EXPLANATORY STATEMENT

Therapeutic Goods Act 1989

Therapeutic Goods Legislation Amendment (Fees and Other Measures) Regulations 2018

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/performance and timely availability of therapeutic goods that are used in Australia or exported from Australia. The Therapeutic Goods Administration (the TGA), which is part of the Department of Health, is responsible for administering the Act.

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

Amongst other matters, the regulations may prescribe fees in respect of matters under the Act or the regulations made under the Act.

The purpose of the Therapeutic Goods Legislation Amendment (Fees and Other Measures) Regulations 2018 (the Regulations) is, principally, to amend the Therapeutic Goods Regulations 1990 (the TG Regulations) and the Therapeutic Goods (Medical Devices) Regulations 2002 (the MD Regulations), to increase the fees set out in those respective regulations by 1.9 per cent, for the financial year 2018-19.

The increase applies, for example, to: application fees for the registration, listing or inclusion of therapeutic goods (including medicines, therapeutic devices, biologicals and medical devices) in the Australian Register of Therapeutic Goods (the Register); application fees for licences to manufacture, or to undertake a step in the manufacture of, therapeutic goods; fees relating to the evaluation of therapeutic goods for marketing approval; clinical trial notification fees; application fees for export certificates and inspection fees for manufacturing premises.

Fees relating to conformity assessments and abridged conformity assessments of medical devices (these are assessments of the quality of a medical device manufacturer’s manufacturing process and of the product design of a medical device), and application fees for conformity assessment certificates for medical devices, are also covered by the increase.

The 1.9 per cent figure for the increase is based on an indexation formula used to calculate adjustments to TGA fees and charges in most previous years, and is based on the Australian Bureau of Statistics’ Wage Price Index (50 per cent) (in this case, for the year to September 2017) and Consumer Price Index (50 per cent) (also for the same period). 

This increase is in line with the TGA’s cost recovery model. In applying this increase, the following rounding policy has been applied:

• for fee items that are less than $10,000 - to the nearest $10; and
• for fee items that are greater than or equal to $10,000 - to the nearest $100.

The Regulations also include a small number of other changes, including to:

• introduce an application fee of $530 for applications to include a Class I medical device in the Register (currently there is no fee for such applications, except for Class I devices that are intended by the manufacturer to be supplied in a sterile state or that have a measuring function); and
• reduce the manufacturing licence application fee for medicines (from $1000 to $770), introduce an application fee of $770 for applications to vary a manufacturing licence to add an additional manufacturing site and increase two other manufacturing fees by more than 1.9 per cent, following a recent review of the costs relating to the regulation of therapeutic goods manufacturers.

Details of the Regulations are set out in the Attachment.

The Act specifies no conditions that need to be satisfied before the power to make the Regulations may be exercised. The Regulations are a legislative instrument for the purposes of the Legislation Act 2003.

The Regulations, principally, commence on 1 July 2018 (sections 1 to 4 commence the day after the Regulations are registered on the Federal Register of Legislation, with the new fees commencing 1 July 2018). The increase to the two manufacturing fees noted above commences on 1 July 2019.

Consultation

Preliminary consultation on possible changes to increase TGA fees (and charges) for 2018-19 was undertaken at bilateral meetings with industry representative bodies (Medicines Australia, the Generic and Biosimilar Medicines Association, AusBiotech, the Medical Technology Association of Australia, IVD Australia, the Australian Dental Industry Association (ADIA), the Australian Self-Medical Industry, Complementary Medicines Australia and Accord Australasia) in December 2017. Further consultation on the proposal to increase most fees by 1.9 per cent, and to introduce an application fee for Class I medical devices, was undertaken at bilateral meetings with the same bodies in February 2018.  No objections were raised to the proposals, except that ADIA had concerns in relation to the new application fee for Class I devices and suggested it be delayed until 1 July 2019 to allow for more consultation. Further information explaining how the fee was calculated was subsequently provided to ADIA. Although this fee will be introduced from 1 July 2018, its level will be monitored as part of the monitoring of all fees to identify areas of under and over recovery.

A consultation paper on proposed changes to fees (and annual charges) for manufacturing licences was released on the TGA’s website on 9 February 2018, and closed on 5 March 2018. A number of ‘roadshows’ were also held in Sydney, Melbourne and Brisbane. Follow-up discussions were held with industry bodies after 5 March 2018, and the changes were discussed at the TGA Industry Working Group on Good Manufacturing Practice (TIWGG) meeting on 15 March 2018. Following stakeholder feedback, the proposal to increase two fees for the assessment of information relating to the overseas manufacture of therapeutic goods by more than 1.9 per cent was proposed to take effect from 1 July 2019, rather than 1 July 2018.

