A compromise has been developed on the highly contentious proposal of a transtasman regulatory agency for medicines and therapeutic products, the Herald understands.
The Government is in the process of consulting other parties about the compromise - devised by New Zealand First - but it is not yet clear if there are enough votes for it to pass.
The compromise would still establish an agency but give makers of New Zealand-based complementary products the option of being regulated by it instead of forcing coverage on them.
A domestic regulatory regime would exist for those who opted out.
If the makers of complementary products wanted to expand into the Australian market they would have to come under the transtasman agency.
Prescription medicines and medical and surgical devices would be covered by the transtasman agency, which would be run in Canberra and Wellington and governed by the two countries' Health Ministers.
There is not enough political support in Parliament for the original bill, which forces all therapeutic products into a transtasman regulatory regime.
Australia has promoted a joint agency for many years and it is not certain that it would rather have a halfway house instead of no house at all.
The bill has been vigorously opposed by the Green and Maori parties and the alternative and complementary medicines industry.
They have suggested that New Zealand's sovereignty would be compromised by a joint agency because products for domestic use would have to comply with Australian standards.
Labour introduced the Therapeutic Products and Medicines Bill in December and, with support parties NZ First and United Future, had enough backing to send it to a select committee.
It had no guarantees beyond that and support for the bill slipped after Taito Phillip Field left Labour and changed his mind.
If the compromise gets enough support it will be introduced when the bill returns to the House.