Consultation (Draft) Regulation Impact Statement - …...In addition to meeting the primary objective of the Treaty, the regulation review project fits strategically into the objectives

Address: PO Box 100 Woden ACT 2606 Website: www.tga.gov.au Telephone: 02 6232 8162 Facsimile: 02 6232 85775 ABN 40 939 406 804

CONSULTATION (DRAFT) REGULATION IMPACT STATEMENT

An impact statement on the proposed

amendments to the current regulatory

system for herbal and homoeopathic medicines

in Australia

May 2006

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Regulation Impact Statement Proposed amendments to the regulation of herbal and homoeopathic medicines in Australia – May 2006

This Regulation Impact Statement (RIS) has been prepared to address the changes that are proposed in the draft Medicines Rule, to the way in which herbal and homoeopathic medicines are currently

regulated in Australia.

The draft Medicines Rule was published for consultation on 23 May 2006 and is available at: <http://www.anztpa.org/consult/consdocs1.htm>

http://www.anztpa.org/consult/consdocs1.htm

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TABLE OF CONTENTS

ACRONYMS / ABBREVIATIONS ........................................................................................4

1. INTRODUCTION ..........................................................................................................5

2. BACKGROUND .............................................................................................................5

2.1 Expert Committee....................................................................................................5 2.2 Trans Tasman Therapeutic Products Agency..........................................................6 2.3 Government Response to the Recommendations of the Expert Committee ...........6 2.4 The Role of the Therapeutic Goods Administration (TGA) ...................................7

3. PROBLEM ......................................................................................................................7

3.1 Homoeopathic Medicines........................................................................................8 3.2 Herbal Medicines ....................................................................................................9

4. OBJECTIVE .................................................................................................................11

5. CONSULTATION........................................................................................................12

5.1 Consultation to Date..............................................................................................12 5.2 Consultation on this Regulation Impact Statement ...............................................13

6. OVERALL ASSESSMENT OF COSTS.....................................................................14

7. IMPLEMENTATION ..................................................................................................15

REGULATION OF HOMOEOPATHIC MEDICINES .....................................................16

8. IDENTIFICATION OF OPTIONS ................................................................................17

9. IMPACT ANALYSIS.....................................................................................................18

9.1 Affected Parties .....................................................................................................18 9.2 Effect on Existing Regulations..............................................................................19 9.3 Impact on Stakeholders .........................................................................................24

10. CONCLUSION AND RECOMMENDED OPTION.....................................................34

REGULATION OF HERBAL MEDICINES.......................................................................35

11. IDENTIFICATION OF OPTIONS ................................................................................35

12. IMPACT ANALYSIS.....................................................................................................37

12.1 Affected Parties .....................................................................................................37 12.2 Effect on Existing Regulations..............................................................................37 12.3 Impact on Stakeholders .........................................................................................38

13`. CONCLUSION AND RECOMMENDED OPTION.....................................................45

REFERENCES........................................................................................................................46

APPENDIX 1 – Regulation Impact Statement for the Government Response to the Recommendations of the Expert Committee on Complementary Medicines in the Health System

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ACRONYMS / ABBREVIATIONS ARGCM Australian Regulatory Guidelines for Complementary Medicines ARTG Australian Register of Therapeutic Goods ASMI The Australian Self-Medication Industry Incorporated ANZTPA Australia New Zealand Therapeutic Products Authority ECCMHS Expert Committee on Complementary Medicines in the Health System CHC Complementary Healthcare Council (of Australia) CMEC Complementary Medicines Evaluation Committee CRIS Cost Recovery Impact Statement DoHA (Australian Government) Department of Health and Ageing GMP Good Manufacturing Practice JAEG Joint Agency Establishment Group (of the TGA and Medsafe) MDOs Managing Director’s Orders (will replace TGOs in the ANZTPA) Medsafe New Zealand Medicines and Medical Devices Safety Authority MinCo Therapeutic Products Interim Ministerial Council (Aust & NZ) aka TPIMC NCCTG National Co-ordinating Committee on Therapeutic Goods NMP National Medicines Policy 2000 NPMB Non-Prescription Medicines Branch (of the TGA) NPNZ Natural Products New Zealand Inc NZSMI New Zealand Self-Medication Industry Association Incorporated NZ New Zealand OCM Office of Complementary Medicines (of the TGA) OICG OCM / Industry Consultation Group OLD Office of Legislative Drafting (within the ORR) ORR Office of Regulation Review OTC Over-the-counter RIS Regulation Impact Statement SUSDP Standard for the Uniform Scheduling of Drugs and Poisons (incorporated into

State and Territory poison’s legislation) TGA Therapeutic Goods Administration TGOs Therapeutic Goods Orders (will be replaced by MDOs in the ANZTPA) TPIMC Therapeutic Products Interim Ministerial Council (Aust & NZ) aka MinCo

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1. INTRODUCTION This Regulation Impact Statement (RIS) has been prepared to address the proposed changes to the way in which herbal and homoeopathic medicines are currently regulated in Australia. While some aspects of the proposed regulatory changes are common to both types of medicines, other aspects such as options and impacts are different. Accordingly, this RIS has been formatted to address the common aspects at the beginning of the document and the remainder of the document is divided, to separately address the issues relating to the regulation of the two different types of medicines. The Therapeutic Goods Administration (TGA) invites comment from stakeholders on the issues raised in this Consultation (Draft) RIS. In particular, stakeholders are asked to comment on the costs and benefits of the proposed and alternative options including:

- effects on small business and restrictions on competition;

- the effect that the proposed regulation would have on the supply of affected products;

- the time and cost imposts on industry;

- the effects of any perceived increase in the complexity of regulatory requirements; and

- a quantification of compliance costs (particularly from Homoeopathic manufacturers and importers in relation to GMP).

2. BACKGROUND

2.1 Expert Committee Following the recall of more than 1,600 medicines in Australia in April 2003, an Expert Committee was established (by the Parliamentary Secretary to the Minister for Health and Ageing) to undertake a high level review of complementary medicines in the Australian health system. The Expert Committee made 49 recommendations1 including:

Recommendation 10:

Homoeopathic medicines and related remedies making therapeutic claims be regulated to ensure that they meet appropriate standards of safety, quality and efficacy and that:

(a) the TGA, in consultation with stakeholders, undertake a review of the regulation of homoeopathic medicines and related remedies making therapeutic claims;

(b) the review take into account the need to clearly differentiate these medicines from other complementary medicines.

Recommendation 11: The TGA, in consultation with stakeholders, and as a matter of priority, progress the review of the regulation of medicines containing herbal ingredients undertaken by the Complementary Medicines Evaluation Committee (CMEC), to ensure that these medicines meet appropriate standards of safety, quality and efficacy.

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2.2 Australia New Zealand Therapeutic Products Authority (ANZTPA) In December 2003, the Australian and New Zealand Governments signed an agreement, to establish a joint regulatory scheme for therapeutic products (the Treaty). In order to meet the primary objective of the Treaty, (to protect public health and safety in Australia and New Zealand by establishing a joint scheme consistent with international best practice for the regulation of the quality, safety, and efficacy of therapeutic products), the scope of Recommendations 10 and 11 has been extended beyond the Australian regulatory system, to include New Zealand. In addition to meeting the primary objective of the Treaty, the regulation review project fits strategically into the objectives of the National Medicines Policy2 (NMP) by attempting to establish a harmonised system for the regulation for herbal and homoeopathic medicines between Australia and New Zealand. The extensive consultation process used to inform the development of the new regulatory system satisfies the requirements of the Therapeutic Goods Administration (TGA) Business Plan, Non-Prescription Medicines Branch (NPMB) Mission Statement, and best practice principles. In summary, a comprehensive review of the regulation of herbal and homoeopathic medicines complies with the Government Response to Expert Committee Recommendations 10 and 11, and meets the needs of the ANZTPA in establishing an appropriate system of regulation for herbal and homoeopathic medicines in Australia and New Zealand.

2.3 Government Response to the Recommendations of the Expert Committee The Government released its Response3 to the Expert Committee’s recommendations on 9 March 2005. As anticipated, the Government Response accepted Expert Committee Recommendations 10 and 11. In accepting these Recommendations it was noted that:

“Implementation will involve consultation with affected stakeholders in Australia and New Zealand. This requirement would be introduced under arrangements for the trans Tasman therapeutic products regulatory agency.”

Included in the Government Response (as Attachment 2) was a Regulation Impact Statement (RIS) which addressed four Expert Committee Recommendations including Recommendation 10. A copy of the ‘Government Response’ RIS is included as Appendix 1 to this document.

The ‘Government Response’ RIS identified three options for managing the regulation of homoeopathic medicines. These options have been addressed in this document under the section entitled Identification of Options. In addition, the Implementation section of the ‘Government Response’ RIS contained the following advice:

“The TGA or its successor agency will undertake a review of the regulation of homoeopathic medicines, in consultation with stakeholders in Australia and New Zealand, with a view to developing proposals for the regulation of these products to ensure they meet appropriate standards of quality, safety and efficacy. It is likely that this review will be completed under the auspices of the proposed trans Tasman therapeutic products regulatory agency, which is due to commence in mid-2005, and that the proposals developed will be considered by the Therapeutic Products Ministerial Council responsible for the new joint agency. The Council will consist of the Minister for Health and Ageing and the New Zealand Minister of Health.

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As part of the development of more detailed proposals for the regulation of homoeopathic medicines, a further RIS will be prepared by the responsible agency that will examine the impacts of all options including the status quo.”

2.4 The Role of the Therapeutic Goods Administration (TGA) The Therapeutic Goods Act 1989 (the Act) sets out the legal requirements for the import, export, manufacture and supply of medicines in Australia. The objective of the Act is to provide a national framework for the regulation of therapeutic goods in Australia, and to ensure their quality, safety and efficacy, and timely availability.

The Act, Regulations and Therapeutic Goods Orders (TGOs) set out the requirements for inclusion of therapeutic goods in the Australian Register of Therapeutic Goods (ARTG), including advertising, labelling, product appearance and appeal guidelines. Some provisions such as the scheduling of substances and the safe storage of therapeutic goods are covered by the relevant State or Territory legislation.

The Therapeutic Goods Administration (TGA) is a unit of the Australian Government Department of Health and Ageing and is responsible for administering the provisions of the legislation. In relation to the implementation of Expert Committee Recommendations 10 and 11, the Expert Committee recommended that “overall accountability for implementing the Committee’s recommendations be clearly assigned to a single body.” This was supported in the Government Response, which stated:

“The TGA will assume the coordinating role on behalf of the Government for overall accountability for the implementation of the recommendations as agreed in the Government Response, in consultation with other Australian and New Zealand Government agencies where appropriate.”

