SUBMISSION: THE THERAPEUTIC PRODUCTS AND MEDICINES BILL

The Green party believes the proposed legislation, as it relates to the regulation of dietary supplements and complementary medicine, should be considered within the context that dietary supplements provide a valuable and beneficial addition to many people's diets, especially those who are deficient in certain minerals and vitamins. They help to keep people well and ward off ill-health and disease, and therefore reduce the economic burden on the health system, and the number of people requiring treatment by our health system.

We note that recent research suggests that many New Zealanders are deficient in key nutrients, and that as a result the government is considering mandatory fortification of our food with some nutrients. We believe that the acknowledged deficiencies in key nutrients in New Zealand suggests a need to facilitate, not restrict, access to dietary supplements in New Zealand; and that government policy should therefore ensure that dietary supplements are widely available and accessible to consumers who wish to use them to supplement their diet.

But if this legislation is passed, it will reduce access to many dietary supplements and traditional medicines, and to nutritional medicine, and in so doing will affect the future health and wellbeing of generations of New Zealanders. It will also result in many traditional medicines that have been safely used for generations, becoming illegal and unavailable in New Zealand.

In proposing New Zealand adopt a high-cost, heavy-handed trans-Tasman regulatory system for dietary supplements, the government has focussed on the risks, rather than the benefits, of dietary supplements, and as a result, is proposing an inappropriate risk assessment and regulatory model for low risk natural medicines, many of which have been used safely for centuries.
We note from the Coroner's recent report that there have been no deaths attributed to dietary supplements in New Zealand, and few adverse events. Natural health care products are extremely low risk compared to the toxicity of many prescribed synthetic pharmaceutical drugs. This begs the question, why would we seek to impose a high-cost pharmaceutical type regulatory system to evaluate and regulate natural health care products, which are low risk compared to pharmaceutical products.

While we share the widely held view that the regulatory system for dietary supplements needs to be improved, it should be New Zealand based and appropriate for low-risk products. The elements of such a system are outlined in the Health Select committee report on its inquiry into how best to regulate dietary supplements, and this should be the basis for improved regulation, not the heavy-handed approach of the Australian Therapeutics Goods Agency, proposed in this bill.

The proposed new system would change forever the status of traditional herbs and dietary supplements. At present they are assumed to be safe unless they contain ingredients that are on a 'negative' list in New Zealand. Under the proposed system, all herbs would be assumed to be unsafe, and therefore illegal, unless they were approved (at considerable expense) and included on a so-called 'positive list.' This will inevitably mean that many traditional medicines such as Chinese and Ayurvedic herbs (even ones that have been approved by regulators such as the American FDA) are likely to become illegal in New Zealand in about five years time, and practitioners could be prosecuted for providing New Zealanders with herbal remedies that have been safely used for millennia. This is Orwellian and will amount to a severe restriction on health choices.

We note that all the bill does is give effect to the provisions of a treaty that the government signed with Australia back in 2003. None of the governance and administrative arrangements of the joint regulatory agency are spelled out in the legislation. The bill also acknowledges that all the details of how the agency will operate will be set out in Rules and Orders, which will be adopted after the legislation has been adopted! These Rules and Orders will determine all sorts of key matters, such as what ingredients will be permitted in dietary supplements, licensing provisions, compliance costs etc. A consultation document on the Managing Director's Orders is not even expected to be released until March — well after submissions have closed! This means that the select committee is being asked to approve an unprecedented new regulatory system, set up under Australian legislation, when it has very little detail before it on how the system will operate.
A similar bill that will set up the agency in Australia has not even been tabled or introduced into the Australian parliament yet. It would therefore appear that the intention is that we will pass legislation in New Zealand before the Australian parliament has considered its bill. Presumably the Australian Parliament could make changes that could affect the way the agency operates, after we have passed legislation in New Zealand. This is of real concern, especially since the agency will be set up under Australian, not New Zealand, legislation.

We note that one of the government's policy priorities is to reduce unnecessary compliance costs on small businesses. This legislation will contradict and undermine this stated government policy, and add unnecessary and onerous compliance costs to small dietary supplements businesses. These compliance costs will result, in turn, in the closures of many small businesses and a reduction in innovation across the sector.

While the government says the proposed agency will enhance Trans-Tasman economic relations, the whole point of pursuing Trans-Tasman mutual recognition with Australia through Closer Economic Relationships was to benefit New Zealand businesses and consumers by eliminating regulatory impediments to trade with Australia. Yet the effect of 'harmonising' with Australia through this joint agency will be to impose new regulations on dietary supplements and increase the imports of Australian dietary supplements coming into New Zealand, but reduce the number of New Zealand owned businesses competing in this marketplace.

