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Cost recovery implementation statement, V1.1
Version 1.1 June 2017
Cost recovery model
A: Pre-market regulatory activities for therapeutic goods
1. Prescription medicines
Medicines are grouped into schedules according to the appropriate level of regulatory control over their availability to consumers.
Higher risk medicines, such as prescription medicines, must be registered on the ARTG before they are made available for supply in Australia.
Prescription medicines are available from a pharmacist, supplied with a doctor's prescription. Otherwise, only authorised health care professionals can supply prescription medicines, such as in a hospital setting. Examples include vaccines, blood pressure tablets, diabetes medications, contraceptive pills, antibiotics and strong painkillers.
There are some legal exemptions to the requirement for a prescription medicine to be registered on the ARTG before they are supplied in Australia. These are implemented through:
- the Special Access Scheme (SAS);
- the authorised prescriber scheme; and
- the clinical trials systems (CTX and CTN).
The business area responsible for administering these exemptions ensures that they are administered in accordance with the legislative and regulatory frameworks.
To enable recovery of the costs of pre- and post-market regulatory activities there are a number of fees and charges for medicines. These include annual charges, application fees and evaluation fees.
Regulatory decisions are made within a framework of guidelines. The guidelines must maintain currency with scientific and technical developments.
International regulators, or regulator groups such as the International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use, may publish guidelines that are reviewed and may be adopted by the TGA.
Registration on the ARTG
Before being placed on the ARTG, prescription medicines are assessed for quality, safety and efficacy. This utilises the following process.
All applications for registration of prescription medicines must be preceded by a pre-planning submission form (PPF). The TGA assesses all PPFs to ensure that application dossiers for registration on the ARTG contain all the appropriate and required information. The information provided in the PPF allows resources to be effectively assigned to the evaluation process. If the PPF is insufficient for planning purposes or indicates that mandatory requirements have not been met, the TGA may deem the PPF to be 'not effective' and the application will not proceed to the dossier submission stage. The submission of the PPF improves the quality of applications and helps in meeting legislative timeframes.
The data submitted with an application is divided into three types.
- Quality data evaluated by chemists, biochemists, microbiologists and other TGA officers includes:
- the composition of the drug substance and the drug product
- batch consistency
- stability data
- sterility data (if applicable)
- the impurity content
- non-clinical data evaluated by toxicologists
- pharmacology data
- Toxicology data
- Clinical data evaluated by a medical doctor (mostly results of clinical trials).
Before making a decision around the suitability of a prescription medicine for registration on the ARTG, the delegate may take into consideration independent expert advice provided by the Advisory Committee on Prescription Medicines.
Regulatory decisions in relation to new chemical entities or fixed dose combination products are published through the Australian Public Assessment Report (AusPAR).
Any person whose interests are affected by the decision may seek a reconsideration of the decision under section 60 of the Act.
Applications to change details of registration
Once a product has been registered, the sponsor can make further applications to change the details of registration. Some examples of the types of change that might be applied for include:
- a change in manufacturer;
- an increase in shelf-life;
- a change in patient population (e.g. allowing children to use the medicine); and
- changing the intended use (usually adding an extra medical condition that can be treated).
Changes may or may not require evaluation of data by the TGA and the prescribed fees apply accordingly.
Medicines for export from Australia must be of a similar quality and safety standard as those supplied domestically. However, they are not required to comply with the labelling standards or advertising standards in force in Australia. Export only products are required to be listed (not registered) on the ARTG before export.
2. Over the counter medicines
Over the counter (OTC) medicines are defined in the Therapeutic Goods Regulations 1990 (the Regulations). OTC medicines can be supplied as pharmacy medicines, pharmacist-only medicines and general sales medicines. Registered OTC medicines are considered to be of lower risk than prescription medicines, but they require an appropriate level of scrutiny.
OTC medicines can be purchased for self-treatment from pharmacies, with selected products also available in supermarkets, health food stores and other retailers. Examples include cough and cold remedies, anti-fungal treatments, sunscreens, non-prescription analgesics such as aspirin and paracetamol.
