Bills Digest No. 125  1998-99 Therapeutic Goods Legislation 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
Concluding Comments
Endnotes
Contact Officer and Copyright Details

Passage History

Therapeutic Goods Legislation Amendment Bill 1999

Date Introduced: 17 February 1999

House: Senate

Portfolio: Health and Aged Care

Commencement: Generally on a day to be fixed by proclamation. If that does not occur within 6 months of Royal Assent, the Act (except Schedule 2) commences 6 months and 1 day after Royal Assent. Schedule 2 is taken to have commenced on 1 January 1999.

Purpose

The Bill encompasses the first component of a package of reforms designed to provide a new framework for the regulation and management of complementary medicines. A number of other changes affecting complementary medicines will be made on an administrative basis.

In addition, the Bill alters other aspects of the regime regulating therapeutic goods. A system for pre-publication clearance of certain advertisements is moved and adapted from existing regulations. Statutory definitions are adjusted to relabel 'drugs' as medicines and to clarify the distinction between 'therapeutic goods' and 'foods'. As part of developing a uniform national approach to poisons, an existing non-statutory committee will be given a statutory foundation with certain responsibilities for medicines and poisons, such as classification and publishing standards.

Background

In recent years the Commonwealth has increased its role in the regulation of substances known variously as drugs, medicines, poisons and therapeutic goods. Since 1991, the Therapeutic Goods Act 1989 has been the principal legislation regulating substances used by humans in a therapeutic setting. Poisons have historically been a matter for States and Territories, albeit with increasing levels of intergovernmental co-ordination (which this Bill takes one step further).

Prior to being available for marketing in Australia, each therapeutic good must be entered onto the Australian Register of Therapeutic Goods (ARTG) which is maintained by the Therapeutic Goods Administration (TGA), a division within the Commonwealth Health and Aged Care Department. Goods can be entered onto the ARTG as either listable or registered goods. Schedule 3 of the Therapeutic Goods Regulations includes the types of substances required to be registered on the ARTG while Schedule 4 of the Regulations contains goods required to be listable goods.

Listable goods require less examination and evaluation prior to their entry onto the ARTG. Examples of listable goods include vitamins, sunscreens and most herbal products. Measures in the Bill propose to ease requirements on these lower-risk goods, enabling their faster pre-market clearance for listing on the ARTG. Registered goods, by contrast, include goods which require evaluation for quality, safety and efficacy, such as prescription drugs. Evaluation of registered goods is conducted by the TGA through its Drug Safety and Evaluation Branch, or the Scheduling and Over the Counter Drug Evaluation Section, or the Complementary Medicines Section.

Under a separate administrative arrangement, the National Drugs and Poisons Schedule Committee classifies drugs and poisons into schedules which are published as the Standard for the Uniform Scheduling of Drugs and Poisons. Toxicity is the main criterion for determining onto which schedule a substance is entered, and the schedule selected has implications for issues such as distribution, labelling, packaging, advertising and storage.

The Poisons Standard and the therapeutic goods regime substantially overlap but they fulfil different regulatory purposes and are not symmetrical - for example poisons outside the TGA's jurisdiction (such as pesticides and acids) are found in the schedules.

Measures in the Therapeutic Goods Legislation Amendment Bill 1999 (the Bill) reflect a period of consultation undertaken by the Government, in particular since December 1998. Several measures are proposed, including the replacement of the term 'drug' with 'medicine' in the Act and Regulations; increasing the emphasis on faster pre-market clearance for low-risk products; and the establishment of two non-statutory committees, the Complementary Medicines Evaluation Committee (CMEC) and the National Drugs and Poisons Schedule Committee (NDPSC) as statutory bodies. The CMEC currently provides advice on complementary medicines to the TGA on an administrative basis. The NDPSC is currently a committee of the Australian Health Ministers' Advisory Council.

