4. Current regulation of cannabis

Introduction

  1. 4.1 Two national frameworks of Commonwealth, state and territory legislation regulate access to cannabis in Australia. One restricts the cultivation, manufacture, supply and use of narcotic drugs in accordance with international obligations to act against drug abuse. The other ensures that therapeutic goods sold in Australia meet suitable standards of safety, quality and efficacy. Both combine Commonwealth, state and territory legislation and are intended to protect public health and welfare.
  2. 4.2 Victorian legislation has an important role to play in establishing and maintaining these frameworks. Currently, the supply and use in Victoria of cannabis for medicinal purposes is prohibited, unless it has been approved or specially exempted under Commonwealth law.
  3. 4.3 The options for changing the law in Victoria are influenced by the operation of the national frameworks. Conversely, the national frameworks could be affected by any Victorian reform. The frameworks are described in this chapter, and the options are discussed in Chapter 5.

Restriction of supply as a narcotic drug

  1. 4.4 Any law reform within Victoria to make cannabis available as a medicine must take account of the national framework that implements Australia’s international obligations to control narcotic drugs.1 Some of these obligations are incorporated into Australian law by the Narcotics Drugs Act 1967 (Cth). They are also implemented indirectly through other legislative instruments, principally in Victoria by the Drugs, Poisons and Controlled Substances Act 1981 (Vic).

Single Convention on Narcotic Drugs 1961

  1. 4.5 Australia is a signatory to three international conventions concerning the control of narcotic drugs. The most significant for a Victorian medicinal cannabis scheme is the Single Convention on Narcotic Drugs 1961.2 The purpose of the Single Convention on Narcotic Drugs is to foster international efforts against the abuse of narcotic drugs.
  2. 4.6 The Single Convention on Narcotic Drugs is administered by two bodies:
  • The Commission on Narcotic Drugs of the Economic and Social Council of the United Nations may make decisions about which substances are encompassed by the Single Convention on Narcotic Drugs and the controls that apply to them. It may also make recommendations for implementing the aims and provisions of the Single Convention on Narcotic Drugs.3
  • The International Narcotics Control Board comprises 11 members elected by the Economic and Social Council of the United Nations. It imposes quotas on the production of narcotic drugs in each country, based on estimates provided to it, and monitors compliance both with these quotas and with the provisions of the Single Convention on Narcotic Drugs. It can call upon a government that has not complied to adopt remedial measures.4

General obligations and control measures

  1. 4.7 Among other things, signatories to the Single Convention on Narcotic Drugs have a general obligation to take necessary legislative and administrative measures to:

limit exclusively to medical and scientific purposes the production, manufacture, export, import, distribution of, trade in, use and possession of drugs.5

  1. 4.8 The Single Convention on Narcotic Drugs categorises the drugs to which it applies into four schedules and sets out control measures that apply generally to them, depending upon their category. Some additional measures are specific to particular drugs. Cannabis,6 cannabis resin,7 the cannabis plant,8 and cannabis leaves9 are the subject of controls under the Convention.
  2. 4.9 The general control measures apply to cannabis, cannabis resin, and extracts and tinctures of cannabis.10 Cannabis and cannabis resin are also singled out for ‘special measures of control’11 on the grounds that they are particularly liable to be abused and produce ill-effects, and that this is not offset by having substantial therapeutic advantages compared to drugs that have not been singled out.12

Use of cannabis for medical and scientific purposes

  1. 4.10 The international community views only the ‘rational’ uses of cannabis for medical and scientific purposes as legitimate under the Single Convention on Narcotic Drugs.13 A controlled substance is used ‘rationally’ when it is prescribed and administered by a professional in response to a patient’s clinical need, in a way that is efficacious for treating the patient’s condition, at an adequate dosage at proper intervals.14 The need to ensure treatment is ‘rational’ is underpinned by Article 30 of the Convention.15
  2. 4.11 Cannabis is one of a limited number of drugs deemed by the Single Convention on Narcotic Drugs to be at high risk of diversion. If the lawful cultivation of cannabis poses a threat to public health and welfare, or if lawfully cultivated cannabis is being diverted into the illicit market, the Single Convention on Narcotic Drugs requires it to be prohibited.16

