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Regulation impact statement: International harmonisation of ingredient names
Version 1, November 2015
5. Impact analysis
There are assumptions and limitations underpinning the impact analysis and the conclusions of the analysis must be regarded as indicative rather than as definitive.
Industry compliance costs have been outlined below and quantified wherever possible. TGA has made assumptions based on general information, ARTG data on existing products, stakeholder feedback from the IHIN and medicine labelling consultations.
In accordance with Office of Best Practice Regulation requirements, the costs below have been costed over a 10 year period and presented as an average annual impact.
|Average annual regulatory costs (from business as usual) ($million)|
|Change in costs
|Business||Community Organisations||Individuals||Total change in cost|
|Option 1 (status quo)||0||0||0||0|
(3 year transition)
(4 year transition)
(3 year transition)
(4 year transition)
(3 year transition)
(4 year transition)
|Business||Community Organisations||Individuals||Total by Source|
|Are all new costs offset? Yes, costs are offset by the savings that were identified by the Low Value Turnover Exemption Scheme RIS|
|Total (Change in costs - Cost offset) ($million) $0|
5.1 Option 1 - Status quo
Option 1 proposes that no changes occur to ingredient names under the harmonisation activity (status quo). Under this option, industry would continue to use the ingredient names that have previously been approved for use in medicines. The current inconsistencies in the TGA Ingredients Table would remain and these non-harmonised medicine ingredient names would continue to be used in Australia. The problems associated with this lack of harmonisation would continue (as outlined in Section 2 - The problem).
Under Option 1 there are no direct compliance costs for industry. However, to establish a baseline, TGA analysed the information it holds on medicine label and product information changes (see Appendix A).
5.2 Option 2 - Mandatory adoption - the full proposal
Option 2 proposes to change the names of 478 ingredients. These new names would be the only Australian approved names for those substances and the old names would be removed from use.
This option affects 18,758 ARTG medicine entries (approximately 54% prescription, 12% OTC, 35% Listed) and 1,029 sponsors. In some ARTG entries more than one ingredient name would be changed.
5.2.1 Impact on the medicines industry
Appendix A outlines the expected costs to industry for Option 2. Depending on the transition timeframe, Option 2 is expected to cost industry $0.91M (3 year transition) or $0.23M (4 year transition) per annum over 10 years.
Companies would be affected differently depending on what type of product they sponsor. Table 2 outlines the type of impact expected for each type of product. These impacts only apply to changes to active ingredient names and a small number of excipient ingredients (25% of the proposed changes).
|Type of product||Type of impact|
|Prescription medicine||Update to PI/CMIs|
|Update to product label (where applicable)|
|Over the counter medicine (including some sunscreens)||Update to PI/CMIs, where applicable (restricted medicines, pharmacist-only medicines)|
|Update to product label, pack inserts, promotional material (where applicable)|
|Complementary medicine (both registered and listed)||
Update to PI/CMIs, where applicable (restricted medicines, pharmacist-only medicines)
Update to product label, pack inserts, promotional material (where applicable)
|Export Only medicine||Negligible impact27|
Product labels and supporting documentation will be affected differently, depending on how the name of the active ingredient has changed. Most of the ingredient name changes involve the change of one letter, the addition/removal of a hydration state, removal of hyphen or a change in word order. It has been assumed that the proposed ingredient name changes would therefore not require redesign of the label.
Some medicines use the active ingredient name as part of the product's trade name (also known as product name or proprietary name). This proposal will harmonise the names of ingredients contained within medicines, not the trade names of the medicines themselves. However, to avoid confusion, the sponsor of such a product may wish to change the trade name to match the harmonised name. The decision to change a trade name as a consequence of an ingredient name change would be a voluntary commercial decision for the sponsor.
Following a one-off cost, Option 2 is expected to provide an ongoing saving to sponsors. This arises from the reduction of costs associated with developing and varying recurring documentation between Australia and other markets (e.g. advertising and marketing materials, supporting documentation). This option will therefore result in a small reduction in barriers to trade for individual companies, however it is not expected to have a noticeable effect on the market overall.
