Issues raised by submitters on “Implementation of the ACVM Act: Regulatory Changes”

Issues raised

Submissions

NZFSA perspective

1. Introduction

Interagency cooperation

One submitter expressed concerns about the potential overlap with the responsibilities of other agencies. The submitter also suggested that industry could be involved in the interdepartmental discussions.

There is potential for overlap with the work of other agencies. NZFSA seeks to avoid duplication of regulatory activity, but when it comes to regulatory oversight, overlaps are preferable to loopholes. Government agencies normally use a Memoranda of Understanding (MoU) to ensure that they work in a complementary way, and manage areas in which responsibilities overlap. NZFSA has MoUs with a number of other Government departments, and will continue to discuss with other agencies the most suitable approaches to interdepartmental cooperation and communication.

Scope

A submitter expressed concern that the intended scope of proposed amendments to do with products that are exempt from registration is wide sweeping.

NZFSA agrees that there is a wide scope; all products that are exempt from registration could be affected by the proposals. The reform of the Act’s administration presents an opportunity to ensure that appropriate regulatory expectations are set around the manufacturing, labelling, and advertising of products that are exempt from registration. NZFSA will continue to apply a risk management approach to the regulation of products that are exempt from registration.

2. Manufacturing regulations

Overall proposals

Several submitters raised concerns based on their understanding that all of the manufacturing proposals were intended to be “one size fits all” and to apply to all products equally. These concerns are discussed in more detail below.

The manufacturing proposals are not intended to apply equally to all products. Although the list of proposed obligations (pp. 15-16) was expressed as applying to all manufacturers, some requirements are only relevant to certain types of operations. NZFSA’s intention was to set proposals out in the discussion paper in a way that was general enough for all parties to get an idea of their responsibilities. It would not have been possible to set out a general list for all readers that went into specific detail on each sector. NZFSA is committed to giving guidance material so that sectors and organisations can understand what their responsibilities are with respect to manufacturing.

2.1 Use of terminology and definitions

Terminology

Comments included:

Is “operating plan” the same thing as “CMC section”?

No. An operating plan would be similar to the PIC/S Site Master File (PIC/S - the Pharmaceutical Inspection Convention and Pharmaceutical Inspection Co-operation Scheme - which develops internationally accepted minimum standards) A Site Master File is a document prepared by a manufacturer to provide information about the production and control of manufacturing operations at the named site, and any closely integrated operations in adjacent and nearby buildings. A chemistry, manufacturing and control (CMC) section is product specific.

Terminology

“Authorisation” is too general for the purposes of effectively conveying risk to the public

“Authorisation” is not used in communications – the public only see the outcomes of authorisations, in terms of registrations and exemptions.

Terminology

“Sale” is so broad that it will make innocent people offenders.

“Sale” appears in the discussion document exactly as it is defined in the Act. It has to be broad, to cover the range of activities that could create the risks that are to be managed under the Act.

Definition

Define “specifications”

If a product is registered, it is registered with release specifications. These will include both the specifications that set the characteristics of the product as well as those for the manufacturing process. Exempt products need to conform to the specifications of what they are stated to be.

2.2.3 International agreements

Compliance

A submitter contended that NZ should aim to comply with international agreements with regard to sales, not just manufacturing.

While there are international standards for manufacturing, there is no consistency in the ways in which countries have dealt with sales.

2.3 Proposed regulatory regime

NZFSA proposes that the regulatory control of manufacturing should focus on outcomes that can be achieved by complying with the principles of responsible manufacturing.

One submitter contended that it should not be necessary to add more regulatory controls to companies that are currently compliant and set their own higher standards of best practice.

NZFSA agrees; companies that do a good job in terms of compliance and best practice are to be congratulated, not more rigorously controlled. As most of the proposed changes are to do with giving effect to the amended scheme of the ACVM Act, there will be little change for existing registrants. Companies that set high standards of best practice are likely to already comply with the manufacturing proposals. Those that do not currently do a good job will receive more attention, to try to address any areas in which they do not meet the standards that would be expected of responsible manufacturers.

The manufacturing process must be subject to a clear and unambiguous operating plan (approved by NZFSA for certain products) that specifies procedures and instructions [2^nd bullet point on page 15 of the discussion paper]

One submitter sought further consultation on operating plans.

NZFSA will provide guidance on operating plans. Where necessary, this will be sector-specific.

Operating plan compliance costs

Another submitter noted that the requirement for an operating plan will add to compliance costs for animal feed manufacturers, and sought to work with NZFSA towards the development of a generic template for the sector’s use.

