Medicines Amendment Bill

Members, we come now to the Medicines Amendment Bill. We start with Part 1, which is the debate on clauses 4 to 10, “Consent to distribute medicines by verification”. The question is that Part 1 stand part.

Thank you, Madam Chair. It’s nice to see this bill enter the committee stage and to see it come through with many improvements made by the Health Committee. We’re always grateful for the opportunity to be able to participate in panel-beating the bill at select committee.

I’d like to ask the Associate Minister of Health some questions tonight. The first one, I’d like to link to the original policy intent of the bill. Clause 4, the “consent by verification”, which is the main innovation in this bill: I’d like to hear from the Minister why this consent by verification and the verification pathway applies to new medicines, and what is meant by a “new” medicine. What about other already approved medicines that might have a minor change, like a change in their presentation, or a minor change in their formulation that doesn’t require a full evidence review? Why is that not part of the verification pathway, given that, on the surface, you’d think those would be lower-risk types of changes and, perhaps, more frequent than the need to actually verify new medicines? I would appreciate it if the Minister could expand on why this consent by verification pathway only applies to new medicines.

Tēnā koe, Madam Chair, and thank you very much. It’s one of those bills where specifics matter, and I’m curious—and if the Minister wouldn’t mind answering some of the questions I have—around the recognised regulatory authorities. That’s in clause 7. It goes on to talk about, as a regulator of medicine—and it lists those that it has in there. I wonder if that might include, to the Minister’s reckoning, or at least to the Minister’s consideration, some of the work that the important ethics committees and others might do in that space, with respect to the medicines. If the Minister wouldn’t mind giving some thought to whether or not they perhaps could be included, either now or at a later date, with respect to making sure that we have recognised regulatory authorities.

The other matter I wanted to raise is, in clause 6, the following particulars are required, and it goes down to the letter “(m) the name and address of the place or places where the manufacture, preparation, or packing is intended to be carried out.” The reason I ask that question is that a number of concerned members of the public who have travelled widely around the world know that, in some countries, they repackage goods, even give them different names, but, in effect, they are still the same thing. Yet they want to be sure that, when these types of matters are raised and medicines are brought into this country, the origin of those particular medicines, of both its manufacture and, of course, its preparation and packaging, is clear and is well understood for those in New Zealand. At the moment, those regulations are pretty tight. What we’re concerned about is any loosening of those matters could cause some confusion about the types of medicines that those people might be gaining access to. Some clarification from the Minister on those particular matters will be helpful.

Thank you, Madam Chair. My colleague has picked up on clause 6, so another question in relation to clause 6, which lists the contents of an application under the verification pathway. I’d like the Associate Minister of Health David Seymour to explain how these requirements interact with the common documentation system used by some of the regulators we are likely to recognise. There’s a number of specifics here that all seem very logical from the perspective of approving a particular medicine, but we’ve been told repeatedly at the Health Committee that there’s the potential for great efficiency through the use of standardised documentation when these applications are made—or applications for the Minister’s consent, as it’s called in this bill. We’d like to understand how requirements (a) through to (m) interact with the standardised documentation system.

Thank you, Madam Chair. I’d just like to support the vote of confidence in this bill from my colleague the Hon Dr Ayesha Verrall, who really gave it some good scrutiny at the Health Committee. I think it’s important to note that, in the broader constitutional policy space, there is quite a shift of power from legal, prescriptive sorts of requirements through to empowering Ministers to act through notices and rules, and I do think that raises a number of legal questions. While I accept that it improves the agility of being able to get medicines out faster, there are questions around parliamentary scrutiny, and there are questions about the transparency of Gazette notices, and also how section 22, in particular, interacts legally with new section 22A.

I’ll just go through them in turn, and I’m happy to either have a longer contribution or do some quick-fire. We do recognise that delegation and flexibility are important, because medicines are the new frontier for being able to get people well faster, and potentially save a lot of money around more invasive procedures, like operations. We do accept that there are efficiency gains, in that there will be a reduction of duplication of effort, consistent with our trade and health cooperation frameworks with Australia. I think where the rubber hits the road, though, is around the dependence on secondary legislation, and there are operational details, such as timelines, data requirements, verification procedures, that will only exist in future rules, not in primary legislation. That produces a kind of layered legal dependency, where the rights and obligations of applicants hinge on rules that are not yet drafted.

That’s tricky; I’d be keen to hear the Minister’s views on how he sees that interplay and the certainty that will be afforded, particularly if applicants are going to be questioning some of the applicant decisions—how those sections 22 and 22A will interplay, because, once again, we find ourselves in the House where we are subordinating to secondary legislation quite a bit of the devil in the detail. That will be important, we want to support that, but we need to know that there will be due diligence given to ensure that there isn’t uncertainty for those who apply, because that could have a chilling effect on the market, and that the rules are really clear from the outset, even though we have this kind of parallel stream of how the Medicines Act is going to work.