Authority:  Subsection 63(1) of the Therapeutic Goods Act 1989

ATTACHMENT

Details of the Therapeutic Goods Legislation Amendment (Fees and Other Measures) Regulations 2018

Section 1 – Name

This section provides that the title of the Regulations is the Therapeutic Goods Legislation Amendment (Fees and Other Measures) Regulations 2018.

Section 2 – Commencement

This section provides that sections 1 to 4 of the Regulations commence the day after the Regulations are registered on the Federal Register of Legislation, that Parts 1 and 2 of Schedule 1 to the Regulations commence on 1 July 2018 and Part 3 of Schedule 1 to the Regulations commences on 1 July 2019.  

Section 3 – Authority

This section provides that the Regulations are made under the Therapeutic Goods Act 1989.

Section 4 – Schedules

Each instrument that is specified in a Schedule to this instrument is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to the Regulations has effect according to its terms.

Schedule 1 – Amendments

Therapeutic Goods (Medical Devices) Regulations 2002

Item 1 – Regulation 9.4

This item repeals regulation 9.4 of the Therapeutic Goods (Medical Devices) Regulations 2002 (the MD Regulations).  Regulation 9.4 is redundant as it relates to a medical device that had been assessed by the Secretary before the commencement of the MD Regulations in 2002.   

Item 2 – Part 1 of Schedule 5 (table item 1.5)

This item repeals item 1.5 in Part 1 of Schedule 5 to the MD Regulations and substitutes a new item 1.5. The item 1.5 increases the application fees specified in item 1.5 (being, application fees to include certain kinds of devices in the Register) by 1.9 per cent, and also introduces a new fee (in paragraph (ea) of item 1.5) for applications to include a Class I medical device in the Register. Previously, no such fee applied, except for Class I devices that were intended by the manufacturer to be supplied in a sterile state or that had a measuring function. The fee for applications to include a Class I device in the Register is in the amount of $530 to principally reflect the cost of managing eligibility verification activities (i.e. to verify that the information provided in the application is correct) and the cost of maintaining IT systems.

Item 3 – Part 1 of Schedule 5 (table item 1.8, column headed “Provision of Act or these Regulations”)

This item makes a minor amendment to clarify that item 1.8 in Part 1 is also made under to paragraph 63(2)(h) of the Act.

Item 4 – Amendments of listed provisions

This item sets out a table of amendments to listed provisions of the MD Regulations.

The effect of these amendments is to increase the fees for all relevant items by 1.9 per cent, subject to the TGA’s rounding policy.

Therapeutic Goods Regulations 1990

Item 5 – Subregulations 43AAJ(2)

This item updates the reference in subregulation 43AAJ(2) of the Therapeutic Goods Regulations 1990 (the TG Regulations) to the Therapeutic Goods (Charges) Regulations 1990, so that subregulation 43AAJ(2) refers to the relevant provision of the new Therapeutic Goods (Charges) Regulations 2018.

Item 6 – Clause 3 of Schedule 9 (table item 2, column 2)

This item amends item 2 in Clause 3 of Schedule 9 to the TG Regulations, to remove the exclusion of applications to which item 3A in Clause 3 of Schedule 9 applies, as item 3A is repealed by the Regulations (item 8 below refers). 

Item 7 – Clause 3 of Schedule 9 (paragraph (d) of table item 2)

This item amends paragraph (d) in item 2 in Clause 3 of Schedule 9 to the TG Regulations, to remove the reference to paragraph (d) being subject to paragraph (f) of item 2.  This reference is redundant as there is no paragraph (f) in item 2. 

Item 8 – Clause 3 of Schedule 9 (table items 3A, 3B and 5A)

This item repeals items 3A, 3B and 5A in Clause 3 of Schedule 9 to the TG Regulations to remove separate categories of application and evaluation fees for therapeutic devices covered by items 3A, 3B and 5A.

Item 9 – Clause 3 of Schedule 9 (table item 6, column 2)

This item amends item 6 in Clause 3 of Schedule 9 to the TG Regulations to refer only to therapeutic devices to which any of items 1 to 3 in Part 1 of Schedule 3 applies. This is because there is no item 4 of Part 1 of Schedule 3.

Item 10 – Clause 3 of Schedule 9 (table item 6A)

This item repeals item 6A in Clause 3 of Schedule 9 to the TG Regulations, which applies to therapeutic devices to which any of items 2 to 5 in Part 2 of Schedule 3 applies. This is because there are no items 2 to 5 in Part 2 of Schedule 3.

Item 11 – Clause 3 of Schedule 9 (table item 7, column 2)

This item amends item 7 in Clause 3 of Schedule 9 to the TG Regulations, to remove the reference in item 7 to item 4 of Part 1 of Schedule 3, as there is no item 4 in Part 1 of Schedule 3.

