BILLS DIGEST NO. 67, 2016–17              27 February 2017

Therapeutic Goods Amendment (2016 Measures No. 1) Bill 2016

Jonathan Mills
Law and Bills Digest Section

Alex Grove
Social Policy Section

Date introduced:  1 December 2016

House:  House of Representatives

Portfolio:  Health and Aged Care

Commencement: Schedules 1 and 9 commence on a day to be fixed by proclamation or six months after Royal Assent. Schedules 2-8 and 10-12 commence the day after Royal Assent.

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill’s home page, or through the Australian Parliament website.

When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the Federal Register of Legislation website.

All hyperlinks in this Bills Digest are correct as at February 2017.

Purpose of the Bill

The purpose of the Therapeutic Goods Amendment (2016 Measures No. 1) Bill 2016 (the Bill) is to amend the Therapeutic Goods Act 1989 (the Act) to implement several recommendations from the Expert Panel Review of Medicines and Medical Devices Regulation (Sansom Review)[1] relating to the streamlining of the regulation of medicines and medical devices. The Bill also introduces other amendments to the Act to simplify some other aspects of the regulation of therapeutic goods and to reflect recent changes to advisory committees.

Structure of the Bill

This Bill is divided into 12 Schedules.

•       Schedule 1 amends the Act to allow sponsors of therapeutic goods to vary the entry relating to those goods on the Australian Register of Therapeutic Goods (the Register) in certain circumstances

•       Schedule 2 allows the Secretary to designate Australian corporations to undertake conformity assessment of medical devices and their manufacture

•       Schedule 3 enables health practitioners to supply certain unregistered therapeutic goods to patients under a notification scheme. The Schedule also makes a consequential amendment to the A New Tax System (Goods and Services Tax) Act 1999

•       Schedule 4 removes the requirement for the Minister to consult with the Therapeutic Goods Committee, which ceased to exist at the start of 2017 (the Minister may still consult with one of the new committees)

•       Schedule 5 provides review and appeal rights for persons who apply to have new ingredients permitted in listed complementary medicines

•       Schedule 6 establishes regulation-making powers to allow for the priority approval of medicines, medical devices and biologicals

•       Schedule 7 enables regulations to be made setting timeframes within which regulatory functions or decisions must be completed or made under the Act

•       Schedule 8 sets out a number of amendments in relation to developing a more comprehensive post-market monitoring scheme for medicines, including record keeping requirements and rights of entry for authorised persons

•       Schedule 9 enables the Secretary to determine the information that must accompany an application to vary an entry in the Register

•       Schedule 10 amends the powers of the Secretary to set requirements around the public notification and recall of therapeutic goods, biologicals and medical devices

•       Schedule 11 broadens the matters about which the Secretary may obtain information from sponsors of listed medicines and

•       Schedule 12 contains several miscellaneous amendments, including new powers for the Secretary to approve unapproved goods in the event of a shortage.

Background

Therapeutic goods

Therapeutic goods are products that are used in humans in connection with:

•       preventing, diagnosing or treating an illness or injury

•       altering a physiological process

•       testing a person’s susceptibility to an illness

•       affecting conception

•       testing for pregnancy or

•       replacing or modifying part of someone’s anatomy.[2]

Therapeutic goods include a wide range of items, from items that could be purchased in a supermarket such as bandages, condoms and vitamins, to over-the-counter and prescription medicines, through to complex medical devices such as pacemakers.

Therapeutic Goods Administration (TGA)

In Australia, therapeutic goods are regulated by the Therapeutic Goods Administration (TGA), which is part of the Australian Government Department of Health (DoH). The TGA regulates the supply, import, export, manufacturing and advertising of therapeutic goods.[3] The TGA administers the Act to ensure that medicines and medical devices are evaluated and regulated before they reach the market, and monitored once they are in use.

Therapeutic goods must be assessed by the TGA and entered in the Australian Register of Therapeutic Goods (the Register) before they can be sold in Australia.[4]

The TGA takes a risk-based approach to regulation, which means that lower risk products will receive less assessment than higher risk products.[5] Higher risk medicines (including all prescription medicines and most over-the-counter medicines) must be assessed by the TGA for quality, safety and effectiveness before they can be registered on the Register. Lower risk medicines such as vitamins, sunscreens and herbal complementary medicines can be listed on the Register if the applicant certifies that claims about the effectiveness of the product are accurate, the medicine contains only approved ingredients, and relevant quality, labelling, packaging and manufacturing standards have been followed.[6]

Similarly to medicines, lower risk medical devices (such as bandages) rely on the applicant's certification of compliance with regulatory requirements for inclusion on the Register, whereas higher risk devices (such as pacemakers) require a direct evaluation of the available evidence by TGA officers before they can be included on the Register.[7]

The TGA manages a number of programs to allow patients to access therapeutic goods that are not on the Register. For example, the Special Access Scheme (SAS) allows for ‘the import and/or supply of an unapproved therapeutic good for a single patient, on a case by case basis.’[8] Doctors apply under the SAS on behalf of the patient. If the patient is a Category A patient (seriously ill and likely to die without treatment) the doctor need only notify the TGA of the supply of the good. For other (Category B) patients, the doctor must seek approval from the TGA to supply the unapproved good to the patient.[9]

The TGA also has a role in monitoring therapeutic goods after they have been approved and are on the market. Depending on the type of good and the degree of risk involved, post-market monitoring activities may include risk management plans, collecting reports of adverse events and reactions, reviewing worldwide complaints data, auditing manufacturers and environmental scanning for safety issues.[10]