We note that no justification is provided in the legislation for the government's decision to include dietary supplements in a trans-Tasman regulator. Nowhere in the bill does the Government explain why it believes the natural health products industry in New Zealand should be subjected to this heavy-handed regulatory regime. We believe it is crucial that this is clarified before Parliament begins to consider the bill.
Further concerns about the bill:
•The proposed regulatory framework for therapeutic goods has failed in Australia. Far from being 'international best practice' as the government alleges, reputable Australian sources claim that the Australian regulatory system for complementary medicines (through the existing Australian Therapeutic Goods Authority) has done considerable harm to the Australian natural health industry in terms of increasing compliance costs for dietary supplements businesses and therefore the cost of natural health products, reducing innovation in the industry, the range of products available to consumers.

•Val Johansen, a key player in the complementary medicines industry in Australia, says the Therapeutic Goods Authority's excessive and bureaucratic regulatory system has hamstrung and hobbled the industry there. She says the excessively high compliance costs (which have been increasing by more than 15% a year) are driving many dietary supplements businesses offshore.

•One of the problems the Australian natural health industry is experiencing is the high cost of getting a product or new ingredient licensed. According to Val Johansen and others, there have been very few new products coming into Australia and consumers there have access to a much restricted range of supplements which are mostly produced by multinational corporations who can afford the high compliance costs, rather than by small businesses. Increased compliance costs will inevitably be passed onto the consumer in terms of higher costs for supplements.

•The proposed agency will undermine the sovereignty of our Parliament. If passed into law, control of dietary supplements, pharmaceuticals and medical devices industries in New Zealand will transfer to the Australia New Zealand Therapeutics Products Authority — an offshore entity that will be set up under Australian law, and will be headquartered in Canberra, with an office in Wellington. It will be the first time entire industries in New Zealand will be controlled by an off-shore entity headquartered in another country. Documents I have obtained under the Official Information Act indicate that about 93% of the staff of the agency will be Australians, and just 7% New Zealanders. This speaks volumes about how 'equal' this agency will be.

•We acknowledge that there will be a Ministerial Council comprising the Ministers of Health of New Zealand and the Federal Government of Australia, who will oversee the agency. But the two Ministers will meet in private. While the agency is subject to the Official Information Act, it appears that the Ministerial Council may be exempt, which would mean that the public will have no way of knowing what the two Ministers discuss or approve in the Ministerial Council, beyond what they choose to make public. I note that the Minister has turned down repeated requests I have made under the Official Information Act for minutes of Ministerial Council meetings and other information relating to the establishment of the agency. The Minister has also refused requests to provide this information to the Health Select committee.

•The two Ministers, meeting in private, not our Parliament, will review the agency. And while a report on the agency will be tabled in Parliament each year, there is no provision for the report to be considered by a select committee, or for other recourse or scrutiny in the event that MPs have concerns about aspects of the report. The agency is not subject to key legislation such as the Public Finances Act. And the main powers of the agency, to issue Orders on all manner of issues, will be delegated to an unelected and unofficial Managing Director who will have statutory powers of delegated legislation presently exercised by the Minister of Health, as well as powers to enforce and police regulations.

•The agency will have unprecedented police powers of search and seizure. This means that inspectors or police from the off-shore entity will have the power to issue warrants and prosecute people and organisation here in New Zealand and close down dietary supplements companies they believe to be non-compliant.

•The agency will also have the power to issue civil penalty and other offences, and to impose instant fines of up to $550,000 on a company. As well as instant fines, penalties for offences range up to $5.5 million for companies.

•Rules and Orders issued by the proposed agency will have the force of law in New Zealand, but will not require the approval of our Parliament. The Managing Director of the proposed agency will have the power to enforce and police Rules and Orders in New Zealand, even though they will not have been voted on by our Parliament.

•Technically the Rules and Orders could be challenged by a 'disallowance motion' in Parliament, but the committee should note that a disallowance motion has never passed in the 153 year history of our Parliament. This means that the power to challenge regulations in our Parliament is essentially illusory.

•The definition of what is a 'therapeutic product' is vague and it would be left to the Managing Director to decide, on a case by case basis, what should constitute a therapeutic product.

•Once the new agency was fully in place, in about five years time, any ingredients that had not been been approved and included on a so-called 'positive list' would become illegal.

•The agency will circumvent the Treaty of Waitangi and reduce the access of Maori to their traditional medicines and herbs, guaranteed by the Treaty of Waitangi. Since traditional herbs are part of the 'flora fauna' guaranteed to Maori by the Treaty of Waitangi, requiring Maori who wish to commercialise their traditional herbs to apply to get it licensed to an off-shore entity, would seem to be a breach of this treaty commitment.

I wish to appear in person before the select committee to support my submission.

Signed:Sue Kedgley
Green Party MP