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PAN-demonium, the $55 million bitter pill - mammoth attack on complementary medicine industry fails

Huge swing to complementary therapies

Failing spectacularly is certainly the case with the debacle surrounding PAN Pharmaceuticals, manufacturer of a huge range of pharmaceutical drugs and complementary medicine products.

This incredible story gives an insight into the subversive attack on this - our - industry.

To recap, back in 2003, PAN manufactured the travel sickness drug Travacalm. Following production of a faulty batch of this drug (note - Travacalm is not a complementary health medicine or nutritional supplement). This affected a number of people and the Federal Government's Therapeutic Goods Administration (TGA) decided to withdraw PAN's manufacturing licence, together with the recall, without testing, of some 6,000 PAN products. This proved to be the world's biggest recall of complementary medicines.

This drastic action had the immediate effect of putting an estimated 1,000 people out of work industry-wide and costing it some $450 million, with material suppliers, pharmacies, health food shops and clinics reliant on PAN products among the big losers. The TGA also issued an international red alert, but as it turned out, not one European country or the US withdrew PAN's products from sale.

Now for the interesting side. In order for the TGA to withdraw PAN's manufacturing licence, it was a statutory requirement for the government to believe that the public was at 'imminent risk' of death, serious injury or serious illness from PAN's products. So, on 23 April 2003, the TGA set up an expert advisory group (EAG) to decide whether this was the case.

This EAG later reported back to the TGA that there was no 'imminent risk'. However, pages of notes made by members of the EAG were then taken by the TGA and shredded at the direction of Dr Fiona Cumming, director of the office of complementary medicines. Lawyers who managed to unearth a transcript of this meeting revealed one member noting 'We don't have much evidence do we?'. Another said 'We're all satisfied that there's no imminent risk. We have consensus on that one'. The TGA then reported to the government that ''imminent risk' existed! It now transpires that the TGA had already decided to make the recall decision well prior to the EAG meeting.

In August this year, after 5 years of legal action, the TGA capitulated and agreed to a payout of $55million to PAN's founder, Egyptian-born Jim Sellim, in response to his negligence claim against the TGA. Whilst PAN deserved to be severely admonished for its production of the faulty drug Travacalm, TGA's reckless attack, albeit indirect, on the complementary medicine industry has had a profound and widespread effect, costing the industry hundreds of millions of dollars. As a result the manufacture of most complementary medicines has been driven offshore, which means less control on production standards and fewer jobs for Australians.

For us here at PNMC, this effect has also been very damaging and costly. Like many other organisations affected by TGA's action in closing down PAN, hundreds of PNMC's patients were inconvenienced. This was due to the absence of suitable alternative products for many months resulting in our practitioners being unable to prescribe the natural remedies which had previously been supplied to us by PAN's various distributors. There was also a significant reaction from some of our regular influx of new patients who had obviously concluded that 'where there's smoke there's fire' and decided to cancel their appointments.

Fortunately, most if not all of our existing patients took the 2003 PAN saga as just a TGA beat-up of our industry and continued to support us, and for this we are most appreciative.

Now it's the turn of the lawyers who are now in the process of launching a huge class action against the TGA worth literally many tens of millions of dollars which no doubt will be funded by us, the taxpayers. Heads will probably roll at the TGA and so they should. Maybe the TGA ought now to treat the complementary health industry with the respect it deserves rather than embark on unwarranted vendettas.

It is said that what goes around comes around!

(An excellent summary of the PAN debacle appeared in The Australian, Wednesday 20 August '08)

Huge swing to complementary therapies

Complementary health therapists - such as naturopaths, acupuncturists and chiropractors - are relatively small occupation groups but have been growing fast, according to census data. Likewise, the number of people who reported having consulted such a therapist in the two-week period increased from around 500,000 in 1995 to almost 750,000 in 2004-05.

According to the census, 8,600 people were employed as complementary health therapists in 2006. This was 80% higher than the number in 1996 (although some of the increase was due to classification changes). The leading occupations were naturopaths (2,980) up 45% from 1996. The fastest growing group was osteopaths, tripling in number between 1996 and 2006. Over the same period, the Australian population increased by 12% and the total number of health professionals rose by 31%.

According to the National Health Survey, in 2004-05, 3.8% of the population (748,000 people) had consulted one of seven selected complementary health therapists in the previous two weeks, compared with about 2.8% in 1995. The most commonly consulted were naturopaths (134,000 visitors) and acupuncturists (90,600 visitors). Also consulted were osteopaths and herbalists. The number of people visiting osteopaths increased by 88% to 60,000 over the period.

People with certain serious health conditions are known to use complementary therapies. Of people who had visited a complementary health therapist in the previous two weeks, 42% reported that they had one of the priority health conditions. This was higher than the rate for the total population (33%) but lower than the rate for people who had consulted other types of health professional (46%). Of these conditions, arthritis (20%), asthma (14%) and mental or behavioural disorders (13%) were the ones most commonly reported by people who had visited a complementary health therapist. These were also the leading three conditions for the total population.

Self rating of health has been found to be a good general indicator of mental and physical condition. Close to one-fifth (18%) of people who had visited a complementary health therapist in the previous two weeks rated their own health as 'fair' or 'poor'.

Private health insurance ancillary cover often includes chiropractic and osteopathy, and sometimes other complementary therapies. In 2004-05, 61% of people who had visited a complementary health therapist in the previous two weeks had ancillary coverage, including 60% of those who had visited an acupuncturist. These rates were higher than the rates of ancillary coverage for the total population (42%) or for people who had consulted other types of health professional in the previous two weeks (43%).

People who had visited a complementary health therapist in the previous two weeks were more likely to have certain healthy behaviours than were either the total population, or people who had consulted any other health professional. These behaviours included eating the recommended minimum serves of fruit and vegetables, exercising at high or moderate level, and not smoking regularly. As an example, almost three-quarters (73%) of people who had consulted a naturopath during the last two weeks reported eating at least two serves of fruit a day, compared with 54% of the total population.

Source: Australian Bureau of Statistics, 4102.0 Australian Social Trends, 2008