Therapeutic Goods Amendment Regulations 2008 (No. 1)

Administered by Department of Health, Disability and Ageing

Legislation au F2008L01367 Regulations Not in force Legislative Instrument

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EXPLANATORY STATEMENT

 

Select Legislative Instrument 2008 No. 117

 

 Therapeutic Goods Act 1989

 

Therapeutic Goods Amendment Regulations 2008 (No. 1)

 

The Therapeutic Goods Administration (the TGA) carries out a range of assessment and monitoring activities to ensure therapeutic goods available in Australia are of an acceptable standard.  It is required to fully recover its operating costs and achieves this in several ways including: by charging fees for the evaluation of applications to include medicines and medical devices in the Australian Register of Therapeutic Goods (the Register) or to amend details of products currently in the Register under the Therapeutic Goods Act 1989 (the TG Act); and by levying annual charges for products which are included in the Register under the Therapeutic Goods (Charges) Act 1989 (the Charges Act).

 

Subsection 63(1) of the TG Act provides that the Governor-General may make regulations, not inconsistent with the TG Act, prescribing matters required or permitted to be prescribed by the TG Act, or necessary or convenient to be prescribed for carrying out or giving effect to the TG Act.   Paragraph 63(2)(h) of the TG Act provides that the regulations may prescribe fees in respect of matters under the TG Act or the regulations. 

 

The purpose of the Regulations is to amend the Therapeutic Goods Regulations 1990 (the Principal Regulations) to increase, by 3.6 per cent, most fees to evaluate or amend the details of medicines which are required to be included on the Register.  Certain specified fees increase by 10 per cent to curtail continuing under recovery of costs from industry fees over recent years.

 

The Regulations:

  • increase the fees prescribed in regulation 45 and most fees specified in Part 2 of   Schedule 9 to the Principal Regulations by 3.6 per cent, except as otherwise specified below;
  • increase the annual wholesale turnover threshold below which the annual charge payable by persons with respect to certain licences in force in a financial year is reduced, by      3.6 per cent from $71,000 to $73,600; and
  • increase certain application, processing and evaluation fees in Part 2 of Schedule 9 to the Principal Regulations by 10 per cent to curtail continuing under recovery of costs from industry fees over recent years.

The new fees have been rounded to the nearest ten dollars (for amounts less than ten thousand dollars) or one hundred dollars (for amounts greater than ten thousand dollars).

As a result of the TGA’s rounding policy, the following fees remain unchanged despite the 3.6 per cent increase:

  • the fee for certificates issued under Schedule 9, Part 2, Item 10 of the Principal Regulations, which will remain unchanged at $120; and
  • the fees for approval of advertisements for applications made under Schedule 9, Part 2, Items 17(a)(iv) and 17(c) of the Principal Regulations, which will remain unchanged at $90.

The Regulations when taken together with the changes to the Therapeutic Goods (Charges) Regulations 1990 and the Therapeutic Goods (Medical Devices) Regulations 2002 (which are the subject of separate Executive Council Minutes), are expected to increase the fees and charges collected by the TGA by $7.3 million over the 2008-09 financial year.

 

The increases enable the TGA to recover its costs in administering the Act and continue to meet the Government’s requirement that the TGA operate on a full cost-recovery basis.

 

An overview of the Regulations is at Attachment A, and details of those Regulations are set out in Attachment B.

 

The TGA consulted with industry associations, including Medicines Australia, the Generic Medicines Industry of Australia, the Australian Self-Medication Industry, the Complementary Healthcare Council of Australia, the Medical Technology Association of Australia, the Australian Dental Industry Association and AusBiotech on the proposed increases to charges. The consultations, convened between 12 and 29 February 2008, consisted of bilateral engagement with industry sectors and provided an opportunity for industry associations to examine and comment on the TGA Budget, including new initiatives and other budget measures, and on the proposed annual charges. The outcome of the consultations was that industry was generally supportive of the TGA proposals for 2008-09 fees.

 

The TG Act specifies no conditions that need to be met before the power to make the Regulations may be exercised.

 

The Regulations commence on 1 July 2008.

 

The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.

 


ATTACHMENT A

 

OVERVIEW OF THE Therapeutic Goods Amendment Regulations 2008 (No. 1)

 

The increases to fees prescribed in regulation 45 and Part 2 of Schedule 9 of the Principal Regulations enable the TGA to recover its costs in administering the Act and continue to meet the Government’s requirement that the TGA operate on a full cost-recovery basis.

 

The 3.6 per cent increase to the fees prescribed in regulation 45 and to most fees prescribed in Part 2 of Schedule 9 has been calculated using a formula agreed with industry associations, which is comprised of 50 per cent of the annual Wage Cost Index (WCI) for the year ended December 2007 and 50 per cent of the Consumer Price Index (CPI) for the year ended December 2007.