To balance the measures providing faster market access for listable goods, the Bill proposes to reinforce through legislation two existing requirements designed to protect the public: that sponsors of listable goods must hold evidence to substantiate therapeutic claims made in the marketplace and that certain advertisements for medicines placed in mainstream print media must be cleared by the Secretary prior to publication. Both these issues have been contentious in the past within some isolated but vocal elements of the complementary medicines industry(1) and it is possible that reinforcing these existing requirements in legislation may prompt a reaction from these elements of the industry.

 

Main Provisions

The substantive provisions of the Bill are found in two schedules. Schedule 1 to the Act contains amendments to the Therapeutic Goods Act 1989 (the Principal Act). Schedule 2 contains amendments to the Therapeutic Goods Amendment Act 1997 (the 1997 Amending Act).

Schedule 1 - Amendment of the Therapeutic Goods Act 1989

Item 3 in Schedule 1 repeals the definition of 'foods' in the Principal Act. This amendment is linked to item 8 which amends the definition of 'therapeutic goods' to exclude goods traditionally used as foods in Australia or New Zealand or referred to in the Food Standards Code under the Australia New Zealand Food Authority Act 1991 (ANZFAA). The Explanatory Memorandum asserts that these amendments addressed to the 'food-therapeutic good interface' will clarify terminology and provide greater certainty. The above amendments steer the Principal Act away from attempting to define 'foods', leaving borderline exclusions from the therapeutic goods regime to be determined by reference either to the Food Standards Code or to the commonly understood meaning of the term 'food'. Substances which fall within the definition of these exclusions may still be declared 'therapeutic goods' under section 7 of the Principal Act.

The Therapeutic Goods Regulations contain a definition of 'drugs'. Item 4 inserts a virtually identical form of words into the Principal Act itself, but attributes it to the term 'medicine' instead. The Explanatory Memorandum states that the latter term is 'more inclusive, positive and publicly acceptable' and that the definition of 'drugs' in the Regulations will be repealed before this Bill is proclaimed. Some industry players have sought in the past to distance their products from the term 'drug' and this recently led to a legislative impasse, when a regulation outlawing use of the term 'drug-free' in advertising was disallowed by the Senate on 31 March 1998 and a committee established by the then Parliamentary Secretary was unable subsequently to achieve unanimous agreement on the issue. It may be that this amendment is designed to address those industry concerns. Item 6is consequential on item 4.

Item 5 inserts a definition of 'poison' into the Principal Act for the first time. It is tied to the legislative recognition given to the National Drugs and Poisons Schedule Committee in item 13.

Item 9 rewrites the objects of the Principal Act. It extends the objects to include establishing a framework for a uniform national approach to the control of poisons. The Explanatory Memorandum says that all States and Territories have agreed to the extension.

Item 10 is designed to accelerate the marketing of therapeutic goods which are regarded as low-risk, by simplifying the procedure by which they are cleared for import, export, manufacture and supply. Essentially, the Principal Act prohibits dealing with goods which have, or are claimed to have, a therapeutic application unless they are registered or listed under the Act. As discussed above in the Background to this Digest, such goods are divided into high or low risk categories. Low risk goods require only 'listing', a less stringent approval procedure than 'registration' but one which necessitates ad hoc amendment of the Therapeutic Goods Regulations. Item 10 will permit goods to be 'listed' by notification in the Gazette rather than amendment of the Regulations, allowing them to get onto the market more swiftly.

Item 11 amends section 28 of the Principal Act which deals with the imposition of conditions on registered and listed goods. Item 11 requires that the sponsor of a good seeking its listing must hold at the time of application, and thereafter, evidence to support any claim made about the product which is included on the Register. The evidence must also comply with any relevant regulations. The information or evidence must be supplied on request to the Health Department - the Explanatory Memorandum points out that such requests will only be made if an issue of controversy arises rather than as a matter of routine. Both the Explanatory Memorandum and Second Reading Speech indicate that this item confirms in legislation a condition which has been applied to date, presumably on an administrative basis.

