Commonwealth Numbered Regulations - Explanatory Statements

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THERAPEUTIC GOODS AMENDMENT REGULATIONS 2003 (NO. 2) 2003 NO. 151

EXPLANATORY STATEMENT

STATUTORY RULES 2003 No. 151

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

Therapeutic Goods Act 1989
Therapeutic Goods (Charges) Act 1989

Therapeutic Goods Amendment Regulations 2003 (No. 2)
Therapeutic Goods (Medical Devices) Amendment Regulations 2003 (No. 1)
Therapeutic Goods (Charges) Amendment Regulations 2003 (No. 1)

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. Under the Act therapeutic goods, unless they have been exempted from this requirement, are required to be entered on the Australian Register of Therapeutic Goods (the Register) before they may be manufactured, supplied, imported or exported for use by humans. Manufacturers of most therapeutic goods are also required to manufacture such goods under licence, unless they, or the class of goods being manufactured, have been exempted from the licensing requirements.

The purpose of this set of Regulations is to increase most of the fees and charges that are payable in relation to therapeutic goods by 3.25 per cent, increase some charges to cover the cost of additional post market surveillance, put in place a range of new fee items, vary existing fees for prescription medicines, put in place provisions allowing for the reduction of fees for therapeutic goods in specified circumstances and make technical amendments.

The legislative context of the Regulations is described in Attachment A.

The Therapeutic Goods Amendment Regulations 2003 (No. 2) (the Regulations):

•       increase, by 3.25 per cent, the fees payable under Schedule 9 of the Therapeutic Goods Regulations 1990 (the Principal Regulations);

•       put in place new fee items relating to the assessment of evidence on the standard of overseas manufacturers;

•       vary existing fees for prescription medicines;

•       put in place provisions allowing for the reduction of fees for therapeutic goods in specified circumstances;

•       put in place a new fee for the testing of samples, and provision of advice, in responding to a request from the Pharmaceutical Benefits Program of the Department of Health and Ageing;

•       put in place a new fee for assessing data relating to the safety, quality and efficacy of listed medicines and a new fee for evaluating the device component of a medicine; and

•       make technical amendments.

The Therapeutic Goods (Medical Devices) Amendment Regulations 2003 (No. 1) (the Medical Devices Regulations):

•       increase, by 3.25 per cent, the fees payable under Schedule 5 of the Therapeutic Goods (Medical Devices) Regulations 2002 (the Principal Medical Devices Regulations), which include the processing of applications for inclusion of medical devices in the Register and initial and subsequent assessments under the conformity assessment procedures; and

•       provide for the reduction of assessment fees in particular circumstances and make a consequential amendment to a Schedule 5 item.

The Therapeutic Goods (Charges) Amendment Regulations 2003 (No. 1) (the Charges Regulations) would:

•       increase most of the charges that are payable under Therapeutic Goods (Charges) Regulations 1990 (the Principal Charges Regulations) in relation to therapeutic goods by 3.25 per cent;

•       increase annual charges for listed and registered therapeutic goods to cover the cost of increased post-market surveillance;

•       increase the percentage level of the value of the wholesale turnover of therapeutic goods in relation to a particular sponsor from 6.7 per cent to 6.8 per cent for the purpose of assessing exemption for a sponsor from the annual charges of maintaining goods entered in the Register;

•       put in place new annual charges applicable to specified prescription medicines; and

•       make a technical amendment.

The rationale for increasing the fees and charges payable by 3.25 per cent is to enable the TGA to continue to meet the Government's requirement that the TGA operate on a full cost-recovery basis.

The 3.25 per cent increase is made up of:

50 per cent of the annual Wage Cost Index (WCI)
for the year ended December 2002        1.75 per cent

50 per cent of the Consumer Price Index (CPI)
for the year ended December 2002        1.50 per cent

The formula for the WCI and CPI increase was discussed with key industry bodies.

These included the Australian Self-Medication Industry, the Complementary Healthcare Council, Medical Industry Association of Australia and Medicines Australia. These industry associations have agreed to the formula as the basis for the 3.25 per cent increase to the fees and charges payable under the Principal Regulations, the Principal Medical Devices Regulations and the Principal Charges Regulations.

The rationale for increasing certain annual charges to cover the cost of additional post-market surveillance resulting from the Pan Pharmaceutical recall and subsequent changes to the Act is also to enable the TGA to continue to meet the Government's requirement that the TGA operate on a full cost-recovery basis. The industry associations have been advised of the need to increase particular charges for this purpose.