NZFSA expects that compliance costs for an operating plan will be minimal, on the basis that a manufacturer should already have an operation plan. It should also be noted that NZFSA has no intention of widening the current verification requirement for operating plans at this point in time. NZFSA will consider the request to develop a generic template.

Acceptable level of confidence

One submitter noted that the requirement for manufacturers to have confidence in their suppliers is fair, but that there is a need for NZFSA guidance in this area – especially around what would be an acceptable level of confidence.

What would be an “acceptable level of confidence” in suppliers varies between the categories of agricultural compound. For example, registered veterinary medicines have approved suppliers who are required to meet certain standards, while exempt products do not. This means that for exempt products, confidence in suppliers is a matter of knowing that the product is of the right quality, and is the cornerstone for good product stewardship.

All formulation materials and processing chemicals must be of a suitable quality; sourced from a competent and reliable source; and managed in a manner that is suitable for the products and the manufacturing process undertaken [5^th bullet point on page 16 of the discussion paper]

A submitter stressed the need to ensure that the process of product certification is timely, and that there are sufficient authorised persons to carry it out.

NZFSA notes that it does not routinely carry out product certification unless there has been a request for compliance certificates. Such a request can be made only by the manufacturer (who is also the registrant). NZFSA does not intend to impose product certification.

Product must not be released for sale until the quality of the product has been confirmed [8^th bullet point on page 16]

A submitter asked, with respect to oral nutritional compounds: what is an “acceptable” level of pathogenic micro-organism?

For information on NZFSA’s risk thresholds, see: Guidelines for risk assessment and hazard analysis under the Agricultural Compounds and Veterinary Medicines Act 1997, which is on the NZFSA website at:

http://www.nzfsa.govt.nz/acvm/publications/standards-guidelines/risk-hazard-guideline.pdf

Cost of delayed product release

The above submitter suggested that the cost of not releasing product until test results were known would outweigh the benefits, and proposed that the application of HACCP principles to the manufacturing and transport chain is the way to address the issue.

Agreed. NZFSA would hope that HACCP principles would be applied when people are preparing an operating plan, but it is not the only way to do one. “Acceptability” would be based on what is industry best practice.

The personnel involved in the manufacturing process must be appropriately qualified and trained [1^st bullet point on page 16]

Two submitters commented that the word “qualified” is inappropriate for manufacturers of oral nutritional compounds.

Agreed. Manufacturers of oral nutritional compounds will not be required to obtain any qualifications. The bullet point was not intended to suggest that anyone would be required to obtain a higher level of qualifications or to undertake any more training than would already be required for their work (see explanation above under 2. Manufacturing regulations).

2.3.1 Status of manufacturers

Veterinary medicines and restricted sale/restricted use vertebrate toxic agents

A submitter asked to be consulted with respect to the development of proposals around veterinary medicines and restricted sale/restricted use vertebrate toxic agents, which it would prefer to see addressed in distinct documents.

The differences between veterinary medicines and restricted sale/restricted use vertebrate toxic agents will be clear when the detail of the manufacturing proposals is developed. In effect, the status quo will remain except for a move away from the term good manufacturing practice (GMP) to “responsible manufacture” when referring to manufacture of restricted sale/restricted use vertebrate toxic agents.

Other product groups

One submitter opposed the introduction of a requirement for all manufacturers of classes of agricultural compounds other than veterinary medicines and restricted sale/restricted use vertebrate toxic agents to be listed by NZFSA.

NZFSA will reconsider the proposed listing requirements, in light of the need to avoid imposing unnecessary costs on business. As all products will require contact information on labels, listing may not prove necessary. In addition, for those products currently listed under the Animal Products Act, NZFSA will use the existing information.

Other product groups, cont.

Another asked that only registrants’ details be listed on any public register, and that the details of the manufacturers be kept confidential within NZFSA.

NZFSA has noted this comment and is currently considering the issue.

Feed manufacturers

A submitter sought clarification on how the manufacturing requirements would most appropriately apply to feed manufacturers and how “home milling” is to be treated.

Buying feedstuffs and using one’s own mill is considered “own use”. NZFSA is currently considering the issue of a feed manufacturer contract milling for a farmer according to the farmer’s formulation.

Feed manufacturers, cont.

Another submitter was unclear on whether renderers who sell meals to an end user to make up their own feed will be directly subject to proposals.

In this situation the person receiving the meal makes it into an agricultural compound, and is responsible for it – unless the rendered product is labelled for use as an agricultural compound, in which case it would be subject to the manufacturing requirements for an oral nutritional compound.

Feed manufacturers, cont.

