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Thursday, 2 September 1993
Page: 906

(Question No. 461)

Senator Newman asked the Minister for Family Services, upon notice on 21 July 1993:

  With reference to Statutory Rules Nos 140 and 141 of 1993:

  (1) Who was consulted in relation to the increases and extension of fees set out in the regulations.

  (2) On what basis were the increases and extension of fees determined.

  (3) What improvement in performance can be expected from the Therapeutic Goods Administration as a consequence of the increases and extension of fees.

Senator Crowley —The answer to the honourable senator's question is as follows:

  (1) The Therapeutic Goods Administration (TGA) has consulted with four peak industry organisations. The organisations are:

    Australian Pharmaceutical Manufacturers Association Inc

    Medical Industries Association of Australia Inc

    Nutritional Foods Association of Australia Inc

    The Proprietary Medicines Association of Australia Inc.

  The need to increase the fees and charges set out in the regulations was discussed with the organisations individually and also within the Industry/Government Consultative Committee (IGCC) which is a committee involving the four peak organisations together with representation from TGA, the Department of Industry, Technology and Regional Development, and the Department of Finance.

  (2) The fees and charges levied by TGA were introduced in 1991 following the passage of the Therapeutic Goods Act 1989. Fees and charges were established through consultation with the IGCC against estimates of the volume of work likely to be undertaken. In the first full year of operation (1991-92) TGA raised $9.4M in revenue compared to a target of $17M to meet 50% cost-recovery. The first discussions with industry on the need to increase fees and charges took place in May 1992. The need to increase fees and charges was widely publicised in the "TGA News", a newsletter sent to all sponsors of pharmaceutical goods in Australia.

  Following detailed discussions which involved the peak organisations, the Department of Finance, the Department of Industry, Technology and Regional Development, and the Department of Prime Minister and Cabinet it was decided to phase in an increase in fees and charges over four years commencing on 1 July 1993. Annual increases will take place until and including the 1996-97 financial year when it is estimated that the 50% cost-recovery target will be achieved.

  (3) The present increase in fees and charges is not directly related to performance but is a requirement to meet the government policy that TGA generate revenue to meet 50% of its budget. The operating budget of TGA has not been increased in any real terms, the increase in fees and charges is required to meet the government policy on revenue generation.

  The performance of TGA is monitored through the IGCC and through the publication of quarterly performance reports. The performance indicators for TGA were determined by the IGCC and are used as management tools by TGA.

  TGA has improved its performance since the implementation of the Baume Report and through adopting new strategies throughout the Branches in TGA involved with the approvals of drugs and medical devices.

  There is a financial incentive for the approval of prescription medicines to be completed by the TGA within the timelines proposed by Baume and now specified in Regulations. For Category 1 and 2 applications, 75% of the evaluation fee is payable when the application is accepted for evaluation and the remaining 25% is payable only if the evaluation and decision is completed within the allotted time period.

  The sponsor may not proceed to market until registration is approved and the drug entered on the Australian Register of Therapeutic Goods.