The TGA operates on a cost recovery basis. Fees are charged for services such as product evaluations, and taxes are also imposed on regulated industries.[11]

Sansom Review

On 24 October 2014 the Australian Government announced an Expert Panel Review of Medicines and Medical Devices Regulation (Sansom Review).[12] This Reviewwas designed to identify:

•       Areas of unnecessary, duplicative, or ineffective regulation that could be removed or streamlined without undermining the safety or quality of therapeutic goods available in Australia

•       Opportunities to enhance the regulatory framework so that Australia continues to be well positioned to respond effectively to global trends in the development, manufacture, marketing and regulation of therapeutic goods.[13]

The Sansom Review provided two reports to the Government in 2015. The first report, dealing with the regulation of medicines and medical devices, as well as access to unapproved goods, made 32 recommendations. The first report recommended expanding the pathways for sponsors to seek approval for a medicine or medical device; enhancing post-market monitoring of goods and streamlining post-market requirements; and improving transparency and predictability of processes and decisions.[14]

The second report, dealing with the regulation of complementary medicines and the advertising of therapeutic goods, made a further 26 recommendations. The second report recommended expanding pathways for sponsors to seek approval for a listed complementary medicine or for an ingredient for use in a listed medicine; enhancing the transparency and predictability of processes and evidence for such approvals; improving the interface between market approval of goods and advertising requirements; and enhancing and streamlining the therapeutic goods advertising framework.[15]

2016–17 Budget

In response to the Sansom Review, the Government provided $20.4 million over four years (including $9.5 million in capital funding) from 2016–17 to improve the regulation of therapeutic goods in Australia. The ongoing cost of the measure from 2017–18 is to be met by the TGA’s cost recovery arrangements.[16]

The objectives of the Budget measure are to bring medicines and medical devices onto the Australian market faster, reduce costs and administrative burden for industry, make some product assessments shorter and simpler, consider removing regulation for some low risk products, improve information about complementary medicines, simplify advertising for therapeutic goods and reduce the number of committees advising the TGA.[17]

Government response

The formal Australian Government Response to the Review of Medicines and Medical Devices Regulation (the Government Response) was released by Minister Ley on 15 September 2016.[18] The Government accepted 43 of the 58 recommendations made by the Sansom Review. A further six were accepted in principle, the Government supported the intent of another five, and two were deferred. Only two recommendations relating to delegation and committee structures within the TGA were rejected.

The stated aim of the Government Response is to strike a balance between improving access to therapeutic goods for consumers and removing unnecessary red tape for industry, while also maintaining the safety of therapeutic goods in Australia.[19] The Government is proposing to implement the reforms in a staged approach over three years, with costs to be recovered from industry where necessary. DoH will consult with government, consumers, health professionals and industry to progress the reforms.[20] A timetable for the release of public consultation papers is available on the TGA website.[21]

Some of the accepted recommendations represent the status quo and require no action, some can be implemented administratively, and some require legislative amendments. The Government has indicated that the Bill supports the implementation of eight key recommendations of the Sansom review: recommendations 3, 13, 15, 24, 27, 41, 42 and 47.[22] These eight recommendations are briefly described below.

Recommendations supported by the Bill

Recommendations 3, 13, 41, 42 and 47 all relate to the assessment and inclusion of medicines on the Register.

Recommendation 3 proposes three pathways for registering a new medicine on the Register: the existing TGA assessment pathway (but with the possibility of work-sharing with comparable overseas regulators); registration via assessment by the TGA of a submission dossier and evaluation report from a comparable overseas regulator, together with Australian-specific information; and expedited approval of a medicine via either of these two pathways.[23]

Recommendation 13 is that the TGA should adopt a risk-based approach to variations to medicines registered in the Register, with assessment by the TGA only required where there is a potential impact on safety, quality or effectiveness of the medicine, and any such assessment to be abridged in scope and limited to these three areas.[24] Recommendation 42 proposes the same risk-based approach for variations to complementary medicines listed in the Register.[25]

Legislative timeframes already apply for the assessment of prescription medicines and higher risk medical devices by the TGA.[26] Recommendation 41 is that legislative timeframes should also be developed for the assessment of complementary and other listed (lower risk) medicines and ingredients.[27]

Recommendation 47 is that a sponsor who applies for approval of a new ingredient for a listed medicine should have review and appeal rights regarding the TGA’s decision on the application.[28]

Recommendation 15 relates to the assessment and inclusion of medical devices on the Register. Similarly to recommendation 3 for medicines, it is recommended that there should be three pathways to seek approval for the inclusion of most medical devices on the Register: assessment within Australia by either the TGA or a body designated by the TGA; utilisation of an overseas marketing approval; and expedited approval in certain circumstances.[29]

Recommendation 24 relates to the SAS for access to unapproved therapeutic goods. It is proposed that certain low risk Category B applications should be subject to automatic approval, but that higher risk applications should continue to require individual assessment and approval.[30]

Recommendation 27 proposes that the Government develop a more comprehensive post-market monitoring scheme for medicines and medical devices, including better integration and analysis of information from data sets such as the Medical Benefits Scheme, establishment of registries for all high-risk implantable devices, implementation of an alert scheme for newly registered medicines to encourage reporting of adverse events, allowing electronic reporting of adverse events, and improving collaboration with overseas regulators.[31]