3. PROBLEM The use of complementary therapies and complementary medicines in Australia is widespread4. In 20005, it was estimated that 52 per cent of the population used at least one non-medically prescribed complementary medicine and that 23 per cent visited at least one complementary healthcare practitioner. The estimated monetary outlay on complementary medicines was reported by MacLennan et al6 to be nearly twice the patient expenditure on pharmaceutical medicines during 1992–1993. Specific information regarding the size of the complementary medicines market is difficult to find. The Australian Bureau of Statistics (ABS) does not recognise a separate complementary medicines sector when compiling market data (information is dispersed among other ABS data pertaining to the food, grocery, pharmaceutical and cosmetics sectors). Collection of comprehensive data on the size and growth of the industry is further complicated by the lack of a single representative body that collects and collates industry data. However, the following information in relation to industry size etc was included in the Expert Committee’s Report:

- the domestic sales of the consumer healthcare product sector of the Australian medicines manufacturing industry was estimated in 2003 to be approximately $1.5 billion per annum”7

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- Industry estimates in 2003 suggested that the annual retail turnover of complementary medicines in Australia was approximately $800 million, with an additional 20 per cent of Australian output being exported.

There is a general expectation in the Australian community that therapeutic products should be safe, effective and of high quality, and that the Government will set standards and regulations to meet these expectations. At the same time, those who manufacture and market therapeutic products expect that regulation will be the minimum necessary, appropriate and commensurate with the assessed risks of their respective products, and consistent with practice in countries with similar public health regulatory policy. The current Australian regulatory system for therapeutic goods aims to protect public health and safety while seeking to minimise compliance costs. In order to do this, the TGA adopts a risk management approach8 in undertaking its regulatory roles, by identifying, analysing, evaluating and treating the risks posed by therapeutic goods (including herbal and homoeopathic medicines). In essence, this means that the TGA:

- identifies, assesses and evaluates the risks posed by therapeutic goods; - applies any measures necessary for treating the risks posed; and - monitors and reviews the risks over time.

The Expert Committee recommended reviews of the current regulatory system for herbal and homoeopathic medicines, because of concerns that many products supplied in the Australian market may not comply with appropriate standards of quality and safety. This concern was acknowledged in the Government Response, which supported the reviews proposed by the Expert Committee.

3.1 Homoeopathic Medicines The TGA considers homoeopathic medicines to be low risk, and this is currently reflected in the level of regulation applied to homoeopathic medicines in Australia. However, because most homoeopathic medicines are exempt from the requirement to be produced by a licensed manufacturer under a recognised code of Good Manufacturing Practice (GMP), assurance of quality (and associated safety) through compliance with recognised standards, cannot be assured, for example, manufacturing standards to control misidentification of starting materials, contamination and variability of ingredient potentisation. Under the current Australian legislation, any homoeopathic preparation that is more dilute than a one thousand fold dilution of a mother tincture, and which is not required to be sterile, is exempt from the requirement to be manufactured under an Australian recognised code of GMP. In addition, many homoeopathic preparations are currently exempt from the requirement to be included in the ARTG prior to supply (providing they are more dilute than a 1000 fold dilution of the mother tincture, do not make prohibited claimsi, and do not include an ingredient of human origin, or certain parts of certain animalsii). This means that these preparations are not subject to the same level of post-market scrutiny that applies to other low-risk medicines. These exemptions mean that there is effectively little regulatory control of many homoeopathic preparations (or purported homoeopathic preparations) once a preparation has been potentised (diluted) further than a 4X dilution of the mother tincture.

i Indicated for treatment of a disease, condition, ailment or defect specified in Part 1 or 2 of Appendix 6 to the Therapeutic Goods Advertising Code. ii This requirement was included to exclude products which may contain material potentially seriously pathogenic for humans.

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Considering that appropriate and accountable preparation methods are imperative to ensure the preparation of a safe and authentic homoeopathic remedy, the lack of regulatory controls for these processes does not appear appropriate. Also, exemption from the requirements of GMP does not provide assurance that there are controls in place to ensure that hazardous homoeopathic starting materials are sufficiently attenuated to allow for safe use. In general, risks associated with homoeopathic medicines may be direct and/or indirect:

- Direct risks refer to direct toxic effects of the ingredients, or adverse effects associated with the use of the medicine. The latter may be associated with active ingredients, excipients, such as preservatives, or interaction with other medicines.

- Examples of indirect risks in homoeopathy include delaying the use of more appropriate or effective treatment for a condition, because of either inappropriate prescribing or self-medication.

In relation to homoeopathic medicines and related remedies, the Expert Committee finding was that:

“It is evident that a number of substances currently not permitted in Listed medicines are being presented on the market as homoeopathic preparations. It is also possible that some of these products are being formulated with little or no regard to homoeopathic principles or practice. The current definition of ‘homoeopathic preparation’ should be amended to make it clear that only ingredients consistent with homoeopathic principles and practice are considered homoeopathic preparations.

A homoeopathic medicine should be adequately described to ensure that it is clearly differentiated from those medicines not consistent with the homoeopathic or a related paradigm. Any misrepresentation of homoeopathic medicines as other medicines needs to be addressed as a priority.

The regulation of homoeopathic medicines and other remedies or medicines with similar paradigms should be reviewed.”

3.2 Herbal Medicines Definition

The fundamental purpose for defining ‘herbal substance’ preparations in the Therapeutic Goods Regulations 1990 (the Regulations) in Australia, was to identify those low risk herbal ingredients, prepared according to traditional herbal medicine, and/or established pharmaceutical practice, which could be included in Listed (low risk) medicines. The definition was intended to cover the more usual forms of traditional herbal preparations such as fresh and dry herbs, essential oils, tinctures, decoctions, infusions and simple extracts. Where there has been a history of traditional use, or use in established pharmaceutical practice, herbal medicines prepared and prescribed according to that tradition are likely to be of low risk to the public. Thus, where many practitioners have, over a long period of time, observed the therapeutic and adverse effects of using a herb, then the indications, preparation, dosage and formulation have been adapted to maximise the therapeutic effectiveness and minimise the risk.

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Note that in the legislative or regulatory context, the purpose of the definition in effect, is to identify the types of herbal substances that are eligible to be included in low-risk (Listed) medicines. The current definition of a herbal substance permits drying, crushing, distilling, extracting, expressing, comminuting, mixing with an inert diluent substance or another herbal substance or mixing with water, ethanol, glycerol or aqueous ethanol; of a plant. This definition currently permits in low risk products, some highly processed extracts whose component profiles may be significantly different from the original herbal material from which they were derived, to the point where (at least theoretically) they could be considered to be isolated chemical entities. It may not be appropriate to base the safety profile of these isolated or altered substances, on that of the traditional preparation of the herb on which safety was originally established. Increased access to novel preparations of herbs traditionally accepted as low risk, has highlighted the need for a mechanism to determine which herbal preparations may be regarded to be inherently low risk, and therefore eligible for inclusion in low-risk medicines in the ANZTPA. There has been significant development and innovation in the herbal industry in recent years. As a consequence, the types of herbal ingredients available are becoming increasingly more complex and sophisticated. Technological development does not mean that some of the novel preparations available today are inherently unsafe. Many novel preparations have undergone significant research to establish quality, safety and efficacy. However, the provision of new and exciting herbal preparations must be supported by appropriate evidence for their quality, safety (particularly in the case of low-risk medicines) and efficacy, which has not been inappropriately ‘borrowed’ from evidence supporting other (sometimes significantly different) herbal preparations. Assurance of safety cannot be based solely on the fact that these substances were originally sourced from herbal material, as they may be very different in chemical (and therefore safety) profile. What needed to be determined in the definition was, where, on the continuum between the raw herb and a single chemical derived from the herb, a preparation is so changed from the original material that it should be evaluated as a new substance by the ANZTPA before its suitability for use in low-risk medicines is decided. In Australia, the Complementary Medicines Evaluation Committee (CMEC) has made a number of recommendations aimed at differentiating those herbal substances for which low risk status is recognised, from those herbal-derived substances for which further evaluation may be required (even if they have been derived from herbs that are permitted for use in low-risk medicines).

The Expert Committee findings in relation to herbal medicines were that:

“The current regulatory system permits Listed complementary medicines to contain a wide range of herbal ingredients and preparations.

Most herbal medicines prepared and prescribed according to tradition are likely to be low risk. However, the Committee noted that the use of non-traditional methods of preparation, including use of non-traditional solvents, can quantitatively and/or qualitatively change the chemical profile of the preparation. Variations in the solvent concentration and amount of herbal material used to prepare herbal extracts may affect both the safety and the therapeutic profile of the preparation.

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The use of dry/fresh weight equivalence to describe the amount of plant material used to produce a herbal ingredient, and the term ‘standardisation’ to describe the ‘potency’ or consistency of herbal ingredients, have the potential to mislead consumers.

The Committee endorsed a recommendation of the Complementary Medicines Evaluation Committee (CMEC) that, in consultation with stakeholders, and as a matter of priority, a review of the regulation of medicines containing herbal ingredients be undertaken.”

NB: Although several issues were identified by the Expert Committee in relation to the regulation of herbal medicines, this Consultation (Draft) Regulation Impact Statement deals only with the proposed change to the definition of ‘herbal substance’, as this is intended for inclusion in the draft Medicines Rule (the ‘draft Rule’) for the joint Australia New Zealand therapeutic products agency. Regulatory approaches to other issues, such as expression of dry/fresh weight equivalence, equivalence of extracts, and standardisation of herbal extracts, are yet to be fully developed. Once finalised, these approaches will be managed through Managing Director’s Orders and guidelines. Therefore, they have not been addressed in this document. A future Regulation Impact Statement may be required in relation to these issues, once workable regulatory approaches have been determined.

4. OBJECTIVE This proposal involves implementing Expert Committee Recommendations 10 and 11, by undertaking a comprehensive review of herbal and homoeopathic medicines (including extensive stakeholder consultation) to facilitate the development of a system of regulation (for implementation as part of the ANZTPA regulatory scheme) that ensures the quality and safety of herbal and homoeopathic medicines in Australia and New Zealand. The object of this proposal is to consider options for amendments to the current regulatory scheme for herbal and homoeopathic medicines in Australia while ensuring that:

• herbal and homoeopathic medicines available for supply in Australian and New Zealand are safe and of high quality;

• the level of regulation is appropriate (ie. risk-based);

• regulation is consistent with best practise (ie. cost effective and minimising the regulatory burden on industry).

