Consultation: Proposal to change the current good manufacturing practice (GMP) fees and charges

6 March 2018

This consultation closed on 5 March 2018

Introduction

The Therapeutic Goods Administration (TGA) engaged Deloitte to undertake a review of its current Good Manufacturing Practice (GMP) fees and charges for medicines and Active Pharmaceutical Ingredients (APIs). The purpose of the review is to improve the accuracy and transparency of the cost recovery arrangements for that regulatory function and address a significant under recovery over the past four financial years.

The review does not include fees and charges related to medical devices, human blood, blood component, and haematopoietic progenitor cells (HPC) or biological products.

Deloitte has now completed its review and put forward three options for TGA's consideration after consultation with potentially impacted stakeholders.

Invitation to comment

The TGA conducted a consultation to seek feedback from the potentially impacted stakeholders (ie: companies within the medicinal product pharmaceutical industry). It is important that every stakeholder consider the impact of changes to the current GMP fees and charges on their product/s and business/s.

Consultation document

How to access a pdf or Word document

About the consultation

The primary objective of this consultation is to seek stakeholders' views on the options proposed by Deloitte for GMP fees and charges to address the under recovery of GMP activities for medicinal products. It is acknowledged that any changes would have varying impacts across sponsors and manufacturers.

Content of submissions

Responses should include:

  • Which option(s) you would support and why.
  • An assessment of how the proposed options will affect you and/or your businesses (either positively or negatively). Please attempt to quantify this (e.g. financial impacts).
  • Any other information you would like to provide to the TGA.

The TGA will also contact the Industry Associations who are members of the TGA –Industry Working Group on Good Manufacturing Practice (TIWGG). Industry Associations will collect and consolidate their members' feedback into a single submission to TGA where feasible.

Timetable

Please include "Fees and charges consultation feedback" in the email subject. The closing date for submissions to the consultation is COB 5th March 2018

Privacy information

Submissions will be acknowledged as they are received. TGA will treat all responses and information provided IN CONFIDENCE. TGA will collate and analyse submissions on matters that are within the scope of the consultation.

  • The TGA collects your personal information in this submission in order to:
    • contact you if the TGA wants to seek clarification of issues raised in your submission or to check whether you consent to certain information that you have provided being made publicly available.
    • help provide context about your submission (e.g. to determine whether you are an individual or a director of a company or representing an interest group).
    • Seek feedback about how the consultation was undertaken.
  • Please do not include personal information about other individuals in the body of your submission. Personal information in this context means information or an opinion about an individual whose identity is apparent, or can reasonably be ascertained, from the information or opinion.
  • More information on consultations and privacy is included in the submission form and on our website.

Planned implementation

Following completion of the consultation process, a proposal will be submitted to seek the Ministerial approval to make changes to the GMP fees and charges. Subject to necessary approval of the regulatory changes, it is planned to implement the revised fees and charges from 1 July 2018.

The current practice of the TGA is to include a fixed number of inspection hours that will be undertaken but not billed over a three-year period. These have come to be known as 'free' hours.

From 1 July 2018 there will be no further accrual of 'free' inspection hours. As part of the transitional arrangement, domestic manufacturers who have unused 'free' inspection hours as at 1 July 2018 will be able to utilise them for further on-site inspections, until 30 June 2020.

Consultation - information sessions

As part of our stakeholder consultation, several information sessions were held in Melbourne, Sydney and Brisbane.

GMP Fee Model Review

Deloitte
Industry Presentation, February 2018

Slide 1 - Deloitte - GMP Fee Model Review

Slide 2 - Background - Cost Recovery

  • TGA operates on full cost-recovery (different to some O/S regulators)
  • Cost recovery should align costs incurred with costs recovered
  • Cost recovery mechanisms should:
    • optimise demand for activities
    • improve efficiency and responsiveness of government activities and accountability for those activities

Slide 3 - Purpose of this Review

  • Simplify the structure of fees and charges
  • Improve transparency
  • Address material under-recovery
Review purpose
  2013-14
$m
2014-15
$m
2015-16
$m
2016-17
$m
Average
$m
Revenue 12.1 12.1 11.2 10.0 11.3
Spend 13.5 12.9 13.2 14.4 13.5
Under – Recovery -1.4 -0.7 -2.0 -4.4 -2.1

Slide 4 - Analysing the under-recovery

Bar chart showing the under-recovery by the over-recovery for TGA activity based costing.

