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Cost recovery implementation statement

2021-2022

30 June 2021

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Introduction

Purpose of the Cost Recovery Implementation Statement

This Cost Recovery Implementation Statement (CRIS) provides information on how the Therapeutic Goods Administration (TGA), within the Department of Health[1], implements and cost recovers its regulatory activities. The TGA's regulatory activities are 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 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 three 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.

In addition, the TGA undertakes a number of public health activities in the public good. These activities are discussed in detail in this CRIS.

Risk management approach to regulation

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/regulatory 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;
  • blood, blood components and biologicals; and
  • good manufacturing practices (GMP)[2].

The TGA provides a number of fee-free services for the public good some of which do not directly relate to any particular product or industry group. The costs of undertaking these types of activities cannot be appropriately recovered from a particular sponsor or industry group. Some (and not all) of the costs of these services are met from the Government appropriation. A review of the TGA fees and charges is underway to determine the costs and the appropriate funding source of the TGA activities.

While some funding is also provided by the Australian Government for meeting secretariat costs for medicines and chemicals scheduling regulation, and in the form of an interest equivalency payment against the special account balance (reserves), the vast majority (around 96%) of funding is generated through fees and charges set under cost recovery arrangements.


Footnotes

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