By Joe Lederman and John Gao
The following article of 2,000 words is adapted from 2 different speeches given respectively by FoodLegal's Joe Lederman to a Food Law Network Conference in Cologne Germany and a presentation made by FoodLegal lawyer John Gao at the Pharmafood Forum at Melbourne’s Federation Square on 27 June 2008. There are many similarities between foods and oral therapeutic goods. Both categories of goods are consumed orally, both may contain natural or added nutrients and both may be consumed for particular functions. These similarities mean that there may be similar products which could be legally considered to be both or either a ‘food’ or a ‘therapeutic good’. The legal issue is significant due to the fact that foods and therapeutic goods are regulated under two quite distinct regulatory regimes. Food is regulated under the Australia New Zealand Food Standards Code (‘the Food Standards Code’) through the Food Acts of each State and Territory and enforced mainly by local municipal councils together with the Food Units within the State or Territory Departments of Health (or Human Services) or, in the case of NSW, by the NSW Food Authority too. By contrast, Therapeutic Goods are governed and enforced around Australia by the Therapeutic Goods Administration in Canberra under the Federal Therapeutic Goods Act. There are several commercially critical issues in defining the difference between supplying a food and supplying a therapeutic good. These differences can result in very different business cost structures pertinent to each, such as the cost of special manufacturing and production processes that require auditing, the cost of maintaining specialised manufacturing premises, as well as a range of limitations on the marketing of therapeutic goods, limitations on making some health claims in relation to food and restrictions imposed on the type of business where some such products can be sold. Generally, producing and supplying a product as a food can sometimes involve considerably less cost than producing the same product as a therapeutic good. However, the laws and regulations in the food-therapeutic goods interface also present opportunities for food manufacturers to give their food products a health function. At the same time pharmaceutical companies may see an opportunity to expand into the field of ‘functional foods’. Generally, if a product can be classified as a food, it will not need to satisfy the requirements under the Therapeutic Goods Act. However, under Section 7 of the Therapeutic Goods Act, the TGA has the power to declare that a product is or is not a therapeutic good. A declaration can be made regardless of whether or not a product comes under the definition of “food”. Factors for differentiating foods and therapeutic goods There are 4 main factors in determining whether a product is a food or a therapeutic good. Note, however, that any one of these factors could make a product a therapeutic good. 1. If the product contains an ingredient that is only permissible in a therapeutic good, for example, paracetamol, then the product would be a therapeutic good. 2. If the product is presented as a therapeutic good rather than a food, for example, in tablet or capsule form, then the product would generally be a therapeutic good. 3. If the product claims to have a therapeutic function, for example, cures headaches or if it says it cures headaches, then the product would generally be a therapeutic good. 4. If the product requires a set dosage to be taken regularly, for example if a desired effect is not achieved without a regular dose, or worse, if there are safety concerns in over-consumption, then the product would generally be considered a therapeutic good. As an example of an interface product that could be considered either as a food or a therapeutic good, it ought to be noted that two of the world’s most popular beverages, Coca Cola and Pepsi, both started life in the late 19th century as medicines developed by pharmacists. These products originally claimed to have therapeutic benefits such as treating morphine addiction, headaches, dyspepsia (indigestion) or even impotence. In fact, some say that the treatment of dyspepsia is part of the original idea from where Pepsi acquired its name. Both of these products are now considered foods because therapeutic claims no longer appear in the marketing or labelling. There may be numerous reasons why Coca Cola and Pepsi chose to market the products as foods rather than therapeutic products. Therapeutic claims must always be substantiated scientifically and people expect medicinal or therapeutic products to be sold, prescribed or endorsed by the medical profession. Another example is that of “complementary medicines”. Complementary medicines are required by the Therapeutic Goods Administration to be listed albeit they are not registered medicines. Yet some products, such as tea, have a traditional history of use as a complementary medicine but are nonetheless regarded as foods. Dietary Supplement under NZ law In Australia, there may be several legal avenues to explore to classify a product as a food and here are some examples. One such avenue is dietary supplements under New Zealand law. Australia has a free trade agreement with New Zealand known as the Trans Tasman Mutual Recognition Agreement. Under the agreement, any food product legally sold or produced in New Zealand can also be sold in Australia. Although the Food Standards in Australia and New Zealand are substantially embodied in a bi-national Food Standards Code, there are exceptions and reservations by which the New Zealanders assert an independent stance. Moreover, there is a separate regime in New Zealand for Dietary Supplements. Significantly for the food-therapeutic good interface, the New Zealand Dietary Supplements regime provides a broader list of vitamins and minerals that can be added to a food-type product without many of the restrictions on the form in which the vitamin or mineral is to be added. For example, before the caffeinated beverages standard existed in the Australia New Zealand Food Standards Code, energy drink importers used this New Zealand-based avenue to get their product into Australia. There are however, additional labelling requirements for such dietary supplements and one must also ensure that such supplements are not to be considered therapeutic goods in Australia (such as by the form of the presentation of the