Senate

Replacement Explanatory Memorandum

(Circulated by authority of the Minister for Health and Aged Care, the Hon Mark Butler MP)

OUTLINE

The Therapeutic Goods and Other Legislation Amendment (Vaping Reforms) Bill 2024 (the Bill) amends the Therapeutic Goods Act 1989 (the TG Act) to prohibit the importation, domestic manufacture, supply, commercial possession and advertisement of non-therapeutic and disposable vaping goods. Therapeutic vaping goods will continue to be available and subject to regulation under the TG Act in line with other medicines and therapeutic goods. This is necessary to address the growing risk posed by vaping in Australia, particularly to youth and young adults, while preserving legitimate patient access to therapeutic vaping goods for smoking cessation and the management of nicotine dependence, where clinically appropriate.

The TG Act provides for the establishment and maintenance of a national system of controls for the quality, safety, efficacy or performance, and timely availability of therapeutic goods used in, whether produced in Australia or elsewhere, or exported from, Australia. The Bill extends the national system of controls for therapeutic goods under the TG Act to the regulation of vaping goods. The national system is essentially a federal cooperative scheme between the Commonwealth, states and territories. It is achieved through the application of corresponding laws enacted in each state and territory, with Western Australia having recently progressed their own corresponding law.

The Bill provides a single consistent framework that applies nationally to regulate the importation, domestic manufacture, supply, commercial possession and advertisement of all vapes, irrespective of nicotine content or therapeutic claims. The extension of the TG Act to vapes is appropriate and necessary in the circumstances to address the alarming increase of vaping rates in Australia, particularly among youth and young adults, and maintain legitimate patient access to therapeutic vapes where clinically appropriate.

The Government's vaping reforms will be implemented in stages over 2024. The Bill is the centrepiece of these reforms to reduce rates of vaping and prevent long term adverse effects on population health. It represents the second stage of regulatory measures taken this year.

The first stage of the Government's vaping reforms comprised amendments to the Customs (Prohibited Imports) Regulations 1956 (the CPI Regulations), the Therapeutic Goods Regulations 1990 (the TG Regulations) and the Therapeutic Goods (Medical Devices) Regulations 2002 (the MD Regulations). These amendments commenced on 1 January 2024 and introduced the following changes:

•

From 1 January 2024, the importation of disposable single use vapes, irrespective of nicotine content or therapeutic claims, is prohibited, subject to very limited exceptions. The personal importation scheme for disposable single use vapes ceased to apply.

•

From 1 March 2024, the importation of all other vaping goods, irrespective of nicotine content or therapeutic claims, is prohibited except in certain circumstances, including where the goods are the subject of a notice from the relevant importer stating compliance with relevant quality standards, and the importation is accompanied by an import licence and permit at the border. The personal importation scheme for all other vaping goods also ceased to apply.

•

From 1 March 2024, stronger regulatory controls apply to the domestic manufacture and supply of therapeutic vaping goods in Australia with enhanced requirements relating to pre-market notification imposed under new statutory pathways and the relevant quality and safety standard.

Specifically, the Bill amends the TG Act to implement a new framework for the regulation of vapes, to more readily authorise state and territory officials to undertake enforcement action and other consequential changes. The framework for the regulation of vapes includes certain powers for the Secretary and Minister to determine the scope and coverage of the regulatory scheme for vaping goods.

Importantly, the Bill introduces new offences and civil penalty provisions relating to the importation, domestic manufacture, supply, commercial possession and advertisement of vaping goods to support the reforms. Exceptions to the offences and civil penalty provisions specify the circumstances in which importation, domestic manufacture, supply and commercial possession of legitimate therapeutic vaping goods for smoking cessation and the management of nicotine dependence is permitted in Australia.

The intention of the new offences and civil penalty provisions is to deter unlawful conduct, arrest the alarming increase in the use of vapes in Australia, particularly among youth and young adults, and prevent a new generation of persons being exposed to dangerous chemicals, and developing nicotine dependence.

The Bill enhances existing compliance and enforcement powers in the TG Act by:

•

enabling state and territory officers to exercise powers and functions, particularly compliance and enforcement powers relating to supply and possession of vaping goods;

•

extending the authority of persons able to issue monitoring, offence, and civil penalty related warrants in relation to premises, to court registrars and other officers of a court of a state or territory;

•

facilitating information sharing with the states and territories and other compliance and enforcement bodies;

•

enabling the publication of information relating to the importation, manufacture, supply and advertisement of vaping goods;

•

amending the TG Act to deal more effectively with the seizure of unlawful vaping goods, and create new powers for the forfeiture and destruction of unlawful vaping goods;

•

introducing a power to allow enforceable directions to be made to manage unlawful vaping goods and therapeutic goods generally; and

•

otherwise facilitating effective enforcement of the new regulatory controls and therapeutic good requirements more generally.

