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| Changes to the Therapeutic Goods Act |
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Contact: Clare Cunliffe, Robert Cooper and Richard Hamer
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Allens Arthur Robinson
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Manufacturers' responsibilities
Changes to the Therapeutic Goods Act following the Pan Pharmaceuticals product recall increase manufacturers' responsibilities in relation to ensuring the quality and safety of therapeutic goods available in Australia.
Overview
In the wake of the Pan Pharmaceuticals product recall, new legislation has been passed requiring manufacturers to follow more rigorous standards in relation to the supplies used in the manufacture of therapeutic goods, notification and recall procedures for potentially unsafe therapeutic goods, and corporate governance of companies associated with the manufacture of therapeutic goods. We explain the changes introduced by the legislation and their implications for manufacturers.
Background: The Pan Pharmaceuticals recall
Pan Pharmaceuticals (Pan) was Australia's largest contract manufacturer of complementary medicines, including herbal, vitamin, mineral and nutritional supplements. They also manufactured over-the-counter medicines including pain relievers and cold and flu preparations. On 28 April 2003, the Therapeutic Goods Administration (TGA ) suspended the licence held by Pan to manufacture medicines for six months, because of 'serious concerns about the quality and safety of products manufactured by the company.'
The suspension resulted from audits of Pan's manufacturing premises. The TGA alleged these audits revealed widespread and serious deficiencies and failures in manufacturing and quality control procedures. It was asserted that these deficiencies included substitution of ingredients, manipulation of test results and substandard manufacturing processes (including a lack of testing of the raw materials, the use of raw materials that had failed testing, and inadequate cleaning of tablet machines between the manufacture of different products).
In light of the TGA's view that 'where the quality of a medicine cannot be certain, neither can the safety or effectiveness of that medicine', the TGA initiated and oversaw the recall of all medicines manufactured by Pan since 1 May 2002 which were available on the Australian market. The TGA identified 219 products manufactured and supplied in Australia by Pan for immediate recall. All of these products were cancelled from the Australian Register of Therapeutic Goods for quality and safety reasons. Pan also had its approval to supply its range of approximately 1650 export products cancelled. The TGA also oversaw the identification and recall of products by other manufacturers containing ingredients manufactured by Pan to identify and recall these products. The resulting product recall has been described as the biggest in Australia's history. Almost 1,600 complementary and other over-the-counter medicines have had to be removed from the market in Australia. This recall has also had international implications, with 28 countries known to be affected.
The Government's response
On 13 May 2003, the Federal Government introduced a package of legislative measures to toughen Australia's regulatory system for therapeutic goods in response to issues raised by the Pan controversy. These amendments were included in the Therapeutic Goods Amendment Act 2003 (Cth) (the Amending Act ), which received royal assent on 27 May 2003, making important changes to the Therapeutic Goods Act 1989 (Cth) (the Act ).
The revised explanatory memoranda to the Amending Act stated that:
The need for these amendments arises from the recent failure of the manufacturer, Pan Pharmaceuticals Ltd, to meet the requirements of good manufacturing practice, and the difficulties encountered in quickly identifying affected therapeutic goods for the purposes of recall.
The explanatory memoranda highlighted the following as key objectives of the amendments:
A clearer definition of the responsibilities and obligations of both sponsors and manufacturers of therapeutic goods;
Increased responsibility of sponsors/manufacturers for their statutory responsibilities and obligations;
More effective deterrents to breaches of standards and other statutory requirements designed to maintain the safety and quality of therapeutic goods.
What do the changes to the legislation mean?
The amendments provide the TGA with greater powers in relation to manufacturing practices and recall procedure.
