Regulation impact statement: Amendments to the new regulatory framework for in vitro diagnostic medical devices (IVDs)

Version 1.0, October 2014 - OBPR Reference: 14631

17 October 2014

This Regulation Impact Statement (RIS) examines a number of issues that were identified during the initial stages of the transition period of the new regulatory framework for IVD medical devices (IVDs), and was prepared by the Therapeutic Goods Administration (TGA). The RIS assists Australian Government decision making in addressing the concerns raised in the consultation process particularly in relation to difficulties some members of the sector anticipated in achieving compliance with the new regulatory framework. The RIS concludes with an outline of proposed amendments to the new framework to reduce regulatory burden for the IVD sector.

Version history

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Original publication

Certified by Office of Best Practice Regulation (ref 14631)

Office of Devices Authorisation 17/10/2014

Introduction

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This Regulation Impact Statement (RIS) has been prepared by the Therapeutic Goods Administration (TGA). The purpose is to assist Australian Government decision making on how to address the problems that have been identified in relation to the Therapeutic Goods (Medical Devices) Regulations 2002 (the Regulations) of in vitro diagnostic medical devices (IVDs) under the new (since July 2010) regulatory framework, particularly in relation to difficulties some members of the sector anticipate in achieving compliance with the new requirements.

A number of proposals to address the identified issues are examined in this RIS including the previously unanticipated negative impact on consumers, laboratories, industry and bodies or individuals associated with the IVD sector if no action is taken to resolve the problems.

This RIS details the problems associated with the framework adopted in July 2010 and summarises the consultation process that has been undertaken with stakeholders to determine the best way forward. The RIS concludes with recommended proposals, including an outline of proposed amendments to the new framework for Government consideration.

Several minor typographical and editing errors in the Regulations were also identified during the consultation process. The TGA does not consider that these changes substantially alter the existing arrangements and no additional costs will be incurred by business or not-for-profit organisations with amendments to correct these in conjunction with the other proposed amendments.

Background

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IVD market in Australia

IVDs are pathology tests and related instrumentation used to carry out testing on human samples. IVDs are typically used in diagnostic pathology laboratories, other laboratories (blood and tissue screening laboratories), at point of care, and in some cases, in the home. The results of these tests (IVDs) are intended to assist in clinical diagnosis and management of patient treatment. It is estimated that the results obtained from pathology tests are responsible for 70% of all medical diagnoses and 100% of all cancer diagnosis and make a significant contribution to the management of disease1. The results obtained from IVDs also play an essential part in screening and prevention programs to improve overall public health.

For the purposes of regulation, IVDs fall into two categories: commercial IVDs and in-house (laboratory developed) IVDs. An in-house IVD is a test that has been developed in a laboratory for use within that laboratory (an IVD not commercially supplied for use outside that laboratory). Commercially supplied IVDs that have been modified by a laboratory are also considered to be an in-house IVD.

In 2003 the TGA commissioned a survey of the IVD market in Australia, for the purpose of preparing the initial RIS for the introduction of the new IVD regulatory framework2. The survey identified over 43,000 different types of commercial IVDs available for sale in the Australian market and found that:

  • more than 95% of the IVDs supplied to the Australian market are imported
  • locally manufactured IVDs accounted for less than 5% of IVDs supplied to the Australian market
  • the majority of Australian manufacturers rely on exports to recoup development costs (most local manufacturers are small business).

At the time of the survey the European Device Manufacturers’ Association estimated that the Australian market accounted for only 1.25% of global sales of commercial IVDs. This situation is unlikely to have changed substantially in the intervening period.

The number of commercial businesses engaged in supplying IVDs to pathology laboratories in Australia was estimated to be approximately 160. Further information provided by an industry peak body in 2009 estimated that the number of suppliers had reduced to less than 80 through consolidation of commercial businesses. Additionally, the majority of suppliers would be classified as small business with 43% indicating that they employed 10 or less people and had a turnover between $1m and $5m. Many of these businesses are distributors.

The TGA commissioned survey also identified at least 640 laboratories that were involved in pathology testing in Australia and of these 48% developed in-house IVDs. In contrast, a more recent survey (September 2013) undertaken by the TGA found that at least 86% of responding laboratories develop some form of in-house IVD. Respondents indicated that in-house IVDs were predominantly developed to address a particular need or where there was no suitable commercial alternative (e.g. specialised genetic tests for rare conditions, tests for uncommon zoonotic infections, or cadaveric donor screening).

The new regulatory framework for IVDs

The new framework for IVDs was introduced to ensure that IVDs undergo a level of regulatory scrutiny that is commensurate with the risks associated with their use. Under the framework, IVDs are regulated as medical devices and, unless exempt, all IVDs were required to comply with these requirements from 1 July 2014 (at the end of a four year transition period).

The framework has the following features:

  • a 4-tier classification schema (Class 1-4 IVD) based on different levels of risk for each class of device, with Class 4 being the highest risk classification (the 4-tier classification schema is described in Appendix 1)
  • a requirement that all commercial IVDs and Class 4 in-house IVDs (those IVDs developed or modified by providers for use in their own laboratories, also see definition of 'in-house IVD' provided in Appendix 2 - Acronyms and Glossary) for therapeutic use were to be included in the Australian Register of Therapeutic Goods (ARTG) from 1 July 2014
  • a requirement that all IVDs comply with a set of Essential Principles (EP)s for quality, safety and performance
  • conformity assessment (CA) procedures, based on risk classification, to be applied by manufacturers to demonstrate initial and on-going compliance with the EPs and
  • provisions for post-market monitoring, including compliance testing, adverse event reporting and recall procedures.

Regulation of IVDs prior to the introduction of the new regulatory framework

Prior to 1 July 2010, commercial IVDs were regulated as diagnostic goods for in vitro use under Parts 3-2 and 3-3 of the Act in conjunction with the Therapeutic Goods Regulations 1990. Tests for Human Immunodeficiency Virus (HIV) and Hepatitis C Virus (HCV) were required to be registered in the ARTG. Tests for home use (pregnancy tests and glucose monitoring kits), tests that include human origin material, blood collection tubes or diagnostic goods for in vitro use that were listed on the Pharmaceutical Benefits Scheme (PBS) were all required to be listed in the ARTG. All other IVDs, including all in-house IVDs3, were exempt from regulation.

All IVDs listed, registered, or currently exempt from entry in the ARTG under the pre-existing framework were considered to be transitioning products and did not require inclusion in the ARTG under the new framework until after 30 June 2014. However, any new commercial IVDs introduced to the Australian market after commencement of the transition period on 1 July 2010 have been required to be in the ARTG prior to supply.

2004 regulation impact statement

In 2003 the Australian Health Ministers’ Advisory Council (AHMAC) asked the TGA to address the level of regulatory oversight of in-house IVDs. From the earliest discussions on the development of a new regulatory framework for IVDs it was intended that in-house IVDs would be subject to the new requirements.

Public consultations on the regulation of IVDs were conducted and a RIS was prepared for the new regulatory framework in January 2004. The RIS considered several options for the regulation of in-house IVDs, including:

  • Options 1 and 2 - no regulation of in-house IVDs
  • Option 3 - regulating all in-house IVDs on the same basis as commercial IVDs
  • Option 4 - regulating high risk in-house IVDs (including tests for screening blood and tissues for transmissible infectious diseases) on the same basis as high risk commercial IVDs, and subjecting low risk in-house IVDs to an approved validation standard.

Option 4 was recommended in the 2004 RIS. AHMAC and the Australian Health Ministers’ Conference (AHMC) considered the RIS and agreed with the recommendation that Option 4 would sufficiently address the concerns of industry about inequities in regulation of both commercial and in-house IVDs.

What's in and what's out of the IVD framework?

Under the framework that came into effect on 1 July 2010 IVDs are regulated under Chapter 4 of the Therapeutic Goods Act 1989 (the Act) and the Regulations. The framework encompasses both commercially manufactured IVDs as well as in-house IVDs.

All IVDs, whether previously (prior to 1 July 2010) registered, listed or exempt (under the pre-existing framework) were to be regulated under the framework from 1 July 2014. This includes tests for serious infectious diseases, tests for screening blood, tissues and organs and cellular products for safety and compatibility, pregnancy tests, glucose monitors, and genetic tests (with the exception of those such as kinship testing that do not have a therapeutic purpose and therefore do not fall within the remit of the Act). Under the original provisions of the framework from 1 July 2014 all commercial IVDs and Class 4 in-house IVDs were required to be included in the ARTG.

However, IVDs used to determine predisposition or susceptibility to a disease, or a condition, are currently defined as ‘other therapeutic goods’. This means that these tests are not captured in the definition of a medical device and therefore are not regulated under the new framework and do not require inclusion in the ARTG.

International regulation of in-house IVDs

The new framework largely reflects the philosophies and recommendations of the Global Harmonization Task Force (GHTF) on medical devices, thereby ensuring that Australian regulatory practice is consistent with the directions of the global regulatory community.

That said, the GHTF guidelines do not specifically refer to the regulation of in-house IVDs, and at the present time the majority of other overseas regulators exclude these from the requirements of their regulatory frameworks.