Explanatory note (this was spoken at the presentation – not part of the original slide)

This chart shows a scaled depiction of the level of under and over recovery based on the initial TGA Activity Based Costing.

We focussed on the two large under-recoveries – because of their scale.

We also focussed on the annual licence charge over-recovery because we had very good data and it would be administratively simple to fix.

The initial data suggested an over-recovery in Overseas Manufacturing Inspections but more detailed analysis showed it was close to even – with an hourly cost of $1338 matching closely to the current hourly rate of $1330 - hence no change proposed.

Slide 5 - Possible Approaches

  • Spread the load but no structural change
  • Minimalist structural change
  • Moderate structural change
  • Complex structural change

Slide 6 - Summary of Options

Summary of Options
  Current State Option One Option Two Option Three
Uniform Increase of all fees & charges
Fully Recover Inspection Hours
Merge Low & High Annual Licence Charge
Licence Variation Application Fee
Increase GMP Clearance Application Processing Fee

Slide 7 - Options – Fee Table

Options – Fee Table
Fees and Charges Current Fees ($) Option One ($) Option Two ($) Option Three ($)
Annual Manufacturing Charges - - 6,000 4,590
Low-Level Manufacturing Charges 6,260 7,352 - -
High-Level Manufacturing Charges 12,200 14,328 - -
Australian Manufacturing Hourly Inspection Fee 660 775 1,150 970
Overseas Manufacturing Hourly Inspection Fee 1,330 1,562 1,400 1,330
GMP Licence Application Fee 1,000 1,174 1,000 770
GMP Licence Variation Fee - - - 770
GMP Clearance Application Processing Fee 390 458 390 790
Obtaining Evidence from Overseas Regularity Authority 680 799 680 680
Compliance Verification 2,030 2,384 2,030 2,030
Certificate of GMP Compliance 170 200 170 170
Certified Copy 60 70 60 60

Slide 8 - Industry Impact

  • We modelled the impact on 6 groups

Comparison bar chart showing the impact on industry.

Slide 9 - Industry Impact

  • High Risk Manufacturers

Comparison bar chart showing the impact on industry.  This chart compares high and low levels of manufacturers for existing, option 3 and annual increases.

Slide 10 - Industry Impact

  • Low Risk Manufacturers

Comparison bar chart showing the impact on industry. This chart compares low levels of manufacturers for existing, option 3 and annual increases.

Slide 11 - Industry Impact

  • Australian vs Overseas Manufacturers

Vertical bar chart showing the impact on industry in Australia verse's overseas manufactures.

Slide 12 - Recap: Options

Recap: Options
  Current State Option One Option Two Option Three
Uniform Increase of all fees & charges
Fully Recover Inspection Hours
Merge Low & High Annual Licence Charge
Licence Variation Application Fee
Increase GMP Clearance Application Processing Fee

Slide 13 - Recap: Fee Table

Recap: Fee Table
Fees and Charges Current Fees ($) Option One ($) Option Two ($) Option Three ($)
Annual Manufacturing Charges - - 6,000 4,590
Low-Level Manufacturing Charges 6,260 7,352 - -
High-Level Manufacturing Charges 12,200 14,328 - -
Australian Manufacturing Hourly Inspection Fee 660 775 1,150 970
Overseas Manufacturing Hourly Inspection Fee 1,330 1,562 1,400 1,330
GMP Licence Application Fee 1,000 1,174 1,000 770
GMP Licence Variation Fee - - - 770
GMP Clearance Application Processing Fee 390 458 390 790
Obtaining Evidence from Overseas Regularity Authority 680 799 680 680
Compliance Verification 2,030 2,384 2,030 2,030
Certificate of GMP Compliance 170 200 170 170
Certified Copy 60 70 60 60

Contact us

If you have any questions, please contact the Manufacturing Quality Branch via or call 1800 446 443.