Therapeutic Products and Medicines Bill tabled

The Labour-led government has made a significant step towards better protecting the health and safety of consumers who use medicines and medical devices with the tabling for introduction into Parliament yesterday of the Therapeutic Products and Medicines Bill, State Services Minister Annette King says.

New Zealand has been working with Australia for more than 10 years to develop a joint regulatory scheme for therapeutic products and to set up a new trans-Tasman agency, the Australia New Zealand Therapeutic Products Authority, to oversee the scheme.

Ms King says the Bill is a ground breaking initiative to establish the first truly trans-Tasman regulator in which both countries will have an equal say.

“I welcome the support of a majority of the House who want to see the Bill go to Select Committee where New Zealanders can have their say.”

Ms King says the joint scheme was considered by the Health Select Committee in 2003. “It made a number of recommendations that it believed should be acted upon before the scheme commenced. These recommendations have been addressed with the Australians over the past three years.

"This will be a world-class joint scheme designed to regulate the safety, quality, effectiveness and promotion of therapeutic products in both New Zealand and Australia. That includes the regulation of complementary and alternative medicines, over-the-counter and prescription medicines, medical devices, blood and blood products and tissues and cellular therapies.

"New Zealanders will be given greater assurances about the medicines and medical devices they use because the joint scheme will require all therapeutic products to undergo pre-market safety approval and licensing and post market surveillance and monitoring," Ms King says.

As well as establishing the trans-Tasman regulatory agency, the Bill will also update the medicines legislation to ensure New Zealand retains sustainable regulation for therapeutic products into the future and maintains its regulatory reputation on the world stage.

Currently there is minimal regulation of medical devices and complementary medicines in New Zealand, which is out of step with international best practice and this has led to therapeutic products being excluded from the trans-Tasman trade agreement, the Mutual Recognition Arrangement, with Australia.

"By harmonising our two countries therapeutic products regulations not only will public health and safety be better protected, but trans-Tasman cooperation will be enhanced and the export of therapeutic products will be facilitated into Australia and into other overseas markets," Ms King says.

Importantly the Bill, alongside the international Agreement signed by both countries in 2003, ensures that New Zealand will have an equal say in the setting up and running of the new Authority and joint scheme.

"The new Authority will be similar to a Crown-owned entity and will be accountable to the New Zealand Parliament. It will be required to table an annual report and statement of intent in the New Zealand Parliament. It will also be subject to other existing legal requirements such as Official Information and Privacy laws and scrutiny by Auditors-General."

The Bill also sets out the direction for the continued advertising of therapeutic products in New Zealand.

"Direct to consumer advertising (DTCA) of prescription medicines will continue to be permitted. However under the new regulatory scheme there will be better controls to ensure consumers are provided with balanced and truthful information about the therapeutic health benefits of medicines so that they can make more informed choices," Ms King says.

"The Government's preference was to ban DTCA of prescription medicines, however it is clear that there is not the necessary support within Parliament for that to happen at this point."

Public consultation on the Bill will take place during the Select Committee process.

Questions and answers, and appendix on 2003 Health Select Committee recommendations, follow.

Contact: John Harvey (04) 471 9305; John Saunders (04) 470 6851.

Questions and Answers

What is the aim of the New Zealand Therapeutic Products and Medicines Bill?

The Bill aims to create the framework for the establishment of the Australia New Zealand Therapeutic Products Authority (ANZTPA) and joint regulatory scheme for therapeutic products. Consistent with the Agreement it sets out the key governance and accountability arrangements for the new Authority; the enforcement and penalties provisions for breaches of the proposed regulations for complementary and alternative medicines, over-the-counter and prescription medicines and medical devices; and the criteria for advertising and promoting therapeutic products. The Bill would replace the outdated New Zealand Medicines Act 1981 and Medicines Regulations 1984.

Is the process for consultation on the New Zealand Bill and the Australian Bill the same?

The Parliamentary processes for public consultation on Bills is different for each country. In New Zealand, public consultation on the New Zealand Bill will take place as part of the Select Committee process. In Australia, the Australian Bill is released as an exposure draft for public consultation prior to its introduction into the Australian Parliament.

How is the new Australia New Zealand Therapeutic Products Authority and proposed joint scheme being established?

