By the end of 2012 the Australian and New Zealand governments intend to have over-the-counter medicines approved jointly to save pharmaceutical firms time and money.
It is part of a move to set up a trans-Tasman therapeutic products agency, covering all medicines and medical devices, within five years.
Health Minister Tony Ryall met his Australian counterpart Tanya Plibersek in Melbourne on Saturday to agree on the new initiative.
Mr Ryall says, at the moment, any new over-the-counter medicine has to go through separate approval processes in both countries.
He says that takes time and money.
Mr Ryall says by the middle of the year, the two governments will have also set up a single website to report on adverse reactions to medicines in both countries.
And they will also develop a common early warning system to inform the public about potential safety issues concerning medicines.