Therapeutic Goods Amendment (2020 Measures No. 2) Bill 2020


Introductory Info Date introduced: 9 December 2020
House: House of Representatives
Portfolio: Health
Commencement: Schedules 1 to 4 and 7 to 10 commence the day after the Act receives Royal Assent. Schedules 5 and 6 commence two months after the Act receives Royal Assent.

Purpose of the Bill

The purpose of the Therapeutic Goods Amendment (2020 Measures No. 2) Bill 2020 (the Bill) is to make a range of amendments to the Therapeutic Goods Act 1989 (the Act), including to facilitate the availability of prescription medicines during medicine shortages, enable the establishment of a unique device identification database, empower the Minister to make disallowable legislative instruments prohibiting the import, export, supply or manufacture of therapeutic goods where the Commonwealth has international legal obligations to do so and remove a potential impediment to the importation and supply of COVID-19 vaccines in Australia.

Structure of the Bill

The Bill is divided into 10 schedules:

  • Schedule 1 allows pharmacists, in specified circumstances, to substitute a different medicine from the one prescribed where there is a declared medicine shortage
  • Schedule 2 enables the making of Regulations to establish and maintain a unique device identification database for medical devices
  • Schedule 3 protects Australian Public Service (APS) officers in the Department of Health from contravening Commonwealth, state or territory law where they obtain, possess or convey goods for the purposes of identifying if the goods comply with requirements of the Act or the Therapeutic Goods Regulations 1990
  • Schedule 4 allows the making of Regulations to prohibit the import, export, supply or manufacture of therapeutic goods that are prohibited or restricted under international agreements that Australia has ratified
  • Schedule 5 modifies the data protection scheme for assessed listed medicines introduced through the Therapeutic Goods Amendment (2020 Measures No. 1) Act 2020, including allowing sponsors and researchers to publish some information about their research without losing access to the scheme
  • Schedule 6 amends provisions relating to applications for the approval of new ingredients for use in listed and assessed listed medicines, including to make clear that an application lapses if the evaluation fee is not paid within a prescribed period
  • Schedule 7 enables APS officers in the Department of Health who are pharmacists to exercise powers to grant approvals to medical practitioners to supply unapproved therapeutic goods to their patients
  • Schedule 8 allows for the retention of submitted material when an application is withdrawn in relation to new application types
  • Schedule 9 enables the Secretary of the Department of Health to consent to the importation and supply of therapeutic goods that do not have their registration or listing number on the label
  • Schedule 10 makes largely technical amendments to the Act.

This Digest provides information on Schedules 1, 2, 4 and 9. The other Schedules are well explained in the Explanatory Memorandum to the Bill.[1] 

Background

Therapeutic goods

Therapeutic goods are any good that is likely to be taken to be for therapeutic use, or any good that is used as an ingredient or component, or a container for a therapeutic good.[2] Therapeutic use means use in connection with:

  • preventing, diagnosing, curing or alleviating a disease, ailment, defect or injury in persons
  • influencing, inhibiting or modifying a physiological process in persons
  • testing the susceptibility of persons to a disease or ailment
  • influencing, controlling or preventing conception in persons
  • testing for pregnancy in persons or
  • the replacement or modification of parts of the anatomy in persons.[3]

Therapeutic goods then include an extremely broad range of goods, they range from items that can be purchased in a supermarket, such as bandages and vitamins, to over-the-counter and prescription medicines and vaccines, through to complex medical devices such as pacemakers or prosthetic limbs.[4] It also includes biologicals.[5]

Therapeutic Goods Administration

In Australia, therapeutic goods are regulated by the Therapeutic Goods Administration (TGA), which is part of the Commonwealth Department of Health. The TGA regulates the supply, import, export, manufacturing and advertising of therapeutic goods principally under the Therapeutic Goods Act 1989.[6] The TGA administers the Act to ensure that medicines and medical devices are evaluated and regulated for safety, quality and (in some cases) efficacy before they reach the market (pre-market). The TGA also monitors therapeutic goods once they are available on the market (post-market).[7]

Therapeutic goods reforms

The Regulation of therapeutic goods in Australia has been significantly reformed in recent years, largely informed by the 2015 Expert Panel Review of Medicines and Medical Devices Regulation (discussed further below). Reforms have been legislated through the Therapeutic Goods Amendment (2016 Measures No. 1) Act 2017, the Therapeutic Goods Amendment (2017 Measures No. 1) Act 2018, the Therapeutic Goods Amendment (2018 Measures No. 1) Act 2018 and the Therapeutic Goods Amendment (2020 Measures No. 1) Act 2020.

