The ministry has alleged that Arthrem is being sold as an unlicensed medicine, and that some of Promisia's marketing activities run afoul of the Medicines Act 1981.
It is therefore filing nine charges against the company, which confirmed these details on Monday.
This is the latest and harshest in a series of clampdowns Promisia has experienced from Kiwi authorities of late.
Last year, medicinal regulator Medsafe issued two alerts against Arthrem, claiming that 14 people had had adverse reactions (such as liver problems and jaundice) to the supplement. These notices, however, did not lead to a recall of the product.
According to official reports, the culprit was Arthrem's key ingredient, a Tanzanian-sourced herb called Artemisia annua, also known as sweet sagewort or sweet wormwood.
While the ingredient is known for its strong antioxidant properties, Medsafe disputed this by warning the public of its apparent side effects, which included vomiting, nausea, itching and jaundice.
Previously, Promisia had stated that the consumer complaints Medsafe had received were a result of the complainants using a 'competing remedy' that also contained Artemisia annua as its key ingredient, not Arthrem.
The repeated allegations from the regulator have also seen Promisia's share price plummet, leading the company to launch a capital-raising to prevent possible collapse. The shares fell from trading at 0.9c a year ago to 0.1c on Monday, after news of government action against the firm broke.
Countering the claims
Speaking to NutraIngredients-Asia, Promisia CEO Rene de Wit said the prosecution was "confusing, to say the least", and insisted that the firm had always relied on the Therapeutic Advertising Pre-vetting Service (TAPS) to approve its advertisements.
De Wit said: "We would never advertise our product as any kind of medicine; it has only ever been a dietary supplement. We have sought all the appropriate approvals in relation to our manufacturing and distribution every step of the way, so we will fight this prosecution vigorously.
"There are independent regulatory advisors that will tell you whether your product is compliant or not, and any advertising and information we produce is always run by such an advisor — to the best of our knowledge, we are 100% compliant.
"We as an organisation pride ourselves on the scientific backing of our products, and the ethical way in which we advertise and promote them — we are held up as industry leaders in New Zealand for that sole reason.
"This is a very new development for us, and we're still trying to understand the basis on which it has happened. We can already see there are significant factual errors."
He added that he could not comment in further detail due to the seriousness of the prosecution, but reiterated that Promisia would "dispute it and fight it".
De Wit also took the opportunity to highlight the need for updated legislation surrounding dietary supplements and complementary medicines in New Zealand.
The NZ supplement industry has been pushing for new regulations for natural health products for years, to no avail. The delay and subsequent rejection of the proposed Natural Health and Supplementary Products Bill was the latest major setback the industry had experienced.
While the recently proposed Therapeutic Products Bill has led to optimism among some industry players, the exclusion of natural health products from the bill may be a cause for concern among others.
In fact, the government's recent announcement of its intention to 'go back to the drawing board' on supplement regulations means industry won't be expecting significant progress anytime soon.
De Wit said: "The difficulty in New Zealand is that there is no legislation that covers dietary supplements. There are a great many companies here that are under attack by the Ministry of Health because of the way it claims they are advertising their products.
"However, all of them are abiding by the law and have sought approval from independent regulatory bodies — as we did — to make sure they don't breach the rules."
He added that while Arthrem had been approved in Australia as a complementary medicine, the same category did not exist in New Zealand.
"There desperately needs to be some legislation (in this area) to provide regulatory guidelines to the categories various products fit into, and rules around what you can and can't do if you develop such products."
Even in the case of dietary supplements, de Wit said there should be new regulations to New Zealand's framework. Currently, the Ministry of Health considers any product marketed as having a therapeutic purpose a medicine.
However, de Wit said, "The trouble is there is no clear guideline around what a 'therapeutic purpose' is, which is why companies like ours seek advice from independent regulatory bodies.
"If the claim you want to make suggests your product is being sold for therapeutic purposes, they will tell advise you on whether or not you should go ahead with it, and you must comply.
"Still, the Ministry of Health could have a completely different view on the matter, because there is no regulation on this at the moment."