To date, the US is the only other jurisdiction to substantively regulate in-house IVDs. While "laboratory developed tests" (the designation given to in-house IVDs) are currently exempt from review by the US Food and Drug Administration (FDA), they are nevertheless regulated under the provisions of the Clinical Laboratory Improvement Amendment 1988, that established quality standards for, and oversight of all laboratories conducting testing on human specimens for the diagnosis, prevention or treatment of disease. The FDA has also promulgated regulations covering Analyte Specific Reagents (ASRs), which are often used as the basis of laboratory developed IVDs.

On 26 September 2012 the European Commission (EC) released a proposal for new IVD Regulations that will replace the current In Vitro Diagnostic Medical Devices Directive (IVDD). The Regulations are to include requirements for in-house IVDs that ensure a higher level of safety and performance for high risk IVDs, irrespective of their place of manufacture. The EC proposal requires approval by the European Parliament and Council and is expected to be adopted in 2014-2015, with a five year transition period.


Footnotes

  1. Australian Association of Pathology Practices Inc, 2008. Viewed 17 March 2014. <http://pathologyaustralia.com.au/wp-content/uploads/2013/03/Pathology-in-Australia.pdf>
  2. Therapeutic Goods Administration, September 2009, Regulation of in vitro diagnostic devices – Cost Recovery Impact Statement, TGA, Canberra.
  3. An in-house IVD is a laboratory developed test. Full definition provided in Appendix 2.

The issues

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A number of issues were identified by the various members of the IVD sector (laboratories, industry and bodies or individuals associated with the IVD sector) during the first two years (July 2010 - July 2012) of the transition period for the new regulatory framework for IVDs.

Issue 1 - Timeframe for valid applications for inclusion in the ARTG

  • Under the original provisions of the new regulatory framework valid applications for inclusion of all commercial IVDs and Class 4 in-house IVDs in the ARTG were required to be lodged with the TGA by 30 June 2014. Any IVDs that did not meet this requirement could not be legally supplied in Australia after this date.
  • Manufacturers of IVDs (both commercial and in-house) were experiencing difficulties providing sufficient documentary evidence to demonstrate compliance with the new requirements resulting in a slower than expected rate of transition to the new framework.
  • Any applications for a TGA CA received late in the transition period may not have been assessed in time to meet the required 30 June 2014 deadline as the legislated timeframe for evaluation of an application for a TGA CA including a design examination is up to 255 TGA working days.
  • Additionally, many in-house IVDs ‘manufactured’ by laboratories are developed by modification of commercial IVDs. Laboratories cannot comply with the requirements until they can ascertain that the commercial IVD on which an in-house IVD is based has, or will be, included in the ARTG.

Issue 2 - Regulatory requirements for Class 4 IVDs and Australian manufactured Class 2 and 3 IVDs

  • Manufacturers of Class 4 IVDs (both commercial and in-house) and Australian manufacturers of Class 2 and 3 IVDs are experiencing difficulties complying with the new regulatory requirements and meeting the associated costs. Commercial industry and laboratories consider that the requirements unnecessarily duplicate work and the high regulatory costs are prohibitive, creating a disincentive to supply products and services in Australia, particularly Class 4 in-house IVDs for donor screening of organ and tissue.
  • Under the new IVD Regulations, any test used for donor screening is considered to be a Class 4 IVD. Laboratories that develop Class 4 in-house IVDs are subject to the same requirements as commercial Class 4 IVDs and will need to obtain TGA CA Certificates for their quality management systems (QMS) and separate certificates for each Class 4 in-house IVD. As part of the application for CA certification, a laboratory must be able to demonstrate that both the Class 4 in-house IVD and the processes used to manufacture it conform to the requirements of the therapeutic goods legislation.
  • Currently in Australia there is a lack of suitable commercial serology IVDs available that are intended for use in screening cadaveric samples from tissue donors for infectious diseases. To comply with the mandatory donor screening requirements laboratories have developed Class 4 in-house IVDs, by modifying an existing commercial IVD intended for screening live donors, for use on cadaveric samples. Where a suitable commercial alternative is unavailable laboratories have also modified commercial IVDs to perform supplemental donor screening, both live and cadaveric, for additional infectious diseases such as malaria. These are also considered to be Class 4 in-house IVDs. Laboratories modifying commercial IVDs are unable to comply with the requirements for Class 4 in-house IVDs as they have no control over the design and manufacturing processes for the commercial IVD and can only provide technical documentation to support the modification they have made.
  • In addition, certain de novo Class 4 in-house IVDs have been developed by laboratories where a suitable commercial IVD has been unavailable. These are typically low volume but nonetheless critical tests used in very specific circumstances (e.g., Class 4 in-house IVDs to detect very weak or uncommon antigens in blood that could potentially cause a significant transfusion reaction in the recipient). It is proving difficult for laboratories to provide the required technical documentation for these tests as the relative ‘rareness’ of the condition means that there is a lack of suitable specimens available to perform an extensive evaluation.
  • There are approximately 5 eye banks and 30 tissue banks in Australia representing a large proportion of the transplantation sector.4 In 2012 there were 3,843 tissue donors with an increased number of tissue and whole organ donations coming from deceased donors (5% of tissue donations came from deceased donors in 2012).5,6 In the transfusion sector, the Australian Red Cross Blood Service (ARCBS) supplied 801,295 units of donated red blood cells in 2011/2012.7 In addition, there is also an extensive network of cord blood banks in Australia, with the Sydney Cord Blood Bank alone having reportedly collected over 10,000 cord blood units for potential stem cell transplantation.8 Donor screening testing to support these types of facilities and services is provided by the ARCBS and at least 10 other Australian laboratories.
  • These laboratories have indicated that they will be unable to comply with the new regulatory requirements or meet the associated costs for their Class 4 in-house IVDs and as a result may cease to provide donor screening services. There is a threat to the continued supply of Australian blood and other biological products (e.g., donor organs, corneas, bone grafts, heart valve transplants, blood components) for transplantation and transfusion.
  • Tissue from Australian cadaveric donors will possibly be no longer available for transplantation in Australia generating a reliance on tissue products from overseas manufacturers. Under the current Regulations donor screening tests (IVDs) used by overseas manufacturers of tissue products are not required to meet the new IVD regulatory requirements whereas Australian tissue manufacturers must comply. This would disadvantage Australian tissue manufacturers and Australian recipients of donor tissue could be exposed to potentially less regulated overseas manufactured tissue products.
  • The Australian market represents a very small proportion of the global market for IVDs and approximately 95% of commercial IVDs supplied in Australia are manufactured overseas.9 Australian commercial manufacturers of Class 2 and 3 IVDs, the majority of which are small businesses, are required to obtain a TGA CA Certificate for their QMS regardless of whether they already hold CA certification from a European notified body. This imposes an additional regulatory burden and cost on Australian manufacturers who want to supply their products both overseas and within Australia. In comparison, overseas manufacturers of Class 2 and 3 IVDs do not require a TGA CA Certificate and sponsors can supply these products in Australia based on third party CA certification (e.g., from a European notified body).

Issue 3 - Performance evaluations for Class 4 IVDs

  • Prior to the commencement of the new IVD framework, IVDs for HIV and HCV testing required registration in the ARTG. The pre-2010 Regulations required practical laboratory performance testing of sample IVDs (for HIV and HCV) to be undertaken as part of the assessment of applications for registration to confirm that a product meets the manufacturer’s intended purpose and performance claims.
  • Under the new framework the TGA does not hold a legislative remit to reserve the right to undertake performance testing of Class 4 IVDs submitted for design examination CA certificates. Consequently performance testing results cannot be taken into consideration by the TGA when making a decision with respect to an application for design examination CA certificates.

Issue 4 - Amend the definition of a medical device to include predisposition and susceptibility tests

  • IVDs used to determine predisposition or susceptibility to a disease or condition are defined as 'other therapeutic goods' under Part 3-2 of the Act and not as a medical device under section 41BD of the Act. This means that, in the Act, these tests fall within the definition of therapeutic goods, but are not captured in the definition of a medical device as IVDs intended to diagnose susceptibility to disease.
  • Consequently, these IVDs, the majority of which are genetic tests, would continue to be regulated under the pre-existing framework and, the majority of these products would be exempt from the requirement to be entered in the ARTG and premarket scrutiny which is inconsistent with other IVDs (with a comparative level of risk).
  • The omission of these products from the definition of a medical device appears to have been a simple oversight as the inclusion of genetic testing was clearly articulated in the 2004 regulatory impact statement for the introduction of the new IVD regulatory framework.

Footnotes

  1. Organ and Tissue Authority, July 2011, Report on the options for more effective eye and tissue retrieval, processing and storage, Organ and Tissue Authority, Canberra.
  2. Organ and Tissue Authority, 2012, Tissue Report, Organ and Tissue Authority, Canberra.
  3. Organ and Tissue Authority, June 2013, Performance Update, Organ and Tissue Authority, Canberra.
  4. Australian Red Cross Blood Service, 2011-2012, Annual Report, Australian Red Cross Blood Service, Melbourne.
  5. Sydney Children's Hospital - Sydney Cord Blood Bank. 2013. Viewed 24 October 2013. <www.schn.health.nsw.gov.au>.
  6. Therapeutic Goods Administration, September 2009, Regulation of in vitro diagnostic devices – Cost Recovery Impact Statement, TGA, Canberra.

Objectives

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As noted above, the objective of the new regulatory framework for IVDs is to ensure that IVDs undergo a level of regulatory scrutiny that is commensurate with the risks associated with their use and that these products are regulated in a proper and appropriate manner that gives the public confidence in the quality, safety and performance of these IVDs.

