Therapeutics Decision Cuts Choice, Ramps Up Costs, Protectionist

Media statement Monday, December 8th, 2003

Therapeutics decision cuts choice, ramps up costs, protectionist

The Health Minister's announcement that Government intends to sign up this week to Australia's Joint Therapeutics Authority will cut consumer choice by two thirds, increase costs by around 15 per cent, and create protectionist anomalies in how the regulations are applied, the Employers & Manufacturers Northern) says.

"The Government is taking a sledgehammer regulatory approach to crack a walnut sized concern," said the Association's Executive Officer Garth Wyllie.

"Nowhere else in the world is such an onerous set of regulations placed on this industry," he said." Why are we doing it?

"We have presented viable alternatives. The dietary supplements industry and associated therapeutic product groups have invested a huge amount of time and resources in preparing submissions only to be overridden by ministerial arrogance.

"The Joint Authority will see our consumers lose choice. We have over three times more product choice than Australia, and we're adopting the Australian regime which is preventing many new products entering their market.

"The costs of the Australian Therapeutic Goods Authority for product registration make our market size not worth the bother for many international products.

"Even Australian manufacturers think our decision to follow their approach is daft.

"The New Zealand industry accepts "high risk" medical products need to be regulated to meet the highest safety standards but they don't accept the same level of regulation should be applied to "low risk" products such as dietary supplements, sunscreens and non medical therapeutic products.

"The decision comes at a time when the Australian regime is being criticised for reducing innovation in health products; the extra regulation and costs will impact disproportionately more heavily on the smaller New Zealand market and decrease innovation more here.

"Companies will rationalise the products they market in New Zealand; many US products in particular will cease being available.

"The price of remaining health products will jump by an estimated 15% on everything from band aids to sunscreens.

"Local manufacturers and importers face added bills to register their products under the Joint Agency scheme, including:

1. Registering a new dietary supplement will cost ($NZ800 to $NZ1000 if its formulation has no new ingredients.

2. The cost of registering a new dietary supplement with new ingredients starts at $NZ3000 and may cost $NZ10,000 or more. At present New Zealand bans unacceptable ingredients.

3. To keep a product registered costs $NZ360 per product annually. Companies with a 1000 products face an annual bill for this alone of $NZ360,000.

4. New audit fees prescribed by the Authority are far higher than anywhere else in the world averaging $NZ17,000 annually.

"That Maori traditional remedies and some products marketed within some Australian states are exempt makes the decision very poor."

ENDS