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Regulatory impact statement (RIS) - update to the Required Advisory Statements for Medicine Labels (RASML)

May 2013

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6. Impact analysis

The options identified above will each have impacts on consumers, industry (Australian sponsors), government and the public health system.

6.1 Option A - Maintain status quo

In the short term, the absence of any immediate requirement to make changes to medicine labels will result in an absence of any immediate costs to industry.

In the long term, the existence of multiple sources of requirements and recommendations, together with the TGA's inability to enforce recommendations that are not in the RASML, could lead to a number of adverse consequences, as detailed below.

6.1.1 Impact of Option A for Australian consumers

If the status quo is maintained, the advisory statements that do not have a legislative basis (i.e. not mandatory) will continue to be inconsistently applied to the labels of OTC medicines.

Consumers may be denied contemporary information that they need to inform their use of medicines. If this leads to consumer harm, consumers and the public health system could face significant costs.

The case-by-case inclusion of advisory statements that are recommended by the TGA (but that are not directly enforceable) will also result in inconsistent labelling of similar medicines supplied by different sponsors. The case-by-case enforcement of TGA-recommended statements that have not been standardised and optimised by a process of public consultation may also lead to considerable variation of the wording on different products, which could cause consumer confusion. Confusion and misunderstanding could lead to decreased compliance with important safety advice, with the consequent potential for consumer harm.

For example, if a non-enforceable advisory statement related to the duration of use of a pain-killer medicine (e.g. 'only for short-term use') is included on the label of one brand, but not on the label of another brand, then a consumer might think that the brand without the statement can be taken for longer than the brands that do include the statement.

As stated previously in this document, adverse events associated with medications place a significant burden to health care costs. In Australia, approximately 2-3% (or 190,000) of annual Australian hospital admissions have been estimated to be medication related, with an estimated cost to the health care system of $380 million to $660 million. About half of these medication-related admissions are due to medication errors which are potentially preventable.

6.1.2 Impact of Option A for industry / Australian sponsors and the Australian Government

The absence of any requirement to make immediate/phased-in changes to medicine labels can be viewed as a short-term cost-saving benefit to the industry. However, Option A will have ongoing costs for all stakeholders.

The RASML does not currently fulfil its intended role as a single reliable source of advisory statements that are required by the TGA. Maintaining the status quo by failing to update the RASML will lead to ongoing compliance costs for industry. In order to ensure that proposed medicine labels include all of the appropriate requirements, sponsors must currently consult multiple sources, including the published RASML consultation document, the ARGOM, the Electronic Listing Facility5 and new Listing Notices.

Apart from the statements that result from Listing Notices, the new and amended advisory statements in the draft RASML update are not currently enforceable through legislation; however, the TGA does attempt to enforce inclusion of safety-related statements on labels as a condition of registration of individual medicines. When a sponsor applies to register or list a medicine on the ARTG, or to vary the labels of a medicine, the Act requires the TGA to determine whether the safety and efficacy of medicines has been satisfactorily established, for the purposes for which they are to be used. As part of such an application, the TGA may request that the sponsor include a new advisory statement on the labels, for reasons of safety under the Act. Under the 'status quo' option, this case-by-case practice of requesting non-enforceable inclusion of statements on labels would continue.

If the status quo is maintained, there could be extra costs to industry associated with the redrafting of medicine labels that are submitted to the TGA without all of the necessary requirements, and with the consequent delay in approval of the new labels.

Inconsistent inclusion of advisory statements on different brands of the same medicine could also lead to an unfair marketing advantage to sponsors whose products appear to be safer or appear to be suitable for broader use (e.g. for more long term use or for a wider patient population) than other similar products that have warnings and restrictions on their labels.

There may also be disadvantage to industry when the inclusion of a statement on one sponsor's product sets a precedent for all other similar products without any public consultation having taken place.

Any costs that are incurred by sponsors due to inconsistent and confusing application of requirements for advisory statements may be transferred to consumers in the form of increased prices.