Cultivation and manufacturing for medical and scientific purposes

  1. 4.12 The Single Convention on Narcotic Drugs requires the cultivation and manufacture of cannabis for medicinal or scientific purposes to be undertaken in a very specific way. Cultivation may take place only under licence to a single national agency, which must take physical possession of the total crop from the licensee.17
  2. 4.13 A government-owned enterprise may then either manufacture the cannabis into another form, or issue licences permitting companies to engage in manufacturing.18 Stocks of cannabis must at all times be held by the national agency or by manufacturers of the medicinal cannabis products.19 This imposes an important logistical constraint for the creation of a Victorian medicinal cannabis scheme.
  3. 4.14 The Single Convention on Narcotic Drugs imposes these restrictions to ensure that stocks of cannabis produced for medical use are reserved for the patients to whom they are prescribed and are not diverted into illicit channels.20

The international system of estimates and assessments

  1. 4.15 The requirements that the state license and take physical possession of cannabis enable signatories to report annually to the International Narcotics Control Board about the amount of cannabis they estimate will be legitimately used for medical and scientific purposes over the coming year.21 They must provide statistical information on ‘estimates and assessments of requirements, manufacture, trade, consumption, utilization and stocks of internationally controlled substances’ such as cannabis that are required for medicinal or scientific purposes.22
  2. 4.16 Based on the estimates, the International Narcotics Control Board assigns the signatory an annual quota of the drug that is permitted to be consumed for legitimate purposes. A signatory that imports or manufactures more than its quota of a drug is in breach of the Single Convention on Narcotic Drugs.23 These quotas prevent the oversupply of narcotic drugs and are therefore vital to preventing the diversion of those drugs into the illicit market.24

Responsibility to adopt a nationally consistent approach

  1. 4.17 The Commonwealth Government, on behalf of Australia, has a responsibility to give effect to the rules of the Single Convention on Narcotic Drugs.25 The International Narcotics Control Board considers that it has a further responsibility to ensure that the rules are not undermined by state governments.

 

If a State, irrespective of its constitutional framework and legal system, enters into an international agreement by acceding to the international drug control treaties, that State must ensure that all state and/or provincial policies and measures do not undermine its efforts to combat drug abuse and trafficking in narcotic drugs, psychotropic substances and precursor chemicals.26

  1. 4.18 The International Narcotics Control Board recommends that federations such as Australia ‘should contain, develop and continually evaluate a comprehensive system of intergovernmental coordination procedures in order to ensure that drug control laws and policies are nationally consistent’.27

Commonwealth Narcotic Drugs Act

  1. 4.19 The Narcotic Drugs Act was introduced by the Commonwealth to ‘regulate the manufacture of, and to make other provision with respect to, narcotic drugs in accordance with the Single Convention on Narcotic Drugs 1961’.28 It applies throughout Australia and is central to the national framework of laws that restrict the supply of cannabis.
  2. 4.20 Consistent with the Single Convention on Narcotic Drugs, narcotic drugs may be manufactured in Australia only under a licence issued by the Minister for Health.29 The amount that a licensed manufacturer may manufacture and possess, and over what period, is specified in a permit issued by the Secretary of the Department of Health.30
  3. 4.21 The Minister for Health may determine and specify any licence conditions31 and the Chief Executive Officer of Customs may specify by written direction any additional requirements concerning security and how the drugs are labelled and handled.32 The Act also provides for government-appointed inspectors to check compliance with the licence conditions and other requirements.33
  4. 4.22 In this way, licences issued under the Narcotic Drugs Act enable the Commonwealth both to control the amount and type of narcotic drugs produced in Australia, within the manufacturing quotas that the International Narcotics Control Board imposes, and to provide the Board with accurate estimates on which to base the future quotas.

Under [the Single Convention], estimates of consumption of narcotic drugs for medical and scientific needs are required to be submitted annually to the United Nations. The total quantity of each drug entering the domestic market, either by importation or by local manufacture, is then kept within these estimates by the allocation of quotas. To ensure that Australia’s obligations under the Single Convention will be fulfilled the Commonwealth must continue to administer the estimates system which is an integral part of national and international control. It is considered essential, therefore, that the Commonwealth extend its legislation to cover all aspects of the manufacture of narcotic drugs.34

  1. 4.23 Within Victoria, the Narcotic Drugs Act currently applies to the processing of poppy straw from alkaloid poppies and would apply to any manufacture of medicinal cannabis products.

 

Victorian Drugs, Poisons and Controlled Substances Act

  1. 4.24 Victoria’s contribution to the national framework for restricting the supply of cannabis and other substances controlled by the Narcotic Drugs Act can be found in the Drugs, Poisons and Controlled Substances Act.
  2. 4.25 The Drugs, Poisons and Controlled Substances Act and the Drugs, Poisons and Controlled Substances Regulations 2006 (Vic) establish when the cultivation, processing, supply, administration and use of drugs, poisons and other controlled substances are legal or illegal in Victoria.35 Cannabis36 is regulated both as a poison and as a drug of dependence.

