How medicines are approved for use in Australia

All medicines sold in Australia that claim to provide a health benefit have to undergo approval and regulation processes. These processes ensure the medicine is safe for human use and of the highest quality.


Medicines regulation and clinical trials

In Australia, all medicines must be approved for sale by the Therapeutic Goods Administration (TGA). The TGA is a division of the Australian Government Department of Health.

Manufacturers of prescription medicines can also apply for their products to be subsidised. This means the government pays part of the cost of the medicine under the Pharmaceutical Benefits Scheme (PBS).

All medicines sold or PBS-listed must meet standards of quality, safety and effectiveness. The TGA also decides how freely a medicine should be available – for example, on prescription only, in pharmacies only or sold in supermarkets.

Some of the strongest evidence about the safety and effectiveness of medicines comes from clinical trials. These are research studies conducted to find out how well medicines work. Clinical trials also give us information about a medicine’s side effects.

Read more about what clinical trials tell us, and why they are important.

A medicine’s journey from the lab to you

A medicine must pass a series of experiments, trials and approval processes before it is allowed to be sold.

Early experiments are performed in laboratories or using animals, to help understand how a medicine might work, and if it is likely to be safe and useful for humans. If these early findings (called pre-clinical results) are promising, the medicine may move into clinical trials.

The first clinical trials for a medicine (Phase I) are small (often only 20–80 healthy volunteers are involved). This trial will work out how the human body reacts to the medicine, and what is a safe dose. The next type of trial (Phase II) involves people who have the target illness (often between 50 and 100 people), and gives information about how well the medicine works in that specific group, as well as more information about dosage.

If the medicine still looks promising after these early trial phases, it will be tested in a bigger trial (Phase III). This phase usually involves 1000–3000 people with the target illness. The Therapeutic Goods Administration, looks at the results of Phase III trials when deciding whether to approve a new medicine for use in Australia.

Read more about what clinical trials tell us, and why they are important

What’s considered before a medicine can be approved?

Before a medicine becomes available for sale in Australia, the Therapeutic Goods Administration (TGA) will look at evidence about the medicine that shows it is being manufactured in a licensed or approved facility, and that the manufacturing process follows certain standards. Once a medicine is approved by the TGA, a decision is also made about how it can be accessed (prescription or non-prescription).

For prescription medicines the TGA also considers evidence from clinical trials, including looking at the benefits of the medicine and agreeing that the side effects are acceptable. The TGA will also look at the information provided in the Product Information to make sure it is accurate and clear. This document is for health professionals who may prescribe or dispense the medicine and tells them about the benefits and side effects.

It can take a long time to develop a medicine and to gather enough evidence for it to be approved for sale – perhaps a decade. Many medicines don't make it through this long process because they don't do well enough in the early trials.

    Medicines availability: how is it determined?

    The approval process involves reviewing the evidence to make sure a medicine is both safe and effective. It also requires checking that the medicine meets manufacturing quality standards.

    When a medicine is approved in Australia, the Therapeutic Goods Administration (TGA) decides how easily it will be available. Medicines may be:

    • only available when prescribed by specific doctors under strict conditions
    • only available when prescribed by a doctor
    • only available from a pharmacy after talking to the pharmacist
    • only available on the shelves of a pharmacy
    • freely sold in supermarkets and other stores.

    Government ‘Schedule’ levels are a national system that controls how medicines are made available to the public. The schedules are listed on the TGA website, with more information available from Healthdirect.

    No medicine is risk free, but some are higher risk because of their ingredients or the conditions they treat. Those with lower risk are often the medicines that are freely available.

    Important factors that the TGA has to consider when determining availability include:

    • safety of the medicine
    • seriousness of the condition it is meant or approved to be used for
    • effects when used correctly
    • side effects
    • likelihood of accidental or deliberate misuse
    • effects if taken accidentally by children
    • effects of taking an overdose
    • potential for people to become dependent on it
    • benefits of making it easily available.

    Listed and registered medicines

    All medicines supplied in Australia have to be included in the Australian Register of Therapeutic Goods (ARTG).

    The rules for approval by the Therapeutic Goods Administration (TGA) vary according to safety of the ingredients. No medicine is risk-free, but the risk is greater for some medicines. The medicines are put into different risk categories (lower or higher risk). These depend on their safety and how serious the condition is that they are treating.