Of the eight recommendations listed above, six were fully accepted in the Government Response. The Commonwealth accepted recommendation 27, except for the establishment of registries for all high-risk implantable devices.[32] The Commonwealth supported the intent of recommendation 47, noting that ‘the design of potential review and appeal rights requires careful consideration of the application of administrative law principles in this context’.[33]

Inquiry into the availability of new, innovative and specialist cancer drugs in Australia

Shortly after the Sansom Review was announced in 2014, the Senate referred an inquiry into the ‘availability of new, innovative and specialist cancer drugs in Australia’ to the Senate Community Affairs References Committee (the Community Affairs Committee).[34] The Community Affairs Committee examined both the TGA process for registering medicines, and the Pharmaceutical Benefits Advisory Committee (PBAC) process for listing medicines for subsidy on the Pharmaceutical Benefits Scheme (PBS). Generally speaking, only the former is relevant to this Bill, although medicines cannot be listed on the PBS until they have been registered by the TGA on the Register.[35]

The Community Affairs Committee noted that the TGA and PBAC processes were ‘appropriately rigorous’, but also that some pharmaceutical companies and other stakeholders had concerns about the ‘potential for inefficiency and uncertainty in the system.’ The Community Affairs Committee considered that Australia should maintain ‘continuous improvement of its assessment processes’, while also acknowledging the role of the pharmaceutical industry in ‘achieving timely listing of cancer medicines.’ The Community Affairs Committee acknowledged the evidence it had received regarding ‘fast track processes used by overseas regulators’.[36]

The Community Affairs Committee acknowledged the work of the Sansom Review, including that the Review had produced findings consistent with the evidence received by the Committee.[37] The Community Affairs Committee, did, however, make recommendations of its own. Of particular relevance to the Bill, the Community Affairs Committee recommended that ‘the Australian Government initiate a comprehensive review of the system for the registration and subsidisation of medicines’, to examine topics such as pathways for the registration and listing of medicines (including the use of assessments by comparable overseas regulators), options for improving the operation of assessment processes, and options for expanding post-market review of medicines.[38]

At the time of writing of this Digest, the Australian Government had not given a final response to the Community Affairs Committee’s report, but had advised that it was considering the implications of the Sansom Review for its final response.[39]

While the focus of the Community Affairs Committee’s inquiry was on improving access to cancer medicines in Australia, some stakeholders did point out that providing earlier access to medicines was not without risk. For example, the Department of Health submitted the example of ponatinib, a cancer medicine that was ‘given accelerated regulatory approval in the USA’ and was ‘subsequently found to cause adverse events, such as heart attacks and deep vein thrombosis, in 27% of patients. Without this information up-front, prescribers and patients took on unknown risks’.[40] Similarly, researchers from the University of Sydney, writing in response to the Community Affairs Committee’s report, advised caution about demands from stakeholders to radically overhaul TGA and PBAC assessment processes ‘that might actually be working quite well’.[41]

Committee consideration

Senate Community Affairs Legislation Committee

The Senate Standing Committee for Selection of Bills recommended that the Bill be referred to the Community Affairs Legislation Committee for inquiry and report by 27 March 2017.[42] Details of the inquiry, its terms of reference and report (when released) can be found on the inquiry homepage.[43] No submissions had been published at the time of writing this Digest.

Senate Standing Committee for the Scrutiny of Bills

The Senate Standing Committee for the Scrutiny of Bills has raised a number of issues with the Bill. Many of these concerns relate to the breadth and significance of the matters to be dealt with in regulations rather than the primary legislation. The Committee has also raised concerns around strict liability offences, reversal of the evidential burden of proof in relation to some offences and abrogation of the privilege against self-incrimination for manufacturers of therapeutic goods who have been asked to provide information or documents to the Secretary.[44] The Committee’s specific concerns are briefly outlined below in the section ‘Key issues and provisions’.

Policy position of non-government parties/independents

At the time of writing this Digest, few statements by non-government parties or independents specifically relating to the Bill had been identified.

Tony Zappia, Shadow Assistant Minister for Medicare, stated that Labor welcomed the Government Response to the Sansom Review. He indicated that Labor would consider the details of the Government Response, but that ‘any measures which provide faster access to medicines whilst maintaining Australia's high regulatory standards are welcome.’[45]

However, Labor was one of the parties that proposed the referral of the Bill to the Senate Community Affairs Legislation Committee, due to concerns that many of the changes to the regulatory system will be made by regulations that have not been drafted.[46]

The Nick Xenophon Team also proposed a referral of the Bill to the Senate Community Affairs Legislation Committee, citing ‘concerns about process proposed in the Bill’.[47]

The Liberal Democratic Party (LDP) supports ‘an approvals sharing system’ for medicines with ‘other nations having similar standards to avoid duplicate testing and approval processes (for example, with the US Food and Drug Administration)’. However, the LDP also believes that approval of medicines by the TGA should be a voluntary measure, and that unapproved medicines (clearly labelled as such) should be available for sale in Australia.[48]

Medicines Australia (representing the patented pharmaceutical industry) claims that the measures in the Bill have ‘widespread-cross political support’.[49]

Position of major interest groups

At the time of writing, there had been little stakeholder comment on the Bill itself. However, a number of stakeholders had commented on the Government Response to the Sansom Review. Selected comments which are relevant to the Bill are presented below.