Regulation as a poison

  1. 4.26 Poisons and controlled substances are regulated in Victoria according to how they are categorised by the Commonwealth. The categories are set out as Schedules 2 to 9 of the Commonwealth’s Standard for the Uniform Scheduling of Medicines and Poisons No 6 (SUSMP).37 A range of factors are taken into account in deciding how a substance should be scheduled, including how a substance is scheduled internationally under the Single Convention on Narcotic Drugs.38
  2. 4.27 State and territory governments voluntarily implement the SUSMP through their legislation. In Victoria, the SUSMP schedules have been incorporated into the Drugs, Poisons and Controlled Substances Act.39
  3. 4.28 Cannabis is listed in Schedule 9 of the SUSMP. Schedule 9 contains prohibited substances. A ‘prohibited substance’ is a poison that may be abused and so its manufacture, possession, sale or use should be prohibited by law except for the purposes of medical use or scientific research.40
  4. 4.29 Similarly, tetrahydrocannabinol (THC) and its alkyl homologues are listed as Schedule 9 poisons, but with the following exceptions:
  • when they are included in Schedule 8
  • when 50 mg/kg or less of THC or its alkyl homologues is in hemp seed oil labelled as not for internal use
  • when 50 mg/kg or less of THC or its alkyl homologues is in other products not for human consumption.41
  1. 4.30 Nabiximols and dronabinol—synthetic formulations of cannabis—are listed in Schedule 8, which contains poisons that are controlled drugs. A ‘controlled drug’ is a substance that in principle is able to be made available by a limited range of health professionals, but may be abused by patients.42 The SUSMP recommends controls on its manufacture, supply, distribution, possession and use.
  2. 4.31 This review is principally concerned with the forms of cannabis that are contained in Schedule 9. Schedule 9 poisons are highly controlled. There are detailed and restrictive rules about record-keeping,43 storage,44 who may lawfully possess them,45 and who may lawfully prescribe them.46
  3. 4.32 Clinical and scientific research into poisons that fall within this category in Victoria require the approval of both the Commonwealth and state governments. To prescribe cannabis in Victoria, a medical practitioner must apply to the Secretary of the Victorian Department of Health and Human Services. In practice, applications to prescribe are not made.

Regulation as a drug of dependence

  1. 4.33 The Drugs, Poisons and Controlled Substances Act imposes penalties on people who unlawfully cultivate a narcotic plant or make a drug of dependence available. It is an offence to cultivate, traffic, administer, possess or use cannabis in Victoria without being authorised or licensed under the Act or Regulations to do so.47
  2. 4.34 In general terms, those who may be authorised under the current law to cultivate, administer or possess cannabis are people who need access to a drug of dependence in the lawful practice of their profession, in connection with their work at a testing facility, or in performing a power, function or duty under the Act.48

Control of quality, safety and efficacy as a therapeutic good

  1. 4.35 When cannabis is used medicinally, it is currently regulated as a therapeutic good. Australia has a national framework for the regulation of therapeutic goods that is designed to protect the health and welfare of the Australian public while minimising the costs associated with pharmaceutical regulation.49 Like the framework for the regulation of narcotic drugs, it is the product of cooperation between the Commonwealth and several state governments.
  2. 4.36 The core of this framework is the Therapeutic Goods Act 1989 (Cth) (Commonwealth Therapeutic Goods Act), as indicated by the objects of the Act:

(1) The objects of this Act are to do the following, so far as the Constitution permits:

(a) provide for the establishment and maintenance of a national system of controls relating to the quality, safety, efficacy and timely availability of therapeutic goods that are:

(i) used in Australia, whether produced in Australia or elsewhere; or

(ii) exported from Australia;

(b) provide a framework for the States and Territories to adopt a uniform approach to control the availability and accessibility, and ensure the safe handling, of poisons in Australia.50

  1. 4.37 The Act is administered by the Therapeutic Goods Administration (TGA), a Division of the Commonwealth Department of Health.