However, the new framework was certainly not intended to give rise to a situation in which critical laboratory tests became unavailable (in Australia) because the regulatory requirements were too onerous for the IVD sector to be able to comply within the legislated timeframes. The new framework was also not intended to exclude IVDs used to diagnose predisposition or susceptibility to disease.

The objective of the proposals to amend the new regulatory framework for IVDs is therefore to:

  • reduce the regulatory burden on commercial and in-house manufacturers of IVDs and provide them with sufficient time to comply with the new regulatory requirements
  • reduce the regulatory burden on Australian IVD manufacturers and ensure they are no longer disadvantaged compared to their overseas counterparts
  • enable laboratories to comply with the new regulatory requirements while still maintaining an appropriate level of regulatory oversight of Class 4 in-house IVDs within a reasonable timeframe and without compromising the health and safety of Australians
  • ensure the continued availability of Australian manufactured human biological products for transfusion and transplantation (e.g., organ transplants, human blood, blood components, corneal transplants, heart valve transplant, bone products) and
  • correct unintended oversights such as the regulation of tests for predisposition and susceptibility to disease in a manner that reflects the level of risk the outcomes of these tests represent.

Consultation

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The proposed amendments to the IVD framework have been subject to extensive consultation with stakeholders, including:

  • initial consultations from 2012 to the first quarter of 2013 with key stakeholders
  • a first round of consultation on specific reform proposals that commenced on 3 May 2013 by publicly releasing a consultation paper, 'Proposed Amendments to the New Regulatory Framework for In Vitro Diagnostic Medical Devices (IVDs)' on the TGA website. The consultation period was initially four weeks (until the end of May 2013). This period was extended by another week until 7 June 2013 to provide more time for individuals and groups interested to make a submission. The consultation paper sought to address a number of outstanding issues that were identified during the transition period to the new regulatory framework and the initial consultations and
  • a second round of consultations that engaged the commercial IVD sector, testing laboratories and bodies or individuals associated with the IVD sector through one-on-one meetings, forums and conferences. These consultations provided further opportunities to consult with stakeholders and receive feedback on the proposed amendments. It was also an opportunity to discuss any outstanding issues that were not covered off in the first round consultations that may need to be included in the final RIS. These discussions were invaluable in informing the final proposals presented in this RIS.

As noted in the introduction, this process started well before any changes were made to the process provided in the June 2010 Best Practice Regulation Handbook and the commencement of The Australian Government Guide to Regulation. Consequently, the TGA did not submit the RIS for an early assessment however it considers that the release of a consultation paper and extensive face-to-face consultation with stakeholders means that the TGA has complied with the intent of the current RIS process. In particular the consultation paper:

  • included discussion of the problem, objectives and options - the minimum three elements of an options-stage RIS
  • included various options for reform including the option of no change however the regulatory burden was not quantified for each option and
  • was released on the basis that the responses to the proposals would assist the TGA in determining the changes required for laboratories, manufacturers and sponsors to comply with the new regulatory framework, and it did not represent the TGA’s final view on the issues raised.

Thirty-four submissions to the consultation paper were received by the TGA representing four main stakeholder groups: consumers (1); laboratories (16); industry (12); and peak bodies or individuals associated with the IVD sector (5).

Summary of Main Comments from Stakeholders on Proposed Amendments
Issue Summary of main comments
Issue 1 There was no opposition to the proposed extension of the transition timeframe. Laboratories and industry are experiencing difficulties meeting the new regulatory requirements.
Issue 2

The majority of stakeholders acknowledged and supported the need for change to the CA procedures.

Industry acknowledged the need for changes to the CA procedures for Class 4 in-house IVDs however were disappointed that the proposed amendments did not extend to the commercial sector and were concerned the changes would create an ‘uneven playing field’ (for a period of time).

Laboratories welcomed the proposed amendments but still had concerns regarding the regulation of IVDs required to deal with public health emergencies and the need for exemptions for special purposes and circumstances.

consumer group did not want to see any changes made to the CA procedures and were concerned that any changes would result in a reduction in the quality of the IVDs available on the Australian market.

Issue 3 The majority of stakeholders supported selective performance evaluation for certain Class 4 IVDs however commercial industry had reservations that this would result in an extra delay to market and only accepted the proposal on the understanding that the TGA would need to provide clear guidance on what Class 4 IVDs would be selected.
Issue 4 The majority of stakeholders supported the need to regulate tests for predisposition and susceptibility to disease due to the potential ramifications on patient health and treatment options. Some concerns were expressed that the regulation of these tests could result in the removal of some IVDs from the Australian market.

Further to this, the TGA also undertook two surveys to attempt to elicit information from both the commercial IVD sector and testing laboratories about the number and anticipated timing of transitioning IVDs and to identify any IVDs at risk of not being available in Australia at the end of the transition period.

The majority of stakeholders that participated in the consultation process recognised the outstanding issues for complying with the IVD framework, and were agreeable to amendments being progressed to support compliance with the new requirements for IVDs.

The preferred proposals developed in this RIS also took into consideration the response of IVD stakeholders to consultation papers proposing changes to premarket assessment requirements for medical devices that were released on 14 January 2013 (Changes to premarket assessment requirements for medical devices: Proposal paper) and 10 May 2013 (Changes to premarket assessment requirements for medical devices).

Proposals

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As a result of the broader consultation process a number of proposals to address the problems with the new regulatory framework for IVDs were developed for consideration. The proposals are outlined here.

Issue 1

A proposal to extend the timeframe for transition to the IVD framework was put forward in the consultation paper and received broad support from stakeholders throughout the consultation process. Although it is expected that an extension to the timeframe would have a beneficial impact on industry and health outcomes, the proposed regulatory change was not considered (by the Office of Best Practice Regulation) to be sufficiently significant to require further examination in this RIS. Therefore the proposal to extend the transition timeframe was addressed by the TGA through a separate process. Affected stakeholders were notified of the amendments to the Regulations, in relation to the new extended timeframes, when the amendments were registered.

Issue 2

For the consideration of the following proposals the TGA regards in-house IVDs as those that can be developed de novo (e.g., from first principles or a published source) or by modifying a commercial IVD (modification to a commercial IVD includes using an IVD for a purpose other than that intended by the manufacturer).

Proposal 2A: modified CA procedure for the regulation of Class 4 in-house IVDs, predicated on commercial IVDs.

Proposal 2A provides that a modified CA procedure would only be applied to certain Class 4 in-house IVDs predicated on registered commercial IVDs where the modification would not be considered to represent fundamental changes to the design of the IVD. Class 4 in-house IVDs that have undergone modifications affecting the components or design of the commercial IVD, or have been developed either from published sources or first principles (de novo) would be required to undergo a full CA process, similar to that currently in place and applicable to commercial Class 4 IVDs.

Laboratories using Class 4 in-house IVDs predicated on a registered commercial IVD would be required to:

  • maintain a Good Manufacturing Practice (GMP) licence or
  • National Association of Testing Authorities, Australia (NATA)accreditation as a medical testing laboratory demonstrating compliance with the international standard ISO 15189 (Medical laboratories – Particular requirements for quality and competence) and demonstrate compliance with the National Pathology Accreditation Advisory Council (NPAAC) standard Requirements for the Development and Use of in-house In Vitro Diagnostic Devices (IVDs).

Where these conditions were met, a CA would consist primarily of an evaluation by the TGA of the adequacy of the data validating the quality, safety and performance of the Class 4 in-house IVD in its modified state/setting and compliance with the EPs. Once approved, the Class 4 in-house IVD would be required to be included in the ARTG.

Laboratory manufactured de novo Class 4 in-house IVDs would still remain subject to the same CA procedures as commercial Class 4 IVDs. There would be no changes to the regulatory requirements for commercial Class 4 IVDs and Australian manufacturers of Class 2 and 3 IVDs.

Proposal 2B: modified CA procedure for the regulation of all Class 4 in-house IVDs.

A modified CA procedure would apply to all Class 4 in-house IVDs, including those developed de novo or modified from a registered commercial IVD.

The application of this modified CA procedure would be risk based, with the level of evaluation determined by the origin of the IVD (i.e. de novo versus modified commercial IVD). For an in-house IVD based on a registered commercial IVD the extent of the modification(s) would determine the level of evaluation required.

The laboratory would be required (as with proposal 2A) to maintain a GMP licence or NATA accreditation as a medical testing laboratory (and demonstrate compliance with the NPAAC standard). In addition to this the laboratory would need to provide validation data for the Class 4 in-house IVD to the TGA for evaluation of compliance with the EPs.

Where these conditions were met, CA would consist primarily of an evaluation by the TGA of the data validating the performance of the Class 4 in-house IVD. Inclusion in the ARTG would not be required however the TGA would maintain a database of the approved Class 4 in-house IVDs.

would be no changes to the regulatory requirements for commercial Class 4 IVDs and Australian manufacturers of Class 2 and 3 IVDs.

Proposal 2C: modified CA procedure for the regulation of all Class 4 IVDs and Australian commercial manufacturers of Class 2and 3 IVDs.

Proposal 2C has been developed following the consultation process and proposes a modified CA procedure that could be applied to:

  • Class 4 in-house IVDs (regardless of whether they have been developed de novo or from modification to a commercial IVD)
  • commercial Class 4 IVDs (both Australian and overseas manufacturers) and
  • Australian commercial manufacturers of Class 2 and 3 IVDs.