I will have more questions later about regulatory capture and the medicines regulations and some of the constitutional implications, but I’d just like the Minister to answer those if he may.

I’d like to thank members for their questions so far, and I’ll try and address each of them in turn. Ayesha Verrall asked about clause 4 and specifically the words “new medicine”: why would a new indication, or perhaps a minor change, to a medicine not be able to access this verification pathway, which the words “new medicine” might suggest that it couldn’t? I’m advised that, in actual fact, a new medicine, a new use—i.e., a major change to a medicine—would be captured as a “new medicine” for the purpose of this bill, whereas a minor change would be already notified. In other words, if a change is significant enough to require consent, then it is a new medicine, even though there might be something very much like it already consented.

Peeni Henare asked two questions, one about clause 7, and he asked a question about whether an ethics committee could also be involved in authorising a medication. I don’t intend it to go any further than the bill right now. He asked if we might in the future—that’s certainly quite possible. But the point here is to rely on trusted nations’ consent authorities—and those trusted nations are set out in secondary legislation—rather than introduce any new pathways through other bodies, besides what I’ve just described.

He also asked about replacement section 21(2)(m)—for motel—inserted by clause 6: the name of the place and why is this necessary. He pointed out that one of the dangers with medication is that what it says on the label might not be what’s there. A lot of Medsafe’s work is ensuring that what you read on the label is actually what’s in there, and it’s certainly true that some medicines are manufactured and packaged in parts of the world that might not have the same sort of ethics and standards that we’re used to in New Zealand. So that’s why it’s actually important that they identify where will this be packaged and manufactured, so that we do have oversight—or Medsafe can have oversight, rather—not only of what does it say it is but what actually is it.

Ayesha Verrall then asked about clause 6, inserting replacement section 21(2), and how these requests interact with the common document system used by other countries. In other words, are the requirements listed in paragraphs (a) to (m) of section (21)(2) going to mesh well with the common technical dossier—I think that was the point of the question. I’m advised that, yes, it will. The company needs to provide the full data dossier, which is standardised internationally, and that has been thought of.

Finally, Ingrid Leary asked about what she says is a shift of power towards Ministers. It’s certainly true that it talks about a Minister granting consent. That, at a constitutional, technical level, may be true, but, ultimately, this decision making is not done by a Minister; it’s done in their name. It’s done by people with far more appropriate qualifications in pharmacology—than most people who have held the role of Minister—in this legislation.

In terms of the question about accountability and stability—and I was pleased to hear about, you know: how do we make sure that there’s certainty for people who are applicants? I just make the point that any rules, made under this law, that will set out how it operates do need to be presented to the House and are subject to disallowance by Parliament. Under our normal conventions, we maintain parliamentary oversight, and there’ll also be consultation with affected people prior to making any of these rules. I hope that addresses the questions that have been asked so far.

Thank you to the Associate Minister of Health for his answers. I’d like to talk about new section 22AA in clause 7. The Health Committee’s view was that it was a helpful change to the bill to, rather than specify the regulators in primary legislation, specify criteria about which overseas regulators would be able to be recognised. We think that that’s a positive, helpful change, and we’re pleased to see it reflected in the bill now.

I want to draw the Minister’s attention to the revocation of recognition of an authority. I would like the Minister to expand on what type of circumstances he imagines an authority’s recognition might be revoked, and any elaboration he can provide based on advice he’s received on that.

Thank you, Madam Chair. I just have two quick questions for the Associate Minister of Health regarding clause 6, inserting new section 21(2).

The first question I have—and this is partly because one of my degrees is actually in pharmacology—is on subsection (2)(h), “reports of toxicological, pharmacological, and clinical studies that support the application:”. I want to check with the Minister whether there is a requirement for that particular study to be conducted or to be peer reviewed as well. The reason I mention that is because there have been instances where, particularly in the chase for funding for toxicological or pharmacological studies, peer review hasn’t been done as much or as well. That is something I want to check with the Minister: whether there is a requirement.

The second thing is around subsection (2)(k), in terms of the distribution in any country other than New Zealand, and also, this plays into “approved or consented to by the appropriate authorities in that country” but also potentially recognises the regulatory authority that has been touched on previously in clause 7, which inserts new section 22AA. My question is: whether there have been any safeguards considered by the Minister on what happens in the event that, or how do we potentially vet if, a particular appropriate authority or authority in that country has been susceptible to undue industrial or political pressure. Those are my two initial questions.