Commonwealth Therapeutic Goods Act

  1. 4.38 The Commonwealth Therapeutic Goods Act regulates the importation, manufacture and supply of therapeutic goods. In particular:
  • It establishes the SUSMP which, as discussed above, is incorporated into the Victorian Drugs, Poisons and Controlled Substances Act.
  • It specifies standards for the quality of therapeutic goods51 and the conditions of their manufacture.52
  • It requires goods to be registered before they are sold in Australia.53
  1. 4.39 The TGA:
  • evaluates the safety, quality and efficacy of therapeutic goods and approves them for sale in Australia
  • licenses the manufacturers of therapeutic goods
  • ensures that therapeutic goods are properly labelled and advertised if they are to be sold on the Australian market.54

Approval by the Therapeutic Goods Administration (TGA)

  1. 4.40 A therapeutic good may not be imported into or manufactured and supplied anywhere in Australia unless it is on the Australian Register of Therapeutic Goods. Before being registered, the TGA assesses its quality, safety and efficacy.
  2. 4.41 Different products are subject to different processes. Prescription medicines are rigorously assessed to ensure that they are fit for their intended purpose and that what is known about them can be stated clearly.55 The risks and benefits associated with a prescription medicine will also inform the prescribing practices of medical practitioners by virtue of the evidence-based practice of contemporary medicine.56
  3. 4.42 The TGA does not work proactively to approve a medicine. The process begins when a sponsor—typically a company that wishes to market a medicine in Australia—applies for approval to have the product included in the Australian Register of Therapeutic Goods for the treatment of a particular indication. The cost of an application for a new chemical entity is about $250,000.57
  4. 4.43 The applicant is required to develop a dossier that includes detailed product information. Sponsors bear the responsibility of satisfying the TGA that a medicine should be approved58 because they stand to gain commercially from its approval.59 To demonstrate a medicine’s quality, safety and efficacy, sponsors will provide data typically obtained from randomised, double-blind, placebo-controlled clinical trials.60

The process is then undertaken at TGA to review that, and that involves a range of evaluators reflecting the nature of the data—clinical delegates, toxicologists, pharmacologists, other experts as needed and appropriate to the particular application. The time for reviewing that application varies but our statutory requirement is to do that within 255 working days—around a year.... We have an advisory committee on prescription medicines that will review many applications and provide advice to the delegate in response to specific questions. That comes close to the end of the process and then the delegate makes a decision. If that is a positive decision within a few weeks it is entered onto the Australian Register of Therapeutic Goods.61

Risk assessment

  1. 4.44 Simply because a medicine is approved by the TGA does not mean that it is harmless. Medicines have risks, and a part of the assessment is to determine whether those risks are acceptable in light of the nature of the condition that is being treated and the benefits of the medicine overall.62
  2. 4.45 Very toxic medicines may be approved because, for example, they improve a seriously ill patient’s overall quality of life. This is why more latitude is given to medicines designed to treat seriously or terminally ill people, even though they may pose risks.63
  3. 4.46 A medicine’s risk can depend upon its side effects and toxicity. Toxicity aside, a medicine’s risk can also reflect its potential for abuse. Therefore the scheduling of a medicine or its ingredients under the SUSMP will affect the risk assessment.64

Continuing obligations and post-market monitoring

  1. 4.47 Sponsors have a number of continuing obligations in respect of medicines and other therapeutic goods that are approved to be sold on the Australian market. A sponsor is required, for example, to ensure that their good has been manufactured in accordance with Good Manufacturing Practice.65 Sponsors are also required to label their good in accordance with the applicable standard.66
  2. 4.48 To ensure that a product is properly marketed in Australia, consistently with the sponsor’s obligations, the TGA engages in ‘post-market monitoring’. For example, if a medical practitioner or the consumer of a prescription drug reports an adverse event to the sponsor, the sponsor must report the event to the TGA.67 The TGA then investigates the event and disseminates relevant information throughout the medical community.68

Victorian Therapeutic Goods Act

  1. 4.49 The Commonwealth relies upon the states to enact complementary legislation in order to fully implement the framework. Victoria has enacted the Therapeutic Goods (Victoria) Act 2010 (Vic), which applies the Commonwealth Therapeutic Goods Act as a law of Victoria to every person in Victoria. Not all state governments have implemented the framework to the same extent as Victoria.69
  2. 4.50 State governments are also responsible for enacting laws that implement the SUSMP. As noted above, Victoria has done so in the Drugs, Poisons and Controlled Substances Act. The SUSMP applies rules about labelling, advertising, prescription and use according to a medicine’s risks. These risks include its toxicity, likelihood of abuse and the way it is controlled under international treaties. The prescription, supply and use of medicines and other therapeutic goods are then regulated by state governments according to how their ingredients are scheduled under the SUSMP.
  3. 4.51 The public health and consumer rights of Victorians are improved by their state’s support of a national framework of quality control over medicines. Unapproved medicines that do not go through this process do not currently have their risks and benefits evaluated; nor are unapproved medicines subject to clear and enforceable standards for their manufacture.
  4. 4.52 To prevent unapproved medicines circumventing these protections, the Commonwealth Therapeutic Goods Act prohibits companies from importing or manufacturing them and places restrictions on their administration and wholesale supply.70 The Victorian Therapeutic Goods Act extends this regulation beyond companies to prevent any Victorian person from marketing medicines in Australia that have not been assessed by the TGA for their potential impact.71