Commercial and laboratory manufacturers of IVDs applying for this procedure would be required to provide the TGA with an acceptable QMS CA certificate as evidence of a QMS. It would no longer be an absolute requirement to obtain TGA QMS CA Certificates prior to inclusion in the ARTG.

As with proposals 2A and 2B laboratories would be required to maintain a GMP licence or NATA accreditation as a medical testing laboratory (as evidence of an acceptable QMS for the manufacture of Class 4 in-house IVDs). Commercial manufacturers of Class 4 IVDs would be required to provide acceptable third party evidence of a QMS (i.e., QMS CA certification from a European notified body).

Where these conditions were met, the CA procedure for Class 4 IVDs would consist primarily of an evaluation by the TGA of the data validating the performance of the Class 4 IVD and evaluation of compliance with the EPs. The evaluation fee would be determined according to the level of evaluation and effort required by the TGA.

All Class 4 IVDs (both commercial and in-house) would require inclusion in the ARTG unless they qualified for an exemption. An exemption would allow IVDs to be supplied for special or experimental purposes in certain circumstances and would be subject to specific conditions.

Third party QMS CA Certification would be accepted for Australian commercial manufacturers of Class 2 and 3 IVDs as a basis for inclusion in the ARTG. However, certain Class 2 and Class 3 IVDs would be subject to an application audit consistent with the current regulatory requirements for overseas manufacturers of certain Class 2 and 3 IVDs.

For manufacturers who require or would prefer a TGA-issued conformity assessment certificate it is proposed that applications for conformity assessment and inclusion in the ARTG could be processed simultaneously to minimise the delay to market.

Proposal 2D: retain the current regulatory framework for Class 4 in-house IVDs (status quo).

No changes would be made to the new regulatory framework for IVDs. All Class 4 in-house IVDs would be subject to the same regulatory requirements as commercial Class 4 IVDs.

Issue 3

Proposal 3A: selective performance evaluation of Class 4 IVDs.

The Regulations would be amended to allow the TGA to reserve the right to undertake performance evaluation of any Class 4 IVD. Performance evaluation would not be undertaken routinely, but would be determined according to the level of risk represented by the type of IVD, the intended purpose, the performance claims made the manufacturer, and the technology used.

outcome of the performance evaluation could then be taken into account when making a decision on an application for a design examination CA certificate.

Proposal 3B: performance evaluation of all Class 4 IVDs.

The Regulations would be amended to allow the TGA to undertake performance evaluation of all Class 4 IVDs (irrespective of the level of risk). The outcome of the TGA performance evaluation would be taken into account when making a decision on an application for a design examination CA certificate.

Proposal 3C: retain the current assessment process (status quo).

No changes would be made to the legislative remit to allow performance evaluations of Class 4 IVDs to be undertaken (particularly for those submitted for a design examination CA Certificate).

Issue 4

Proposal 4A: amend the definition of a medical device to include predisposition and susceptibility tests.

The definition of a medical device would be amended to include IVDs used to determine predisposition or susceptibility to a disease or condition. These IVDs would therefore no longer be defined as 'other therapeutic goods' under Part 3-2 of the Act and would instead be subject to the requirements of the new IVD Regulations.

Proposal 4B: retain the current the definition of a medical device (status quo).

No changes would be made to the definition provided in the Act. IVDs to determine predisposition or susceptibility to disease would continue to be regulated as 'other therapeutic goods'.

Proposal 4C: retain the current definition of a medical device and issue a Therapeutic Goods Order that predisposition and susceptibility tests are not considered to be IVDs.

No changes would be made to the definition provided in the Act. IVDs to determine predisposition or susceptibility to disease would continue to be regulated as 'other therapeutic goods' and would not be subject to premarket scrutiny for quality and performance. To clarify the TGA would issue a Therapeutic Goods Order declaring that predisposition and susceptibility tests are not IVDs.

Impact analysis

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The proposals provided above all impact on consumers, laboratories, industry and bodies or individuals associated with the IVD sector.

Impact of each proposal

Proposal 2A: modified CA procedure for the regulation of Class 4 in-house IVDs, predicated on commercial IVDs.

The majority of stakeholders acknowledged and supported the need for change to the CA procedures for the regulation of Class 4 in-house IVDs, particularly those predicated on commercial IVDs. Stakeholders considered that the proposal would reduce the regulatory burden on laboratories and avoid unnecessary duplication by limiting the evaluation assessment to the validation of any differences between the Class 4 in-house IVD and the predicate product.

Although industry's preference was that no changes be made to the agreed and legislated IVD framework there was recognition that this was not practical given the potential impact on donor screening services. They recognised the difficulties that laboratories would have supplying (as part of their application to the TGA) complete manufacturing information for an in-house IVD that was based on a commercial IVD.

The majority of those within industry (that were aware of the need for change) supported a proposal for a modified CA procedure for Class 4 in-house IVDs, predicated on commercial IVDs. There was agreement within the sector that undertaking a full CA for what has been determined to be a minor change to a registered product is excessive. The proposal was regarded as a reasonable compromise between patient safety and the practical challenges presented by some relatively low volume tests such as those used for testing cadaveric donor samples. However, there was disappointment that the proposed amendments to the CA procedures did not provide any similar reduction in the regulatory burden for those commercially supplying IVDs in Australia.

Some industry responses did not support the use of Class 3 IVDs for routine supplemental donor screening (e.g. donor screening for malaria) unless there was no commercial Class 4 IVD alternative available. Industry respondents considered that the introduction of this measure would be a strong disincentive for commercial manufacturers to develop and commit the resources required to validate IVDs for this purpose. One submission to the consultation paper cautioned that amending the requirements to allow Class 3 IVDs to be used as Class 4 IVDs may inadvertently create a loophole that exempts high risk assays from the requisite regulatory review, as the TGA registration process for a commercial Class 3 IVD does not necessarily require pre-market assessment of the product. This is a valid point that would need to be taken into consideration when determining the level of evaluation required by the TGA for these particular Class 4 in-house IVDs.

If this proposal was to be accepted, industry respondents would like to see a prescriptive list of acceptable modifications and further information about the fees and charges that would be applied to a modified Class 4 in-house IVD. There was some concern regarding the proposed classification of modifications as being either minor or fundamental.

Generally there was a sense that the TGA would need to provide comprehensive guidance that defined what constitutes an appropriate level of validation, and the types of modifications that would be considered minor. It was recognised that laboratories would need to seek a final ruling from the TGA as to whether the modification(s) 'represent a fundamental change to design' and hence which type of CA would be required. Industry considered that the same level of assessment and fees should apply to both a laboratory modified IVD and changes made by the commercial manufacturer to a registered commercial IVD.

If a modified CA procedure were adopted industry respondents considered that laboratories maintaining GMP licences would have an adequate level of scrutiny in place to manufacture Class 4 in-house IVDs. However concerns were expressed that NATA accreditation (ISO 15189) alone was insufficient and should not be considered as an alternative. Additionally, there was a concern that there may be a divergence in compliance depending on whether a laboratory was assessed to NATA accreditation or to GMP licensing requirements.

However, limiting the requirements to the need for a GMP licence would restrict the number of laboratories that could access the modified CA procedure. Laboratories that provide donor screening services for organ transplantation and cord blood banking are not required to hold a GMP licence and thus would not be eligible to apply for a modified CA procedure for their Class 4 in-house IVDs. These laboratories do however hold NATA accreditation and have successfully provided these services in Australia prior to the introduction of the new framework. NATA accreditation to ISO 15189 is considered by the TGA to be an appropriate and acceptable standard for demonstration of a QMS for a medical testing laboratory that develops Class 4 in-house IVDs that are based on commercial IVDs.

Rather than reducing regulation this proposal allows laboratories to demonstrate compliance with an alternative standard (ISO 15189) for a QMS that is more practical and relevant to medical laboratories. Compliance with this standard is already accepted by the TGA as evidence of an appropriate QMS for Class 1-3 in-house IVDs. The quality, safety and performance of the Class 4 in-house IVD would be continue to be assured as the changes made to the commercial IVD product would still require evaluation by the TGA.

Not all Class 4 in-house IVDs would benefit from this proposal as de novo Class 4 in-house IVDs and a number of Class 4 in-house IVDs (where the modification to the commercial IVD was considered to be a fundamental change to the design of the IVD) would still be required to apply for a full TGA CA. Laboratories expressed concern that although the proposal was an improvement on the current arrangements, they still considered that the supply of some critical pathology tests would be compromised or cease in Australia after the transition period as it still imposes an unachievable level of regulation for some Class 4 in-house IVDs, particularly for de novo Class 4 in-house IVDs. Those affected have indicated that it would be uneconomical for them to continue to provide these services if they were required undergo a full CA procedure and pay the associated fees.

These would be predominantly low volume tests for uncommon diseases/disorders used for a specific purpose and include anti-sera used to detect rare or weak antigens to assess compatibility for blood transfusion, HIV proviral DNA testing in neonates, and testing for exotic and emerging diseases. If this proposal was to be adopted there is a high risk that these tests would no longer be available in Australia as they would not be able to meet the proposed CA process.

