Bills Digest no. 84 2008–09
Therapeutic Goods Amendment (Medical Devices and Other Measures) Bill 2008
WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced
and does not canvass subsequent amendments. This Digest does not have
any official legal status. Other sources should be consulted to determine
the subsequent official status of the Bill.
CONTENTS
Passage history
Purpose
Background
Main provisions
Concluding comments
Contact officer & copyright details
Passage history
Date introduced: 3 December 2008
House: Senate
Portfolio: Health and Ageing
Commencement: Sections 1 to 3 and all other provisions not listed in item
2 – on Royal Assent
Schedules
1, 2, and 5-7 – the day after Royal Assent
Schedule
3 – a single day to be fixed by Proclamation, or six months after Royal Assent,
whichever is the earlier.
Schedule
4 – 1 July 2009.
Links: The relevant links to the Bill, Explanatory Memorandum
and second reading speech can be accessed via BillsNet, which is at http://www.aph.gov.au/bills/. When Bills have been passed they can
be found at ComLaw, which is at http://www.comlaw.gov.au/.
The Therapeutic Goods Amendment (Medical Devices and Other
Measures) Bill 2008 (the Bill) seeks to amend the Therapeutic Goods Act 1989 (the Act) to:
- align the regulatory framework for medical devices with that of
prescription medicines in instances of national emergency
- put into effect several regulatory changes that were due to be
incorporated in legislation underpinning the now disbanded Australia New
Zealand Therapeutic Products Authority (ANZTPA), and
- improve transparency of TGA processes.[1]
The Therapeutic Goods Administration (TGA) is the principal
regulator of therapeutic goods in Australia. Before a product can be marketed
in Australia it must be registered in the Australian Register of Therapeutic
Goods (ARTG). For therapeutic goods such as medicines and medical devices, the
TGA makes an assessment of the quality, safety and efficacy of the product. The
TGA also has a post-marketing surveillance role and monitors adverse reactions
to therapeutic goods. It operates on principles of risk management, balancing
the maintenance of public health and safety with reducing unnecessary
regulatory burden.
The Act and the Therapeutic Goods Administration
Regulation 1990 (the Regulations) are the primary means by which
therapeutic goods and medical devices are regulated in Australia.[2]
In part, the proposed amendments reflect much of what was
agreed in the context of the ANZTPA. Before ANZTPA was disbanded in 2007, the
TGA undertook a significant consultation process and many of the proposed
changes were agreed upon by stakeholders and Government.
Information about the proposed regulatory reform program was
announced in July/August 2008. The TGA conducted a series of consultations for
each sector; prescription medicines, complementary medicines, over-the-counter
medicines and medical devices. The information presented at these sessions was
made publicly available with extensive material about the regulatory reform process. It was noted by
the TGA that these consultation sessions were intended to provide an
opportunity to discuss how the proposed reforms might be implemented and were
not intended to re-open discussion.[3]
The TGA has described implementation of the reform agenda as
‘an opportunity to reduce regulatory burden across all sectors at the same time.’[4] Reducing regulatory burden was also noted by the Parliamentary Secretary during
the consultation sessions.[5] The changes to the ‘fit and proper person’ test (for the purposes of holding a
manufacturing licence or medical device conformity assessment certificate) and
the additional pharmacopoeias to be used as TGA standards were noted in the
consultation process and have been reflected in the legislation.
As the Explanatory Memorandum is quite comprehensive, this
section of the Digest simply seeks to summarise the key issues raised by the
Bill. The Main Provisions section of the Digest provides more detailed analysis
of some of the amendments proposed in the Bill.
The proposed changes in the Bill are:
- changes to the ‘fit and proper person’ test in relation to the
grant of manufacturing licences and conformity assessment certificates
- inclusion of the United States Pharmacopeia and European
Pharmacopeia as default standards for therapeutic goods
- increased access to information for the public and other
regulatory agencies, including more information on the ARTG and the minutes and
deliberations of expert advisory committees, and
- clarification of the limits and restrictions that apply to advertisements.