It is also possible that there could also be very extensive financial costs to industry and public health from later regulatory action such as medicine recalls or more restrictive scheduling of medicines that result from incidents of consumer harm.

6.2 Option B - Update the RASML document to include new labelling requirements

In the short term, industry will incur extra costs due to implementation of new labelling requirements. These costs might be transferred to consumers. However, once all of the existing products are compliant with the new requirements there will be no additional ongoing costs. In fact, the ongoing costs in relation to labelling compliance are expected to be reduced compared to Option A due to the advantages of having all of the requirements published in one place. Under Option B, all of the ongoing costs associated with Option A will be minimised or avoided.

As discussed below, the RASML update provides transparency and enforceability of advisory statements. Enforceability will ensure that the new advisory statements are consistently present on medicine labels. This should result in a 'level playing field' for industry, and should also assist consumers in avoiding potential harm from use of the medicines. It is expected that there will be reduced administrative costs to industry and the TGA from introduction of the updated RASML as a single authoritative source of required advisory statements.

6.2.1 Impact of Option B for Australian consumers

Benefits for public health

Under this option it is expected that advisory statements that are considered necessary for public safety reasons will be consistently applied, as the requirements will be in a single source document and be able to be legally enforced.

New safety information continues to emerge due to monitoring of adverse events internationally and in Australia. Provision of this information to consumers via advisory statements can reduce patient harm by informing consumers of the way medicines should be used, and when they should seek advice.

For example, there have been several recent international reports of renal toxicity occurring in dehydrated but otherwise healthy children who were given commonly available NSAIDs such as ibuprofen and naproxen. In Australia, in children and adolescents aged under 18 years, eight renal adverse reactions involving ibuprofen and seven involving naproxen have been reported to the TGA, including six reports of renal failure (three reports for ibuprofen, and three for naproxen). The current RASML update proposes mandatory statements for the labels of NSAIDs products advising care givers to ask a doctor or pharmacist for advice before using the medicines in children who may be dehydrated through diarrhoea or vomiting.vii

Another example of new information on adverse events for existing products relates to international concerns about adverse effects from overuse of choline salicylate teething gels in infants. In other countries, these concerns have resulted in products containing choline salicylate being either withdrawn from the market (e.g. in the United Kingdom) or subject to labelling changes (e.g. in New Zealand). In Australia, the relevant expert committees have advised that the products should remain available, but that labelling requirements should be introduced to improve the dosage instructions and to advise parents and carers not to exceed the recommended dose.

While label warnings may not always be effective, the study by Ley described above indicated that the effectiveness of warnings can be improved by optimising the wording. In this context it should be noted review of the proposed statements by stakeholders was part of the consultation process for the RASML update.

The ongoing management of newly identified medicine risks via application of advisory statements rather than other regulatory approaches (such as withdrawing the products from the market, restricting the indications, restricting the patient groups, or restricting the medicine scheduling as prescription only) allows consumers to have best possible access to medicines while also being adequately informed of how best to use medicines safely and effectively.

6.2.2 Impact of Option B for industry / Australian sponsors and the Australian Government

One-off costs

The proposed update to the RASML includes over 50 new and/or changed requirements.

The majority of the proposed new advisory statements have been available to sponsors for 1-3 years, having been published on the TGA website, most recently as the 'RASML 6' consultation document (published February 2011) and the TGA response to submissions (March 2012). However, until the new advisory statements are finalised and incorporated in the legislation, sponsors cannot be certain of the requirements that will apply. In view of the costs involved in updating medicine labels, some sponsors may have chosen not to include the proposed statements on their labels until they are certain of the requirements.

Some of the proposed changes will not involve any cost to industry, as the affected medicines are already compliant with the proposed update. These include proposed new advisory statements that originate from long-standing specifications of the ARGOM and the Electronic Listing Facility, as well as new Listing Notices.

Other situations where medicines may already be compliant with the proposed updated RASML include the following:

Changes that have limited or no adverse impact on sponsors or manufacturers of current products are detailed in Appendix 1.