Approval of cannabis products

  1. 4.53 As discussed above, the TGA employs high-quality processes to evaluate scientifically the data on the quality, safety and efficacy of therapeutic goods. A number of submissions asserted that medicinal cannabis products should be made available in Victoria only if they have been tested and approved by the TGA.72 This was the position of Dr Roger McLennan who contended that ‘it would be foolish to override the Therapeutic Goods Administration and ignore the Food and Drug Administration and the Medicines and Healthcare Products Regulatory Agency’.73
  2. 4.54 AMA Victoria, for example, put the view that:

Therapeutic cannabinoids that are scientifically evaluated to be safe and effective should be made available to patients for whom existing medications are not as effective. However, approval for these treatments must be subject to the same regulatory and quality control processes that are applied to other medicines in Australia.74

Scientific testing and evaluation

  1. 4.55 The approval process for prescription medicines sets high standards of purity and consistency, as well as requiring rigorous clinical trials. Sponsors would need to do a great deal of work to ‘standardise’ cannabis so that its purported therapeutic effect can be measured against a stable and predictable dose in a clinical trial setting. Professor David Penington has argued that these standards are not appropriate:

Cannabis can never be a pharmaceutical agent in the usual sense for medical prescription, as it contains a variety of components of variable potency and actions, depending on its origin, preparation and route of administration. Consequently, cannabis has variable effects in individuals. It will not be possible to determine universally safe dosage of cannabis for individuals based on a clinical trial.75

  1. 4.56 Only one non-synthetic medicinal cannabis product has been approved by the TGA. Sativex, manufactured by GW Pharmaceuticals, is a whole-plant extract of cannabis and contains approximately equal parts of THC and CBD, along with a small amount of other cannabinoids. It is a pharmaceutical-grade medicine administered as an oro-mucosal spray. It was registered by the TGA on 26 November 2012 as a treatment for symptom improvement in patients with moderate to severe spasticity due to multiple sclerosis who have not responded adequately to other anti-spasticity-related symptoms during an initial trial of therapy.76
  2. 4.57 Before any other medicinal cannabis product is approved for sale in Australia, it also would need to be standardised, subjected to clinical trials, and subsequently evaluated and approved by the TGA. The limited range of products currently being trialled suggests that it is likely to be some time before the state of knowledge develops to the point that an evaluation of another medicinal cannabis product by the TGA would have any realistic prospects of success.
  3. 4.58 The above observation applies equally to the rescheduling of cannabidiol to Schedule 4 of the SUSMP. How a medicine is scheduled affects how strictly it is regulated once it is available on the market, and influences how doctors assess its risks. But a CBD medicine would still have to be assessed by the TGA before it could be sold in Australia. Currently, no CBD medicine is included on the Australian Register of Therapeutic Goods.
  4. 4.59 Even the approval of a medicine after rigorous scientific evaluation does not ensure that it is sold in Australia. Sativex was withdrawn from the Australian market by its sponsor, Novartis, after the decision was made not to subsidise it under the Pharmaceutical Benefits Scheme.77 The barriers to entry into the Australian medical market are commercial as well as scientific.

Commercial considerations

  1. 4.60 Sponsors provide the impetus for a medicine to be approved: they fund the clinical research and make applications to the TGA with the ultimate aim of accessing the Australian market. If the costs are unlikely to bring strong financial returns, there is no incentive to seek approval. The TGA responds to applications for approval; it does not seek out products that may meet community health needs.
  2. 4.61 Compounding this problem is that less refined cannabis products are becoming more widely available, both legally and illegally. This reduces the economic incentive for sponsors to bear the costs of undertaking clinical research with a view to having a product approved.78 The economic incentive is further reduced because it can be difficult for a sponsor to protect its intellectual property in a cannabis product, and therefore to prevent competitors from selling something very similar or identical to that product on the market.79
  3. 4.62 Others have observed that there is a lack of interest by sponsors in making cannabis medicines available in Australia. In 2013, the New South Wales Legislative Council’s General Purpose Standing Committee No 4 noted during its enquiry into medicinal cannabis that ‘the small market for [cannabis] medicine is not seen to justify the costs, as the indications for cannabinoids are uncommon and more effective drugs have emerged to treat conditions such as nausea and vomiting’.80
  4. 4.63 The market-driven therapeutic goods regime has not resulted in cannabis-based medications becoming available in Australia. It follows that for the Victorian Government to achieve its policy of making cannabis available to people in exceptional circumstances, some alternative method of access must be considered.