    • Listed medicines are lower-risk products and show an 'AUST L' number on the label. The TGA assesses their quality and safety, but not their efficacy – the TGA has not evaluated these medicines to see if they work. Listed medicines include vitamins and minerals, and herbal medicines, as an example. There is also AUST L(A) medicines which are ‘assessed listed’ medicines that have slightly riskier health claims than other listed medicines. The TGA has assessed the health claims of these listed medicines.
    • Registered medicines are higher-risk products and show an 'AUST R' number on the label. The TGA does a comprehensive assessment of their quality, safety and efficacy. All prescription medicines are AUST R. Some examples of AUST R medicines include blood pressure tablets and strong painkillers.

    Read more about how the TGA assesses medicines.

    Prescription and non-prescription medicines

    All prescription medicines are registered medicines which will have an AUST R number on the label. A medicine is classified as prescription-only because of the potential risk from using it, how it is taken and the potential for it to be used incorrectly.

    Read more about how the Therapeutic Goods Administration (TGA) approves prescription medicine.

    Remember that non-prescription medicines can also cause side effects and interact with your other medicines.

    Some non-prescription medicines have specific rules about their availability.

    • Pharmacist-only medicines are stored behind the pharmacist’s counter. You can buy them only after talking to a pharmacist to make sure they are appropriate and safe for you.
    • Pharmacy medicines are stored on the open shelves in pharmacies. You do not have to seek advice from a pharmacist before buying them, but if you want advice you can ask for it.

    There are also non-prescription medicines that do not fall into either of these categories. For example, over-the-counter (OTC) medicines are available from a pharmacy but some can be sold in supermarkets, grocery stores and health food stores as well. Complementary medicines are in this group.

    In some cases, the amount of medicine in a packet affects where and how it can be sold. This means that small packets of some medicines are available in supermarkets and other retail outlets. Bigger packets with more tablets, or higher doses, are available only in pharmacies. For example, supermarkets sell paracetamol in packets of 20 tablets or less, but packets of more than 20 tablets are only sold in pharmacies.

    Keeping track of all the medicines you are taking (prescription and non-prescription) is important.

    Learn more about why and how to keep a medicines list.

    What is PBS listing?

    After a medicine has been approved for sale by the Therapeutic Goods Administration (TGA), the manufacturer can apply for the cost to be subsidised under the Pharmaceutical Benefits Scheme (PBS).

    When a medicine is subsidised under the PBS, you pay a lower price for the medicine and the government pays the rest.

    Applications for a medicine to be listed on the PBS are considered by the Pharmaceutical Benefits Advisory Committee (PBAC). They decide if the new medicine has a better or equal health benefit compared to an existing one. They also look at the side effects. If these are acceptable, they recommend the medicine to be subsidised on the PBS. Usually, the government follows the recommendation, if the cost of the medicine to the government is acceptable.

    The pharmaceutical company must prove that the new medicine is worth the price the government is asked to pay. The company has to prove the new medicine is better than an existing one. Otherwise, the government will only pay the same price as the existing medicines. If the new medicine has uncertain benefit and is expensive, it may not be PBS-listed.

    The PBAC also makes recommendations about whether new vaccines should be included in the National Immunisation Program or PBS, after advice from the Australian Technical Advisory Group for Immunisation (ATAGI) on the effectiveness of each vaccine in the Australian population.

      Why does the PBS subsidise a medicine for some illnesses and not others?

      The Pharmaceutical Benefits Advisory Committee (PBAC) decides whether evidence from clinical trials for a medicine shows a health benefit for people with a particular illness. The Pharmaceutical Benefits Scheme (PBS) listing will be limited to illnesses and situations where a benefit has been proven.

      The PBAC also considers whether the benefits of the new treatment justify the cost.

      For example, a medicine may have good evidence that it improves survival in lung cancer, but very little evidence in kidney cancer. In this case, the PBS listing might only be for people with lung cancer.

      In some cases, the PBAC may also recommend that the medicine be subsidised under the PBS only for certain groups of people. This might be suggested if they feel wider use could be unsafe.

      More information about medicines