Commonwealth Numbered Regulations - Explanatory Statements

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THERAPEUTIC GOODS AMENDMENT REGULATIONS 2001 (NO. 2) 2001 NO. 160

STATUTORY RULES 2001 No. l60

Issued by authority of the Parliamentary Secretary to the Minister for Health and Aged Care

Therapeutic Goods Act 1989

Therapeutic Goods Amendment Regulations 2001 (No. 2)

The object of the Therapeutic Goods Act 1989 (the Act) is to establish and maintain a national system of controls for the quality, safety, efficacy and timely availability of therapeutic goods that are used in Australia or exported from Australia. The Therapeutic Goods Administration (the TGA) is responsible for administering the Act.

The Governor-General may, under section 63 of the Act, make regulations for the purposes of the Act. In particular, the Governor-General may, under subsection 63(1) and paragraphs 63(2)(h) and (3(a) of the Act, make regulations prescribing fees for any matter under the Act or the Regulations, as well as fees in relation to different classes of therapeutic goods or different steps in the manufacture of such goods.

The principal purpose of the regulations is to increase the fees payable under Schedule 9 of the Therapeutic Goods Regulations by 6.6% to enable the TGA to continue to meet the government's requirement that the TGA operates on a full cost-recovery basis. These fees reflect the cost incurred by the TGA in performing the various tasks under the Act and Regulations.

The 6.6% increase is made up of:

       50% annual Wage Cost Index (WCI) 1.55%

       50% CPI (annual adjusted) 1.75%

       increased rent 3.30%

The increased rent is a result of the Government's policy of commercialisation of its specialpurpose and industrial estates, which includes the TGA building in Symonston. This will lead to a significant increase in the annual rent that must be paid. The increase of 3.317 million is to be phased in over 3 years from 1 July 2001 at the rate of $1.5 million in each of the first two years and the balance in the third year. An increase to both fees and charges of 3.3% is required to fully recover the $1.5 million rental increase in the 2001/2002 financial year. The formula for the 6.6% increase was discussed with all key industry bodies. These are the Australian Self-Medication Industry, the Complementary Healthcare Council, the Medical Industry Association of Australia and the Australian Pharmaceutical Manufacturers Association. The four industry associations have agreed to the formula as the basis for the 6.6% increase to the fees in Schedule 9 of the Therapeutic Goods Regulations.

The regulations will also increase the prescribed level of a manufacturer's annual wholesale turnover that would make a manufacturer of therapeutic goods eligible for a 50% reduction in the amount of annual charges otherwise payable for maintaining a manufacturing licence for the purposes of the Act. The amount of the annual wholesale turnover will increase from $56,000 to $61,000. This increase is based upon the Consumer Price Index increases since this provision was last amended in 1997.

Details of the Regulations are set out in the Attachment.

The Regulations commence on 1 July 2001.

ATTACHMENT

Therapeutic Goods Amendment Regulations 2001 (No. 2)

Regulation 1 states that the title of the regulations will be the Therapeutic Goods Amendment Regulations 2001 (No. 2)

Regulation 2 provides that the regulations will commence from 1 July 2001.

Regulation 3 provides that the regulations amend the Therapeutic Goods Regulations 1990 as provided in Schedule 1.

SCHEDULE 1 - AMENDMENTS

Item 1 is a consequential amendment to make the heading consistent with the amendment made under Item 2, in relation to regulation 45A of the Regulations.

Item 2 increases the level of the annual wholesale turnover which would make a manufacturer of therapeutic goods eligible for a 50% reduction in the amount of annual charges otherwise payable for maintaining a manufacturing licence for the purposes of the Act. The amount for the annual wholesale turnover has increased from $56,000 to $61,000.

Item 3 makes a presentational change to the wording of Item 2. Removal of the reference to "Schedule 9" makes the wording in Item 2 consistent with all the other Items in Schedule 9.

Item 4 corrects a typographical error.

Item 5 increases all the fees in Schedule 9 by 6.6%.