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Exclusive Q&A on Biotechnology and Pharmaceuticals with Madeleine Kearney

Posted: 25th May 2016 08:39
Who are the main regulators and what are the key legislations that apply to biotechnology & pharmaceuticals?
Pharmaceutical and biomedical products are primarily regulated under the Therapeutic Goods Act 1989 and its associated regulations.  The Therapeutic Goods Administration (TGA) is the agency responsible for administering this legislation. 
Foods and food ingredients developed using biotechnology are subject to the Food Standards Code, which includes approval requirements for food produced using gene technology and for ‘novel foods’.  Food Standards Australia and New Zealand is the Federal agency responsible for setting food standards and product approvals, however, State and Territory food regulators are responsible for enforcement.  Agricultural and veterinary products are regulated to comply with the Agricultural and Veterinary Chemicals Code Act 1994, with the Australian Pesticides and Veterinary Medicines Authority being the main regulator for these types of products.
Can you talk us through the development & approval process for new products entering the market?
Subject to some limited exceptions, such as for use in clinical trials, products intended for therapeutic use in humans are required to be included in the Australian Register of Therapeutic Goods (ARTG) before they can be supplied, imported or manufactured in Australia.  Different approval frameworks exist for medicines, biologicals and medical devices, and in all cases a risk based approach is taken.
Medicines are classified as either “listed” or “registered”.  Listed medicines are products that contain only specified low risk components, and while the manufacturers of these products are required to be licenced, the submission processes is a self-certification procedure, and TGA does not review data for individual products.  In contrast, sponsors of registered products are required to submit data supporting the quality, safety, and efficacy of the product which is assessed by the TGA.  The precise data requirements vary depending on the nature of the application – for example, while an application for a new chemical entity will require the submission of comprehensive clinical and non-clinical safety and efficacy data, for generic products establishing bioequivalence with a product already included in the ARTG reduces the data that is required to be submitted.
The regulatory framework for biologicals provides for four classes.  For all classes except class 1, sponsors must submit a dossier to the TGA for evaluation.  For class 2 biologicals the TGA will assess compliance with relevant standards, and for classes 3 and 4 the TGA will assesses the product for safety, quality and efficacy.  Sponsors of class 1 biologicals are only required to submit a statement of compliance, however, no class 1 biologicals are currently specified.
Medical devices are also classified according to risk, and the classification will determine the conformity assessment procedures that a manufacturer is required to have in place to ensure compliance of the device with the Essential Principles, as well as the conformity assessment evidence that will be accepted by the TGA.  For all classes other than class 1 conformity assessment evidence is required to be submitted to the TGA.  Due to the fact that there are similarities between the Australian and EU medical device regulatory systems, in many cases the TGA will accept conformity assessment evidence issued by an EU notified body under the EU Medical Devices Directive, however, in some case it is necessary t obtain a Conformity Assessment Certificate issued by the TGA.
Have there been any recent regulatory changes or interesting developments?
In the past year there have been reforms to the Pharmaceutical Benefits Scheme (PBS), Australia’s government funded drug reimbursement scheme.  These reforms passed parliament in June 2015 and are projected to save the PBS over $6 billion over a 5 year period.  The reforms include changing the pricing calculations for generic medicines to lower the price, an across the board 5% price cut for medicines under patent that have been listed on the PBS for more than 5 years, and changes to the way combination drugs are subsidised. 
Otherwise, on the transparency front, new reporting obligations came into effect in October 2015.  These reporting obligations are contained in the Medicines Australia Code of Conduct, which is an industry code that is only binding on members of the pharmaceutical industry’s peak industry body, Medicines Australia, and require companies to publicly report payments and financial support for educational activities provided to healthcare professionals.
Can you outline the opportunities and challenges relating to personalised medicine?
If personalised medicine does live up to its promise there will be benefits for patients, industry and payors alike.  Therapies that are targeted based on the genetic basis for disease promise more effective treatments with fewer side effects, which has obvious benefits for patients, but reducing ineffective therapies also means less waste and a more cost-effective health system.  Identifying in advance those patients who stand to benefit from a therapy and those who won’t and may well suffer harm from using the therapy should help to reduce product liability claims which is another way that personalised medicine may help to reduce costs.  Understanding which patient sub-groups may respond well to a therapy could completely change the risk/benefit profile of drug, opening up new avenues of treatment.  There are clear commercial opportunities for the diagnostic industry,
Of course there are some very real challenges as well.  While personalised medicine has the potential to reduce waste, cost effectiveness does not necessarily mean lower costs.  Because personalised treatments will likely have a smaller market size, the cost of individual treatments may rise.  Reimbursement arrangements will have a significant influence on the development of new therapies, as the economics of developing new products will not stack up if payors are unwilling to foot the cost.  Regulatory challenges include issues regarding clinical trial design and genetic privacy matters.
What systems can be put into place to minimise the risk of litigation?
Speaking from a product liability perspective, the challenge for suppliers of therapeutic products is that because they are intended to act on and modify physiological processes, almost inevitably their use will involve inherent risks.  The key is developing systems to firstly identify these risks at the earliest possible stage, and secondly, once these risks have been identified putting in place appropriate risk mitigation strategies.
Australia’s regulatory scheme does require sponsors to have systems in place to identify and manage risks – for example, at the drug development phase, it is necessary to obtain data regarding quality, safety and efficacy as such data is required for regulatory approval, and post market there are requirements to report adverse events.  While compliance with these regulatory requirements will certainly go some way to mitigating product liability risks, it is important to understand that regulatory compliance is not a defence to a product liability claim.  In many cases, safety issues will only become apparent once the product has a significant history of real world use, meaning that having effective processes in place for monitoring post-market adverse events is critical.
In terms of risk mitigation strategies, it is common for plaintiffs’ claims to be based on an allegation of a failure to warn of the particular risks that manifested, so ensuring that product information and instructions for use contain comprehensive warnings is essential.  These warnings will be more effective if they are provided to the patient directly, although depending on the nature of the product this may not always be possible, for example, in respect of implantable medical devices.  In some cases product recall/withdrawal will necessary.
What efforts are being made to tackle the issue of high drug prices and increase accessibility of affordable healthcare?
In Australia, pharmaceuticals are subsidised by the government through the PBS, and while it is by no means perfect, the PBS does facilitate access to a wide range of pharmaceuticals at an affordable price for Australian patients.  The challenge for the Australian government is that PBS expenditure is rising due to the costs of new drugs that Australians demand access to.  As mentioned previously, a package of reforms passed parliament in June 2015 which were put forth by the government as enhancing the sustainability of the PBS and permitting investment in new drugs going into the future.  However, with the budget in chronic deficit the PBS, with its high cost, is and will remain a target for potential cuts which could jeopardise Australians’ access to new therapies. 

Madeleine Kearney is a highly regarded product risk specialist. She has substantial experience advising and representing both domestic and international clients in relation to advertising and labelling, product safety/liability, product recalls and product regulatory law.

Madeleine has experience in a diverse range of industry sectors including automotive vehicles and components, cosmetics, chemicals, children’s products, electrical products, food and drink, heavy equipment, over the counter and complementary medicines, dietary supplements, therapeutics and medical devices. 

Madeleine can be contacted on +61 2 9931 4801 or by email at

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