New Zealand and Australia have abandoned efforts to establish a joint therapeutic products regulator.
The decision to not go ahead with the Australia New Zealand Therapeutic Products Agency was made after a review of the costs and benefits to both countries, Australian Health Minister Peter Dutton and New Zealand Health Minister Jonathan Coleman said in a joint statement.
The two ministers said the countries would continue to cooperate on the regulation of health products "where there are mutual benefits for consumers, businesses and regulators in each country".
New Zealand and Australia would continue to cooperate in areas that would deliver mutual benefits to consumers, businesses and regulators - including developing a new information-sharing arrangement, and formalising mutual recognition of good manufacturing practice audits.
The ministers said this would increase the potential for regulatory alignment over time to reduce compliance costs.
Dr Coleman said the government would instead be upgrading New Zealand's health products regulation scheme.
"I have asked the Ministry of Health to develop a comprehensive regulatory scheme for therapeutic products in New Zealand.
"It is important we modernise our regulation of medicines. There are benefits in bringing medicines, devices, cell and tissue therapies under a single cost-effective regulatory framework.
"Other countries are increasingly looking for assurances about health and safety of therapeutic products. We are committed to maintaining standards in line with international best practice."
Consumer healthcare products industry body, the New Zealand Self-Medication Industry Association (SMI) said it was disappointed the government had once again shelved plans for ANZTPA.
SMI executive director Tim Roper said the formation of a single regulatory body has been one of his organisation's key platforms for a number of years.
"The SMI remains a strong supporter of the joint agency. ANZTPA would have provided a unique opportunity to pursue best practice regulation through harmonisation and adoption of the best of both worlds. However, we appreciate the joint agency needs to be cost effective and efficient for both countries." Mr Roper said he was concerned about the prevailing attitude that the Australian regulatory scheme is the 'gold standard' to which New Zealand needs to harmonise, when New Zealand was progressive in some aspects.