OTC medicines can be registered or listed on the ARTG depending on the level of risk associated with making the product available and accessible to consumers.
Registering an OTC medicine on the ARTG
Registered OTC medicines are considered to be of relatively higher risk than listed OTC medicines, based on their substances or the indications made for the medicine. Registered medicines are evaluated for quality, safety and efficacy prior to being accepted on the ARTG and able to be marketed.
The pre-market regulatory processes for OTC medicines include:
- lodgement of an application for product registration or listing on the ARTG;
- administrative and technical screening;
- scientific evaluation;
- label assessment;
- ensuring appropriate GMP is in place;
- requesting advice from the Advisory Committee on non-prescription medicines;
- advising the sponsor of the outcome of the application process; and
- updating the ARTG.
Once a product has been registered, the sponsor can make further applications to change the details of registration. Examples of changes that may be sought include details related to labels, shelf-life, formulation, indications or directions for use.
Listing an OTC medicine on the ARTG
The listing process for an OTC medicine is the same as listing a complementary medicine which is explained in the complementary medicines section of the CRIS.
Brand equivalence statement for registered OTC medicines
TGA receives requests from sponsors for brand equivalence statements for the purpose of PBS listing either as part of an application to register an OTC medicine or after a medicine has been registered on the ARTG.
Applications to register an OTC medicine infrequently include requests for a brand equivalence statement. As TGA provides advice for the purpose of PBS listing at the time of approval for registration a separate fee is not charged for this service.
Requests that are received after a medicine has been registered on the ARTG may or may not require evaluation of clinical data, typically bioequivalence data. Post-registration requests for brand equivalence statements that do not require supporting clinical data are charged a lower fee than the fee charged for a request that requires supporting clinical data or a justification for not providing such data.
3. Complementary medicines
Medicinal products containing such ingredients as herbs, vitamins, minerals, nutritional supplements, homoeopathic and certain aromatherapy preparations are referred to as 'complementary medicines' and are regulated as medicines under the Act. Complementary medicines may be either listed or registered, depending on their ingredients and claims made for the medicine. Most complementary medicines are listed on the ARTG.
Listing a complementary medicine on the ARTG
Listed medicines are low risk medicines that are listed on the ARTG via a streamlined electronic listing facility. This process for listing products allows for early market access for low risk complementary medicines. At the time of submitting a listed medicine application, the sponsor must certify that the goods that are the subject of the application meet all of the regulatory requirements.
Unlike registered medicines, there is no evaluation prior to the medicine being listed on the ARTG. The TGA therefore uses a variety of other mechanisms to assure the safety and quality of complementary medicines, such as:
- they may only contain substances that have been previously evaluated and approved as being of low risk;
- they can only make indications (for therapeutic use) for health maintenance and health enhancement or certain indications for non-serious, self-limiting conditions;
- a proportion of listed complementary medicines are reviewed following their listing for compliance with the regulatory requirements; and
- additional substances or ingredients to be used in listed medicines may be evaluated and approved by the TGA on application from the industry. On average, there are 12 such applications received each year.
Registering a complementary medicine on the ARTG
Registered complementary medicines are considered to be of relatively higher risk than listed complementary medicines, based on their substances or the indications made for the medicine. Registered complementary medicines, like any other registered medicine, are fully evaluated for quality, safety and efficacy prior to being accepted on the ARTG and able to be marketed.
4. Medical devices
The Australian medical devices regulatory framework sets out the requirements for the quality, safety and performance of medical devices, based on a series of Essential Principles, rather than a prescriptive framework. All medical devices must demonstrate compliance with the Essential Principles. The extent of evidence required to demonstrate compliance with these principles is based on the risk classification of the device, with higher risk devices undergoing greater assessment prior to being allowed into the Australian market.
In order to recover costs of pre- and post-market regulatory activities, there are a number of fees and charges for medical devices. These include annual charges, application fees, conformity assessment fees and application audit fees.