The Bill implements measures that are necessary to give effect to reforms announced by the Minister for Health and Aged Care on 2 May 2023 and 28 November 2023. The reforms support the Government's broader objectives to reduce the prevalence of smoking and vaping in the community and align with the objectives, priorities and targets outlined in the National Tobacco Strategy 2023-2030. All Australian governments are strongly committed to addressing the public health challenge posed by the marketing and use of vaping goods.

Consequential amendments are also included in this Bill to other Commonwealth legislation, namely, the Customs Act 1901 (the Customs Act), the Industrial Chemicals Act 2019 and the Public Health (Tobacco and Other Products) Act 2023.

The public health problem

Vaping is rapidly increasing in Australia, particularly among youth and young adults. The latest available trend data shows that among people aged 14 years and over, current use of vaping nearly tripled between 2019 (2.5%) and 2022–2023 (7.0%). The increase was even more marked among young people, with current use of vaping goods increasing from 5.3% to 21% among people aged 18-24, and from 1.8% to 9.7% among people aged 14-17 during the same period. ^[1] These findings reinforce a widespread and serious concern among public health policy makers and practitioners at the increasing use and marketing of vaping goods.

Vaping goods are widely marketed, available and accessible to youth and young adults in Australia, and many products have a low purchase price compared to many consumer goods and tobacco products. Advertising occurs across a range of media channels that have broad reach among youth and young adults, including websites, social media, in print and in retail stores. Evidence also suggests that exposure to these advertisements increases the likelihood that youth and young adults will try vaping. Direct exposure to promotional material relating to vaping contributes to decreased risk perceptions for vaping.

Marketing of vaping goods intentionally targets youth and young adults through promotional activities and product features. Vaping goods are aggressively promoted by the vaping industry in online advertising and other youth-focused media channels. Advertising spending is often focused on social media promotion, allowing for lower costs and wider reach, particularly to youth and young adults. Colours and flavours further contribute to the appeal of vaping goods and their uptake among youth and young adults.

The Australian Government introduced regulatory changes in October 2021 to clarify that persons require prescriptions from a health practitioner for the lawful supply of products containing nicotine for human use except in certain circumstances, such as nicotine replacement therapies for oromucosal or transdermal administration or tobacco smoking. These changes were intended to prevent youth and young adults from taking up vapes, while allowing current smokers to access therapeutic vapes for smoking cessation under appropriate medical supervision.

However, increasing rates of vaping among youth and young adults suggest that these reforms are not meeting their objectives. The latest findings from the 2022/23 Australian secondary school students alcohol and other drug survey show that 1 in 6 (16%) secondary school students (12 to 17 years) reported recent vaping in 2023/24.

Reforms are therefore needed to address the high levels of uptake of vaping among youth and young adults, the health risks that vapes pose to human health, the impacts of vaping on the initiation, continuation and cessation of tobacco product use, and the practice of dual use with conventional tobacco products. Indeed, there is strong and consistent evidence that youth and young adults who vape are more likely to take up smoking, compared to those who do not, ^[2] and the long-term health risks of vaping are not yet known. The highly addictive nature of nicotine, and the fact that vapes are inhaled into the lungs, mean the population-wide health risks of these products can be severe.

Vaping involves inhaling a large mix of chemicals, including listed poisons, heavy metals such as nickel and chromium, and chemical by-products produced during heating such as formaldehyde, nitrosamines, acetone, and acrolein. Acrolein, aldehydes, and polycyclic hydrocarbons are 'probably carcinogenic' according to the International Agency for Research on Cancer, while nicotine derivatives (nitrosonornicotine and nitrosamine ketone) are known potent carcinogens in humans. Further, low concentrations of toxic chemicals in vaping substances convert to high concentrations when aerosolised, after heating, and as chemicals combine. ^[3]

A review of global evidence published in April 2022 found evidence that vaping by non-smokers results in dependence and conclusive evidence that vaping can cause respiratory disease, severe burns, poisoning and seizures. Studies have shown the many damaging impacts of e-cigarette use include addiction, poisoning, acute nicotine toxicity, seizures, burns, lung injury, and increased uptake of cigarette smoking. ^[4]

Based on the available evidence to date, numerous studies have highlighted concerns regarding vaping use and their potential effects on adverse pregnancy outcomes, adolescent brain development, cardiovascular disease risks, cancer risks, respiratory disease and oral health. Second-hand exposure to e-cigarette aerosol is also a further area of concern. Emerging research also suggests that use of nicotine e-cigarettes may worsen mental health, and amplify stress, anxiety and depressive symptoms. However, given that vaping goods remain relatively new, the impact of their use on most clinical outcomes remains highly uncertain. ^{[5] [6] [7] [8]}

Broader actions to reduce the prevalence of vaping and smoking in Australia

The regulatory reforms included in this Bill complement a wider set of actions being taken by Governments in Australia in line with the National Tobacco Strategy 2023-2030 to reduce the rates of use of tobacco and nicotine products. The Australian Government is implementing a comprehensive range of regulatory and non-regulatory measures in parallel with this Bill. The Public Health (Tobacco and Other Products) Act 2023 commencing from 1 April 2024 streamlines and modernises existing Commonwealth tobacco control laws. It also extends advertising regulations to vaping goods. New tobacco excise measures were announced in May 2023 to further reduce the affordability of tobacco products.

