Pharmaceutical law update
Welcome to our pharmaceutical law update - this page gives you a summary of the latest significant amendments to the Commonwealth Therapeutic Goods Act 1989 and the Therapeutic Goods Regulations 1990.
This page was last updated on 19 August 2003.
Below is a list of the latest changes to the Act and Regulations - we've summarised those that introduce significant changes. Click on "our summary" for our brief overview, or click on the legislation's title to access it from the Government's SCALEplus legislation site.
- Therapeutic Goods Act 1989 (Cth) (the Act)
- Therapeutic Goods Regulations 1990 (the Regulations)
- Therapeutic Goods Amendment Act (No.1) 2003 – our summary
- Therapeutic Goods Amendment Regulations 2003 (No.1) – our summary
- Therapeutic Goods Amendment Regulations 2003 (No.2) – our summary
- Therapeutic Goods (Charges) Amendment Regulations 2003 (No.1) – our summary
- Therapeutic Goods (Medical Devices) Amendment Regulations 2003 (No.1) – our summary
Therapeutic Goods Amendment Act (No.1) 2003
On 13 May 2003, the Federal Government introduced a package of legislative measures to toughen Australia's regulatory system for therapeutic goods in response to issues raised by the Pan Pharmaceuticals controversy. These amendments were included in the Therapeutic Goods Amendment Act (No.1) 2003 (Cth) (the Amending Act), which received royal assent on 27 May 2003, making important changes to the Therapeutic Goods Act 1989 (Cth) (the Act).
The explanatory memoranda highlights the following key objectives to the amendments:
- A clearer definition of the responsibilities and obligations of both sponsors and manufacturers of therapeutic goods;
- Increased responsibility of sponsors/manufacturers for their statutory responsibilities and obligations; and
- More effective deterrents to breaches of standards and other statutory requirements designed to maintain the safety and quality of therapeutic goods.
What do the changes to the legislation mean?
The amendments provide the Therapeutic Goods Administration (TGA) with greater powers in relation to manufacturing practices and recall procedures. In particular, the Amending Act aims to achieve its objectives by:
- increasing maximum financial penalties for a range of existing offences under the Amending Act, including for failures to comply with standards, the making of false statements in applications for marketing authorisation and in conformity assessment statements, breaches of manufacturing licence conditions (including failure to comply with good manufacturing practice principles (GMP)), and counterfeiting of therapeutic goods, to fines of up to $220,000 for individuals or $1.1 million for a company, and a jail term of up to 5 years;
- creating new offences for the falsification of other documents created or retained as part of manufacturer's regulatory obligations and supplying goods from a manufacturer or site which has not been approved by the TGA;
- expanding compulsory notification provisions. Manufacturers are now subject to extended duties to report adverse effects of therapeutic goods and to a requirement to provide information to the TGA where the quality, safety or efficacy of goods is no longer acceptable;
- expanding recall provisions to require that where goods do not meet certain standards (for example, because they do not comply with standards, are not manufactured in accordance with GMP or under licence, are not registered with the TGA, or are counterfeit) manufacturers may be required to recover goods from distribution and to make a public notification of the circumstances of recall;
- introducing a 'fit and proper person' requirement into the standards used to grant manufacturing licences or conformity assessment certificates and in consideration of suspension or revocation. That is, where the grant of a manufacturing licence or a conformity assessment certificate is under consideration, the TGA should be satisfied not only that the applicant manufacturer can comply with GMP, but also that the applicant manufacturer and every individual involved in the control or management of the applicant are also fit and proper persons. In assessing whether an applicant or an individual is a fit and proper person, the TGA may have regard to any of the following indicia, as well as any other relevant considerations:
- the business record of the applicant or person (including experience in other businesses);
- any previous suspension or revocation of a manufacturing licence or failure to comply with a condition of a licence; and
- any conviction for an offence against State or Commonwealth law.
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It is also a ground for suspension or revocation of a licence if the licence holder or persons in control of the licence holder are not fit and proper persons;
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creating new conditions of a manufacturing licence to ensure compliance with GMP and the reporting of adverse events. That is, licence holders must now ensure that manufactured goods conform to all applicable standards and to GMP;
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requiring sponsors to maintain records of manufacturers involved in production of their therapeutic goods and to notify the TGA of any changes to these manufacturers (penalties apply). These records must be kept for at least 12 months after the product expiry date. A failure to supply these details can result in immediate cancellation of TGA registration in respect of goods;
- providing for better identification of therapeutic goods used in the manufacture of products to assist product recall. Goods will be unacceptably presented if the product name is insufficiently unique to allow product recall; and
- improving adverse event reporting for therapeutic goods. Where manufacturing licence holders become aware of information relating to adverse events, they are now required to provide this information to the TGA.
Other Amendments
The Amending Act also brings some foods within the administration of the TGA and rationalises the regulation of advertising of therapeutic goods.