However, for some of the new statements, there are situations where currently supplied medicines will not yet be compliant. In these situations, the statements are likely to have some impact on stakeholders.

The statements that are likely to have an impact on stakeholders include those proposed for currently registered or listed non-prescription medicines as a result of TGA Expert Committee recommendations made after the publication deadline for the current RASML in 2008. These include the new and updated RASML for the medicines listed below:

  • Anticholinergic medicines used for conditions such as travel sickness, stomach aches and diarrhoea
  • benzydamine, which is used for sore throat
  • chlorhexidine in topical antiseptics
  • choline salicylate, which is used in products such as teething gels
  • coal tar in topical products for relief of itchy skin and scalp conditions
  • non-steroidal anti-inflammatory drugs (NSAIDs) (including diclofenac, ibuprofen, indomethacin, ketoprofen and naproxen) that are used for pain relief
  • fluconazole, an antibiotic
  • fluorides, when in medicines such as oral fluoride supplements that are scheduled S2 (Pharmacy Medicine) or S3 (Pharmacist Only Medicine)
  • proton pump inhibitors (lansoprazole, pantoprazole, omeprazole) used for gastric reflux and stomach ulcers
  • vitamin B6 supplements (pyridoxal, pyridoxine and pyridoxamine).

In some cases (e.g. benzydamine) only a small number of products will be affected by the new or amended statements, whereas the requirements for some other substances will affect multiple products and sponsors. For example, in the case of anticholinergics, there are at least 16 affected products registered on the ARTG, corresponding to at least 7 sponsors. The wording of the proposed statement that is recommended by the TGA was published in the RASML 6 consultation document in 2011, but some sponsors will be waiting to amend their labels until they are sure of the requirements.

Medicines that are impacted by the new or amended advisory statements are also detailed further in Appendix 3.

Cost estimates

Overall, the changes are expected to result in amendments to the labels of over 500 individual products (and affecting about 70 sponsors).

The actual number of impacted businesses, and total cost is not known precisely.

Costs to business include both the direct expense of designing and printing new labels that comply with the updated RASML, as well as costs incurred by the fees applied by the TGA for approval of the new labels.

  • The typical design and printing cost of a simple change involving only one printing plate has been estimated to be about $1500 to $2000. More complicated changes could cost $6,000 or more6,
  • The current TGA application and evaluation fees are given in the table below.
TGA regulatory fees for changes to OTC medicines Cost (including GST)
Application fee $1,370
Evaluation fee $3,310
  • However, it should be noted that the TGA evaluation fee is not applicable if the label is amended solely by addition of a new advisory statement required by legislation. In this case the TGA only charges the application fee.

The actual costs will depend on many factors. For example, design and printing costs will be increased where there are several marketed pack sizes, and/or both primary pack and container labels for each product registration. Typically blister in carton packs will have one artwork impacted (ie carton), while bottle in carton, tube in carton or sachet in carton have two artworks impacted. The costs per product due to TGA fees will depend on how many labels can be included in a single application.

The actual total costs will also depend on the number of products that are already compliant (as discussed above), and the number of registered products that are not actually marketed, as well as the time period allowed for phase-in of the changes. Unforeseen labelling changes that require immediate implementation can lead to substantial direct costs due to wastage of stocks of already-printed labels together with the cost of a new unscheduled print run, or overstickering of existing stock. However, if adequate time is allowed for sponsors and manufacturers to incorporate the change into the next scheduled print run, any extra design and printing cost due to the new statement should be negligible.

Using 'worst-case' figures above, the total cost for 500 products could be over $5,000,000. However, in a hypothetical scenario where the printing and design costs average at $2000 per product, and the TGA fees average at $1370, a total hypothetical cost for 500 products can be calculated to be less than $2,000,000.

Ongoing benefits

Once all existing products are compliant with the new requirements, there will be no ongoing costs arising from the introduction of the updated RASML. Indeed, the ongoing costs in relation to labelling compliance are expected to be reduced compared to maintaining the status quo due to the advantages of having all of the requirements published in one source document.