Unique device identification for medical devices

Unique device identification (UDI) regimes are intended to strengthen post-market monitoring of medical devices, thereby supporting patient safety and improved industry outcomes. The TGA has noted:

Demand is growing for improved traceability of medical devices in the supply chain…The development and implementation of the Unique Device Identification Scheme is widely acknowledged by the industry and regulators as an effective means of ensuring timely access to complete, accurate and consistent information about medical devices.[8]

A unique device identifier consists of internationally recognised data that identifies the specific version or model of a device, and potentially additional information such as a batch number, serial number or manufacturing date.[9]

Globally, unique device identification is either fully implemented, in the process of being implemented or is being planned for, in a number of jurisdictions including the United States (U.S.A), the European Union (EU), Canada, and Japan.[10] The International Medical Device Regulators Forum has developed guidance to support consistent development of UDI systems in different jurisdictions, while also recognising the need for country-specific regulatory requirements.[11]

Review of Medicines and Medical Devices Regulation

On 24 October 2014, the Australian Government announced an Expert Panel Review of Medicines and Medical Devices Regulation (the Expert Panel Review). This review was 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 and
  • 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.[12]

The Expert Panel Review provided two reports to the Government in 2015. The first report — included as part of the Explanatory Memorandum — deals with the regulation of medicines and medical devices.

Recommendation 22 of this report called for strengthening of Australia’s post-market monitoring of medical devices, including the establishment of registries for all high-risk implantable medical devices. Device registries provide information about patients, procedures and devices not routinely collected through other means.[13]

While not explicitly recommended, the Panel supported Australia pursuing adoption of UDI, in alignment with international practice and data linkage activities.[14] A UDI system could help underpin any register developed subsequently.

The Government responded to the Review in May 2016. The response deferred consideration of Recommendation 22, explaining:

[E]stablishing and maintaining registries requires careful consideration of the range of registries managed by a variety of organisations and how they could be sustainably managed and funded in the future. Further consultation with stakeholders is required to adequately assess the risks and benefits of establishing registries, and to determine appropriate mechanisms to enable access to the data.[15]

Senate Community Affairs Committee inquiry into transvaginal mesh implants

On 15 February 2017, the Senate referred for inquiry and report, the number of women in Australia who have had transvaginal mesh implants and related matters.

The Committee’s report made recommendations around strengthening post-market monitoring, including that:

… the Australian Government prioritise consideration of the implementation of Recommendation 22 of the report of the Review of Medicines and Medical Devices Regulation recommending the establishment of a registry for all high-risk implantable devices, together with consideration of the feasibility of establishing such a registry on a cost recovery basis.[16]

The Government response, tabled on 10 October 2018, stated that the Government supported considering the feasibility of establishing a clinical quality registry for urogynaecological procedures, and was ‘carefully considering the scope and appropriateness of different types of registries as recommended by the Committee in the context of developing a National Clinical Quality Registry Policy and Funding Strategy.’[17]

TGA consultation on UDI

In January 2019, the TGA released a consultation paper on a Proposal to introduce a Unique Device Identification system for medical devices in Australia. The paper sought feedback on the proposal, whether the TGA or another body should be responsible for establishing and maintaining the database, and the potential scope of regulatory and legislative amendments required.[18]

A total of 49 submissions were received from stakeholders, including industry, research institutions, professional bodies, consumer organisations and government agencies. The TGA stated there was a strong consensus across all stakeholder groups for the need to introduce the UDI system in Australia, with the majority considering the TGA should be responsible for establishing and managing the system.[19]

In September 2020, the TGA released a second consultation paper, Exploring options for the introduction of an Australian Unique Device Identification (UDI) system.[20] Submissions closed on 24 December 2020. Submissions and outcomes from the consultation have not been published at time of writing this Bills Digest.

