You are here

Regulation impact statement: Changes to premarket assessment requirements for medical devices

26 June 2013

Book pagination

Impact analysis

This section will provide an overview of the affected stakeholders followed by an analysis of how each stakeholder group is affected by the different proposals.

Affected stakeholders

Key stakeholders affected by the changes to premarket assessment requirements of medical devices include:

  • consumers
  • health care professionals
  • the medical device industry
  • Government, including Government agencies.

Consumers

The consumer group generally includes those people who use medical devices, whether independently or as patients of, or with advice from health care professionals.

Consumer concerns about the regulation of medical devices have been a key driver for the proposed regulatory changes. Consultations from the HTA review and the 2008 and 2010 medical device reforms, as well as feedback relating to the two Senate Inquiries (on the ASR hip joint and PIP breast implants) have highlighted an increased need for the TGA to address consumer concerns about medical device regulation in Australia.

Health care professionals

Health professionals include doctors, nurses and pharmacists, but also members of ancillary professions such as physiotherapists, audiologists, orthotists, podiatrists etc. The institutions, such as hospitals, pharmacies and practices in which these professionals work with their patients are also relevant. Health care academics and the educational institutions in which they operate could also be included in this group.

Many medical devices are designed for use by health care professions in their clinical practices, rather than for consumer use, or may be paid for by public health providers. Many of the issues for consumers are also applicable to the healthcare professionals and other allied professionals who work towards health outcomes for consumers. These professionals have an interest in the inherent safety of medical devices, which they may facilitate use of by consumers.

Health care professionals may also have separate concerns from consumers, such as concerns about the impacts on their organisations as businesses.

Top of page

Medical device industry

The medical device industry includes people or organisations that manufacture or sponsor medical devices. There are also a number of bodies which represent sectors of the industry, such as the MTAA, AusBiotech, IVD Australia or the Australian Dental Industry Association (ADIA).

With the Australian market for medical technology only being around 2 per cent of the global market any analysis of impacts on the medical device industry must be considered in an international context. There are differences in regulation for medical devices between other regulators such as the USA and Canada. Europe is a key international market for the Australian medical device industry, and as noted earlier the EU regulator is proposing to strengthen medical device regulation.

Government agencies

The Australian Government has a number of interests in the regulation of medical devices. In representing the interests of the Australian community they need to balance many competing issues. These range from the health and safety of the public and the confidence of the public in the health care system, to the economic interests of companies in the medical device market place. Balancing these is the purview of Government, and it is the aim of this RIS to provide Government with information on competing priorities.

There are particular impacts on the efficiency and effectiveness of Government operations in administering regulatory systems, and the impacts of regulatory changes on various Government agencies needs to be assessed. While the TGA is responsible for regulating medical devices supplied in Australia and self-evidently will be impacted by changes to the regulatory framework, other Government agencies which rely on the assurance of TGA regulatory oversight provides on the quality, safety, and performance of medical devices may also be affected. This would include other parts of the Department of Health and Ageing that are part of the HTA processes, and public health authorities (such as state health departments, with parallel impacts on private health providers).

Organisations which interact with TGA at an operational level may also have an interest in the changes. For example, TGA and Customs work cooperatively to enforce TGA marketing restrictions through border controls, and changes to the oversight of devices may affect the incentives to import devices.

Options outlined in this paper may also impact on broader policy areas, and so be of policy interest to other Government agencies.

Top of page

Advantages and disadvantages

The following table analyses the impacts of the options on each of the key stakeholder groups in relation to the following:

  • Public health and safety: Changes to the risks and benefits of using medical devices
  • Costs: Financial impacts likely to be experienced, whether direct (fees and charges, etc.) or indirect (relating to implementation or compliance)
  • Access: Impacts on the availability of medical devices in Australia
  • Timeliness: Impacts on the efficiency of the regulatory process
  • Other: Such as the international impacts.

Option 1 - No immediate action

This would be the preferred option for a number of industry stakeholders. A number of submissions from the medical device industry argue that the more effective use of existing regulatory arrangements, particularly post market surveillance of medical devices, together with changes already underway, such as the reclassification of hip, knee and shoulder joint replacement implants, the introduction of clinical registries and improved adverse event reporting, are sufficient to address the issues around high risk medical devices. Further, many manufacturers operate in an international market, so changes in other jurisdictions, such as the reforms proposed for Europe, are also affecting these stakeholders.

However, as detailed earlier in this RIS this option fails to address the fundamental concerns of other stakeholder groups on the need for increased transparency and rigour of premarket assessment, particularly around implantable medical devices, and exposes Australian patients to risks that could be prevented through increased scrutiny.