The current fees for administrative activities under the Act and the Principal Regulations as they relate to evaluation of therapeutic goods use a page count structure. The Regulations amend the fees for the evaluation of therapeutic goods mentioned in Part 1 of Schedule 10 to the Principal Regulations to be based on a per submission basis instead of the number of pages. This is consistent with international practice as no major overseas regulatory agency charges by page count. The calculation of page count fees by industry and TGA results in avoidable compliance costs for both parties. Additionally, the TGA has determined that the time taken to evaluate these applications does not correlate to application page counts, which suggest this is also not a determinant of the work required for completion of the process.

New fees are proposed to fully recover the costs involved in the assessment of overseas manufacturers' Good Manufacturing Practice (GMP). GMP includes standards to be maintained at manufacturing premises and procedures for quality assurance and quality control in manufacturing therapeutic goods. The Regulations impose new fees relating to the assessment of evidence of GMP compliance of an overseas manufacturer, for obtaining GMP evidence from overseas regulatory authorities and for re-instatement of GMP approval of an overseas manufacturer where this has been allowed to expire.

The Regulations include a provision which would allow the Secretary of the Department of Health and Ageing to waive or reduce evaluation fees set out in Schedule 9 of the Principal Regulations. The Secretary would be able to waive or reduce the evaluation fees that are payable for therapeutic goods mentioned in Part 1 of Schedule 10 of the Principal Regulations where it was required to make the goods available in Australia in order to deal with an actual health emergency and the Secretary had information relating to the goods that would allow the evaluation to be abridged.

In order to fully recover the costs involved in evaluation and testing of samples, a new fee would be imposed in response to a request for testing and advice from the Pharmaceutical Benefits Program of the Department. The cost of undertaking this activity would be borne by the sponsors who would benefit from the pharmaceutical benefits listing of the therapeutic goods.

To fully recover the costs involved in evaluating data requested by the Secretary to assess the safety, quality and efficacy of listed medicines a new fee would be imposed based on the total number of pages to be evaluated. Following the Pan Pharmaceutical recall incident it is anticipated that there will be increased post-market surveillance in this area the cost of which is to be borne by the sponsors who benefit from marketing the products. Also with the aim of achieving full cost recovery, a new fee would be imposed in relation to a medicine that includes a device component, for the cost of evaluating data relating to the device component of the medicine. No fee currently exists to recover this cost.

The Medical Devices Regulations include a provision to enable the Secretary to reduce the assessment fee where payment of the full fee would make the supply of the device commercially unviable and supply would be in the interest of public health. The Medical Devices Regulations would also allow the Secretary to reduce assessment fees in circumstances where a reduced assessment was possible as the Secretary already had knowledge of compliance with regulatory requirements.

The Charges Regulations increase the percentage level of the value of the wholesale turnover of therapeutic goods in relation to a particular sponsor. This is for the purposes of determining whether the annual charge otherwise payable by a sponsor for maintaining an entry of goods in the Register may be waived under regulations 4B and 4C. These Regulations would benefit persons with small businesses with an annual turnover of a few thousand dollars who have goods on the Register. The 6.7 per cent benchmark would be increased to 6.8 per cent to reflect the corresponding increase to the annual charges that would be payable for goods entered on the Register proposed by the Charges Regulations.

The Charges Regulations would also put in place new annual charges in relation to specified prescription medicines mentioned in Part 1 of Schedule 10 of the Principal Charges Regulations. These changes would better reflect the costs of TGA's post-market activities and the relative costs of pre- and post-market activities.

Details of the Regulations are set out in Attachment B.

Details of the Medical Devices Regulations are set out in Attachment C.

Details of the Charges Regulations are set out in Attachment D.

The regulations would commence on 1 July 2003.

ATTACHMENT A

Details of the legislative context of the proposed set of Regulations.

Section 63 of the Therapeutic Goods Act 1989 (the Act) provides that the Governor-General may make regulations, not inconsistent with the Act, prescribing matters required or permitted to be prescribed by the Act; or necessary or convenient to be prescribed for carrying out or giving effect to the Act. In particular, the Governor-General may, under subsection 63(1) and paragraphs 63(2)(h) and 63(3) 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 particular therapeutic goods, and provide for reduction of fees.

