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Cost recovery implementation statement


9 December 2019

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Purpose of the Cost Recovery Implementation Statement

This Cost Recovery Implementation Statement (CRIS) provides information on how the Therapeutic Goods Administration (TGA) implements cost recovery activities associated with the registration and listing of medicines and inclusion of medical devices, including in vitro diagnostic (IVD) devices, and biologicals onto the Australian Register of Therapeutic Goods (ARTG) and the ongoing monitoring and surveillance of them.

Description of the activity

The TGA is a part of the Department of Health and contributes to Outcome 5 as outlined in the 2019-20 Portfolio Budget Statements:

Outcome 5: Regulation, Safety and Protection

Protection of the health and safety of the Australian community and preparedness to respond to national health emergencies and risks, including through immunisation, initiatives, and regulation of therapeutic goods, chemicals, gene technology, and blood and organ products.

5.1: Protect the Health and Safety of the Community through Regulation

The Government, through the Therapeutic Goods Administration (TGA), protects the health and safety of the community by regulating therapeutic goods for safety, effectiveness/performance and quality. The TGA aims to deliver efficient, best practice regulatory outcomes through international collaboration and reform.

To achieve this outcome, the TGA approves and regulates products based on an assessment of risks against benefits. The Australian community expects therapeutic goods in the marketplace to be safe, of high quality and of a standard at least equal to that of comparable countries. The TGA regulates therapeutic goods through:

  • pre-market assessment;
  • post-market monitoring and enforcement of standards; and
  • licensing of Australian manufacturers and verifying overseas manufacturers' compliance with the same standards as their Australian counterparts.

Therapeutic goods are divided broadly into 3 classes: medicines, medical devices and biologicals. Medicines must be entered as either 'registered' or 'listed' medicines on the ARTG. Medical devices and biologicals must be 'included' on the ARTG before they may be supplied in or exported from Australia, unless exempted.

If a problem is discovered with a medicine, device, biological or manufacturer, the TGA is able to take action. Possible regulatory actions vary from continued monitoring to withdrawing the product from the market and revoking or cancelling a manufacturing licence.

Risk management approach

All therapeutic goods carry potential risks, some of which are minor, some potentially serious. The TGA applies scientific and clinical expertise to its decision-making to establish that the benefits of a product outweigh any risk. The level of regulatory control increases with the level of risk a medicine or medical device can pose. The risk-benefit approach assures consumers that the products they take are safe for their intended use, while still providing access to products that are essential to their health needs.

Industry groups

The TGA's cost recovery arrangements cover the following industry sectors:

  • prescription medicines;
  • over the counter medicines;
  • complementary medicines;
  • medical devices, including in-vitro diagnostic (IVD) devices;
  • good manufacturing practices; and
  • blood, blood components and biologicals.

While some funding is provided by the Government for meeting the cost of medicines and chemicals scheduling activity, and in the form of an interest equivalency payment against the special account balance (reserves), the overwhelming majority of funding is generated through fees and charges set under cost recovery arrangements.

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