Australia: New Zealand Natural Health Products Bill – Implications for Supplies of Dietary Supplements – What Could This Mean For Your Business? – Increased Compliance Requirements and Costs?

On 15 September 2011, the Natural Health Products Bill was read for the first time in the New Zealand Parliament. If passed, the new legislation will cover most natural therapeutic-type products which are currently regulated as dietary supplements under the Dietary Supplement Regulations 1985.¹

What Does the Bill Propose?

• A new category of products, "natural health products" (NHP). An NHP is a product that is intended by the Sponsor ² of the product (i.e. those who import or manufacturer or arrange for the import or manufacture), to be administered to a person, to bring about a health benefit to that person. NHPs must contain only natural health product ingredients and no prohibited ingredients. Further, NHPs must be administered by the following means only:
  • oral ingestion;
  • application to the skin, scalp or nails;
  • application to the teeth, throat, anal canal or vagina; or
  • application to the mucosa of the mouth or nose.
• A new Natural Health Products Regulatory Authority (the Authority) within the Ministry of Health, to administer the regime. This Authority will be required to establish an NHP advisory committee, and a code of practice for the manufacture of NHPs. The Authority will also be responsible for the establishment and maintenance of the NHP database and have the power to set labelling requirements.
• Before distributing the NHP, Sponsors will be required to submit to the Authority information about the NHP, themselves, the manufacturer and health benefit claims of the NHP. The Authority will have the power to accept, audit, suspend or cancel NHP notifications, as well as recall previously accepted NHPs. These notifications can be submitted online.
• Product notifications will not be required for any "export-only natural health products." However, if a sponsor requires an export certificate, it must do so meeting the requirements of the Authority which includes providing a product notification.
• All New Zealand manufacturers of NHPs will need to be licensed, unless exempted by the Authority.
• Ingredients will need to fall within permitted ingredient classes, failing which ingredients cannot be used unless assessed and approved.
• All NHPs distributed in New Zealand will need to comply with labelling requirements.
• Heavy penalties for breaches: fines up to $500,000 for corporations and, in respect of individuals, fines up to $100,000 and imprisonment for up to 5 years.
• A staggered transition period of 3 years.
• The revocation of the Dietary Supplements Regulations 1985.

What Does This Mean?

Concern has been voiced as to how this new legislation will impact the implementation of the joint scheme with Australia for the uniform trans-Tasman regulation of therapeutic goods. Despite these concerns, the New Zealand Ministry of Health has expressed its intention to continue moving ahead with the joint scheme, while continuing to regulate natural health products under a New Zealandonly scheme. This is similar to the manner of operation of the New Zealand Dietary Supplements Regulations, which the new Bill will replace, and will result in inconsistent regulations in New Zealand and Australia.

There are concerns with regard to the cost of establishing a new regulatory authority; developing an online, automatic product notification system that has integrity and is free from abuse and maintaining the NHP database and prohibited lists. Sponsors can also expect higher compliance costs, as they will have to pay fees to obtain a licence for their products.

Sponsors can also expect a greater regulatory burden as a result of the new labelling requirements. In addition, they will have to comply with the new manufacturing code of practice and provide the necessary evidence to support claims relating to the health benefits of their products. A particularly onerous regulatory obligation is that Sponsors will be required to provide (and pay the cost of) a new product notification every time there is a change in the product's manufacturing arrangements, health benefit claims or ingredients – no matter how minor.

As the approval process in New Zealand will likely be more cost effective and time efficient, companies may continue to import New Zealand compliant products into Australia under the TransTasman Mutual Recognition Arrangement (subject to the risk inherent in relying on this Arrangement). ³ Further, as stated above, if the NHP is for export only, no product notification will be required.

Going Forward

Following the first reading of the Bill in September 2011, the Bill was referred to the Health Select Committee. Whilst public submissions closed on 24 February 2012, the Committee is not due to deliver its report until 31 July 2012. Watch this space!

Footnotes

¹ Food-type dietary supplements are regulated by the New Zealand (Supplemented Food) Standard 2010.
² A Sponsor of a NHP, within the context of the Bill, must be resident in New Zealand – s12 Natural Health Products Bill.
³ When relying on the Trans-Tasman Mutual Recognition Arrangement there is always a risk that the Australian Quarantine and Inspection Service (AQIS) may seize the products if AQIS considers the products are a therapeutic good (for example in pill form) and thus should be listed with the Therapeutic Goods Administration.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.