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5. CONSULTATION

5.1 Consultation to Date In January 2005, the Therapeutic Goods Administration (TGA) and the New Zealand Medicines and Medical Devices Safety Authority (Medsafe) released the following Consultation Papers in Australia and New Zealand:

• Proposed Regulatory Definitions for Complementary Medicines and Homoeopathic and Related Medicines in a Joint Australia New Zealand Therapeutic Products Agency9;

• Regulation of Herbal Medicines in a Joint Australia New Zealand Therapeutic Products Agency10; and

• Regulation of Homoeopathic and Related Medicines in a Joint Australia New Zealand Therapeutic Products Agency11.

The Consultation Papers proposed new regulatory definitions for complementary medicines and homoeopathic medicines, and identified issues relating to the regulation of herbal substances, and the regulation of homoeopathic and related medicines, under the ANZTPA. In addition, the papers focused on the development of an appropriate regulatory system for these medicines, to meet the needs of consumers, industry, health professionals and regulators, while protecting and enhancing public health and safety in Australia and New Zealand. Stakeholders were requested to provide comment to help inform the development of a risk-based regulatory framework for complementary medicines (including herbal, homoeopathic and related medicines). Stakeholders were also invited to provide any other comment to assist the development of appropriate regulatory arrangements for these types of medicines. To provide background, and the opportunity to clarify matters directly related to the content of the consultation papers, Medsafe and the TGA held information sessions for stakeholders on the Consultation Papers, at which information on transition arrangements in the ANZTPA was also provided. Information sessions were held in Auckland, Christchurch, Sydney, Melbourne and Brisbane and were attended by over 260 stakeholders. The consultation period closed on 11 March 2005. Fifty three submissions were received (30 from Australia, 21 from New Zealand, 1 from Canada and 1 from Switzerland) with the following number of responses to each paper:

Regulatory Definitions for Complementary and Homoeopathic Medicines – 33 responses Regulation of Herbal Substances – 30 responses Regulation of Homoeopathic and Related Medicines – 29 responses

A wide range of stakeholders were represented, including: individuals, consumer groups, peak complementary medicine industry associations, professional associations, sponsors and manufacturers of complementary medicine products, practitioners and practitioner associations (representing a range of herbal and homoeopathic philosophies). The Office of Complementary Medicines has a convened a group of experts with experience in the regulation and manufacture of complementary medicines in Australia and New Zealand, to ‘provide a forum for considering technical issues affecting the regulation of complementary medicines'. This group is called the Office of Complementary Medicines / Industry Consultation Group (OICG).

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The OICG is composed of Members nominated by the peak industry bodies: the Australian Self-Medication Industry Inc (ASMI), the Complementary Healthcare Council of Australia (CHC), Natural Products New Zealand (NPNZ) and the New Zealand Self-Medication Industry Inc (NZSMI). Members of the OICG were asked to review the submissions and consider the regulatory definitions proposed by the TGA in the light of the stakeholder comments received, with a view to working closely with the TGA in developing the draft Ruleiii relating to complementary medicines under the ANZTPA. The regulatory definitions for complementary and homoeopathic medicines have also been developed in consultation with the Complementary Medicines Evaluation Committee (CMEC), which is an independent expert committee that provides scientific and policy advice relating to controls on the supply and use of complementary medicines. The National Co-ordinating Committee on Therapeutic Goods (NCCTG) is an independent Commonwealth, State and Territory committee that provides recommendations on administrative and regulatory controls for therapeutic goods. The NCCTG was also consulted in relation to the proposed regulatory definitions and the release of the Consultation Papers. The submissions will also be used to inform the development of other legislative instruments, such as Managing Director’s Orders (MDOs)iv for regulating complementary medicines. Once the Rules and MDOs for the joint regulatory scheme have been finalised, regulatory guidance documents for the joint scheme will be compiled. These will be based on the current Australian Regulatory Guidelines for Complementary Medicines and will be revised in consultation with industry. Discussion on the main views contained within the stakeholder submissions, is addressed later in this document, in the sections that deal with the specific issues relating to the regulation of herbal and homoeopathic medicines.

5.2 Consultation on this Regulation Impact Statement This Consultation (Draft) RIS has been prepared to present the options available and assess the impact of the proposed changes to the way in which herbal and homoeopathic medicines are currently regulated in Australia. Comments from stakeholders are sought in response to this. Stakeholders are invited to provide written comment on this Consultation (Draft) Regulation Impact Statement directly to the email and/or postal address below. Electronic submissions should be emailed to:

[email protected]

iii The Ministerial Council will make a single set of Rules (analogous to Regulations in the current Australian and New Zealand regulatory systems). This Rule will contain much of the detail of the regulatory requirements and some institutional matters.

iv The Managing Director of the ANZTPA will make Managing Director’s Orders in relation to technical matters such as standards, manufacturing principles and packaging and labelling requirements.

mailto:[email protected]

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Hard copy submissions should be addressed to:

The Project Officer Regulation Review Project c/- Joint Agency Establishment Group Therapeutic Goods Administration PO Box 100 WODEN ACT 2606 AUSTRALIA

Submissions or comments must be received by the TGA by close of business Tuesday 15th August 2006.

6. OVERALL ASSESSMENT OF COSTS The Treaty requires that all activities associated with the regulation of therapeutic products be cost recovered. Irrespective of the options chosen, all costs attributable to the regulation of the therapeutic products by the Australian Government are therefore required to be fully cost recovered from industry. A more detailed paper on cost recovery and fees and charges is to be included in a broader Cost Recovery Impact Statement for all activities that form part of the joint scheme between Australia and New Zealand.

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7. IMPLEMENTATION As previously mentioned, a RIS has already been prepared in relation to Expert Committee Recommendation 10. That RIS identified possible options for managing the regulation of homoeopathic medicines, but noted that a further RIS would be required once more detailed proposals for the regulation of homoeopathic medicines were developed. This RIS identifies the possible impacts of changes to the regulation of herbal and homoeopathic medicines that are currently proposed. Once the content of the Ministerial Council Rules has been approved and the subordinate legislation (eg. Managing Director’s Orders) and guidelines have been drafted, a further RIS may need to be developed which examines the impact of options which address the details of the regulatory scheme for herbal and homoeopathic medicines. The comments received from stakeholders on this Consultation (Draft) RIS will be used to inform the development of any further RIS’s. Accordingly, input from stakeholders, particularly in relation to the direct and indirect costs associated with the proposed regulatory changes will assist in a full consideration and analysis of the options. It is intended that any amendment to the current regulatory system for herbal and homoeopathic medicines in Australia will be implemented as an integral part of the introduction of the joint scheme for the regulation of therapeutic products in Australia and New Zealand (the joint Scheme). As such, they will be subject to the same conditions and transitional arrangements as the joint Scheme, which are outlined in 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 (the Treaty)12. As detailed in Section 2.2 of this document, the Australian and New Zealand Governments have agreed to establish a new Australia New Zealand Therapeutic Products Authority (ANZTPA) to administer the joint Scheme. The joint Scheme is expected in to be in place for the opening of the new Authority. The Ministerial Council Rules are not considered to be ‘Legislative Instruments’. As such, they are not subject to the sunsetting provisions of the Legislative Instruments Act 2003. In relation to review of the proposed regulation, Article 17 of the Treaty advises that: ‘The Parties agree to conduct and conclude, no later than five years after the date of entry into force of this Agreement, a review of the effectiveness of the Scheme and of the Agency, with a view to agreeing to and implementing any necessary improvements.’

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Regulation Impact Statement Proposed amendments to the regulation of herbal and homoeopathic medicines in Australia – July 2005

This page has been left intentionally blank, to facilitate double-sided printing of the document.

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REGULATION OF HOMOEOPATHIC MEDICINES

8. IDENTIFICATION OF OPTIONS Option 1: Maintain the status quo The current system of regulation for homoeopathic preparations was developed at a time when the majority of homoeopathic medicines being supplied were being dispensed via a homoeopathic practitioner. At this time, homoeopathic medicines were not widely available over-the-counter, and the low numbers of products on the market, together with the fundamentally low risk nature of properly manufactured homoeopathic preparations, led to a very minimal approach to the regulation of this category of therapeutic products. Maintaining the status quo would mean that only homoeopathic medicines meeting certain basic criteria would be required to obtain a low-risk product licence and the remainder would continue to be minimally regulated. Option 2: Regulate via an industry Code of Practice This option involves the industry being encouraged to develop, in consultation with other stakeholders, a code of practice as the basis for a system of voluntary self-regulation or co-regulation for homoeopathic and other energetic or vibrational type remedies. The code of practice would need to provide guidance on addressing the quality, safety and efficacy of homoeopathic medicines, and would include any other matters necessary to ensure these products are clearly differentiated from other medicines. Sponsor compliance with such a code of practice would be voluntary, or a condition of membership of an industry association. Option 3: Proposed new system of regulation This option proposes that homoeopathic medicines be regulated in a similar manner to other therapeutic products, to ensure they meet appropriate standards of quality, safety and efficacy. The proposed new system of regulation involves a revision of the current definition of ‘homoeopathic preparation’, and development of additional definitions for ‘homoeopathic medicine’, ‘anthroposophic preparation’, ‘anthroposophic medicine’, and ‘essence. Under this option, most homoeopathic medicines would be required to obtain a product licence prior to supply, and all would be required to be manufactured under an appropriate system of Good Manufacturing Practice (GMP), although interpretive guidelines relevant to homoeopathic manufacturing would need to be developed by the regulator, in consultation with stakeholders. Homoeopathic medicines and energetic remedies making therapeutic claims would be clearly differentiated from other medicines, as recommended by the Expert Committee on Complementary Medicines in the Health System (Recommendation 10).

Regulation of Homoeopathic Medicines – Options and Impact Analysis 18


In order to ensure that homoeopathic practitioners retain access to the remedies they require to undertake their business, it is proposed that certain, specified, single ingredient homoeopathic preparations be exempt from the requirement to obtain a product licence prior to supply. The key differences between the current regulation and the proposed system of regulation (Option 3) are:

• Anthroposophic medicines would be defined and recognised separately to homoeopathic medicines

• Most over-the-counter homoeopathic and anthroposophic medicines would be required to obtain a product licence prior to import, export, manufacture or supply, irrespective of dilution

• All homoeopathic and anthroposophic medicines would be required to be manufactured under a system of GMP

• A Managing Director’s Order would need to be developed to specifically identify homoeopathic starting materials, and which may include restrictions on concentration or other regulatory requirements

• Exemption from product licensing would apply only to single ingredient homoeopathic or anthroposophic preparations that are not promoted for therapeutic use (and that meet other conditions). The aim of this exemption would be to ensure that homoeopathic and anthroposophic practitioners would retain access to the variety of low turn-over remedies they require to undertake their profession

• Essences would be separately defined and recognised, with the intent of declaring these products not to be therapeutic goods, where they meet certain conditions.

