Welcome to the first 2004 edition of my Complementary Health Newsletter.
There is a lot to report on since my last newsletter. The saga of the government's attempt to hand over control of our dietary supplements industry to an Australian-based regulator goes on, and has reached a critical phase, so I will bring you up to date on the latest developments on this and other issues. It is vital that ordinary New Zealanders who care about these issues let the government know what they think of its handling of these issues, so please feel free to forward this newsletter to anyone who might be interested.
IN THIS EDITION:
Update: Govt. tries to give Australian agency control of NZ supplement industry
Australians Seek Tighter Controls on Dietary SupplementsHealth Practitioners Competency Bill
Pan Pharmaceutical Recall
UPDATE: GOVT. TRIES TO GIVE AUSTRALIAN AGENCY CONTROL OF NZ SUPPLEMENT INDUSTRY
As you will know the Health Select Committee inquiry into dietary supplements (which was triggered by the Green Party's 30,000 strong petition to the Committee) recommended that New Zealand should not regulate our dietary supplements industry through an expanded Australian based Therapeutic Goods Administration (TTTGA).
Instead, the Committee recommended unanimously that we strengthen New Zealand's own regulatory system and pursue Mutual Recognition rather than a joint agency with Australia.
A few days before our report was to be released, the government signed a treaty with Australia committing New Zealand to regulating dietary supplements through an expanded Australian TGA — ignoring the recommendations of the yearlong inquiry and the overwhelming majority of submitters to the Inquiry.
This was particularly galling given that all four Labour's MP's on the Health Sect committee had supported the committee's recommendation.
MP's from National, Greens, New Zealand First, Act and United Future all held a joint press conference condemning the government's actions.
Fortunately, however, implementing legislation has to be adopted by Parliament before the treaty that the government has signed can come into force. Hopefully the government will find that it does not have the numbers in Parliament to pass the implementing legislation — which would be highly embarrassing for the government.
At this stage all parties other than Labour and the Progressives have indicated they will not support implementing legislation to regulate dietary supplements through the TTTGA.
Despite this, the government is charging ahead as if it has the numbers to pass legislation implementing the treaty it has signed. The treaty has been sent to the Health Select committee for 'consideration,' and legislation implementing the treaty is expected to be introduced into Parliament in the next few months.
Parliament does not have the power to amend treaties between governments, but the Health Select Committee can recommend to government that it not ratify the treaty, as it relates to dietary supplements and hopefully that is what the committee will do.
During hearings in the Health Select committee on the treaty and the proposed new joint agency, all of the concerns and fears that the industry and consumers have raised over the past few years have been confirmed.
As part of the treaty examination process, the government has had to conduct a 'National Interest Analysis' of the proposal, and has finally made public its 'Regulatory Impact Statement' of the likely impact joining the TTTGA will have on New Zealand businesses and consumers.
These documents confirm that regulating our dietary supplements industry through the TTTGA will lead to 'significant increases in compliance costs for manufacturers and distributors of complementary medicines, especially smaller, New Zealand based companies': higher prices for consumers and 'some brands being taken off the market, leading to decreased consumer choice.'
•They confirm that all dietary supplements will be classified and regulated under the same system as medicines. This means that dietary supplements will be regulated out of all proportion to their profile of risk, using an inappropriate pharmaceutical methodology, by a pharmacy dominated regulator — even though there are significant differences in risk levels, ingredients and philosophies between the two industries which are in effective competition with each other.
•They acknowledge that in terms of how the new agency will operate it will simply be an expanded version of the present TGA — effectively a case of the TGA extending its authority and control to New Zealand — despite the fact that we were constantly assured during the Health Select committee inquiry that the new agency would be quite different from the existing TGA.
•They confirm that the new agency will be 100% cost recovery which means that all the costs of operating the highly bureaucratic trans tasman agency will be paid for by industry itself. It estimates that New Zealand businesses will be required to pay $3.2 million a year in fees to the TTTGA. This is on top of the costs manufacturers will incur in obtaining product licenses for every single product they sell, and for meeting Good Manufacturing Practice standards which are essentially the same as those for pharmaceuticals. It says all companies (whatever their size) will have to upgrade their facilities to GMP standards or cease manufacturing.
•They say the greatest impact of the increased compliance costs will fall on small businesses, and on companies that import large numbers of products from different manufacturers. It says that unless the importers can ensure that all companies they import products from have Australian style GMP licensing, these companies may need to find alternative sources of product!
•They acknowledge that there has been no direct consultation with industry on the costs of regulation. Then say one of the benefits of the new scheme is that government will be able to transfer $3.1 million in costs to the dietary supplements industry.
•An Australian government's Regulatory Impact Statement acknowledges that "Australian businesses which already have approval in Australia (that is, all of them) will have an "early competitive advantage' over New Zealand firms having to seek local approval for new products, and will 'benefit financially from having products on the market earlier than (New Zealand) firms, with the potential for enhanced profit.'