Thank you, Madam Chair. My question was in relationship to new section 22AA(1)(e), inserted by clause 7. This is in relationship to the recognised regulatory authorities. One of the requirements that’s been set out in the legislation is for those to conduct their business and release reports in English. I wanted to ask whether the Minister for Regulation thinks that that may, potentially, hinder the ability for us to access medicines where the business may be conducted in another language.

The reason why I ask this, as well, is because we do have, in replacement section 21(2)(j), inserted by clause 6, that, for example, translations may be provided when it comes to the applications for the Minister’s consent. In clause 6, there’s this acknowledgment that translations can play a part in enabling good decision-making, but then, in new section 22AA, there is the sort of much more tight requirement for the business of these entities to be conducted in English without, I guess, being able to accommodate, for example, resources to translate necessary documents to English in order to be able to broaden the range of recognised regulatory bodies that the Government can tap into so that people can have greater access to medicines.

My question to the Minister is: whether he thinks that new section 22AA(1)(e) unnecessarily narrows the recognised regulatory authorities, particularly in relationship to the way that clause 6 has been written. Thank you.

Thank you, Madam Chair. I’d just like to ask a further supplementary question based on the question raised by the Hon Dr Ayesha Verrall regarding the revocation or designation of a recognised authority. Normally, ministerial decisions are not subject to explicit procedural safeguards. If it’s in the Gazette and a decision has been made, normally there are notice and comment requirements beyond publication. My first question to the Minister on that natural justice and transparency issue is: are there other forms of contesting decisions either with designation or revocation, except via judicial review, which we know is incredibly expensive and, again, could have a chilling effect on the market?

I wouldn’t mind turning also to—just for some clarity, I think really for the Hansard, because I did raise this previously—the relationship between section 22 and the amendment. If there is a question of which one supersedes, because there are two pathways, it would be good to know what is the primary section out of those? If there are two pathways, if there are inconsistent rules, which rules under those two pathways should supersede?

I’ve got another question, too, just around the administrative burden, because with the gazetting of notices which are required—so they recognise or they revoke authorities—it could create some transitional uncertainty for applicants. Is there an efficient way of doing that or is that just going to be a constant stream of Gazette notices?

The other one is: could legal challenges arise where a medicine has been approved under one recognition regime and then is later affected by revocation? Probably, again, the “hierarchy” is the word I was looking for in terms of which of the two streams that they can be approved under would take precedence.

I think there is also another question that is similar but different to the one raised by the Green member around localised safety assessment. Where the Minister may revoke consents, the process relies on post-market intervention rather than pre-market evaluation, and that can have inherent public risk if adverse effects arise later. What are the mitigations for that risk, particularly because that is a localised situation and those conditions may have changed within the New Zealand market, but may not necessarily have come up from an external market?

That’s probably all my questions, but they are important legal questions if we are to see this legislation actually reap the full financial and health benefits to New Zealand that it is touted to do.

I thank members for this latest batch of questions. I appreciate Ayesha Verrall saying that this is a positive change that the countries, or at least the regulators of the countries, that will be deemed equivalent or valid for the assurance pathway—that is going to be set in secondary legislation, rather than hard-wired into this law. Then she asked a question about revocation. The test is whether the regulator continues to meet the criteria set out in paragraphs (a) to (e) of new section 22AA(1) in clause 7. If it starts failing to meet those, then it would be revoked, and so those are the criteria set out in the legislation.

Lawrence Xu-Nan asked about the credibility of toxicological, pharmacological, and clinical studies. They’re peer reviewed by the regulator who has given consent overseas, and so, I guess, that the point is that if we’ve—these questions sort of go together. If the overseas regulator is approved, then one of the criteria for that is that we can trust that they rely on good science, and, of course, if they rely on good science, that probably answers Lawrence Xu-Nan’s question.

With regard to new section 21(2)(k) in clause 6, there was a question about proof that it’s been consented elsewhere. It really is as simple as being able to demonstrate credibly that the consent overseas truly exists, and so it’s a fairly mechanical, administrative thing.

Ricardo Menéndez March raised an interesting question about: does limiting ourselves to English-speaking jurisdictions restrict the possible range of overseas agencies that we could rely on for verification? Potentially, but I think that members might be surprised. For example, I asked about Japan. I’ve been informed that the Japanese consenting authority actually conducts its business in English, and so that’s a significant country with its own language that none the less uses English to work with the rest of the world. There may be countries that conduct their business in other languages, but there are certainly enough countries who do their medical consenting in English that I think that there’s a big enough pool for this policy to work very well.