A third submitter proposed a formal annual review to update the list of petfood producers, and enquired what the manufacturing regulations would mean to a small petfood processor (eg a pet shop). This submitter opposed retaining the status quo for compliance, and proposed formal, frequent, targeted reviews be introduced, on the basis that the domestic petfood industry has a history of poor compliance.

NZFSA’s intention is to develop appropriate guidelines for sectors based on the minimum manufacturing requirements. It will discuss these with the relevant industry sector to ensure that they are appropriate for that sector.

Contract manufacturing

One submitter asked for an explanation of any weaknesses perceived by NZFSA in the area of contract manufacturing.

There is no problem with contract manufacturing in the context of responsible manufacturing. NZFSA does see weaknesses in the area of contract compounding of unregistered products that are not exempt from registration – if done on a regular basis, this can circumvent registration. It is also questionable whether people or organisations carrying out contract compounding have appropriate knowledge and have put appropriate quality controls in place.

Active pharmaceutical manufacturers

One submitter asked whether NZFSA proposes to retrospectively require approval of active pharmaceutical ingredient (API) manufacturers.

NZFSA will not progress the proposal relating to the approval of API manufacturers. This will mean that the status quo will remain: API manufacturers are regulated for export purposes only.

2.3.2 Overseas manufacturers

Requirements

One submitter was unclear about the proposal to set criteria for products manufactured overseas. Another supported overseas manufacturers being required to meet the same requirements as those required in New Zealand. A third stated a preference for overseas manufacturers to be included in the definition of “acceptable manufacturer”, while a fourth suggested that products imported from countries whose standards are not recognised as equivalent to New Zealand’s could still be suitable provided they pass testing to New Zealand standards.

NZFSA is currently considering this issue. NZFSA will review the situation relative to overseas manufacturers and make it as practical and as rigorous as appropriate. It is agreed that overseas manufacturers should meet the same outcomes as those manufacturing in New Zealand.

Certificates of compliance

The one submission received from an overseas-based manufacturer of active ingredients was generally supportive, but contended that a proposal to issue certificates of compliance is unnecessary when it could instead be left to each country of origin.

The proposal only applies to exports.

3. Labelling

Labelling

One submitter expressed support for most of the labelling requirements, while querying the relevance of some of them to animal feeds, in particular bulk products. This submitter suggested that the use of a date of manufacture is sufficient as a batch number for animal feeds. The submitter opposed the requirement to include an expiry date for animal feeds, and also noted that it is not practical to list all ingredients in animal feeds.

NZFSA has noted this comment and is currently considering proposals related to labelling.

Labelling, cont.

Another submitter asked for further consultation on communication around compliance with labelling requirements.

NZFSA intends to keep industry sectors informed on its policy development process, and to contact them for discussion where necessary.

Labelling, cont

A third submitter supported moves to enhance consumer information on products exempt from registration, on the basis that too many have insufficient labelling. This submitter noted that some products are accompanied by reference material that exaggerates their value.

NZFSA has noted this comment and is currently considering proposals related to labelling.

4. Advertising and promotion regulations

Transfer of information

Generally, submissions indicated that industry would prefer an approach that was less likely to stifle the transfer of important information.

NZFSA has noted this preference and is currently considering the issue.

4.2 Current regulatory regime

Provision of consumer information

Noting that NZFSA proposes to impose an obligation on parties to support their products with adequate, reliable and readily available consumer information, one submitter sought clarification around the status quo with regard to the provision of consumer information.

Part of the purpose of the ACVM Act is to ensure the provision of sufficient consumer information about agricultural compounds. Section 75(1)(d) provides a regulation-making power to prescribe requirements for the purpose of confirming that any consumer information requirements provided by suppliers are providing adequate information. To date there has been no definition in the Act of what constitutes “adequate”.

4.2.1 Negative effects

Enforcement

One submitter suggested that recent incidents of products causing harm to horses show that legislation is not being enforced.

The incidents were investigated by NZFSA, which will always investigate the facts where someone suggests that the legislation has not been followed. In these cases NZFSA was satisfied that the necessary regulatory action had been taken, and that there was no further need for enforcement.

4.3.1 Warning information

Concerns

Two submitters asked for examples of the lack of prominence of warning information on promotional material, as proof that the proposals around warning information are necessary.

One submitter asked for a clearer definition of “adequate” in regard to warning information, and for clarification around warning information generally, noting that registered products’ existing labels and safety data sheets should provide adequate consumer information.

Another submitter stated that if warning information increased costs, many businesses in the natural products industry would close.

NZFSA has noted the various comments received and is currently considering the proposals relating to this issue.