Section 3 of the Therapeutic Goods (Charges) Act 1989 (the Charges Act) states that the Therapeutic Goods Act 1989 is incorporated, and is to be read as one with the Charges Act.

Section 4 of the Charges Act provides that annual charges as are prescribed are payable for maintaining entries of therapeutic goods in the Register. Subsection 4(1A) of the Charges Act provides that where more than one therapeutic good is "grouped", and each of the "grouped" therapeutic goods is covered by the same registration or listing number, then an annual charge as prescribed will apply for maintaining all the registered or listed goods covered under the same grouping. A single charge has been prescribed for this purpose.

Section 5 of the Charges Act provides that the Governor-General may make regulations, not inconsistent with the Act, prescribing the amounts of charges.

Subsection 5(2) of the Charges Act enables the Governor-General to prescribe different levels of charges in respect of different classes of goods and annual licensing charges for maintaining manufacturing licences for the manufacture of therapeutic goods. Licensing charges may be prescribed for different steps in the manufacture of therapeutic goods.

Schedule 9 of the Therapeutic Goods Regulations 1990 provides the list of fees chargeable under the Act relating to therapeutic goods other than medical devices which are covered by the Therapeutic Goods (Medical Devices) Regulations 2002 (the Principal Medical Devices Regulations). These fees reflect the cost incurred by the TGA in performing the various tasks under the Act and the regulations.

Schedule 5 of the Principal Medical Devices Regulations provides the list of fees chargeable under Chapter 4 of the Act. These fees reflect the cost incurred by the TGA in performing the various tasks under the Act and the regulations.

ATTACHMENT B

Details of the Therapeutic Goods Amendment Regulations 2003 (No. 2)

Regulation 1 states that the title of the Regulations will be the Therapeutic Goods Amendment Regulations 2003 (No. 2).

Regulation 2 provides that the Regulations will commence from 1 July 2003.

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

SCHEDULE 1 - AMENDMENTS

Items 1 to 3 insert definitions of "generic medicine", "submission" and "trade name" in regulation 2 of the Therapeutic Goods Regulations 1990 (the Principal Regulations).

Item 4 prescribes two further matters for the purposes of paragraph 31(2)(h) of the Act that the Secretary may require information or documents in relation to. Sponsors of listed therapeutic goods or applicants for listing may be required to give information or documents relating to the quality and efficacy of the goods.

Items 5 to 8 are technical amendments providing for renumbering of section 32 in the Act to section 9D.

Item 9 amends existing subregulation 43(1) by making that provision subject to other provisions in Part 7 of the Principal Regulations.

Item 10 removes the definition of "page" from regulation 43. This definition now appears in Part 1 of Schedule 9.

Item 11 amends subregulation 45(2) so that it no longer applies to an application relating to goods mentioned in Part 1 of Schedule 10 (prescription medicines).

Item 12 amends subregulation 45(4) so that it also no longer applies to an application relating to goods mentioned in Part 1 of Schedule 10. It also inserts a new provision (subregulation 45(4AA)) which would allow the Secretary to waive or reduce an evaluation fee in relation to goods of a kind mentioned in Part 1 of Schedule 10 of the Principal Regulations. The waiver or reduction in evaluation fees would be granted, if in the Secretary's opinion, the supply of goods in Australia is necessary because of a public health emergency, the waiver or reduction is necessary to enable the goods to be supplied in Australia and the Secretary has information relating to the goods which would allow the evaluation to be abridged.

Item 13 substitutes a new heading to regulation 45A reflecting the revised annual turnover figure.

Item 14 increases the wholesale turnover value of therapeutic goods index by 3.25%.

Item 15 is a minor technical amendment.

Item 16 creates two parts in Schedule 9. Part 1 contains definitions relevant for the purposes of interpreting the table of fees in Part 2. New definitions of "major variation", "minor variation" and "new chemical entity" are inserted in Part 1. The scope of a "submission" is also explained. Submissions are now the basis for the charging of fees for therapeutic goods mentioned in Part 1 of Schedule 10 of the Principal Regulations.

Item 17 is a minor technical amendment.

Items 18 and 19 are also technical amendments substituting the word "medicine" for "drug" and relocating the words "for each medicine" within the item.

Item 20 amends paragraph (ba) of Item 2 of Schedule 9 to change when an application fee is payable in relation to medicines mentioned in Part 1 of Schedule 10 of the Principal Regulations. An application fee of $5,670 or 20% of the relevant fee under Item 4 (whichever is less) applies in these circumstances:

•       where an application for registration of these goods has been received and the Secretary considers that the application cannot be determined because of insufficiency of information; or

•       the application is withdrawn before it is determined as acceptable for evaluation.

