A cost recovery risk assessment for this activity was undertaken in May 2015 resulting in a medium risk rating.

The cost recovery risk rating of medium is based on assessment of the criteria on the Cost Recovery Risk Assessment (CRRA) template. The key medium to high risks for the cost recovery of this activity are that the amount to cost recover exceeds $20.0 million, the recovery is sourced through fees and levies, they involve an Act of Parliament and many stakeholders will be affected.

The most likely risks identified were:

• Cost recovery fees creating a disincentive to products entering the market
• Inherent risks in implementing diverse cost recovery arrangements; and
• Potential for misunderstanding of how fees and charges are calculated.

These risks are addressed by:

• Continued improvements in regulatory and administrative functions
• Implementing current best practice in activity based costing (ABC) methodology
• Working closely with stakeholders and industry representatives to mitigate the cost impact to business; and
• Ensuring charging practices are aligned to our services and are transparent and defensible.

From a regulatory perspective risk management is applied to regulating therapeutic goods by:

• Identifying, assessing, and evaluating the risks posed by therapeutic goods before they can be approved for use in Australia (pre-market assessment or evaluation)
• Identifying, assessing, and evaluating the risks posed by manufacturing processes before a manufacturer is issued with a licence to manufacture therapeutic goods (licensing of manufacturers); and
• Identifying, assessing, and evaluating the risks that may arise following approval of the product and licensing of the manufacturer (post-market surveillance).