THERAPEUTIC GOODS LEGISLATION AMENDMENT (ANNUAL CHARGES EXEMPTION) REGULATION 2015 (SLI NO 75 OF 2015) EXPLANATORY STATEMENT

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THERAPEUTIC GOODS LEGISLATION AMENDMENT (ANNUAL CHARGES EXEMPTION) REGULATION 2015 (SLI NO 75 OF 2015)

EXPLANATORY STATEMENT

Select Legislative Instrument No. 75, 2015

Subject: Therapeutic Goods Act 1989

Therapeutic Goods Legislation Amendment (Annual Charges Exemption) Regulation 2015

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/performance and timely availability of therapeutic goods that are used in Australia or exported from Australia. The Therapeutic Goods Administration (the TGA), which is a part of the Department of Health, is responsible for administering the Act.

Subsection 63(1) of 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 implementing and giving effect to the Act, the TGA operates on a cost recovery basis, and collects both fees and charges from the industry it regulates. The Act provides for the collection of annual charges payable for maintaining registrations, listings or other entries of therapeutic goods in the Australian Register of Therapeutic Goods (the Register), specifies when payment of annual charges must be made and provides for regulations to be made to exempt persons from liability to pay annual charges where turnover of goods is of "low value".

Generally, annual charges for therapeutic goods are levied in order to support post-market monitoring of the goods for so long as they are in the Register.

Currently, a Low Value Turnover (LVT) scheme operates under the Therapeutic Goods Regulations 1990 (the Principal Regulations) to exempt persons from the requirement to pay annual charges in a financial year for maintaining entries in the Register (other than for biologicals) where the turnover of goods supplied in Australia in that year is of "low value". Under the LVT scheme, a sponsor's turnover will be of "low value", where the turnover of their goods is less than 15 times the applicable annual charge payable for the goods.

Under the LVT scheme, a person must apply to the Secretary of the Department of Health seeking an exemption. Where the person's entry was already on the Register at the beginning of a financial year, the application must be accompanied by a statement and verification of the actual turnover for the goods for the immediately preceding financial year.

For an entry that commences on the Register during a particular financial year, the application must be made at least 21 days before the end of the second month after the month in which the entry commenced. Exemption applications for new entries are based on a sponsor's estimate of what their turnover will be for that first financial year, and sponsors must follow up with a verification of their actual turnover for that year by 1 September in the following year. If the actual turnover turns out to be greater than 15 times the applicable annual charge, the person must pay the annual charge.

For both existing and new entries, failure to meet the relevant deadline for applying for an exemption results in the person not being able to obtain an exemption for the entry for that financial year.

The purpose of the Regulation is to amend the Principal Regulations to replace the current LVT scheme with a new scheme that is based on an exemption applying automatically from when an entry is included in the Register, after 1 July 2015 (when the new scheme commences) and for so long as there is no turnover. Special rules apply to entries already on the Register immediately before 1 July 2015. The LVT scheme ceases to apply from that date.

Under the new exemption scheme (the annual exemption scheme (ACE)), a person in relation to whom any kind of therapeutic goods (including biologicals) are entered on the Register on or after 1 July 2015, is not be required to pay annual charges for that entry until there is turnover for those goods.

For entries on the Register as at 1 July 2015 (other than biologicals), there are transitional arrangements. The sponsor of such goods is not required to pay annual charges for that entry until there is turnover for those goods, provided that:

* the entry had an exemption under the LVT scheme for financial years 2013-14 and 2014-15 (or, where the entry came on the Register in 2014-15, for that year); and

* there was no turnover for the relevant goods for those financial years (or where the entry came on the Register in 2014-15, no turnover for that year).

In either case, the person must then make an annual declaration on or before 22 July in each successive financial year that there was no turnover for the previous financial year for the exemption to continue to apply. Once there is turnover, the annual charge for the financial year in which the turnover occurred, and for all future financial years (irrespective of turnover), is payable while the goods remain on the Register.

However, in certain circumstances, the sponsor is able to apply for a waiver from paying charges in a particular financial year if they can satisfy criteria relating to financial viability and public health.