Item 21 substitutes a new paragraph (a) in Item 2A of Schedule 9 of the Principal Regulations to make it clear that this fee is now on a per submission basis.

Item 22 inserts new fee items 2B and 2C in Schedule 9. New Item 2B imposes a fee of $4,300 for an application to which regulation 16F or 16G applies for the evaluation of chemistry, quality control or manufacturing process only of the medicine. New Item 2C imposes a fee of $4,300 for an application under section 9D of the Act where evaluation of clinical, pre-clinical or bio-equivalence data and chemistry, quality control or manufacturing information of the medicine are required.

Items 23 and 24 are minor technical amendments to remove a double reference to the word 'listed'.

Item 25 and Item 26 insert the correct reference to fee Item 4 in item 3B of Schedule 9 of the Principal Regulations as a consequence of amendments in proposed Item 27.

Item 27 amends Item 4 to effect the charging of evaluation fees for the purposes of subsection 24(1) of the Act on a per submission basis. The new fee items apply to goods mentioned in Part 1 of Schedule 10 to the Principal Regulations. The fee levels reflect the complexity of evaluation required ranging from $192,600 for a new chemical entity to $1,350 for evaluation of consumer patient information. The relevant fee is still payable where a submission is withdrawn before the evaluation is taken to be complete under section 24D of the Act because of the need to recover costs that will have been incurred by TGA in the evaluation process.

Item 28 is a minor technical amendment.

Item 29. This item replaces existing items 6AA to 6AC in Schedule 9 with three new items relating to fees for determining whether there has been good manufacturing practice (GMP) used in the manufacture of goods where a manufacturing step has taken place overseas.

New item 6AA sets the fee for assessment of evidence of GMP that relates to an application for entry of goods on the Register or a variation of an entry on the Register.

New item 6AB sets a fee where the TGA is required to obtain GMP evidence from an overseas regulatory authority. This fee is additional to the fee under item 6AA.

New item 6AC sets a fee where the sponsor has allowed the GMP approval of an overseas manufacturer to expire and the sponsor wishes that approval to be reinstated. This fee is also additional to the fee under item 6AA and covers the additional administrative costs involved where goods have already been included on the Register on the basis of the previous GMP approval.

Item 6AD replaces previous item 6AC. The fees in this item reflect the 3.25% fee increase.

Item 30 is a minor technical amendment.

Item 31 replaces existing item 6C with two new items relating to listed medicines. New item 6C provides a fee for assessing documentation required by the Secretary under paragraph 31(2)(f) of the Act where that requirement only relates to the safety of the goods. New item 6D provides fees based on the number of pages required to be assessed where the documentation required by the Secretary under paragraphs 31(2)(f) and (h) of the Act relates to safety, quality and efficacy of the medicine.

Items 32 and 33 correct the reference to Item 4 in item 7AA as a consequence of proposed Item 27.

Item 34 replaces existing item 6C with a new item 9C providing a fee for assessing documentation required by the Secretary under paragraph 31(2)(f) of the Act relating to the safety of listed devices.

This item also inserts a new item 9D for evaluation of data relating to the device component of a medicine. This new fee is in addition to the fee for evaluating the medicine and is required to enable recovery of the full cost of evaluating a medicine product that has a device component. The fee for assessment of the device component will vary depending whether Chapter 3 or Chapter 4 of the Act applies to the device.

Item 35 imposes a new fee of $9,990 for testing a sample of, and providing advice in relation to a prescription medicine on the request of the Pharmaceutical Benefit Program of the Department of Health and Ageing before listing the medicine in the Pharmaceutical Benefits Listing Program of the Department.

Item 36 takes account of renumbering in the Act, by deleting the reference to section 32 in Schedules 12 and 13 and replacing it with section 9D.

Item 37 increases the fees in regulation 45 by 3.25 per cent.

Item 38 increases the specified fee items in Schedule 9 in most cases by 3.25 per cent. The fee in item 9B relating to a safety evaluation of a device under paragraph 26(1)(d) of the Act has been increased to $11,700 in line with the fee under new item 9C (item 34 above) to provide cost recovery for this activity. The fee in item 10 to provide an export certification under section 58 of the Act has been reduced from $150 to $80 to correct an error made when the fees were last revised.