9. IMPACT ANALYSIS

9.1 Affected Parties The parties which may be affected by regulatory action in this area are:

• Industry, including manufacturers, importers and suppliers, some of whom will be small businesses

• Complementary medicine practitioners: - classical homoeopaths; - clinical homoeopaths; - naturopaths; - other therapists.

• Consumers of complementary medicines • Government agencies (the ANZTPA).



9.2 Effect on Existing Regulations It is anticipated that Option 1 and Option 2 would have little, if any, impact on the existing Regulations. Option 3, if adopted, would be likely to result in significant changes to the existing legislation, as it proposes the implementation of a comprehensive regulatory system for homoeopathic and anthroposophic medicines. Apart from definition revisions, there are also regulatory changes suggested for inclusion in the Medicines Rule ‘the Rule’, and the development of appropriate Managing Director’s Order(s) and guidelines. Accordingly the suggested modifications pertaining to ‘the Rule’ have been outlined below. The following amendments to the current definition and regulation of homoeopathic substances have been proposed following extensive stakeholder discussion and consultation. Provisions in the Draft Ministerial Council Rule for Medicines (the ‘draft Rule’) have been developed, taking into account, and incorporating, the majority stakeholder viewpoint for each item. It must also be remembered that these proposals are being considered at the ‘Rule’ level, which is the highest level of legislation in effect. It is anticipated that many of the issues that are identified may be adequately managed, to the satisfaction of industry, in subordinate legislation, and with interpretive advice in appropriate guidelines. Definition

In general, stakeholder comments on the Consultation Papers identified a dichotomy between those stakeholders who believe that the method of manufacture is the only thing unique to homoeopathic medicines, and those who believe appropriate diagnosis and use in accordance with homoeopathic principles is also fundamental. Following consideration of stakeholder input in the context of a regulatory framework, it was proposed that the current definition of ‘homoeopathic preparation’ be amended to define the manufacture of the medicine, and direct that homoeopathic ingredients be manufactured in accordance with the monographs and methodology outlined in approved homoeopathic pharmacopoeia. If this option was adopted, a list of appropriate pharmacopoeia would need to be developed. The proposed definition also refers to ‘mother substances’, which are established homoeopathic starting materialsv, sometimes referred to as ‘homoeopathic stocks’. A list of accepted mother substances would also need to be developed if this option was adopted. Although the use of homoeopathic preparations in accordance with homoeopathic principles is fundamental to this system of medicine, it is apparent from stakeholder submissions, that there are a number of different schools of thought. From a regulatory perspective, it is only the medicine itself that can be regulated, not the use of that medicine.

v In order for a substance to be accepted for use in the homoeopathic paradigm, it must first have been subject to a ‘proving’. In short, a proving is where a group of healthy individuals ingest a particular substance and record the symptoms they experience. Collated symptoms from all participants are compared, and where appropriate and significant, form the basis of a ‘symptom picture’ for the substance. A homoeopathic preparation of the substance would then be used to treat diseases, ailments or conditions which mirror the combination of symptoms experienced by the ‘provers’.



Therefore, a definition is required that addresses the concerns of practitioners and consumers of homoeopathic medicines, whilst retaining much of the diversity of remedies currently available. It is therefore proposed that the statement in the current definition referring to ‘formulated for use on the principle that it is capable of producing in a healthy person, symptoms similar to those which it is administered to alleviate’ be omitted. However, as it is also proposed that homoeopathic medicines be required to obtain a product licence prior to supply, legitimacy of homoeopathic products, efficacy issues, or substantiation of claims (which were issues raised in response to the consultation paper), may be managed via other regulatory means such as ‘levels of evidence’ requirements, or inclusion of legitimate mother substances (starting materials) in an appropriate Managing Director’s Order (MDO). A definition for homoeopathic medicine has also been proposed. This definition permits multiple homoeopathic preparations to be combined, and also recognises that certain excipients may be necessary for presentation of the homoeopathic medicine in the final dosage form. The issue of combination homoeopathic products was an area of considerable contention between stakeholders, with some practitioners in particular, rejecting the use of multiple ingredient products within the homoeopathic paradigm. However once again, from a regulatory perspective, it is only the medicine itself that may be regulated, not the use of that medicine. Also, in line with suggestions from some stakeholders, it may be necessary to specify the excipients permitted in homoeopathic medicines consistent with homoeopathic philosophy. It is possible that certain regulatory arrangements may only apply to those products that meet the definition of ‘homoeopathic medicine’. In line with stakeholder recommendations, definitions have also been proposed for anthroposophic preparation and anthroposophic medicine, with the intent of recognising the differences between these medicines, and homoeopathic medicines. Apart from a separate philosophy of use, anthroposophic medicine uses a number of preparation methods and ingredients, some of which are derived from unique anthroposophic starting materials. A number of these substances are not covered by the complementary medicine definition, nor by the homoeopathic definition, and if not defined separately, have the potential to be excluded from an appropriate route of regulation for these products in the ANZTPA. The definition for ‘anthroposophic preparation’ defines the manufacture of the medicine, with specific reference to manufacture in accordance with anthroposophic and homoeopathic manufacturing procedures described in approved anthroposophic sources and homoeopathic pharmacopoeiavi. An ‘anthroposophic medicine’ may contain more than one preparation, and may contain those excipients necessary for presentation of the medicine in its final dosage form. As with homoeopathic medicines, it may be necessary to specify the excipients permitted in anthroposophic medicines consistent with anthroposophic philosophy. It is proposed that homoeopathic and anthroposophic medicines be individually referred to as part of the definition of complementary medicines. In the context of the ‘draft Rule’, the definitions for ‘homoeopathic medicine’, ‘anthroposophic medicine’ or ‘essence’, are intended as regulatory tools, the purpose of which is to enable an appropriate regulatory framework to be effectively implemented for the quality, safety, and efficacy of these medicines.

vi It is anticipated that approved anthroposophic sources and homoeopathic pharmacopoeia for this purpose will be included in a Managing Director Order.



As such, there has been no attempt to capture the definitive philosophy of any particular belief system within the definition. However this separate recognition should allow more appropriate management of the special requirements of these types of medicines via subordinate legislation and guidelines. In line with stakeholder comments, and established need, a regulatory definition of ‘essence’ has been developed. This definition is a manufacture-based definition (referring to ‘approved essence manufacturing proceduresvii), states that essences may not be derived from substances referred to in the Scheduling Standard (currently the Standard for the Uniform Scheduling of Drugs and Poisons [SUSDP]), and permits the inclusion of excipients. It may be necessary to specify the excipients permitted in essence products, given that most of these products will fall outside the jurisdiction of the medicines regulator. The definition for ‘essence’ has been proposed with the primary intent of specifically excluding certain very low-risk preparations from being regarded as therapeutic products. This would provide clarity to both sponsor and regulator regarding this long-standing issue. However, if the conditions pertaining to this exclusion were not met, then it is considered appropriate that these products be evaluated as complementary medicines. This approach is intended to meet the specified requirements for this sector of the industry, whilst not compromising the safety of consumers of these products. Other regulatory arrangements

Class 1 product licences

Currently, those homoeopathic preparations required to be Listed on the Australian Register of Therapeutic Goods (ARTG) prior to supply include:

• those products containing a 1000 fold dilution, or a lesser dilution, of a mother tincture which are not required to be sterile, and do not contain more than 10mg/kg (10µ/g) of a scheduled substance

• those products containing dilutions of mother tincture higher than a 1000 fold dilution that are not required to be sterile, but which refer to a ‘prohibited claimviii’

Anthroposophic medicines and essences are not separately defined or referred to in the current legislation in Australia (apart from ‘flower essence’ being a recognised preparation method for herbal substances). Anthroposophic formulations are currently included in low-risk medicines by virtue of the fact that potentised ingredients are entered as homoeopathic preparations, and are combined with non-homoeopathic ingredients. This option supports separate definitions for ‘homoeopathic preparation’ and ‘homoeopathic medicine’, and recognition of ‘anthroposophic preparation’ and ‘anthroposophic medicine’. This enables single homoeopathic and anthroposophic preparations to continue to be permitted to be combined with non-homoeopathic ingredients, while also allowing customisation of regulations (such as in MDOs or guidelines), where appropriate, for medicines that comply with a homoeopathic or anthroposophic paradigm.

vii A list of recognised essence manufacturing procedures will be determined following further consultation with essence manufacturers in both Australia and New Zealand. If not included in a Managing Director Order, they will be incorporated into the Guidelines for essence products. viii Indicated for treatment of a disease, condition, ailment or defect specified in Part 1 or 2 of Appendix 6 to the Therapeutic Goods Advertising Code.



An MDO would need to be developed that lists permitted homoeopathic and anthroposophic starting materials, and the potencies (effectively the concentration, for regulatory purposes), at which they may be included in low-risk medicines. Potency (concentration) or other restrictions may apply to the use of:

• substances included in a Scheduling Standard; and • substances that have not been approved as low risk permitted ingredients; and • mother substances derived from materials of zoological or human origin (measures to

minimise the risk of agents of infection from these materials are required). Any homoeopathic or anthroposophic medicine that contains a preparation with a concentration of mother substance greater than 10mg/kg would require Listing (a Class 1 product licence in the ANZTPA) providing it does not contain a substance subject to the Scheduling Standard. This would also apply to any homoeopathic or anthroposophic medicine that is promoted for therapeutic use, irrespective of concentration (dilution), providing it is not required to be sterile. Any combination homoeopathic medicine (combination of homoeopathic potencies) will also be required to obtain a product licence, prior to supply. It is proposed that, where a multi-ingredient homoeopathic or anthroposophic medicine contains a preparation that is derived from a substance where the Scheduling Standard may apply (eg. current Schedules 8, 9 or Appendix C substances in the SUSDP, the concentration of the mother substance would need to be 1 nanogram/kg or less, unless a higher concentration were to be specifically permitted in a MDO for mother substances. A Class 1 product licence, would also be required for homoeopathic or anthroposophic medicines containing a preparation derived from mother substances of human or zoological origin with infectious potential, providing adequate measures have been taken to minimise the risk of agents of infection in the preparation. A schedule of the MDO for mother substances would need to specify the restrictions applicable to such products, and conditions of licensing may apply. Class 2 product licences There are currently no specific provisions requiring homoeopathic medicines to be Registered on the ARTG. However, under the proposed provisions, all sterile dosage forms, including homoeopathic or anthroposophic medicines required to be sterile, would require regulation as higher risk products. Any medicine containing a homoeopathic or anthroposophic substance subject to the Scheduling Standard (other than where the substance is a single homoeopathic preparation where the concentration of the mother substance is 1 nanogram/kg or less, or where specifically permitted in the MDO for mother substances), would also require a Class 2 product licence. This provision would allow such remedies to be legally supplied in Australia for the first time, providing that they met the regulatory requirements for a higher risk medicine. As it is proposed that homoeopathic and anthroposophic medicines fall under the definition of a complementary medicine, these products would be most appropriately considered in the context of their therapeutic paradigm.