The consultation paper explores additional implementation considerations, including whether the first phase should be limited to a small number of high-risk devices, possible mechanisms for submitting UDI data, and potential benefits or impacts of drawing on international experience. The TGA stated it will undertake a series of consultations to inform the planning and design of a potential Australian implementation.[21]

The TGA anticipates that the key benefits of implementing a UDI system in Australia will include:

  • better visibility for recalls, and reduced time and effort to locate and remove recalled devices
  • improved post-market surveillance due to the ability to unambiguously identify models of devices on a national, regional and global basis
  • ability for patients and consumers to more easily find information relating to devices
  • improved ability to detect fraudulent devices through the supply chain
  • reduction of the risk of device shortages
  • improved ability for data sharing across regulators and research organisations.[22]

2020–21 Budget

In the 2020–21 Budget, the Government provided $7.7 million over four years from 2020–21 to establish a unique device identification system for implanted medical devices.[23] The Minister for Health said:

Patient safety will be enhanced through the establishment of a Unique Device Identification System for medical devices. The system is an Australian first and will allow tracking and tracing of medical devices that have been implanted in patients. It will enhance the ability for doctors to notify patients quickly if there is a safety issue and strengthen Australia’s post market medical device adverse event system.[24]

A fact sheet on the budget measure further explains:

The UDI system is a key pillar of the Government’s response to the Senate Inquiry into The number of women in Australia who have had transvaginal mesh implants and related matters. It underpins the response to four recommendations made by the Senate Committee relating to post-market surveillance and monitoring throughout the healthcare system.[25]

Medicines shortages

Medicines shortages occur when the supply of a medicine in Australia is not likely to meet normal or projected consumer demand. Due to the multinational nature of the pharmaceutical industry, medicines shortages are a complex global issue. Medicines disruptions occur for a range of reasons including manufacturing or transportation challenges, changes in clinical practice affecting demand, shortages in raw materials, natural disasters or unexpected quality issues.[26]

The Explanatory Memorandum notes that the TGA receives notifications of approximately 150 new medicines shortages every month.[27]

In the context of COVID-19, the TGA notes that there have been temporary local-level disruptions to supply for some medicines driven by increased demand through excessive purchasing (panic buying and stockpiling). Widespread national-level shortages due to COVID-19 are not currently anticipated, however the TGA continues to monitor the situation.[28]

COVID-19 vaccines

The last 12 months has seen massive global effort to develop COVID-19 vaccines. Many vaccine candidates have been developed around the world.

On 18 August 2020, the Government released Australia’s COVID-19 Vaccine and Treatment Strategy, setting out five areas of Government activity: research and development, purchase and manufacturing, international partnerships, regulation and safety, and immunisation administration and monitoring.[29]

On 13 November 2020 the Government released the Australian COVID-19 Vaccination Policy, endorsed by the National Cabinet. This sets out:

  • immunisation policy regulation and governance arrangements
  • the approach to COVID-19 vaccination (including responsibilities across different levels of government)
  • COVID-19 vaccines purchased for Australia
  • rollout of the COVID-19 pandemic vaccination program
  • data and reporting
  • communications strategy.[30]

While most of Australia’s University of Oxford/Astra Zeneca vaccine doses will be manufactured in Australia by CSL, other vaccines purchased by Australia will be manufactured overseas. For example, the Pfizer and BioNTech vaccine will be manufactured in the United States, Belgium and Germany.[31]

The TGA is responsible for regulating vaccines in Australia and assesses vaccines for safety, quality and efficacy before they can be used in Australia. The TGA must register or list any vaccine on the Australian Register of Therapeutic Goods (ARTG) before it may be supplied in Australia.[32]

On 25 January 2021, the TGA granted provisional approval to Pfizer Australia Pty Ltd for its COVID‑19 vaccine. Following review, the TGA decided the vaccine meets the standards required for use in Australia. The approval is subject to strict conditions, such as the requirement for Pfizer to continue providing information to the TGA on longer term efficacy and safety from ongoing clinical trials and post-market assessment.[33]

At that time, the Government stated that its latest advice was that the first doses of the Pfizer vaccine were expected to arrive and be rolled out in late February. It further stated it continues to work with Pfizer on the final date of delivery of vaccines, noting that Pfizer has experienced some temporary production delays from its European manufacturing plant.[34]

On 28 January 2021, representatives from the Department of Health, Pfizer Australia and New Zealand, AstraZeneca Australia and medical peak bodies appeared before the Senate Select Committee on COVID-19 in a hearing focused on vaccinations. The Secretary of the Department of Health, Dr Brendan Murphy, told the Committee that:

… the initial estimate of four million people by the end of March—which was predicated on the certainty of supply of our initial doses of Pfizer and international AstraZeneca vaccine—because of the supply chain issues with Pfizer and AstraZeneca, may extend into early April by a week or so … We're still not sure about some of those international supplies. What we are sure about is the vast majority of our supply, which is locally produced and coming online, hopefully, in March and will give us absolute security and a ramp-up of supply.[35]

On 27 January 2021, the Australian Government launched a $23.9 million public information campaign to encourage Australians to get a COVID-19 vaccine.[36]

News and information about the development, approval process and plans for COVID-19 vaccines is available from the Department of Health’s COVID-19 vaccines website.

