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Cost recovery impact statement: Prescription medicines, 1 July 2014 - 30 June 2015

Version 1.0, June 2014

26 June 2014

Book pagination

2. Cost recovery model

2.1. Outputs and business processes of the activity

Australia has a two-tiered system for the regulation of medicines, higher risk medicines, such as prescription medicines, must be registered on the ARTG before they are made available for sale 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 pain killers.

There are some legal exemptions to the requirement for a prescription medicine to be registered on the ARTG. These are implemented through:

  • The Special Access Scheme (SAS)
  • The clinical trials systems (CTX and CTN)

2.2. Registration on the ARTG

Before being registered on the ARTG prescription medicines are assessed for quality, safety and efficacy.

2.2.1. Applications

All applications for registration of prescription medicines must be preceded by a pre-planning submission form (PPF). 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 the TGA to effectively assign resources for 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.

2.2.2. Data evaluation

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
  • Nonclinical data evaluated by toxicologists:
    • Pharmacology data
    • Toxicology data
  • Clinical data evaluated by a medical doctor:
    • Mostly results of clinical trials

2.2.3. 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:

  • A change in manufacturer
  • An increase in shelf life
  • A change in patient population (e.g. allowing children to use the medicine)
  • Changing the intended use (usually adding an extra medical condition that can be treated)

2.2.4. Decision making

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.

2.2.5. Risk management

TGA works with consumers, health professionals, industry, and its international counterparts in order to effectively regulate therapeutic products, many of which are increasingly complex as a result of rapid scientific developments.

The TGA applies a risk management approach 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).

2.3. Regulatory framework

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 International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use (ICH), may publish guidelines that are reviewed and may be adopted by the TGA.

2.4. Export

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.

2.5. Special Access Scheme

In the circumstances where patients need access to therapeutic goods that are not on the ARTG, access to the therapeutic good may be arranged through the Special Access Scheme (SAS).

TGA reviews each access under the SAS on a case by case basis.

2.6. Clinical trials

TGA reviews the use of unapproved medicines to be made available to patients participating in a clinical trial.

2.7. Compliance monitoring and enforcement

Post-market activities undertaken in relation to prescription medicines include:

  • Providing access to a comprehensive source of up to date consumer medicine information and product information
  • Review Periodic Safety Update Reports to ensure the ongoing suitability of products for registration on the ARTG
  • Monitoring risk management plans that detail how safety concerns will be identified and mitigated post-registration
  • Ensuring that regular post-market reports are received from sponsors
  • Monitoring any international concerns about a product’s safety or efficacy
  • Laboratory testing program on selected medicines
  • Publishing a Medicines Safety Update in each edition of the Australian Prescriber
  • Managing the problem reporting system for:
    • Medicine deficiency or defect
    • Adverse reaction to a medicine
  • Undertaking random and targeted sampling of approved products
  • Undertaking appropriate regulatory action for identified problems. Actions include:
    • informing health care professionals and consumers about the risks of using the product
    • re-assessing the benefit-risk profile
    • requiring product labelling changes
    • requiring design or manufacturing change
    • requesting post-marketing studies
    • restricting access
    • recalling products
    • removing the product from the ARTG

2.8. Reform of business processes

The TGA has continued to work on a series of reforms to improve understanding of regulatory processes by its stakeholders; significantly enhance post market and surveillance capability and enhance public trust in the safety and quality of therapeutic goods. For the prescription medicines sector these reforms aim to:

  • Upgrade the content of the Australian Regulatory Guidelines for Prescription Medicines (ARGPM) to improve the usability, accuracy and consistency of business processes and requirements to external user groups of prescription medicines
  • Provide more information on the regulatory framework so that stakeholders understand regulatory processes and requirements
  • Revise labelling and packaging requirements to improve consumer safety and quality use of medicines
  • Align ingredient names used in Australia to international standards
  • Improve the management of adverse event reporting in support of consumer safety
  • Promote the distribution of therapeutic goods safety information so that consumers are alert to warning signals
  • Align recall procedures including communication of alerts to the public and health professionals
  • Ongoing review of registration processes to provide for predictable timeframes for applicants and the efficient use of resources
  • Enhance the receipt, processing, review and lifecycle management of applications, minimise paper use during the exchange of information between applicants and agency and facilitate business processes through the adoption of the electronic Common Technical Document (eCTD) - a set of rules and requirements for the structured submission of electronic files developed under the auspices of International Conference on Harmonisation (ICH)
  • Provide guidance on how to organize application information for electronic submission to the Agency using the eCTD specifications and harmonise the organization and formatting of electronic submissions for various application types
  • Support the evaluation process through the adoption of international guidelines concerning data requirements
  • Assess and report on the feasibility of an online tracking system for submissions or applications
  • Streamlining processes for minor variations to the entry of the medicine on the ARTG. The minor variations that are being considered include:
    • corrections to the entry
    • safety-related variations
    • 'self-assessable' variations
    • Category 3 quality-related changes

2.9. Activity level assumptions

2.9.1. Registering on the ARTG

The TGA estimates demand for its services based on prior years' volumes which are adjusted for forecast changes in the industry operations and changes in the regulatory framework and/or service delivery models.