Exemption from the requirement to obtain a product licence Some homoeopathic preparations in Australia are currently exempt from the requirement to be included in the ARTG prior to supply, providing they are more dilute than a 1000 fold dilution of the mother tincture, do not make prohibited claims, are not required to be sterile, and do not include an ingredient of human origin, or certain parts of certain animalsix If all single ingredient homoeopathic preparations were required to obtain a Class 1 medicine licence prior to supply, there is the potential that a large number of rarely required remedies would cease to be available for practitioner use, as they may not be economically feasible to manufacture or supply. Given that there is currently no government recognised provision for identifying trained and competent homoeopathic practitioners in Australia, it is therefore pragmatic to propose that certain, single ingredient homoeopathic or anthroposophic preparations be exempt from the requirement to be licensed prior to supply, to ensure that they remain available for practitioner use. It is therefore proposed that non-sterile, single substance homoeopathic medicines that are not subject to the Scheduling Standard (except where the concentration of mother substance is 1 nanogram/kg or less, or is specifically permitted at a lower concentration) and are not derived from certain specified mother substances, such as those with a potentially infectious nature (eg. nosodes and some sarcodes), would be exempt from the requirement to obtain a Class 1 medicines licence prior to supply, providing the concentration of mother substance is 10 mg per litre or per kilogram, or less (and other conditions, outlined below, are met). This situation is essentially the status quo for most single ingredient homoeopathic products both in Australia and New Zealand at present, and is consistent with the classical homoeopathic paradigm which maintains that individual claims are generally inappropriate for single ingredient homeopathic ingredients, which should be prescribed and used in the context of the ‘symptom picture’ for the individual being assessed. To ensure that the products are manufactured to a suitable level of GMP, and to ensure traceability for adverse reaction, complaint and recall purposes, the label of the homoeopathic medicine would be required to include the manufacturer’s licence number (for the ‘release for sale’ step of manufacture). This manufacturer will also be required to record and maintain details (including licence numbers) for all other steps of product manufacture. Industry contends that these products would only be accessed by consumers who are aware of their appropriate use, or have been advised to purchase a particular preparation by a practitioner. However, a system to record the supply of these types of products may need to be established to ensure that this exemption is not abused. Although these medicines may not be permitted to be promoted for therapeutic use (and hence may not include indications on the label), it is proposed that they must otherwise comply with the ANZTPA labelling standard, and must be labelled with a statement such as ‘to be used only in accordance with homoeopathic (or anthroposophic) principles’ (or words to that effect). This exemption is considered necessary to ensure that practitioners of homoeopathy retain access to the medicines they require to undertake their profession. A large number of the single ingredient homoeopathic remedies that are used as starting materials by homoeopaths, are used infrequently, and would likely not be cost effective to manufacture if product licences were required for all potencies of all remedies.

ix This requirement was included to exclude products which may contain material potentially seriously pathogenic for humans.



Good Manufacturing Practice (GMP) Currently, most homoeopathic medicines are exempt from the requirement to be manufactured by a manufacturer holding an appropriate GMP licence (ie. those homoeopathic medicines which are more dilute than a 1000 fold dilution of the mother tincture). Considering that appropriate and accountable dilution and succussion is imperative to ensure the preparation of an authentic homoeopathic remedy, the current lack of regulatory controls for these processes does not appear to be in the best interests of the consumer or practitioner. Also, exemption from the requirements of GMP does not provide assurance that there are controls in place to ensure that hazardous homoeopathic starting materials are sufficiently attenuated to allow for safe use. Under the proposed arrangements, all homoeopathic and anthroposophic medicines would be required to be manufactured under an acceptable standard of GMP. However, interpretive guidelines would need to be developed to take into account the special nature of these types of medicines. Essences The regulatory status of vibrational essences, such as flower essences, has long been a matter of confusion for manufacturers and sponsors. The current system of regulation permits the inclusion of flower essences as herbal substances. However the philosophy and manufacture of essences is more akin to that of homoeopathic medicines, in that they are intended to work on an energetic level rather than on a pharmacological basis. The usual claims made for essences do not, generally, fall within a physiologically based therapeutic intent. Rather than providing specific exemptions from different parts of the legislation, which could be unwieldy and difficult to manage, it is proposed that essences that contain a concentration of the mother substance equal to or less than 10 mg per litre or per kilogram, that are not referred to in the ANZTPA Scheduling Standard, that are not required to be sterile, and that make no therapeutic claims, would be considered not to be therapeutic products. If therapeutic claims are made, or any of the other conditions are not met, then they would need to be evaluated as complementary medicines and meet all requirements currently applicable to complementary medicines.

9.3 Impact on Stakeholders Option 1 Maintain the status quo Impact on Industry

Benefits

There would be no GMP set-up costs for manufacturers and sponsors if this option were adopted, and therefore no related increase in the on-going costs associated with product manufacture and supply.



Costs

As maintaining the status quo would mean that sponsors would not be permitted to supply a number of the legally permitted homoeopathic preparations and dosage forms available internationally, there would be less potential for profit for sponsors of these products in Australia. Under this option there is less clarity for industry as to what homoeopathic, anthroposophic and essence preparations are required to be included in approved low-risk products, and which ingredients or medicines fall outside of the current regulations. At best, this option would be a short-term solution.

QUESTIONS FOR STAKEHOLDERS Question – Industry and other stakeholders are invited to comment on what quality assurance procedures have been implemented to ensure correct identification and processing of homoeopathic and anthroposophic preparations and medicines. Question – Industry and other stakeholders are invited to comment on the financial impact that restricted access to some internationally available homoeopathic preparations and dosage forms has on prospective business success. Question – Industry and other stakeholders are invited to comment on the impact that unrestricted access, by practitioners and consumers, to medicines sourced internationally, has on their own prospective business success. Impact on Complementary Medicine Practitioners

Benefits

Practitioners could retain access to a large range of homoeopathic remedies, and there should not be any increase in costs associated with access to these remedies.

Costs

The main disadvantage for homoeopaths for maintaining the status quo is that there is no assurance of the quality of the medicines they purchase and use. Also, access to remedies and dosage forms sometimes legally available internationally (such as sub-cutaneous and intra-cutaneous injections) would remain unlikely.

QUESTIONS FOR STAKEHOLDERS Question – Practitioners and other stakeholders are invited to comment on any concerns they may have regarding the quality of medicines that are currently available and used, both nationally, and from international sources. Question – Practitioners and other stakeholders are invited to comment on the source of medicines used in the course of their business, in particular with regard to those medicines or starting materials sourced from overseas.



QUESTION FOR STAKEHOLDERS Question – Practitioners and other stakeholders are invited to comment on the financial impact that restricted access to some internationally available homoeopathic preparations and dosage forms has on the success and viability of their business. Impact on Consumers

Benefits

Consumers would continue to have access to a wider range of products. However it should be remembered that the current range of products could include homoeopathic preparations or medicines that may not be authentic.

Costs

The main risk of this option is that consumer safety is not assured as the quality, and hence safety, of these remedies is not guaranteed. This option also allows for continued misinterpretation of, and dissatisfaction with, inappropriately marketed products.

QUESTION FOR STAKEHOLDERS Question – Consumers and other stakeholders are invited to comment on any concerns they may have with regard to the authenticity of the homoeopathic and other energetic medicines currently available and, present their views on continued access to these products. Impact on Government

Benefits

Maintaining the status quo would require less resource commitments (people, time and money) by the medicines regulator in the lead up to the implementation of the ANZTPA. There is a cost advantage in not having to be involved in the further development of an appropriate regulatory system, rewrite legislation to legally underpin regulatory requirements and/or allocate resources to compliance and enforcement issues.

Costs

It is anticipated that there would be a continued call for the medicines regulator to provide advice, on an ad hoc basis, as to the authenticity or inappropriate marketing of particular homoeopathic medicines. This problem is compounded by the fact that the Office of Complementary Medicines (OCM) has been advised that the current definition of ‘homoeopathic preparation’ may not be robust enough to challenge some ‘problem’ products in court. Maintaining the status quo does not meet the requirements of the Expert Committee on Complementary Medicines in the Health System Recommendation 10, the National Medicines Policy or the TGA Business Plan, and the future impacts of such a precedent are unlikely to be beneficial.



Most significantly, lack of GMP for these products could compromise public health and safety. For both Australia and State/Territory Governments, the impact of this option could mean increased costs on the healthcare system if there is an increased number of consumer adverse events associated with homoeopathic medicines that are marketed without appropriate quality assurance. Option 2 Regulate via an industry Code of Practice Impact on Industry

Benefits

If this option were adopted, much of the ‘control’, or influence, over the management of these types of products, would remain with industry and, potentially, practitioners. It is possible that there would be lower compliance costs for some businesses.

Costs

The wide variety of homoeopathic philosophies that currently abound would likely result in difficulties in developing a workable, unified code of practice. It is also likely that universal acceptance and adherence to a single code of practice would be difficult to manage. It is possible that this sector of the industry may not have the critical mass to appropriately develop, police and ensure compliance with an industry code of practice. It is possible that different industry associations would implement their own code of practice, which, whilst having the advantage of allowing industry greater autonomy in setting requirements, is also likely to lead to greater inconsistency of requirements, interpretation and the application of sanctions for the same type of offence. It is likely that the set-up and compliance costs of the code of practice would be initially borne by industry, although it is likely that these costs would subsequently be passed on to consumers and practitioners. The cost of prosecutions would need to be cost-recovered from industry. It may be difficult for industry associations to recover the costs associated with their self-regulatory activities from non-members of the industry associations. There is also likely to be a significant ‘upfront’ cost to each association in setting up their own infrastructure to develop the code of practice and handle compliance.

QUESTION FOR STAKEHOLDERS Question – Industry and other stakeholders are invited to comment on any concerns that they may have with regard to the development of an industry code of practice, particularly with respect to the set-up and running costs, cost recovery, and likelihood that a unified code of practice that meets the needs of all stakeholders, could be developed, maintained, and complied with.