Applications to include medical devices on the ARTG
Under the Act, medical devices must be included on the ARTG prior to supply in Australia unless exempt from that requirement, such as exemption from complying with the standards under section 14 of the Act. The level of assessment conducted at the point of application for ARTG inclusion depends on the risk classification of the device, the conformity assessment evidence supporting the application, and whether there are any concerns with the application that would require the TGA to request further information for review prior to inclusion.
High-risk medical devices must have an ARTG entry for each unique device. Lower risk devices can have multiple similar devices included under one ARTG entry (a 'kind of medical device'). As the application fee is payable per ARTG entry and the value of the fee is higher for higher risk medical devices, higher risk medical devices are associated with higher overall costs.
Approval for each medical device is exclusive to the sponsor applying for inclusion, so approval for one sponsor cannot be used by other sponsors, even where the medical device is identical.
While all medical devices must comply with minimum requirements for quality, safety and performance, devices other than the lowest risk must be accompanied by conformity assessment certification following an assessment of a manufacturer's quality management system and assessment of design dossiers where applicable.
In addition to the conformity assessment certification accompanying an application for ARTG inclusion, the application process also involves a review of other information supplied with the application such as the labelling and instructions for use for the device.
Some applications for inclusion of medical devices on the ARTG will undergo an application audit.
- Applications to include certain medical devices in the ARTG must be selected for an application audit-for these mandatory audits an application audit assessment fee is charged.
- The TGA may also select any other application for inclusion for an application audit - an audit assessment fee is not charged for these audits.
There are two levels of application audit-Level 1 and Level 2 for non-IVD medical devices and one level of application audit for IVD medical devices. If an application audit is to be conducted the TGA determines what level of application audit is appropriate for each application. There are different fees for each level of application audit, which apply if the audit is mandatory.
A conformity assessment is a systematic and ongoing examination of evidence and procedures to ensure that manufacturers of medical devices have systems and processes that provide assurance that the device conforms to the Essential Principles for quality, safety and performance.
A manufacturer must implement and maintain a post-market monitoring system for devices after supply, with reportable events reported as specified in the Regulations. A manufacturer's quality system certification may be subject to periodic surveillance audits.
For the majority of medical devices and IVDs the TGA is able to accept the assessment of conformity assessment bodies that are considered to have the appropriate authority and expertise. As the Australian and the European Union (EU) regulatory requirements are similar, certificates issued by EU conformity assessment bodies (also known as Notified Bodies) may be accepted as conformity assessment evidence for the supply of devices in Australia.
For certain higher risk medical devices and IVDs, manufacturers must obtain Conformity Assessment Certificates from the TGA for supply to the market in Australia, regardless of whether they have a certificate issued by an EU notified body. In conducting assessments for these products, the assessment will take into account any existing EU conformity assessment evidence. This requirement for TGA conformity assessment applies to medical devices containing medicinal substances or materials of animal, microbial, recombinant or human origin and Class 4 IVDs. Manufacturers may also choose to seek conformity assessment certification from TGA to support supply of their medical devices in Australia, rather than relying on certification from an EU notified body.
5. Other therapeutic goods listed and registered on the ARTG
A large majority of medical devices listed and registered on the ARTG prior to 2002 (previously called therapeutic devices) have now been transitioned to the new regulatory framework and are now largely regulated as included devices under Chapter 4 of the Act. The full transition period for in-vitro diagnostic (IVD) medical devices ended on 30 June 2017. There is a small number of therapeutic devices which are not captured under the new Chapter 4 arrangements. These are largely disinfectants, tampons and menstrual cups.
Biologicals include human tissue and cell therapy products. Tissue therapy products involve the use of tissues as therapeutic goods, while cell therapy products involve the use of isolated living cells either as therapeutic goods or as replacements for cells that are defective or deficient in particular disorders.
Some examples of tissue therapies currently being used are:
- skin replacement after severe burns;
- transplantation of heart, kidney, liver, lung or pancreas;
- bone, tendons and ligaments to repair injuries;
- heart valves to replace defective heart valves; and
- corneas to restore eyesight.
