Development of a Natural Health Products Bill – Update on
Government decisions
Background
The National and Green Parties have agreed to develop a New Zealand-only
regulatory scheme for natural health products.
From mid-March to mid-June 2010, the Ministry of Health consulted on proposals for
the development of a natural health products bill. The consultation paper proposed a
relatively light regulatory scheme (comprising an Act, regulations and administrative
orders), commensurate with the relatively low-risk nature of natural health products.
Fifteen hundred submissions were received from a wide range of stakeholders,
including consumers, industry, and practitioners.
Having considered the analysis of submissions, the National and Green Parties
propose to proceed with the development of a natural health products bill. The main
elements of the proposed regulatory regime are set out below. Some of the detail will
be in regulations and administrative orders, which will be developed with input from
the natural health products industry, food and medicine regulators, and others with the
necessary technical expertise.
Natural health products bill
The bill will propose the following.
Purpose and principles
The purpose of the bill is “to provide assurance to consumers that natural health
products are safe, true to claim and true to label”.
The principles to be included in the bill are that:
a. the level of regulatory control applied to natural health products should be
commensurate with the risks associated with their use, eg, pharmaceutical level
controls, which include a detailed pre-market safety assessment of products, are
considered unnecessarily onerous
b. consumers should be supported to make informed choices about their use of
natural health products, eg, standards for claims and labelling requirements will
support the provision of accurate information.
It is also considered important that use is made of assessments and approvals by
trusted overseas regulators, where relevant. A set of criteria for determining trusted
regulators (who have processes and standards at least as robust as those in New
Zealand) will be developed.
Definitions
‘Natural health products’ would, by definition in the bill, be products that contain only
low-risk natural ingredients or their synthetic equivalents (and low-risk quantities of
those ingredients), would be used with the intention of achieving a health benefit, and
would be suitable to be regulated within a light regulatory scheme (eg, not intended for
administration to the eye or by injection).
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The definition will clearly distinguish natural health products from medicines, foods
and cosmetics. It is not intended to significantly redefine products currently defined as
foods or medicines as natural health products.
Some amendments will, however, be made to the Medicines Act 1981 to exclude any
products considered low risk and suitable to be regulated as natural health products
from its coverage.
Regulator
The regulator will sit within the Ministry of Health, but separate to Medsafe, the
medicines regulator.
Notification of products
The bill will require the importer or manufacturer (or person commissioning the
manufacture within New Zealand), prior to marketing, to enter product information into
an online database which would automatically check that information against pre-set
criteria. There will not be a detailed pre-market safety assessment followed by product
approval, as there is with medicines.
Ingredients
The bill will require the regulator to develop and maintain two lists of ingredients:
a. a list of ingredients prohibited for use in natural health products
b. an open-ended list of ingredients approved by trusted overseas regulators,
recognised in traditional medicine or pharmacopoeia, or assessed by the New
Zealand regulator as suitable for use in natural health products.
Any new ingredient not previously approved by a trusted regulator or recognised in
traditional medicine would be notified to the regulator at least three months before it is
to be marketed, so that the regulator could assess available evidence about the safety
of the ingredient. The regulator would either allow the product containing the new
ingredient to be marketed, require further evidence of safety from the applicant, or
place the new ingredient on the prohibited ingredients list.
Exemptions from notification
The bill will provide exemptions for:
a. products tailor-made by a practitioner for an individual (eg, by Chinese or
Western herbal medicine practitioners, rongoā Māori practitioners, etc)
b. certain products or categories of products, such as aromatherapy and
homeopathic products meeting particular specified criteria (such as very low
levels of active ingredients).
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The regulator would provide appropriate certification for export products, to meet the
requirements of the export country1. In this case, the exporter would need to provide
such information as the regulator requires to prepare the export certificate (which
could include information from other trusted regulators, where relevant).
In order to protect the integrity of New Zealand’s government-to-government
assurances, certification would only be provided where the production process had
been audited and met the proposed code of manufacturing practice for natural health
products (or equivalent). Products that do not require certification would be exempt
from the requirements of the scheme.
Broader concerns with respect to practitioners, such as rongoā Māori and traditonal
Chinese medicine practitioners
The proposed scheme will not in any way regulate the cultural practices of traditional
medicine, such as rongoā Māori or traditional Chinese medicine, or the practitioners
themselves. The scheme will also not regulate traditional products that are provided
as part of a practitioner-patient relationship. However, these products would be
regulated if they were commercialised and sold outside a practitioner-patient
relationship.
Claims and evidence