A longer transition period would allow sponsor companies to more easily incorporate these ingredient name changes into business-as-usual (BAU) practices. For example, it is assumed that approximately 50 per cent of affected products would change their label within a three year period as part of BAU. The remaining 50 per cent of products would need to bring forward any planned changes to labels and other documentation to avoid having to pay twice for changes (once for the regulatory changes, once for the business need). Appendix A outlines the costs of name changes to sponsors under both a three and four-year transition period.
5.2.2 Impact on consumers and healthcare professionals
During consultation, most stakeholders agreed that international harmonisation of ingredient names would generally benefit consumers. Once consumers are familiar with the new ingredient names, benefits include improved access to information and reduced risk of confusion with medicines when travelling overseas. Similarly, ingredient name harmonisation is also expected to assist healthcare professionals in the long term. This activity will help Australian practitioners who are not aware of international naming by improving their access to information. However, due to the complexity of how consumers and healthcare professionals interact with medicines and ingredient names, it is not possible to isolate and quantify the benefits of the proposed harmonisation activity.
Improving consistency within TGA databases can also improve the consistency of names used in prescribing and dispensing software and potentially reduce the costs associated with maintaining these systems. The NeHTA e-Health program includes the development of medicines terminology derived from the ARTG and other TGA databases. Using one name for an ingredient and improving TGA database consistency allows easier alignment for the NeHTA databases. For example, using only one name for an ingredient would reduce the risk of the ingredient name on a label differing from the name on the prescribing software. These benefits then flow onto the users of prescribing, dispensing and ordering software reliant on NeHTA terminology.
During the transition period, consumers and healthcare professionals will gradually start to see changes to ingredient names on the labels of affected products, in Product Information and Consumer Medicine Information documents, as well as in prescribing and dispensing software28. Most of the proposed name changes are to excipient ingredients (75%), which will have minimal impact as this information is not often included on labels and is not visible in the public view of the ARTG. Where changes are made to active ingredients, many involve limited label changes (such as changing from amoxycillin to amoxicillin or the removal of a hyphen within the ingredient name).
Stakeholders raised safety concerns about the transition periods for ingredient name changes, especially where:
- one sponsor has changed their labels at the beginning of the transition period, and
- another sponsor of a medicine with the same active ingredient chooses to delay the change until the end of the transition period.
There are products currently available in Australia that use different names for the same substance (e.g. amoxycillin versus amoxicillin). As described earlier, there is limited evidence to show that medication errors have occurred in Australia as a result of the current availability of more than one name for these ingredients. However, TGA acknowledges that increasing the number of substances that have multiple ingredient names also increases the likelihood of prescribing errors. Dual-labelling has also been proposed for substances of high clinical significance to help reduce the risk of confusion.
Industry, healthcare professional and consumer stakeholders all noted that communication and education activities are required to reduce the likelihood of such errors. Section 8 - Implementation and review provides further information on proposed communication strategies. Due to these proposed activities, there appears to be little difference in risk to consumers between a three and four-year transition period.
There are significant benefits to industry, healthcare professionals and consumers from Option 2. However, during consultation, stakeholders noted that some of the proposed ingredient name changes may result in a lack of harmonisation between Australian nomenclature and the most widely used international terminology. Therefore, the net outcomes would be significantly improved by removing from the proposal those ingredient names that have not been adopted consistently in the international market.
5.3 Option 3 - Mandatory adoption - a reduced proposal
Option 3 proposes to reduce the full list of name changes, based on the issues raised during consultation. This option removes ingredient name changes that have not been adopted consistently in the international market. Option 3 comprises four sub-options (a-d) which are described below.
5.3.1 Option 3a - Maintain status quo for metal-containing ingredients
TGA naming policy requires new metal ingredients to use common English names (rather than Latin names) and include oxidation states - for example, 'copper(I)' and 'iron(II)' rather than 'cuprous' and 'ferrous'. This approach is applied as common English names are more easily understood by consumers.
Overall, INN policy prefers the use of English names for substances. However, there is no specific INN policy for metal names. Some existing INNs for metal-containing ingredients include English names and some use Latin names. The TGA Ingredients Table also currently includes some metal ingredients in English and some in Latin; however, since 2006, new ingredients are provided with English names.