4.3.3 Information transfer versus advertising/promotion

Clarification and guidelines

One submitter asked for clarification of the difference between information transfer versus promotion. This submitter expressed a view that parties with no vested interests in products should have similar obligations to registrants, and that there should be clear NZFSA guidelines to explain this.

NZFSA has noted the various comments received and is currently considering the proposals relating to this issue.

Responsibilities

One submitter criticised the link drawn between advertising/promotion by a company and information transfer by individuals outside the company – and asked if the proposal would make a company directly responsible for actions of people who are not directly linked to it.

NZFSA has no intention of imposing responsibilities on any party for the comments of some other independent party.

Approach

Two submitters encouraged NZFSA to continue to take a light handed approach to information transfer. One of these submitters commented that the proposed regulations will prevent free speech in the field of natural products.

NZFSA agrees that responsible information transfer should not be hindered.

4.3.4 Obligations on parties with no vested interest in the products

Outside scope

One submitter supported the view that parties with no vested interest in products should be outside the scope of the regulations making powers. This submitter also felt the proposal would prevent them from reporting on dangerous products.

NZFSA has noted this comment and is currently considering the issue.

4.3.5 Communication about off-label uses

Clarification

Three submitters sought clarification around off-label use communications.

It is evident from the submissions that “off-label” use is not well understood. See explanation on page 1 above.

Advertising

One submitter stated that allowing advertising by third parties about off-label uses is inconsistent with requirements to be consistent with product authorisation and to support products with adequate consumer information.

NZFSA has noted this comment and is currently considering the issue.

Partnership approach

Another sought a partnership approach around communication about off label use, as registrants may want to have rights of veto of some off-label uses. This submitter noted that ACVM regulation should work in tandem with the industry-developed FairAd.

Agreed.

5. Own use/off-label regulations

Clarification

One submitter sought clarification on a disparity around “own use”.

There is a need to clarify “own use” and “off-label use”. See explanation on page 1 above.

5.2.2 Proposed regulatory regime

Commercial activities only

One submitter stated that registrants should be involved in any large scale off-label use. This submitter wanted regulation of own use to relate only to commercial activities, and would prefer own use to only apply to non-commercial organisations where no third party is at risk from the activity.

NZFSA has noted this comment and is currently considering the issue.

5.4 Provision of professional services

Compounding

One submitter opposed the compounding within professional services proposals, while noting that oral nutritional compounds are a special case because compounding is a recognised industry activity. This submitter queried whether the Act has authority over the listed professional groups.

NZFSA will not progress the proposal to regulate compounding as part of the provision of professional services at this time; further work is needed. The submitter’s comments are appreciated, and accepted. It should be noted that there are current exemptions from registration for oral and topical homeopathic and herbal veterinary medicines, and homeopathic products used to manage plants.

6. Regulatory impact statement

Problems

One submitter made the following comments: are there any significant problems with the system for registered products? The submitter asked where problems have arisen with registered agricultural chemical products, and whether they have been due to ignorance or intentional non-compliance.

There are no significant problems with the system for registered products – the proposed changes are largely due to amendments to the scheme of the Act. There have been problems with registered agricultural chemical products, potentially due to intentional non-compliance. Some parties also appear to have been unaware of the requirements.

“Acceptable level”

What does “acceptable level” mean when managing risk?

For information on NZFSA’s risk thresholds, see: Guidelines for risk assessment and hazard analysis under the Agricultural Compounds and Veterinary Medicines Act 1997, on NZFSA’s website at:

http://www.nzfsa.govt.nz/acvm/publications/standards-guidelines/risk-hazard-guideline.pdf

Compliance costs

Manufacturers of oral nutritional compounds feel the proposals may increase compliance costs.

This view may be due to the listed bullet points in the manufacturing section of the discussion paper appearing to impose requirements on all manufacturers. As noted above, the intention was for them to apply only where relevant.

Overseas manufacturers

NZFSA should monitor the quality of “approved” countries’ regulatory standards.

Agreed – NZFSA does monitor the quality of “approved“ countries’ regulatory standards.

Other issues

Organics industry

A submission requested that products approved by MAF-approved organic certifying bodies be exempted from the ACVM regulations.

NZFSA is responsible for approving organic certifying bodies. Any exemption from compliance would need to be based on evidence that relevant risks were adequately managed.

Organics industry, cont.

The above submission also stated that existing regulatory requirements are particularly onerous given most producers of organics are small businesses.

It is accepted that small to medium-sized businesses may find regulatory requirements more onerous than larger businesses. Avoiding disproportionately-onerous costs is part of NZFSA’s objective of setting regulatory control at a level that is considered necessary to manage risks.