The regular public consultations that are part of the RASML update process will lead to reduced costs to industry resulting from the opportunity to have input into proposed and existing requirements. The usefulness of this input is evident from the results of the public consultation held in the context of the draft 'RASML 5' and 'RASML 6'. The TGA took stakeholder suggestions for amendments to the proposed requirements into account for 38 out of the 46 cases where stakeholder input was provided.

An up-to-date and complete RASML will be of benefit to both industry and the TGA as the updated RASML will identify the advisory statements that are required for particular products.

Certainty in regards to labelling requirements for medicines should result in reduction in compliance costs associated with medicine applications. There should be fewer time delays and inconvenience in relation to the processing of applications for new registrations and variations to labels if sponsors are aware of the particular requirements.

As a result of the consultation process that has been undertaken, the statements that are proposed for inclusion in the updated RASML have already been agreed to in principle by all relevant stakeholders in the interests of safe and effective medication management. Sponsors have indicated that updating of the RASML would be generally welcomed.

6.2.3 Overall impact of Option B

Updating the RASML will result in some immediate costs to sponsors and manufacturers for updating the labelling for currently marketed products affected by new requirements. However, these short-term costs are likely to below.

As a result of the consultation process that has been undertaken over a period of several years, industry has had advance warning of the changes, and has had the opportunity to voluntarily incorporate the changes as part of label updates undertaken for other reasons. The TGA published the proposed 'RASML 6' document on the TGA website in February 2011 as part of the consultation process. The TGA response to stakeholder submissions to the consultation was published on the TGA website in March 2012. Where proposed statements were amended as a result of the consultation, the TGA response clearly stated the amendments.

The Australian Self Medication Industry Association (ASMI) stated in its published submission to the recent 'RASML 6' consultation that its "...members affected by the changes have, in general, commented that several of these proposed statements or similar are already on labels, having been required by the TGA as part of the registration/listing process", and that "...at least half of the proposed additions to this update arise from recommendations pre-2008, and one from 1998".

Industry has requested that the implementation time for introduction of the statements for existing products where there are no immediate safety concerns be increased from 12 months (as originally proposed by TGA) to 18 or 24 months, to allow the changes to be introduced as part of the sponsors' next scheduled label print run. The TGA is agreeable to an extended time of 18 months. This extended implementation time should provide opportunity to address the concerns that were raised by industry groups during the consultation (see under Communication and consultation, below).

Updating the RASML will result in ongoing benefits to all stakeholders due to the increased transparency and predictability of TGA requirements; with resultant ongoing reduction in compliance costs, together with a more 'level playing field' for different brands of similar medicines.

There should be ongoing benefits to the public as the presence of advisory statements can enable consumers to choose the right medicines for their needs, and to use the medicines more safely and effectively.

The amount of consumer harm that can be avoided by the proposed statements is likely to be low, and cannot be quantified precisely; however, any readily avoidable harm to otherwise healthy people taking non-prescription medicines is unacceptable.

6.3 Option C - Update the RASML document to include new labelling requirements and implement the updated RASML as a Legislative Instrument

The costs and benefits of this option will be identical to those for Option B, except that this option will have the additional benefit that it will avoid the need to update the definition of the RASML in the Labelling Order each time the RASML document is updated in the future.

The adoption of the RASML as a Legislative Instrument is in line with the intent of the Therapeutic Goods Amendment (2009 Measures No 2) Act 2009, which required that, from a date to be proclaimed, the Minister will be able to specify, by legislative instrument, advisory statements required to be included on the labels of specified medicines (see Explanatory Memorandum to the Therapeutic Goods Amendment (2009 Measures No. 2) Bill 2009).


Footnotes

  1. The Electronic Listing Facility (ELF) provides a web-based electronic lodgement facility for applications to list medicines on the ARTG.
  2. Figures are based on information provided from the ASMI, as well as information provided in the context of the recent consultation on adoption of the new sunscreen standard.

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