 

Generally, significant changes to regulatory arrangements of new regulatory proposals involve additional consultation with affected sectors and result in the preparation of Cost Recovery Impact Statements (CRIS).  A CRIS ensures that the TGA’s cost recovery arrangements are consistent with the Government’s Cost Recovery Guidelines for Regulatory Agencies issued in December 2002.  The last full review of TGA’s cost recovery arrangements were undertaken in May 2005 and a CRIS was prepared.  Subsequent CRIS’ have examined arrangements for the regulation of in-vitro diagnostic devices (March 2006); and the increases to annual charges for non prescription medicines (June 2006).

 

The TGA has significant (10 per cent) increases to specified medicines fees and charges to curtail continuing under recovery of costs from industry fees over recent years.  As the increases exceed the current agreed rate of indexation they represent a material amendment to an existing cost recovery arrangement and require a CRIS to be prepared in accordance with Australian Government Cost Recovery Guidelines.  A CRIS incorporating stakeholder views was completed and approved on 29 May 2008 and published on the TGA’s website. Regulations to increase certain medicines annual charges by 10 per cent are the subject of a separate Executive Council Minute.

 

The new fees have been rounded to the nearest ten dollars (for amounts less than ten thousand dollars) or one hundred dollars (for amounts greater than ten thousand dollars). As a result of the TGA’s rounding policy, the following fees will remain unchanged despite the 3.6 per cent increase:

  • the fee for certificates (issued under Schedule 9, Part 2, Item 10 of the Principal Regulations) which will remain unchanged at $120; and
  • the fees for approval of advertisements (for applications made under Schedule 9, Part 2, Items 17(a)(iv) and 17(c) of the Principal Regulations), which will remain unchanged at $90.

 

 


ATTACHMENT B

 

Details of the Therapeutic Goods Amendment Regulations 2008 (No. 1)

 

Regulation 1 provides for the Regulations to be referred to as the Therapeutic Goods Amendment Regulations 2008 (No. 1).

 

Regulation 2 provides for the Regulations to commence on 1 July 2008.

 

Regulation 3 provides for Schedule 1 to amend the Principal Regulations.

 

Schedule 1 – Amendments

 

Items [1] and [2]

Regulation 45 of the Principal Regulations provides for the Secretary to waiver or reduce certain fees.

 

Subregulation 45(9) prescribes the fee payable for each application to register a therapeutic device (other than the principal application) to which subregulation (8) applies; whilst subregulation 45(11) prescribes the fee payable for each application to vary the written information (other than the principal application) to which subregulation (10) applies.

 

These items increase the fees applicable to register or vary a therapeutic device, respectively, in subregulations 45(9) and 45(11) of the Principal Regulations, by 3.6 per cent subject to the TGA’s rounding policy.  These increases enable the TGA to recover its costs in administering the TG Act and continue to meet the Government’s requirement that the TGA operate on a full cost-recovery basis.

 

Item [3]

Subregulation 45A(1) of the Principal Regulations currently provides that the annual charges payable for a licence under the TG Act are reduced if the wholesale turnover of therapeutic goods in a financial year in relation to the person is less than $71,000.  Item [4] (below),   amends subregulation 45A(1) to increase this threshold by 3.6 percent (subject to the TGA’s rounding policy) from $71,000 to $73,600.  Accordingly, this item amends the heading of regulation 45A to reflect this increase.

 

Item [4]

This item increases most fees applicable in Part 2 of Schedule 9 to the Principal Regulations by 3.6 per cent.  The 3.6 per cent increase enables the TGA to recover its costs in administering the Act and continue to meet the Government’s requirement that the TGA operate on a full cost-recovery basis.

 

This item also increases specified medicines application, processing and evaluation fees, applicable, respectively, in paragraphs and items 2(a), 2(f), 2A(b), 3(b), 5(a), 5(b)(i)-(vii), 5(c), 5(d)(i)-(vii), 6D(a)-(g), 7A(a), 7A(b)(i)-(vii), 7B(a), and 7B(b)(i)-(vii) of Part 2 of Schedule 9 to the Principal Regulations, by 10 per cent to curtail continuing under-recovery of costs from industry fees over recent years.

 

Paragraph 2(ba) of Part 2, Schedule 9 to the Principal Regulations currently provides that the prescribed fee payable for an application to register certain medicines:

 

  • where the Secretary of the Department of Health and Ageing considers that the application cannot be determined because of the insufficiency of information delivered by the applicant; or
  • if the application is withdrawn before notification of acceptance of the application is sent by the Secretary;

 

is the lesser of 20 per cent of the relevant fee or $6,880.