Committee consideration

Senate Selection of Bills Committee

In Report No. 12 of 2020 the Senate Selection of Bills Committee noted that it had deferred consideration of the Bill until its next meeting.[37]

Senate Standing Committee for the Scrutiny of Bills

The Scrutiny Committee had no comment on the Bill.[38]

Policy position of non-government parties/independents

At the time of writing, no comment by non-government parties or independents specifically relating to the Bill had been identified.

Position of major interest groups

At the time of writing, no comment by major interest groups specifically relating to the Bill had been identified.

As noted earlier, the TGA has undertaken public consultation on the development of unique device identification database in Australia. The TGA summary of feedback received on the first consultation paper stated ‘Submissions received in response to the consultation showed a strong consensus across all stakeholder groups for the need to introduce the UDI system in Australia’.[39] The peak body for the medical technology industry in Australia, the Medical Technology Association of Australia (MTAA), supports an Australian UDI database being established and managed by the TGA.[40]

Financial implications

The 2020–21 Budget provides $7.7 million over four years (from the TGA’s cash reserves) to establish a unique device identification database for medical devices.[41] This is not a direct cost of the Bill however, which simply enables the establishment of the UDI system.

The Explanatory Memorandum notes implementation of all other measures will be funded through the TGA’s current cost recovery mechanisms, where costs of administering the Act are fully recovered from industry.[42] The TGA charges fees for services such as product evaluations and also imposes annual charges on regulated industries to recover the cost of monitoring and compliance activities.[43]

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 because it promotes the right to health, and because any engagement with the right to privacy is reasonable, necessary and proportionate.[44]

Parliamentary Joint Committee on Human Rights

At the time of writing, the Committee had not commented on the Bill.[45]

Key issues and provisions

Substitution of prescription medicine by pharmacists (Schedule 1)

Section 4 of the Act sets out the legislation’s objects, which are, within Constitutional boundaries, to provide:

  • for the establishment and maintenance of a national system of controls relating to the quality, safety, efficacy and timely availability of therapeutic goods that are used in Australia (whether produced in Australia or elsewhere) or exported from Australia and
  • a framework for the states and territories to adopt a uniform approach to control the availability and accessibility, and ensure the safe handling, of poisons in Australia.

Item 1 of Schedule 1 inserts an additional object for the Act, being to provide for a scheme allowing pharmacists to substitute certain medicine for other medicine if the Minister has declared there is a serious scarcity of the other medicine.

Item 2 inserts new Division 2C—Substitution of prescription medicine by pharmacists into Part 3‑2 of the Act, which deals with the registration and listing of therapeutic goods. New Division 2C contains proposed sections 30EK and 30EL.

Making of a serious scarcity declaration

Proposed subsection 30EK(1) allows the Minister to declare, by legislative instrument, that there is a serious scarcity of a specified medicine and specify a substitutable medicine that pharmacists can dispense (a serious scarcity declaration). The scarcity may be Australia-wide or in a specified part of Australia. The instrument may also specify circumstances where substitution is permitted. For example, proposed subsection 30EK(4) indicates this may specify a class of persons for whom the substitutable medicine is suitable or not suitable.

Criteria for serious scarcity declarations

Proposed subsection 30EK(2) sets out pre-conditions for making the instrument, namely that the Minister is satisfied:

  • that the supply of a scarce medicine in Australia is not currently meeting the demand for that medicine[46] and/or that there is imminent risk that the supply of the scarce medicine in Australia will not, or will not be likely to, meet the demand for that medicine[47] and
  • that there is a significant risk of adverse health consequences for patients in Australia if those patients are unable to take the scarce medicine[48] and
  • of any other matters prescribed by the Regulations for the making of such declarations.[49]

Medicines to which a serious scarcity declaration may apply

Proposed subsection 30EK(3) specifies the kinds of medicine that can be covered through this scheme. Both the scarce medicine and the substitutable medicine must be a medicine that includes one or more substances included in Schedule 4 to the Poisons Standard, but does not contain any substances included in Schedule 8 to that standard.