Under this proposal, the limited CA requirements for Class 4 in-house IVDs based on commercial IVDs where the modification does not represent a fundamental change to the design are expected to be associated with a commensurate reduction in the applicable fees and charges. There was some reluctance by stakeholders to provide detailed information on how the proposals would affect their businesses financially and they commented that they would prefer to see a proposed fee structure prior to providing further comment. However, many anticipated that there would be a reduction in the fees (for laboratories) if there were an amendment to the new regulatory framework to reduce the level of assessment required for in-house IVDs and this was implied in the consultation paper. It was recognised that under any of the proposals there would still be substantial fees for laboratories with a high number of Class 4 in-house tests. There is no reduction in regulatory burden or costs for the commercial industry under this proposal.

Proposal 2B: modified CA procedure for the regulation of all Class 4 in-house IVDs.

Proposal 2B is intended to reduce the regulatory burden on laboratories and increase the capacity of laboratories to comply with the new regulatory requirements while still maintaining the TGA regulatory oversight for all Class 4 in-house IVDs. All laboratories producing Class 4 in-house IVDs (de novo and modified commercial) would benefit from this proposal through a reduction in cost and an increased ability to comply with the regulatory requirements.

The majority of those in support of this proposal were laboratories, as it was considered to be a practical approach that addresses the compliance concerns and reduces the regulatory burden on laboratories that manufacture Class 4 in-house IVDs while providing sufficient risk management and scrutiny of these tests.

Amending the framework to provide a modified CA procedure for the regulation of all Class 4 in-house IVDs is likely to allow IVDs, for which there is no commercial alternatives, (including HIV proviral DNA testing for neonates, tests for exotic and emerging pathogens, and nucleic acid testing for organ and tissue donors) to continue to be available for use.

Those who supported the proposal agreed that in-house IVDs should not be required to be included in the ARTG as they considered that the ARTG should only include products that can be lawfully supplied on the Australian market (in-house IVDs cannot be legally supplied outside a laboratory or laboratory network). However, others expressed concern that there would be a reduction in the level of transparency if Class 4 in-house IVDs were not required to be included in ARTG.

Industry was prepared to support a modified CA procedure for Class 4 in-house IVDs that were predicated on a commercial IVD that had already been included in the register and where the modification did not significantly impact on the design of the commercial IVD. However, they considered that a modified CA procedure for all Class 4 in-house IVDs may not deliver an appropriate level of regulatory oversight required for high risk IVDs, particularly those developed de novo.

Industry respondents considered Proposal 2B inappropriate as it would create an 'uneven playing field' where non-commercial IVDs were not subjected to the same level of scrutiny (or fees) as commercial IVDs, and would lead to a two tiered regulatory system - one tier for laboratory manufactured IVDs and a second for commercially manufactured IVDs. This system was considered a disincentive for manufacturers to develop commercial Class 4 IVDs for the Australian market due to the higher regulatory burden and fees payable than laboratory developed IVDs.

As with Proposal 2A the limited CA requirement would be associated with a commensurate reduction in the applicable fees and charges for laboratories. There is no reduction in the regulatory burden or costs for the commercial industry under this proposal.

Proposal 2C: modified CA procedure for the regulation of all Class 4 IVDs and Australian manufactured Class 2 and 3 IVDs.

Proposals 2A and 2B put forward options for reducing the regulatory burden for laboratories developing Class 4 in-house IVDs however neither proposal provides a mechanism for easing the regulatory burden on commercial manufacturers of IVDs. The majority of IVD stakeholders supported some form of modification to the current CA procedure for Class 4 in-house IVDs however were disappointed that the proposed amendments in the consultation paper did not take into consideration the regulatory burden on commercial manufacturers.

Proposal 2C has evolved as a result of the consultation process and provides a modified CA procedure for all Class 4 IVDs (both commercial and in-house) and Australian manufactured Class 2 and 3 IVDs. It has taken stakeholder views into consideration and significantly decreases the regulatory burden and increases the ability of both commercial manufacturers and laboratories to comply with the regulatory requirements and ensure that critical Class 4 in-house IVDs continue to remain available in Australia, while not compromising public health and safety.

Commercial and laboratory manufacturers of Class 4 IVDs applying for this modified procedure would be required to provide the TGA with acceptable CA evidence of a QMS. As with proposals 2A and 2B laboratories would be required to maintain a GMP licence or NATA accreditation as a medical testing laboratory (and demonstrate compliance with the NPAAC standard). Commercial manufacturers of Class 4 IVDs would be required to provide acceptable evidence of QMS CA certification from a European notified body (i.e., third party QMS CA).

Where these conditions were met, the modified CA procedure for Class 4 IVDs would consist primarily of an evaluation by the TGA of the data validating the performance of the Class 4 IVD and evaluation of compliance with the EPs. On application to the TGA for this modified CA the level of evaluation required would be determined by the TGA and an evaluation fee commensurate with the amount of work to be performed would be charged. Proposal 2C provides an appropriate and practical level of regulation that still maintains a high level of patient safety.

Under this proposal acceptable third party CA evidence of a QMS could also be used by Australian commercial manufacturers to support their applications for inclusion of Class 2 and 3 IVDs in the ARTG. Certain products, such as self-tests and tests that can be used at the point of care, would still require product review by the TGA prior to entry in the ARTG. This would be consistent with what is currently accepted for overseas manufacturers of Class 2 and 3 IVDs. Australian IVD manufacturers supplying their products in Australia and Europe would no longer be disadvantaged compared to their overseas counterparts. Commercial manufacturers would still retain the option to apply for TGA CA Certificates if desired.

The acceptance of third party QMS evidence for commercial manufacturers and GMP or NATA accreditation for laboratory manufacturers of IVDs is not considered to be a significant reduction in regulatory oversight but rather minimising duplication of work and providing greater flexibility for manufacturers to demonstrate that they have an acceptable QMS for the manufacture of IVDs (whether they be commercial or in-house). A more coordinated approach and a reduction in duplication is something that both industry and laboratories have been seeking from the TGA for some time. Under this proposal any (potential) increased risk to public health is minimised as all high risk (commercial and in-house Class 4) IVDs would still require assessment of quality, safety and performance by the TGA prior to entry in the ARTG and being made available on the Australian market.

However there continues to be concern from some laboratories that a number of low volume in-house IVDs for specific disease categories (i.e., an assay used for testing Human T-cell Lymphotropic Virus (HTLV-1) disease in Australian Aboriginal populations) would still be unable to comply with the requirements and these tests would therefore no longer be available in Australia after the transition period.

Additionally without amendments there is a risk that essential low volume specialised IVDs (required in the national interest and in the event of a public health emergency to detect exotic and emerging diseases, including infectious agents deemed to be security sensitive biological agents) would no longer be available. This was seen as potentially weakening Australia's national security by diminishing our capacity to rapidly respond and detect biological and infectious agents that may constitute a serious threat to public health. A number of stakeholders considered that this could be addressed by providing exemption provisions for these tests to ensure that they would be available as the need arises.

In response to this concern, amendments to the existing exemption provisions in the Act and Regulations may be required (as referred to in Proposal 2C) to address some of the outstanding stakeholder concerns regarding continued access to specialised IVDs, particularly Class 4 in-house IVDs, in certain circumstances. Exemption provisions are already provided in the Act for medical devices subject to conditions in the Regulations however they do not adequately address exemptions for IVD medical devices. Amendments to the Regulations may be required to allow the supply of IVDs for special or experimental purposes in certain circumstances. Suppliers of commercial IVDs and manufacturers of in-house IVDs would potentially be eligible for an exemption if appropriate.

The CA requirements put forward in this proposal are expected to be associated with a commensurate reduction in the applicable fees and charges and reduce the regulatory burden for both commercial and laboratory manufacturers of IVDs while still maintaining a high level of quality and safety.

Two additional concerns described below, were raised by stakeholders during the consultation process in relation to the regulatory requirements for Class 1-3 in-house IVDs and the risk classification for Class 3 IVDs. It is considered that both of these concerns are best addressed in conjunction with Proposal 2C.

A number of laboratories using Class 1-3 in-house IVDs have indicated that they are NATA accredited to an alternative quality management standard (ISO 17025 as opposed to ISO 15189) as they are not considered to be 'medical testing' laboratories, while others do not operate under an Approved Pathology Authority (APA) as they do not access Medicare reimbursement. Laboratories have also indicated that the notification process for Class 1-3 in-house IVDs is both onerous and inefficient. Minor amendments to the Regulations are proposed so that the requirements are both less prescriptive and offer laboratories greater flexibility in the way in which they comply with the Regulations for lower risk Class 1-3 in-house IVDs.

It is proposed that NATA accreditation to ISO 17025 would also be accepted as evidence of an appropriate QMS for laboratories that manufacturer Class 1-3 in-house IVDs. The ISO 17025 standard actually forms the basis of ISO 15189 and, from a quality management perspective, is considered by the TGA to be equivalent. It is also proposed that the requirement for a laboratory to provide the TGA with a list of their Class 1-3 in-house IVDs could be replaced with a declaration of conformity that identifies the 'kinds' of in-house IVDs and that they comply with the EPs. Laboratories would still be required to notify and provide the TGA with information on their NATA accreditation status.