Industry

Industry peak bodies have expressed their support for the measures in the Bill. Medicines Australia believes the Bill ‘will enable faster access to certain new medicines for Australian patients and help to cut unnecessary red tape for industry too.’ In particular, Chief Executive Milton Catelin has praised the ‘changes to approval, registration and listing times’.[50] The Generic and Biosimilar Medicines Association (representing the off-patent pharmaceutical industry) has also welcomed the prospect of faster approval times for medicines, as well as the streamlining of post-market requirements and a simpler process for making changes to products already on the Register.[51]             

The peak body for the biotechnology industry, AusBiotech, welcomed the Government Response to the Sansom Review. Chief Executive Officer (CEO) Glenn Cross said ‘AusBiotech and its members have repeatedly expressed support for third party conformity assessment and the expedited pathway for assessment of novel medical devices for inclusion on the Register.’ Mr Cross expects the measures to reduce time-to-market and improve the commercial viability of innovative products.[52]

Consumers

The CEO of the Consumers Health Forum of Australia (the peak body for health consumer organisations), Leanne Wells, has welcomed the fast tracking of assessments for medicines and medical devices. However, she has also pointed out that, while new medicines may come to market sooner under the changes, they may still be too expensive for many consumers until they are listed on the PBS. She has encouraged the Government to ‘develop more timely assessment processes so that approvals for use in Australia and the separate decisions over subsidising the new drugs are better coordinated’.[53]

Pharmacists

The Society of Hospital Pharmacists of Australia (the national professional body for pharmacists working in the hospital sector) welcomed the 2016–17 Budget announcement to fast-track access to new therapeutic goods. CEO Kristin Michaels believes that ‘[c]ollaborating and sharing information with international trusted regulators is a logical step to improve the efficiency of medicine and medical device regulation’.[54]

Financial implications

As noted earlier, the Government provided $20.4 million over four years (including $9.5 million in capital funding) in the 2016–17 Budget to improve the regulation of therapeutic goods in Australia, with the ongoing cost of the measure from 2017–18 to be met by the TGA’s cost recovery arrangements.[55] The Explanatory Memorandum states that the ‘Government allocated $13.5 million in both operating and capital expenses from the Budget in 2016–2017 to improve the regulation of therapeutic goods in Australia.’[56]It appears that the $13.5 million figure may only relate to the 2016–17 financial year.

The TGA operates on a cost recovery basis and is largely self-funding. The Explanatory Memorandum states that ‘TGA special account reserves (comprised of revenue from industry fees and charges)’ will be used to fund the $13.5 million allocation.[57] The opening balance of the TGA special account at 1 July 2016 was budgeted to be $63.2 million, and the closing balance at 30 June 2017 is budgeted to be $49.9 million.[58]

Statement of Compatibility with Human Rights

As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible.[59]

Parliamentary Joint Committee on Human Rights

At the time of writing this committee had not reported on the Bill.[60]

Key issues and provisions

Review recommendations 3 and 15—faster approval of medicines and devices

Items 1, 2 and 4 of Schedule 6 address these recommendations by introducing new sections of the Act to establish regulation-making powers to allow the Secretary to make determinations relating to priority applicants for purposes of the approval of therapeutic goods, biologicals and medical devices respectively.[61] Item 3 similarly provides for the making of priority applicant determinations for conformity assessment determinations.

In each case a determination that an applicant is a priority applicant for the purposes of the respective existing application provisions means that the evaluation period for the therapeutic goods or biologicals may be shorter than would otherwise be required by the Act,[62] and the priority for the conformity assessment or medical devices application may be determined by the regulations.[63]

Proposed sections 25AAA, 32DEA, 41ECA and 41FKA provide that further details regarding the operation of the priority application schemes may be provided by regulations. These further details include the applications, forms, fees, required information and publication of decisions, as well as providing for the revocation of priority determinations and the consequences of doing so.

The Government has stated that the proposed changes support a risk-based approach and that medicines and devices will still be ‘fully evaluated for safety- quality and efficacy or performance’.[64]

Issue—faster approval of medical devices

A study of 309 medical devices approved in the EU between 2005 and 2010 found that, while the majority of these devices were eventually approved in both the EU and the US, most were approved in the EU first. The difference between the two regulatory systems was described as follows:

In the European Union, medical devices are approved by private notified bodies if they meet performance criteria and are likely to be safe, but notified bodies generally do not require evidence of effectiveness for most devices.

Many high risk devices are approved faster in the EU than in the United States, where the Food and Drug Administration usually requires prospective clinical trials of such devices.[65]

The study found that devices approved first in the EU were associated with an increased risk of post-marketing safety alerts and recalls. The authors suggest that ‘products introduced earlier in their development cycle are also more likely to increase the risk of harm’.[66]

Review recommendations 13 and 42—variations to medicines through notification

Schedule 1 addresses these recommendations by amending the Act to allow sponsors of therapeutic goods to vary the entry in relation to those goods on the Register in certain circumstances.

Section 9D of the Act deals with variations to the Register. Item 1 inserts proposed subsection 9D(2C) to provide that, where a person who has registered therapeutic goods makes an appropriate request to vary the entry on the Register, the Secretary must do so. Proposed paragraphs 9D(2C)(b) and (c) provide that the kind of variation and any conditions to be satisfied may be specified in regulations.

Items 3 and 5 make similar changes to permit the varying of entries for biologicals and medical devices, respectively.