product, or by inappropriate labelling or by inappropriate claims being made in labels, on packaging materials or advertising media). Moreover, the New Zealand Food Safety Authority is currently adopting a change in the way in which dietary supplements are regulated in New Zealand. Those that are considered to be “food type dietary supplements” will be regulated as foods subject to new rules under a new New Zealand Food Bill while “therapeutic type dietary supplements” will be regulated as therapeutic goods. More details regarding this proposal can be obtained from FoodLegal, which provides professional advice on many issues pertaining to this area. Special Purpose Foods Another avenue to consider in Australia for a ‘functional food’ is as a Special Purpose Food. There are currently 4 categories of special purpose foods in Australia which have different rules in relation to composition, in particular concerning the addition of nutritive substances. They are: · Infant formula products · Foods for infants · Formulated Meal Replacements and Formulated Supplementary Foods · Formulated Supplementary Sports Foods However, these ‘special purpose foods’ also carry additional compliance obligations and extra labelling requirements such as warnings. If you would like more information on any of the above and how these provisions may apply to your particular products, please contact us at Foodlegal. Proposed Foods for Special Medical Purposes Standard A category of Special Purpose Foods not currently in the Food Standards Code but being proposed is ‘Foods for Special Medical Purposes’. Foods for Special Medical Purposes might be foods that will be specially formulated for the dietary management of individuals with certain medical conditions. As at the publication date of this article, the Standard regulating such foods had not yet been finalised and Australia’s Food Standards Code agency, Food Standards Australia New Zealand (‘FSANZ’), was at the second last stage in the assessment of a new Standard (see FSANZ Proposal P242). The Preliminary Final Assessment Report for this Proposal was released in August 2004 but FSANZ had indicated that the progress of this Proposal had been delayed due to the priority of its other work. Like the other categories of Special Purpose Foods mentioned above, the current draft of the proposed new Standard contains approval for certain nutritive substances not otherwise permitted in food generally. However, again there are restrictions on advertising to consumers and additional labelling requirements may apply. Proposed Health Claims Food Standard Another avenue in the food area that will expand in the future will be that of health claims for foods. There has been up until now a legal prohibition in Australia on any claims referring to a specific health effect of a food with the exception of a claim that promotes added folate as a means of improving health having regard to a FSANZ-approved link between folate intake and a reduction in the risk of neural tube defects in unborn foetuses. There is currently a proposal (see FSANZ Proposal P293 – Nutrition, Health and Related Claims) to broaden the number and type of health claims for food to be made. The proposal has been finalised by FSANZ and is currently awaiting approval from the Australia New Zealand Food Regulation Ministerial Council. On 20 June 2008, the Ministerial Council requested that FSANZ review its proposed Health Claims Standard. It appears from the current version of the proposed Standard that there will initially be 9 high-level health claims permitted which refer to relationships between certain foods and serious diseases, for example, the link between a food high in calcium and vitamin D and the reduced risk of osteoporosis. There will also be permission to make general level health claims which refer to relationships between a food and a health effect other than a serious disease, subject to substantiation requirements and eligibility criteria for the type of food product. However, there is otherwise a limitation on making other health claims in relation to food. Clause 3(2) of the latest version of the proposed Standard 1.2.7 states: “A claim must not refer to the prevention, diagnosis, cure, alleviation or symptom of a disease, ailment, defect or condition” This means that health claims for food still cannot refer to an absolute health effect. The Food Lawyer’s role FoodLegal specialises in legal advisory work dealing with innovative product development areas. We work with companies in the food industry and pharmaceutical companies in the food-therapeutic goods interface to overcome many potential problems. Our role at FoodLegal is to clarify and interpret what is legally possible and what is not, and we aim to give clients the best possible solutions within the parameters of the law. Common food law issues to be aware of Food composition standards in Australia are quite prescriptive especially when it comes to nutritive substances and functional ingredients and might not allow the addition of a particular ingredient that your proposed product has in it. The fact that an ingredient may be acceptable in America or another country does not mean that it is acceptable in Australia. Another situation you need to be careful of is where the proposed product does not have a tradition of being consumed as a food in Australia. In such a situation, it may be a ‘novel food’ under the Australia New Zealand Food Standards Code requiring pre-approval or it may even be a therapeutic good. The situation for each product depends on the specific facts of each case. A product can be a new food product without necessarily being a ‘novel food’. Where a product name or descriptor conveys a message (either expressly or implicitly) about the food, you must make sure that it could not be potentially misunderstood or be ambiguous to consumers. In particular, the ACCC which administers the Trade Practices Act 1974 can take the view that a claim is misleading or deceptive under that Act even if it only has a potential to mislead and even though the company has no intention to mislead. On the other hand, there may well be other legal solutions such as relying on the persuasiveness of favourable case law, making use of trade mark law, patent protection and other legal marketing solutions that can potentially help overcome a variety of difficult situations.
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