The new Authority is to be established under an international Agreement, or Treaty, signed between New Zealand and Australia in December 2003. The Treaty sets the fundamental high level framework for the Authority and the regulatory Scheme. It requires that both countries need to pass legislation. The Treaty is crucial in ensuring that New Zealand has an equal voice with Australia in the new Authority. Once the legislation is passed in both countries the Agreement or Treaty would need to be ratified to have legal effect.
The new Australia New Zealand Therapeutic Products Authority (ANZTPA) would then replace New Zealand's Medsafe and Australia's Therapeutic Goods Administration and the governance and accountability arrangements, including the Ministerial Council and the Board of the Authority, would come into force.

Is consultation on the proposed joint regulatory scheme already underway?

Significant and ongoing consultation on the proposed joint regulatory scheme, known as the draft Rules and Orders, has and continues to be undertaken to ensure the new scheme is workable and meets the overall objective of protecting public health and safety. Three main phases of consultation are being undertaken during 2006/2007. The first two phases began in May 2006 and October 2006. A third phase of consultation on the detail of the proposed joint regulatory scheme is planned for March 2007.
The Rules and Orders are similar to regulations, and contain the technical details of the proposed regulatory scheme. Once passed into law, the Therapeutic Products and Medicines Bill would allow the Rules and Orders to be made. Both Rules and Orders will be subject to similar Parliamentary processes as apply to regulations.

What is the aim of the proposed joint regulatory scheme?

The overall aim of the proposed joint regulatory scheme is to protect the health and safety of New Zealanders and Australians who use and consume therapeutic products. It would do this by regulating the pre and post-market safety and quality of therapeutic products including:
· complementary medicines such as herbal and traditional medicines, homoeopathic medicines and aromatherapy products, vitamins, minerals and dietary and nutritional supplements;
· over-the-counter medicines;
· prescription medicines;
· medical devices, for example bandages, contact lenses, hearing aids, heart valves, pace makers and endoscopes;
· blood and blood products and tissues and cellular therapies.

Why do we need a joint regulatory scheme for therapeutic products?

It is the best way to ensure both countries are able to update their legislation and to provide sustainable therapeutic products regulation that meets international guidelines, benchmarks and recommendations into the future. The proposed Australia New Zealand Therapeutic Products Authority will also help to open the door for greater trans-Tasman trade opportunities and enhance Closer Economic Relations and the Single Economic Market between Australia and New Zealand. It is also likely to lead to closer cooperation with regulators in the wider Asia-Pacific region.

Will traditional Rongoa Maori be affected by the proposals?

Traditional Rongoa Maori will not come under the proposed Authority and will not be regulated by the proposed regulatory scheme. Traditional healers and the products they prepare for individual patients will not be regulated by the Authority.
In addition, the proposed scheme does not deal with the intellectual property rights of herbs used by healers and there is no intention in the proposals for intellectual property rights of traditional herbs or plants to be covered by the new regulatory scheme. Intellectual property rights and any claims about their standing are handled through different regulatory channels in each country. In New Zealand, Maori claims about the role or use of certain intellectual property rights are often dealt with through the Treaty of Waitangi. Therefore, intellectual property rights are considered to be separate from the regulation of therapeutic products and would remain that way under the proposals.

What is Direct-to-Consumer Advertising?

Direct to consumer advertising or DTCA is the advertising or promotion of prescription medicines directly to consumers.

APPENDIX

2003 HEALTH COMMITTEE RECOMMENDATIONS AND RESPONSES

Recommendation: We recommend to the Government that it not become party to the Agreement between the Government of Australia and the Government of New Zealand for the establishment of a joint scheme for the regulation of therapeutic products unless the following recommendations are met in any implementing legislation. That the legislation:

a) provides for parliamentary accountability of the agency that is the same as the requirements on other New Zealand crown entities

Response: Article 8 of the Treaty explicitly provides that ‘the appropriate level and type of accountability for the Agency is that which would normally apply to a regulatory agency established by the legislation of each Party.’ Article 8(6) of the Treaty provides for the application of statutory accountability arrangements to the ANZTPA.

As noted above the draft legislation does provide for parliamentary accountability of a type that is akin to a New Zealand Crown Entity. Other aspects of parliamentary accountability are already provided for in New Zealand’s regular constitutional arrangements and in Standing Orders. These will apply. The accountability of the Minister of Health to Parliament in respect of the ANZTPA will be the same as for New Zealand crown entities, and Members of Parliament would be able to hold the Minister accountable through the usual channels of written and oral questions, and in other parliamentary for a. The tailored disallowance scheme will also enable Parliamentary scrutiny of Rules and Orders made under the Treaty.