2.9.2. Compliance monitoring and enforcement

Estimates for the number of products on the register incorporate expected cancellations and new additions.

A sponsor can seek exemption from the liability to pay an annual charge for an entry on the ARTG if the therapeutic good qualifies for low value turnover (LVT), which is a turnover of not more than 15 times the applicable annual charge for that therapeutic good.

Table 1: Estimated volumes for prescription medicines on the ARTG
2013-14 2014-15
Prescription medicines - biologics 992 998
Prescription medicines - non-biologics 13,110 14,556

2.10. Design of cost recovery charges

TGA recovers the cost of its regulatory activities through fees and charges for services provided to product manufacturers and sponsors.

2.10.1. Fees

Fees are used to recover the cost of the premarket services performed. For registered prescription medicines, the fee structure is based on an application and evaluation fee. Fees are scaled to account for the effort undertaken with the highest fees applicable for evaluating a new chemical entity.

Fees are also charged when a sponsor requires a change to the information contained in the ARTG.

2.10.2. Charges

Annual charges are payable for prescription medicines that are registered on the ARTG.

Annual charges are used to recover cost of activities, usually post market, where:

  • they cannot reasonably be assigned to individual sponsors
  • they maintain the integrity of the regulated industry to the benefit of all sponsors
  • assigning costs to individual sponsors would deter sponsors from disclosing important public health information, such as reporting adverse events

2.10.3. Reform program

The implementation of the reform program is scheduled to continue through to mid 2015-16. As changes in regulatory activities are implemented, fees and charges will be adjusted to ensure that they continue to accurately reflect the costs of underlying activities.

2.10.4. Indexation

For the 2014-15 financial year, fees and charges were indexed by 2.4% which is a 50:50 composite of the Australian Bureau of Statistics Consumer Price Index and the Wage Price Index.

2.11. Fees and charges

Fees and charges for the prescription medicine sector for 2014-15 are outlined below. Fees and charges that applied for the sector for 2013-14 are at Attachment A.

Registration fees
Registration fees 2014-15
Application Fee
$
2014-15
Evaluation Fee
$
New Chemical Entity 44,200 177,200
New Chemical Entity of a medicine used as an ancillary medical component of a device (item 4(aa)(i) and 4(aa)(ii)) 14,700 59,100
New Chemical Entity of a medicine used as an ancillary medical component of a device (item 4(aa)(iii)) 29,500 118,000
Extension of indications 26,300 105,300
Extension of indicators of a medicine used as an ancillary medical component of a device - chemistry, quality control and manufacturing or pre-clinical studies 8,775 35,100
Extension of indicators of a medicine used as an ancillary medical component of a device - documentation mentioned in subparagraphs (i) and (ii) 17,600 70,100
Major variations 17,200 68,500
Major variation of a medicine used as an ancillary medical component of a device - chemistry, quality control and manufacturing or pre-clinical studies 5,725 22,700
Major variation of a medicine used as an ancillary medical component of a device - documentation mentioned in subparagraphs (i) and (ii) 11,500 45,800
New generic product 17,000 67,600
Additional trade name 2,785 11,200
Minor variations (Change in formulation, composition, design specifications, type of container or change of trade name). 1,015 4,035
Variation fees
Variation fees 2014-15
Application Fee
$
2014-15
Evaluation Fee
$
Variations to a Register entry involving the evaluation of clinical, pre-clinical or bio-equivalence data, but not included in another fee category. Includes applications for changes to Product Information involving the evaluation of clinical, pre-clinical or bio-equivalence data. 1,015 4,035

Variations to a Register entry involving the evaluation of only chemistry, quality control or manufacturing data.

Includes applications for changes to Product Information involving the evaluation of only chemistry, quality control or manufacturing information.

5,050
Variations to a Register entry (requiring changes to Product Information) with no evaluation of data 'minor editorial changes' 1,555
Testing and provision of advice, requested from Pharmaceutical Benefits Program, prior to listing on Pharmaceutical Benefits Listing Program (*this item is inclusive of GST)

2,040

(2,244*)

Administrative fees
Administrative fees 2014-15 Fee
$
Correction of a Register entry 1,555
Annual charges
Annual charges 2014-15 Charge
$
Biological Medicines (Biologics) 6,585
Non-Biologics 3,955
Clinical trials
Clinical trials 2014-15 Fee
$
CTX 30 Days 1,595
CTX 50 Days 19,900
CTN 330
CTN - more than one trialing body 330

Book pagination