The Senate Standing Committee for the Scrutiny of Bills has concerns about these items, as no detail has been provided in the Bill or the Explanatory Memorandum regarding what kind of variation, or what type of conditions, might be prescribed in the Regulations. Pending the provision of this detail, the Committee believes that the items may be considered to delegate legislative powers inappropriately.[67]

Review recommendation 15—enabling Australian ‘notified bodies’ to undertake conformity assessment of medical devices

Schedule 2 implements this recommendation by allowing the Secretary to designate Australian corporations as Australian conformity assessment bodies, thereby permitting these third parties to undertake conformity assessment of medical devices and their manufacture to ensure that the devices will comply with safety and performance principles.

Item 4 introduces proposed section 41EWA into the Act to establish regulation making powers to enable the Secretary to determine that an Australian corporation is an Australian conformity assessment body for the purposes of the Act. The proposed section provides that regulations may provide for a wide range of conditions and administrative matters attaching to such determinations.

The Senate Standing Committee for the Scrutiny of Bills has two major concerns regarding proposed section 41EWA. The first concern is that it provides a broad regulation-making power which leaves most of the details of how Australian companies will be designated as ‘conformity assessment bodies’ to delegated legislation. The second concern is that the Secretary is not precluded from delegating their functions under this section to a relatively large class of persons. This concern also applies to the delegation of the Secretary’s powers in other parts of the Bill.[68]

Item 5 inserts proposed section 41FIA to provide that a certificate issued by an Australian conformity assessment body may be considered by the Secretary if an audit is carried out on an applicable device.

Review recommendation 24—enabling health practitioners to supply certain therapeutic goods not on the Register to patients under a notification scheme

Schedule 3 enables health practitioners to supply certain unregistered therapeutic goods to patients under a notification scheme.

Items 4, 12 and 24 of Schedule 3 provide for such a notification scheme for therapeutic goods, biologicals, and medical devices, respectively. The Senate Standing Committee for the Scrutiny of Bills is concerned by the inclusion of strict liability offences subject to 10 penalty units for health practitioners who do not comply with the notification requirements of the scheme.[69] The key legal effect of strict liability is that no fault element applies to these offences. That is, the prosecution only needs to prove the relevant physical elements—in these offences that the person is a health practitioner who is authorised by the rules to supply the relevant goods, biologicals or medical devices, that the person supplied the authorised item in accordance with the rules and that the person failed to notify the Secretary of the supply within 28 days.[70]

Item 1 of Schedule 3 also makes a consequential amendment to the A New Tax System (Goods and Services Tax) Act 1999 to ensure that unapproved therapeutic goods supplied under proposed subsection 19(7A) of the Act will also attract the GST exemption that currently applies to goods supplied under the Special Access and Authorised Prescriber Schemes.[71]

Review recommendation 47—review and appeal rights for persons applying to include new ingredients as permissible ingredients in listed complementary medicines

As noted above, in responding to the Sansom Review and supporting the intent of recommendation 47, the Commonwealth noted that ‘the design of potential review and appeal rights requires careful consideration of the application of administrative law principles in this context’.[72]

Schedule 5 addresses this issue by amending the Act to provide review and appeal rights for persons who apply to have new ingredients permitted in listed complementary medicines.

A person seeking to have a medicine listed on the Register must certify that the medicine contains only permissible ingredients (paragraph 26(2)(ca) and (cb)). Permissible ingredients are set out by the Minister in a determination made under section 26BB.[73] Current section 26BD provides that a person may apply for a variation of a determination of permissible ingredients in a medicine. Application and evaluation fees are able to be prescribed. If an application for variation of the determination is made, section 26BD permits the Minister to require the applicant to provide certain information, and requires the Minister to have regard to the quality and safety of the ingredients, but does not contain any mechanism for review or appeal of the variation decision. Existing section 60 contains review mechanisms for the review of various decisions of the Secretary or delegate that are made under the Act.

Item 1 repeals section 26BD while item 2 inserts proposed section 26BE to perform a similar function but with the initial decision on an application to vary a determination made by the Secretary or a delegate, rather than the Minister. The section provides that the Secretary may either make or refuse to make a recommendation that a determination be varied by the Minister. The section provides for an application for a variation to be accompanied by prescribed application and evaluation fees.

The Senate Standing Committee for the Scrutiny of Bills would like consideration to be given to providing greater legislative guidance as to how the application and evaluation fee amounts in proposed section 26BE are to be determined.[74] There is currently no guidance in section 26BD about how the application and evaluation fee amounts are to be determined. The Committee also sought advice from the Minister as to why it is considered necessary to provide for two fees, rather than a single fee.[75]

As the decision under proposed section 26BE (which falls within Part 3-2 of the Act) will be made by the Secretary, it will be reviewable by the Minister under existing paragraph 60(1)(c) and subsection 60(2) of the Act. Item 3 inserts proposed subsection 60(2B), which will provide that an application for review of the Secretary’s decision under proposed section 26BE may only be made by the person who made the application for variation of the determination.

Review recommendation 41—setting timeframes for regulatory decisions in relation to listed complementary medicines

Section 63 of the Act provides a broad regulation-making power. Item 1 of Schedule 7 addresses Recommendation 41 by inserting proposed paragraphs 63(2)(de) and (df) to enable regulations to be made setting timeframes within which regulatory functions or decisions must be completed or made under the Act.

Review recommendation 27—strengthening post-marketing activity

The aim of this recommendation is addressed through various amendments in Schedules 8 to 11.