Also identified, as a concern, is the IVD risk classification rule in the Regulations that refers directly to the National Notifiable Disease List (NNDL) (a list maintained by the Department of Health). Under this rule, an IVD intended to detect a pathogen listed on the NNDL is automatically deemed to be a Class 3 IVD. This list is not controlled by the TGA and any addition to the list may result in the up-regulation of a Class 2 IVD to a Class 3 IVD without any industry consultation. If the sponsor of the IVD is unable to comply with the regulatory requirements for a Class 3 IVD it may result in the removal of the product from the Australian market. Amendment to the TGA classification rule is proposed to ensure that the regulatory responsibility for determining 'What is a Class 3 IVD?' resides with the TGA and that any up-classification of an IVD occurs only after appropriate consultation.

Proposal 2D: retain the current regulatory framework for all Class 4 IVDs and Australian manufacturers of Class 2 and 3 IVDs (status quo).

There was little support for the proposal of retaining the current CA requirements for Class 4 IVDs, particularly for Class 4 in-house IVDs, and Australian manufactured Class 2 and 3 IVDs, as the risks associated with maintaining the status quo are considered to be too high.

The current requirement for manufacturers of Class 4 IVDs (commercial and laboratory in-house) and Australian manufacturers of Class 2 and 3 IVDs to undergo TGA CA is considered by the majority of stakeholders to be an unreasonable constraint and disadvantages Australian manufacturers compared to their overseas counterparts. Industry has commented that the requirement to undergo TGA CA significantly increases costs, will result in the removal of IVDs from the Australian market, may delay timely access to new technology and unnecessarily duplicates assessments undertaken by notified bodies. CA is considered by stakeholders to be an intensive and costly process. The unnecessary duplication of work drives up the cost of IVDs and creates a disincentive to supply products in Australia's relatively small market.

Laboratories using modified commercial IVDs indicated that they would generally be unable to comply with the regulatory requirements for Class 4 in-house IVDs as they have neither control over the design and manufacturing processes for the commercial IVDs nor access to the commercial manufacturer's technical documentation. A laboratory can only provide the technical evaluation performed to validate the modification made to the commercial IVD. In addition, the costs associated with compliance with the new framework would make it non-viable for many laboratories to continue to provide testing services using Class 4 in-house IVDs, particularly as many are not-for-profit organisations.

Currently in Australia there is a lack of suitable commercial serology IVDs available that can be used by laboratories to screen cadaveric tissue donors for infectious diseases (i.e., HIV, HCV, HBV, HTLV and Syphilis) and laboratories have had to develop their own Class 4 in-house IVDs to address this issue. Although one commercial supplier has indicated that they will validate their commercial serology IVDs for use with cadaveric samples there was concern from stakeholders that even if all laboratories were able to use these IVDs this would lead to a reliance on one commercial platform with no back-up options available in Australia if there were problems. There also remains the outstanding issue of supplemental donor screening for additional infectious disease (e.g., Malaria, West Nile Virus). For many of these tests, commercial IVDs are unavailable for donor screening and laboratories would still be required to develop Class 4 in-house IVDs for this purpose.

The Consumer Health Forum of Australia (CHF) was not supportive of any changes to the CA procedure for the regulation of IVDs. The CHF commented that laboratories must be able to demonstrate that an IVD and its manufacture, or modification, conform to the current legislation because of the level of risk associated with these tests. Although the proposals put forward in the consultation paper retained the requirement for manufacturers to provide appropriate evidence of a QMS to the TGA and the evaluation of all Class 4 IVDs by the TGA for quality, safety and performance, the retention of the current system was regarded by the CHF to be in the best interests of end-users and consumers.

However, the view of the majority of stakeholders was that if the current framework for all Class 4 in-house IVDs were retained there may not be any appropriately validated assays for some high risk conditions and this would result in certain services, including transplantation and transfusion services, being compromised or withdrawn. In many cases (at the end of the transition period) laboratories will no longer maintain and develop specialised in-house IVDs to detect exotic infectious diseases or infectious agents that represent a possible biosecurity or public health threat. The risk that critical IVDs and services may be unavailable in Australia, particularly for donor screening, after the end of the transition period far outweighs the benefit of retaining the existing CA procedures for Class 4 in-house IVDs.

In addition to the compliance difficulties faced by commercial and in-house manufacturers of Class 4 IVDs, Australian manufacturers of Class 2 and 3 IVDs are currently disadvantaged under the new regulatory requirements compared to their overseas counterparts. Third party QMS CA evidence is accepted for overseas manufacturers of Class 2 and 3 IVDs however Australian manufacturers require a TGA QMS CA Certificate, regardless of whether they already hold third party CA certification (e.g., from a European notified body). This unnecessarily increases the regulatory burden and costs imposed on our Australian IVD manufacturers.

Proposal 3A: selective performance evaluation of Class 4 IVDs.

Under the current regulatory framework the TGA has no legal remit to request premarket performance evaluation of a Class 4 IVD to independently verify the manufacturer's performance claims. The TGA approval of a design examination certificate for a Class 4 IVD is solely reliant upon the evaluation of the evidence provided by the manufacturer. In many cases the performance of the product is well established on the global market and the manufacturer can provide appropriate supporting evidence. However, in particular instances, there may be a need for the TGA to seek additional assurance that the manufacturer's claims can be independently verified and that any potential risks associated with use of the product are outweighed by the benefits to both the individual and public health. Independent performance testing of a Class 4 IVD may be warranted to ensure that there is no additional risk to public safety in certain circumstances such as when there is a novel indication for use of a product or there is evidence to suggest that a new technology is significantly different to existing technology and the manufacturer has failed to provide adequate supporting evidence.

There was general support for the proposal to amend the Regulations to allow the TGA to reserve the right to undertake premarket performance evaluations for Class 4 IVDs although a number of respondents chose to withhold comment on this proposal. The commercial industry only supported the proposal with the caveat that this would not be a requirement for all Class 4 IVDs, and that the TGA should have sound reasons for requiring a performance evaluation.

Some industry members expressed concern that changing the current assessment process could be a disincentive for manufacturers and sponsors of Class 4 IVDs and could delay (as additional time would be required to perform the evaluation) or prevent innovative products being supplied in Australia. Industry would like the TGA to provide comprehensive guidelines on what products are likely to be selected for performance testing and consider the possibility of an option for a manufacturer to conduct their own studies to generate further evidence (as this may be quicker).

Many respondents noted that it is in the interests of public health and patient safety to have a regulatory framework that allows for selective performance evaluation of Class 4 IVDs, if deemed necessary, to ensure that the performance of these Class 4 IVDs meet appropriate standards.

Although overall those who provided a response were supportive of the proposal to introduce selective performance evaluation of Class 4 IVDs concerns were raised that the cost for the TGA to undertake the performance evaluation would be recovered through higher fees from all applicants. This is not the intention of this proposal. Manufacturers would be required to provide the test kits for evaluation however under this proposal they would not be charged any additional evaluation fees.

Proposal 3B: performance evaluation of all Class 4 IVDs.

There was very little support for the introduction of performance evaluation for all Class 4 IVDs to confirm that a product meets the manufacturer's intended purpose and performance claims. Supporters considered that TGA conducted performance testing would allow independent, impartial assessments of high risk IVDs under laboratory conditions on specimens sourced from an Australian population and would ensure the Class 4 IVDs available on the Australian market are of the highest quality. However, these concerns were not shared by others, particularly commercial industry, where it was considered that performance testing for all Class 4 IVDs would be excessive and should only be reserved, if necessary, for specific high risk products.

As with Proposal 3A, manufacturers would be required to provide the test kits for evaluation however under this proposal they would not be charged any additional evaluation fees.

Proposal 3C: retain the current assessment process (status quo).

Only two submissions indicated outright that they would prefer the current arrangements be retained. It was noted that manufacturers are already required to demonstrate that an IVD's analytical and clinical characteristics were appropriate for its intended use in Australia and that if the amendment were introduced it would add some uncertainty into timelines and requirements for approval of these IVDs.

A number of respondents chose not to comment on any of the proposals put forward in the consultation paper in relation to performance evaluations for Class 4 IVDs. Although the commercial industry was conditionally supportive of Proposal 3A in subsequent meetings it was made clear to the TGA that the preference was to maintain the status quo.

If the status quo was maintained the TGA would have no capacity to undertake independent performance testing of certain high risk IVDs (in relation to an applications for a design examination certificate) prior to their release on the Australian market. However, the TGA would still maintain the ability to undertake independent performance testing of specific high risk products in the postmarket environment, if required, to confirm the manufacturer's claims and ensure the quality, safety and performance of an IVD on the Australian market.

Proposal 4A: amend the definition of a medical device to include predisposition and susceptibility tests.

In recent years, technological advances have resulted in an increased availability of in vitro diagnostic genetic tests to detect molecular markers that can provide an indication of a person's predisposition or susceptibility to a particular disease or condition. Some of these tests are being marketed directly to the consumer without any form of medical supervision. The results from these tests can cause significant anxiety and stress, particularly if an increased risk of developing a disease or condition is identified.

These tests fall within the definition of a therapeutic good, but as they do not meet the definition of a medical device they are not subject to regulation as an IVD medical device. Without an amendment to the definition of a medical device, these IVDs (the majority of which are genetic tests) would continue to be exempt from the requirement to be entered in the ARTG and consequently would not be assessed for quality, safety and performance prior to release on the Australian market. If they are included, under the IVD framework, they would predominantly be classified as Class 3 IVDs and as such are considered to represent a moderate public health risk or high individual risk.