Medicines and poisons are classified into schedules according to the level of regulatory control over the availability of the substance required to protect public health and safety.[50] These schedules are published in the Poisons Standard and given legal effect through state and territory legislation.

Proposed paragraph 30EK(3)(a) limits coverage to Schedule 4 medicines, which are prescription only medicines. Proposed paragraph 30EK(3)(b) explicitly provides that the scheme cannot be used for any Schedule 8 substances. Schedule 8 relates to controlled drugs, which are substances available for use but require restriction of manufacture, supply, distribution, possession and use to reduce abuse, misuse and physical or psychological dependence.[51] Cocaine, ketamine, and morphine are examples of Schedule 8 substances.

Dispensing substitutable medicines

Proposed section 30EL authorises a pharmacist to dispense a substitute medicine in accordance with an instrument in force under subsection 30EK(1). This authorisation permits the medicine to be dispensed, even if this would otherwise be a contravention of a law of a State or Territory, so long as the serious scarcity declaration applies.

Duration and delegation

Serious scarcity declarations made under proposed section 30EK(1) will remain in force for the period specified in the instrument, unless sooner revoked.[52] There is no proposed requirement that the Minister revoke the serious scarcity declaration should they no longer be satisfied that the criteria for making such a declaration applies.

Item 3 inserts a new subsection into section 57, which provides for delegation under the Act. Proposed subsection 57(10AA) allows the Minister’s power to make a legislative instrument under section 30EK(1) to be delegated to the Secretary of the Department of Health, or to an SES employee, or acting SES employee, in the Department.

Unique Device Identification system (Schedule 2)

Schedule 2 inserts new provisions into the Act to allow for the creation of regulations establishing and maintaining a database of unique device identifiers of medical devices. The detail of the database and how it would operate is largely left to regulation, with the Bill focused on providing broad scope for regulations on the establishment and operation of a database and specifying limitations on personal information that can be included and published.

Definitions

‘Medical device’ is defined by section 41BD of the Act, as any ‘instrument, apparatus, appliance, software, implant, reagent, material or other article’ that is

  • intended to be used by human beings in regard to a wide range of uses related to disease, injury, disability, anatomy, contraception, and in vitro examination of a specimen derived from the human body for a specific medical purpose and
  • does not achieve its principal intended action in or on the human body by pharmacological, immunological or metabolic means.

The Secretary has broad powers to specify:

  • by notice, that a particular ‘instrument, apparatus, appliance, software, implant, reagent, material or other article’ is a medical instrument. This notice is not a legislative instrument and is not disallowable[53]
  • by legislative instrument, that a particular class of ‘instrument, apparatus, appliance, software, implant, reagent, material or other article’ is a medical instrument. This legislative instrument is disallowable[54]
  • by order, that a particular ‘instrument, apparatus, appliance, software, implant, reagent, material or other article’ or class of such are not medical devices.[55]

A definition for the unique device identifier of a medical device is inserted into subsection 3(1) of the Act through item 1 of Schedule 2 to the Bill, being any combination of numbers, symbols or letters given to the device to enable identification of the device.

Regulations for a database of unique device identifiers

Item 4 inserts new Division 3—Database of unique device identifiers of medical devices within Part 4-2 of the Act, which deals with essential principles and standards for medical devices. Proposed Division 3 comprises proposed section 41CE, concerning a database of the unique device identifiers of medical devices.

Proposed subsection 41CE(1) allows for the making of Regulations whereby the Secretary of the Department of Health may establish and maintain a database known as the Australian Unique Device Identification Database (or another name as prescribed by Regulations).

Proposed subsection 41CE(2) specifies that the Regulations must provide that the database must not include personal information except in specific circumstances. The Explanatory Memorandum explains that:

This reflects that the information in the database will principally be focussed on the medical devices themselves and related information, rather than on persons, but that these very specific instances of personal information will be important to include in the database in order to support the identification and traceability of medical devices and the ability to contact manufacturers and sponsors in relation to any safety concerns.[56]

Under the definition inserted by item 1, personal information has the same meaning as in the Privacy Act 1988.[57]

Proposed subsections 41CE(3) and (4) enable the Regulations to provide for the removal of, or corrections to, information in the database.