Recommendation (continued): b) details the accountability arrangements of the managing director

Response: The accountability arrangements of the Managing Director have been set out in the Treaty in order to ensure that the Managing Director is equally accountable to both New Zealand and Australian Ministers of Health through the joint Ministerial Council. The scheme for the ANZTPA has the following advantages:

1.There is a clear chain of accountability: Under the Treaty, the Managing Director would be accountable to the Board for his or her performance in relation to the management of the ANZTPA. In turn, the Ministerial Council would appoint the Board, and the New Zealand member on the Ministerial Council would be accountable to Cabinet and Parliament.

2.The arrangements are transparent: The accountability arrangements will be transparent because they will be set out in the Treaty, Legislation and Ministerial Council Rules.

3.The Executive is not able to unilaterally alter the arrangements: The power of the Executive to alter the accountability arrangements of the Managing Director would be limited because the Rules would have to comply with the Treaty, New Zealand law, New Zealand’s constitutional arrangements and the principles of delegated legislation.

Recommendation (continued): c) provides that the powers of the managing director of the agency not exceed the powers of other New Zealand public service chief executives.

Response: It is intended that the powers of the Managing Director would be comparable to the powers of other State sector chief executives in New Zealand. The powers of the Managing Director would be limited through the Treaty and the Rules. Importantly, the Managing Director will not be employed as such, they will be appointed and their terms of appointment publicly available in the relevant Rule.

Recommendation (continued): d) gives equal recourse to New Zealanders and Australians under the complaints system

Response: The arrangements give effect to this recommendation. The Treaty mandates a merits review process that provides for a specialist tribunal to review decisions of the agency on their merits. Unlike judicial review, which is focused on the decision-making process rather than the decision itself, merits review would review the substance of the decision. The draft legislation provides for there to be a New Zealand Review Tribunal and there are rights of appeal from the New Zealand Review Tribunal to the High Court. This would provide New Zealanders with greater access to a review process than they currently have under the Medicines Act. New Zealanders and Australians would have equal recourse under this system. (A similar tribunal would be established in Australia)

It is also intended that New Zealanders and Australians would have continued access to other avenues of redress, such as judicial review, review by the Ombudsmen, or review by the Privacy Commissioner.

Recommendation (continued): e) provides that the Official Information Act 1982, the Privacy Act 1993, the Protected Disclosures Act 2000, the Public Audit Act 2001, and other relevant New Zealand accountability legislation applies to the agency in no less a manner

Response: Article 8(1)(b) of the Treaty provides that ‘the appropriate level and type of accountability for the Agency is that which would normally apply to a regulatory agency established by the legislation of each Party.’ The Government considers that this involves making the ANZTPA subject to the Official Information Act 1982, the Privacy Act 1993, the Protected Disclosures Act 2000 and the Public Audit Act 2001. The proposed legislation provides for this accountability.

Recommendation (continued): f) contains all matters of significant policy and principle concerning the joint agency scheme; and g) provides for only the implementation and details of those policies and principles to be left to the rules and orders and ensures significant policy matters are not to be dealt with in the rules and orders.

Response: Significant matters of policy and principle have been set out in the Treaty in order to ensure that both New Zealand and Australia have an equal say in the design and management of the ANZTPA. Many of these matters would be developed further in the Ministerial Council Rules to ensure this equal say. The Treaty and the Ministerial Council Rules would only have effect in New Zealand through the legislation.

The proposed legislation also contains a number of significant matters that could be dealt with in Rules, but both Governments have elected to deal with them in legislation. These include matters such as:

·The duties of Board members and consequences for breaches of duties
·Core accountability arrangements, such as the requirement to produce a statement of intent
·The ability for the Minister to direct the ANZTPA.
·Central provisions in respect of the financial powers of the ANZTPA and the role of the Minister of Finance.

Recommendation (continued): h) clearly sets out the limits of the powers to be exercised by the agency, and does not authorise rules to determine the extent of the sub-delegation

Response: The limits of the powers to be exercised by the agency are set out in the Treaty in order to ensure that both New Zealand and Australia have an equal say in the design and management of the ANZTPA. Many of these matters would be developed further in the Ministerial Council Rules to ensure this equal say.