Food as a therapeutic good
The TGA is now able to designate food items as therapeutic goods. Previously, prescribed foods were not classified as therapeutic goods. Now, where a food product prescribed under the Australia and New Zealand Food Standards Code is designated by the TGA as having therapeutic properties, the TGA may declare the product to be a therapeutic good, and therefore as subject to regulation under the Act.
This is used by the TGA to extend the operation of the Act to products like sports drinks, medicated lozenges and foods which may be regarded by consumers as possessing therapeutic properties even where no therapeutic claim is made for the product.
Advertising Provisions
All offences relating to the advertising of therapeutic goods under the Therapeutic Goods Advertising Code (the Code) are now set out in the Therapeutic Goods Act 1989 (the Act), rather than the Therapeutic Goods Regulations (the Regulations).
Previously, some offences were regulated by the Act, while other similar offences were regulated by the Regulations. This led to an inconsistency in the applicable penalties for similar offences (generally, maximum penalties provided for by the Act were greater than those provided for by the Regulations). The transfer of offences from the Regulations to the Act has been undertaken to ensure consistency of penalties applying for all breaches of the Code.
The Amending Act also removes an inconsistency whereby the approval process for broadcast advertisements for therapeutic goods (ie, advertisements disseminated electronically, whether by audible or visible means) was overseen by the Minister for Communications, information Technology and the Arts, while the approval process for all other advertisements for therapeutic goods was overseen by the TGA. Now, the approval process for all specified media is supervised by the TGA.
Specified media is defined as encompassing mainstream media, cinema advertising, broadcast media, displays of goods, and advertisements on public transport, in shopping centres and on billboards. However, second reading speeches and explanatory memoranda indicate that Internet advertising is likely to be exempted from this definition by the operation of the Regulations and included under the provisions relating to point of sale advertising.
In relation to media advertising:
- It is an offence to publish or broadcast an advertisement for therapeutic goods aimed at consumers which has not been approved where approval is required.
This offence also applies to broadcasters and publishers. - It is an offence to publish or broadcast an advertisement which differs from the advertisement which has been approved, or which does not meet the conditions of approval, or where the approval has expired, or, in the case of visual advertisements, to publish an advertisement without the correct approval number.
Publishers/ broadcasters are provided with a defence to these offences.
In relation to 'point of sale' advertising
In relation to advertising which does not require pre-approval ('point of sale advertising', including flyers, letter box drops, Internet advertising and 'shelf talkers'):
- persons may be prevented from making false or misleading representations in advertising;
- certain prohibited representations (to be specified by regulation) may not be made in advertising; and
- representations in advertisements which relate to serious diseases must be approved by the TGA and may be subject to additional requirements (an example might be the publishing of disclaimers or limitations).
In relation to all advertising
- It is an offence to publish generic information relating to the ingredients of a therapeutic good (including any statement, pictorial representation or design about the composition, properties or other characteristics of those ingredients) which does not comply with the Code.
- It is an offence to advertise therapeutic goods which are not included on the Therapeutic Goods Register and not otherwise exempted from the Act.
- It is an offence to make representations about therapeutic goods which do not comply with the Code.
- It is an offence to use an unapproved restricted representation or a prohibited representation in advertising therapeutic goods.
- It is an offence to publish or broadcast an advertisement concerning therapeutic goods which does not include a required representation about those goods.
- It is an offence to publish or broadcast advertisements which have been identified by the TGA as false and misleading.
- It is an offence to suggest government or TGA endorsement of therapeutic goods in advertising (other than stating that a therapeutic good is available as a pharmaceutical benefit).
For further information on the Therapeutic Goods Amendment Act (No.1) 2003, see Changes to the Therapeutic Goods Act, Biotech News feature article, 10 June 2003.
Therapeutic Goods Amendment Regulations 2003 (No.1)
The Therapeutic Goods Amendment Regulations 2003 (No.1) (the Amending Regulations) amend the Therapeutic Goods Regulations 1990 (the Regulations).
Unless therapeutic goods are registered or listed in the Australian Register of Therapeutic Goods (the Register), or are exempt from the requirement to be included in the Register, the importation, manufacture or supply of such goods by sponsors is unlawful. Section 18A(1) of the Therapeutic Goods Act 1989 (the Act) enables the Minister to exempt therapeutic goods from the usual registration or listing requirements needed for the supply of goods in Australia, where it is considered to be in the national interest to stockpile goods in preparation for a potential threat to public health, or to make available goods required in an actual threat to public health caused by an emergency.
The Act provides for the Secretary to the Department of Health and Ageing to arrange for the disposal of any unused goods exempted under subsection 18A(1) of the Act, in accordance with the Regulations, once the exemption ceases to have effect. While considered exempt goods under the Act, the Minister is able to maintain control over the goods and impose conditions over the use, supply, storage and disposal of exempt goods. Prior to the commencement of the Amending Regulations, once the goods ceased to be exempt, there was no power for the Minister to ensure that such goods were properly handled and disposed of.