Table 4: Option 1 - Advantages and disadvantages
Stakeholder Advantages Disadvantages
Option 1 – No immediate action
Consumers and health care professionals

Costs: No increase in regulatory costs to be passed on to consumers and/or health care professionals.

Access and Timeliness: No change to incentives for supplying in Australian market, and so maintains current level of device availability and does not change market entry timelines

Health and safety: Does not address the public health and safety concerns with the existing system.

Costs: Not preventing the failure of an implantable medical device can be very costly for consumers and healthcare professionals and taxpayers who ultimately fund the public healthcare system.

Medical device industry

Health and safety: Industry argues that existing reforms (joint reclassification, adverse event reporting, clinical registries) are sufficient to address concerns about implantable medical devices.

Costs and Access: No changes in the costs to industry (direct fees and charges, or changes to compliance costs), which means there is no change to the business viability of existing and potential products.

Timeliness: No change in the time taken for regulatory assessments.

Health and safety: Industry acknowledges there is community concern about transparency and rigour of assessment, and this would not be addressed.

Cost: Loss of opportunity to reduce costs by removing the requirement for TGA assessment for Australian manufacturers. Not preventing the failure of an implantable medical device can be very costly for the industry through loss of confidence in the sector as a whole.

Access: Loss of opportunity for faster and/or more predictable assessment timeframes.

Government agencies

Costs: No implementation costs.

Access: No impetus for industry to withdraw existing or withhold new medical devices from the Australian market.

Timeliness: No change in the time taken for regulatory assessments.

Health and safety: Does not address the public health and safety concerns with the existing system.

Cost: Loss of opportunity to reduce costs by removing the requirement for TGA assessment for Australian manufacturers.

Not preventing the failure of an implantable medical device can be very costly for public and private health funders.

Access: Loss of opportunity for faster and/or more predictable assessment timeframes.

Top of page

Option 2 - Changes to premarket assessment of medical devices

The most significant concern for medical device industry is the implementation cost of Option 2, particularly for those manufacturers and sponsors whose medical device range is primarily comprised of high risk devices. The net estimated cost for Option 2 to the TGA and therefore to industry is estimated to be $5,927,634 per year, against the total revenue for medical device industry estimated at $10 billion in 2010-1130. Therefore, the proposed increase in costs to industry represents a small proportion of the total revenue for medical device industry (0.06 per cent).

The cost estimate above relates to TGA costs, which would be passed on to industry as fees and/or charges (following consultation on implementation and subject to a Cost Recovery Impact Statement). In addition industry may incur additional costs in complying with the new requirements, such as obtaining and providing additional information:

  • Class IIb medical devices newly captured by audit requirements will be required to provide information requested (in line with the Table 3 above). This information should be available to the sponsor given this information needs to be held by them under the current regulatory framework.
  • Under the new Level 3 audit sponsors may be requested to provide copies of the design examination report and/or raw clinical data.
    • Design examination reports which the TGA has not routinely requested be provided on a regular basis, although sponsors are already legally required to either hold this information or be able to obtain the information in 20 working days. These reports will be requested under existing information gathering powers. The MTAA submission notes that some notified bodies charge a fee of up to $10,000 to provide a copy of the design examination report, however these costs have not been included in the cost estimate as sponsors are already required to have this information available on request, some notified bodies do not charge for copies of the design examination report and costs vary for notified bodies which do charge.
    • Providing the raw clinical data may be the most difficult information to obtain from a manufacturer, but should be available given the notified body would have needed to review this information in undertaking the conformity assessment

The additional audit requirements will also mean longer processing times for those applications subject to additional audit requirements:

  • For Class IIb medical devices newly subject to mandatory audit, the target timeframe is 30 days for a Level 1 audit and 60 days for a Level 2 audit.
  • Under the new Level 3 audit the target timeframe has not yet been determined, and will be subject to implementation consultation. However it is expected to be between 60 days (which applies for a Level 2 audit) and 255 days (which applies for conformity assessment).

The cost estimate also includes TGA costs associated with the publication of decisions. Industry stakeholders have expressed concern that the publication of decisions would also result in longer processing time for applications. As the publication of a decision can only be done after the decision is made, it is unlikely that publication will increase TGA time to make regulatory decisions, or market entry.

It is also acknowledged that some companies may be more impacted by the proposed changes than others. Based on analysis of 2012 applications for ARTG inclusion, a few companies submit relatively large numbers of applications for devices which would be subject to a Level 3 audit, with the highest number of affected applications for a single sponsor estimated at 32 per year. These AIMD and Class III applications are already subject to audit, but based on 2012-13 application and audit fees this proposal would raise fees for these applications by 140 per cent, from $234,240 to $561,024. There are four or five sponsors in this situation. Similarly, some sponsors will be disproportionately impacted by the expansion of mandatory audits to selected Class IIb medical devices. The sponsor with the highest number of applications which would be affected submitted an estimated 12 such applications in 2012, and this proposal would raise fees for these applications by 539 per cent, from $10,680 to $68,197. Options to address this impact through a revision of the fees and charges structure would be a subject for implementation discussions with stakeholders. The other issue of concern to industry is the potential for an increase in assessment time as this proposal increases the number of devices subject to a mandatory audit together with the introduction of a Level 3 audit.