Some examples of cell therapies currently being used, or currently under development are:
- chondrocytes used for cartilage regeneration;
- isolated pancreatic islet cells for the treatment of diabetes; and
- mesenchymal progenitor cells for the treatment of musculoskeletal defects and in a range of other clinical applications such as cardiovascular repair.
Inclusion on the ARTG
The regulatory activities for biologicals involve the following registration and approval activities:
- management of applications for inclusion in the ARTG;
- sponsors of Class 1 biologicals are required to attest compliance with relevant mandatory standards;
- Class 2, 3 and 4 biologicals undergo pre-market evaluation prior to ARTG inclusion;
- highly manipulated Class 3 and 4 biologicals are subject to the highest levels of pre-market evaluation; and
- manufacturers of Class 2, 3 and 4 biologicals are required to demonstrate compliance with manufacturing principles equivalent to the Australian Code of Good Manufacturing for human blood and blood components, human tissues and human cellular therapy products (2013).
7. Blood and blood components
Blood, blood components and plasma derivatives are regulated under the Act. Under the Act 'blood' means whole blood extracted from human donors and 'blood components' means therapeutic components that have been manufactured from blood (including red cells, white cells, progenitor cells, platelets and plasma). 'Blood components' do not include products derived through fractionation of plasma. Plasma derivatives are prescription medicines subject to full regulation, including compliance with set standards, licensing of manufacture and inclusion in the ARTG after review of manufacturing, pre-clinical and clinical data.
Some blood and blood components are exempt from regulation by TGA, including those:
- collected by a medical practitioner in the course of medical treatment and for the purposes of diagnosis or testing for a medical condition;
- manufactured by a medical practitioner for therapeutic application to a particular patient under the practitioner's care; and
- manufactured by a blood collection centre for a medical practitioner for therapeutic application to a particular patient under the practitioner's care.
B: Compliance, monitoring and enforcement
The TGA's Regulatory Compliance Framework outlines how the TGA manages its compliance function under its legislation and sets out the overall approach to compliance. This also outlines the TGA's general approach to ensuring uniform and proportionate responses where non-compliance with regulatory requirements is identified.
The TGA actively monitors the quality, safety and performance of therapeutic goods when they become available to consumers to promote the on-going compliance of the products with TGA's regulatory requirements and has an ongoing program of verifying the suitability of manufacturers to produce therapeutic goods for supply in Australia. The TGA also actively monitors unlawfully supplied products and takes appropriate regulatory action where these are identified.
Risk-based approach to regulation
Australians have a right to expect that each of the medicines they take and the medical devices they use meet acceptable levels of safety and quality.
One of the roles of the TGA is to regulate therapeutic products based on a scientific and clinical assessment of the evidence of both the risks and the benefits of those products. It is important to recognise that in doing so, the TGA cannot avoid all risks - that would be impossible - our approach is about managing risks, so that the impact of any risks identified in relation to a therapeutic product are kept to an acceptable level.
The TGA uses this same risk-based approach in its monitoring and compliance activities. There are several different sources of risks that can arise in relation to therapeutic goods - they can be product risks (risks that are inherent to the product), compliance risks (risks occurring from products failing to meet requirements), and unlawful products (risks of unauthorised products).
Approach to monitoring
The TGA employs a combination of monitoring strategies to support its compliance program. Underpinning all forms of monitoring is the legislated requirement for sponsors to monitor the performance of their products in the marketplace and, where higher risk products or serious health issues are involved, to report problems to the TGA in a timely manner.
The TGA uses its strategies to monitor the market for signals of potential non-compliance across the range of regulatory areas covered by the Act. The TGA employs a uniform risk-based approach to determining the significance of any signals detected and the appropriate regulatory response.
Approach to compliance
The TGA uses a staged risk-management approach to compliance that attempts to identify entities at risk of unintentional or deliberate non-compliance and enable the development of appropriate strategies to prevent non-compliance.
The TGA can communicate its regulatory requirements and compliance expectations quickly and directly to a market-entry applicant and can deny market access to applicants who cannot demonstrate compliance with these requirements. Providing regulatory education to applicants at or before this point can help to minimise non-compliance once a product is marketed.
