Lyn Allison (Victoria, Australian Democrats) Share this | Hansard source

I seek leave to incorporate my speech on the second reading debate on this bill.

Leave granted.

The speech read as follows—

The current legislation is part of a response by the Government to an incident in 2003 in which the TGA suspended the licence of Pan Pharmaceuticals for the breach of manufacturing safety and quality standards and what was believed to be the systematic and deliberate manipulation of quality control test data.

It led to some 1,600 products being taken out of the market, the biggest recall in Australia’s history. The decision significantly impacted on Pan and other complementary medicine companies, particularly smaller companies that had links with Pan.

At the time many people in the complementary medicines industry argued that the TGA had been heavy-handed and overreacted to the problems with Pan.

Complaints were made about the handling and release of information – information which eventually led to the collapse of the complementary drugs manufacturer.

In fact only last month Pan’s former boss Jim Selim launched a series of cross claims against the TGA, which he blames for the collapse of the complementary drugs manufacturer in 2003.

Documents lodged with the Federal Court show that Mr Selim claims that if the TGA had acted properly there would have been no need for the regulator to have taken action against Pan, which ultimately led to its collapse.

Let me be clear - the Democrats support the TGA’s role in protecting public health and safety.

They play a vital part in ensuring the quality and safety of all medicines that are available to the Australian public.

In a society where many consumers have decided that they wish to use complementary medicines it is important that the community has confidence that complementary health care products are safe. The TGA is essential to that confidence.

However we share the concerns of some in the complementary medicines industry that the sector has been subject to regulatory compliance that is unnecessarily onerous and out of step with the low risk nature of the vast majority of their products.

We are concerned that the measures in this bill will continue that pattern.

It is true that the Australian system of regulation makes no clear distinction between complementary medicines and other medicines. Indeed complementary medicines are regulated according to the same risk management approach that governs regulation of all other medicines listed on the Australian Register of Therapeutic Goods.

This means that the type of assessment process used for a specific product is determined by an evaluation of the risk of that product.

This would seem to suggest that there are appropriate differences between the approaches taken to regulating lower risk complementary medicines than are used for higher risk prescription medicines.

But there are parts of the complementary medicines industry that argue this is not the case.

Many within the industry have raised concerns with me that the TGA does not have sufficient expertise in complementary medicines or an adequate understanding of the nature of their products.

Some sectors of the complementary medicines industry have argued that the lack of expertise and experience displayed by the TGA staff during its handling of the Pan Pharmaceuticals recall meant that the TGA exercised its authority in an overly partisan manner during that situation.

It has been suggested that there was no evidence that such a huge number and quantity of products needed to be recalled and destroyed - a process which lowered confidence in the complementary medicines industry unnecessarily.

This mistrust on the part of some in the industry means that they are concerned about how the new sanctions and enforcement options will be applied to their industry.

It is important to note that this bill does not introduce any new offences to those already existing in legislation; it simply increases the range of options available to the TGA when offences are committed.

The Democrats supported the changes to the Act in 2003 that tightened regulation around manufacturing standards but we have not been convinced of the need for this legislation or that sufficient safeguards have been put in place to ensure that the complementary sector is not unduly negatively affected.

In light of the Pan crisis it may be appropriate for the TGA to review the nature and frequency of its audits but there seems to be little justification for the introduction of what have been described by some as draconian measures.

Indeed there is a case for the TGA to improve its own practices in relation to the complementary medicines sector.

The Australian National Audit Office’s report, released in December 2004 looked specifically at the TGA’s ability to regulate non-prescription medicines - the bulk of which are complementary medicines.

This report was critical of the level of consistency, transparency and accountability in TGA systems and procedures.

For instance, the report says:

Manufacturers approved by the TGA are subject to regular audit. An audit frequency matrix determines the time to next audit. This is based upon two risk parameters: the products manufactured; and compliance with the Code of good manufacturing practice from the previous audit. However, the rationale for assigning audit frequencies for these risk parameters has not been documented, nor supported by a systematic risk analysis.

The audit frequency may be varied from that indicated by the risk parameters. However, the reasons for the variation are often not documented, reducing transparency and accountability for these discretionary judgments.

The report also says:

The TGA’s regulatory framework is supported by a substantial number of standard operating procedures. However, greater clarity and guidance is required for some key aspects of the TGA’s regulatory functions. There are also some gaps in documented procedures.

Decision-making, including reasons for particular action and enforcement, requires more structured documentation, especially when discretionary judgments have been made.

It goes on:

Performance management arrangements are insufficient to support sound management of regulation, and accountability to stakeholders. Performance indicators provide limited insight into the effectiveness of the regulation of non-prescription medicines, and of manufacturer compliance.

Transparency to manufacturers and sponsors can be enhanced, both to facilitate manufacturers’ ability to comply with regulatory requirements, and to improve the TGA’s accountability for its actions.

The legislation before us will give the TGA unprecedented discretionary power.

Much of the detail of this legislation will be expressed in guidelines and will be implemented through regulations.

We need to have confidence that any decisions about whether a breach has been made, the severity of the breach, what penalty should be imposed and what action taken is made objectively and open to assessment.

It is interesting that Medicines Australia have said:

It is not particularly clear from the amendment bill or the narrative outline provided with the bill precisely how the regulator will decide when to pursue a criminal penalty ... There seems to be a degree of discretion available to the TGA, which is not good regulatory practice.

So we might have a situation where different companies commit the same breach and they are handed different penalties.

This is not how things should operate.

It should be clear to all involved what penalty will apply to a particular action.

It is also worth commenting that parts of the industry have expressed concern about the lack of consultation about this bill in the first place.

I hope that there is sufficient consultation with the industry in an ongoing manner as this new regime comes into effect.

The Democrats are also concerned, as were many who put in submissions to the Inquiry into this bill, that there is a lack of right of review and appeal in relation to penalties.

The concerns raised by many over the interpretation and application of these new sanctions within the highly discretionary framework that the TGA will operate in, surely means that redress to an independent arbitrator is essential when disputes arise —as they invariably will.

Another aspect of this legislation that is problematic is that the TGA can publicly name a drug company or an employee that they believe is breaching the rules—even if this has not been proven.

There are many risks with this approach.

Not the least of which is the damage that can be done to that person’s or company’s reputation before any guilt has been established.

And let us not forget the discussion that has occurred around the size of any fines that might be placed.

Many witnesses to the Inquiry commented that the level of proposed penalties, particularly for civil penalties, is very high

One witness commented that breaches of the Therapeutic Goods Act will carry double the financial penalty for treason, terrorism or genocide.

The seemingly excessive level of the fines proposed in the civil penalties regime and the potential impact of these fines on the complementary medicines industry is unjustified.

There is a real and beneficial place for complementary medicines in the health care arena.

It is time that the Government recognised the value of this sector.

Question agreed to.

Bill read a second time.