 Conclusion

  1. 4.64 Limiting a Victorian medicinal cannabis scheme to products that have been approved by the TGA would reinforce the status quo. There would be no change to the products available and the means by which they could be accessed. Apart from facilitating clinical trials of products with a view to approval by the TGA—an initiative which is already under way—there is no scope for the Victorian Government to expedite the approval of medicinal cannabis products under current Commonwealth law.
  2. 4.65 However, the Commission considers that the establishment of a Victorian medicinal cannabis scheme should supplement the national framework for the regulation of therapeutic goods only to the extent that the market does not produce affordable and appropriate medicinal cannabis products for eligible patients. The position of the TGA as the pre-eminent entity responsible for the evaluation and approval of medicines for commercial supply on the Australian market should be maintained and reinforced.

Access to unapproved products

Importation under the Special Access Scheme

  1. 4.66 The Secretary of the Commonwealth Department of Health has the discretion to allow unapproved medicines to be imported and/or supplied on a case-by-case basis.81 As a matter of policy, the Secretary exercises this discretion through the operation of a number of schemes established by the TGA, including the Special Access Scheme.82 It was proposed to the Commission that unapproved medicinal cannabis products could be imported for individual patients under the Special Access Scheme.83
  2. 4.67 The Special Access Scheme allows an unapproved therapeutic good to be imported with the agreement of an overseas supplier.84 The patient’s circumstances are assessed against a set of criteria, and the nature of the assessment depends on whether the patient is seriously or terminally ill.85The prior approval of the TGA is not required for a terminally ill patient, but is required for other patients. The use of unapproved medicines under the scheme is treated as experimental; the patient and their doctor bear personal responsibility for any adverse effects.86
  3. 4.68 In practice, the Special Access Scheme provides medical practitioners with a way of seeking the Commonwealth Government’s permission for their individual patients to have access to a medicine that is available in other countries but for which approval to supply in Australia has not been sought from, or given by, the TGA.
  4. 4.69 The scheme is not designed to facilitate systematic access to unapproved medicines by groups of patients suffering from a particular condition and associated symptoms. The guidelines for the scheme emphasise that it is not to be used in this way.87
Importation of Sativex
  1. 4.70 Although Sativex has been approved by the TGA, if imported from overseas it would be as an unapproved product for the purposes of the Special Access Scheme. This is because Sativex as labelled and marketed overseas would not necessarily meet the requirements the TGA imposes on the local product.
  2. 4.71 It follows that a medical practitioner who forms the view that there is clinical justification for their patient to be treated with a 1:1 THC/CBD product may seek to import Sativex from GW Pharmaceuticals/Novartis under the Special Access Scheme.
  3. 4.72 The Commission was given notice of a number of anecdotal estimates of the cost of importing Sativex. These estimates ranged from $500 to $1200 per month.88
Conclusion
  1. 4.73 The Special Access Scheme has features that are entirely appropriate for its limited purpose but which make it an inadequate basis for supply of medicinal cannabis under a Victorian scheme.
  2. 4.74 Only a few medicinal cannabis products have been approved by the overseas counterparts of the TGA and are therefore potentially available under the Special Access Scheme. Sativex is the most obvious candidate for importation under the scheme but would not be suitable for all the patients, and all the conditions and symptoms, that a Victorian medicinal cannabis scheme would encompass. For example, due to Sativex’s psychotropic effect it would not be suitable to treat paediatric epilepsy.
  3. 4.75 To reduce the cost burden on patients who may benefit from being treated with Sativex, the Victorian Government could subsidise the cost to individual patients of importing Sativex under the Special Access Scheme. However, it could not expedite the process nor provide a means of broadening access to a wider patient group. The Special Access Scheme is an ad hoc evaluation tailored to a particular patient, which turns on the quality of the evidence able to be assembled by the medical practitioner in each instance.
  4. 4.76 Furthermore, if the scheme were able to be used to facilitate the systematic supply of an unapproved cannabis medicine to Victorians, it would undermine the general requirement that sponsors must apply to have their medicines included on the Australian Register of Therapeutic Goods before they are able to market it in Australia.89

Access to unapproved products through clinical trials

  1. 4.77 By participating in clinical trials, patients can be provided with access to unapproved medicinal cannabis products. The TGA administers two schemes under which clinical trials for unapproved therapeutic goods may be conducted, and can permit unapproved medicines to be imported into Australia for the purposes of a clinical trial under its Clinical Trial Exemption scheme. The Commission received a number of submissions from people who expressed an interest in participating in clinical trials, to determine whether cannabis would be effective in their case.90
Conclusion
  1. 4.78 While this form of access to medicinal cannabis may assist in individual cases, it is not a substitute for establishing a scheme that provides for a reliable supply of a variety of products to eligible patients. The results of clinical trials should inform which products may be supplied under a Victorian scheme and the eligibility criteria for the patients who participate. 