Item 12 inserts a new Part in the Principal Act to deal with advertising. Proposed section 42A applies pre-publication 'clearance' of advertisements to certain situations - essentially commercial advertising which targets the general public, for most therapeutic goods (excluding 'devices' and goods which appear in certain schedules of the Poisons Standard). It does so by cross-reference to the Therapeutic Goods Regulations, which generally speaking exclude advertisements directed at practitioners, hospitals, wholesalers and export markets. They also exclude communications between practitioner and patient in the course of treatment, as well as advertisements of goods not for human use.

Proposed section 42C creates various offences of strict liability in relation to unauthorised advertisements in newspapers or magazines. It obliges a product's promoter to obtain approval for advertisements which go beyond the provision of minimal information such as brand name, price and points of sale. Approvals are obtained from the Health Department. The Therapeutic Goods Regulations will continue to set out the grounds for obtaining approval and procedures for review etc. The offence provisions in the Bill are the same as currently spelt out in the Regulations, but the penalties have increased generally by a factor of 10, from $1100 to $11 000.

A publisher must not knowingly or recklessly publish an advertisement which has not been approved: proposed section 42D. In other words they face a less stringent obligation than the promoter of a product, who faces offence provisions of strict liability.

The first half of item 13 inserts a new Part 5B in the Principal Act, establishing the National Drugs and Poisons Schedule Committee (NDPSC) (which already exists in a non-statutory form) as a statutory body and describing its functions and activities, and its responsibilities for the Poisons Standard. The Standard is currently recognised in the Therapeutic Goods Regulations but item 13 brings it into the Principal Act itself and fixes the NDPSC with legislative responsibility for its publication and amendment.

The retention of the word 'Drugs' in the Committee's title appears anomalous, given that the Bill (as discussed above) generally replaces references to 'drugs' in the Principal Act with the term 'medicines' for public policy reasons, and that Part 5B itself assigns to the Committee responsibilities for 'substances' which are defined as poisons or medicines (not drugs).

Proposed section 52B establishes the NDPSC but, apart from specifying that each State and Territory government together with the Commonwealth is entitled to one representative, it leaves it to regulations to specify how the Committee is constituted, holds meetings and makes decisions.

Proposed section 52C delineates the functions of the NDPSC, which include responsibilities for classification and scheduling of substances and providing expert advice. Other functions may be conferred by regulation.

Proposed section 52D assigns responsibility for upkeep of the Poisons Standard to the NDPSC and for notifying changes in the Gazette.

Proposed section 52E sets out factors which the NDPSC must and may take into account when considering changes to the Poisons Standard.

The second half of item 13 inserts a new Part 5C in the Principal Act dealing with 'complementary medicines'. Proposed section 52F defines 'complementary medicines' and some related terms, adapting definitions which currently appear in various parts of the Therapeutic Goods Regulations. Essentially a complementary medicine is a therapeutic good which contains an ingredient listed in Schedule 14 of those Regulations, where the ingredient has a well-established use in health care or a use prescribed by regulation.

Proposed section 52G establishes as a statutory entity the Complementary Medicines Evaluation Committee but leaves the Committee's constitution, functions and ways of operating to be defined by regulation. The Second Reading Speech states that the Committee was established on an administrative footing in December 1997. The speech suggests that the Committee is intended to provide expert advice on the evaluation of complementary medicines to the Therapeutic Goods Administration and to sponsors, as well as discuss relevant policy issues.

A Media Release from the Parliamentary Secretary for Health and Aged Care dated 11 January 1999 foreshadowed that the Committee will be asked to review the level of evidence required to support claims of safety and beneficial health effects. This exercise was mentioned in the context of industry assertions that current advertising restrictions go too far.

Item 14 inserts a new offence provision in the Principal Act. Proposed section 54AA makes it an offence to contravene a condition attaching to a licence or permission to import or export therapeutic goods. The standard penalty is 50 penalty units, but it rises to 240 penalty units(2) where the condition is concerned with public safety or relates to possession, custody, transport, use or disposal of the goods. The insertion of these penalties completes the transfer of offence provisions relating to import and export from customs regulations to the Principal Act, begun in April 1998.(3)

Schedule 2 - Amendment of the Therapeutic Goods Amendment Act 1997

Item 1 effects technical re-numbering of an earlier amendment to the Principal Act.