Schedule 8 sets out a number of amendments in relation to developing a more comprehensive post-market monitoring scheme for medicines, including record keeping requirements and rights of entry for authorised persons.

Items 1 to 4 amend section 28 of the Act, dealing with conditions of registration or listing of goods. This section, among other requirements, currently requires a sponsor to permit an authorised person to enter premises at which sponsored goods are dealt with, for inspection purposes. Item 1 will expand this requirement so that sponsors of goods will also be obliged to allow authorised persons to enter premises where record keeping requirements are undertaken or documents stored. This will allow access to premises where sponsored goods are not kept, but where record keeping requirements in relation to those goods are undertaken. Item 2 will allow the inspection and copying of compliance related records.

Item 3 inserts an ability for additional recordkeeping requirements to be prescribed in regulations.

Item 5 amends section 46A, dealing with the searching of premises to monitor compliance with Act, to extend the application of that section to premises related to compliance records.

Schedule 9 amends section 9D, which deals with the variation of entries in the Register and circumstances where applications for variations will not be considered effective. Item 1 would provide further grounds where such applications would not be effective – specifically where the application is not accompanied by information that the Secretary has determined in a legislative instrument under new subsection 9D(8) and where that information is not in a form approved in writing by the Secretary.

Schedule 10 amends the powers of the Secretary to set requirements around the public notification and recall of therapeutic goods, biologicals and medical devices.

Items 1 to 20 amend Part 3-2 of the Act, dealing with the public notification and recovery of therapeutic goods, while items 21 to 53 make similar amendments relating to biologicals and medical devices. The amendments include the substitution of the term ‘recall’ for the current term ‘recovery’, clarification of the grounds under which the Secretary may require recall actions to be taken, and to allow the Secretary to require a person to inform the public or specified persons of specified recall information about the goods.

The Secretary’s power to release recall information in relation to biologicals and devices is also amended by item 62 to bring it into line with that for therapeutic goods.

Schedule 11 broadens the matters about which the Secretary may obtain information from sponsors of listed medicines.

Currently, paragraph 31(2)(fa) allows the Secretary to require a sponsor to provide information or documents relating to any claim that the applicant makes relating to a medicine. Item 1 amends this paragraph to allow the Secretary to require a sponsor to provide information or documents relating to any of the matters that a sponsor has certified at application.[76]

Other provisions

Amendments to TGA statutory advisory committees

Schedule 4 removes the requirement for the Minister to consult with the Therapeutic Goods Committee, which ceased to exist at the start of 2017.

Item 1 repeals subsection 10(4) which required the Minister to consult with a committee before making or varying an order for a standard for therapeutic goods.

The Minister may still consult with one of the remaining committees to obtain advice, but will not be required to do so. The Senate Standing Committee for the Scrutiny of Bills has questioned the removal of this requirement to consult, given that other committees will still be available to provide advice to the Minister.[77]

Item 2 repeals subsection 36(3), which stated that the Minister may obtain advice from a committee before determining written principles to be observed in the manufacture of therapeutic goods. The Senate Standing Committee for the Scrutiny of Bills has similarly questioned the removal of this reference to the Minister’s discretion to obtain advice from a committee.[78]

Miscellaneous amendments

Schedule 12 contains several miscellaneous amendments to the regulation of therapeutic goods, biologicals and medical devices.

Items 2, 4, 5, 11-22, 25-28, 30-33, 37-48, 50, 51, 53, 54, 56 and 57 introduce new powers for the Secretary to approve the importation or supply of unapproved goods in the event of a shortage or unavailability of equivalent registered goods.

The Explanatory Memorandum explains that, while the Secretary can currently approve the importation and supply of unapproved goods where the goods in question are either registered or approved for general marketing in a foreign country specified by the Secretary in a legislative instrument:

There are instances, however, when the only unapproved medicines that are available globally to address a shortage are not available in any of the countries that the Secretary has specified.[79]

The proposed provisions will extend the existing approvals so that the Secretary can approve goods from other countries where they are not registered in any of the countries specified in the legislative instrument or are registered in one of those countries, but are not easily available. The Secretary must be satisfied that, among other things, the approval is necessary for public health and the goods are registered in a foreign country and have acceptable manufacturing and quality control procedures.

Item 6 amends section 30 of the Act, to extend the grounds under which the Secretary may cancel the registration or listing of therapeutic goods to include circumstances where a false or misleading statement was made in an application. A minor amendment relating to the administration of cancellations due to non-payment of fees brings the cancellation provision for therapeutic goods into line with those for biologicals and devices.

Items 9, 29 and 36 amend the Act to allow sponsors of goods whose registration was cancelled due to non-payment of annual charges to apply to the Secretary for a revocation of that cancellation, within 90 days of the cancellation, where the charges have been paid.

Item 34 amends the Act to enable the Secretary to require manufacturing licence holders to provide information or documents about a range of specified matters relating to the goods they are manufacturing and the manufacturing process, as well as providing for further matters to be specified in regulations. Offences are included for contravening such a requirement or for providing false and misleading information.

The Senate Standing Committee for the Scrutiny of Bills has sought the Minister’s justification for two aspects of this item: the reversal of the evidential burden of proof in the offence-specific defences relating to the provision of false or misleading information or documents, and the abrogation of the privilege against self-incrimination when a person is required by the Secretary to give information or produce a document.[80]

Item 35 inserts proposed subsection 41FN(5) to provide a regulation making power to set out conditions for the inclusion of kinds of medical devices in the Register, and also allows the Minister to determine such conditions by legislative instrument.