It is the TGA's policy to publish information about regulatory compliance decisions and actions on its website.
The TGA uses a range of tools when taking action on a compliance matter, including:
The majority of stakeholders comply with regulatory requirements. Through interaction with the TGA it is possible to foster understanding of the compliance framework within which they operate and thus facilitate compliance.
There may be a need for the TGA to act in the interests of consumers to restrict or revise an indication for use of a therapeutic good. Sometimes this may be based on information from other jurisdictions.
The identification of more serious contraventions of the TGA Act and/or Regulations may require therapeutic goods to be suspended from the ARTG or sanctions, such as enforceable undertakings, to be applied.
Some products may be seized and/or cancelled from the ARTG in the event of deliberate non-compliance or discovery of non-compliant systems or activity associated with the therapeutic good. The discovery of activities with criminal intent in relation to therapeutic goods - e.g. counterfeit medicines - is dealt with under provisions of the Act and Regulations, not necessarily only through the imposition of civil penalties but also, on occasion, through criminal prosecution.
Prioritisation of compliance and enforcement matters
The TGA's monitoring programs receive signals of possible non-compliance with regulatory requirements from many sources. All signals, including complaints about a therapeutic good, are recorded and considered, but the TGA cannot investigate all complaints received. Once again, a risk-based approach is taken to prioritise complaints and other signals of possible non-compliance with regulatory requirements, in order to provide the greatest overall benefit for the Australian public. The actions taken in response to signals of potential non-compliance will depend on the likely risk associated with the non-compliance.
The following criteria are indicative of the factors guiding the prioritisation of monitoring and compliance actions:
- issues that may have adverse health consequences for consumers as a result of public access to inappropriate or dangerous goods; and
- issues that may affect the TGA's reputation among key stakeholders leading to a loss of confidence in the regulatory processes and subsequently loss of confidence in available therapeutic goods.
In cases where the TGA decides not to engage in regulatory action in relation to non-compliance, we may:
- provide information to the party to help deal with the issue and gain a better understanding of the Act;
- postpone or cease investigations, where insufficient information is available, with a view to a later investigation once more information is available;
- draw the possibilities of contraventions of legislation to the attention of the party and provide information to encourage rectification and future compliance;
- place relevant parties on notice about TGA's concerns and the possibility of future actions and investigation should non-compliance continue; and
- deal with a matter informally, where parties have attempted to correct possible contraventions and provide information to prevent recurrence.
The TGA is less likely to pursue matters that are one-off events, unless non-compliance is a deliberate and a blatant breach of the law and/or there are public health consequences.
Where appropriate, the TGA works with other agencies in performing its monitoring and compliance functions. This may involve an exchange of information, or more direct engagement in joint investigatory activities.
TGA reviews advertisements for therapeutic goods, where permitted, to ensure compliance with the conditions of inclusion on the ARTG that are detailed in the Regulations and the Therapeutic Goods Advertising Code (TGAC). These advertisements may be in, but are not limited to, broadcast and mainstream print media, billboards, cinema films or the internet.
Where a complaint about a product advertisement is received, the TGA will assess the validity of the complaint and, if necessary, ensure that rectifying action is undertaken.
In its review of advertising, the TGA works with the following stakeholders:
- therapeutic goods industry;
- health practitioners;
- advertising industry;
- Australian Competition & Consumer Commission;
- Medsafe (NZ therapeutic goods regulator);
- Therapeutic Goods Advertising Code Council; and
- Complaints Resolution Panel.
The Complaints Resolution Panel considers complaints about advertisements for medical devices and other therapeutic goods appearing in broadcast and mainstream print media, billboards, cinema films, the internet etc. As advertisements do not require pre-approval, the majority of activity in this area is related to assessing the validity of complaints about current advertisements that are claimed as not meeting the requirements.
The TGA does not charge for lodging a complaint with the Complaints Resolution Panel. To do so would be contrary to the intent of allowing all complaints about advertising to be appropriately examined. The costs of validating complaints are recovered via annual charges which are linked to the maintenance of the sponsor's ARTG entry, spreading the cost of the function evenly across all products.
