Importing, manufacturing and supplying medicinal cannabis in Australia

The importation, manufacture and supply of unapproved medicinal cannabis products is tightly regulated in order to manage the risks of unlawful supply, and to ensure any necessary public health alerts and recalls can be managed appropriately.

To that end, the 'direct control' requirement in the Therapeutic Goods Regulations 1990 is in place to ensure that the sponsor remains responsible for product control and supply decisions throughout the supply chain.

If you import or manufacture finished medicinal cannabis products that are not entered in the Australian Register of Therapeutic Goods, you can only supply those products:

• if they are held under your direct control until they are supplied under an approved pathway to an Authorised Prescriber or Special Access Scheme approval holder
• if you comply with certain conditions.

Provided you comply with these requirements, you can enter into distribution arrangements with third parties, where they provide services to assist you in supplying finished medicinal cannabis products.

Finished medicinal cannabis products, as opposed to starting materials, are products that are in a form that can be supplied to a patient.

Starting materials for use in manufacturing therapeutic goods are exempt goods. This means that they are not required to be entered in the ARTG unless they are pre-packaged for supply for other therapeutic purposes or are formulated as a dosage form.¹ The TG Act therefore allows the importation, manufacture, supply or export of starting materials (including active pharmaceutical ingredients), without those goods being entered in the ARTG, as long as they are not in a form that can be given to a patient

In order to lawfully import, export, manufacture or supply finished medicinal cannabis products, those products must be registered or listed on the ARTG unless an exception applies; such as an exemption, approval or authority under the TG Act.

Note: The import into or export from Australia of medicinal cannabis products as starting material or finished goods must comply with the requirements set out in the Customs (Prohibited Imports) Regulations 1956. The cultivation and production of cannabis starting materials in Australia (prior to export or manufacture under a TGA GMP licence) must comply with the requirements set out in the Narcotic Drugs Act 1967.

The Therapeutic Goods Regulations 1990 (TG Regulations) exempt finished medicinal cannabis products, imported or manufactured in Australia, from the requirement to be entered in the ARTG² so long as the products are held under the direct control of the sponsor until they are supplied under one of the approved pathways for unregistered medicines.

Those pathways are: Special Access Scheme B,³ the Authorised Prescriber Scheme⁴ or under a clinical trial notification or approval.⁵

In addition to the requirement of 'direct control' and supply through an approved pathway, the ARTG exemption is subject to the following conditions:⁶

• the goods are kept in a warehouse or a properly secured area under the control of the sponsor
• the supply of the goods is in accordance with the relevant notification, approval, or authorisation under the approved pathway, and
• the sponsor must keep records relating to the source and supply of the goods and, if requested, give those records to the TGA.

If the finished medicinal cannabis products are imported, manufactured or supplied in non-compliance with the above requirements and conditions, the ARTG exemption does not apply and the importation, or manufacture of those products will be unlawful.

However, the supply of the product to the patient or health care practitioner will remain lawful, if it is in accordance with the relevant approval, authority or exemption issued under the approved pathway.⁷

Civil and criminal penalties may apply to sponsors who unlawfully import, manufacture or supply unapproved finished medicinal cannabis products.

Note 1: An entity that is principally responsible for the activity of exporting, importing or the domestic manufacture of the goods (or arranging for another party to undertake those activities) will usually be the sponsor of those goods for the purposes of the TG Act.⁸ In the present context, this is evidenced by import or manufacturing licences and permits issued by the Office of Drug Control.

Note 2: The sponsor's record-keeping obligations relating to the source and supply of goods are set out in regulation 47B of the Therapeutic Goods Regulations 1990 and are designed to enable rapid communication to the approval holder in the event of a product recall or defect, and adverse events reporting.

In Australia, the supply of unapproved medicinal cannabis products through wholesale arrangements is prohibited. This is the case even if the supply is to or by a wholesaler licensed under state or territory law. A sponsor of an unapproved therapeutic good will commit a criminal offence, and may be liable for civil penalties, if they supply that therapeutic good to another person and it is not subject to a relevant exemption, approval or authority.⁹

The TG Act further provides that it is a criminal offence for a person who is not the sponsor of an unapproved therapeutic good to supply that therapeutic good to 'another person who is not the ultimate consumer of the goods' (including by wholesale) unless the goods are registered or listed in the ARTG or subject to an exemption, approval or authority.¹⁰

Although an ARTG exemption applies to finished medicinal cannabis products that are held under the direct control of the sponsor until supplied under an approved pathway (as discussed above), the exemption does not support wholesale arrangements. This is because wholesale arrangements generally involve the sale of the products to an intermediary or third party, which means that the products are no longer under the sponsor's direct control.

As the sponsor is no longer in direct control of the products prior to supply, the supply of the products is not subject to the ARTG exemption. This could also have implications for licences issued under the Narcotic Drugs Act 1967, Customs (Prohibited Imports) Regulations 1956 and state and territory legislation.

Sponsors can engage third parties to assist them in distributing the goods if the sponsor continues to own the goods, and has direct control over them, until they are supplied. Under a distribution arrangement, a third party generally provides services to the sponsor (such as warehousing, courier or brokering services) in relation to the products, but the sponsor does not relinquish ownership or control of those goods as would be the case with wholesale arrangements.