The majority of those consulted were supportive of the proposal to amend the definition of a medical device to include tests for predisposition and susceptibility to disease and considered that it was in the interest of both consumers and providers for these products to be regulated in a manner that reflects the level of risk they represent.

In support of this, it was noted that molecular genetic tests can have a significant impact on individuals and therefore these tests should be regulated in the same manner as other IVDs. It was also noted that any test for disease predisposition or susceptibility should be defined as a medical device, irrespective of the specific technology used for the test.

The amendment of the definition of a medical device to include these IVDs would correct an unintended oversight and ensure that that these products are regulated in a manner that reflects the level of risk they represent. The fees and charges applied would be comparable to other IVDs of the same risk rating.

Proposal 4B: retain the current the definition of a medical device (status quo).

There was very little support to retain the current definition as it was generally acknowledged that it was an unintended oversight that these products were not included in the definition of a medical device. If the status quo were maintained these IVDs would continue to be regulated under the pre-existing framework. The majority of these products would be exempt from the requirement to be entered in the ARTG and would not be subject to any premarket scrutiny, prior to supply on the Australian market, or post-market monitoring.

The few who did not support any amendment considered that there was a risk that if an equivalent level of assessment is applied to these IVDs that these products may be withdrawn from the Australian market as it may not be possible for sponsors to meet the regulatory requirements (and costs). However there is little evidence to support this being the case. The CHF's view is that there are significant potential ramifications for patients receiving the results of tests for predisposition and susceptibility to disease and that regulation is needed and justified.

As previously provided, these IVDs represent a moderate public health risk or high individual risk and therefore these tests should be required to demonstrate an adequate level of quality, safety and performance. The inability to regulate these tests appropriately under the IVD framework would result in the continued availability of products in Australia that would otherwise not meet minimum quality requirements.

Proposal 4C: retain the current definition of a medical device and issue a Therapeutic Goods Order that predisposition and susceptibility tests are not considered to be IVDs.

The impact of this proposal is similar to the impact of Proposal 4B. If these tests were declared not to be IVDs they would continue to remain exempt from any regulatory requirements and would not be subject to any premarket or post-market scrutiny.

The CHF's view is that there are significant potential ramifications for patients receiving the results of tests for predisposition and susceptibility to disease, particularly for genetic testing and that regulation is needed and justified.

Additionally, the TGA would need to provide the general public and health professionals with a warning about the risks of using and interpreting the results from these IVDs for clinical decision making. This would be likely to provoke comment and questions as to why these products are not subject to an adequate level of regulatory oversight commensurate with the level of risk they represent.

Conclusion

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As demonstrated above, there are issues associated with new regulatory framework for IVDs and amendments are required to ensure the continued availability of IVDs, particularly critical Class 4 in-house IVDs, in Australia after the end of the transition period. In considering the issues every effort is being made to ensure that stakeholders are less likely to be disadvantaged by the introduction of the framework at the end of the transition period while the Australian population benefit from the supply of IVDs that are regulated in a manner that reflects the level of risk they represent.

It is was also recognised that there are uncertainties surrounding the costs with most of the proposals but that the financial and regulatory burden will be eased for most stakeholders when the transition timeframe is extended and if a modified CA procedure is introduced for Class 4 IVDs and Australian manufacturers of Class 2 and 3 IVDs.

Preferred proposals

The preferred approach to resolve the issues is to make a number of amendments to the framework. The following recommendations (which address each issue) have been informed by the impact analysis of all the information that has been provided to the TGA by stakeholders for this RIS.

Issue 1: Timeframe for valid applications for inclusion in the ARTG.

An extension to the timeframe for transition to the new IVD framework was the most suitable proposal for all stakeholders and has been addressed outside the RIS process.

Issue 2: Regulatory requirements for Class 4 IVDs and Australian manufacturers of Class 2 and 3 IVDs.

Modifying the CA procedure for the regulation of all Class 4 IVDs and Australian manufactured Class 2 and 3 IVDs (Proposal 2C) is recommended as it will reduce the regulatory burden on commercial IVD manufacturers and testing laboratories. It will increase their capacity to comply with the requirements while still maintaining an appropriate level of regulatory oversight without compromising the health and safety of Australians.

It will, importantly, ensure the continued availability of Australian manufactured human biological products for transfusion and transplantation. In addition the ability, in specific circumstances, to exempt IVDs from inclusion in the ARTG will ensure the continued supply of low volume, specialised Class 4 in-house IVDs (predominantly de novo) for special or experimental purposes.

It was agreed by most of those consulted that the regulation of commercial Class 4 and Class 4 in-house IVDs should be proportionate, cost-relevant, non-duplicative and designed to balance the safety of Australians with timely access to appropriate technologies.

Proposal 2C resolves many of the residual concerns expressed regarding the capacity to meet the regulatory requirements and associated fees for Class 4 IVDs, particularly Class 4 in-house IVDs where there are currently no commercial alternatives, and Australian manufacturers of Class 2 and 3 IVDs.

It is anticipated that the additional concerns raised by stakeholders during the consultation process regarding the ability of laboratories to comply with the requirements for Class 1-3 in-house IVDs and ensuring that the TGA retains responsibility for determining what is a Class 3 IVD will be addressed in conjunction with the amendments proposed under Proposal 2C.

Issue 3: Performance evaluations for Class 4 IVDs.

The analysis of the submissions and subsequent discussions with stakeholders found that Proposal 3C, retain the current assessment process (status quo), was the preferred proposal supported by the majority of stakeholders and therefore no regulatory amendments are required.

It is noted that the TGA has now progressed a significant way through the transition period and to date no safety issues or concerns have arisen as a consequence of not being able to undertake performance testing for Class 4 IVDs. The TGA has considered whether public safety would be impacted and has come to the conclusion that that it would not be, as the TGA will maintain the ability to undertake performance testing of Class 4 IVDs in the postmarket environment. Additionally, proceeding with performance evaluations for Class 4 IVDs would be ‘out-of-step’ with the regulation of medical devices as a whole and potentially create some uncertainty for the non-IVD medical device industry as to whether premarket performance evaluations would be expanded to capture all high risk medical devices.

Issue 4: Amend the definition of a medical device to include predisposition and susceptibility tests.

Proposal 4A, amending the definition of a medical device to include predisposition and susceptibility tests is preferred as it best meets the safety and public health objectives of the TGA, as well as correcting an unintended oversight in the legislation.

Cost analysis

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Quantification of cost to business and the community

The TGA is fully funded by the businesses it regulates. The cost of regulation is recovered by way of fees and charges. The fees are based on the costs of direct service provided by the regulator and charges are the tax imposed by the TGA annually on users. Annual charges are used to recover costs or resource functions which cannot reasonably be assigned to individual businesses or where such assignment would act as a deterrent to effective delivery of service.

Prior to the introduction of the new regulatory framework for IVDs in July 2010 only a select group IVDs were required to be registered or listed on the ARTG. All others were exempt from regulation and the associated regulatory compliance costs.

The 2004 RIS estimated that, for both commercial and non-commercial manufacturers, the one off cost of compliance would be between $15,000-$60,000, depending on the size and complexity of the business. Additionally there would be a cost to employ staff to implement, meet and maintain the regulatory requirements of the framework.

Needless to say all within the sector would like to see a reduction in both the level of regulation and cost of compliance. Industry considers the current TGA conformity assessment process to be an intensive and expensive process resulting in the unnecessary duplication of work that drives up the cost of IVDs and creates a disincentive to supply products in Australia’s relatively small market. However industry (commercial) does not want to see a return to the pre-2010 level of regulation for IVDs, in particular the lack of regulation of high risk laboratory developed or modified IVDs.

The elements of cost for a manufacturer of IVDs are the administrative and developmental costs and regulatory compliance costs. Administrative and developmental costs include the cost of generating performance data, implementing a quality system, the generation and holding of documentation. Most of these costs are incurred as part of normal business practice and are not considered to arise from government regulatory requirements. The regulatory compliance costs can be ascribed to the need to employ regulatory personnel. The TGA fees and charges (for audit, application, assessment of data and annual charges) are considered to be the financial cost of compliance for business.

Overall the amendments to the IVD regulatory framework in the recommended proposals will have a cost negative impact on most stakeholders, particularly laboratories. There will be a significant reduction in regulatory burden and the degree of evaluation required by the TGA for Class 4 IVDs and Australian manufacturers of Class 2 and 3 IVDs. Additionally there will be savings for many businesses by reducing the regulatory requirements and removing any duplication.

It is not possible to fully quantify the overall fiscal impact on the sector as the total number of IVDs to be included in the ARTG is unknown, therefore some assumptions have been made and calculations on the impact of each recommended proposal are provided below.

It is anticipated that the preferred proposals will minimise any additional regulatory costs on the commercial and laboratory sector, particularly laboratories providing specialised services. Overall the three recommended proposals would provide business an estimated saving of $1.0 million over ten years (not including fees and charges).

Additionally there would be an overall reduction in the direct financial cost (fees and charges) of compliance for business of approximately $5.7 million over ten years.