The proposed amendments in the Bill would also enable the
Government to stockpile and supply medical devices in situations of medical
emergency without having to satisfy certain requirements usually related to the
regulatory approval by the TGA. Perhaps the most contentious aspect of this
legislation is that these exemptions are not subject to parliamentary
disallowance. This provision has also been extended to pharmaceuticals.
The amendments to the Bill seek to balance the objectives of
the Act while reducing regulatory burden. Overall, the amendments are not
contentious but there are some amendments that warrant further consideration by
the Parliament, such as the exemptions for medical devices and associated
accountability processes.
Conditions on manufacturing licences would now be linked
with the ‘fit and proper person’ test. There would be provision in the
legislation to empower the Secretary[6] to require a licence holder to provide information for the purposes of deciding
whether to suspend a licence under the ‘fit and proper person’ test. A
manufacturing licence can be revoked if the ‘fit and proper person’ test is not
met.
According to the TGA, the proposed changes to the ‘fit and
proper person’ test are designed to improve objectivity and administrative
processes.[7]
Further detail and references to proposed provisions are provided
in the Main Provisions section.
Currently the default standard for submissions to the TGA is
the British Pharmacopeia. This is a collection of standards for UK medicinal
standards and is considered the official source of UK pharmaceutical standards.[8] It details the mandatory standards for active substances, excipients and
formulated preparations.[9] The addition of the European and United States Pharmacopoeias as default
standards would potentially give the pharmaceutical industry greater
flexibility. Sponsors would have to observe all aspects of a given standard.[10]
Another amendment of potential benefit to the pharmaceutical
industry would be the change in the ‘effective date’ in the publication of all
pharmacopoeias. This means that a manufacturer would be able to adopt the
relevant pharmacopoeia at the same time that it comes into effect in that
country. Currently, manufacturers of therapeutic goods have to wait for
determination and gazettal by the Minister.[11]
It is not unusual for regulators to accept other standards
as part of regulatory process. For example, the FDA accepts the use of
alternative pharmacopoeias in limited circumstances.[12] The addition of the United States Pharmacopeia and European Pharmacopeia
reflects the growing trend towards harmonisation of global pharmaceutical
regulation. The TGA has a range of agreements with countries such as Canada,
Europe, Singapore, Switzerland and the United States.[13]
Further detail and references to proposed provisions are
provided in the Main Provisions section.
According to the Government, Schedule 5 is designed to give
greater transparency to information on the ARTG and the deliberations of
Committees that provide advice to the TGA.[14] However, it is clearly stated in the Explanatory Memorandum that these measures
are not designed to provide full inspection to the ARTG.[15] It is anticipated that greater access to the ARTG will be through the TGA
website.
Improved transparency of Committee deliberations would
benefit consumers and other stakeholder groups. The challenge for the TGA will
be to ensure the timeliness of the release of information.
There are also provisions in the Schedule about the release
of information by the Secretary to specific bodies such as regulatory agencies.
References such as ‘Director-General’ and ‘head’ would be removed to allow for
greater information sharing between regulatory agencies. These proposed provisions
would be particularly important during times when there is a need for rapid
sharing of information such as national emergency, pandemics and emerging
disease patterns.
Further detail and references to proposed provisions are
provided in the Main Provisions section.
Currently, direct to consumer advertising of prescription
medication is not permitted in Australia. Advertising for some therapeutic
goods is permitted but this requires pre-approval.[16] Schedule 6 is intended to clarify what advertisements require pre-approval and
the relevant sanctions. It should be noted that this part of the Act does not apply
to advertisements directed towards the medical profession.[17]
The Bill proposes that false or misleading representation
(express or implied) would not be permitted under the Act.[18]
Further detail and references to proposed provisions are
provided in the Main Provisions section.
In normal circumstances, therapeutic goods such as
prescription medicines; over-the-counter medicines; and medical devices must be
listed on the ARTG before they can be marketed in Australia.[19] The Bill contains provisions for medical devices to be stockpiled and supplied
in emergency situations without having to satisfy certain requirements under
the Act for approval by the TGA. These are similar to existing provisions for
therapeutic goods that been in place since 2002 and are also intended to be
used in situations of national emergency, such as bioterrorism or the emergence
of a highly contagious disease.