Other measures in the Regulation include provisions dealing with when annual charges become payable, late notification of a declaration of low value, notification by a person of turnover in relation to entries in the Register, a power for the Secretary of the Department of Health to notify a person that an annual charge is payable where an entry was not exempt from an annual charge because there was in fact turnover in relation to the entry, and the fees payable for late notification of a declaration of low value.

Details of the Regulation are set out in the Attachment.

The Act does not specify conditions that have to be met before the power to make the Regulation may be exercised.

The Regulation would be a legislative instrument for the purposes of the Legislative Instruments Act 2003.

The Regulation commences on 1 July 2015.

Consultation

The TGA released a consultation paper in April 2014 seeking feedback on the current LVT scheme and on a number of possible options for replacing it, including an option of only applying annual charges when therapeutic goods are supplied to the market. Feedback noted that the current LVT scheme was complex and burdensome to navigate. Most submissions supported either changes to the current scheme or its replacement with one that applied charges when goods are supplied to the market.

The TGA met with peak bodies in October and November 2014, and with consumer health advocacy groups in December 2014, to discuss proposed changes to exemption arrangements in more detail. There were follow-up communications in writing. Subsequent sectoral meetings were held with these groups to discuss the likely impact of the proposed changes, and a targeted industry information session in late March 2015 included modelling of the effects of the proposed changes. The design of the new scheme, consistent with that set out in the Regulation, was also outlined with peak bodies at bilateral meetings in early March 2015. Overall, industry is supportive of the new arrangements, with only the Australian Dental Industry Association expressing reservations. A regulation impact statement has also been prepared, and is available from the TGA's website at http://www.tga.gov.au/publication/regulation-impact-statement-review-low-value-turnover-annual-charge-exemption-scheme.

Authority: Subsection 63(1) of the

Therapeutic Goods Act 1989

ATTACHMENT

Details of the Therapeutic Goods Legislation Amendment (Annual Charges Exemption) Regulation 2015

Section 1 - Name of Regulation

This section provides that the title of this Regulation is the Therapeutic Goods Legislation Amendment (Annual Charges Exemption) Regulations 2015.

Section 2 - Commencement

This section provides for this Regulation to commence on 1 July 2015.

Section 3 - Authority

This section provides that the Therapeutic Goods Legislation (Annual Charges Exemption) Regulation 2015 is made under the Therapeutic Goods Act 1989 (the Act).

Section 4 - Schedule

This section provides that each instrument specified in a Schedule to this instrument is amended or repealed as set out the applicable items of the Schedule, and any other item in the Schedule has effect as provided for under that item.

Schedule 1 - Amendments

This Schedule sets out amendments to the Therapeutic Goods Regulations 1990 (the Principal Regulations) as set out under Part 1 ("Main amendments") and Part 2 ("Other amendments") of the Schedule. Part 2 also contains amendments to the Therapeutic Goods (Medical Devices) Regulations 2002 (the MD Regulations).

Part 1 - Main amendments

The amendments in Part 1 amend the Principal Regulations to replace the current arrangements relating to applying for, and granting, exemptions from the requirement to pay annual charges for therapeutic goods in Subdivisions 1 and 2 of Division 1 of Part 7 of the Principal Regulations, with new arrangements.

Item 1 - Regulation 2

Regulation 2 of the Principal Regulations is amended by inserting a definition of "turnover" for the purposes of Division 1 (other than Subdivision 3) of Part 7 of the Principal Regulations, which is described in new subregulation 43AAA(2) below.

Item 2 - Subdivisions 1 and 2 of Division 1 of Part 7

This item repeals the above subdivisions of Division 1 of Part 7 of the Principal Regulations and replaces them with three subdivisions.

Subdivision 1 - Preliminary

Regulation 43AAA - When is a person's turnover of therapeutic goods for a financial year is of low value

This provision describes what is meant by a "low value" turnover for the purposes of the proposed new exemption arrangements. "Turnover" for therapeutic goods in a financial year commencing on or after 1 July 2015 is the gross amount (in dollars) received (excluding GST) from sales (directly or indirectly) in Australia of the person's goods entered in the Australian Register of Therapeutic Goods (the Register) in that year.