Proposed subsection 41CE(5) enables the Regulations to provide for the database, in whole or in part, to be made publicly available or made available to specified persons, authorities or bodies. As noted in the Explanatory Memorandum, this could include health departments, overseas regulators or research bodies.[58]

Proposed subsection 41CE(6) specifies that personal information covered by proposed paragraphs 41CE(2)(b) and (c) must not be made publicly available. That is, information about an authorised representative of the manufacturer of a medical device or about an authorised representative of a person in relation to whom a kind of medical device is included in the Register. By not referencing paragraph 41CE(2)(a), the Bill leaves open the possibility that the name of a person in relation to whom a kind of medical device is included in the Register can be made publicly available. The Explanatory Memorandum notes that this information would arise principally where the person in relation to whom a device is included in the Register is an individual rather than a company or business.[59]

Section 41CA of the Act provides that Regulations may set out requirements for medical devices. Item 3 inserts proposed subsection 41CA(3) specifying that these Regulations may include requirements relating to including unique device identifiers and other related information into the database.

International agreements (Schedule 4)

Schedule 4 inserts new Chapter 2A into the Act, providing for regulations to be made to prohibit the import, export, manufacture or supply of therapeutic goods where this is to give effect to international agreements that Australia is a party to.

The Explanatory Memorandum notes that similar mechanisms exist elsewhere in Commonwealth legislation. For example, it cites section 69C of the Agricultural and Veterinary Chemicals (Administration) Act 1992, which provides for regulations prohibiting the import, manufacture, use or export of certain chemical products under international agreements.

The Explanatory Memorandum explains that these arrangements are being proposed to create preparedness for the anticipated ratification of the Minamata Convention on Mercury (the Minamata Convention) as well as possible future international agreements.[60]

Background: the Minamata Convention on Mercury

The Minamata Convention is a global treaty seeking to protect human health and the environment from the adverse effects of mercury.[61] Australia signed the treaty in 2013 but has yet to ratify.[62]

The Department of Agriculture, Water and the Environment (DAWE) is the lead agency for Australia’s engagement on the Minamata Convention. In 2014, the then Department of the Environment undertook public consultation on the impacts of Australia meeting the obligations of the Minamata Convention.[63] In late 2016, the then Department of the Environment and Energy released an Exposure Draft – Final Regulation Impact Statement and costs and benefits assessment on the ratification of the Minamata Convention, seeking views on the options and impact on Australia of meeting the obligations of the Convention.[64] The Department’s website states that DAWE is preparing a National Interest Analysis and Regulatory Impact Statement to be considered by the Joint Standing Committee on Treaties (JSCOT) before a final decision is made by the Australian Government.[65]

Application: making of regulations under proposed s9K

Proposed Chapter 2A of the Act contains proposed sections 9J to 9N.

If therapeutic goods are the subject of an international agreement that the Minister is satisfied requires the parties to the agreement to ‘take steps to prohibit or restrict one or more of the import, export, manufacture and supply of certain goods’, regulations may be made prescribing that international agreement and prohibiting one or more of the following:

  • the import into Australia
  • the export from Australia
  • the manufacture in Australia
  • the supply in Australia

of the therapeutic goods.[66]

Such a prohibition may be absolute or subject to conditions.[67]

Similarly, if an ingredient or component of therapeutic goods is the subject of an international agreement that the Minister is satisfied requires the parties to the agreement to ‘take steps to prohibit or restrict one or more of the import, export, manufacture and supply of goods containing that ingredient or component’, regulations may be made prescribing that international agreement and prohibiting one or more of the following:

  • the import into Australia
  • the export from Australia
  • the manufacture in Australia
  • the supply in Australia

of all or specified therapeutic goods that contain that ingredient or component.[68]

Such a prohibition may be absolute or subject to conditions.[69]

Proposed subsection 9K(6) requires the Minister to publish on the Department’s website details of the international agreement, confirmation of the Minister’s satisfaction that the agreement requires Australia to take steps to prohibit or restrict the import, export, manufacture and/or supply of certain goods (including those that contain a specified compound or ingredient) and the proposed prohibition, at least 30 days before regulations are made. This will provide a transparent record of the Minister’s satisfaction that the terms of the Act are satisfied prior to making regulations.

