Health Supreme by Sepp Hasslberger

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June 20, 2003

Natural Products Recall in Australia - Push for tougher regulations?

The Australian TGA - Therapeutic Goods Agency - has recently ordered an unprecedented recall of more than a thousand three hundred natural products formulated and produced for other companies by Pan Pharmaceuticals.

Public warnings by the agency stated consumers should not use any natural products, while emphasising that there was "nothing wrong" with the pharmaceutical medicines produced by the same company?!

Australia and New Zealand have been talking for some years now to extend the current very restrictive Australian system, where health products have to be registered ("listed") as Therapeutic Goods, to New Zealand, which has enjoyed a comparatively very liberal regulation.

Ron Law, a former biochemist and adviser to natural healthcare product associations on industry issues, examines the background of the unprecedented products recall and its implications to health freedom in New Zealand.

20 June 2003 - Update on this Australian attack on supplements

The UK Health Authorities, acting on the Australian supplements recall, have now issued their own warning statement to protect us from these highly dangerous products. No matter that they state themselves, that they're not aware of any health problems reported in connection with the food supplements, non-licensed medicines and herbal products that have been supplied to the UK by Pan Pharmaceuticals or, indeed, that neither the Australian Authorities had any reports of problems with supplements. The double standard gets more and more blatant....

Update December 2003:

A very good article describing what happened can be found on the Holistic Health Topics site: Pan Pharmaceuticals Recall of Australian Drugs, Dietary Supplements and Alternative Medicines

Natural justice?

Deficiencies in the Australian regulatory system will likely cost the Aussie/NZ natural healthcare product industry $300-$500 million, writes Ron Law