Option 3a would remove from the full proposal changes where a Latin metal name was amended to its English name. Option 3a would also remove any changes where an oxidation state was included for a metal-ingredient (a flow-on effect from the Latin to English name change).
Due to existing TGA labelling requirements, many preparations containing trace elements as mineral supplements are already labelled with the quantity of the element in each dose. For example, a product containing 'ferrous fumarate' could be labelled as 'iron 5mg (as ferrous fumarate)'. As this option does not affect labelling requirements, under Option 3a, labels would still need to show how much iron, copper or manganese (using their English names) is in each dose of a product.
5.3.2 Option 3b - Maintain status quo for active ingredients used in TGA-regulated sunscreen products
In Australia, most sunscreen products are regulated as therapeutic goods with the majority of these being primary sunscreens with a Sun Protection Factor (SPF) rating of 4 and entered on the ARTG as listed medicines29. Secondary sunscreens that are excluded from regulation under the Therapeutic Goods Act 1989 are regulated as cosmetics by NICNAS.
However sunscreens are regulated by most countries as cosmetics, not therapeutic goods. In these countries, sunscreen products use European International Nomenclature of Cosmetic Ingredients (INCI) names for the active ingredients. Similarly, for sunscreens regulated by NICNAS, the names of the ingredients on the label must be either their English names or their INCI names30.
TGA applies the INN naming policy to all ingredients, if an INN exists. This approach is also used for sunscreen ingredients because these ingredients can be included in other therapeutic goods (for example, arthritis creams).
Option 3b would reduce the full proposal by removing proposed changes from an INCI or USAN name to an INN for ingredients that are solely used as actives in sunscreens (i.e. not used in any other type of therapeutic good). Sunscreen active ingredients that are present as actives in arthritis creams would still change their name to an INN name; and sunscreen ingredients where the INCI reference name was updated by the reference-setting organisation would change to the new updated name.
Importantly, some sunscreen active ingredients may be associated with adverse reactions31. Although the TGA proposes a comprehensive communication strategy for ingredient name changes, there is still a risk of consumer confusion because ingredients in cosmetic sunscreen products would continue to use INCI names on labels. By reducing changes to existing sunscreen ingredient names, Option 3b would significantly reduce the impact on consumers otherwise resulting from proceeding with Option 2.
5.3.3 Option 3c - Maintain status quo for some excipient ingredients
TGA seeks to apply INN naming policies to both new active and new excipient ingredients. These naming policies include the application of INN spelling conventions (using 'f' instead of 'ph','t' instead of 'th', 'e' instead of 'ae' etc). However, many excipient ingredients do not have INN names and in these instances other international naming references are used (e.g. BP, United States Pharmacopeia (USP)).
Several of the proposed changes applied INN spelling conventions to ingredient names from other references (such as pharmacopoeias). For example, the USP name cyclomethicone (an excipient also used in cosmetics) was proposed to be changed to cyclometicone to align with the spelling for other silicone-based polymers (such as dimeticone and simeticone, which have INNs). As there is no INN or BP entry for cyclometicone, the new name would pre-empt international changes.
Option 3c would remove from the full proposal excipient ingredients that have had INN spelling conventions applied to non-INN reference names. For example, many international references continue to use 'cyclomethicone' (instead of 'cyclometicone') or 'lauryl' (instead of 'lauril'). These name changes have been removed under Option 3c. However, the new spelling of 'dimeticone' and 'simeticone' has been widely accepted by INN and several non-INN references. Under Option 3c, the removal of the 'h' in 'dimethicone' would still occur.
Although cyclomethicone and sodium lauryl sulfate are present in many medicine and cosmetic products, in many cases only cosmetic products include these ingredients on the label. In rare situations where these ingredients are included on medicine labels, Option 3c would avoid ingredient name misalignment between medicine and cosmetic products.
5.3.4 Option 3d - Maintain status quo for macrogol excipient ingredients
TGA applies INN 'macrogol' terminology to synthetic polymeric substances. Synthetic polymeric substances can be:
- active ingredients - polyethylene glycols (PEGs), used as laxatives and
- excipients - ceteths, oleths etc, used as emulsifiers in medicines and cosmetics.