Impact on Complementary Medicine Practitioners

Benefits

If this option were adopted, much of the ‘control’, or influence, over the management of these types of products, would likely remain with industry. However, it is anticipated that practitioner organisations may also have a certain degree of influence with regard to many of the single ingredient preparations that are almost exclusively used by homoeopaths and anthroposophic practitioners. Costs

The wide variety of homoeopathic philosophies that currently abound would likely result in difficulties in developing a workable, unified code of practice. It is also likely that universal acceptance and adherence to a single code of practice would be difficult to manage. It is possible that different practitioner associations may have different concerns with regard to the regulation of these types of products, and may in fact wish to implement a code-of practice separate to that developed by industry. This may lead to greater inconsistency of requirements, interpretation and the application of sanctions for the same type of offence. Even if industry stakeholders were able to develop an industry standard to cover all aspects of the industry, it is likely that the primary facilitators would be the main industry associations who self-profess to be primarily concerned with over-the-counter homoeopathic remedies. Although the volume of sales is probably higher for over-the-counter homoeopathic products, they comprise only a small proportion of the range or variety of different remedies required by practitioners. It is therefore possible that the viewpoint and needs of practitioners may not be fully taken into account by the rest of industry. Also with regard to practitioners, if self-regulation were to lead to inappropriate self-treatment by consumers, healthcare practitioners may find that the number of consumers who need to seek medical advice would increase. This may, in turn, lead to a compromised understanding of homoeopathy in the general community. If this option were implemented, it is likely that these costs would subsequently be passed on to consumers, including practitioners. It may be difficult for practitioner associations to recover the costs associated with their self-regulatory activities from non-members. There may also be significant ‘upfront’ costs to each association in setting up their own infrastructure to develop the code of practice and handle compliance.

QUESTIONS FOR STAKEHOLDERS Question – Practitioners and other stakeholders are invited to comment in relation to any concerns regarding the influence they may have over the development and implementation of a code of practice for the regulation of energetic remedies that meets their own particular needs. Question – Practitioners and other stakeholders are invited to comment on any concerns they may have regarding any increase of cost that may result from an increase in regulatory control, whether they feel these costs are justifiable, and why.



Impact on Consumers

Benefits

Consumers may have access to a wider range of products.

Costs

The impact on public health and safety is unknown and will depend on the industry ability to develop an appropriate and workable code of practice, and ensure compliance with it. Consumers may still have to deal with deceptive labelling and potentially unauthentic products. There is also potential for increased costs for consumers associated with cost-recovery through industry.

QUESTION FOR STAKEHOLDERS Question – Consumers and other stakeholders are invited to comment regarding the impact that any increase in costs associated with the availability of homoeopathic, anthroposophic and other energetic types products may have, whether these costs are justifiable, and why. Impact on Government

Benefits

This option would require less resource commitment (people, time and money) by the medicines regulator in the lead up to the implementation of the ANZTPA. It is also probable that cost recovery related to the development and implementation of the system will remain the responsibility of industry, rather than being passed on to industry by the regulator by means of fees and charges.

Costs

Whilst this option might appear initially to require less Government resources in the lead up to the implementation of a ANZTPA, practically speaking it is likely that significant assistance would be required by industry and practitioners to ensure that the diverse views of this industry sector are appropriately taken into account and managed, given that this does not appear to be a major industry sector. Regulation via an industry code of practice means that the medicines regulator would have no direct control over the regulation of this category of medicines, and the setting of standards by industry could be seen as being influenced by commercial interests. It is also possible that there would be a continued call for the medicines regulator to provide advice, on an ad hoc basis, as to the authenticity, and inappropriate marketing of particular homoeopathic medicines. There is also the chance that ‘problem’ products might not be adequately managed, as the regulator would have little jurisdiction over what are considered by many to be under the purview of a medicines regulator (eg. essences). This may have political implications if a major health scare or recall were not managed efficiently and appropriately, as the medicines regulator may still be held accountable for the outcome, at least in the public’s eyes.



Finally, this option has the potential to compromise the operation of the joint Australia New Zealand therapeutic products agency, in that it potentially supports a different level of regulation of these types of products in Australia and in New Zealand. This also has implications for the complete implementation of the Free Trade Agreement Option 3 Proposed New System of Regulation Impact on Industry

Benefits

The benefits for industry include greater clarity as to what is regulatory requirements apply to ensure safe, quality products. There is the potential for a more ‘level playing field’ for industry in that whilst some manufacturers already have GMP licences, or equivalent quality accreditation, they are competing with other manufacturers who have none. There are potential trade imbalances that could be rectified following implementation of this option. As it is proposed that specific GMP interpretive guidelines be developed to assist in the appropriate assessment of GMP for homoeopathic and anthroposophic manufacturers, it is likely that many of the benefits and recognition of this quality system would be enjoyed, without the sometimes prohibitive costs associated with ‘pharmaceutical grade’ GMP. Under this option, there would be a wider recognition of the specific needs for certain higher-risk categories of homoeopathic and anthroposophic medicines, such as injectable dosage forms, and remedies derived from scheduled starting materials, and appropriate regulation to permit supply in a safe and responsible manner.

Costs

The most significant costs for industry if this option were to be adopted would be the financial costs incurrable for almost all stakeholders. Manufacturers who do not have a current GMP licence would be required to obtain and maintain one. This potentially involves building refurbishment and staff increases to manage increased administration responsibilities such as paperwork and internal quality assurance (where this is not being currently undertaken). Sponsors would have increased costs associated with product licence applications, filing and correspondence associated with the above. Labelling and ‘levels of evidence’ compliance is currently required, so increases in associated compliance costs are not anticipated. Importers may have more difficulty in establishing GMP compliance than resident manufacturers, and this could lead to a commercial imbalance. It is not known how big the import share of the homoeopathic and anthroposophic market is.



Manufacturers, sponsors and importers face the risk that they will no longer find it economical to produce a range of single ingredient practitioner remedies given that the variety of different remedies, coupled with the number of different dilutions required for each type, may mean that thousands of sometimes rarely required homoeopathic preparations are potentially affected. These remedies are essential for practitioners who need them to properly carry out their business. Therefore, measures have been taken in an attempt to ensure that these remedies will remain viable to produce. It is also likely that any costs incurred by industry stakeholders may be passed on to consumers, (including homoeopathic and anthroposophic practitioners in a relatively small number of cases). There are some ‘problem’ products, currently available as exempt homoeopathic products that would be unlikely to be eligible to obtain a product licence if this option were selected. However these products do not appear to be authentic, seem to have used loop-holes in the current legislation in order to stay on the market, and have been the subject of a number of complaints and ministerial correspondence. There are also some combination homoeopathic and non-homoeopathic products that are currently included on the ARTG, which may not be eligible to obtain a product licence under the proposed new arrangements. However, it is proposed that if this system were to progress, these products would be identified and the product Sponsors would be given the option to provide evidence to support the claims being made for the product.

QUESTIONS FOR STAKEHOLDERS Question – Industry and other stakeholders are invited to comment on existing trade imbalances that may be alleviated, or aggravated, by this proposed option. Question – Industry and other stakeholders are invited to comment on the elements of GMP that should be applicable to manufacturers of homoeopathic and anthroposophic medicines. Where possible, justification should be supplied as to why certain aspects of ‘pharmaceutical grade’ GMP would not be appropriate for these types of medicines. Question – Industry stakeholders are asked to comment on the types of issues and associated costs involved with the implementation of this option, including factors such as GMP compliance, administration costs, equipment, processing and system costs, general staffing issues, and to provide an estimate or indication of the monetary commitments required to achieve the required outcomes. Question – Sponsors and manufacturers of imported homoeopathic or anthroposophic medicines are invited to comment on the impact this option may have on the importation of homoeopathic preparations or medicines, including access to GMP licensed (or equivalent) suppliers in the international arena. Importers are also invited to provide advice on the size of the import share of the market and the effect on the balance of the market (ie. imported vs locally produced products). Question – Industry, and other stakeholders, are invited to comment on the potential, if any, that any product lines may become uneconomical to produce, and the impact that this may have on business.




Benefits

A major benefit for practitioners would be assurance of product quality. There is also likely to be a wider recognition of the specific needs for certain higher-risk categories of homoeopathic and anthroposophic medicines, such as injectable dosage forms, and remedies derived from scheduled starting materials. Under the proposed system these could be legally accessed above certain dilutions, or where they meet specific criteria.

Costs

The major risk for practitioners is the potential loss of access to, or decreased choice relating to, remedies that may be uneconomical for manufacturers to produce (however measures have been proposed to mitigate this factor).

QUESTIONS FOR STAKEHOLDERS Question – Stakeholders are invited to comment on products they fear may be adversely affected by the adoption of this option, and the reasons why they feel such products should not be disadvantaged. Question – Practitioners and other stakeholders are invited to comment on concerns regarding the impact that any increase in costs associated with increased regulatory control may have, whether these costs are justifiable, and why. Impact on Consumers

Benefits

The main benefit for consumers would be increased quality of remedies and associated decreases in risks with regard to safety. There should also be a reduction in non-legitimate homoeopathic products available on the market.

Costs

The industry costs associated with compliance with the proposed definition, are likely to result in slightly higher prices for some products, as industry shifts the cost burden. There may be decreased choice of products available.

QUESTION FOR STAKEHOLDERS

Question – Consumers and other stakeholders are invited to comment regarding the impact that any increase in costs, or reduced availability of homoeopathic, anthroposophic and other energetic types products may have, whether these costs are justifiable, and why.



Impact on Government

Benefits

The benefits for government for this option would be increased assurance, and better management of the quality and hence safety of this category of medicines. There is also the inbuilt ability to customise regulatory arrangements for these types of medicines, to ensure that stakeholder concerns are met. There would be an increased jurisdiction over, and ability to manage, ‘problem’ products, and a more comprehensive framework under which to take action.

Costs

Apart from the multiple resource implications for the regulator (including staffing issues, time and equipment required, and travel costs) to set up this system of regulation, the major risk associated with Option 3 is industry non-compliance.



10. CONCLUSION AND RECOMMENDED OPTION Option 1, which supports the continuation of the current minimal regulatory approach for homoeopathic preparations, has been discounted following full consideration of the issues. The consequences of adopting this approach are that public safety may be compromised (albeit to a lesser degree than for most medicinal products), and that none of the long-standing issues with the current system would be addressed. At best, this option would be a short-term solution. Option 2 would be an increase to the current regulatory requirements for homoeopathic and other energetic type products. However, this option is not considered to be an appropriate solution as it is a relatively small industry sector that is involved, and it is unlikely that there would be sufficient agreement between different factions, nor adequate infrastructure overall, to develop, implement and police an appropriate code of practice. Option 3 is considered, overall, to most appropriately meet the needs and expectations of consumers, practitioners, the medicines regulator, and industry - as has been indicated by the resounding support for a higher level of regulation for these types of products following recent stakeholder consultation. The implementation of GMP for homoeopathic and anthroposophic manufacturers, and the associated set-up and running costs, has been tempered by the proposal that interpretive guidelines be developed for homoeopathic and anthroposophic medicines, so that ultimate quality (and hence safety) of these products can be assured, without the much larger financial undertakings required for medicines which include pharmacological ingredients and dosage forms. This option meets the requirements of Recommendation 10 of the Expert Committee Report, the intent of the treaty between Australia and New Zealand with respect to the establishment of a joint therapeutic products regulator and ensuing compatibility in medicines regulation in the two countries. It provides an improved framework for the medicines evaluator to manage safety, quality and efficacy issues associated with these products, and greater clarity as to what action can be taken with respect to ‘problem’ products. From the industry and practitioner perspectives, there would also be greater clarity as to what is required to ensure the safety, quality, and efficacy of these products, and there is greater chance of a ‘more even playing field’ given that only authentic, quality products should be manufactured and supplied. Practitioners and consumers are also likely to benefit from the assurance of safe, quality products that are legitimate within the homoeopathic paradigm.