The rationale behind the 'direct control' requirement is to establish a clear link between the sponsor and patient supply so that in the event of a public health safety alert relating to an unapproved medicine, sponsors can respond quickly to recall the product.

For a sponsor to hold medicinal cannabis products under its 'direct control', it must:

• maintain legal ownership of the product, and
• make decisions as to where and how the products are to be kept, and to whom (i.e. the Authorised Prescriber (AP) or the Special Access Scheme (SAS) approval holder) the products are to be supplied.

A sponsor of finished medicinal cannabis products will not meet the 'direct control' requirement if:

• the legal ownership of the products is transferred to a person other than the sponsor prior to the supply of those products, or
• the sponsor does not itself decide where the products are to be kept, and when and to whom the products are supplied, prior to the supply of those products (i.e. the sponsor is the decision maker in relation to supply of the product on the basis of an AP or SAS approval).

Sponsors must ensure that this requirement is reflected both in any contracts between the sponsor and third parties providing distribution services, and in the way in which they deal with the finished medicinal cannabis products in practice.

Important: The sponsor takes ultimate responsibility for supply arrangements. It is the sponsor's responsibility to ensure that throughout the distribution and supply process the approval conditions relating to the release of the product, including product quantity, are met because that responsibility does not transfer to the distributor or any other third party under the therapeutic goods framework.

For example, it is the sponsor's responsibility to ensure that:

• the products are supplied in accordance with the TGA issued approval letter
• the products are not supplied in greater quantity than what is approved for, e.g. the sponsor does not supply a different product to the AP or SAS approval holder due to stock shortage or discontinuation, and
• any product released to the AP or SAS approval holder is released with the sponsor's approval.

Sponsors should ensure that any contract between themselves and any third parties providing distribution services (referred to below as the distributor):

• clearly specifies the services to be provided to the sponsor by the distributor
• if the distributor is providing storage or warehousing services, require that the distributor store the products in a specified warehouse or other secured area (stating, as specifically as possible, the location at which the products will be stored), that the sponsor be allowed access to the products, and that access to the warehouse or distribution centre is restricted to the sponsor and the distributor only
• requires that the services to be provided by the distributor are to be undertaken by the distributor and its employees only or other personnel approved by the sponsor
• provides that prior written approval by the sponsor is required before any subcontractors can be engaged by the distributor with respect to the storage, handling or transport of the products
• provide for mechanisms for the sponsor to make decisions on supply, and
• any record keeping arrangements necessary to meet reporting obligations.

While contractual arrangements between the sponsor and distributor may evidence the sponsor's ownership of the products, they may not be determinative in all cases of 'direct control' and closer consideration of the contractual terms, and the way in which the sponsor and distributor deal with the goods in practice, may be required to evidence compliance with the 'direct control' requirement.

Sponsors are reminded that they must report to the TGA every six months in relation to finished MCP that has been supplied under the Special Access Scheme (SAS) and Authorised Prescriber scheme.

Regulation 47B of the Therapeutic Goods Regulations 1990 outlines the requirement for the sponsor (importer) to submit six-monthly supply reports to the TGA listing the product (brand name) details and quantities supplied in Australia in the relevant period. Reporting periods are 1 January - 30 June (inclusive) and 1 July - 31 December (inclusive). Reports must be submitted within 1 month of the end of the relevant reporting period.

Sponsor six monthly reporting data is used to publish medicinal cannabis product details by active ingredient category. This aims to support health care professionals in prescribing and supplying medicinal cannabis products.

The approved reporting form is available on the TGA website.

Reports must be provided by email to medicinal.cannabis@health.gov.au

• This guidance explains the requirements of the Therapeutic Goods Regulations 1990, Schedule 5A, Items 1 and 2
• The Australian Government materials on Medicinal Cannabis are available from:
  • Medicinal cannabis: Information for sponsors and manufacturers
• If you have questions about the legal requirements regarding advertising of therapeutic goods, please visit:
  • Advertising guidance for businesses involved with medicinal cannabis products
    or
  • lodge an advertising enquiry with the TGA.
• You can also contact the TGA by phone on 1800 020 653 (free call within Australia) or 02 6289 4124 (for mobiles that do not allow 1800 calls)

1. Therapeutic Goods Regulations 1990 (Cth), Schedule 5, Item 9.
2. Therapeutic Goods Regulations 1990 (Cth), Schedule 5A, Items 1 and 2.
3. Therapeutic Goods Act 1989 (Cth), subsection 19(5).
4. Therapeutic Goods Act 1989 )(Cth), subsection19(7A).
5. Therapeutic Goods Act 1989 (Cth), subsection 19(1).
6. Therapeutic Goods Regulations 1990 (Cth), Schedule 5A, Items 1 and 2.
7. Therapeutic Goods Act 1989 (Cth), sections 19B and 19D.
8. Therapeutic Goods Act 1989 (Cth), section 3.
9. Therapeutic Goods Act 1989 (Cth), sections 19B and 19D.
10. Therapeutic Goods Act 1989 (Cth), section 21.