TGA fees and charges explanatory note
Background
The Australian community has an expectation that the therapeutic products in the marketplace are safe and of high quality, to a standard equal to that of countries with comparable standards. The objective of the Therapeutic Goods Act 1989 (the Act) which came into effect in 1991 is to provide a national framework for the regulation of therapeutic products supplied or sold in, or exported from, Australia.
The Therapeutic Goods Administration (TGA) is the regulatory authority for the medicines and medical devices industries. Most products for which therapeutic claims are made must be assessed by the TGA and entered on to the Australian Register of Therapeutic Goods (ARTG) before they can be marketed in this country. The ARTG keeps a record of products that are approved for marketing, the ingredients contained in each product, and the therapeutic claims made for medicines and the intended use of medical devices.
Most Australian therapeutic product manufacturers are required to be audited and licensed by the TGA. Overseas manufacturers are required to meet equivalent standards. The TGA also regulates fresh blood, blood components and banked tissues. These products are not generally included on the ARTG, their regulation is through audit and licensing of manufacturers and compliance with standards.
Australia has a risk-based system where the level of regulatory control of a therapeutic product is based on the relative safety of the product and the seriousness of the condition for which it is intended to be used. Products are reviewed by the TGA at a level consistent with the risk associated with their use in the community and subsequent entries on the ARTG are classified as either 'registered' or 'listed', or in the case of medical devices "included".
For prescription medicines, new chemical entities and other high risk medicines, the TGA conducts a full evaluation of the data submitted in support of an application to ensure that the quality, safety and efficacy of the product has been demonstrated adequately. Extensive toxicology, pharmaceutical chemistry and clinical data are required. These products are 'registered' on the ARTG.
Most non-prescription medicines and complementary medicines are subject to a lower level of evaluation and have lesser data requirements. These products are intended for use for the treatment of minor self-limiting conditions and are subject to assessment of quality and safety only, not effectiveness. Data requirements for complementary medicines reflect the fact that comprehensive scientific data may not be available for herbal and alternative medicines, but that other evidence may be available to demonstrate a long history of safe use. These products are 'listed' on the ARTG.
A new regulatory framework for medical devices in Australia came into effect on 4 October 2002 based on the international regulatory model developed by the Global Harmonisation Task Force. Medical devices registered or listed on the ARTG at the time these new arrangements were implemented had 5 years (until 4 October 2007) to meet the new requirements.
Medical devices are classified into one of five risk classes (I, IIa, IIb, III and Active Implantable Medical Devices - AIMDs) based upon the manufacturers intended use, the level of risk and the degree of invasiveness in the human body. All classes must comply with minimum requirements for quality, safety and performance (the Essential Principles) and be "included" in the ARTG according to Class. Compliance with the Essential Principles may be demonstrated through meeting the requirements of appropriate gazetted non-mandatory internationally accepted standards, use of a certified quality system (Class IIa, IIb, III and AIMD) and also assessment of design dossiers (Class III and AIMD).
In addition to the pre-market evaluation or assessment of medicines and medical devices, the TGA conducts a post-market monitoring and compliance program.
Cost recovery
The TGA collects its revenue primarily through annual charges, evaluation and assessment fees and licence fees.
To coincide with the implementation of the Act in April 1991 Government decided the TGA would recover 50% of its operating costs through fees and charges collected from the therapeutic goods industry.
Following the 1996 Election and as part of the Budget deficit reduction strategy the Government announced it would increase the level of cost recovery for TGA activities to 75% to be phased in over the following three financial years, commencing 1996/97 (58% in 1996/97, to 67% in 1997/98 and to 75% in 1998/99).
Improved efficiencies delivered by the TGA to that time included a reduction in evaluation times, pursuit of a Mutual Recognition Agreement (MRA) with the European Union on medical devices and medicines GMP to provide Australian suppliers with automatic approval where goods have been assessed by recognised bodies. The TGA now has a MRA on medicines GMP with Singapore. Another improved efficiency is the substantial reductions in approval times for listed medicines through introduction of the Electronic Lodgement Facility (ELF) and the medical devices electronic application lodgement system (DEAL).
In framing the 1997/98 Budget the Government decided to accelerate the rate of increase in the level of cost recovery from industry, moving to 75% in 1997/98 and to full cost recovery in 1998/99.
The decision covered all activities which fall within the scope of the Act including regulation of theindustry, the TGA's public health responsibilities, responsibilities to consumers for information on products and TGA's support for the industry generally (ie. facilitation of exports and international harmonisation of standards).
In December 2002 the Government released Guidelines for cost recovery by government agencies in response to the Productivity Commission's Report number 15 - Cost Recovery by Government Agencies. The Guidelines require significant cost recovery agencies to comply with cost recovery principles and undertake a review of existing cost recovery arrangements at least every five years. The TGA's cost recovery arrangements were found to be consistent with the Guidelines when reviewed in May 2005. During 2006, the TGA also completed cost recovery impact statements for the planned introduction of in-vitro diagnostic device regulation <http://www.tga.gov.au/fees/cris-ivd.htm> and the annual review of fees and charges for non-prescription medicines <http://www.tga.gov.au/fees/cris-npfees06-07.htm>.
The TGA is very conscious of the costs associated with its regulatory responsibilities and is continually seeking to contain those costs through improvements in both efficiency and effectiveness. Each year the TGA meets with representatives of each of the four major industries to discuss and agree the TGA's schedule of fees and charges for the forthcoming financial year.