Posted 23/02/2021 by Matthew Thomas
The Narcotic Drugs Amendment (Medicinal Cannabis) Bill 2021 (the Bill) amends the Narcotic Drugs Act 1967 (the ND Act) to reduce the regulatory burden on industry participants in the medicinal cannabis scheme and improve the operation of the scheme.
The Bill responds to several of the recommendations of the 2019 McMillan review of the ND Act, including by seeking to, among other things:
- replace the existing three licence structure (for cultivation and production, manufacture and research) with a single licence for medicinal cannabis products (Recommendation 7)
- allow for a medicinal cannabis licence to be granted in perpetuity, unless the licence is revoked or surrendered, or a time-limit is specified by the Secretary—responding toRecommendation 10, which suggested the introduction of a maximum term of five years for all licences, with an opportunity for renewal. The ND Act currently does not specify a maximum allowable licence period—licences are currently granted for up to three years—or a procedure for renewal—and
- include a statement in the ND Act, indicating that the purpose of the medicinal cannabis scheme established by the Act is to ensure that medicinal cannabis products are available to patients in Australia for therapeutic purposes (Recommendation 1).
Narcotic Drugs Amendment Act 2016
In Australia the control of illicit drugs and medicines is shared between the Commonwealth, states and territories. States and territories are primarily responsible for criminal controls within their own jurisdictions, while the Commonwealth is responsible for border controls and some domestic issues. Medicines are regulated under a suite of complementary Commonwealth, state and territory laws.
The international drug control conventions impose further obligations on the Commonwealth to prohibit certain drugs domestically and to tightly control the production of narcotic drugs when authorised for medical or scientific purposes.
For some time there has been interest in the use of medicinal cannabis for chronically and terminally ill people where other medications have failed. In recent years, some states and territories indicated a desire to begin cultivation and production of cannabis for medicinal purposes but were stymied by the Commonwealth ND Act. The ND Act did not permit the cultivation of cannabis, and any cultivation that occurred outside of Commonwealth regulatory control would have placed Australia in breach of its obligations under the international drug control conventions.
This situation changed with the Minister of Health announcing on 17 October 2015 that the Government intended to amend the ND Act to allow the controlled cultivation of cannabis for medicinal and scientific purposes, and the subsequent passage through the Parliament of the Narcotic Drugs Amendment Bill 2016.
The Narcotic Drugs Amendment Act 2016 (NDA Act) amended the ND Act to establish a regulatory regime, administered by the Commonwealth Department of Health (through the Office of Drug Control (ODC)), to control the cultivation, production and manufacture of cannabis for medicinal or scientific purposes.
The resultant medicinal cannabis scheme includes licenses and permits for each stage of the process, designed to ensure that only authorised persons have access to the regulated substances. Under the scheme, the Commonwealth has control over the volumes produced and is thus able to ensure that these do not exceed legitimate need for medicinal cannabis products. The Secretary of the Department of Health is responsible for administering the licenses and permits and has the power to impose appropriate conditions. These arrangements provide the statutory controls necessary for Australia to fulfil its international treaty obligations.
The provisions of the ND Act also operate in conjunction with the existing medicines authorisation schemes in the Therapeutic Goods Act 1989 (TG Act). The NDA Act made amendments to the TG Act to allow regulations to be made specifying conditions and prohibitions for access to medicinal cannabis in certain circumstances.
Most of the provisions of the NDA Act commenced on 29 October 2016.
The McMillan Review
Section 26A of the ND Act (inserted by the NDA Act) requires the Minister for Health to cause a review of the operation of the ND Act during the third year of operation of the medicinal cannabis scheme. The findings and recommendations of this review, which was conducted by Professor John McMillan, were released on 10 July 2019.
As a part of the review process a Discussion Paper was published and public consultation with key stakeholders undertaken.
Broadly speaking, the findings of the review were positive. It noted that the NDA Act had helped to establish ‘a comprehensive framework to facilitate and support an Australian industry dedicated to the supply of medicinal cannabis therapies’. Further, the framework was described as being:
… notable for the careful balance it strikes between facilitating cultivation and production of medicinal cannabis products, implementing Australia’s obligations under the Single Convention to safeguard against illegal practices, and facilitating cooperation with State and Territory governments to administer safe and sustainable pathways for patient access to medicinal cannabis therapies (p. 6).
Despite still being in its early days, the review found that the establishment of the scheme had ‘overall been resoundingly successful’.
While the review report was complementary of the balance struck between sometimes competing priorities in the development of the regulatory framework, it observed that, understandably, the ND Act, along with the National Drugs Regulation 2016 and the regulatory method of the ODC, were characterised by a risk minimisation focus. This effectively controlled the risk of criminal infiltration and diversion within the medicinal cannabis scheme, but also contributed to overly demanding obligations on licence applicants and holders, and an excessive administrative and regulatory compliance burden on the ODC.
As such, the most substantive of the review’s recommendations are oriented towards reducing the intensity of the medicinal cannabis scheme’s risk management focus while still ensuring that the country’s obligations under the Single Convention on Narcotic Drugs, 1961 are met. In short, the recommendations largely seek to reach a better balance between managing risks and enabling increased cultivation and manufacturing activity by ND Act licence holders, and, ultimately, improved patient access to medicinal cannabis therapies.
The Australian Government agreed in principle to adopt all 26 recommendations of the McMillan review, chief of which is that the current three licence structure (for cultivation and production, manufacture and research) in the ND Act should be replaced with a single licence structure.
Position of major interest groups
As noted above, consultation on the operation of the ND Act was undertaken as a part of the McMillan Review, and the Department of Health also obtained feedback on the measures contained in the Bill.
According to the McMillan Review report, ‘strong interest was expressed in submissions and consultations … for legislative and administrative reforms to improve the operation of the medicinal cannabis scheme’. Further, a view ‘forcefully expressed’ during the Review was that ‘the same intensity is no longer required on risk minimisation in the design and administration of the medicinal cannabis scheme’.
Should it be implemented, the Bill would relax the existing regulatory framework and compliance requirements of existing and would-be licence holders. As such, it is reasonable to assume that the medicinal cannabis industry would be broadly supportive of the Bill. Rhys Cohen, editor-at-large for the industry publication Cannabiz has stated that ‘fixing the issues with the licensing system by making it easier for companies to operate should translate into higher-quality and lower-cost medicines for Australian patients’.
Patient access to medicinal cannabis products did not fall within the scope of the McMillan review. Nevertheless, many submitters took the opportunity to argue that the new medicinal cannabis scheme ‘had not fulfilled the expectation of making medicinal cannabis more readily and easily available to Australian patients’. Should the Bill be passed, this could contribute to the medicinal cannabis scheme’s better meeting the needs of patients, while not compromising regulatory compliance.