ATTACHMENT C

Details of the Therapeutic Goods (Medical Devices) Amendment Regulations 2003 (No. 1)

Regulation 1 states that the title of the Regulations will be the Therapeutic Goods (Medical Devices) Amendment Regulations 2003 (No. 1).

Regulation 2 provides that the Regulations will commence from 1 July 2003.

Regulation 3 provides that the Regulations amend the Therapeutic Goods (Medical Devices) Regulations 2002 as provided in Schedule 1.

SCHEDULE 1 - AMENDMENTS

Item 1 increases by 3.25 per cent the level of reduced fees that apply for an abridged assessment under regulation 9.4.

Item 2 inserts two new regulations providing for a reduction of assessment fees. New regulation 9.6 allows the Secretary to reduce by 70 per cent the assessment fees that would be payable under Schedule 5 if payment of the full fees would make the supply of the medical device commercially unviable and the supply would be in the interest of public health.

New regulation 9.7 provides for a reduction of the specified assessment fees payable under Part 1 of Schedule 5 where the Secretary has information about the medical device or the application of the conformity assessment procedures to the device that allows an assessment to be abridged.

Item 3 makes a consequential renumbering amendment to item 1.11 of Schedule 5 because of amendments to the Therapeutic Goods Regulations 1990.

Item 4 increases the level of supplementary assessment fee in item 2.1 of Schedule 5 by 3.25 per cent.

Item 5 increases the fees in all the specified items of Schedule 5 by 3.25 per cent.

ATTACHMENT D

Details of the Therapeutic Goods (Charges) Amendment Regulations 2003 (No. 1)

Regulation 1 states that the title of these regulations will be the Therapeutic Goods (Charges) Amendment Regulations 2003 (No. 1).

Regulation 2 provides that these regulations commence on 1 July 2003.

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

SCHEDULE 1 - AMENDMENTS

Item 1 inserts definitions of "biologic", and "biological substance". These definitions are required for the purposes of proposed subregulation 3(1) and 3(1A) of the Therapeutic Goods (Charges) Regulations 1990 (the Principal Charges Regulations).

Item 2 substitutes the current paragraphs 3(1)(a) and (b) of the Principal Charges Regulations with new paragraphs 3(1)(a), (b) and (c). The annual charges have been increased by 3.25% plus an additional loading to cover the cost of increased post market activity resulting from the Pan Pharmaceuticals recall and anticipated future post market activity resulting from changes made to the Act as a consequence of that incident. Annual charges for prescription medicines have been increased by an additional $200, other registered medicines by 25%, listed medicines by $100 and registered and listed devices by 75%. The higher increase for registered and listed devices is to make up for past under recovery of post-market surveillance costs with regard to listed and registered devices. An additional loading has not been applied to annual charges for medical devices included in the Register under Chapter 4 at this stage whilst the new medical devices scheme settles into place.

Proposed item 2 introduces two levels of annual charges for prescription medicines whose registration is in force and that are mentioned in Part 1 of Schedule 10. The higher annual charge for biologics reflects the greater costs associated with post-market activities for these medicines. The annual charge for registration of a prescription medicine which is a biologic is now $2,300. Biologic goods are those in which the active ingredient is a biological substance such as hormones, enzymes and other related substances. If the prescription medicine is not a biologic, the annual charge is $1,420.

Item 3 substitutes paragraphs 3(1A)(a) and (b) of the Principal Charges Regulations with new subparagraphs 3(1A)(a), (b) and (c). Proposed Item 3 introduces two levels of annual charges for grouped prescription medicines whose registration is in force during the financial year. The two levels of charges are similar to those proposed in new subparagraph 3(1)(b).

Item 4 omits the reference to the word "drug" and substitutes it with the word "medicine" to ensure consistency in the Principal Charges Regulations.

Item 5 increases the percentage level of the value of the wholesale turnover of therapeutic goods in relation to a particular sponsor for the purposes of determining whether the annual charge otherwise payable by a sponsor for maintaining an entry in the Register may be waived from 6.7 per cent to 6.8 per cent.

Item 6 increases the charges for maintaining entries of therapeutic goods in the Register including groupings of therapeutic goods, and charges for maintaining licences for steps of manufacture of therapeutic goods. The proposed 3.25 per cent increase generally covers charges under regulations 3 and 4E of the Principal Charges Regulations.


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