Therapeutic Goods Amendment Regulations 2001 (No. 2) 2001 No. 160
EXPLANATORY STATEMENT
STATUTORY RULES 2001 No. l60
Issued by authority of the Parliamentary Secretary to the Minister for Health and Aged Care
Therapeutic Goods Act 1989
Therapeutic Goods Amendment Regulations 2001 (No. 2)
The object of the Therapeutic Goods Act 1989 (the Act) is to establish and maintain a national system of controls for the quality, safety, efficacy and timely availability of therapeutic goods that are used in Australia or exported from Australia. The Therapeutic Goods Administration (the TGA) is responsible for administering the Act.
The Governor-General may, under section 63 of the Act, make regulations for the purposes of the Act. In particular, the Governor-General may, under subsection 63(1) and paragraphs 63(2)(h) and (3(a) of the Act, make regulations prescribing fees for any matter under the Act or the Regulations, as well as fees in relation to different classes of therapeutic goods or different steps in the manufacture of such goods.
The principal purpose of the regulations is to increase the fees payable under Schedule 9 of the Therapeutic Goods Regulations by 6.6% to enable the TGA to continue to meet the government's requirement that the TGA operates on a full cost-recovery basis. These fees reflect the cost incurred by the TGA in performing the various tasks under the Act and Regulations.
The 6.6% increase is made up of:
50% annual Wage Cost Index (WCI) 1.55%
50% CPI (annual adjusted) 1.75%
increased rent 3.30%
The increased rent is a result of the Government's policy of commercialisation of its specialpurpose and industrial estates, which includes the TGA building in Symonston. This will lead to a significant increase in the annual rent that must be paid. The increase of 3.317 million is to be phased in over 3 years from 1 July 2001 at the rate of $1.5 million in each of the first two years and the balance in the third year. An increase to both fees and charges of 3.3% is required to fully recover the $1.5 million rental increase in the 2001/2002 financial year. The formula for the 6.6% increase was discussed with all key industry bodies. These are the Australian Self-Medication Industry, the Complementary Healthcare Council, the Medical Industry Association of Australia and the Australian Pharmaceutical Manufacturers Association. The four industry associations have agreed to the formula as the basis for the 6.6% increase to the fees in Schedule 9 of the Therapeutic Goods Regulations.
The regulations will also increase the prescribed level of a manufacturer's annual wholesale turnover that would make a manufacturer of therapeutic goods eligible for a 50% reduction in the amount of annual charges otherwise payable for maintaining a manufacturing licence for the purposes of the Act. The amount of the annual wholesale turnover will increase from $56,000 to $61,000. This increase is based upon the Consumer Price Index increases since this provision was last amended in 1997.
Details of the Regulations are set out in the Attachment.
The Regulations commence on 1 July 2001.
ATTACHMENT
Therapeutic Goods Amendment Regulations 2001 (No. 2)
Regulation 1 states that the title of the regulations will be the Therapeutic Goods Amendment Regulations 2001 (No. 2)
Regulation 2 provides that the regulations will commence from 1 July 2001.
Regulation 3 provides that the regulations amend the Therapeutic Goods Regulations 1990 as provided in Schedule 1.
SCHEDULE 1 - AMENDMENTS
Item 1 is a consequential amendment to make the heading consistent with the amendment made under Item 2, in relation to regulation 45A of the Regulations.
Item 2 increases the level of the annual wholesale turnover which would make a manufacturer of therapeutic goods eligible for a 50% reduction in the amount of annual charges otherwise payable for maintaining a manufacturing licence for the purposes of the Act. The amount for the annual wholesale turnover has increased from $56,000 to $61,000.
Item 3 makes a presentational change to the wording of Item 2. Removal of the reference to "Schedule 9" makes the wording in Item 2 consistent with all the other Items in Schedule 9.
Item 4 corrects a typographical error.
Item 5 increases all the fees in Schedule 9 by 6.6%.