The bill will require the regulator to develop a list of pre-cleared claims, as well as a
standard setting out the levels of evidence required to make specific types of claims.
Traditional claims and claims recognised by trusted overseas regulators will be
allowed where appropriate. Approval of products making high levels of claim will
continue to be required under the Medicines Act. The regulator will be able to assess
the evidence that claimants hold about claims on demand.
Manufacturing licences and audits
The bill will allow for the development of a risk-based New Zealand-specific code for
the manufacture of natural health products. In addition, manufacturing audits and
licences issued by trusted overseas regulators will be recognised.
All manufacturers will be required to hold a manufacturing licence and be subject to
regular audit. The New Zealand regulator will not audit and license facilities with a
manufacturing licence issued by a trusted overseas regulator, as these facilities will
already be meeting standards at least as high as those applying in New Zealand.
Other manufacturers will be audited and licensed against the New Zealand code.
Similarly, if there are other Risk Management Programmes (eg, such as those under
the Animal Products Act) that are of a comparable standard to the New Zealand code,
then these too will be recognised.
Audits will be streamlined across the new natural health products regulator, Medsafe
and the Ministry of Agriculture and Forestry (New Zealand Food Safety Authority), so
that, as far as possible, manufacturers are not faced with multiple audits.
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There may be some limits on what certification the regulator is able to provide. For example, the
Animal Products Act 1999 specifies that the New Zealand Food Safety Authority (NZFSA) is
responsible for providing export assurances relating to animal products, so the natural health
products regulator could not provide such assurances.
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Sanctions and penalties
The bill will contain sanctions and penalties set at a level commensurate with other
relevant recent legislation, such as the Food Bill that is currently before Select
Committee, the Wine Act 2003 and the Animal Products Act 1999; that is, fines of
$50,000 up to $500,000 and imprisonment from two years to not more than five years
for serious offences.
In the first instance, the regulator will work with non-compliant companies to assist
them to comply and the application of penalties will be graduated, and commensurate
with the seriousness of the breach.
Appeals
The bill will require that appeals be made, in the first instance, to the Director-General
of Health and following that to a review committee.
Committees
The bill will provide for a technical expert advisory committee, which will not be
representative, but rather contain people who are suitably qualified and who have
natural health expertise to advise the regulator on technical matters, such as changes
in the status of ingredients, or evidence to be required for any new types of claims.
An interim technical expert advisory committee is to be established to advise on the
detailed development of the scheme, eg, lists of ingredients, labelling requirements
etc.
Funding model
At this stage, it is not possible to be clear about the cost of establishing this regulatory
scheme, as there is a lack of good information on the number and type of products in
the market, and the likely demand for various regulatory activities. The Ministry of
Health’s preliminary estimate is that it could cost $1.100 million capital expenditure
and $1.800 million of operating costs to set up the regulator, with ongoing costs of
$3.640 million per annum.
These costs are preliminary as very little market information exists on which to base
them. Further modelling is being undertaken to improve these cost estimates, identify
a preferred funding model and determine the level of charges to industry. Industry is
involved in this work.
The Crown will meet the costs of regulatory policy advice, capital and post-market
activities (ie, compliance, audit, monitoring and enforcement). All other costs will be
met by the industry (including set-up costs, which will be met up front by the Crown
and recouped through charges on industry over a period of about six years). This
means that the Crown will meet one-third and industry two-thirds of the ongoing costs.
There will be a review of costs after two years to ensure that they are set at a level
that matches the actual cost of providing the services.
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Transitional arrangements
The bill will contain the following transitional periods (ie, from enactment):

one year for products containing ingredients not on the initial ingredients list,
which will allow companies to continue marketing these products while a more
complete ingredients list is developed

two years for product notification

three years for compliance with manufacturing requirements.
As it is an entirely new regulatory scheme, provisions will be made for a substantive
review of the scheme after five years.
Regulation making powers
The bill will include regulation making powers to enable:
a. the development of a standard setting out the levels of evidence required to
make health claims, including traditional claims
b. the specification of minimum labelling requirements
c. fees and levies to be set following consultation with the industry
d. administrative processes (eg, advisory committees)
e. a code setting out manufacturing requirements.
Next steps
A bill will be drafted and introduced into the House in the second half of 2011. The
public, industry and others will have the opportunity to have further input when the bill
is considered by Select Committee.
In the meantime, an interim technical expert advisory committee and an industry test
panel will be established to work with the Ministry of Health on the further detailed
development of the regulatory scheme.
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