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REGULATION OF HERBAL MEDICINES

11. IDENTIFICATION OF OPTIONS Option 1: Maintain the status quo The current definition was intended to cover the more usual forms of traditional herbal preparations such as fresh and dry herbs, essential oils, tinctures, decoctions, infusions and simple extracts. The rationale for this was that where there has been a history of traditional use, or use in established pharmaceutical practice, herbal medicines prepared and prescribed according to that tradition are likely to be of low risk to the public. Although not explicitly referred to, this definition is intended to exclude preparation methods that involve chemical transformation of the original plant material (other than that incidental to the traditional preparation method), such as fermentation or enzymatic degradation. It is also not intended to include those substances that select for particular components in the herb through chemical reactions and precipitation. However, although unintended, the definition does permit complex multi-step extraction processes using a wide range of solvents, provided that these are, in most cases, removed to acceptable limits in the final product (water, ethanol and glycerol may remain). Over time, and with the development of more sophisticated extraction and processing methodology, the term ‘extraction’ has come to result in substances that are very different in safety profile to that of the original substance on which safety was based. Non-traditional methods of preparation, including use of non-traditional solvents, can quantitatively and/or qualitatively change the component profile of a herbal material. Such changes may affect safety (and therapeutic activity), or alter the profile to the point where it is difficult to determine the impact on safety without further evaluation. Maintaining the status quo would mean retaining the definition of ‘herbal substance’ currently included in the Regulations. This means that any new ‘extract’ of a herbal species currently included in a low-risk product, may be included in a new product Listed on the ARTG. This would include those plant parts and preparations that have very little, if any relationship to the original material on which safety was based. Meanwhile, more traditional preparation methods, such as some traditional Chinese medicine methodologies, would not be permitted. Option 2: New definition - proposed approach Under this option, the definition of ‘herbal substance’ would be amended in a way that seeks to manage the types of preparations that would automatically be included in low-risk medicines, using a more contemporary risk-based approach. The proposed definition is intended to help clarify which preparations would require further evaluation before being supplied to consumers. The term ‘herbal substance’ has caused confusion for a number of years, as it is usually not considered in its regulatory context, namely, as an ingredient eligible for use in a low risk medicine. To more clearly indicate the intent of the term, that is to identify those herbal ingredients suitable for use in low-risk medicines, it is proposed that the term ‘herbal substance’ be replaced by the term ‘Class 1x herbal ingredient’.

x In the joint Australia New Zealand therapeutic products agency, low-risk medicines will be referred to as ‘Class 1’ medicines.

Regulation of Herbal Medicines – Options and Impact Analysis 36


The proposed definition identifies two categories of herbal material preparations permitted for use in low-risk medicines – those that are prepared using traditional methodology applied to a given part of a given plant, and those that are more ‘novel’, or non-traditional. The first category would permit traditional preparations of approved herbal material, including those found in other herbal medicine cultures, such as traditional Chinese medicine and Ayurveda. For the purposes of this definition, accepted traditional and non-traditional methodologies would only be permitted for those herbal materialsxi that have been previously approved for use in low-risk medicines. Additionally, traditional preparations would be limited to the herb species and plant part traditionally manufactured that wayxii. Clearly differentiated from traditional preparations would be those modern phyto-pharmaceutical preparations of approved herbal materials that can establish a low-risk status by other means. Non-traditional preparations of approved herbal materials would not be permitted where they include those preparations that involve chemical transformation of the herbal material, as these may change the chemical profile of the original material to such a degree that relying on sponsor-justified suitability for inclusion in Class 1 medicines is not appropriate. The definition of a herbal substance would also need to be revised to recognise that there are other options for establishing the safety of non-traditional herbal preparation. Many non-traditional preparations are currently used widely in a number of other countries, with no significant reports of adverse reactions, or where extensive evaluation for safety and efficacy has been undertaken and the substance approved for use. Guidance would need to be developed to establish the data requirements for justifying the safety of non-traditional herbal preparations. It is proposed that justifications would be audited as part of post-market monitoring of complementary medicines. A permitted list of ingredients nominating species and plant parts would need to be developed, most likely as an MDO. In order to be eligible to be included in a low-risk product, the herbal material would need to be prepared in a way that meets the definition of ‘Class 1 herbal ingredient’. The key differences between the current regulation and the proposed system of regulation are:

• the name of the term being defined would be changed from ‘herbal substance’ to ‘Class 1 herbal ingredient’

• a greater range of traditional preparations of herbs would be permitted to be included in low-risk medicines without a costly evaluation process

• there would be greater assurance of the safety of non-traditional preparations of herbs with established low risk status when present in traditional preparations

• sponsors would have two options to establish the low-risk status of non-traditional preparations of herbs currently being supplied in low-risk medicines

• the permitted list of approved herbal materials would include reference to plant parts that have been determined to be low risk.

xi Approved herbal materials would specify particular plant parts permitted for a given herbal species. xii That is, a traditional method of preparation applied to one species of plant may not have been traditionally used

with another plant species and such a preparation will require evaluation before use.



Option 3: Full evaluation of all new herbal preparations Under this option, all ‘new’ preparations of herbal materials would be required to be first evaluated by the Office of Complementary Medicines (OCM) for safety, prior to supply, including new extracts. It is proposed that any herbal ingredient that does not meet the definition of a traditional herbal preparation, would need to undergo a full safety evaluation, as, potentially, would any ‘non-traditional’ preparation of a herbal substance currently included in a low-risk product. It may be possible under this option, for the medicines regulator to take factors into consideration other than tradition of use, when undertaking this evaluation. However evaluations would need to be fully cost recovered.

12. IMPACT ANALYSIS

12.1 Affected Parties The parties which may be affected by regulatory action in this area are:

• Industry, including manufacturers, importers and suppliers, some of whom will be small businesses

• Complementary medicine practitioners • Consumers of complementary medicines • Government agencies (the ANZTPA)

12.2 Effect on Existing Regulations The adoption of Option 1 would have no affect on the existing regulations, other than the possibility of the existing definition being imported into the ‘Rule’ for the joint Australia New Zealand therapeutic products agency, followed by the revocation of the existing Therapeutic Goods legislation in Australia. The adoption of Option 2 would provide a revised definition for ‘herbal substance’, which it is proposed would instead be termed ‘Class 1 herbal ingredient’ if the definition was incorporated into the ‘Rule’ for the ANZTPA. Under Option 2, it is also proposed that an MDO be developed to provide greater clarity as to the plant species and plant parts that would be eligible to be included in low-risk medicines. Under the current system, there is a permitted list of vitamins, minerals and other substances permitted in Listed medicines in Australia. However, the only list currently included in the Regulations is a list of restricted herbs (ie. those that may not be included in low-risk medicines, or those herbs that may only be included when certain conditions are met).



There is reference in Schedule 4 of the Regulations, to a requirement that “the herbal substance is present in therapeutic goods included on the Register for supply in Australia”. However, there is no official list of permitted herbal species other than that included in the ‘TGA Approved Terminology for Medicines’ or the ELF code table for eligible species. Neither of these lists specify the parts of the plant on which safety has been established. It is anticipated that adoption of Option 3 might also have little affect on existing regulations, apart from a potential revision of the definition for herbal substance. If a ‘traditional herbal preparation’ were to be defined, this option might simply involve a much stricter interpretation and administration of what is deemed to be ‘separate and distinct’.

12.3 Impact on Stakeholders Option 1 Maintain the status quo Impact on Industry

Benefits

The benefit for industry under this option would be that there would be no change to the current requirements, with the added advantage that any future preparation of a low-risk herbal species that might be considered to be an ‘extract’ (short of a pure substance), would be eligible for inclusion in a low-risk medicine. Additionally, sponsors and manufacturers would be free to use any plant part of a species currently included in a low-risk medicine, even if it had never been used therapeutically before.

Costs

Industry would not be able to use some traditional preparations that have been used in other cultures without a potentially costly evaluation, despite the fact that the low risk status of the nominated herbal species may have been based, at least in part, on that tradition of use. There is the risk that sponsors and/or manufacturers could, perhaps inadvertently, present higher risk ingredients in low-risk products. Under this option, the responsibility for establishing the safety of more novel preparations falls entirely on the shoulders of industry. Apart from consumer misadventure, recall costs for such products might affect numerous sponsors (if similar ingredients were used in products marketed by more than one sponsor). The negative impact of a recall (including reduced consumer confidence in products) has the potential to affect the whole industry significantly (eg. similar to the flow-on effects from the Pan Pharmaceuticals situation in 2003).

QUESTION FOR STAKEHOLDERS Question –Industry and other stakeholders are invited to comment on the impact that compromised consumer confidence has on business.




Benefits

An increasing range of herbal ingredients and products would remain accessible.

Costs

Healthcare practitioners may remain unaware of the non-traditional nature of the ingredients currently touted on labels as ‘extracts’. As most practitioners utilising herbal ingredients base their recommended dosage and therapeutic usage of the medicine on traditional practice, unexpected outcomes, including over-dose, interactions and other adverse effects, may eventuate. Complementary medicine practitioners might also find themselves being called upon to advise consumers regarding the benefits/usage of particular products of which they may have little, or no knowledge.

QUESTION FOR STAKEHOLDERS Question – Practitioners and other stakeholders are invited to comment on any concerns they may have regarding differentiation of traditional and non-traditional herbal extracts/preparations, and what effect, this may have on the normal practice of their business. Impact on Consumers

Benefits

Consumers would continue to have access to many of the most recently developed herbal preparations, with a potentially wider range of products being available. Costs The main risk from this option is that consumer safety is not assured, as the safety of many of these more novel preparations has not been fully established. There could be an increased incidence of adverse reactions as essentially non-evaluated herbal ingredients enter the market, and direct costs to the consumer could include medical treatment costs, injury and, potentially, death.

QUESTION FOR STAKEHOLDERS Question – Consumers and other stakeholders are invited to comment on any concerns they may have with respect to the availability of novel herbal preparations that have not undergone evaluation for safety.



