New Zealand and Australia are to put in place an agency to regulate medical treatments.

Speaking from Canberra today, Prime Minister John Key announced that officials on both sides of the Tasman had agreed to immediately beginning work on implementing the Australia-New Zealand Therapeutic Products Agency.

The agency, which would take up to five years to establish, would will regulate medicines, medical devices and new medical interventions, such as cellular therapy.

"New Zealand's regulatory arrangements for medicines and medical devices need to be updated, and this is a cost-effective and comprehensive way of achieving this," Mr Key said.

"We want to move into a situation where all medicines and medical devices are specifically approved for New Zealanders before they are used.

"Currently, medicines are subject to this approval but medical devices are listed on a notification database which should be improved -- the establishment of this new agency provides the opportunity to do so."

The New Zealand Government's review of the proposed separate scheme for natural health products in five years' time would consider whether or not to maintain a separate scheme for natural health products.

Mr Key said both countries had agreed the creation of the joint agency was not dependent on natural health products being part of the joint regulatory arrangements, but that they did not want to exclude the option for the future.