It should be noted that an increase in TGA staffing has been factored in to the overall costs associated with this proposal to handle the anticipated increased workload required to administer the regulatory framework reflecting the proposed changes. Additionally, the TGA has refined (and continues to refine) its assessment processes to ensure that only relevant information as part of an application audit or conformity assessment is requested. These should ensure that there is minimum impact on assessment times associated with this proposal.

It should also be noted that the overall impact of Proposal 2 is reduced as increased confidence in the performance of European Notified Bodies is obtained.

Table 5: Option 2 - Advantages and disadvantages
Stakeholder Advantages Disadvantages
Option 2 - Changes to premarket assessment of medical devices
Consumers and health care professionals

Health and safety: Increases the transparency and rigour of premarket assessment.

Costs: There may be reduced costs for medical devices manufactured in Australia.

Timeliness: Removal of requirement for TGA conformity assessment for Australian manufacturers may decrease time to market for some Australian devices as mandatory audit assessments require less time to complete than conformity assessments.

Health and safety: There may be some remaining concerns about continued use of European notified bodies, despite checks undertaken through Level 3 audits for high risk devices.

Costs: Increased costs to industry may be passed on to consumers and/or health care professionals.

Access: The choice of devices may be reduced as it may be unviable to continue marketing some products or as some products will not be supported by sufficient evidence.

Timeliness: Increased assessment times may delay availability for some devices which were not previously audited or audited at a lower level.

Medical device industry

Health and safety: Increased consumer confidence in regulatory system increases confidence in available devices.

Costs: Reduced costs for Australian manufacturers from reduced duplication of conformity assessment between Australia and Europe. Mandatory audits are a less expensive option than requiring full TGA conformity assessment.

Timeliness: Removal of requirement for TGA conformity assessment for Australian manufacturers may decrease time to market for some Australian devices. Mandatory audits are a faster option than requiring full TGA conformity assessment (with targeted completion timeframe for audits of 30 to 60 days, compared to 255 TGA days for conformity assessments).

Health and safety: Increased transparency of decisions will highlight the different levels of evidence available for different devices.

Costs: Increased costs for sponsors for mandatory audits (additional audits of targeted Class IIb devices, the higher Level 3 fee for AIMD and Class III implantable devices) including cost of acquiring additional information required to be submitted to TGA as part of a Level 3 audit31. Costs of publication of decisions. Implementation costs for change.

Access: The range of products available for marketing may be reduced, possibly reducing the profitability of the sector.

Timeliness: Mandatory audits likely to increase current processing times for affected applications, extending time to reach the market.

Government agencies

Health and safety: Increases the transparency and rigour of premarket assessment.

Costs: Reduced costs for Australian manufacturers may encourage local medical devices industry. Timeliness: Removal of requirement for TGA conformity assessment for Australian manufacturers may decrease time to market for some Australian devices as TGA conformity assessment can take 255 TGA days32 while the targeted completion timeframe for application audits is 30 to 60 days.

Other: Removal of requirement for TGA conformity assessment for Australian manufacturers will assist with ANZTPA transition.

Health and safety: Increased transparency of decisions will highlight the different levels of evidence available for different devices.

Costs: Increased regulatory costs for devices subject to mandatory audits (additional audits of targeted Class IIb devices, the higher Level 3 fee for AIMD and Class III implantable devices). Costs of publication of decisions. Implementation costs for change.

Access: The choice of devices may be reduced as it may be unviable to continue marketing some products or as some products will not be supported by sufficient evidence.

Timeliness: Increased assessment will extend processing time, delaying availability of devices in the Australian market.

Top of page

Option 3 - Mandatory conformity assessment for AIMD and Class III implantable medical devices and allow third party conformity assessment for other devices other than Class 4 IVDs

This option was not supported by consumers, industry and most health professionals.

Option 3 has many of the same advantages and similar disadvantages as Option 2. However, under Option 3, fewer higher risk devices are subjected to additional TGA scrutiny at a higher cost to industry than Option 2 (see 'Costs and Benefits' section below). This means that the cost per public health outcome is higher and therefore less cost-effective. Furthermore, Option 3 does not provide flexibility to reduce the levels of regulatory oversight over time (and therefore costs), based on changing risks for particular devices or notified bodies.