Implications for a Victorian medicinal cannabis scheme

  1. 4.79 In introducing law reform to allow access to medicinal cannabis, the Victorian Government could either work within the existing regulatory frameworks or depart from them. The extent to which it could depart from them is determined by the scope of its jurisdiction and whether it has the support it needs from the Commonwealth Government for the changes it wants to make.
  2. 4.80 Victoria’s jurisdiction to regulate the cultivation, manufacture, distribution, possession and use of medicinal cannabis within its borders is confined in two ways:
  • The Commonwealth has overriding jurisdiction, granted by the Constitution and exercised under Commonwealth legislation, to regulate many parts of the supply chain, in particular production and manufacture.
  • Victoria has passed legislation that complements the Commonwealth legislation, in the interests of establishing national regulatory frameworks.
  1. 4.81 This means that Victoria can either establish a stand-alone medicinal cannabis scheme within the limits of its own jurisdiction or involve the Commonwealth in establishing and operating the scheme.91

A stand-alone Victorian scheme

  1. 4.82 A number of submissions urged Victoria to act independently in introducing a medicinal cannabis scheme.92 The Cannabis Policy Project, for example, put the view that:

Whilst it is desirable to work with the Commonwealth the Commission should focus on recommending regulatory changes that can be achieved within the jurisdiction of Victoria.93

  1. 4.83 Some individuals argued that Victoria should adopt the approach taken in the United States, where each state that has legalised medicinal cannabis has done so despite federal laws criminalising cannabis for all purposes. Marc Selan, for instance, said that:

In the USA, the states that have legalised medicinal cannabis issue licences that protect users but the federal police do not accept them. Victoria should take the step to move against the Commonwealth.... If you allow cannabis production, as in the USA, you have wealth decentralisation, creating wealth throughout the community and vast employment opportunities.94

  1. 4.84 Others, such as Cannabis Science Ltd, were cautious about Victoria working in opposition to the Commonwealth:

It is of upmost [sic] importance to avoid the missteps taken by the United States, and to ensure that the various levels of government are on the same page. Additionally, it is important that we do not put further strain on our already under-resourced frontline services.95

  1. 4.85 The implications of establishing a stand-alone scheme in Victoria would be different from those in the United States of America, not least because the division of powers between the federal and state governments is not the same. Nevertheless, the experience in the United States of America illustrates both the feasibility and the difficulty of introducing a stand-alone medicinal cannabis scheme within a federal system. A problem common to all of the state schemes is that patients, industry members, and those who assist them are confused about their liability under federal criminal laws and uncertain about whether they will be enforced.
  2. 4.86 The scope for Victoria to establish a stand-alone scheme was discussed in the issues paper.96 Comments made in submissions and consultations concurred with the Commission’s analysis.97
  3. 4.87 A medicinal cannabis scheme established solely by Victorian legislation and without Commonwealth support could not license corporations to cultivate and manufacture cannabis products. Individuals could be permitted to cultivate and possess cannabis but are unable to be authorised under Victorian law to manufacture cannabis. The importation of any cannabis seeds or medicinal cannabis products would still be subject to Commonwealth law.
  4. 4.88 To avoid the reach of the Therapeutic Goods Act, the Victorian Government could enter an agreement with unincorporated entities or natural persons to cultivate cannabis and manufacture medicinal cannabis products. Alternatively, the Victorian Government could create a statutory authority that did not generate revenue to perform these activities.
  5. 4.89 However, a stand-alone scheme involving unincorporated entities or a Victorian Government agency is still legally fragile and potentially exposes Victorians to criminal liability under Commonwealth law. Unincorporated entities and natural persons are clearly subject to the Commonwealth’s Narcotic Drugs Act. Arguably, even a Victorian agency would require a licence under the Narcotic Drugs Act to manufacture cannabis products.98 Participants in a stand-alone Victorian scheme who did not have a licence would be subject to a considerable risk of criminal liability.
  6. 4.90 Similar problems attend a stand-alone grow your own scheme. The Narcotic Drugs Act would apply to patients who manufactured their own refined forms of cannabis, exposing them to criminal liability.
  7. 4.91 This discussion shows that the participation of the Commonwealth in a Victorian scheme is vital to the scheme’s regulatory and legal stability. A stand-alone Victorian medicinal cannabis scheme that is not supported by the Commonwealth is subject to unsatisfactory and arbitrary limitations on its form and scope.