Where the expression is used in determining turnover for a year commencing before 1 July 2015, it has the same meaning as in the Principal Regulations immediately before the commencement of this Regulation, that is, for a therapeutic good (other than a biological), the gross dollar receipts (excluding GST) from sales of the therapeutic good (other than a biological) in Australia for a financial year, including retail and wholesale sales.

In both cases, "low value" is $0.

Subdivision 1A - Time for payment of certain annual charges

Regulation 43AAB - Time for payment of certain annual charges.

This provision would set out when certain annual charges are payable for the purposes of subsection 44(1) of the Act.

Subregulation 43AAB(1) - Entry of goods in Register commencing in financial year

This provision specifies the date on which an annual charge becomes payable for a financial year when the registration, listing or inclusion of the goods in the Register commences in that financial year.

The effect of paragraph 43AAB(1)(a) is that where the person in relation to whom the goods are registered, listed or included in the Register notifies the Secretary of the Department of Health during the financial year (in accordance with new regulation 43AAF) that the goods no longer have a "low value" turnover (i.e. that the goods have commenced turnover) in a financial year, the annual charge becomes payable for those goods on the last day of the month immediately following the month in which the notification occurred.

The effect of paragraph 43AAB(1)(b) is that where the person fails to provide a declaration of "low value" turnover for goods that are registered, listed or included in the Register (henceforth collectively referred to as "entered" in the Register) for a particular financial year in accordance with either regulation 43AAC or 43AAD (i.e. on or before 22 July in the next financial year), then the annual charge is payable for the entered goods on 15 September in the following financial year.

Subregulation 43AAB(2) - Entry of goods in Register commencing before start of financial year

This provision nominates 15 September of a financial year as the date on which annual charges would be payable by a person who has goods entered in the Register on 1 July of that financial year.

Subdivision 2 - Exemption from liability to pay certain annual charges

Regulation 43AABA - Purpose of this Subdivision

This provision describes the purpose of new Subdivision 2 which is to set out, for the purposes of section 44A of the Act (which allows regulations to be made to exempt persons from liability to pay annual charges), the circumstances in which a person is exempt from paying annual charges for a financial year in relation to an entry in the Register if the turnover of the person's goods for that financial year is "low value" (i.e. $0).

Subdivision 2 also provides for a waiver of annual charges to be sought and given by the Secretary of the Department of Health.

Regulation 43AABB - Exemption from liability to pay certain annual charges - 2014-15 financial year - goods entered on the Register on or after 1 May 2015 and on or before 30 June 2015

This provision sets out special rules for therapeutic goods (other than biologicals) that are entered in the Register at any time on or after 1 May 2015 and before 1 July 2015. This is because the person in relation to whom such goods are entered in the Register would not have had the opportunity to apply for an exemption under the current Low Value Turnover scheme as it was in force immediately before the commencement of this Regulation (1 July 2015) so would not otherwise be covered by proposed regulation 43AAC.

Subregulations 43AABB(2) and (3)

The effect of these subregulations is that such persons are taken to have been granted such an exemption for the 2014-15 financial year.

Regulation 43AAC - Exemptions from liability to pay certain annual charges - 2015-16 financial year

This provision sets out when a person is exempt from paying annual charges in the 2015-16 financial year for goods entered into the Register in that financial year, or for goods that were already entered in the Register before the beginning of that financial year.

Subregulation 43AAC(1) - Therapeutic goods other than biologicals

The effect of this provision is that a person whose goods are entered in the Register at any time in the financial year 2015-16 (i.e. whether they were in the Register already on 1 July 2015 or were entered in the Register on a day during that financial year) is exempt from having to pay annual charges if the circumstances set out in subregulations 43AAC(2), (3), (4) or (5) are met. These provisions only apply to therapeutic goods that are not biologicals (subregulation (6) sets out the arrangements for biologicals).