Then Ingrid Leary asked a series of questions about the natural justice of revocation, and whether there could be peer review or other ways to challenge that. I think that it’s important to recognise, simply, that in the part that she talked about, she’s talking about whether or not—as I understand it—a particular country can be recognised for their consenting agency, rather than a particular applicant. It’s true that a country might be offended that we no longer recognise them, but that in itself is, I don’t think, a reason to have a major bootstraps, belt and braces approach to natural justice where New Zealand’s Government will choose countries that it thinks it can rely on for this pathway.

There was a question about a hierarchy between the usual consenting pathway and the new rule-of-two consenting pathway. For a starting answer—and I might need to get more advice about this, because she also asked what would happen if a medicine fails at one pathway but succeeds at another. I would start by saying that the purpose is that if you have consent through either of them, it must be adequate, but we certainly would not retrospectively revoke. Then there was a question of could there be a—actually, I’ve addressed the question of the legal challenge against revocation.

There was, finally, a question about localised safety assessments, and are there problems where there might be local conditions where the population—if I understood her question correctly—the population in New Zealand has different needs or vulnerabilities from those in other countries. I would just make the point that most countries have quite diverse populations within their borders. By the time you’ve got two other countries that have consented a medication, I suspect that you’d find that, actually, they’ve covered enough bases so that it’s safe in New Zealand, particularly considering that one of the criteria for considering if you want to keep doing business with someone is to ask whether they have robust systems. I hope that addresses the questions asked today.

Thank you. I’d now like to ask the Associate Minister of Health some questions about the development of his policy thinking in this area. In particular, I have been studying the coalition agreement between the National and the ACT Party, which is referenced in the regulatory impact statement (RIS). The commitment that’s relevant to this bill was to require Medsafe to approve new pharmaceuticals within 30 days of them being approved by at least two overseas regulatory agencies recognised by New Zealand. I read that and I interpret that as automatic approval, and yet that’s not what this bill does. This bill still requires a sponsor to make an application. It is not the case that we’d have a very efficient system where just with approval in two jurisdictions, there will be a requirement for automatic approval. Instead, it requires a sponsor, usually the pharmaceutical company, and the application to be made.

My first question to the Minister is: why has the thinking, with respect to how this bill will operate, changed from what was envisaged in the coalition agreement and what’s in the bill now? I’m interested to know how he thinks that change will impact the efficiency benefits that will come from this bill, because the purpose of the bill is to speed up the approvals of new medicines in New Zealand, and, of course, as a result of the change between what’s envisaged in the coalition agreement and the bill that we have now, there will be fewer medicines being considered through this pathway. In particular, one of the things that comes into play—because of the way the bill we’re debating is crafted—is the incentives that apply to a sponsor. Now, in the original version that wasn’t relevant, but it is now, in the way that this bill is constructed.

We heard at the Health Committee that a number of incentives operate on sponsors, including that they make judgments on the likelihood of their bill achieving Pharmac funding in New Zealand. They’ll think, “Well, is it really worth our while to put something through a process when”—perhaps, they would say—“unlikely to get it funded.” That makes me wonder, well, will this bill have the actual impacts that were promised when it was proposed? I’d like to hear the Minister’s explanation of how impactful he thinks it will be in light of those changes.

Thank you, Mr Chair. I’m going to speak to new section 22B(4) in clause 7 and just ask for a bit of clarification, so this won’t take very long: “The Director-General may issue the applicant with 1 or more invoices for any fee payable under regulations in respect of the application.” Is that only those that are successful? Does that include those that are declined? Is there an opportunity to see a schedule of what those fees may look like? Is there transparency around those particular invoices we can expect to be made public to allow us the confidence that there’s consistency in their fees framework? So just some clarification around that. I know it seems relatively small in the scheme of things, but I just think that, when we look towards the way that those who access the ability for consideration as medicines—that it’s made very clear what those fees do look like, and whether or not those include those that are accepted as well as the ones that are declined.

My colleagues have talked about the drivers, if you like, of efficiency with the system and how that will look compared to the original coalition agreement. I think, extrapolating on that, there is a real potential for a streamlined process to reduce scrutiny of pharmaceutical submissions if the decision making becomes overly reliant on the second stream. We don’t have any control over that or influence over that. There are jurisdictions that we compare ourselves to that have far more lobbying and political influence in their system. Conceivably, there may be two or more jurisdictions with very big pharma companies—just as there are with tobacco companies, actually—where a concerted effort is made to promote things that may not necessarily be consistent with New Zealand public interest standards.

