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Cost recovery impact statement - Good manufacturing practice, 1 July 2013 - 30 June 2014

28 June 2013

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6. Periodic review

TGA recovers the full costs of its regulatory services from industry. Fees and charges were historically established through an Activity Based Costing (ABC) methodology and indexed to maintain currency.

Fees and charges for GMP assurance are established to reflect as closely as possible the costs of undertaking the individual activities.

In 2012, TGA commenced a review of its ABC model, including undertaking an effort collection exercise. Analysis of the effort data and the review of the impact of the fees and charges have indicated presence of an over-recovery and that a structural review of the fees and charges for the GMP sector is warranted.

In reviewing the underlying structures of the fees and charges, TGA will take into consideration any changes in business processes, such as a move to greater reliance on compliance verifications over on-site inspections; ensuring that the charging regimen is consistent with compliance with good manufacturing practices; and minimising administrative effort in managing inspections. A key objective will also be to tighten the nexus between activities for which fees are charged and the scheduled fee.

The review may result in the establishment of a new suite of fees and charges. Rather than implementing significant changes arising from the ABC review to the current fees and charges for 2013-14 and then implementing additional changes following the structural review, TGA has opted to combine the processes and update fees and charges once.

TGA aims to have the changes implemented for the 2015-16 financial year and these will be documented in a new CRIS.

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