Commonwealth Numbered Regulations - Explanatory Statements

[Index] [Search] [Download] [Related Items] [Help]

THERAPEUTIC GOODS (CHARGES) AMENDMENT REGULATIONS 2002 (NO. 1) 2002 NO. 144

STATUTORY RULES 2002 No. 144

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

Therapeutic Goods (Charges) Act 1989

Therapeutic Goods (Charges) Amendment Regulations 2002 (No. 1)

The object of the Therapeutic Goods Act 1989 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. Under that Act therapeutic goods, unless they have been exempted from this requirement, are required to be registered or listed in the Australian Register of Therapeutic Goods before they may be manufactured, supplied, imported or exported for use in humans. Manufacturers of 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 Therapeutic Goods Administration (the TGA) is responsible for administering the Act.

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

Subsection 4(1) of the Act provides that annual charges as are prescribed are payable for maintaining registrations and listings of therapeutic goods in the Register. Subsection 4(1A) of the 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 Act provides that the Governor-General may make regulations, not inconsistent with the Act, prescribing the amounts of charges.

Subsection 5(2) of the Act enables the Governor-General to prescribe levels of charges that are payable for maintaining goods in the Register or for maintaining grouped therapeutic goods in the Register. Subsection 5(2) also enables the Governor-General to prescribe 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.

The purpose of the Regulations is to increase most of the charges that are payable on therapeutic goods by 6.315 per cent, increase the licence charge for each of the eight metropolitan Australian Red Cross Blood Service (ARCBS) sites engaged in the manufacture of human blood and blood components from $8,530 to $70,000 and to increase the percentage level of the value of the wholesale turnover of therapeutic goods in relation to a particular sponsor from 6.5 per cent to 6.7 per cent for the purposes of assessing exemption for a sponsor from the annual charges of maintaining registered or listed goods.

The 6.315 per cent increase is made up of:

50 per cent annual Wage Cost Index (WCI)................1.75 per cent

50 per cent CPI (annual adjusted)...........................1.55 per cent

increased rent...........................................3.015 per cent

The increased rent is a result of the Government's policy of commercialisation of its special-purpose and industrial estates, which includes the TGA building in Symonston. This has led to an 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 2002 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 3.015 per cent is required to fully recover the $1.5 million rental increase in the 2002/2003 financial year. The formula for the 6.315 per cent 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 6.315 per cent increase to the charges payable under the Therapeutic Goods (Charges) Regulations (the Principal Regulations).

The Regulations increase the annual licence charge for the manufacture of human blood and blood components at ARCBS manufacturing premises covered by metropolitan site licences from $8,350 to $70,000. The cost of regulating human blood and blood components by the TGA has been consistently under recovered in recent years. This is not sustainable in the future without jeopardising the safety and quality of Australia's blood products. The cost of regulating these products is met by the ARCBS from funds provided by the Commonwealth, State and Territory Governments. There are only eight licensees affected by this increase. Officials representing Commonwealth, State and Territory Health Departments have agreed that as the cost of regulation is considered a normal operating cost, it should be met by the ARCBS from the funds already provided by Governments. They also accepted that the annual licence charge could be significantly increased to fully recover the cost of regulation. The ARCBS has also been consulted.

The Regulations also increase the percentage level (from 6.5 per cent to 6.7 per cent) 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 a registration or listing of goods in the Australian Register of Therapeutic Goods may be waived under regulations 4B and 4C. These Regulations benefit persons with small businesses who have registered or listed goods with an annual turnover of a few thousand dollars. The 6.5 per cent benchmark has been increased to 6.7 per cent to reflect the corresponding increase to the annual charges that will be payable for registrations and listings proposed by these regulations.

Details of the Regulations are set out in the Attachment.

The Regulations commence on 1 July 2002.

ATTACHMENT

Details of the Therapeutic Goods (Charges) Amendment Regulations 2002 (No. 1)

Regulation 1 states that the title of these regulations will be the Therapeutic Goods (Charges) Amendment Regulations 2002 (No. 1)

Regulation 2 provides that these regulations commence on 1 July 2002.

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

SCHEDULE - AMENDMENTS

Item 1 increases all the existing charges set out in the Therapeutic Goods (Charges) Regulations.

The increases consist of the following:

(i)       charges for maintaining registrations and listings of therapeutic goods in the Australian Register of Therapeutic Goods, including groupings of therapeutic goods, and charges for maintaining licences for steps of manufacture of therapeutic goods. The 6.315 per cent increase generally covers charges under regulations 3 and 4E of the Regulations, except for the annual licence charge for the manufacture of human blood and blood components under subparagraph 3(2)(j)(i) as discussed below.

(ii)       the annual licence charge for the manufacture of human blood and blood components at manufacturing premises in a metropolitan site will significantly increase from $8,350 to $70,000. The cost of regulating human blood and blood components by the TGA has been consistently under recovered in recent years. This is not sustainable in the future without jeopardising the safety and quality of Australia's blood products. The cost of regulating these products is met by the Australian Red Cross Blood Service (ARCBS) from funds provided by the Commonwealth, State and Territory Governments. There are eight licensees affected by this increase. Officials representing Commonwealth, State and Territory Health Departments have agreed that as the cost of regulation is considered a normal operating cost, it should be met by the ARCBS from the funds already provided by Governments. They also accepted that the annual licence charge could be significantly increased to fully recover the cost of regulation. The ARCBS has also been consulted.

(iii)       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 a registration or listing of goods in the Register may be waived has been increased from 6.5 per cent to 6.7 per cent.