Regulatory burden and cost offsets
Average annual change in compliance costs (from BAU)
Cost ($m) Business Community Organisations Individuals Total by cost category
Total by Sector ($0.1) 0 0 ($0.1)
Annual Cost Offset ($m) Business Community Organisations Individuals Total by Source
Agency 0 0 0 0
Within portfolio 0 0 0 0
Outside portfolio 0 0 0 0
Total by Sector 0 0 0 0

Proposal is cost neutral? No, cost negative

Proposal is deregulatory? Yes

Balance of cost offsets to be banked: $0.1 Million P/A

Cost to business per issue

Issue 2: Regulatory requirements for Class 4 IVDs and Australian Manufacturers of Class 2 and 3 IVDs.

The recommended proposal would provide a modified conformity assessment procedure for the regulation of all Class 4 IVDs, with fees to be determined by the level of evaluation undertaken by the TGA. It presents a fee structure where the fees payable would be reduced for both the commercial manufacturer and laboratory sectors.

Additionally, the recommended proposal would allow Australian manufacturers of Class 2 and 3 IVDs to provide acceptable evidence of third party conformity assessment to support their applications for inclusion of Class 2 and 3 IVDs in the ARTG. This would mean that Australian manufacturers would not be required to obtain a TGA conformity assessment certificate which in turn would represent a saving to the sector.

However, Australian manufacturers would still retain the option of applying and paying for a TGA conformity assessment certificate if this was more applicable to their business. Additionally, for manufacturers with multiple ARTG entries that require a mandatory application audit it may be more cost effective for them to apply for a TGA conformity assessment as opposed to undergoing multiple application audits for inclusion of their products in the ARTG. This option would still be available to them.

Minor compliance cost savings would be achieved by the removal of the requirement for laboratories to provide the TGA with a list of their Class 1-3 in-house IVDs.

The recommended proposal would provide a compliance cost saving (not including fees and charges) of approximately $2.2 million over ten years for business.

Additionally there would be a reduction in the direct financial cost (fees and charges) of for business of approximately $6.2 million over ten years.

If the current compliance requirements for Class 4 IVDs and Australian manufacturers of Class 2 and 3 IVDs are maintained there will be no savings as the level of evaluation required by the TGA would be unchanged.

Issue 3: Performance evaluations for Class 4 IVDs.

The regulations will remain unchanged. There is no cost to the sector as the TGA would not conduct premarket performance testing for Class 4 IVDs undergoing an evaluation for a design examination certificate.

Issue 4: Amend the definition of a medical device to include predisposition and susceptibility tests.

IVDs used to determine predisposition or susceptibility to a disease or condition are not subject to fees and charges as they are currently not required to comply with the new IVD regulations. However it should be noted that many of these IVDs may already be included in the ARTG by the choice of the sponsor. If the recommended proposal is adopted all these IVDs would either require inclusion in the ARTG (commercial products) or comply with the requirements for in-house IVDs. The majority of these tests are likely to be Class 3 IVDs. Consistent with the current Regulations, it would remain unlawful to supply IVD self-tests for genetic testing to determine the presence of, or predict susceptibility to, diseases in humans.

The recommended proposal is likely to cost business $0.9 million over ten years to comply with the regulatory requirements (not including fees and charges).

Implementation

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If the recommendation to amend the new regulatory framework for IVDs is agreed through this RIS process, the Regulations and Act will need to be amended to address Issue 2. A legislative instrument under s.41BD(2B) of the Act specifying that IVDs used to test for predisposition or susceptibility are to be included within the definition of a medical device would be required to address issue 4 as well as minor regulatory amendments to support the current restrictions on the supply of genetic self-tests. Issue 1 has not been included in this section as it is being addressed outside the RIS process.

Stakeholders will be advised of any amendments (including through the Commonwealth Gazette, the TGA website and emails to the industry associations and stakeholders that have been contacted through the consultation).

The instrument will be tabled in Parliament and the finalised regulatory amendments will be published on the Federal Register of Legislative Instruments (FRLI).

The date of commencement will be immediate and a transition period for sponsors and manufacturers (both commercial and non-commercial) to meet the requirements will be provided.

The TGA website will include a link to the amendments on FRLI, as well as extensive advice and information for stakeholders.

Appendix 1 - classification of IVD medical devices

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The medical devices regulatory framework has a separate classification system for IVD medical devices. Under this system, IVD medical devices are classified according to the risk posed to the health of the public or an individual, and relates to the risk of an incorrect result arising from the use of the IVD.

The detailed legislation describing the classification of IVDs can be found in:

  • Regulation 3.1 of the Regulations
  • Subregulations 3.2 (2) and 3.3 (2) of the Regulations
  • Schedule 2A of the Regulations.
IVDs are classified according to Subregulation 3.3 (2) as follows:
Classification Level of risk
Class 1 IVD no public health risk or low personal risk
Class 2 IVD low public health risk or moderate personal risk
Class 3 IVD moderate public health risk or high personal risk
Class 4 IVD high public health risk

The same classification rules apply to both commercial IVDs and in-house IVDs.

The manufacturer is responsible for determining the class of an IVD using the classification rules in Schedule 2A and having regard to:

  • the manufacturer's intended use of the device
  • the level of risk to the patient and the public (taking into account the likelihood of harm and the severity of that harm).

Identical devices may be classified differently if they are to be used for different diagnostic purposes. This is why the manufacturer's intended use of the device is critical to determining the appropriate class. The intended use can be obtained from the:

  • Information provided with the IVD (including Instructions for Use and labelling)
  • Advertising materials
  • Design dossier (if applicable).

Please note: There are IVD medical devices where the classification in Australia may be different to the classification in other countries. Australia has aligned the principles for classification of IVDs with those of the Global Harmonisation Task Force (GHTF); however the manufacturer should take into account Australian legislation when determining the classification of a device that is to be supplied in Australia.

Appendix 2 - acronyms and glossary

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APA - approved pathology authority

ARTG - Australian Register of Therapeutic Goods

CA - conformity assessment - the systematic and ongoing examination of evidence and procedures to ensure that a medical device complies with the EPs. A CA provides objective evidence of the safety, performance, benefits and risks for a specific medical device and enables regulatory bodies to ensure that products placed on the market conform to the applicable regulatory requirements.

Cadaveric sample - sample taken from a non beating heart donor

Classification of IVDs - IVD medical devices are classified according to the risk posed to the health of the public or an individual, and relates to the risk of an incorrect result arising from the use of the IVD.

  • Class 1 IVD - no public health risk or low personal risk
  • Class 2 IVD - low public health risk or moderate personal risk
  • Class 3 IVD - moderate public health risk or higher personal risk
  • Class 4 IVD - high public health risk

The same classification rules apply to both commercial IVDs and in-house IVDs.

Design examination - an assessment based on the design and development records produced under the manufacturer's QMS and compiled/summarised into a 'design dossier'.

EP - Essential Principles - a set of principles that define the basic principles for quality, safety and performance of the device

FDA - US Food and Drug Administration

GHTF - Global Harmonization Task Force - was a group of representatives from national medical device regulatory authorities and the regulated industry. The GHTF comprised of representatives from five founding members grouped into three geographical areas, where each actively regulated medical devices using their own unique regulatory framework. The GHTF was superseded by the International Medical Device Regulators Forum (IMDRF) in 2011.

GMP - good manufacturing practice - a set of principles and procedures that, when followed by manufacturers of therapeutic goods to ensure that the products manufactured will meet appropriate quality standards.

In-house IVD - an IVD medical device used within the confines or scope of an Australian medical laboratory or laboratory network that has been developed from first principles, developed or modified from a published source or commercial IVD; or used for a purpose other than that intended by the manufacturer; and is not supplied for use outside that medical laboratory or medical laboratory network.

Intended purpose - the purpose that the manufacturer of the device intends it to be used, as stated in the information provided with the device, the instructions for use, or any advertising material applying to the device.

ISO 13485 - International Standard 13485:2003 for medical devices QMS required for regulatory purposes. ISO 13485 represents the requirements for a comprehensive management system for the design and manufacture of medical devices.

ISO 15189 - International Standard 15189 for Medical laboratories, particularly the requirements for quality and competence. It is the standard against which the QMS will be assessed and the assessment will include review of the validation data for any in-house IVDs that are changed or newly implemented since the time of last audit.

ISO 17025 - International Standard 17025 for accreditation of testing and calibration facilities.

IVD - In vitro diagnostic medical device - a medical device that is:

  1. a reagent, calibrator, control material, kit, specimen receptacle, software, instrument, apparatus, equipment or system, whether used alone or in combination with another diagnostic product for in vitro use and
  2. intended by the manufacturer to be used in vitro for the examination of a specimen derived from the human body, solely or principally for:
    1. giving information about a physiological or pathological state or a congenital abnormality or
    2. determining safety and compatibility with a potential recipient or
    3. monitoring therapeutic measures and
  3. not a product that is:
    1. intended for general laboratory use and
    2. not manufactured, sold or presented for use as an IVD medical device.

NATA - National Association of Testing Authorities, Australia - provides assessment, accreditation and training services to laboratories and technical facilities throughout Australia and internationally.

NPAAC -National Pathology Accreditation Advisory Council - advises the Commonwealth, state and territory health ministers on matters relating to the accreditation of pathology laboratories.

Predicate IVD - a commercial IVD from which an in-house IVD has been developed or adapted.

RIS -Regulatory Impact Statement - a document prepared by a department, agency, statutory authority or board responsible for a regulatory proposal following consultation with affected parties, formalising and documenting some of the steps that must be taken in good policy formulation.

TGA CA - TGA Conformity Assessment - carried out according to ISO 13485:2003. See also CA