Information session

Ms Nicole McLay

Assistant Secretary, Regulatory Business Services Branch

Regulatory Support Division, TGA

June 2015

Annual Charge Exemption Scheme

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Representatives from the TGA

• Ms Nicole McLay– Assistant Secretary, Regulatory Business Services Branch

• Mr Vinod Mahajan– Director, Regulatory Decision Review

• Ms Jo Flynn– Regulatory Education Section

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• Background• Key features• New ACE scheme components• Waivers• New rates of annual charges• Compliance program• Sponsor actions• Key dates

Annual Charge Exemption Scheme

Annual Charge Exemption Scheme

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Background • Low value turnover exemption scheme introduced 1990

– No longer meets objectives– Complex and burdened with red tape– High number of complaints– Inconsistent with government’s cost recovery policy– Unsustainable and inequitable

• Consultation paper released in 2014

• New scheme commences 1 July 2015

1990

2015

Annual Charge Exemption Scheme

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Key features• Rates of annual charges will reduce for some product categories

– from 5% to 23%• Self declaration - online system to make notifications and declarations• Significant reduction in administration - $3m p.a. in savings to industry• A new waiver option for annual charges

Annual Charge Exemption Scheme

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New ACE scheme - components

Annual Charge Exemption (ACE)

Scheme

Begins 1 July 2015

New entries from 1 July 2015 will automatically qualify and be

granted exemption

ACE applies until

commencement of turnover

No application fee

Existing entries at 1 July 2015 pre-qualify if

LVT exempt in last 2 years on basis of $0

turnover

Annual self-declaration

through client portal or by mail

No TGA delegate decision

Annual Charge Exemption Scheme

Sponsors will not be invoiced for ACE entries

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Benefits of ACE• No application fee – additional saving of $2.4m p.a. to industry

• A high number of current exemptions continue (74%)

• No third party accountant certification

• Only need to declare no turnover rather than the value of turnover

• Annual charges are reducing for:

– non-biological (chemical) prescription medicines, and

– medical devices class IIa and above

• Annual charge invoices only issued for non-exempt entries

• Waivers available on public health/financial viability grounds

Annual Charge Exemption Scheme

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Waivers new waiver option under ACE

Available for registered medicines, biologicals, devices

class IIa or higher and IVD class 2 or higher

Decision by a TGA delegate

Waiver refused, annual charge

payable

Decision appealable

Waiver criteria• public health risk if product

is removed from the ARTG• product becomes financially

unviable if annual charge applies

Annual application

Annual Charge Exemption Scheme

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Chemical prescription medicines - 2 levels of annual charges

• Two levels of annual charges for chemical prescription medicines based on pharmacovigilance activities/costs:– Higher amount – relevant goods until 8th anniversary*– Lower amount – most generic medicines*, relevant goods past 8th anniversary

• Relevant goods = new chemical entity, extension of indications, or change to intended patient group

• Other major variations such as new formulation, change of strength, dosage forms – higher or lower amount depending on parent good

• *goods containing certain active ingredients will always attract the higher amount – thalidomide, leflunomide, lenalidomide, mifepristone, clozapine and isotretinoin

Annual Charge Exemption Scheme

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Fees and charges 2015-16• Non-biological prescription medicines

– 23% reduction in annual charge for lower amount– 5% reduction in annual charge for higher amount

• Medical devices– 5% reduction in annual charges for class IIa and above

• All fees and charges– 2.12% increase in fees and charges (CPI/WPI 2.5%)

• Revised fees and charges schedule - TGA website 1 July 2015

Annual Charge Exemption Scheme

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Audit and compliance program

• Audit and compliance assurance program will commence• Uses existing information collecting provisions in the legislation • Failure to provide information in response could result in

suspension/cancellation of entry• Providing incorrect declaration results in cancellation of the

exemption – from year of turnover (multiple annual charges could become payable)

• Criminal Code applies• Exempt and waived entries published on the website

Annual Charge Exemption Scheme

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Sponsor actions

• Letter sent to sponsors with pre-qualified entries 3 June– please check your list of exempt entries– new entries will be automatically exempted

• Notify commencement of turnover for exempt entries at any time

• Declaration of $0 turnover between 1 - 22 July each year for prior year to maintain exemption

first declaration July 2016

• Payment of annual charges by 15 September each year

Annual Charge Exemption Scheme

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Key dates June 2015

Advice to sponsors on existing entries, information sessions, website material

1 July 2015ACE scheme commences

Between 1 July and 22 July (annually starting 2016)Sponsor self-declares that entry had $0 turnover in the previous financial year

Sponsor may notify commencement of turnover at any time

July (annually)Annual charge invoices issued for non-exempt entries

15 September (annually) Due date for the payment of annual charges

Annual Charge Exemption Scheme

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More information

TGA website - https://www.tga.gov.au/annual-charge-exemption-scheme

email: ace.scheme@tga.gov.au