Subregulation 43AAC(2) - Entry of goods in Register commencing in 2015-16 financial year

The effect of this provision is that a person is exempt from paying annual charges if:

* their goods are entered in the Register on a day in 2015-16 and the goods have 'low value turnover' (that is, no turnover) for the remainder of the financial year; and

* the person gives a declaration to the Secretary of the Department of Health (in a form or manner approved by the Secretary of the Department of Health) on or before 22 July 2016 that the goods had no turnover for that financial year.

Subregulation 43AAC(3) - Entry of goods in Register commencing on or after 1 May 2015 and on or before 30 June 2015

The effect of this provision is that a person is exempt from paying annual charges if:

* their goods were entered in the Register on or after 1 May 2015 and before 1 July 2015, and the person is taken to have been granted an exemption from liability to pay an annual charge for the goods for the 2014-15 financial year under regulation 43AABB;

* there was no turnover either in the 2014-15 financial year or in the 2015-16 financial year; and

* the person gives the Secretary of the Department of Health a declaration (in a form or manner approved by the Secretary of the Department of Health) on or before 22 July 2016 that the goods had no turnover for each of those financial years.

This provision addresses the situation covered in regulation 43AABB where a person whose goods were included in the Register during this period would not have had the opportunity to be granted an exemption under the previous LVT scheme before 1 July 2015 in relation to the 2014-15 financial year.

Subregulation 43AAC(4) - Entry of goods in Register commencing on or after 1 July 2014 and on or before 30 April 2015

The effect of this provision is that a person is exempt from paying annual charges if:

* their goods were entered in the Register between 1 July 2014 and 30 April 2015;

* the person was granted an exemption from paying annual charges (based on the person's estimated turnover for that period under the previous LVT scheme) for the 2014-2015 financial year; and

Subregulation 43AAC(5) - Entry of goods commencing on or before 30 June 2014

The effect of this provision is that a person is exempt from paying annual charges if:

* their goods were entered in the Register on or before 30 June 2014;

* the person was granted an exemption from paying annual charges (under the previous LVT scheme) for the goods for the financial years 2013-14 and 2014-2015; and

* there was no turnover of the goods during the financial years 2013-14 and 2014-15 or in 2015-2016; and

Subregulation 43AAC(6) -Biologicals

Biologicals (which are included in the Register under Part 3-2A of the Act) were not covered by the previous LVT scheme, so are capable of satisfying the conditions set out in the subregulations (2) to (5).

The effect of this provision is that where the inclusion of a biological on the Register commences at any time in the 2015-16 financial year, the person in relation to whom the biological is included is exempt from paying the annual charge for that financial year if:

* there was no turnover of the biological during the 2015-16 financial year; and

Note 2 at the end of the proposed regulation refers to the fact that the provision of false or misleading information or documents is an offence under the Criminal Code.

Regulation 43AAD - Exemption from liability to pay certain annual charges - financial years commencing on or after 1 July 2016

This provision sets out the circumstances in which a person is exempt from paying annual charges where their entry in the Register commences in the financial year 2016-17 or any following financial year.

The exemption will apply for 2016-17 and any following year, if:

* the entry of the goods in the Register commenced in that financial year, or the person was exempt from paying in relation to the goods for the previous financial year; and

* there was no turnover for the goods for the financial year; and

* the person gives the Secretary of the Department of Health a declaration (in a form or manner approved by the Secretary of the Department of Health) on or before 22 July in the next financial year that the goods had no turnover for that financial year.

Note 2 at the end of the proposed regulation refers to the fact that the provision of false or misleading information or documents is an offence under the Criminal Code.

Regulation 43AAE - Exemption from liability to pay certain annual charges - late notice that turnover was of low value

This provision allows a person to give a late declaration of no turnover (that is, later than 22 July of the next financial year) in certain circumstances.