Item 12 – Clause 3 of Schedule 9 (table item 7AA)

This item repeals item 7AA in Clause 3 of Schedule 9 to the TG Regulations, which applies to therapeutic devices to which item 5 in Part 1 of Schedule 3 applies. Item 7AA is redundant, because item 5 in Part 1 of Schedule 3 has been repealed.

Item 13 – Clause 3 of Schedule 9 (table item 8)

This item repeals item 8 in Clause 3 of Schedule 9 to the TG Regulations (which only provides for one type of application fee for a manufacturing licence for the purposes of paragraph 37(1)(g) of the Act), and substitutes new items 8 and 8A.

The new item 8 introduces a separate application fee for blood, blood components, haematopoietic progenitor cells and human tissues (paragraph (b) of column 2) and a separate application fee for medicines (and other therapeutic goods, as outlined in paragraph (a) of column 2) that are not covered by paragraph (b). The fee for blood, blood components, haematopoietic progenitor cells and human tissues is the same as the previous fee with the indexation applied (i.e. by 1.9 per cent, subject to the TGA’s rounding policy).

The new item 8A also introduces a fee for the purposes of paragraph 40B(2)(g) of the Act, for the variation of a licence to which paragraph (a) of item 8 applies (not paragraph (b)).      

Item 14 – Clause 3 of Schedule 9 (table item 9)

This item repeals item 9 in clause 3 of Schedule 9 to the TG Regulations, and introduces a new item 9 which does not refer to the manufacture of diagnostic goods for in vitro use. Diagnostic goods for in vitro use are all regulated as medical devices under Chapter 4 of the Act.

Item 15 – Clause 3 of Schedule 9 (table item 9D, column 2)

This item amends item 9D in Clause 3 of Schedule 9 to the TG Regulations, to remove the reference in item 9D to item 5 in Clause 3 of Schedule 9, as there is no item 5 in Clause 3 of Schedule 9.

Item 16 – Amendments of listed provisions

This item sets out a table of amendments to listed provisions of the TG Regulations.

The principal effect of these amendments is to increase various fees specified in the table by 1.9 per cent, subject to the TGA’s rounding policy, from 1 July 2018.

This item also increases the Australian manufacturing hourly inspection fee by $310, based on a recent review of the costs relating to the regulation of therapeutic goods manufacturers.

Item 17 – Clause 3 of Schedule 9 (table item 6AA, column 3)

This item amends item 6AA in Clause 3 of Schedule 9 to increase the fee for a GMP clearance by $240, from 1 July 2019.

Item 18 – Clause 3 of Schedule 9 (table item 6ABA, column 3)

This item amends item 6ABA in Clause 3 of Schedule 9 to increase the fee for a compliance verification assessment by $360, from 1 July 2019.

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Therapeutic Goods Legislation Amendment (Fees and Other Measures) Regulations 2018

The Therapeutic Goods Legislation Amendment (Fees and Other Measures) Regulations 2018 (the Regulations) is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

The Regulations are made under subsection 63(1) of the Therapeutic Goods Act 1989 (the Act), and amend the Therapeutic Goods Regulations 1990 (the TG Regulations) and Therapeutic Goods (Medical Devices) Regulations 2002 (the MD Regulations) to, principally, increase fees relating to the regulation of therapeutic goods and manufacturing licences by 1.9 per cent, from 1 July 2018.

The increase applies, for example, to: application fees for the registration, listing or inclusion of therapeutic goods (including medicines, therapeutic devices, biologicals and medical devices) in the Australian Register of Therapeutic Goods (the Register); application fees for licences to manufacture, or to undertake a step in the manufacture of, therapeutic goods; fees relating to the evaluation of therapeutic goods for marketing approval; clinical trial notification fees; application fees for export certificates and inspection fees for manufacturing premises. A small number of additional changes to fees are also included, in particular to introduce a fee for applications for marketing approval for Class 1 medical devices (currently no such fee applies unless such devices are intended by their manufacturer to be supplied in a sterile state or have a measuring function, leading to an under-recovery of the costs of processing these applications).

The 1.9 per cent figure is based on a formula used to calculate adjustments to TGA fees and charges in most previous years, based on the Australian Bureau of Statistics’ Wage Price Index (50 per cent) (in this case, for the year to September 2017) and Consumer Price Index (50 per cent)) (for the same period). This increase is designed to ensure that the TGA is able to continue to recover its costs of administering the Act.

Human rights implications

As the Regulations do not introduce any changes to the TG Regulations or MD Regulations other than to implement the changes outlined above, it does not engage any of the applicable rights or freedoms.

Conclusion

This legislative instrument is compatible with human rights as it does not raise any human rights issues.

Greg Hunt, Minister for Health