According to the explanatory memorandum, the purpose of the Amending Regulations is to provide for the manner in which the Secretary may put in place arrangements for the disposal of any unused therapeutic goods when the exemption under Section 18A(1) ceases to have effect. These requirements and arrangements include:
- the giving of notice and records in relation to goods held;
- the storage and disposal of such goods;
- directions from the Secretary in relation to the disposal of unused goods;
- the relocation of the unused goods if they pose a risk to the public and the environment;
- destruction of goods;
- export of goods;
- supply of goods to authorised persons;
- compensation to the owner of goods;
- record keeping requirements; and
- various sanctions for non-compliance.
In addition to the requirements and arrangements relating to therapeutic goods the subject of an exemption under Section 18A(1), the Amending Regulations also:
- increase the membership of the Therapeutic Goods Advertising Code Council from 12 to 13 to allow the Therapeutic Goods Administration to nominate an additional non-government member;
- introduce a requirement that the Chairperson of the Therapeutic Goods Advertising Code Council be a member nominated by the TGA; and
- clarify the circumstances wherein a member of the Complaints Resolution Panel would not be allowed to participate in the deliberation of complaints in relation to advertisements.
The Amending Regulations commenced on 13 June 2003.
Therapeutic Goods Amendment Regulations 2003 (No.2)
The Therapeutic Goods Amendment Regulations 2003 (No.2) (the Amending Regulations) amend the Therapeutic Goods Regulations 1990 (the Regulations).
According to the explanatory memorandum, the Amending Regulations:
- increase the fees payable under Schedule 9 of the Regulations by 3.25 per cent;
- introduce new fee items relating to the assessment of evidence on the standard of overseas manufacturers;
- vary existing fees for prescription medicines;
- introduce provisions allowing for the reduction of fees in specified circumstances;
- introduce a new fee for the testing of samples and the provision of advice in relation to responding to a request from the Pharmaceutical Benefits Program of the Department of Health and Ageing;
- introduce a new fee for assessing data relating to the safety, quality and efficacy of listed medicines;
- introduce a new fee for evaluating the device component of a medicine; and
- make other technical amendments.
The Amending Regulations commenced on 1 July 2003.
Therapeutic Goods (Charges) Amendment Regulations 2003 (No.1)
Section 4 of the Therapeutic Goods (Charges) Act 1989 (the Charges Act) provides that annual charges are payable for maintaining entries in the Therapeutic Goods Register (the Register). Section 5 of the Charges Act provides that the Governor General may make regulations prescribing the amounts of such charges.
The Therapeutic Goods (Charges) Amendment Regulations 2003 (No.1) (the Amending Regulations) amends the Therapeutic Goods (Charges) Regulations 1990 (the Charges Regulations).
According to the explanatory memorandum, the Amending Regulations:
- increase most charges payable under the Charges Regulations in relation to therapeutic goods by 3.25 per cent;
- increase annual charges for listed and registered therapeutic goods to cover the cost of increased post-market surveillance resulting from the Pan Pharmaceutical recall, and the subsequent amendments to the Therapeutic Goods Act 1989;
- increase the threshold percentage of the value of wholesale turnover of therapeutic goods for the purpose of assessing a sponsor's eligibility for an exemption from the annual charges associated with maintaining goods entered in the Register;
- introduce a new annual charge applicable to prescription medicines, differentiating those which have a biological agent as the active ingredient due to the higher costs of post market activities associated with these medicines; and
- make further technical amendments.
The Amending Regulations commenced on 1 July 2003.
Therapeutic Goods (Medical Devices) Amendment Regulations 2003 (No.1)
The Therapeutic Goods (Medical Devices) Amendment Regulations 2003 (No.1) (the Amending Regulations) amend the Therapeutic Goods (Medical Devices) Regulations 2002 (the Medical Devices Regulations).
Schedule 5 of the Medical Devices Regulations provides the list of fees chargeable under Chapter 4 of the Therapeutic Goods Act 1989 (the Act). These fees reflect the cost incurred by the Therapeutic Goods Administration in performing various tasks under the Act and the Medical Device Regulations.
According to the explanatory memorandum, the Amending Regulations:
- increase the fees payable under Schedule 5 of the Medical Devices Regulations by 3.25 per cent. This includes the processing of applications for inclusion in the Therapeutic Goods Register, and the initial and subsequent assessments under the conformity assessment procedures;
- provides for the reduction of assessment fees in particular circumstances, such as where the supply of the device would be in the interest of public health and payment of the full assessment fee would make the supply of the device commercially unviable; and
- makes further technical amendments to Schedule 5 items.
The Amending Regulations commenced on 1 July 2003.
For further information, please contact:
- Guy FosterPartner,
Sydney
Ph: +61 2 9230 4798
Guy.Foster@aar.com.au