Further detail and references
to proposed provisions are provided in the Main Provisions section.
Schedules 1 to 7 of the Bill propose amendments in relation
to matters including:
- medical devices
- emergency exemptions in relation to therapeutic goods that are
not medical devices
- ‘fit and proper person’ test
- additional default standards
- information disclosure, and
- advertising.
Item 2 of Schedule 1 of the Bill proposes to insert
new Part 4-6A into Chapter 4 of the Act, containing provisions that
would exempt certain medical devices from requirements under Chapter 4 of the
Act (Medical Devices), so as to allow those medical devices to be stockpiled to
deal with actual or possible emergencies.
Under proposed subsection 41GS(1), the Minister would
have the discretionary power to make a written exemption from the following
requirements:
- essential principles or requirements of medical devices as set
out in the regulations (section 41CA)
- requirements relating to the obligations of manufacturers of
medical devices in relation to conformity assessment procedures, as well as
medical devices classifications, as set out in the regulations (sections 41DA
and 41DB)
- conformity assessment certificates (Part 4-4), and
- including medical devices in the Australian Register of
Therapeutic Goods (Part 4-5).
However, proposed subsection 41GS(2) would limit the
use of that discretion, whereby the Minister could only exercise that
discretion if he or she is satisfied that it would be in the national interest
for the exemption to be made to deal with:
- a possible threat to public health that may be caused by a
possible future emergency, or
- an actual threat to public health caused by an emergency that has
in fact occurred.
Such an exemption would not be a legislative instrument[20] under proposed subsection 41GS(6).
However, under proposed section 41GV, if the Minister
does make such an exemption, the Minister would have to take reasonable steps
to give a copy of either the exemption or the variation/revocation thereof, to
each person who imports, manufactures, supplies or exports the relevant medical
devices.
In addition, there are notification and tabling requirements
under proposed section 41GW.
The exemption would be subject to particular conditions set
out in proposed section 41GT and would be able to be varied or revoked
under proposed section 41GU.
Item 35 of Schedule 1 of the Bill proposes to insert
new Division 3A into Part 4-11 of Chapter 4 of the Act. Division 3A would
contain provisions dealing with offences and civil penalties related to the
proposed exemptions.
Proposed offences include:
- criminal offences for breaching a condition of an exemption (proposed
section 41MNB)
- civil penalties for:
- breaching a condition of an exemption (proposed section 41MNC),
and
- making misrepresentations about medical devices (proposed section
41MND).
Where the breach of a condition of an exemption is likely to
cause serious risk to public health, the maximum penalty is five years
imprisonment and/or 2000 penalty units ($220 000).[21] Where it is a corporation that is found guilty of an offence, the pecuniary
penalty can be up to five times that applying to an individual,[22] hence in this case, the potential penalty for a corporation would be $1.1
million.
Where there is no likelihood of serious risk to public
health, the penalty is proposed to be four years imprisonment and/or 240
penalty units ($26 400).[23]
Note, however, that in both the above instances, it is
proposed that strict liability[24] would apply to the fact that the device is of a kind covered by the exemption
in proposed section 41GS.[25]
Where the offence is a strict liability offence, the penalty
is proposed to be 60 penalty units ($660).[26]
Note that the Bill only refers to ‘penalty’ not ‘maximum
penalty’. This conforms with the amendments proposed in Chapter 7 of the Bill
and it is noted that the aim of these proposed amendments is to conform with
subsection 4B(3A) of the Crimes Act 1914.[27]
It is also noted that these penalties generally conform to
similar penalties in the Act.[28]
The maximum civil penalties are:
- 5000 penalty units or $550 000 for individuals, and
- 50 000 penalty units or $5 500 000 for corporations.