New measures will also provide information and support to people seeking to quit vaping and smoking, and to discourage people from starting or taking it back up. The Government will provide $29.5 million over 4 years to help Australians quit, including through enhanced nicotine cessation, education and training among health practitioners, scaling up state and territory Quitlines and other quit services, and online quit supports including a national consumer online cessation hub and redeveloping and modernising the My Quitbuddy app. A further $63.4 million investment in public health information campaigns aims to discourage Australians from taking up vaping and smoking and encourage quitting. The Government will provide $141.2 million to extend the successful Tackling Indigenous Smoking program to reduce uptake of vaping and reduce smoking among First Nations people.

Australia's international obligations

As a party to the World Health Organization Framework Convention on Tobacco Control (WHO FCTC), Australia has legal obligations to develop and implement effective policies not only to prevent and reduce tobacco consumption and exposure, but also to prevent and reduce nicotine addiction.

Australia has also committed under Article 5.3 of the WHO FCTC to protect its public health policies with respect to tobacco control from commercial and other vested interests of the tobacco industry in accordance with national law. Australia's obligations under Article 5.3 extend to new and emerging products, such as e--cigarettes and heated tobacco products. ^[9]

CONSULTATION

The TGA conducted two significant consultations in relation to the vaping reform measures. Between 30 November 2022 and 16 January 2023, the TGA undertook a public consultation on reforms to the regulation of nicotine vaping products in Australia. Close to 4,000 submissions were received from a range of organisations and individuals, including state and territory health departments, universities, health practitioner peak bodies, consumer groups, retailers, and suppliers. This included over 3,500 submissions from private individuals.

Following feedback from this consultation and advice received from public health experts at Tobacco Control Roundtables on 30 September 2022 and 17 April 2023, the TGA engaged in extensive consultation with the states and territories to assess the regulatory options and develop policy proposals. Consultations with the states and territories took place principally through the Health Ministers' Meeting and its subordinate National E-Cigarette Working Group, culminating in the Health Ministers' Meeting Communique dated 1 September 2023, which conveyed the Ministers' collective commitment to enhancing regulation of vapes.

A second targeted consultation was undertaken with stakeholders between 7 September 2023 and 21 September 2023 on the regulatory proposals developed in consultation with the states and territories, in addition to holding numerous webinars and stakeholder meetings. Submissions and survey responses to this consultation closed on 21 September 2023. The feedback to the consultation paper informed the deliberations of the Minister for Health and Aged Care on the regulatory measures to be implemented, including those in this Bill.

On 28 November 2023, the Minister announced the Next steps on vaping reforms, including the commencement of the first stage of the new vaping reforms on 1 January 2024. The TGA engaged in further updates with supply chain stakeholders, including manufacturers, suppliers, pharmacies and pharmaceuticals, healthcare professional and public health organisations, following the Minister's announcement.

On 12 January 2024, the TGA and the Office of Drug Control hosted a webinar to outline the impacts of the reforms to the medicinal cannabis industry. On 17 January 2024, the TGA hosted a further public webinar to outline the reforms. On 22 and 27 February 2024, the TGA held additional webinars with medical practitioners and pharmacists respectively.

On 1 March 2024, the TGA circulated draft provisions of the Bill to members of the National E-Cigarette Working Group, comprising representatives from the Commonwealth, states and territories for comment. Feedback from the exposure draft informed the final drafting of the Bill.

IMPACT ANALYSIS

An impact analysis was prepared on the proposed reforms to the regulation of vapes, based on the feedback received from stakeholders and the Australian public. The Office of Impact Analysis assessed the impact analysis and determined that it was consistent with good practice and met Australian Government best practice regulation requirements (OBPR23-03933).

The impact analysis supports this explanatory memorandum and has also been published on the Office of Impact Analysis website: www.oia.pmc.gov.au/.

FINANCIAL IMPACT STATEMENT

The Government will provide $82.0 million over four years from 2023–24 to support the vaping reforms, awareness raising and enforcement activities. Funding includes:

•

$56.9 million over two years from 2023–24 to the Therapeutic Goods Administration to support regulatory development activities; and

•

$25.0 million over two years from 2023–24 to support the Australian Border Force's regulatory and enforcement activities.

This measure builds on the 2023–24 Budget measure titled Vaping Regulation Reform and Smoking Cessation Package. The package committed to ban all vapes, other than therapeutic vapes imported, manufactured or supplied in accordance with the TG Act.

The regulatory reforms are part of the Government's implementation of the National Tobacco Strategy and related initiatives on vaping and smoking prevention and cessation.