Laurie Ferguson (Reid, Australian Labor Party, Shadow Minister for Consumer Affairs) Share this | Hansard source

The opposition supports the Therapeutic Goods Amendment Bill (No. 3) 2006. It is essentially designed to streamline the application-making process for medicines, blood products and tissue. The e-business portal will enable manufacturing applicants to monitor the passage of their applications and to make amendments as the need arises. Since taking over as the shadow minister with responsibility for the TGA, I have embarked on an extensive process of meeting key TGA stakeholders. These include consumer and industry groups. To date I have received significant feedback which has reiterated the perception of the competence of the TGA. Whilst it has its critics, the TGA commands widespread respect.

The Medical Industry Association of Australia have, over the past few months, made a concerted effort to keep me fully informed of the key issues with which they have been dealing over the past few years. Given, as I say, that this bill is non-controversial and there is agreement to it from the opposition, I intend to make some broader comments. I recently had the pleasure of touring key medical devices manufacturing operations and distributors in my own and neighbouring electorates. During our meetings, the MIAA and their members raised numerous issues with regard to the industry and the TGA. According to the MIAA, the industry supported the 2002 revision of the Therapeutic Goods Act and regulations to provide a harmonised regulatory model for medical devices and in vitro diagnostics. Industry support was then based on three important factors: (1) the incorporation of a risk based approach to regulation; (2) harmonisation with the regulatory systems of Australia’s manufacturing suppliers, in terms of both the content of the legislation and the TGA’s interpretation and administration of the regulation; and (3) cost-effectiveness.

The medical devices industry’s support for the proposals was based on an expectation that harmonisation of the system would reduce regulatory duplication and shorten the approval time to allow medical devices onto the Australian market. To date, the MIAA are reporting to me that their expectations are unmet. According to them:

Australian manufacturers and importers face considerable difficulty and costs in moving to the new model. Transition of products has proved to be slow and there is a real risk of products (manufactured locally or imported) not being available to consumers in Australia.

Industry had envisaged the TGA act would be consistent with the Australian government’s public commitment to the work of the Global Harmonisation Task Force, the GHTF. Their objectives focus on providing a forum for national regulatory authorities and industry representatives from the European Union, the United States of America, Japan, Canada and Australia to promote international convergence in regulatory requirements and practice and, in particular, to promote the safety, effectiveness, performance and quality of medical devices; to encourage technological innovation; and to foster international trade. It would also serve as an information exchange forum through which countries with medical devices regulatory systems under development could benefit from the experience of those with established systems. The MIAA have publicly stated:

... the majority of current problems for industry result from the regulations’ deviation from the European framework with which they were originally intended to be harmonized.  The resulting extra work for many Australian sponsors and their suppliers on top of regulatory work performed and approved elsewhere in the world, means the Australian system is currently duplicative, difficult and expensive.  Even though the new regulatory system is in its early days, MIAA believes that the signs are already becoming obvious that it will negatively impact the growth of the Australian industry and ultimately affect consumer access to state-of-the-art technology.

From an industry perspective, the majority of the current problems arise as a result of losing sight of the European framework with which they were originally supposedly to be harmonised. Whilst lodging manufacturing applications may be a minor part of the delay, all the same it will aid in the process of creating greater efficiencies, especially given that the industry is looking to move more than 10,000 items into the new regulatory regime before the October 2007 deadline. Obviously, that is a mammoth task—10,000 items will be basically moved over and reauthorised, and the clock is certainly ticking.

I turn to the complementary health sector. I recently had the opportunity to visit the Symbion vitamins manufacturing plant in Virginia, Brisbane. This is one of the country’s leading manufacturers of complementary medicines, also known as neutraceuticals. Again, I take this opportunity to highlight some of the key issues which are currently affecting this aspect of the industry and their dealings with the TGA.

Treating this field as a type of drug is probably the right approach, so long as the nature of the products and the supply chain is properly allowed for. Raw material manufacturers are not subject to good manufacturing processes. This creates difficulties for the industry, as the companies involved in Australia are essentially unable to control the supply chain and guarantee product. Australian industry is relatively small, so there are limits to what we can expect overseas raw material manufacturers to undertake for the Australian companies. They are generally controlled by large US manufacturers. Australian companies report that the size of the Australian market means that they are unable to gain priority. Australian requirements and expectations tend to be a low priority for these companies.

Natural variations in raw materials are to be expected, so pharmaceutical type tolerances are not achievable. To this end, greater margins for deviation are essentially to be allowed for. The margins are much tighter, so compliance costs must be reasonable. This is especially important given that the public health risk is generally much lower. A greater risk management approach by the TGA is sought by the manufacturers. Compliance should be linked to consumer risk.