It is also noted that, as with the penalties proposed for
criminal offences, these penalties generally conform to similar penalties in
the Act.[29]
Item 1 of Schedule 2 of the Bill proposes to amend
section 18A of the Act by inserting new subsections (9A) and (9B).
Section 18A provides for emergency exemptions in relation to
therapeutic goods.
The proposed amendments would have the effect that:
- an exemption under subsection 18A(1) would not be a legislative
instrument,[30] and
- if the Minister makes an exemption under subsection 18A(1), the
Minister must take all reasonable steps to inform any person or class of
persons who import, manufacture, supply or export the therapeutic goods to
which section 18A applies, by giving each person a copy of the exemption, or
the variation/revocation thereof.
These proposed amendments are similar to proposed
sections 41GS and 41GV above.
The proposed amendments to the test applied in determining
whether a person is a ‘fit and proper person’ in relation to grants of
manufacturers’ licences and conformity assessment certificates seek to narrow
its scope and make it consistent with similar tests in other legislation.[31]
Items 2-6 of Schedule 3 of the Bill propose to amend section 38 of the Act.
In particular, item 2 proposes to replace
paragraphs 38(1)(g)-(i) of the Act with new paragraphs 38(1)(g) and (h).
Subsection 38(1) generally provides that the Secretary must
grant a manufacturing licence unless the Secretary is satisfied of several
matters, which include:
- the applicant is not a fit and proper person to hold a
licence; or
- a person who is participating in, or is likely to
participate in, managing the applicant’s affairs is not a fit and proper person
to participate in the management of the affairs of a holder of a licence; or
- a person who has, or is likely to have, effective control
over the applicant is not a fit and proper person to have effective control
over a holder of a licence.
Proposed new paragraph 38(1)(g) provides that the
Secretary must be satisfied that, within the 10 year period immediately before
the licence application, at least one of the following persons:
- the licence applicant
- a manager making, or participating in making, decisions affecting
all or a substantial part of the applicant’s affairs, and
- if the applicant is a body corporate, someone who is a major
interest holder, in other words, a person who is either:
- in the position to cast or control the casting of, more than a
fifth of the maximum number of votes that might be cast at the body corporate’s
general meeting, or
- holds more than a fifth of the body corporate’s issued share
capital (excluding what does not carry a right to participate beyond a
specified amount in distribution of profits or capital),[32]
had:
- been convicted of an offence either against the Act or
corresponding State law; or against a Commonwealth, State or Territory law
involving fraud or dishonesty
- been ordered to pay a pecuniary penalty for contravening a civil
penalty provision either of the Act or corresponding State law; or of a
Commonwealth, State or Territory law involving fraud or dishonesty
- breached a condition of a manufacturing licence[33]
- had a manufacturing licence revoked or suspended, or
- been a manager or major interest holder of the body corporate at
the time that the above offence, contravention, breach or suspension/revocation
occurred in relation to the body corporate.
In addition, proposed new paragraph 38(1)(h) would
enable other circumstances to be prescribed by regulations, which could
influence the Secretary’s determination.
Currently, subsection 38(1A) provides for what the Secretary
must consider in determining whether the person meets the ‘fit and proper person’
test above.
Item 3 of Schedule 3 proposes to amend subsection
38(1A) by replacing the existing provisions with a reference to section 19B
of the Crimes Act 1914 or corresponding State or Territory law dealing
with the finding that a person has committed an offence and acting on that
finding, without recording a conviction.
Other items in Schedule 3 of the Bill propose similar
amendments to other provisions in the Act. Examples are as follows.
Section 41 (items 9-11)
Currently, paragraphs 41(1)(a)-(cd) give the
Secretary discretion to suspend or revoke a manufacturing licence in specific
circumstances, generally involving commission of offences, orders being made against
the licencee and associated persons, and such persons not being considered to
be fit and proper persons.
Subsection 41(1A) currently sets out what the
Secretary must consider in relation to the ‘fit and proper person’ test.
