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TGA presentation on Annual Charge Exemption scheme, 15 June 2015

19 June 2015


These presentation papers are provided on the TGA's website solely for the purpose of indicating or suggesting what TGA representatives spoke about to the various conferences and seminars to which it relates. The papers are not legislative in nature and should not be taken to be statements of any law or policy in any way.

The Australian Government Department of Health (of which the TGA is a part) advises that (a) the presentation papers should not be relied upon in any way as representing a comprehensive description of regulatory requirements, and (b) cannot guarantee, and assumes no legal liability or responsibility for, the accuracy, currency or completeness of the information contained in the presentation paper.


  • Presented by: Ms Nicole McLay
  • Presented at: TGA ACE roadshow, June 2015
  • Presentation summary: This presentation provides sponsors with information outlining the changes from the Low Value Turnover (LVT) scheme to the new Annual Charge Exemption (ACE) scheme.


Annual Charge Exemption Scheme

Information session

Ms Nicole McLay
Assistant Secretary, Regulatory Business Services Branch
Regulatory Support Division, TGA

June 2015

Slide 1 - Representatives from the TGA

  • Ms Nicole McLay
    - Assistant Secretary, Regulatory Business Services Branch
  • Mr Vinod Mahajan
    - Director, Regulatory Decision Review
  • Ms Jo Flynn
    - Regulatory Education Section

Slide 2 - Annual Charge Exemption Scheme

  • Background
  • Key features
  • New ACE scheme components
  • Waivers
  • New rates of annual charges
  • Compliance program
  • Sponsor actions
  • Key dates

Slide 3 - Background

  • Low value turnover exemption scheme introduced 1990
    • No longer meets objectives
    • Complex and burdened with red tape
    • High number of complaints
    • Inconsistent with government’s cost recovery policy
    • Unsustainable and inequitable
  • Consultation paper released in 2014
  • New scheme commences 1 July 2015

Slide 4 - Key features

  • Rates of annual charges will reduce for some product categories
    • from 5% to 23%
  • Self declaration - online system to make notifications and declarations
  • Significant reduction in administration - $3m p.a. in savings to industry
  • A new waiver option for annual charges

Slide 5 - New ACE scheme - components

  • Annual Charge Exemption (ACE) Scheme Begins 1 July 2015
    • New entries from 1 July 2015 will automatically qualify and be granted exemption
    • Existing entries at 1 July 2015 pre-qualify if LVT exempt in last 2 years on basis of $0 turnover
    • ACE applies until commencement of turnover
    • Annual self-declaration through client portal or by mail
    • No application fee
    • No TGA delegate decision
    • Sponsors will not be invoiced for ACE entries

Slide 6 - Benefits of ACE

  • No application fee - additional saving of $2.4m p.a. to industry
  • A high number of current exemptions continue (74%)
  • No third party accountant certification
  • Only need to declare no turnover rather than the value of turnover
  • Annual charges are reducing for:
    • non-biological (chemical) prescription medicines, and
    • medical devices class IIa and above
  • Annual charge invoices only issued for non-exempt entries
  • Waivers available on public health/financial viability grounds

Slide 7 - Waivers

new waiver option under ACE

  • Waiver criteria
    • public health risk if product is removed from the ARTG
    • product becomes financially unviable if annual charge applies
  • Available for
    • registered medicines,
    • biologicals,
    • devices class IIa or higher and
    • IVD class 2 or higher
  • Decision by a TGA delegate
  • Waiver refused, annual charge payable
  • Decision appealable
  • Annual application

Slide 8 -

  • Two levels of annual charges for chemical prescription medicines based on pharmacovigilance activities/costs:
    • Higher amount – relevant goods until 8th anniversary*
    • Lower amount – most generic medicines*, relevant goods past 8th anniversary
  • Relevant goods = new chemical entity, extension of indications, or change to intended patient group
  • Other major variations such as new formulation, change of strength, dosage forms – higher or lower amount depending on parent good
  • * goods containing certain active ingredients will always attract the higher amount:
    • thalidomide,
    • leflunomide,
    • lenalidomide,
    • mifepristone,
    • clozapine and
    • isotretinoin

Slide 9 - Fees and charges 2015-16

  • Non-biological prescription medicines
    • 23% reduction in annual charge for lower amount
    • 5% reduction in annual charge for higher amount
  • Medical devices
    • 5% reduction in annual charges for class IIa and above
  • All fees and charges
    • 2.12% increase in fees and charges (CPI/WPI 2.5%)
  • Revised fees and charges schedule - TGA website 1 July 2015

Slide 10 -Audit and compliance program

  • Audit and compliance assurance program will commence
  • Uses existing information collecting provisions in the legislation
  • Failure to provide information in response could result in suspension/cancellation of entry
  • Providing incorrect declaration results in cancellation of the exemption - from year of turnover (multiple annual charges could become payable)
  • Criminal Code applies
  • Exempt and waived entries published on the website

Slide 11 - Sponsor actions

  • Letter sent to sponsors with pre-qualified entries 3 June
    • please check your list of exempt entries
    • new entries will be automatically exempted
  • Notify commencement of turnover for exempt entries at any time
  • Declaration of $0 turnover between 1 - 22 July each year for prior year to maintain exemption
    • first declaration July 2016
  • Payment of annual charges by 15 September each year

Slide 12 - Key dates

  • June 2015
    • Advice to sponsors on existing entries, information sessions, website material
  • 1 July 2015
    • ACE scheme commences
  • Between 1 July and 22 July (annually starting 2016)
    • Sponsor self-declares that entry had $0 turnover in the previous financial year
    • Sponsor may notify commencement of turnover at any time
  • July (annually)
    • Annual charge invoices issued for non-exempt entries
  • 15 September (annually)
    • Due date for the payment of annual charges

Slide 13 - More information

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