The net estimated cost for Option 3 to the TGA and therefore to industry is estimated to be $18,553,264 per year. Industry feedback indicates that TGA conformity assessments both cost more and take longer than seeking the equivalent certifications from a European notified body. Generally the same documentation would need to be submitted to the TGA as to a European notified body, given the Essential Principles underpinning the EU and Australian regulatory frameworks are the same.

Note that these costs could be offset somewhat if manufacturers choose to only seek TGA conformity assessment (and not maintain duplicate certification from a European notified body). This is a business decision for manufacturer, and will depend not only on cost, but also factors such as the speed of access to market. This potential reduction has not been costed, as the fees notified body charge are a commercial arrangements, and not publicly available.

The cost estimate above also includes costs to maintain conformity assessment certification (such as reviews for device changes, regular QMS site audits, etc). For manufacturers holding both TGA and European conformity assessments, these costs to maintain the currency of the conformity assessment certification would be duplicated across both jurisdictions.

The requirement to seek TGA conformity assessment would also mean longer processing times for those applications, with conformity assessment subject to a statutory timeframe for completion of up to 255 TGA days. However it is not possible to quantify the change in processing given that the duration of an assessment will depend on the quality of the information supplied for review, the need for an onsite inspection of manufacturing facility, and the number of other assessments in the queue. It should be noted that speed to market does not guarantee market penetration given that HTA reimbursement us critical to the financial viability of some medical devices.

Table 6: Option 3 – Advantages and disadvantages
Stakeholder Advantages Disadvantages
Option 3 - Expand TGA mandatory conformity assessment for AIMD and Class III implantable medical devices and allow third party conformity assessment for other devices except Class 4 IVDs
Consumers and health care professionals

Health and safety: Increases the transparency and rigour of premarket assessment.

Timeliness: Removal of requirement for TGA conformity assessment for most Australian manufacturers may decrease time to market for some Australian devices.

Health and safety: There may be some remaining concerns about continued use of European notified bodies for lower risk devices.

Costs: increased costs to industry, which may be passed on to consumers and/or health care professionals.

Access: The choice of devices may be reduced as it may be unviable to continue marketing some products or as some products will not be supported by sufficient evidence.

Timeliness: Increased assessment times will delay availability for some devices.

Medical device industry

Health and safety: Increased consumer confidence in regulatory system increases confidence in available devices.

Costs: Reduced costs for Australian manufacturers from reduced duplication of conformity assessment between Australia and Europe. Alignment of third party conformity assessment with introduction of Australian notified bodies may decrease overall expense for international manufacturers.

Timeliness: Removal of requirement for TGA conformity assessment for Australian manufacturers may decrease time to market for some Australian devices. Competitive market for conformity assessment may enable faster times to market.

Health and safety: Increased transparency of decisions will make clear the minimal evidence for some devices.

Costs: Increased costs for sponsors for conformity assessment (TGA conformity assessment fees for a much broader range of higher risk devices). Costs of publication of decisions. Implementation costs for change.

Access: The range of products available for marketing may be reduced, possibly reducing the profitability of the sector.

Timeliness: Conformity assessment will increase current processing times for affected applications, extending time to reach the market (more likely than for Option 2).

Government agencies

Health and safety: Increases the transparency and rigour of premarket assessment.

Costs: Reduced costs for Australian manufacturers may encourage local medical devices industry.

Access: Higher risk devices with insufficient evidence of safety and performance no longer supplied in Australia.

Timeliness: Removal of requirement for TGA conformity assessment for Australian manufacturers of lower class devices may decrease time to market for some Australian devices. Other: Creation of Australian third party conformity assessment bodies may strengthen community of technical expertise. Removal of requirement for TGA conformity assessment for Australian manufacturers will assist with ANZTPA transition.

Health and safety: Increased transparency of decisions will make clear the minimal evidence for some devices.

Costs: Increased conformity assessment costs. Possible recruitment difficulties for technical staff to undertake TGA conformity assessment. Costs of publication of decisions. Implementation costs for change.

Access: The choice of devices may be reduced as it may be unviable to continue marketing some products or as some products will not be supported by sufficient evidence.

Timeliness: Increased assessment will extend processing time, delaying availability of devices in the Australian market.


Footnotes

  1. <http://www.mtaa.org.au/about-the-industry/industry...
  2. Information requirements for the Level 3 audit are outlined in the definition of 'Application audit assessments' in Attachment H: Glossary and acronyms. Applications for ARTG inclusion already include a declaration by sponsors that they have, or have access to, a range of information, and information which may be required for a Level 3 audit falls within current requirements. However where sponsors do no hold the information, they may incur costs in accessing that information.
  3. Regulation 4.3 of the Therapeutic Goods (Medical Devices) Regulations 2002

Top of page

Book pagination