Subregulations 43AAE(1), (2), (3) and (4)

These subregulations apply in relation to a person who would have been exempt under proposed regulations 43AAC or 43AAD from paying annual charges for goods for a particular financial year, but failed to give the Secretary of the Department of Health a declaration on or before 22 July in the following financial year as required under 43AAC or 43AAD.

These provisions allow such a person to give the Secretary of the Department of Health, on or before 15 September in the following financial year, a notice which sets out the following information:

* the reasons why the person did not give the declaration or declarations on or before 22 July; and

* a declaration stating that there was no turnover for the goods for the financial year; and

* if the particular financial year was 2015-16 - a declaration in accordance with whichever of proposed paragraphs 43AAC(3)(d), (4)(d) or (5)(d) was applicable.

The notice must be accompanied by the prescribed fee.

The note at the end of the proposed regulation refers to the fact that the provision of false or misleading information or documents is an offence under the Criminal Code.

The person will be exempt from liability to pay the charge for the particular financial year if such a notice is given.

Subregulation 43AAE(5)

The effect of this provision is that if the person is exempt from paying the charge for their goods for that financial year, the Secretary of the Department of Health must notify the person to that effect.

Subregulation 43AAE(6)

The effect of this provision is that if the above requirements are not met or the fee has not been paid, the Secretary of the Department of Health must give the person a written notice stating:

* that the person is liable to pay the annual charge;

* the reasons, being any or all of the following - that the person did not give the documents to the Secretary of the Department of Health by the required date, one or more of the documents did not contain the required declarations or the fee was not paid;

* the date on which the annual charge for that financial year becomes payable by that person.

Regulation43AAF - Person may notify the Secretary of the Department of Health that turnover of goods for financial year will not be of low value

Under this regulation, a person can notify the Secretary of the Department of Health that turnover of the person's goods that are in the Register will not be of low value for a financial year (that is, there will be, or is, turnover of the goods).

Subregulation 43AAF(1)

This provision sets out the circumstances in which a person can notify the Secretary of the Department of Health that goods are not of low value for a particular financial year. These circumstances are:

* if the person's goods are first entered goods in the Register in that financial year, or if the person was exempt from paying annual charges in relation to the goods in the immediately preceding financial year; and

* the person becomes aware, during the current financial year, that there has been turnover of the goods in that year.

Subregulation 43AAF(2)

The effect of this provision is that the person can notify the Secretary of the Department of Health of this fact in a form or manner approved by the Secretary of the Department of Health.

Subregulation 43AAF(3)

The effect of this provision is that as soon as practicable after receiving such a notification, the Secretary of the Department of Health must give the person a written notice that specifies the date on which the annual charge becomes payable for the goods.

Regulation 43AAG - Secretary of the Department of Health may notify person that annual charge is payable if turnover not of low value

This regulation would describe the circumstances under which the Secretary of the Department of Health can notify a person that an annual charge for a financial year (and later years) is payable because the turnover of goods was not in fact of low value, that is, there was in fact turnover of the goods in that financial year.

Subregulation 43AAG(1) - Goods entered in Register at any time in 2015-16 financial year

The effect of this provision is that in certain circumstances the Secretary of the Department of Health must notify a person that they are liable to pay an annual charge in relation to their goods for which the person has not paid an annual charge in the 2015-16 financial year. These circumstances are as follows:

* the person gave the Secretary of the Department of Health a declaration of no turnover in accordance with regulation 43AAC or 43AAE for that financial year or for a previous financial year (for instance for 2014-15 in relation to which the person would have been required to make a declaration of low value under either of those regulations); and

* the person did not pay the annual charges for 2015-16 for the goods; and

* the Secretary of the Department of Health becomes aware that the person's turnover for 2015 or any of those years was not of low value.

Subregulation 43AAG(2)

The effect of this provision is that the notification that the Secretary of the Department of Health is required to give is that the person was not exempt from liability to pay annual charges for 2015-16 or for any subsequent financial year for which the person did not pay their annual charge (other than if the annual charge was waived under proposed regulation 43AAH) and must specify a date on which the relevant charge or charges becomes payable.