Proposed subsection 9K(7) specifies that the regulations cannot commence ahead of the international agreement entering into force for Australia. Proposed section 9N clarifies that proposed Chapter 2A relies on the Commonwealth’s external affairs power under paragraph 51(xxix) of the Constitution.

Administration of section 9K Regulations

As set out above, Regulations made under proposed section 9K may impose an absolute or conditional prohibition on relevant goods.[70] Without limiting any conditions that may be imposed, proposed subsection 9K(8) would allow the Regulations to confer power on the Minister or the Secretary to make a decision of an administrative character, refer to the Minister or Secretary as being satisfied of a particular matter and allow the Minister or Secretary to delegate relevant powers to an SES employee or acting SES employees within the Department.

Offences

Proposed section 9L creates an offence and civil penalty.

Proposed subsection 9L(1) creates an offence if a person imports, exports, manufactures or supplies therapeutic goods in contravention of an absolute prohibition or one or more conditions of a prohibition, which is subject to a maximum penalty of 300 penalty units.[71] As the Bill does not specify any fault elements for this offence, the fault element would be one of intention.[72]

Proposed subsection 9L(2) creates an equivalent civil penalty, with a maximum civil penalty of 300 penalty units for an individual and 3,000 penalty units for a body corporate.[73]

The Explanatory Memorandum notes these penalties are commensurate with comparable mechanisms in the regulatory regime for agricultural and veterinary products.[74] The proposed offence and civil penalty add to the existing arrangements in the Act to prevent harm from therapeutic goods, for example criminal offences for importing, supplying or exporting goods that do not comply with standards are set out in section 14 of the Act, while a similar civil penalty scheme is set out in section 14A.

Proposed section 9M allows for specified provisions of the Customs Act 1901 to apply where the importation or exportation of goods is an offence or contravention under proposed section 9L and the Secretary of Health notifies the Comptroller-General of Customs that the Secretary wishes the Customs Act 1901 to apply. In such a case the goods included in the importation or exportation will be forfeited to the Crown.[75]

Consequential amendments

Items 2–26 in Schedule 4 to the Bill amend the Act to make several consequential amendments to incorporate the prohibition mechanism in proposed section 9K. The Explanatory Memorandum provides further detail.[76]

Application provisions contained in items 27–30 clarify that the amendments are not retrospective and will only apply to applications for the listing, registration or manufacture of therapeutic goods made on or after the commencement of the Schedule.

Interaction with Australia’s treaty-making process

The stated purpose of Schedule 4 is to enable the Commonwealth to meet its international legal obligations regarding the Minamata Convention. The potential scope of this power however is not limited to this Convention and its subject matter (mercury) but extends to any therapeutic good which the Minister is satisfied Australia is required to prohibit or control as a party to an international agreement.

The Bill does not constitute treaty action as it does not relate specifically to the Minamata Convention or any other international agreement; it only provides for regulations to be made that would then give effect to international agreements.

The Explanatory Memorandum states that ‘the regulations would then become part of the treaty-making process and would be subject to the Joint Standing Committee on Treaties (JSCOT) recommendation and the Australian Government decision to ratify’.[77]

Any proposal for Australia to join a new treaty would be subject to Australia’s usual treaty-making process, including scrutiny by JSCOT. Given that proposed subsection 9K(2) requires the Minister to be satisfied that the agreement requires parties to take steps to prohibit or restrict the import, export, manufacture or supply of certain goods, the use of regulations to implement the treaty would be expected to be covered in some form in the National Interest Analysis provided to JSCOT for future treaties. This would provide JSCOT visibility and opportunity to comment on the use of these arrangements to control therapeutic goods. If the specific amendments to the Regulations were not included as part of the National Interest Analysis, it would remain open to JSCOT to consider whether further scrutiny is appropriate, noting the broad scope of the Committee to inquire into and report on ‘matters arising from treaties and related National Interest Analyses and proposed treaty actions and related Explanatory Statements presented or deemed to be presented to the Parliament.’

While the Explanatory Memorandum notes the intention is to provide preparedness for other possible future international agreements,[78] there does not appear to be any restriction on the Minister also using the proposed arrangements in relation to international agreements that Australia has already ratified, if satisfied they require Australia to take steps to prohibit or restrict the import, export, manufacture or supply of certain therapeutic goods. It would be open to JSCOT to inquire into any regulatory amendments made in this situation. 