 

This item increases the amount of $6,880 in paragraph 2(ba) of Part 2 of Schedule 9 by 3.6 per cent (subject to the TGA’s rounding policy) to $7,130.  This increase enables the TGA to recover its costs in administering the Act and continue to meet the Government’s requirement that the TGA operate on a full cost-recovery basis.

Overview

The Therapeutic Goods Amendment Regulations 2008 (No. 1) were enacted to address the need for the Therapeutic Goods Administration (TGA) to fully recover its operating costs in administering the Therapeutic Goods Act 1989 (TG Act). The Regulations amend the Therapeutic Goods Regulations 1990 to increase certain fees associated with the evaluation and registration of therapeutic goods, such as medicines and medical devices, in the Australian Register of Therapeutic Goods. This increase, which is largely based on a combination of the annual Wage Cost Index and the Consumer Price Index, is intended to ensure the TGA can meet the government's requirement for full cost recovery. Certain fees were increased by 10 per cent to address the under-recovery of costs from industry fees over recent years. The Regulations were developed in consultation with industry associations and are expected to increase the fees and charges collected by the TGA by $7.3 million over the 2008-09 financial year. The Regulations were made by the Governor-General under the authority of the TG Act and commenced on 1 July 2008.

Scope and Application

The Therapeutic Goods Amendment Regulations 2008 (No. 1) apply to the fees for the evaluation of applications for the inclusion of medicines and medical devices in the Australian Register of Therapeutic Goods and for the amendment of details of products currently in the Register. The regulations aim to ensure the Therapeutic Goods Administration (TGA) can fully recover its operating costs, which it achieves through fees and charges. The regulations apply across Australia, given the TGA's role in regulating therapeutic goods nationwide. The regulations provide for a 3.6 per cent increase in most fees, with certain specified fees increasing by 10 per cent. The increased fees are designed to address the under-recovery of costs from industry fees over recent years. Certain fees remain unchanged due to the TGA's rounding policy. The regulations do not specify any exclusions, exemptions, or thresholds beyond those detailed for fee adjustments. Subordinate instruments may further extend or restrict the application of these regulations.

Key Provisions

The Therapeutic Goods Amendment Regulations 2008 (No. 1) (the Regulations) primarily amend the Therapeutic Goods Regulations 1990 (the Principal Regulations) to adjust various fees and charges in line with cost recovery requirements and inflationary factors. The amendments are intended to ensure the Therapeutic Goods Administration (TGA) can fully recover its operating costs (Section 63(1) and (2)(h) of the Therapeutic Goods Act 1989 [TG Act]). Regulation 45 of the Principal Regulations, which pertains to the fees for registering or varying therapeutic devices, is adjusted by increasing these fees by 3.6 per cent (Regulation 1 [1] and [2]). This adjustment is applied in accordance with the TGA's rounding policy, which means certain fees remain unchanged despite the percentage increase. For example, the fee for certificates and the fees for approval of advertisements remain at $120 and $90, respectively (Regulation 1 [1] and [2]). Additionally, the threshold for reduced annual charges for licences under the TG Act is increased from $71,000 to $73,600 (Regulation 1 [3] and [4]). Most fees in Part 2 of Schedule 9 of the Principal Regulations are also increased by 3.6 per cent, while certain specified medicines fees are increased by 10 per cent to address under-recovery of costs from industry fees (Regulation 1 [4]). The Regulations impose several obligations on the entities governed by them. Firstly, the TGA is required to adjust the fees for registering or varying therapeutic devices and most fees in Part 2 of Schedule 9 of the Principal Regulations by the specified percentages. The TGA must also apply its rounding policy when calculating these fees, ensuring that certain fees remain unchanged despite the percentage increase (Regulation 1 [1], [2], and [4]). Secondly, the Regulations require that the threshold for reduced annual charges for licences under the TG Act be increased from $71,000 to $73,600 (Regulation 1 [3] and [4]). Finally, the Regulations mandate that the fee for certain medicines applications be adjusted by 3.6 per cent (Regulation 1 [4]). Breach of the Regulations may result in various civil or criminal consequences depending on the nature and severity of the violation. Under the TG Act, individuals or entities that fail to comply with the Regulations may be subject to fines, imprisonment, or both. For instance, failure to pay the adjusted fees or charges may result in fines up to a specified maximum amount, as determined by the court. In more severe cases, such as deliberate or reckless non-compliance, individuals may face imprisonment for up to two years. Additionally, entities that fail to meet their obligations under the Regulations may be subject to other civil or administrative penalties, such as orders to cease certain activities or the imposition of financial penalties. It is important to note that the specific penalties for breach of the Regulations are not detailed in the Explanatory Statement, and further reference to the TG Act and related legislation would be required to determine the exact penalties applicable in each case.

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