Export of medicinal cannabis and other changes to the Narcotic Drugs Regulation 2016

Summary

• Subject to the passage of regulations, the Government will now allow the export of Australian-manufactured medicinal cannabis products through a change to the Narcotic Drugs Regulation 2016.
• It is anticipated that regulations will be in place by late February and a more detailed regulatory guidance document will also be available at that time to assist industry in transitioning into the new arrangements.
• There will be conditions on Australian cultivation licences to ensure that Australian patients are not denied access to an Australian product, if their doctor has received all the appropriate state/territory and Commonwealth approvals to prescribe medicinal cannabis.
• The new policy will not allow for the export of unprocessed or bulk raw cannabis, nor will it allow export for recreational use in other countries.
• As well as permitting export of oils and extracts by manufacturers, cultivators and producers will now be able to supply raw cannabis flower to companies who hold manufacturing licences under the Therapeutic Goods Act 1989 for them to carry out dose standardisation, final packaging and labelling of the product.
• This means that medicinal cannabis products manufactured under the Narcotic Drugs Act 1967, as well as final standardised, packaged and labelled raw cannabis may be made available both to domestic patients under appropriate medical prescription and to export into medicinal markets.
• Importantly, export of Australian manufactured, but unregistered medicines is subject to listing requirements under the Therapeutic Goods Act 1989. This includes medicinal cannabis products even though they may be being supplied as unapproved medicines in Australia, through the Authorised Prescriber and Special Access Schemes. They must be listed (but not registered) on the Australian Register of Therapeutic Goods and meet Australian manufacturing quality standards in order to be exported. Exports of medicinal cannabis products will have to comply with these provisions.

Discussion

Following a series of consultations during 2017, the Government has given policy approval for the Department of Health to progress regulatory changes that will allow Australia to export medicinal cannabis products and to make a number of other changes to the Narcotic Drugs Regulation 2016 aimed at supporting industry and streamlining administrative processes.

Once those regulatory changes have been put into law, Australian manufacturers will be allowed to export medicinal cannabis. It is important to note that this includes only cannabis for medicinal purposes and that it will not be possible to export cannabis for commercial sale into recreational markets, even where recreational use may have been legalised in that state or country.

Should the regulatory changes be formally agreed, they will likely take effect in late February / early March this year.

What will change?

The new Regulations would allow:

• the export of medicinal cannabis products
• the supply of cannabis produced under a Narcotic Drugs Act 1967 (the ND Act) medicinal cannabis licence to the holder of a Therapeutic Good Act 1989 (TG Act) manufacture licence for dose control and packaging of the dried herbal product.

With both changes will come a requirement for Narcotic Drugs Act 1967 licences to include conditions that Australian patients will always have reliable access to particular medicinal cannabis products.

A number of other minor amendments to the Regulations will also be progressed, including:

• prescribing the time to report on certain matters by licence holder, at 72 hours
• clarifying the application requirements for individual persons and corporate entities so that they ask for the same information
• settling the requirement that a licence holder must be the entity that conducts the primary activity authorised under the licence and cannot contract out those activities
• strengthening the provisions around non-disclosure of sensitive law enforcement information where a licence is suspended
• reducing the documentary requirements for a State or Territory Agency when applying for a licence
• adding a 'source of cannabis cultivars or seeds' information requirement for permit applications, and
• other minor changes to information and documentation requirements.

Why are we changing?

The decision to allow export is in recognition that export has always been envisaged within the design of the ND Act, and was mentioned as a future pathway in the Explanatory Memorandum which accompanied the original Narcotic Drugs Amendment Bill 2016.

Consultation with existing licence holders and with potential industry entrants made it clear that industry was of the view that enabling the export market would allow for scaled approaches to cultivation and production and would be directly economically beneficial to the industry as well as provide a "critical mass" to enable the availability of a range of products for Australian patients.

As a consequence, licences allowing export will be conditioned requiring the licence holder to demonstrate domestic supply was as accessible by doctors for the range of products to be exported.

The second major change, allowing cannabis produced under an ND Act licence to then be processed and packaged by a TG Act manufacturer, was introduced in recognition that medicinal cannabis is defined under the ND Act as including any part of the cannabis plant. The current ND Act definitions of manufacture do not, however, allow the end product to be an unaltered form of cannabis, while the TG Act does allow such where dose control and packaging are done to good manufacturing practice standards. This change was required to reduce ambiguity around prescription of raw cannabis to domestic patients from a domestic supply, and make it clear that this is supported in law.

Importantly, while this change allows for medicinal cannabis products that are essentially vaporisable dried flowers, the choice of dose form for particular patients remains a matter for medical practitioners in consultation with their patients. The other changes are largely to clarify existing policy and simplify administrative processes for industry through having consistent information requirements between licence types under the ND Act.

From June 2017, the Office of Drug Control (ODC) sought comment from interested parties on the export of Australian cultivated and manufactured medicinal cannabis products.

The consultation process included seeking written submissions, holding two industry seminars on the regulatory scheme as well as over a dozen bilateral industry meetings. Proposed changes to the regulations have been endorsed by the Australian Advisory Council on the Medicinal use of Cannabis, the State and Territory Law Enforcement Working Group on Medicinal Cannabis, and the State and Territory Cultivation and Production Working Group on Medicinal Cannabis.

More detail on export!

The policy to allow export has been specifically designed to focus on enabling export of medicinal cannabis that has been manufactured, or of raw cannabis that has been dose controlled and packaged. The Australian Government policy does not include the export of unprocessed raw cannabis.

The basis for this policy is the ongoing requirement for Australia to maintain its conformance with the Single Convention on Narcotic Drugs 1961 and minimise international narcotic drug diversion risks.

In addition, exporting only value added products builds upon the strong quality systems that have been put into place for the manufacture of medicinal cannabis products in Australia.

There are two categories of value added ("manufactured") medicinal cannabis products:

• those which have been manufactured under a manufacturing licence issued under the ND Act
• those that have been prepared for patient access through standardisation of cannabinoid content and conformance with good manufacturing practices under manufacture licences granted under the TG Act.

The first such category is purified oils, tinctures or extractions of cannabinoids for further preparation (such as refined cannabidiol or tetrahydrocannabinol) manufactured under the ND Act. The second category is dried and packaged raw cannabis that has been quality assured for cannabinoid contents and dose controlled for prescribed delivery under good manufacture practices provided in the TGA Act.

For both categories, manufacturers under either Act are required to ensure that cannabis used in preparation of medicinal cannabis products is compliant with the standards outlined in Therapeutic Goods Order (TGO) No. 93 Standard for Medicinal Cannabis, which covers minimum quality requirements for medicinal cannabis products.

Supporting domestic supply

In consulting with industry on the issue of export, the importance of maintaining adequate supply to the domestic market was given a high value. A number of options were put up for discussion as to how industry could ensure domestic supply.

It has been decided that conditions for medicinal cannabis licences should be introduced that require licence holders to demonstrate that they can and will meet local domestic demand as part of licensing and permit granting processes.

Enquiries

Email enquiries should be directed to MCS@health.gov.au.

Phone enquiries should be directed to +61 2 6232 8433.