator.
Part 6 3 of the Act currently contains provisions establishing
the NDPSC, clarifying the NDPSC s functions and matters relating to
the Poisons Standard.[46] Part 6 3 currently provides for the joint scheduling of
medicines and poisons by the NDPSC.
Amendments proposed in Schedule 1 seek to separate the
scheduling of medicines and substances other than therapeutic
goods.
For example, item 8 of Schedule
1 proposes to insert new sections 52B
52C into the Act. Proposed sections
52B and 52C establish the advisory
committees on medicines and chemical scheduling respectively in
similar terms. These committees would replace the NDPSC. Each
committee would be constituted by members from each state and
territory, as well as the Commonwealth, according to the
regulations. Functions of the committees would include:
- subject to certain provisos, make recommendations to the
Secretary about classification and scheduling of medicines and
chemicals*
- make recommendations to the Secretary about changes to the
Poisons Standard other than the Schedules
- reconsider such recommendations
- advise the Secretary about restrictions to be imposed in
relation to particular substances,* and
- any other functions prescribed in the regulations.
Note that functions marked with an * would not apply to
substances:
- (in relation to medicines) to the extent that those substances
are, or are included in, goods other than therapeutic goods
- (in relation to chemicals) to the extent that those substances
are, or are included in, therapeutic goods.
Item 10 proposes to replace subsections
52D(2)-(4) in the Act with new subsections
52D(2)-(3). These amendments would effectively empower the
Secretary, not the NDPSC as it occurs now, to amend the current
Poisons Standard or prepare a document in place of the current
Poisons Standard. The Secretary would do so either on his or her
own initiative or following an application under proposed
section 52EAA (see below).
Item 12 proposes to replace section
52E in the Act with new sections 52E and
52EAA. Proposed section 52E provides for
certain matters that the Secretary must consider when amending or
substituting the Poisons Standard, which include:
- the risks and benefits of using the substance
- the purpose and extent of use of the substance
- the toxicity of a substance
- the potential of abuse of the substance, and
- any other matters considered necessary by the Secretary to
protect public health.
In addition, when amending the Poisons Standard, the Secretary
must:
- comply with specified guidelines, such as those of the
Australian Health Ministers Advisory Council, which are brought to
the Secretary s attention, and
- consider any recommendations or advice of either one of the
advisory committees on medicines and chemical scheduling.
The Secretary has discretion as to whether to seek advice from
one or both of:
- a committee that the Secretary considers appropriate
- any person.
Importantly, the Secretary may consider information other than
the above when amending or substituting the Poisons Standard.
Proposed section 52EAA enables a person to
apply for amendment of the Poisons Standard and sets out the
requirements for such applications.
It is noted that poisons and chemicals have, in general, been
referred to almost interchangeably. It has been decided to continue
to do so in this Digest.
However, it is noted that the Act itself generally refers to
poisons and substances , while the Bill generally refers to
substances other than therapeutic goods, chemicals in relation to
the name of the proposed new committee, and poisons in relation to
the Poisons Standard.[47]
In the absence of explanation, Parliament may consider seeking
clarification of the various terms used and how those terms relate
to each other.
Amendments proposed in Schedule 2 of the Act relate to ensuring
that medical devices used in ways that threaten public and
individual health are not included in ARTG.
Item 1 proposes to insert new section
41BEA into the Act. Proposed section
41BEA gives discretionary power to the Secretary to
specify, by legislative instrument, purposes for which a medical
device of a particular type is not used exclusively.[48]
Item 2 proposes to
insert new paragraph 41FD(ia) into the Act, so
that a person wishing to apply for a medical device to be included
in ARTG must certify that that kind of device is not used
exclusively for one or more purposes specified by the Secretary in
proposed section 41BEA (see above).
Item 3 proposes to
insert new paragraph 41FF(1A) into the Act. The
effect of this proposed amendment is that, following an application
by a person for a medical device to be included in ARTG, the
Secretary must not include that kind of medical device in ARTG if
the Secretary is satisfied that the particular kind of device will
be exclusively used for one or more purposes specified by the
Secretary in proposed section 41BEA (see
above).
Schedule 3 contains provisions proposing various amendments
relating to matters such as:
- extending advertising offence provisions to anyone, not only
sponsors, who inappropriately advertises therapeutic goods
- extending the circumstances when consultation with, and advice
sought from, the Gene Technology Regulator can occur, regarding
applications for listing or registration of therapeutic goods, to
those goods that either are or contain genetically modified
organisms
- amending provisions regarding the delegation of the Secretary s
powers, and
- enabling the Minister to specify advisory statements to be
included on labels of particular medicines.
Item 2 proposes to replace subsection
22(5) of the Act to the effect that it would be an offence
for anyone, not just the sponsor, to advertise registered
therapeutic goods for an indication that is not one for which the
therapeutic goods are included in ARTG.
Note that item 5 proposes a similar amendment,
in relation to medical devices, to section 41ML of
the Act.
Item 4 proposes to replace subsection
30D(1) of the Act to extend the ability of the Secretary
to seek advice from the Gene Technology Regulator about genetically
modified organisms, as well as genetically modified
products.[49]
Item 6 proposes to amend paragraph
57(8)(b) in the Act, so that the Secretary s powers to
make exemptions from requirements in certain circumstances, such as
where the medicine is in short supply, may be delegated to any
person in a position within the TGA prescribed by the regulations
for this purpose, as opposed to just the Director of the Drug
Safety and Evaluation Branch of the TGA as is the case now.
Item 8 proposes to insert new paragraph
3(5)(ca) into the Act in relation to advisory statements.
Proposed new paragraph 3(5)(ca) provides that
labels of medicines, included in a class of medicines prescribed by
the Regulations for the purposes of this new paragraph, must
contain advisory statements specified under proposed
subsection 3(5A) in relation to medicines (see below).
Item 9 proposes to insert new
subsections 3(5A) and (5B) into the Act.
Proposed new subsection 5(5A) provides that the
Minister may specify advisory statements for the purposes of
proposed new paragraph 3(5)(ca) by legislative
instrument. Proposed new subsection 3(5B) provides
that the Minister may specify different types of advisory
statements for different medicines or classes of medicines for the
purposes of proposed subsection 3(5A).
Concluding comments
Many of the stakeholder concerns were expressed in the course of
the Committee s Inquiry and largely relate to amendment proposed in
Schedule 1 of the Bill. However, it is specifically noted that most
of the detail of what is proposed in the Bill will be set out in
the Regulations. The lack of detail in the Bill does preclude
comprehensive analysis of proposed amendments.
Members, Senators and Parliamentary staff can obtain further
information from the Parliamentary Library on (02) 6277 2442.
Rebecca de Boer
Sharon Scully
7 August 2009
Bills Digest Service
Parliamentary Library
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