The TGA are more used to the nature of the pharmaceutical industry and prefer the greater certainties, and they tend to interpret the guidelines along pharmaceutical lines. Whilst industry recognises the need for institutionalising the highest possible standards, there is, nevertheless, a perception that these standards ought not necessarily to be those of the pharmaceutical industry. Enforcement of regulation lacks transparency and accountability in this field and is therefore often inconsistent—for example, between big and small or between Australia and overseas. Again, manufacturers require a universal standard applied to all manufacturers, regardless of the size of the operations. They also require greater transparency and consultation by the TGA. They take the view that the Pan calamity has created a very uneven relationship with the regulator, and yet the reality is that industry has moved on and now operates under a totally revised regime.

Compliance costs are probably amongst the highest in the world. I ask: is this based on evidence of any specific problems? The process to debate audit issues does not seem to be in place or is ineffective, as communication is normally restricted to the lead auditor. Contacting auditors and seeking advice on and interpretation of issues is very difficult, and the time taken for resolution is often commercially damaging. Audits are becoming longer and more in-depth. Why is this set in stone for companies with a proven track record, as against those which are perceived to have more risk, either domestic or overseas owned?

The issues raised above are contributing to a situation where domestic manufacturing is being replaced by overseas options, especially from India and China, where manufacturing is cheaper and audits are more difficult to conduct. And yet it is not likely that the standards in India and China are higher than or equivalent to the standards that we have here in Australia. Certainly, it is much more difficult to audit a plant in China or India, for that matter, than in Australia. Likewise, there is little evidence to suggest that there are any unannounced audits in places such as these countries.

I turn to concerns of consumer groups in respect of the TGA and the broad field of pharmaceuticals. In a submission to the ACCC the Australian Consumers Association argued that the objective of the regulation of pharmaceutical marketing should be to achieve a balance between the interests of pharmaceutical companies in promoting their products, the need for consumers to receive accurate and comprehensive information about medicines, and minimising the risk of overprescription or incorrect prescription. Consumer groups have expressed concern about the manner in which pharmaceutical companies target both consumers and doctors in their marketing practices. Some pharmaceutical companies have circumvented the prohibition of direct consumer advertising by a number of means, and these have been internationally exposed in recent months. Advertising is masqueraded as educational campaigning. They place stories in the media that are presented as medical breakthroughs. They sponsor high-profile events. They subsidise academics to provide favourable expert opinion, and they sponsor prizes for journalism awards.

Whilst the opposition supports the provisions of self-regulation in the pharmaceutical industry, it is also a reality that much of the abuse outlined above arises from a seemingly lax attitude to enforcement by the self-regulatory body. An example of this is the self-regulatory code sanctions, which are inadequate as they clearly pose very little deterrence to repeat offenders. The ACA argue that it is a fundamental requirement of any successful code that there be meaningful sanctions if the code is breached. Most fines imposed by the code committee are under $25,000 and only one was more than $100,000. I think we know how those sorts of penalties would be regarded in a very highly capitalised industry such as pharmaceuticals.

Abuses of the current self-regulatory system are detrimental to consumers. Advertising inflates the prevalence of certain conditions and encourages consumers to take medication that they may not need. Increased demand for new products occurs when older versions with the same efficacy are available, and that inflates the cost to the Pharmaceutical Benefits Scheme. The limitations of the self-regulatory regime extend much further than advertising. Advertising can take the form of insidious incentives, as revealed two weeks ago in the press, which point to a culture of handouts and expensive functions for physicians, fully paid for by pharmaceutical companies.

Roche Pharmaceuticals were recently in the news for providing cancer specialists with a $200-a-head meal at the Opera House Bennelong restaurant. Roche argue that this dinner was simple, modest and appropriate given that it followed an education conference the company had organised and sponsored. For what purpose? For their own purposes.

The Australian Medical Association raced to the defence of its members’ right to attend such functions. It even went so far as to argue that it is part of the process of ‘oiling the wheels’. This was clearly inconsistent with the standards set by the Medicines Australia code—that is, by the pharmaceutical companies themselves—which suggests that hospitality be simple, modest and reasonable. Whilst the AMA is unable to identify fault in the manner in which its members are wooed by industry, the ACCC has taken a more critical view by reauthorising the code with an added emphasis on monitoring and publishing details of hospitality received by AMA members. Whilst the views of the AMA are held in good faith, there is mounting evidence contradicting its sincerity and sense. The online journal New Matilda last week carried an article by Dr Ken Harvey, who stated:

A large amount of research contradicts the view that no patient harm comes from such interactions between the medical profession and the pharmaceutical industry. Research shows that industry-doctor interaction correlates with doctors’ preferences for new products that hold no demonstrated advantage over existing ones, decreased prescribing of more cost-effective generic drugs and a rise in both and irrational and incautious prescribing.

In conclusion, I have canvassed a number of other facets connected with the TGA and broader pharmaceutical industry. The bill is supported by the opposition. It is a step towards ensuring swiftness of operation, and we endorse the bill.

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