Subregulation 43AAG(3) - Goods entered in Register at any time in financial year commencing on or after 1 July 2016

The effect of this provision is that in certain circumstances the Secretary of the Department of Health must notify a person that they are liable to pay an annual charge in relation to goods for which the person has not paid an annual charge in any financial year commencing after 2015-16. These circumstances are as follows:

* the person gave the Secretary of the Department of Health a declaration of no turnover in accordance with regulation 43AAC or 43AAE for any financial year after 2015-16; and

* the person did not pay the annual charges for that financial year for the goods; and

* the Secretary of the Department of Health becomes aware that the person's turnover for that financial year was not of low value.

Subregulation 43AAG(4)

The effect of this provision is that the notification that the Secretary of the Department of Health is required to give is that the person was not exempt from liability to pay annual charges for that financial year or for any subsequent financial year for which the person did not pay their annual charge (other than if the annual charge was waived under regulation 43AAH) and must specify a date on which the relevant charge or charges becomes payable.

Regulation 43AAH - Waiver of certain annual charges

Under this regulation a person in relation to whom therapeutic goods are entered in the Register would be able to apply for a waiver of annual charges in certain circumstances.

Subregulation 43AAH(1) - Scope

The effect of this provision is that the option of seeking a waiver is limited to certain types of therapeutic goods - biologicals, kinds of medical devices classified under the Therapeutic Goods (Medical Devices) Regulations as a Class IIa or higher device, or as Class 2 IVD medical devices or higher. Thus only therapeutic goods of a type that might satisfy the criteria for a waiver are included.

Subregulation 43AAH(2) - Application for waiver of charge

Under this provision a person who is liable to pay annual charges in a particular financial year to apply for therapeutic goods of the type referred to in proposed subregulation (1) can apply in writing to the Secretary of the Department of Health for a waiver of those charges for that year.

Subregulation 43AAH(3)

The effect of this provision is that an application must be made:

* where the goods were already on the Register on 1 July of the financial year, during that financial year, or

* where the entry of the goods occurred during the financial year, before 31 December in the next financial year.

The reason for the longer period for making an application for a waiver is that it may not become apparent that a person is liable to pay an annual charge for a new entry in a financial year until close to, or after, the end of that year.

A waiver application must be accompanied by information that addresses the matters in proposed subregulations (7) and (8) that are described below.

Notes to this proposed subregulation make it clear that no fee is payable in relation to the application and that the provision of false or misleading information or documents is an offence under the Criminal Code.

Proposed subregulation 43AAH(4) - Decision by Secretary of the Department of Health

The Secretary of the Department of Health is required under this provision to either waive the annual charge or refuse to do so, within 60 days after receiving a properly made application.

Subregulation 43AAH(5)

The effect of this provision is that the Secretary of the Department of Health, when making a decision, must into account any information the applicant lodges in support of its application. The Secretary of the Department of Health is not however, allowed to consider any other information that is provided after the application has been provided, whether by the applicant or on the applicant's behalf, unless the information is sought by the Secretary of the Department of Health.

This ensures that the person making the application provides all the information available that will be relevant to a decision by the Secretary of the Department of Health at the time the application is made, but does not prevent the Secretary of the Department of Health seeking further information.

Subregulation 43AAH(6)

This provision makes it clear that the prohibition on taking into account additional material provided by or on behalf of the applicant does not prevent that Secretary of the Department of Health taking into account any other information that may be relevant to the Secretary of the Department of Health's consideration of the application.

Subregulation 43AAH(7)

The effect of this provision is that the Secretary of the Department of Health can decide to waive the annual charge for a financial year only if satisfied that it is in the interests of public health for the goods in question to remain in the Register and it would not be financially viable for the goods to remain in the Register if the person otherwise liable to pay the annual charge was required to pay the annual charge for that financial year. The Secretary of the Department of Health must also be satisfied that at the time of considering the application, the entry is still on the Register.