INN macrogol names consist of a stem name (macrogol, lauromacrogol) and a number that designates the substance's average molecular mass (for example, macrogol 500).
Not all synthetic polymeric substances have individual INN stem names. For example, there is an INN stem for ceteths (cetomacrogol) but not for oleths (the INN stem would likely be olomacrogol, if created). Changing all synthetic polymeric substance names to macrogol terminology would in some cases pre-empt INN action. As many of these substances are also present in cosmetic products, changes to excipient synthetic polymeric substances may result in a misalignment between medicines and cosmetic products.
Option 3d would remove from the full proposal macrogol changes to excipient ingredients only. Ingredients that are used as actives in medicines will still change to macrogol terminology, where an INN stem exists for that specific synthetic polymeric substance.
5.3.5 Impact of Option 3
Table 3 outlines the total number of ingredients removed from the full proposal under this option.
|Option||Type of change||Number of ingredients removed from full proposal|
|Option 3(a)||Status quo for metal-containing ingredients||27|
|Option 3(b)||Status quo for sunscreen active ingredients||9|
|Option 3(c)||Status quo for some excipient ingredients||7|
|Option 3(d)||Status quo for macrogol excipient ingredients||100|
|Combined Option 3(a-d)||143|
Under this option, 336 ingredient names would change. This option affects 17,886 ARTG entries (55% prescription, 11% OTC, 34% Listed) and 972 sponsors.
Appendix A outlines the costs to industry for Option 3. Depending on the transition timeframe, Option 3 is expected to cost industry $0.73M (3 year transition) or $0.13M (4 year transition) per annum over 10 years.
Compared to Option 2, the benefits to industry, healthcare professionals and consumers are increased under Option 3. By removing these ingredients from the proposal, the compliance costs to industry (e.g. updating labels) are reduced. As the removed ingredients are not consistently adopted internationally, Option 3 also minimises potential qualitative impacts on industry, consumers and healthcare professionals. The impact of the three and four-year transition period to industry, healthcare practitioners and consumers is similar to that outlined earlier, under Option 2.
Due to the qualitative gains from harmonisation, this option is expected to result in an overall net benefit to consumers, healthcare professionals and industry once the name changes are embedded in Australian nomenclature.
5.4 Option 4 - Mandatory adoption - Direct harmonisation of INN/reference and substances of high clinical significance
During consultation, stakeholders raised concerns about proposed name changes that included a 'modification' in the name. For example, a name was modified from the international reference to include the name of a salt or a hydration state.
Option 4 proposes to further reduce the full list of name changes. This option comprises only those changes where the replacement name has an international reference or an INN that does not require modification, plus those ingredients identified as being of high clinical significance.
The WHO usually creates only an INN for the active part of the molecule, to avoid multiple entries where several salts, esters or other derivatives are used32. In such cases, individual member countries modify INNs by including further information in the name (such as the salt or hydration state)33.
TGA naming policy requires that ingredients be named in a way that clearly and unambiguously identifies the substance being named. Consequently, TGA allocates individual names for each derivative of a substance. For example, where a substance is used in the form of a salt or ester, that salt or ester is included in the name. In situations where there are different hydration states for substances, separate entries are included in the Ingredients Table, with anhydrous (dry or containing no water) as the default type (i.e. if no hydration state is included in the name, the ingredient is anhydrous). The majority of modifications are due to the inclusion of this type of additional information, however some modifications also propose minor typographical changes (i.e. removing hyphens, e.g. 'sodium phosphate - monobasic' to 'sodium phosphate monobasic'.
5.4.1 Impact of Option 4
Under this option, 160 ingredient names will change. This option would affect 6,478 ARTG entries (47% prescription, 13% OTC, 29% Listed) and 350 sponsors.
Appendix A outlines the costs to industry for Option 4. Depending on the transition timeframe, Option 4 is expected to cost industry $0.51M (3 year transition) or $0.12M (4 year transition) per annum over 10 years.