Concluding Comments

Conflicting Terminology

The Bill proposes to replace the reference to the term 'drugs' with 'medicines' in the interpretation section of Part 1 of the Regulations as well as other references to 'drugs' in the Act and Regulations. It is unclear why the opportunity was not taken to rename the National Drugs and Poisons Schedule Committee upon its reconstitution as a statutory entity, using the term 'medicines' rather than 'drugs' given that the Explanatory Memorandum claims that the former is a 'more inclusive, positive and publicly acceptable term'.

Establishing Statutory Committees

The Bill gives a statutory basis to two existing administrative committees, but leaves significant details about each Committee to regulation. This may have the effect of reducing (though not eliminating) public and Parliamentary scrutiny of the constitution and other features of these committees, in an area of growing public importance.

Professor Cheryl Saunders contributed a paper on the little-analysed role of statutory advisory bodies to a past Senate Public Lecture Program. She noted in relation to statutory advisory bodies that, while they are often (as in this Bill) part of the executive branch, 'the fact of creation by statute gives such bodies a special standing' and 'the Parliament from which they derive their authority' has a stake in their operation.(4) She suggested some standard principles, including that the 'constituent statute should prescribe criteria or selection mechanisms for appointment to the advisory body'.(5) She explained that 'the existence of criteria will require appointments to be justified and enable them to be evaluated by reference to the purpose for which the body was created'.(6)

Acts which establish statutory bodies frequently include provisions dealing with issues such as criteria for appointment, termination, disclosure of interests, quorums, voting and record keeping.

The Complementary Medicines Evaluation Committee (CMEC) has been described by the responsible Parliamentary Secretary as 'the key advisory body' in relation to complementary medicines.(7) The Government has acknowledged increased public reliance on complementary medicines, and that diverse interests are at stake, notably public health and safety, and business growth in the complementary medicines sector. Industry regulation can be expected to generate arguments over competing notions of the public interest. For example, the Government has noted industry dissatisfaction with the system of pre-publication clearance for advertisements and will ask the CMEC to evaluate the level and quality of evidence required to substantiate claims.(8) In this context, it may be thought desirable that the Principal Act itself spell out in more detail the membership criteria and appointment procedures, the functions of the Committee and its method of operation.

The National Drugs and Poisons Schedule Committee is currently a subcommittee of the Australian Health Ministers' Advisory Council. The Bill establishes the Committee as a statutory entity and spells out considerably more detail regarding functions, government representation and decision-making criteria than is the case with the CMEC. However important details regarding the overall membership and constitution are again left to regulation. The scheduling of substances by the Committee has a number of public health and commercial implications, but has taken on added significance following the Government's decision (in response to the Vos Committee) to propose levying a GST only on items in certain schedules.

Endnotes

  1. The Hon. Trish Worth MP, Parliamentary Secretary to the Minister for Health and Family Services, Health Consumers Urged to Ignore Misleading Campaign, Media Release, 3 March 1998.

  2. The value of a penalty unit is set at $110 by the Crimes Act 1914 (Cwth), unless a contrary intention appears in another Commonwealth Act.

  3. Therapeutic Goods Legislation Amendment Act 1998.

  4. Professor Cheryl Saunders, 'The Role and Independence of Statutory Office-Holders: The Particular Case of Advisory Bodies', Papers on Parliament No. 7, March 1990, 63-81 at 66-67.

  5. Ibid., p. 68.

  6. Ibid.

  7. Senator the Hon. Grant Tambling, Parliamentary Secretary to the Minister for Health and Aged Care, Agreement Reached on Future Directions for Complementary Medicines, Media Release, 16 December 1998.

  8. Senator the Hon. Grant Tambling, Parliamentary Secretary to the Minister for Health and Aged Care, New Partnership with Complementary Healthcare Industry, Media Release, 11 January 1999.

Contact Officer and Copyright Details

Sean Brennan & Paul Mackey
3 March 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.

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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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