The Treaty authorises sub-delegation of some, mainly administrative, powers. The Government is mindful of the principle that a legislative power ought not to be sub-delegated unless the sub-delegation is subject to adequate limitations and controls. In addition, Rules and Orders would be subject to judicial review on the ground of inappropriate sub-delegation of powers.

Recommendation (continued): i) provides for effective parliamentary control of delegated legislation that includes scrutiny by select committee as well as disallowance. The rules and orders should be subject to Regulations Review Committee scrutiny

Response: Disallowance is a separate process from scrutiny. Disallowance is a statutory process and would be provided for in the implementing legislation, as required by the Treaty.

Scrutiny by the Regulations Review Committee is a House procedure and is governed by Standing Orders. The Government has been considering seeking an amendment to Standing Orders, to bring the Rules within the definition of ‘regulations’ in Standing Order 3(1), and therefore make them subject to scrutiny by the Regulations Review Committee. This is a matter on which the Government is consulting with the Clerk of the House.

Recommendation (continued): j) ensures that parliamentary control of the Rules and Orders should extend over the life of the instrument and that there should be no time limits on disallowance

Response: In accordance with the Treaty, the legislation would limit the time allowed for disallowing the Rules and Orders, but parliamentary scrutiny of the Rules and Orders would not be limited.

In many respects, the New Zealand and Australian disallowance regimes are similar. The most significant difference is that in New Zealand, the Regulations (Disallowance) Act sets no time limit for disallowance of regulations. In Australia, the Legislative Instruments Act sets a time limit on disallowance. There are no technical barriers to New Zealand adopting time-limited disallowance, and the Australian model sets a precedent for time-limited disallowance for JTPA Rules and Orders.

The Health Committee has expressed a preference for the New Zealand system of disallowance (no time limit), but the Government considers that there are several advantages to having a limited time-period for disallowance for the JTPA:

·It increases consistency of treatment of Rules and Orders in the two parliaments, which helps to ensure that neither parliament has a greater say over the agency than the other.

·It places a greater incentive on officials to ensure that the Rules and Orders comply with the principles of delegated legislation, as set out in the reports of the Regulations Review Committee.

·It places an incentive on officials to develop a strong ongoing relationship with the Regulations Review Committee to ensure that scrutiny is conducted quickly and effectively before the disallowance period expires.

·It gives the Minister an incentive to seek comment from the Regulations Review Committee on draft Rules and Orders under Standing Order 377(2).

·It provides industry and consumers with certainty. Were either New Zealand or Australia to provide for unlimited disallowance, it would be possible at some future date for the parliament of one country to disallow a Rule or Order with effect in the other country. In these circumstances, the disallowing parliament could be taking an action that has significant extra-territorial effect. As a result, businesses and citizens of one country, who may have a significant interest in the disallowed Rule or Order, would find their interests subject to the decisions of a foreign parliament which they cannot hold accountable, and to which they have no guaranteed right to make representations or submissions.

The proposal for a limited period for disallowance does not in any way limit the powers of the Regulations Review Committee under Standing Orders. That committee would still be able to hear complaints, investigate, and draw the House’s attention to Rules and Orders.

Recommendation (continued): k) provides for automatic disallowance of rules and orders as well as disallowance by resolution of the House

Response: The proposed legislation provides for the automatic disallowance of Rules and Orders where a member of the regulations review committee lodges a notice of motion and after 21 days no decision on the motion has been taken. The proposed legislation also provides for disallowance by resolution of the House.

Recommendation (continued): l) provides for disallowance of the rules or orders in part

Response: Article 9(4) of the Treaty requires parties to legislate for disallowance of Rules and Orders in whole and not in part. The legislation would only provide for disallowance in whole because it would be inappropriate for one parliament to alter the application of the Rule or Order in the other country. The Government does not consider that this is a significant issue because the Rules and Orders may be drafted as small instruments, so they can be readily disallowed without disrupting the entire regulatory scheme. The Government also notes that disallowance has never occurred in New Zealand.

Recommendation (continued): m) provides for a separate category for complementary healthcare products.

Response: It is proposed to create separate units in both the Canberra and Wellington offices of the ANZTPA to regulate these products. Other types of therapeutic product (such as prescription medicines and medical devices) would be regulated by staff in separate units dedicated to those products.