If this option is adopted, some of the ambiguity in ingredient naming will remain within the TGA Ingredients Table. As the number of international pharmacopoeia references that include the degree of hydration within ingredient names increases, the risks of confusion between Australian ingredient names and those used internationally increases. For example, occasionally Australia experiences shortages of medicines. Additional medicine supplies are then sourced from other countries. For higher risk medicines, the packaging may be altered to reduce the risk of confusion for Australian consumers or healthcare professionals. Under this option, there is increased risk of confusion for those medicines where labels were not altered and a different hydration state has been used to determine the amount of active ingredient per dose.
Overall, there is little difference in the compliance costs to industry between Options 3 and 4. Due to the potential for ambiguity and confusion, the qualitative benefits have been significantly reduced under Option 4.
5.5 Option 5 - Voluntary name changes
Option 5 proposes that ingredient name changes be applied voluntarily. Therefore, sponsor companies could chose to move over to using the new ingredient name on labels and product information or continue to use the old name. The new harmonised ingredient names would be added to the TGA Ingredients Table, but the old name would only be removed if all sponsors had moved over to the new name.
Out of the full proposal to change 478 ingredients, 128 of the new names already exist on the Ingredients Table (27%) and 350 new names would be added.
5.5.1 Impact of Option 5
Under Option 5, existing inconsistencies in the TGA Ingredients Table would be magnified. Many of the new ingredients have been identified as being of high clinical significance. For example, both colaspase (the current Australian Approved Name) and asparaginase (the new name) could be used on different medicine labels, depending on the sponsor's preference. If a sponsor wished to use the new name, there would also be no dual-labelling requirement to show that asparaginase used to be known as colaspase in Australia. The old name would only be removed from use once all products using that name move to the new ingredient name. However, it is possible that both old and new names for the same substance could remain in use indefinitely.
There would be no compliance costs imposed on sponsors under this option. However, its adoption would increase the complexity of the registration and listing process for new medicines, resulting in potential increased costs to industry. This option would be especially problematic for changes where the old name is proposed to change to a new meaning. For example, 'carbidopa' is proposed to change to 'carbidopa monohydrate' (contains water). 'carbidopa anhydrous' would become just 'carbidopa' (does not contain water). Under Option 5, there is a greater risk that some products would show inaccurate amounts of the active ingredient if a structured transition process is not implemented.
Under Option 5, the risk of confusion for consumers and healthcare professionals would be significantly increased. By increasing the use of multiple names for a single substance, healthcare professionals are more likely to make prescription mistakes (where the wrong medicine is prescribed or administered) and consumers are at greater danger of accidentally double-dosing (taking two medicines containing the same substance but identified using different names). These risks are especially high in situations where the old and new ingredient names are not similar (i.e. colaspase versus asparaginase).
These risks could be significantly lowered if this option were only applied to a subset of ingredient names, for example for excipient ingredients only. As excipient ingredients are not usually included on product labels, using more than one name for an excipient would have very little effect on prescribing or taking medicines. As most compliance costs arise due to label changes, the cost to industry for this sub-option would be in effect identical to costs outlined in earlier options.
Although there are no quantified compliance costs, there is a high qualitative cost for Option 5. Due to the significant increase in confusion and the potential danger to consumer health and safety, Option 5 is associated with an overall net cost to industry, consumers and healthcare professionals.
- Some export only sponsors may wish to update 'Certificate of Pharmaceutical Product' documentation, however this does not need to be resubmitted to the TGA.
- The ingredient names used in prescribing and dispensing software is not regulated by TGA. However, TGA will work with these stakeholders to assist in changes, where required.
- Australian regulatory guidelines for sunscreens (ARGS)
- Trade Practices (Consumer Product Information Standards) (Cosmetics) Regulations 1991
- Many stakeholders raised concerns about the potential for adverse reactions with sunscreen ingredients. A search of the TGA Adverse Event Database revealed 15 reports of adverse events associated with sunscreens between July 2012 and June 2013. However, these results may also be due to non-sunscreen ingredients.
- WHO Guidance on INN
- WHO International Nonproprietary Names Modified (pdf,67kb)