C: Regulation of manufacturers of therapeutic goods
Good manufacturing practices
In Australia, manufacturers of therapeutic goods are required to hold a licence, except for manufacturers of certain medical devices who have European conformity certification (CE Mark). To obtain the licence, a manufacturer must demonstrate that they have the ability to comply with good manufacturing principles (GMP), which include relevant Codes of GMP and Quality Systems, and have appropriate facilities to manufacture safely. Overseas manufacturers of therapeutic goods supplied to Australia must provide evidence of compliance with equivalent GMP standards or otherwise undergo on-site inspections in the same manner as manufacturers based in Australia.
GMP is a generally accepted term internationally to describe a set of principles and procedures that, when followed by manufacturers of medicines and biologicals, helps to ensure that the products manufactured will possess the required quality.
The GMP related regulatory activities undertaken are as follows:
The TGA usually undertakes on-site inspections of Australian manufacturers prior to the issue of a licence to ensure that the manufacturer can comply with the manufacturing principles set under the Act and has suitable premises to undertake the proposed manufacturing steps. The extent of the inspection depends on the size and complexity of the manufacturing processes.
The TGA participates in international harmonisation activities to ensure that GMP requirements applied in Australia are best practice.
To obtain a licence for the manufacture, manufacturers of blood components are required to demonstrate compliance with manufacturing principles equivalent to the Australian Code of Good Manufacturing for human blood and blood components, human tissues and human cellular therapy products (2013) and to submit a technical master file which demonstrates compliance to relevant standards.
The TGA has an on-going program of verifying the suitability of manufacturers to produce therapeutic goods for supply in Australia. The TGA undertakes periodic planned and unplanned inspections of manufacturers to assess the level of compliance with the applicable manufacturing standards, both domestically and overseas. The level and frequency of inspections for a particular manufacturer is influenced by its size and complexity but also by its compliance history. In particular, manufacturers with a history of lower levels of compliance are subject to a higher frequency of on-site inspections, compared with more compliant manufacturers, to help ensure that therapeutic goods supplied in Australia are of appropriate quality and to allow TGA to take appropriate regulatory action where safety concerns are identified.
D: Access to unapproved products
Patient access to unproved therapeutic goods
There are circumstances where patients may require access to certain medicines or medical devices that have not been approved for supply in Australia. Under the legislation access to unapproved goods is available to patients under two schemes as follows:
Special Access Scheme (SAS)
The Special Access Scheme (SAS) refers to arrangements which provide for the import and/or supply of an unapproved therapeutic good for a single patient, on a case by case basis. Patients are grouped into two categories under the scheme:
- Category A patients are defined as 'persons who are seriously ill with a condition from which death is reasonably likely to occur within a matter of months, or from which premature death is reasonably likely to occur in the absence of early treatment'.
- Category B patients are all other patients that do not fit the Category A definition.
Authorised prescribers (AP)
In these circumstances a medical practitioner may be granted authority to become an authorised prescriber (AP) of a specified unapproved therapeutic good (or class of unapproved therapeutic goods) to specific patients (or classes of recipients) with a particular medical condition.
The TGA assess applications to grant medical practitioners authority to prescribe a specified unapproved therapeutic good or class of unapproved therapeutic goods to specified recipients or classes of recipients with a particular medical condition. The medical practitioner becomes an 'Authorised Prescriber' and can prescribe that product for that condition to individual patients in their immediate care without further TGA approval.
Further information on the cost recovery of the two schemes is included in the 'Fee-free regulatory activities' section.
The TGA reviews the use of unapproved medicines and medical devices to be made available to patients participating in a clinical trial. There are two schemes under which clinical trials involving medical devices may be conducted:
- Clinical Trial Notification (CTN) Scheme-this involves a notification only with a nominal notification fee (no approval or decision is made by the TGA).
- Clinical Trial Exemption (CTX) Scheme-this process comprises an assessment of summary data and usage guidelines for a proposed clinical development program, and if approval is granted the subsequent trials must be carried out under the terms of the approval and be notified to the TGA.