If there is a two-tier system and they both function, that’s probably not much of a problem, but if the second tier becomes the predominant way of getting pharmaceuticals through to New Zealand, I think it does raise real questions about the drivers and the safeguards. I’m really just wanting some reassurance that the New Zealand public interest standards are met through whatever rules come out, which have not yet been written, and that we don’t see a kind of tail wagging the dog, where the whole sector then becomes beholden to international commercial interests that don’t necessarily serve New Zealand public interest standards.

Thank you, Mr Chair. Thank you, Minister, for responding to my previous questions. I have two more questions for the Associate Minister of Health. The first one is something the Minister said, and it kind of ties into new section 22C(1)(b)(v) as well, inserted by clause 7. I think the Minister was saying that, in terms of some of the pharmacological or clinical studies that have been done in other countries, other countries also have a diverse population in order to be able to test some of that. Two authorities have approved that, and it should, again, be safe enough here. But I think one of the things I would be interested to know about—certain countries, most of the other countries, don’t have the same data on the indigenous population of Aotearoa, and also, potentially, Pacific populations.

So, you know, looking at new section 22C(1)(b)(v), when it talks about contextualising “the benefit-risk profile of the medicine due to local disease epidemiology, public health considerations”, I do wonder, in those sorts of considerations: does the Minister consider that, while we do have a diverse population, some of that interaction, particularly when we’re looking at it from a pharmacological context, may not have been tested here? I just want to check; the Minister may already have a response to that.

The second part is around new section 22D, inserted by clause 7, noting that there is a lot of ministerial authority in this bill, and we’re looking at the rules for Minister’s consent by verification. I wanted to check with the Minister: when we are looking at things that are done by Order in Council and when there is secondary legislation, did the Minister, as always, consider some sort of review clause in terms of how the Minister may make rules setting out some of that requirement, or is there something that will be done, in terms of a review of those rules, on a more ad hoc or need basis?

In terms of the rules, as we are always concerned about, in terms of any potential overreach or potential “Henry VIII” clause, I think having something of a review clause would also be another level of safeguard that can be protected when it comes to, particularly, consent by verification. Those are my two questions.

I thank members for further questions. Ayesha Verrall asked about the perceived difference between the ACT-National confidence and supply agreement and the workings of this legislation. As a Minister, I’m not actually responsible for political agreements. All I would say is that I’m a very thoughtful and receptive Minister who’s always prepared to make the legislation work in the best interests of all New Zealand. I’ll also just make the point that having an applicant, as the member asked, demonstrates that there is a company that will take responsibility for the supply chain within New Zealand. So that is a worthwhile benefit in my view.

Peeni Henare asked about what fees these foreign pharmaceutical companies might be charged. I have to say that I’m heartened by the Labour member’s concern for foreign pharmaceutical companies; it’s a new development, but not an unwelcome one. The fees will be published, they’ll be set by regulation, and they will be transparent. But they’re not currently set, so that will come as a consequence of the law of passing, if the Parliament decides to pass it.

Ingrid Leary repeated the question by Ayesha Verrall and then also asked about the lobbying and political influence on overseas consenting agencies. All I would say is that if you imagine a place like, say, Switzerland, which was in the original bill, or if you imagine a place like the EU or the United Kingdom, your mind doesn’t immediately think, I’m sure, that their consenting authorities consent dangerous medicines because of undue influence. I think that would be a surprising thing to most people; there’s no evidence to believe that is the case. All of those jurisdictions do have much greater access to medicines than New Zealand and that is one of the things that we are trying to fix here.

Going back to Ayesha Verrall, she also asked if it might be that because companies are unlikely to—well, she posits that companies are unlikely to apply for consent if they don’t believe they’ll ultimately get Pharmac funding. That may be a calculation for some companies, but at the margin what we’re doing here is making the consenting process easier and quicker. So you would expect the net effect of that to increase medicines’ availability. Of course, any company coming to the New Zealand market will be asking themselves “Will people actually buy it?”, but that’s a commercial decision for them, not one that we can control.

Then we had Lawrence Xu-Nan asking about Māori and Pacific populations. But he also, helpfully, answered his own question by pointing to new section 22C(1)(b)(v), inserted by clause 7, where he pointed out that the Minister can consent a medicine if he believes or she believes it “does not require independent assessment … to contextualise the benefit-risk profile of the medicine due to local disease epidemiology, public health considerations, or New Zealand specific health risks;”. So that is actually covered.

Finally, Lawrence Xu-Nan asked if there would be a review clause. Much secondary legislation—I expect all secondary legislation—will be made in best practice.

I move, That debate on this question now close.

Motion agreed to.

Part 1 agreed to.

Part 2 Other amendments