Subregulation 43AAH(8)

The effect of this provision is that the Secretary of the Department of Health must consider certain matters in deciding whether it is in the interest of public health for the relevant goods to remain in the Register. These matters are:

* the population who use the goods;

* the clinical needs of the population who uses the goods and the reasonable availability of alternatives to the goods for that population through alternative means;

* any health risks to the population who use the goods that may be associated with obtaining alternative goods or obtaining the goods through alternative means; and

* the likelihood of the goods being available through alternative means to the population who uses the goods if the person should request the Secretary of the Department of Health to cancel the goods from the Register.

Subregulation 43AAH(9)

The effect of this provision is that the Secretary of the Department of Health may take into account any other matter the Secretary of the Department of Health considers relevant in considering whether it is in the interests of public health for the goods to remain in the Register.

Subregulations 43AAH(10) and (11) - Notice of decision

Under these provisions the Secretary of the Department of Health is required to give the applicant a written notice of the decision as soon as practicable after making the decision.

Any decision to refuse an application must:

* be accompanied by reasons; and

* specify the date on which the annual charge for that financial year becomes payable.

A person whose application is refused has the right to have the Minister reconsider the decision under regulation 48 of the Principal Regulations and, if dissatisfied with the outcome of that process, a right of review by the Administrative Appeals Tribunal.

Subregulations 43AAH(12) and (13) - Period during which decision has effect

The effect of these provisions is that if, having been granted a waiver for a financial year in relation to an entry on the Register, a person requests the Secretary of the Department of Health before the end of that year to cancel the entry, the waiver is no longer effective. If such a request is received, the Secretary of the Department of Health must give written notice to the applicant specifying the date on which the annual charge for that financial year becomes payable.

Item 3 - Regulation 45A

This item repeals regulation 45A of the Principal Regulations. As there is no application fee payable for an exemption from annual charges under the new exemption arrangements, there is no need to have a maximum total for any financial year for such applications.

Item 4 - After paragraph 48(1)(f)

This item adds the decision to refuse to waive an annual charge as another "initial decision" that is reviewable both internally by the Minister and subsequently by the Administrative Appeals Tribunal in accordance with regulation 48.

Item 5 - Part 2 of Schedule 9 (table item 3AB)

This item repeals item 3AB of Schedule 9 to the Principal Regulations, and replaces it with a new item 3AB that prescribes the fee for the purposes of proposed new regulation 43AAE. Under that regulation a person can provide a late notification in relation to an exemption to pay annual charges for a financial year, for therapeutic goods other than biologicals. The fee would be $400 if the notice relates to up to 5 entries in the Register, and for every additional entry above 5 an additional $50 is payable on top of the $400.

Item 6 - Part 2 of Schedule 9A (after table item 3)

This item prescribes the fee for the purposes of new regulation 43AAE for a late notification in relation to an exemption to pay annual charges for a financial year, for a biological. The fee is $400 if the notice relates to up to 5 entries in the Register and for every additional entry above 5 an additional $50 is payable on top of the $400.

Part 2 - Other amendments

Therapeutic Goods (Medical Devices) Regulations 2002

Items 7 and 8 amend the Therapeutic Goods (Medical Devices) Regulations 2002 (the MD Regulations).

Item 7 - Regulation 8.1A

Regulation 8.1A of the MD Regulations sets out what matters in relation to which information may be sought for the purposes of paragraph 41JA(1)(j) of the Act. This item corrects an incorrect reference in regulation 8.1A to paragraph "41JA(j)" of the Act to the correct reference, 41JA(1)(j).

Item 8

This item adds two additional matters in relation to which the Secretary of the Department of Health can obtain information or documents under subsection 41JA(1) of the Act about kinds of medical devices, to include matters relating to the new arrangements for exempting persons from a liability to pay annual charges outlined above, and matters relating to applications for the waiving of annual charges.

Therapeutic Goods Regulations 1990

Items 9-11 amend the Therapeutic Goods Regulations 1990 (the Principal Regulations).

Item 9

This item amends regulation 16AA of the Principal Regulations, which sets out additional matters to those set out under sections 31 and 32JA of the Act in relation to which the Secretary of the Department of Health can obtain information or documents about registered or listed therapeutic goods or biologicals.