For a summary of the operation of further specific items included in the Bill readers are referred to the Explanatory Memorandum.

Concluding comments

While this Bill introduces many amendments to the Act, the proposed changes to the regulation of therapeutic goods are in support of recommendations made by the Sansom Review and are broadly supported by stakeholders. However, the Bill is complex and leaves much of the detail of the changes to delegated legislation. Concerns about the Bill have been raised by the Senate Standing Committee for the Scrutiny of Bills, and it has been referred to the Community Affairs Legislation Committee for further inquiry.

Specifically on the issue of faster approvals for therapeutic goods, a note of caution is raised by the above-cited overseas research that links the earlier approval of medical devices with an increased risk of safety alerts and recalls.[81] This of course must be weighed against the reasons laid out in the Sansom Review in support of faster access to medicines and medical devices. The details of the operation of the proposed approval pathways in Australia will not be known until the relevant regulations have been introduced.

© Commonwealth of Australia

Creative Commons

With the exception of the Commonwealth Coat of Arms, and to the extent that copyright subsists in a third party, this publication, its logo and front page design are licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia licence.

In essence, you are free to copy and communicate this work in its current form for all non-commercial purposes, as long as you attribute the work to the author and abide by the other licence terms. The work cannot be adapted or modified in any way. Content from this publication should be attributed in the following way: Author(s), Title of publication, Series Name and No, Publisher, Date.

To the extent that copyright subsists in third party quotes it remains with the original owner and permission may be required to reuse the material.

Inquiries regarding the licence and any use of the publication are welcome to webmanager@aph.gov.au.

Disclaimer: Bills Digests are prepared to support the work of the Australian Parliament. They are produced under time and resource constraints and aim to be available in time for debate in the Chambers. The views expressed in Bills Digests do not reflect an official position of the Australian Parliamentary Library, nor do they constitute professional legal opinion. Bills Digests reflect the relevant legislation as introduced and do not canvass subsequent amendments or developments. Other sources should be consulted to determine the official status of the Bill.

Any concerns or complaints should be directed to the Parliamentary Librarian. Parliamentary Library staff are available to discuss the contents of publications with Senators and Members and their staff. To access this service, clients may contact the author or the Library’s Central Enquiry Point for referral.

Members, Senators and Parliamentary staff can obtain further information from the Parliamentary Library on (02) 6277 2500.

[1].              Department of Health (DoH), ‘Expert review of medicines and medical devices regulation’, DoH website, 15 September 2016.

[2].               DoH, ‘What are 'therapeutic goods'?’, Therapeutic Goods Administration (TGA) website; Therapeutic Goods Act 1989, section 3.

[3].              DoH, ‘Who we are and what we do’, TGA website.

[4].              DoH, ‘TGA basics’, TGA website.

[5].              DoH, ‘TGA regulatory framework’, TGA website, May 2012.

[6].              DoH, ‘Product regulation according to risk’, TGA website.

[7].              Ibid.

[8].              DoH, ‘Special access scheme’, TGA website.

[9].              Ibid.; DoH, ‘Special access scheme applications’, TGA website, 8 April 2011.

[10].              DoH, ‘Product regulation according to risk’, op. cit.

[11].              DoH, ‘Fees and charges: summary—from 1 July 2016’, version 1.3, TGA website, 8 February 2017.

[12].              DoH, ‘Expert review of medicines and medical devices regulation’, DoH website, 15 September 2016.

[13].              P Dutton (Minister for Health) and F Nash (Assistant Minister for Health), Expert Panel to review medicines and medical devices regulation, media release, 24 October 2014.

[14].              DoH, ‘Expert review of medicines and medical devices regulation’, DoH website, 15 September 2016.

[15].              Ibid.

[16].              Australian Government, ‘Part 2: expense measures’ Budget measures: budget paper no. 2: 2016–17, p. 106.

[17].              DoH, Improving the regulation of therapeutic goods in Australia, Budget 2016–17 fact sheet, DoH, 2016.

[18].              DoH, Australian Government response to the review of medicines and medical devices regulation, DoH, Canberra, 2016; S Ley (Minister for Health and Aged Care), Reform of regulation of medicines and medical devices , media release, 15 September 2016.

[19].              DoH, Australian Government response to the review of medicines and medical devices regulation, op. cit., p. 2.

[20].              Ibid., p. 5.

[21].              DoH, ‘Implementation of reforms—public consultation forecast’, TGA website, 20 February 2017.

[22].              Explanatory Memorandum, Therapeutic Goods Amendment (2016 Measures No. 1) Bill 2016, p.1.

[23].              L Sansom, W Delaat and J Hovarth, Review of medicines and medical devices regulation: report on the regulatory framework for medicines and medical devices, (Sansom Review [Stage One]), Commonwealth of Australia, March 2015, p. ix.

[24].              Ibid., p. xv.

[25].              L Sansom, W Delaat and J Hovarth, Review of medicines and medical devices regulation—stage two: report on the regulatory frameworks for complementary medicines and advertising of therapeutic goods, (Sansom Review Stage Two), Commonwealth of Australia, July 2015, p. xii.

[26].              DoH, Annual report 2015–16, DoH, Canberra, 2016, p. 150. For example, the TGA has 255 working days to assess an application for a new prescription medicine to be registered—regulation 16C of the Therapeutic Goods Regulations 1990.