The largest regulatory failure of foods or medicines in the history of the planet happened in the self-proclaimed best-regulated country in the world – Australia.
Blessed with watchdog the Therapeutic Goods Agency (TGA), extracting $NZ60 million from the pharmaceutical and natural healthcare product industries, Australians probably thought they had a guarantee against the shoddy practices behind this month’s extraordinary recalls of products manufactured by Pan Pharmaceuticals.
The New Zealand dietary supplements industry – of which some players had been clients of the now-suspended Pan – has come under grossly unfair and evidentially unwarranted attacks in the wake of the Aussie debacle.
A recent statement by Health Minister Annette King that the New Zealand industry does not want regulation is patently false.
Papers will today be tabled at Parliament’s Health Select Committee inquiry into the proposed trans-Tasman joint TGA proving that not only does industry want appropriate regulation, it is fully united and had agreement with the Health Ministry on a proposed Healthcare and Therapeutic Products Bill in November 1998.
The papers will show the minister was, on taking office, advised of the proposed Bill and gave it her blessing, not realising her officials had already scuttled it via a secret letter by former minister Wyatt Creech to his counterpart in Australia in July 1999.
The case for New Zealand to join Australia in health product regulation is demolished by the TGA’s recent extraordinary responses to the apparently errant Pan:
• December 2002-January 2003: Serious adverse reaction reports pour in to the TGA relating to a pharmaceutical product Travacalm Original. (Eventually, nearly 100 serious adverse reactions – including 19 admissions to hospital will be reported.)
• 21 January 2003: Based on adverse reaction reports, TGA initiates a “voluntary recall” of Travacalm Original, a product containing dimenhydrinate 50mg, hyoscine hydrobromide 0.2mg and caffeine 20mg.
Over the next week TGA tests the other two Travacalm products. Travacalm H.O. (which contains hyoscine hydrobromide 0.3mg) is found to contain between 0% and 700% of the active ingredient in tablets within a single packet, indicating that the formula was not mixed properly prior to tabletising.
The third Travacalm product, Travacalm Natural, which contains 500mg of ginger, was assayed and found to be OK and not required to be withdrawn.
• 30 January 2003: TGA initiates “voluntary” recall of Travacalm HO.
All three Travacalm products were contract-manufactured by Pan Pharmaceuticals.
Then, for mysterious reasons, which we can only speculate about at present, three months later,
• 28 April 2003: shortly before close of business, and without any warning, the TGA holds a media conference to announce Pan Pharmaceutical product would be recalled, including export-only products, and “many thousands of products” made by Pan for other companies were “under suspicion.” TGA made the calculated statement that, “consumers should stop taking ALL complementary medicines.” As it turned out, less than 10% of products on the TGA database were eventually withdrawn, and perhaps less than 5% of New Zealand product was implicated.
Having thus placed all natural healthcare products under suspicion, whether made by Pan or not, the medical head of the TGA, bizarrely, reassured the public that pharmaceutical products were kosher.
However, the two products which had failed the TGA’s laboratory analysis were pharmaceutical products. The natural healthcare product had been found to be of high quality.
What about the prescription medicines for export that had their licenses revoked – were they faulty? How could it be that pharmaceutical products – paid for by the Australian government – were high quality, yet the same products being exported were not?
The TGA had discovered “serious quality and safety breaches in the manufacture of products by that company [Pan Pharmaceuticals] since May 1, 2002,” to quote the Honourable Annette King, New Zealand Minister of Food Safety as she issued the largest recall of food products in the world.
King’s recall came less than 24 hours after she publicly stated she couldn’t recall these products “because they were unregulated and that is why she needed new regulation.”
MPs Lynda Scott and Sue Kedgley pointed out in Parliament question time on 1 May that s40 of the Food Act gave her such powers – and the minister backtracked.
The recall in New Zealand was mandatory. The minister had no evidence any of the natural healthcare products recalled were “unsound or unfit for human consumption or damaged or deteriorated or perished, or contaminated with any poisonous, deleterious, or injurious substance,” the only basis s40 provides for a mandatory recall.
King’s only evidence was Australian TGA hearsay (it won’t release evidence in case it decides to prosecute).
Our minister would appear to have acted illegally and this may well be considered by Parliament’s Regulations Review Select Committee as an unusual or unexpected use of powers in the Act.
But back to the TGA. Having discovered a major public health problem with pharmaceutical products in January, during February, March and April all it did to protect the public from patently unsafe pharmaceutical products was:
• It cancelled Pan Pharmaceutical’s license to manufacture microdose medicines – including prescription medicines and products such as over-the-counter pharmaceutical folic acid medicines – without telling the public or recalling the relevant medicines. The TGA did not appear to care that many women rely on high-dose pharmaceutical folic acid medicines to protect their babies from severe deformities.
• Having established there were major quality assurance problems with at least two pharmaceutical products, it tested every pharmaceutical product made by Pan.
• According to inside sources, the TGA decided against testing the natural healthcare products because “that would cost too much.” (So much for the natural healthcare industry’s paid-up fees.)
Much media comment had suggested New Zealand needed a system such as Australia’s to ensure this sort of disaster didn’t happen and that products were easily traced and recalled.
We were told New Zealand needed Good Manufacturing Practice (GMP) and a register of products. Yet nearly all the New Zealand companies involved in this Australian scam already operate under GMP (voluntarily). They all have proper recall procedures in place.
And, even with the most burdensome regulatory system in the world, requiring GMP and consisting of a government-controlled central register of products and regular audits, Australia could not guarantee quality.
The TGA had audited Pan Pharmaceuticals and given it the big tick. Companies had contracted Pan because the regulator gave them the big tick.
Why did it take the TGA a week to come up with a full list of products? New Zealand, with its so-called “unregulated” industry under the New Zealand Food Safety Authority was only ever half a working day behind Australia in recalling products.
This sorry saga demolishes the argument that New Zealand needs a regulatory system such as Australia’s to facilitate recalls. In catastrophic situations such as, this no amount of planning or regulation can work. Not when the regulator ambushes an industry sector with zero warning and sends the media and medico-centric politicians into a feeding frenzy preventing industry responding in a measured way.
The TGA has failed society and industry miserably. The TGA system was not even capable of differentiating pharmaceutical and natural healthcare products and could not differentiate registered (“Aust-R high risk”) and listed (“Aust-L low risk”) products.
The TGA had to resort to a manual, paper-based system to identify product. Every supplier had to provide via email or fax a separate document relating details of every product affected.
Many Australian companies which used Pan will be driven out of business. They cannot quickly bring to market a product from another manufacturer: regulatory approval will take a minimum of six weeks for a listed product and six months for a registered one. Each entry will cost in the region of $500 plus an equivalent consultant fee – and many companies have 300-500 products.
The natural healthcare product industry pays the TGA $6 million in protection money per year, money supposedly to help guarantee the credibility of the therapeutic goods industry. Why did the TGA protect the interests of the pharmaceutical industry and not afford the natural healthcare product industry the courtesy of a phone call?
There is no evidence to show the TGA has analysed a single natural healthcare product involved in this recall and found it wanting. There was no evidence of adverse reactions to natural products. Recalling things like charcoal tablets and vitamin C tablets and suggesting that they are unsafe is absurd in the extreme.
For a problem that surfaced as a result of serious adverse reactions to pharmaceutical medicines, it is a mystery that the Australian regulators have turned that around to hammer innocent parties.
If the TGA had planned to inflict severe wounds on innocent parties it could not have planned it better.
The negative impact on the natural healthcare product industry in Australia and New Zealand is likely to be $300 million-$500 million a figure orders of magnitude more than the maximum fine a court can impose on a guilty party.
It is staggering the TGA has exercised unbridled power without notice, without affording the right to consult a lawyer, without a formal charge, a trial, right of defense or right of appeal.
Not just the alleged sinner, but an industry that is an innocent bystander is punished because it used a manufacturer approved by the regulator itself.
Even those industry players who could be regarded as “friends” of the TGA have opposed the notion that it dominate the proposed trans-Tasman joint regulatory agency the government and health officials are seeking. Large companies such as Blackmore’s, Mayne, Healtheries and Nutralife variously described TGA as “restrictive,” “oppressive,” “overly prescriptive,” “inflexible,” “lacking transparency,” “burdensome,” “overly-bureaucratic,” “costly,” “excessive,” and “cumbersome” in their submissions to New Zealand’s Health Select Committee.
Few within the natural healthcare industry would disagree with the above adjectives. To this list could be added “vindictive,” “uncontrolled,” “vile,” “despicable” and even “corporate terrorist.”
The Australian system was supposed to guarantee the quality of product but has failed to do so. It seems that the only thing that the Australian TGA system protects Australian citizens from is the good quality imports that we enjoy in New Zealand.
Now is the time to establish an independent commission of inquiry into the wider issue of regulation of health. This would expose how the natural healthcare industry remains in bondage to regulators with motives not driven by good regulatory practice.
Industry should now pool resources, employ the best team of litigation lawyers it can find, initiate a “war on corporate terrorism” and run the Australian TGA out of town.
Compared with its style of democracy, totalitarianism is a cakewalk.

