This article provides a detailed examination of how the safety and cost-effectiveness elements of Australia's drug regulatory system will respond to nanomedicines. The case study investigated involves Abraxane, a newly developed anti-cancer agent. The article concludes by proposing some responses to the challenges which nanomedicines are likely to present to international and domestic agencies. Additionally, it considers whether the recommendation of the Australian Productivity Commission to allow parallel submissions to the Pharmaceutical Benefits Advisory Committee (PBAC) and the Therapeutic Goods Administration (TGA) is appropriate when applied to new nanotherapeutics.