•They acknowledge the likelihood that companies — both pharmaceutical and dietary supplements manufacturers — will shift their operations to Australia, as a result of high compliance costs, reducing the New Zealand government's tax take.
•They confirm that the new agency will be headquartered in Australia and will have 'legal personality' in Australian domestic law.' It will be the first in the world where an agency in one country has total control to regulate and enforce an industry in another country. The agency will not only make all decisions and regulations about dietary supplements, it will also monitor these regulations and have powers to enforce and police the entire dietary supplements industry in New Zealand -including withdrawing product licenses, shutting down companies, a la Pan fiasco etc, which has cost the Australian and New Zealand industry more than $400 million to date.
•An all-powerful Managing Director will take over the powers of regulatory decision-making and enforcement presently exercised by the Minister of Health. Parliament will be asked in implementing legislation to delegate law-making power to the Managing Director who will be able to make all 'regulatory' decisions on his own, as the treaty says he will not even be accountable to the Board for regulatory functions — let alone to the New Zealand Parliament. Curiously, the unelected and unaccountable Managing Director will be able to delegate the power to make decisions to other persons and organisations of his choice (it's bound to be a 'he').
•The government has dressed up this abdication of sovereignty by saying that the Minister of Health will have equal decision-making powers with the Australian Minister of Health on a Governing Council, and that New Zealand will have good representation on a Board which will set budgets and strategy for the agency. The only problem is that the key regulatory decision-making powers are all delegated to the Managing Director!
•In essence, then, the proposal is that we hand over control and sovereignty of a vital New Zealand industry to an expensive, highly bureaucratic Australian-based organisation over which our Parliament will have no effective control. The only beneficiaries of this astonishing abdication of our sovereignty will be Australian businesses, which will have a 'competitive advantage' in the New Zealand market, and the government, which will save $3 million in compliance costs by passing these costs to the dietary supplements industry.
•In return for this, compliance costs will escalate, small businesses will go to the wall, the cost of dietary supplements will increase, entire brands of dietary supplements will be taken off the market, and consumers will have less choice.
•It is worth remembering that the whole point of pursuing Trans Tasman Mutual Recognition with Australia was to benefit New Zealand business and consumers by eliminating regulatory impediments to trade with Australia. But the effect of 'harmonising' with Australia through the joint agency will be to burden New Zealand businesses with increased compliance costs and regulatory impediments (which will be passed on to consumers), and open up competitive trading opportunities for Australian businesses, which will likely wipe out many New Zealand businesses.
•Pursuing mutual recognition, instead of harmonisation through the TTTGA, would ensure that New Zealand businesses could trade more freely with Australia without incurring excessive compliance costs and getting tied up in the over zealous bureaucracy of the Australian TGA, or giving up our sovereignty.
•If anyone still has any doubts about the effect the proposal would have on industry, let me quote from an email I received Bruce Murrary, Managing Director of Nature's Sunshine Products New Zealand. Bruce had just returned from attending a two-day conference in Australia about TGA regulations. He concluded "I cannot emphasise more the fact that harmonising with the TGA will ruin all innovation and many of the fine, 30 year formulations manufactured by my company will disappear as we struggle to meet the pre & post production testing costs and reformulate our products as numerous ingredients we use are not on the TGA white list."
•To ensure that all political parties continue to oppose this proposal, I would urge people to contact MP's in the coming months which will be decisive. It is probably worth contacting the government as well, which presumably is more sensitive to public opinion at this time.
•Let me assure you that the Green Party will not waver in our opposition to the joint agency proposal — our party policy is opposed to handing over our control and sovereignty of this important industry to an Australian based organisation.
AUSTRALIANS SEEK TIGHTER CONTROLS ON DIETARY SUPPLEMENTS
After the Pan fiasco, the Australian government set up a 16 member expert committee to look at whether regulatory controls over complementary medicines needed to be further strengthened. Only four members of the committee had any formal training in complementary medicine.
The committee has released its report that contains a wide range of recommendations to further strengthen the regulation of complementary medicines — recommendations that would have an immediate impact in New Zealand if we were to be regulated by the TTTGA.
The committee recommends that homeopathic medicines be regulated: that herbal medicines and the use of raw herbs in medicines be reviewed, to bring them into line with the regulation of other complementary medicines. It proposes ensuring that legally enforceable quality standards are in place for all complementary medicines; removing 'Practitioner Only' dispensing products, increasing penalties to companies who refuse to provide information to support claims they make on products etc. The Report (Complementary Medicines in the Australian Health system can be accessed from the Parliamentary Secretary to the Minister for Health and Ageing website.
HEALTH PRACTITIONERS COMPETENCY BILL
The Health Practitioners Competency bill was passed in Parliament last year and will come into effect on 18 September 2004.
It will extend coverage to Osteopaths but not to Acupuncturists, because the government did not support a Green Party amendment to include Acupuncturists in the bill.