Ron Law, a former biochemist, advises natural healthcare product associations on industry issues and lectures in business management. He was appointed by the Director General of Health to the Sentinel Event Project working group that advised the Ministry of Health on the reporting and management of medical injury in the public health system.

- - -

Four years later - April 2007:
Democrats Demand Howard Apologise for Pan Pharmaceuticals Witch Hunt

The Howard Government must now apologise following the acquittal of Pan Pharmaceuticals boss Jim Selim in the New South Wales Supreme Court. The pharmaceuticals giant was forced into administration in May 2003 following the largest pharmaceutical recall in Australias history.

It was a pointless exercise targeting complementary medicines and it sent hundreds of small businesses broke, Democrats leader and Health spokesperson Senator Allison said today. The Howard Government turned its back on the mess and just walked away.

1500 products were recalled, not because they caused adverse reactions, but because of speculation about inconsistent quality. Senator Allison raised concerns in the Senate at that time about what was playing out as a destructive over-reaction.

Mr.Selim was accused of a litany of charges, including breaching his manufacturing licence. In the end only two counts made it to court which were thrown out today.

The unprecedented recall had a devastating effect on small businesses and shook public confidence in complementary health, Senator Allison said. The very least those who have suffered deserve is an apology.

August 2008:

Pan founder Jim Selim gets $55m settlement
The company, worth more than $300 million on the Australian Stock Exchange, collapsed, sending shockwaves through the complementary medicine industry, costing investors and creditors millions, and sullying the reputation of its founder, Mr Selim. But he fought back, suing the TGA for $234 million in the Federal Court, citing a vendetta against him.

Yesterday, five years after he was ruined by the TGA, he had an astonishing win. The case settled publicly in his favour, with the Government agreeing to pay him $55 million - the figure he had asked for in settlement negotiations.

The Federal Court was told yesterday that the Government had agreed to a judgment being entered in favour of Mr Selim, who claimed the TGA had breached its duty of care and engaged in misfeasance in public office, or abused its powers.


posted by Sepp Hasslberger on Friday June 20 2003
updated on Tuesday November 30 2010

URL of this article:


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Australia - Senator Questions Natural Products Recall
The Australian Health Authorities, in June last year, recalled more than a thousand different food supplements manufactured by Pan Pharmaceuticals and had them destroyed in a thinly veiled attempt to destroy the credibility of nutritional products for health care. The mega-sequester came at a time when Australia apparently wanted to show "leadership" in how to deal with natural products, firmly establishing the Therapeutic Goods Administration as the lead agency in... [read more]
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Readers' Comments

I work for a holistic health cllinic in Buffalo, New York and we have a client we are treating by distance in Australia. We would like to send her some natural supplements to assist her in the healing process but are unsure of the regulations of such. Can you offer any help? Thanks,

Posted by: Suzanne McCreary on February 9, 2004 05:58 PM


I am sitting in Rome, Italy and so have little specific data on Australia. You could contact Patricia Reed ( of the Natural Health Care Alliance there.

The website is

Posted by: Josef on February 10, 2004 09:42 AM


I write in regards to Travacalm natural, My son was one of the group claimants in the law suit against Pan, as of today 15.9.2005 We have been informed that he is now eneligiable to claim due to him having had the natural tablets, but we have yet not had it explained why he suffered serve vomitting, nausa, & stomach cramps for more then 24hrs after taking 2 of these tablets, Lawyers have said the tablets my son took were not affected by the active ingredient, but they also said findings found that machines were not cleaned between batches of tablets so couldnt his tablet have contained the active ingredient if the machines werent cleaned? How is it these tablets stop nausa & vomitting but yet he suffered these symptoms in a serve way?

Thanks Mel

Posted by: melissa on September 15, 2005 03:45 AM


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