KEY POINTS:
The Government is believed to have tentative political support for a transtasman drug agency, but National claims Labour has been forced to make a u-turn to secure the votes.
And Green MP Sue Kedgley says the Government may try to force the legislation's first reading through "in the dead of night" under urgency, just before the House rises for the year.
Work on the joint regulatory agency, which would replace MedSafe, started in the 1990s and a treaty was signed with the Australian Government in 2003.
Since then, State Services Minister Annette King has been trying to gain enough political support to get the necessary legislation passed.
But no other political party was willing to back the draft plans, designed to regulate prescription and over-the-counter medicines, medical devices and blood products.
Ms King has repeatedly said that a failed deal would have significant transtasman ramifications.
The agency is seen as a template for further joint initiatives.
It now appears the Government has gone back to the drawing board.
A spokesman for United Future leader Peter Dunne said this week his party was prepared to support the deal after three compromises were put on the table.
Ms King refused to comment this week, but it is understood the Government believes New Zealand First will also now support the legislation.
The party's health spokeswoman, Barbara Stewart, would not confirm this yesterday, saying the party had yet to see the legislation.
But she said New Zealand First "may be likely to" support it as a result of the changes.
Mr Dunne said through a spokesman the compromises involved the exclusion of complementary medicines from the plan, medical device certification and a proposed ban on consumer advertising.
"Initially the plan was that if you brought medical devices into the New Zealand-Australia area, you'd have to get certified there."
This had been opposed by many companies, such as Fisher & Paykel, which were certified elsewhere and didn't want to go through the process twice.
"Complementary medicines are out of all this, but they have the right of accession within five years, so if the industries decide they want to join in and not have a separate regulatory regime then they can do so.
"The third point is there will be no direct ban on consumer advertising on medical things so you're still going to see Jude Dobson on TV."
National health spokesman Tony Ryall said: "This is a significant back-down by the Government."
Ms King had said for the past five years the regime couldn't exclude complementary medicines "and it now appears that you can", he said.
But the proposal was still too expensive and would not benefit New Zealand businesses.