Section 41EC (items 13-14)
It is necessary that the medical device, or the
manufacturing processes used to make that device, conforms to legislative
requirements. Conformity assessment of a medical device, which is the
responsibility of the manufacturer of that device,[34] is an examination of the evidence that is generated, and procedures that are
undertaken, by the manufacturer, in deciding whether a medical device is safe
and performs as it should.[35]
Section 41EC currently deals with how applications for
conformity assessment certificates[36] are considered. A conformity assessment certificate is one issued under existing
section 41EE.[37]
Under existing section 41EA, the regulations may prescribe
the kinds of:
- manufacturers of medical devices, or
- medical devices,
in relation to whom conformity assessment certificates must
be issued before applications for the kind of:
- medical devices manufactured by those manufacturers, or
- medical devices,
are included in the Register.
The form of and procedures relating to applications are
provided for in existing section 41EB.
Currently, paragraphs 41EC(3)(a)-(c) set out factors
involving the ‘fit and proper person’ test, which the Secretary must consider
when deciding whether to issue such certificates. Items 13-14 propose
amendments to those paragraphs, which are similar to amendments proposed in items
2-3 of Schedule 3.
Section 41ET (items 18-19)
In addition, items 18-19 propose similar amendments
to paragraphs 41ET(1)(e)-(g) and subsection 41ET(1A). Those
provisions currently set out in what circumstances the Secretary may revoke a
conformity assessment certificate and considerations of the ‘fit and proper
person’ test.
It is noted that the ‘fit and proper person’ test set out in
these proposed provisions are generally consistent with tests used in other
regulatory regimes.[38]
Importantly, items 12 and 22 of Schedule 3
propose to insert new section 41AA, as well as subsections
41ET(4) and 41JA(3) respectively into the Act, which would provide
for spent convictions protections. These protections are part of a Spent
Convictions Scheme (the Scheme), that subject to certain exclusions, aim to
protect against discrimination based on certain previous convictions, once a
particular period of time has passed without the person in question
re-offending.[39]
Schedule 4 of the Bill contains proposals to amend
existing provisions in the Act in relation to default standards.
Certain proposed amendments, such as items 2, 5, 8-9, 11, 13-14, 16-19, simply
delete references to ‘animal(s)’ or ‘British Pharmacopeia (Veterinary), which
reflect that the Act does not regulate therapeutic goods for veterinary use.
Other proposed amendments relate to amending the definitions
of ‘standard’, ‘British Pharmacopeia’, ‘European Pharmacopeia’ and United
States Pharmacopeia-National Formulary, to include the European Pharmacopeia
and United States Pharmacopeia-National Formulary as alternative default
standards to which therapeutic goods must conform, in addition to the existing
default standard —the British Pharmacopeia.
Item 15 proposes to replace existing section 13 of the Act with a new section 13. This proposed amendment generally
reflects the use of additional default standards and the non-application of the
Act to therapeutic products for veterinary purposes.
Items 4-8 of Schedule 5 of the Bill propose to amend subsections 61(3) and (4); as well as paragraphs 61(2)(a), 61(2)(b),
61(3A)(a) and 61(4A)(a)-(ba) of the Act, to the effect that the Secretary
would be able to release information to the organisation rather than simply to
the person in the position of ‘head’ or ‘Director-General’ of that
organisation. The aim is to reduce administrative difficulties in giving
information to another regulatory body when the head of that body cannot be
contacted.[40]
In addition, items 13 and 14 of Schedule 5 of the Bill propose to insert new subsections 61(5AA), 61(5AB), 61(5C) and 61(5D) into the Act, with the effect that the Secretary would be
able to release therapeutic goods information of a kind specified by
legislative instrument, either to a person, body or authority also specified by
legislative instrument that the Secretary would be able to make or to the
public.
The Act and Regulations regulate the advertising of
therapeutic goods[41] and Schedule 6 of the Bill proposes amendments to the Act relating to such
advertising.
The proposed amendments basically restructure Divisions 1-3
of Part 5-1 of the Act dealing with advertisements.