Professions which are covered by the bill are busily finalising their scopes of practice and establishing Registration Authorities to comply with the new legislation. The Osteopaths have already set up a Registration Authority and are working on the scope of practice for their profession.
Any profession which is not covered by the bill, such as the Acupuncturists, can apply at any time to be covered by the bill. The Ministry of Health has already received an application from Physiotherapists to come under the bill, but has not yet received one from Acupuncturists. I gather this is because the different groups within the acupuncture profession have not yet managed to resolve their differences, which is a real shame, as most people agree that Acupuncture should be covered by the bill.
PAN PHARMACEUTICALS RECALL
The recall of about 700 Pan Pharmaceutical dietary supplements has cost the Australian and New Zealand dietary supplements industries more than $400 million to date. 143 tonnes of the recalled dietary supplements were destroyed without ever being tested, so there is no analytical evidence that any of the dietary supplements actually posed a risk to New Zealand consumers.
In my last newsletter I expressed concern that the massive mandatory recall was pushing many small businesses to the brink of financial collapse and had been used to tarnish the reputation of the dietary supplements industry — even though the two products that had sparked the recall were over- the-counter pharmaceutical products.
While the Green party strongly supports GMP appropriate standards for pharmaceuticals and dietary supplements, and acknowledges there were serious problems at Pan Pharmaceuticals, I am concerned that the dietary supplements industry has been unfairly targeted by regulatory authorities over the Pan Pharmaceutical recall.
Since then I have been asking numerous questions of the Minister of Health about the Pan Pharmaceutical recall. Her answers raise as many questions as they answer — such as why, if the largest ever recall was prompted by fabrication and manipulation of tests etc, as she claims, has nobody ever been prosecuted for the alleged crimes, or any criminal charges laid, and why have none of the recalled products ever been tested?
I print in full a sample of the Minister's answers to my questions.
3039 (2004). Sue Kedgley to the Minister of Health (18 March 2004): Has anyone been arrested or prosecuted for alleged crimes relating to Pan Pharmaceuticals; if so whom; if not, why not?
Hon Annette King (Minister of Health) replied: No one has been arrested or prosecuted in New Zealand.
1291 (2004). Sue Kedgley to the Minister of Health (23 February 2004): Were any Pan Pharmaceutical products that were recalled also destroyed; if so, why?
Hon Annette King (Minister of Health) replied: All Pan Pharmaceuticals medicines and dietary supplements that were recalled in New Zealand were destroyed. Because Pan Pharmaceuticals' manufacturing licence had been suspended, there was no confidence that these products had been manufactured to an appropriate standard. The destruction of dietary supplements was in accordance with section 40 of the Food Act 1981.
1292 (2004). Sue Kedgley to the Minister of Health (23 February 2004): If Pan Pharmaceutical products were destroyed, what volume was destroyed and where?
Hon Annette King (Minister of Health) replied: A total of 20,359 units of Pan Pharmaceuticals medicines were destroyed in New Zealand. In excess of 143 tonnes of dietary supplements were destroyed at various centres in New Zealand, primarily in Auckland.
1295 (2004). Sue Kedgley to the Minister of Health (23 February 2004): Were any of the Pan Pharmaceutical products that were destroyed the subject of reported adverse reactions or death; if so, what are the details?
Hon Annette King (Minister of Health) replied: Further to the interim reply to this question, I am now able to provide the information requested.
No direct linkage was established in New Zealand between Pan Pharmaceuticals products and adverse reactions or death.
1294 (2004). Sue Kedgley to the Minister of Health (23 February 2004): What were the test results of any of the Pan Pharmaceutical products that were recalled and tested?
Hon Annette King (Minister of Health) replied: No products were tested in New Zealand.
3130 (2004). Sue Kedgley to the Minister for Food Safety (19 March 2004): Further to her reply to written question No 01293 (2004), what are the appropriate standards in Section 40 of the New Zealand Food Act that were breached and that therefore initiated the recall of Pan Pharmaceutical products in New Zealand?
Hon Annette King (Minister for Food Safety) replied: The standard applied that resulted in a recall of Pan Pharmaceutical products being initiated was that set out in section 40(1) of the Food Act 1981 relating to protecting the public. Section 40(1) states that this protection can relate to "any food that is unsound or unfit for human consumption or is damaged or deteriorated or perished, or that is contaminated with any poisonous, deleterious, or injurious substance."
In terms of the decision to recall, protecting the public was paramount and this was made initially on the basis of the reported extent of non-compliances of Pan Pharmaceutical manufacturing practices (including data manipulation, results fabrication, ingredient substitution, deficient raw material and finished product controls, unsatisfactory process controls and inadequate assurance regarding mix-up +/- (cross) contamination) that resulted in the suspension of the Pan Pharmaceutical licence by the Australian Therapeutic Goods Administration and the impact such non-compliances would have on products from Pan Pharmaceuticals.