In particular, the Amending Act aims to achieve its objectives by:
increasing maximum financial penalties for a range of existing offences under the Amending Act, including for failures to comply with standards, the making of false statements in applications for marketing authorisation and in conformity assessment statements, breaches of manufacturing licence conditions (including failure to comply with good manufacturing practice principles (GMP )), and counterfeiting of therapeutic goods, to fines of up to $220,000 for individuals or $1.1 million for a company, and a jail term of up to 5 years;
creating new offences for the falsification of other documents created or retained as part of manufacturer's regulatory obligations and supplying goods from a manufacturer or site which has not been approved by the TGA;
expanding compulsory notification provisions. Manufacturers are now subject to extended duties to report adverse effects of therapeutic goods and to a requirement to provide information to the TGA where the quality, safety or efficacy of goods is no longer acceptable;
expanding recall provisions to require that where goods do not meet certain standards (for example, because they do not comply with standards, are not manufactured in accordance with GMP or under licence, are not registered under the TGA, or are counterfeit) manufacturers may be required to recover goods from distribution and to make a public notification of the circumstances of recall;
introducing a 'fit and proper person' requirement into the standards used to grant manufacturing licences or conformity assessment certificates and in consideration of suspension or revocation. That is, where the grant of a manufacturing licence or a conformity assessment certificate is under consideration, the TGA should be satisfied not only that the applicant manufacturer can comply with GMP but also that the applicant manufacturer and every individual involved in the control or management of the applicant are also fit and proper persons. In assessing whether an applicant or an individual is a fit and proper person, the TGA may have regard to any of the following indicia, as well as any other relevant considerations:
the business record of the applicant or person (including experience in other businesses);
any previous suspension or revocation of a manufacturing licence or failure to comply with a condition of a licence; and
any conviction for an offence against State or Commonwealth law.
It is also a ground for suspension or revocation of a licence if the licence holder or persons in control of the licence holder are not fit and proper persons;
creating new conditions of a manufacturing licence to ensure compliance with GMP and the reporting of adverse events. That is, licence holders must now ensure that manufactured goods conform to all applicable standards and to GMP;
requiring sponsors to maintain records of manufacturers involved in production of their therapeutic goods and to notify the TGA of any changes to these manufacturers (penalties apply). These records must be kept for at least 12 months after the product expiry date. A failure to supply these details can result in immediate cancellation of TGA registration in respect of goods;
providing for better identification of therapeutic goods used in the manufacture of products to assist product recall. Goods will be unacceptably presented if the product name is insufficiently unique to allow product recall; and
improving adverse event reporting for therapeutic goods. Where manufacturing licence holders become aware of information relating to adverse events, they are now required to provide this information to the TGA.
What does it mean for manufacturers?
In light of the more onerous penalties and more rigorous licence conditions introduced by the Amending Act, manufacturers of therapeutic goods should ensure their compliance with the Act and safeguard their business interests by reviewing the following areas:
Generally, manufacturers should ensure:
Product information effectively and uniquely identifies all therapeutic goods; and
The person or organisation holding the licence and those employees involved in the control and management of manufacture are 'fit and proper persons'.
In relation to suppliers, manufacturers should ensure:
Record keeping and TGA notification procedures in relation to suppliers meet the new standards; and
Agreements with suppliers ensure that suppliers can meet GMP and other quality standards (and that manufacturers are indemnified against deficiencies in quality control procedures).
In relation to risk management, manufacturers should ensure:
All insurance policies ensure adequate indemnification against failures in quality control procedures; and
Adverse event reporting and product recall procedures are adequate
Manufacturers should review insurance policies, employment policies and most importantly, product recall policies to ensure their compliance with the revised Therapeutic Goods Act 1989 (Cth).
Other recent changes to the Therapeutic Goods Act
The Amending Act also brings some foods within the administration of the TGA and rationalises the regulation of the advertising of therapeutic goods.
Introduction
In addition to the regulatory measures introduced as a result of the Pan Pharmaceuticals controversy (see feature article), the Amending Act also made some important changes to the regulation of food and advertising under the Act. These changes are outlined briefly below.
Food can now be a therapeutic good
The TGA is now able to designate food items as therapeutic goods. Previously, prescribed foods were not classified as therapeutic goods. Now, where a food product prescribed under the Australia and New Zealand Food Standards Code is designated by TGA as having therapeutic properties, the TGA may declare the product to be a therapeutic good, and therefore as subject to regulation under the Act.
This is used by the TGA to extend the operation of the Act to products like sports drinks, medicated lozenges and foods which may be regarded by consumers as possessing therapeutic properties even where no therapeutic claim is made for the product.
