EXPLANATORY STATEMENT

 

Select Legislative Instrument 2009 No. 180

 

Therapeutic Goods (Charges) Act 1989

 

Therapeutic Goods (Charges) Amendment Regulations 2009 (No. 2)

 

The object of the Therapeutic Goods (Charges) Act 1989 (the Act) is to allow the imposition of an annual charge on the registration, listing and inclusion of therapeutic goods in the Australian Register of Therapeutic Goods (the Register), and on the licensing of manufacturers of therapeutic goods. The Therapeutic Goods Administration (the TGA) is responsible for administering the Act.

 

Section 4 of the Act provides that annual charges of such amounts as are prescribed are payable in respect of entries of therapeutic goods (including medical devices) in the Register, as well as in respect of licences that are in force at any time within a financial year. Subsection 4(1A) of the Act provides that where one or more therapeutic goods are “grouped” and each of the “grouped” therapeutic goods is covered by a single 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.

 

Subsection 4(2) of the Act provides that an annual charge of such amount as is prescribed is payable in respect of a licence that is in force at any time during a financial year.

 

Subsection 5(1) of the Act provides that the Governor-General may make regulations, not inconsistent with the Act, prescribing the amounts of charges. Subsection 5(2) enables the Governor-General to prescribe different levels of charges for different classes of goods or, in the case of annual licensing charges, for different steps in the manufacture of therapeutic goods.

The purpose of the Regulations is to amend the Therapeutic Goods (Charges) Regulations 1990 (the Principal Regulations) to increase most annual product charges for medicines and medical devices which are listed, registered or included on the Register by 4.3 per cent, except for certain specified annual charges where the increases will be greater to curtail continuing under recovery of costs from industry fees over recent years. Specifically, registered prescription medicines charges increase by 6.6 per cent, registered non- prescription medicines charges increase by 13.3 per cent, listed non-prescription medicines charges increase by 14.3 per cent, and blood, blood component, and human tissues charges increase by 12.8 per cent.

The 4.3 per cent general composite increase has been calculated using a formula agreed with industry associations, which is comprised of 50 per cent of the Wage Cost Index to September 2008 and 50 per cent of the Consumer Price Index to September 2008.

 

The Regulations also include a technical amendment to amend the note to subregulation 3(3) of the Principal Regulations to ensure that it is consistent with regulations amending the Therapeutic Goods Regulations 1990 (which are the subject of a separate Executive Council Minute). The note refers to the current low turnover threshold of $73,600 and, accordingly, need to be changed to ensure consistency across the two sets of regulations.

 

The new charges have been rounded to the nearest ten dollars (for amounts up to $10,000) or one hundred dollars (for amounts of $10,000 or more). As a result of the TGA’s rounding policy, the annual charge for Class I ‘Other medical devices [therapeutic goods referred to in Regulation 3, paragraph 3(1B)(a) of the Principal Regulations], will remain unchanged at $60 despite the 4.3 per cent increase.

 

When taken together with the changes to the Therapeutic Goods Regulations 1990, and the Therapeutic Goods (Medical Devices) Regulations 2002 (which are the subject of separate Executive Council Minutes), it is expected to increase the fees and charges collected by the TGA by $8.8 million (to $99.9 million) over the 2009-10 financial year.

 

In administering the Therapeutic Goods Act 1989 and the Therapeutic Goods (Charges) Act 1989, the TGA collects fees and charges prescribed in these Acts from persons and companies involved in the supply, import, export and manufacture of therapeutic goods in Australia.

 

The increases in charges enable the TGA to recover its costs in administering the Therapeutic Goods Act 1989 and continue to meet the Government’s Cost Recovery Guidelines.

 

Details of the amendments are set out in the Attachment.

 

Consultations with industry associations and consumer health representatives on the TGA’s draft Business Plan, Budget and proposed Schedule of Fees and Charges were convened at the TGA Industry Consultative Committee meeting on 3 March 2009. The proposals for fees and annual charges were subject to additional bilateral consultation at sectoral bilateral meetings convened between 16 and 19 March 2009.

 

The Act specifies no conditions that need to be met before the power to make the Regulations may be exercised.

 

The Regulations commence on 10 July 2009.

 

The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.

 

 

Authority: Subsection 5(1) of the Therapeutic Goods (Charges) Act 1989

 

ATTACHMENT

 

Details of the Therapeutic Goods (Charges) Amendment Regulations 2009 (No. 2)

 

Regulation 1 provides for the Regulations to be referred to as the Therapeutic Goods (Charges) Amendment Regulations 2009 (No. 2).

 

Regulation 2 provides for the Regulations to commence on 10 July 2009.

 

Regulation 3 provides for Schedule 1 to amend the Therapeutic Goods (Charges) Regulations 1990.

Schedule 1 - Amendments

 

Item [1]

 

This item increases annual product or manufacturing licence charges in subparagraphs 3(1)(a)(ii), 3(1)(a)(iii), 3(1)(c)(ii), 3(1)(c)(iii), 3(1A)(a)(ii), 3(1A)(a)(iii), 3(1A)(c)(ii), 3(1A)(c)(iii), and paragraphs 3(1B)(b), (c), and (d), 3(2)(a), (b), (c), (d), (e), (f), (g) and (h) by 4.3 per cent.

 

For specified registered prescription medicines in subparagraph(s) 3(1)(b)(i)-(ii) and 3(1A)(b)(i)-(ii), the annual charges increase by 6.6 per cent to curtail a forecasted under-recovery of costs from industry charges.

 

For specified registered non prescription medicines in subparagraphs 3(1)(a)(i) and 3(1A)(a)(i), the annual charges increase by 13.3 per cent to curtail significant

under-recovery of costs from industry charges over recent years.

 

For specified listed non prescription medicines in subparagraphs 3(1)(c)(i) and 3(1A)(c)(i), the annual charges increase by 14.3 per cent to curtail significant under-recovery of costs from industry charges over recent years.

 

The annual manufacturing licence charges for blood, blood components and human tissues in subparagraphs 3(2)(j)(i)-(ii), 3(2)(ja), 3(2)(k) and 3(2)(l) increase by 12.8 per cent to curtail significant under-recovery of costs from industry charges over recent years.

 

Subregulation 45A(1) of the Therapeutic Goods Regulations 1990 currently provides that the annual charges in respect of a licence payable by a person who is required to hold a licence under Part 3-3 of the Act are reduced if the wholesale turnover of therapeutic goods of the person is not more than $73,600. Separate Regulations increase the low turnover threshold by 4.3 per cent, to $76,800. The note to subregulation 3(3) of the Principal Regulations currently refers to the $73,600 threshold. This item amends the note to subregulation 3(3) so that it refers to the new $76,800 threshold.

 

The annual charge for Class I ‘Other medical devices’ [therapeutic goods referred to in Regulation 3, Paragraph 3(1B)(a)], remains unchanged due to rounding at $60.