Consents to importations or supplies of therapeutic goods (Schedule 9)

Background: Prohibition on importation and supply of goods not correctly labelled

Subsections 19D(3) and (4) of the Act establish civil penalties for the importation or supply of therapeutic goods in Australia where the registration number (AUST-R) or listing number (AUST-L) is not set out on the label of the goods in the required manner. The maximum penalty for contravention of these sections is 200 penalty units for an individual and 2,000 for a body corporate.[79]

All medicines in Australia must be included in the Australian Register of Therapeutic Goods (ARTG). The TGA divides the register into two types of medicines:

  • Registered: Certain medicines assessed as having a higher level of risk must be registered (AUST R), and are assessed for safety, quality and efficacy before going on sale. The TGA also approves the medicine’s label before it reaches the market. All prescription medicines and most over-the-counter medicines are registered medicines.
  • Listed: Lower risk medicines made with a list of pre-approved ingredients are considered listed medicines, are subject to reduced regulatory requirements and can be purchased off the shelf.

Medicines approved for supply in Australia must display an ARTG number, commencing ‘AUST-R’ for registered medicines and ‘AUST-L’ for listed medicines. [80]

Schedule 9 Amendments: Power of Secretary to consent to unlabelled import or supply of goods.

Schedule 9 of the Bill amends section 19D of the Act to allow a mechanism for therapeutic goods to be imported into or supplied in Australia without the required labelling. The Explanatory Memorandum explains this is intended to remove a potential impediment to the importation and supply of COVID-19 vaccines in Australia.[81] Specifically, that ‘inclusion of the AUST-R may not be possible for some COVID-19 vaccines, for example if they are required to be stored at particularly low temperatures or if it is not possible to include the number when they are manufactured in another country’.[82]

For context, mRNA COVID-19 vaccines need to be stored at extremely low temperatures. The Pfizer Vaccine (BNT162b2) recently provisionally approved for use within Australia needs to be stored at -70°C.[83]

Items 1 and 2 modify the terms of the civil penalty provisions set out in subsections 19D(3) and (4) by providing that a person would not contravene the subsection if they have consent in writing from the Secretary of the Department of Health. That is, the Secretary could consent to importing or supplying registered or therapeutic goods that do not have the required labelling.

Item 3 inserts proposed subsections 19D(6) and (7). Proposed subsection 19D(6) requires the Secretary, as soon as practicable after making a decision to give consent, to publish the decision on the Department’s website.

Proposed subsection 19D(7) requires the Secretary, within 28 days of having made a decision to refuse to give consent, to notify the applicant in writing of the decision and the reasons for it. The amendments do not specify how such applications are made, any factors that the Secretary must consider in making a decision, or in what period the Secretary must decide to grant or refuse consent upon receiving an application.

While the Explanatory Memorandum advises the amendments are intended to facilitate importation and supply of a potential COVID-19 vaccine, the Secretary consent mechanism is not specific to any particular type of medicine and could be used in other circumstances. The Explanatory Memorandum notes:

… it is anticipated that in the future (other than in relation to COVID-19), such consents will principally be appropriately targeted at circumstances where there is a national public health emergency, for example a pandemic as declared by the WHO. It may also be likely that this power would principally be delegated to the Deputy Secretary classification level and that consideration would be given to limiting any consent for a short period of up to 6 to 12 months.[84]

The Secretary’s power to give consent could be delegated under section 57(1) of the Act. Note that while the Explanatory Memorandum indicates the Government would likely not delegate below the Deputy Secretary classification, the Act does not restrict delegation in this way. The Bill also does not make any specific provisions regarding the duration of a consent the Secretary may give.

Other provisions

Schedules 3, 5, 6, 7, 8 and 10 amend a range of provisions of the Act and are adequately explained in the Explanatory Memorandum.

Concluding comments

The Bill introduces many amendments to the Act across diverse issues ranging from providing another mechanism to deal with medicine shortages to enhancing post-market monitoring capabilities.

Moves to establish a unique device identification system have been the subject of extensive consultation with the sector and the proposed system appears to have broad support, although the detail of implementation is yet to be seen as part of Regulations.

The amendments proposed in Schedule 4 give the Minister broad powers to make regulations to prohibit the import, export, manufacture and supply of products containing substances that are prohibited or restricted under an international agreement that the Australian Government ratifies.

Providing a mechanism for Secretary consent to importation and supply of goods without required labelling appears to be a pragmatic approach to respond to a potential impediment to timely availability of COVID-19 vaccines.