What manufacturers can do: Manufacturers should keep watch on any proposals by the TGA for their products to be designated as therapeutic goods. They may wish to lobby on the issue or prepare to meet the necessary standards.
Advertising provisions rationalised to promote consistency
All offences relating to the advertising of therapeutic goods under the Therapeutic Goods Advertising Code (the Code) are now set out by the Act, rather than the Therapeutic Goods Regulations (the Regulations). Previously, some offences were regulated by the Act, while other similar offences were regulated by the Regulations. This led to an inconsistency in the applicable penalties for similar offences (generally, maximum penalties provided for by the Act were greater than those provided for by the Regulations). The transfer of offences from the Regulations to the Act has been undertaken to ensure consistency of penalties applying for all breaches of the Code.
The Amending Act also removes an inconsistency whereby the approval process for broadcast advertisements for therapeutic goods (ie, advertisements disseminated electronically, whether by audible or visible means) was overseen by the Minister for Communications, information Technology and the Arts, while the approval process for all other advertisements for therapeutic goods was overseen by the TGA. Now, the approval process for all specified media is supervised by the TGA (Specified media is defined to encompass mainstream media, cinema advertising, broadcast media, displays of goods, and advertisements on public transport, in shopping centres and on billboards. However, second reading speeches and explanatory memoranda indicate that internet advertising is likely to be exempted from this definition by the operation of the Regulations and included under the provisions relating to point of sale advertising).
The general outline of the revised regulatory scheme applying to the advertising of therapeutic goods is outlined below:
a. In relation to media advertising
It is an offence to publish or broadcast an advertisement for therapeutic goods aimed at consumers which has not been approved where approval is required.
This offence also applies to broadcasters and publishers; and
It is an offence to publish or broadcast an advertisement which differs from the advertisement which has been approved, or which does not meet the conditions of approval, or where the approval has expired, or, in the case of visual advertisements, to publish an advertisement without the correct approval number.
Publishers/ broadcasters are provided with a defence to these offences.
b. In relation to 'point of sale' advertising
In relation to advertising which does not require pre-approval ('point of sale advertising', including flyers, letter box drops, internet advertising and 'shelf talkers'):
persons may be prevented from making false or misleading representations in advertising;
certain prohibited representations (to be specified by regulation) may not be made in advertising; and
representations in advertisements which relate to serious diseases must be approved by the TGA and may be subject to additional requirements (an example might be the publishing of disclaimers or limitations).
c. In relation to all advertising
It is an offence to publish generic information relating to the ingredients of a therapeutic good (including any statement, pictorial representation or design about the composition, properties or other characteristics of those ingredients) which does not comply with the Code.
It is an offence to advertise therapeutic goods which are not included on the Therapeutic Goods Register and not otherwise exempted from the Act.
It is an offence to make representations about therapeutic goods which do not comply with the Code.
It is an offence to use an unapproved restricted representation or a prohibited representation in advertising therapeutic goods.
It is an offence to publish or broadcast an advertisement concerning therapeutic goods which does not include a required representation about those goods.
It is an offence to publish or broadcast advertisements which have been identified by the TGA as false and misleading.
It is an offence to suggest government or TGA endorsement of therapeutic goods in advertising (other than stating that a therapeutic good is available as a pharmaceutical benefit).
In summary
In light of the revisions made by the Amending Act, to ensure compliance with the Act:
Food manufacturers should review their portfolios to identify any foods with therapeutic properties which are included under the Food Standards Code. These foods may now be classified by the TGA as therapeutic goods and therefore be subject to the Act.
Publishers, Broadcasters and Therapeutic Goods Manufacturers should ensure that all broadcast and media advertisements as to therapeutic goods are duly approved by the TGA.
Therapeutic Goods Manufacturers should consider the following:
What may be advertised: Manufacturers should ensure that advertisements relate only to those therapeutic goods which are included on the Therapeutic Goods Register or exempt under the Act.
The form of advertisements: Manufacturers should also ensure that advertisements do not:
contain false or misleading representations;
contain unauthorised representations as to serious conditions or other prohibited representation;
suggest government or TGA endorsement;
and that advertisements do:
contain all required representations; and
conform with the Code (including representations as to the ingredients of therapeutic goods).
June, 2003
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