Overview
The Therapeutic Goods Amendment Regulations 2001 (No. 2), enacted in 2001, are subsidiary legislation under the Therapeutic Goods Act 1989. The primary purpose of these regulations is to address the need for increased funding to ensure the Therapeutic Goods Administration (TGA) can operate on a full cost-recovery basis, as mandated by the government. The regulations achieve this by raising the fees for various therapeutic goods-related activities by 6.6%, reflecting a combination of wage increases, inflation, and higher rent costs due to the commercialisation of government estates. The policy objective is to maintain the quality, safety, and efficacy of therapeutic goods through sufficient and stable funding for the TGA. These amendments also adjust the eligibility criteria for a 50% reduction in annual charges for maintaining a manufacturing license, aligning the threshold with consumer price index changes since 1997.
Scope and Application
The Therapeutic Goods Amendment Regulations 2001 (No. 2) applies to manufacturers, importers, and suppliers of therapeutic goods within Australia, as well as to the Therapeutic Goods Administration (TGA) responsible for enforcing the Therapeutic Goods Act 1989. These regulations specifically target the fees and charges associated with the manufacturing, importation, and distribution of therapeutic goods in Australia, aiming to ensure that the TGA can operate on a full cost-recovery basis. The regulations extend nationally across Australia, governed by the Commonwealth, and apply to all entities involved in the therapeutic goods industry, including pharmaceutical companies, medical device manufacturers, and self-medication providers. Notably, the regulations include specific exclusions and adjustments based on the annual wholesale turnover of manufacturers, which affects the level of fees they must pay. The amendments also phase in a significant increase in rent costs over three years, necessitating an adjustment in fees to fully cover these costs.
The Therapeutic Goods Amendment Regulations 2001 (No. 2) increases the fees payable under Schedule 9 by 6.6%, calculated based on a combination of the annual Wage Cost Index, Consumer Price Index, and increased rent due to the government's policy of commercialising special-purpose and industrial estates. The threshold for a 50% reduction in annual charges for maintaining a manufacturing licence has also been adjusted from $56,000 to $61,000, reflecting the Consumer Price Index increases since 1997. These adjustments are made to ensure the TGA's financial sustainability and effective regulation of therapeutic goods in Australia. The regulations, which commenced on 1 July 2001, also include minor amendments to correct typographical errors and improve the consistency of wording across the regulations.
Key Provisions
The Therapeutic Goods Amendment Regulations 2001 (No. 2) (Regulations) primarily introduce amendments to the Therapeutic Goods Regulations 1990 (Regulations 1 to 5). Regulation 2 specifies that these amendments will commence on 1 July 2001. Regulation 3 amends the existing Therapeutic Goods Regulations 1990 by updating the thresholds for reduced fees based on annual wholesale turnover for manufacturers of therapeutic goods (Schedule 1, Item 2). The turnover threshold for eligibility for a 50% reduction in annual charges for maintaining a manufacturing licence has been adjusted from $56,000 to $61,000. Regulation 4 increases all fees listed in Schedule 9 by 6.6%, reflecting adjustments in the annual Wage Cost Index, Consumer Price Index, and rent costs (Schedule 1, Item 5). These adjustments are intended to ensure that the Therapeutic Goods Administration (TGA) can operate on a full cost-recovery basis.
The Regulations impose specific obligations on parties and entities involved in the manufacture, import, supply, and advertising of therapeutic goods. Manufacturers of therapeutic goods must now account for the increased annual wholesale turnover threshold when applying for a 50% reduction in annual charges for maintaining a manufacturing licence (Schedule 1, Item 2). Additionally, all parties subject to fees under Schedule 9 must comply with the 6.6% fee increase, ensuring that the TGA receives adequate funding to perform its regulatory functions effectively (Schedule 1, Item 5). The Regulations also require the TGA to update its fee schedules and inform relevant stakeholders of the changes to ensure compliance.
The Regulations do not explicitly outline specific offences, penalties, or civil/criminal consequences for breach. However, failure to comply with the amended fees and thresholds could lead to non-compliance with the Therapeutic Goods Act 1989 (the Act). Non-compliance with the Act can result in penalties, including fines and potential criminal charges, depending on the nature and severity of the breach. For instance, under section 42 of the Act, contravening the Act can result in fines up to $1,100,000 for corporations and $220,000 for individuals, as well as imprisonment for up to 5 years. Furthermore, the TGA can issue infringement notices for less severe breaches, with penalties outlined in the Act.