Impact on Government

Benefits

Maintaining the status quo would require less resource commitment (people, time and money) by the TGA as the regulator of therapeutic products, in the lead up to the implementation of the ANZTPA.

Costs

It is anticipated that there would be a continued call for the medicines regulator to provide advice, on an ad hoc basis, as to the suitability of particular herbal preparations for inclusion in low-risk medicines. This problem is compounded by the fact that the current definition of ‘herbal substance’ legally permits preparations of herbs which do not have safety based on traditional use. As such, the medicines regulator may be required to permit on the market, following request by a sponsor, a herbal ingredient which has not had safety established. The legal and political ramifications for the Government if such an ingredient were to subsequently be responsible for the injury or death of a consumer, are significant, not to mention the potential negative publicity for the Agency itself. Maintaining the status quo does not meet the requirements of the Expert Committee on Complementary Medicines in the Health System Recommendation 11 and the future impacts of such a precedent are unlikely to be beneficial. For both Australia and State/Territory Governments, the impact of this option, may be increased costs on the healthcare system (if there is an increased number of consumer adverse events because more new medicines are marketed without being appropriately evaluated for safety). Option 2 New definition – proposed approach Impact on Industry

Benefits

A greater range of traditional preparations would be permitted; particularly those derived from traditional Chinese medicine or Ayurvedic (Indian) traditions. Under this option, it will also be possible for sponsors and manufacturers to supply non-traditional preparations of approved herbal species, providing that it has been established that either the ingredient is not significantly different to a traditional preparation, or that justification of the safety of the preparation is possible by other (yet to be established) means. There are significant costs savings anticipated for industry in situations such as these as it is proposed that the safety of non-traditional preparations (from approved herbs) will be assessed post-market, and not as a pre-market evaluation (where costs are upward of $5,000-$10,000). As the proposed definition provides some differentiation between traditional and non-traditional herbal preparations, it may be possible, in subordinate legislation, to be more flexible regarding the relevant regulatory requirements for each of these categories of ingredients (ie. labelling, quality standards, expression etc.).



Under this option, there would also be greater clarity for industry as to what herbal species, plant parts and preparations have an established low risk status. Therefore, there is potentially less onus, with respect to industry reputation, if a significant adverse event were to eventuate. Whilst sponsors would be required to satisfy themselves that the ingredients they wish to use are of low risk, there would be more flexibility in the means by which they undertake this, and more certainty that the ingredients they wish to use meet the requirements. A further benefit for industry arising from a specific list of permitted herbal materials, and a more specific definition as to what constitutes a low-risk preparation, is the reduction in risk for a sponsor who is compliant with the definition and the MDO being held liable for adverse events associated with the sponsor’s product.

Costs

There would likely be less ‘automatic’ acceptability of some extracts sourced internationally, which would in turn, lead to potentially significant increased costs associated with establishing the safety of the ingredient intended for use. For example, literature reviews, laboratory testing, etc. However, it must be remembered that these costs would still be significantly less than those required if a full evaluation of the ingredient were required to be undertaken by the medicines regulator. There would be more defined responsibility for the sponsor in relation to establishing the suitability of some herbal ingredients for inclusion in low-risk products. This is likely to have resource implications, and incur direct costs associated with review of products for non-traditional ingredients, and generation of data to support safety of such ingredients - which could also include development and implementation of testing regimes and purchase of hardware required for (or outsourcing of) testing procedures. Although industry would initially incur these costs, it is likely that any cost increases would be recouped from consumers through increased prices. There would be less freedom in some herbal species in relation to the plant parts permitted for use (although it must be remembered that all plant parts which have an established low risk would be permitted).

QUESTION FOR STAKEHOLDERS Question – Industry and other stakeholders are invited to comment on potential costs associated with the implementation of this option, including those issues and costs associated with laboratory testing, equipment, administration and staffing to achieve the required outcome. Impact on Complementary Medicine Practitioners

Benefits

It is likely that the ability to differentiate between traditional and non-traditional preparations of herbs would permit more appropriate dosage, usage and advice to consumers.



Costs

There may be a small extra cost for products containing non-traditional preparations, as it would be necessary for the sponsor/manufacturer to establish the risk status of the ingredient. There is the potential that some products that are currently being supplied would no longer be available. However, it is not anticipated that the number of products affected would be large.

QUESTION FOR STAKEHOLDERS Question – Practitioners, consumers, and other stakeholders are invited to comment on the impact that any increase in costs, or reduced availability of products, may have. Impact on Consumers

Benefits

The main benefit for consumers would be the greater protection against ingestion of ingredients with no established safety. These benefits may include the financial benefits associated with the reduction in direct medical costs associated with treatment, and the reduction of indirect costs resulting from loss of productivity due to absence from work either for themselves, or to care for members of their family (eg children). Non-financial benefits may include greater confidence in the products which they purchase, and reduced incidence of stress and emotional trauma associated with adverse reactions.

Costs

The industry costs associated with compliance with the proposed definition may result in slightly higher prices for some products as industry shifts the cost burden. However, it is not anticipated that products containing traditional preparations of herbs would be affected. Impact on Government

Benefits

The benefits for Government for this option would be increased certainty that herbal ingredients supplied in low-risk medicines are safe. This would have a beneficial effect in reducing the public health costs associated with adverse effects from complementary medicines. There would be better management of safety (quality and efficacy) issues associated with herbal ingredients, and the potential to separately manage regulatory arrangements for traditional herbal ingredients and non-traditional herbal ingredients.

Costs

Under this option, there would be direct costs associated with the development, implementation and maintenance of an MDO for herbal materials. There would also be increased responsibility for the ANZTPA, in ensuring that the MDO only includes low-risk herbal materials, or that appropriate restrictions are linked to individual herbal materials, where appropriate.



Option 3 Full evaluation of new herbal preparations Impact on Industry

Benefits

There would be few benefits for industry under this option.

Costs

There would be significant costs for industry if this option were to be adopted. In fact, it is likely that the financial costs associated with collation of submissions, and evaluation fees, would be prohibitive for a significant proportion of sponsors and manufacturers. This option may also mean that few sponsors or manufacturers would be able to utilise many of the new herbal ingredients on the market, as well as potentially adversely impacting on a large proportion of the products currently available. If this option were adopted, there is the possibility that a number of sponsors and manufacturers could go out of business, as they would be unable to meet the financial costs of assuring the safety of all herbal ingredients in their products.

QUESTION FOR STAKEHOLDERS Question – Industry and other stakeholders are invited to comment on the impact adoption of this option may have on business, both in terms of financial viability, and product continuity. Impact on Complementary Medicine Practitioners

Benefits

There would be greater assurance of the safety and identity of herbal ingredients supplied.

Costs

There would likely be a significant decrease in the range of products available, and potentially a large increase in cost of those that remained on the market, as industry undertook to recover losses in other areas.

QUESTION FOR STAKEHOLDERS Question – Practitioners and other stakeholders are invited to comment on the impact an increase in cost, and a decrease in availability, of products may have on their business.



Impact on Consumers

Benefits

It is likely that there would be increased consumer confidence in the safety of herbal products available on the market.

Costs

There would probably be a large decrease in the range of products available, and potential increases in the costs associated with those products remaining on the market. Impact on Government

Benefits

The likelihood of public health and safety being compromised would be decreased.

Costs

It is anticipated that there would be major resource implications associated with a large increase in the number of applications submitted for safety evaluations. It is anticipated that there may be significant ‘political fall-out’ from a disgruntled industry, which may adversely affect the regulator.



13`. CONCLUSION AND RECOMMENDED OPTION Option 1, maintaining the status quo has been discounted following full consideration of the issues. The consequences of adopting this approach are that public safety may be compromised, and that none of the long-standing issues with the current system will be addressed. Option 2, the introduction of a revised definition for ‘herbal substance’, which recognises the differences between traditional and non-traditional preparations of a herb, provides clear public health advantages. Although much of the responsibility for initially assessing certain herbal ingredients as ‘low risk’ would remain with the sponsor or manufacturer, there would be much more clarity as to how this may be undertaken. This is the preferred option Option 3, which proposes that all new preparations of currently approved herbal species be fully evaluated by the OCM prior to inclusion in products, was rejected as a viable option as costs arising from this option would significantly outweigh the benefits. This option would be likely to stifle innovation in industry, and may result in a significant proportion of sponsors and/or manufacturers going out of business.

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REFERENCES

1 Complementary Medicines in the Australian Health System – Expert Committee on Complementary Medicines in the Health System. Report to the Parliamentary Secretary to the Minister for Health and Ageing, September 2003. Canberra, Commonwealth of Australia. http://www.tga.gov.au/docs/pdf/cmreport.pdf

2 National Medicines Policy, 2000. Canberra, Department of Health and Aged Care.

http://www.health.gov.au/internet/wcms/Publishing.nsf/Content/nmp-objectives-policy.htm 3 Government Response to the Recommendations of the Expert Committee on Complementary Medicines in the Health

System, March 2005. Canberra, Commonwealth of Australia. http://www.tga.gov.au/cm/cmresponse.pdf 4 Harris P, Rees R, 2000. The prevalence of complementary and alternative medicine use among the general

population: a systematic review of the literature. Complementary Therapies in Medicine, 8, 88–96. 5 MacLennan AH, Wilson DH, Taylor AW, 2002. The escalating cost and prevalence of alternative medicine.

Preventive Medicine, 35, 166–173. 6 MacLennan AH, Wilson DH, Taylor AW, 1996. Prevalence and cost of alternative medicine in Australia. The

Lancet, 347, 569–573. 7 AZTEC Information Systems data. www.aztec.com.au/aztec 22 July 2003. 8 The Therapeutic Goods Administration’s risk management approach to the regulation of therapeutic goods, 2004.

http://www.tga.gov.au/about/tgariskmnt.pdf 9 Proposed Regulatory Definitions for Complementary Medicines and Homoeopathic and Related Medicines in a

Joint Australia New Zealand Therapeutic Products Agency, 2004. http://www.jtaproject.com/Downloads/Hot%20Topics/CompMedDefinitionsConsultationPaper16Dec04.pdf

10 Regulation of Herbal Medicines in a Joint Australia New Zealand Therapeutic Products Agency, 2004.

http://www.anztpa.org/cm/herbal.pdf 11 Regulation of Homoeopathic and Related Medicines in a Joint Australia New Zealand Therapeutic Products

Agency, 2004. http://www.anztpa.org/cm/homoeopathic.pdf 12 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. http://www.anztpa.org/about/treatytext.pdf

Documents

Consultation (Draft) Regulation Impact Statement - …...In addition to meeting the primary objective of the Treaty, the regulation review project fits strategically into the objectives