A comprehensive scheme

  1. 4.92 Many submissions expressed support for a comprehensive Victorian scheme in which the Commonwealth has a role.99 It was suggested that, by regulating every step of the supply chain, Victoria could avoid the quality control and law enforcement challenges experienced by some medicinal cannabis schemes in other countries. Mullaways Medical Cannabis Pty Ltd observed that:

Setting up a Medicinal Cannabis Industry will take a lot of investment to achieve. It requires infrastructure for the security, cultivation, manufacturing, processing, delivery and reporting of regulated Cannabis/Cannabinoid medications and the removal of criminal convictions from those Licensed to be involved in the Victorian medical Cannabis Industry.100

  1. 4.93 Others focussed on the need to retain a national approach to the regulation of narcotic drugs and therapeutic goods:

It would [be] unwise and bureaucratically very difficult to implement this outside of a national framework. So our recommendation is that if all other appropriate safeguards are in place, that a national system would need to be established, not independent state activities.101

  1. 4.94 As the Commission’s review was conducted at the same time as an inquiry by the Senate Legal and Constitutional Affairs Legislation Committee into the Regulator of Medicinal Cannabis Bill, which proposed a national medicinal cannabis scheme which the states could opt into, those who commented did not always envisage that Victoria would be the architect or primary regulator of the scheme.102
  2. 4.95 Professor David Penington, for example, presented both to the Commission and the Senate Committee a proposal for a national medicinal cannabis regulatory framework, of which a Victorian scheme would form a part:

A relatively simple arrangement, explicitly built around State legislation, with national consultation, through a Standing Committee of AHMAC, is preferable. This could provide communication and co-ordination between the Commonwealth and States in regulating the production and use of cannabis products for medicinal purposes. Such an approach would require full consultation seeking common ground on important matters, with expert and professional advice as necessary. Consensus could be sought on many issues to facilitate Commonwealth support. Appropriate agreement on sharing of information and products between States would be desirable. Commonwealth resolution of the legal obstacles could be made contingent on such common agreement between States; this would be a powerful incentive to gain consensus.103

  1. 4.96 Having considered the legal ramifications of confining the scope of the scheme to the limits of Victoria’s jurisdiction, the Law Institute of Victoria expressed the view that collaborating with the Commonwealth is the only viable option:

A comprehensive medicinal cannabis scheme in Victorian would need to rely on collaboration with the Commonwealth Government. A stand-alone Victorian scheme without Commonwealth amendments would be difficult. The Tasmanian Dam case has long established that, if the Commonwealth is a party to an international convention, it will retain the power to intervene in state legislation relevant to the international convention. As the manufacture of medicinal cannabis falls within Commonwealth obligations to three international conventions, it is unclear how Victoria could protect itself from potential interference from the Commonwealth without some form of collaboration.104

  1. 4.97 Although not all parties to the Single Convention on Narcotic Drugs comply with all aspects of it, the Convention requires that the state take physical possession of medicinal cannabis stocks and distribute it to retail suppliers in a way that is generally consistent with Article 23. To foster collaboration, an option for law reform should be consistent with the Commonwealth’s international obligations, as the Commonwealth evaluates proposals to produce and supply narcotic drugs against the requirements of the Convention.105 The importance of such compliance was identified by the Senate Legal and Constitutional Affairs Legislation Committee’s report of 11 August 2015 on the Regulator of Medicinal Cannabis Bill, including by its recommendation that the Bill be amended to ensure compliance with Australia’s international obligations under the Single Convention on Narcotic Drugs.106 A system that enables Victoria to report accurately to the Commonwealth the amount of cannabis being produced annually, and which establishes a process of control that limits diversion to the greatest possible extent, should be an attribute of a Victorian scheme.

Conclusion

  1. 4.98 The Commission agrees with the Law Institute’s legal analysis. Victoria’s jurisdiction permits it to regulate only limited aspects of the supply chain, and the division of regulatory responsibilities between the Commonwealth and Victoria does not align clearly or easily with the practicalities of cultivating, processing, manufacturing, distributing, prescribing and using medicinal cannabis. The arbitrary and unclear reach of the respective jurisdictions would expose Victoria, and Victorians, to legal liability. It would be preferable for any Victorian medicinal cannabis scheme to be established in collaboration with the Commonwealth.

Recommendation

  1. 17 The Victorian Government should seek to work in collaboration with the Commonwealth Government in establishing any medicinal cannabis scheme in Victoria.

 

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