[27].              (Sansom Review Stage Two), p. xii.

[28].              Ibid., p. xiii.

[29].              Sansom Review [Stage One], p. xvi.

[30].              Ibid., p. xx.

[31].              Ibid., p. xxii.

[32].              DoH, Australian Government response to the Review of medicines and medical devices regulation, op. cit., p. 25.

[33].              Ibid., p .34.

[34].              Senate Community Affairs References Committee, Availability of new, innovative and specialist cancer drugs in Australia, The Senate, Canberra, September 2015, p. 1.

[35].              NPS MedicineWise, ‘What is PBS listing?’, NPS MedicineWise website, 25 October 2012.

[36].              Senate Community Affairs References Committee, Availability of new, innovative and specialist cancer drugs in Australia, op. cit., p.33.

[37].              Ibid., p. 109.

[38].              Ibid., p. 111.

[39].              F Nash (Minister representing the Minister for Health and Aged Care in the Senate) and S Ley (Minister for Health and Aged Care), Interim Government Response to the Senate Community Affairs References Committee, Inquiry into availability of new, innovative and specialist cancer drugs in Australia, 10 October 2016.

[40].              Australian Government Department of Health, Submission to Senate Community Affairs References Committee, Inquiry into Availability of new, innovative and specialist cancer drugs in Australia, submission no.197, 17 March 2015, p. 20.

[41].              N Ghinea and W Lipworth, ‘Affordable access to innovative cancer medicines—don't forget the prices’, Medical Journal of Australia, 204(6), 4 April 2016, pp. 214–215.

[42].              Senate Standing Committee on Community Affairs, Report, 1, 2017, The Senate, 9 February 2017.

[43].              Senate Standing Committee on Community Affairs, Therapeutic Goods Amendment (2016 Measures No. 1) Bill 2016, The Senate, Canberra.

[44].              Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 1, 2017, The Senate, 8 February 2017.

[45].              T Zappia (Shadow Assistant Minister for Medicare), Sansom review of medicine and medical device approvals, media release, 15 September 2016.

[46].              Senate Standing Committee for Selection of Bills, Report, op. cit.

[47].              Ibid.

[48].              Liberal Democratic Party, ‘Pharmaceuticals’, Liberal Democrats website.

[49].              Medicines Australia, Legislation will improve access to medicines and cut red-tape, media release, 2 December 2016.

[50].              Ibid.

[51].              Generic and Biosimilar Medicines Association, ‘GBMA welcomes Health Minister’s plans to streamline medicines regulation’, GBMA website, 15 September 2016.

[52].              PharmaDispatch, ‘Government congratulated for TGA review response’, PharmaDispatch website, 16 September 2016.

[53].              Consumers Health Forum of Australia, Fast track for new drugs will need faster subsidy decisions, media release, 15 September 2016.

[54].              Society of Hospital Pharmacists of Australia, SHPA supports Budget measure to fast-track medicine approvals, media release, 4 May 2016.

[55].              Australian Government, Part 2: expense measures, Budget measures: budget paper no. 2: 2016–17, p. 106.

[56].              Explanatory Memorandum, Therapeutic Goods Amendment (2016 Measures No. 1) Bill 2016, p. 6.

[57].              Ibid.

[58].              Australian Government, Part 1: special appropriations table, Agency resourcing: budget paper no. 4: 2016–17, p. 117.

[59].              The Statement of Compatibility with Human Rights can be found at page 7 of the Explanatory Memorandum to the Bill.

[60].              Parliamentary Joint Committee on Human Rights, Report, 1, 2017, The Senate, Canberra, 16 February 2017, p. 53.

[61].              Biologicals are therapeutic products that are made from, or contain, human cells or human tissues. See Therapeutic Goods Act 1989, section 32A and DoH, ‘Products regulated as biologicals’, TGA website, 8 January 2013.

[62].              Proposed subsections 25AAA(6) and 32DEA(6), respectively.

[63].              Proposed subsections 41ECA(6) and 41FKA(6), respectively.

[64].              Explanatory Memorandum, op. cit., pp.1, 2.

[65].              T Hwang, E Sokolov, J Franklin and A Kesselheim, ‘Comparison of rates of safety issues and reporting of trial outcomes for medical devices approved in the European Union and United States: cohort study’, BMJ, 2(8), August 2016, pp. 50–57.

[66].              Ibid.

[67].              Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, op. cit., pp. 31–32.

[68].              Ibid., pp. 32–35.

[69].              Ibid., p. 35. Currently, 10 penalty units is equal to $1,800: Crimes Act 1914, section 4AA.

[70].              Criminal Code Act 1995, section 6.1. A defence of mistake of fact is available to the person—see section 9.2.

[71].              A New Tax System (Goods and Services Tax) Act 1999.

[72].              DoH, Australian Government response to the Review of medicines and medical devices regulation, op. cit., p. 34.

[73].              The current determination made under section 26BB is the Therapeutic Goods (Permissible Ingredients) Determination No. 1 of 2017.

[74].              Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, op. cit., pp. 37–38.

[75].              Ibid.

[76].              Such matters are specified in subsections 26A(2) and (2A) of the Act.

[77].              Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, op. cit., pp. 35–36.

[78].              Ibid.

[79].              Explanatory Memorandum, p. 36.

[80].              Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, op. cit., pp. 38–39.

[81].              Hwang et al, Comparison of rates of safety issues, op. cit.