However, it is noted that item 9 of Schedule 6 of the Bill proposes to insert new subsection 42DKB(2) into the Act,
whereby a notice under proposed new subsection 42DKB(1) prohibiting the
publication or broadcasting of an advertisement containing a false or
misleading representation, would not be a legislative instrument.[42]
While it may be argued that overall, the proposed amendments
are not contentious, the following proposed amendments warrant further
consideration by the Parliament.
First, the Bill proposes that certain notices would not be
legislative instruments.[43] If such notices are not legislative instruments, they would not be tabled in
Parliament and not be subject to parliamentary scrutiny and disallowance.
According to the Government, the reason why it proposes that
notices of exemption allowing medical devices and therapeutic goods to be
stockpiled in case of future possible or current actual national emergencies is
because the contents of the stockpile should be classified as ‘confidential’ to
protect it from potential bioterrorists using it to plan attacks for diseases
or other agents for which Australia is not prepared.[44] The question remains, however, that notwithstanding national security, what
systems will be implemented to ensure accountability in relation to such major
decisions?
It is also noted that the following would not be legislative
instruments:
- notices prohibiting advertisements containing misleading and
false representations (proposed subsection 42DKB(2) – item 9 Schedule
6), and
- ministerial orders relating to the non-applicability of standards
in particular circumstances (proposed subsection 13(5) – item 15
Schedule 4),
thereby also removing
such notices from Parliamentary scrutiny and disallowance, raising questions of
necessity, as well as transparency and accountability. A possible compromise would
be that there should be legislative instruments, which would not be subject to
disallowance in accordance with the provisions of section 44 of the Legislative
Instruments Act 2003.
Second, the proposed amendments would give the Minister
discretionary power in relation to certain matters, which include:
- making, varying and revoking exemptions
- specifying persons and bodies to whom therapeutic goods information
may be released
- specifying the kind of therapeutic goods information that may be
released, and
- determining the applicability of standards in certain
circumstances involving therapeutic goods consisting of a mixture of
ingredients or a combination of component parts (proposed subsection 13(5) – item 15 Schedule 4).
However, the proposed amendments do not specify the
parameters underpinning the exercise of that discretion. For example, under proposed
subsection 41GS(2) in item 2 of Schedule 1 of the Bill, references
are made to ‘potential threat to public health’ and ‘possible future emergency’
without including an explanation of how, and on what basis, such matters would
be determined.
The wording is similar to existing subsection 18A(2) of the
Act.
It is also noted that the Regulations do provide for the
establishment of various Committees whose roles include providing specialist
advice to the Minister about various issues, such as standards. These
Committees include:
- Therapeutic Goods Committee (regulation 34),[45] and
- Medical Device Evaluation Committee (regulation 35).[46]
Presumably, in practice, the Minister would consult these
Committees when making decisions proposed under the Bill.
Third, the Bill, itself, does not refer to review mechanisms
of decisions made by the Secretary or Minister. While it is noted that both the
Act[47]and
the Regulations[48] do provide for review of decisions, such review is limited to the types of
decisions listed in the legislation. It does not appear that existing appeal
rights would apply to many of the proposed amendments.
Finally, several important matters would be left to be
specified in regulations yet to be made. This makes it difficult to assess the
likely impact and effect of the proposed amendments, thereby affecting proper
consultation with stakeholders. This is particularly relevant given that the
Government has stated that the financial burden of these proposed amendments
would be cost-recovered from industry.[49]
The aims of the amendments proposed in the Bill are not
disputed. However, notwithstanding national security requirements for Schedules
1 and 2, the means by which such purposes are to be achieved do raise several
concerns.
As there has been little published stakeholder comment about
the proposed amendments it is not possible to comment on stakeholder reactions
or acceptance of the proposed amendments. The absence of such commentary should
not be read as a signal about stakeholder confidence in the operational effects
of the proposed changes. Rather, the issues identified in this Digest point to
the need for more detailed examination of the practicalities of some of the
amendments.
Members, Senators and
Parliamentary staff can obtain further information from the Parliamentary
Library on (02) 6277 2503.
Rebecca de Boer
3 February 2009
Bills Digest Service
Parliamentary Library
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