The effect of this item is to enable the Secretary of the Department of Health to obtain information and documents relating to the new scheme for exempting persons from a liability to pay annual charges established under Subdivision 2 of Division 1 of Part 5 of the Regulations, and to applications under regulation 43AAH for waiving annual charges.

Item 10

This item amends regulation 48 of the Principal Regulations to include subregulation (2A), the effect of which is to allow a request for an internal review of an initial decision under that provision to be accompanied by information in support of the request.

Item 11

This item amends regulation 48 of the Principal Regulations to include a new subregulation (3A), the effect of which is to require the Minister to take into account information provided under proposed subregulation 48(2A) in reconsidering an initial decision made under the Principal Regulations. However the Minister is precluded from considering any other information that is provided after the application for reconsideration has been made, whether by the person making the request or on that person's behalf, unless the information is sought by the Minister.

This is to ensure that the person making the application provides all the information available that will be relevant to a decision by the Secretary of the Department of Health at the time the application is made but does not prevent the Minister seeking further information.

Subregulation (3B) makes it clear that the prohibition on taking into account additional material provided by or on behalf of the person who made the request for reconsideration does not prevent that Minister taking into account any other information that may be relevant to the Minister's consideration of the request.

Where the Minister revokes an initial decision and makes a new one in its place, then the substituted decision is taken to be a decision of the Secretary of the Department of Health (other than for the purposes of an appeal to the Administrative Appeals Tribunal) and takes effect, or is taken to have had effect, on and from a date that the Minister determines.

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Therapeutic Goods Legislation Amendment (Annual Charges Exemption) Regulation 2015

This legislative instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

The Therapeutic Goods Legislation Amendment (Annual Charges Exemption) Regulation 2015 (the Amendment Regulation) is made under subsection 63(1) of the Therapeutic Goods Act 1989 (the Act). Under the Act, therapeutic goods must be entered on the Australian Register of Therapeutic Goods (the Register) before being supplied in, or exported from, Australia, unless exempt or otherwise approved. Sponsors of goods (other than export only goods) must pay an annual charge to maintain their entries on the Register. The Therapeutic Goods Administration (TGA), which is part of the Department of Health and administers the Act, operates on a cost recovery basis. Annual charges fund important post-market monitoring and compliance activities under the Act. Under the Therapeutic Goods Regulations 1990 (the Principal Regulations), sponsors with a turnover in a financial year of not more than 15 times the amount of the annual charge for that year will be exempt if they make an application to the Secretary within the specified time period and provide evidence that is validated by an independent accountant.

The Amendment Regulation amends the Principal Regulations to replace that scheme (from 1 July 2015) with revised exemption arrangements. Sponsors of goods coming onto the Register will be exempt from annual charges until they commence turnover of their goods if the sponsor submits a declaration to the TGA for each financial year confirming that that was the case. The declaration must be given by 22 July in the next financial year, but sponsors who miss this deadline may submit a late declaration by 15 September in that next year. There are also transitional arrangements for sponsors of goods already on the Register on 1 July 2015 - such sponsors must not have had turnover for financial years 2013-14 or 2014-15 (or, in the case of new entries in 2014-15, for that year) as well as for 2015-16, in order to qualify for an exemption in 2015-16.

The Amendment Regulation also allows the sponsor of a registered medicine, biological or higher risk medical device not eligible for an exemption to apply to the Secretary for a waiver of the annual charge for a financial year. The Secretary may grant a waiver if satisfied it is in the interests of public health for the goods to stay on the Register, and that it would not be financially viable for the goods to stay on the Register if the charge has to be paid. This decision is subject to review by the Minister and by the Administrative Appeals Tribunal.

Human rights implications

As the Amendment Regulation does not introduce any changes to the Principal Regulations other than to implement the changes mentioned above, it does not engage any of the applicable rights or freedoms.

Conclusion

This legislative instrument is compatible with human rights as it does not raise any human rights issues.

Fiona Nash, Assistant Minister for Health

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