The document proposes changes to the low value turnover (LVT) exemption scheme for annual charges paid to the Therapeutic Goods Administration (TGA) in Australia. Key aspects of the proposed new Annual Charge Exemption (ACE) scheme include: - Self-declaration of $0 annual turnover to qualify for exemption from annual charges. - Reduced annual charge rates for some product categories like non-biologic prescription medicines and higher-risk medical devices. - A waiver option for annual charges on public health or financial viability grounds. - Reduced administration saving $3 million per year for industry and TGA through streamlined processes like no application fee and online declarations. The new ACE

1. TGA Business Services Improvements
Proposed changes to the low value turnover (LVT)
scheme
Ms Nicole McLay
Assistant Secretary, Regulatory Business Services Branch
Regulatory Support Division, TGA
ARCS Scientific Congress 2015
6 May 2015

2. Annual Charge Exemption Scheme Proposal
• Background
• Key features
• The new scheme
• Waivers
• New rates of annual charges
• Compliance program
• Sponsor actions
• Key dates
TGA Business Services improvements

3. Background
1990
2015
• 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 proposed
TGA Business Services improvements

4. Key features
• TGA proposes to offer an exemption scheme for annual charges
• Rates of annual charges would reduce for some product categories
– from 5% to 23%
• Self declaration
• Significant reduction in administration - $3m p.a. in savings to industry
• A new waiver option for annual charges
TGA Business Services improvements

5. New ACE Scheme - components
Annual Charge
Exemption (ACE)
Scheme
Proposed to start
1 July 2015
New entries from
1 July 2015 will
automatically
qualify
ACE applies
until
commencement
of turnover
No application
fee required
No TGA
delegate
decision
required
Annual self-
declaration
through client
portal or by mail
Existing entries at 1 July
2015 pre-qualify if LVT
exempt in last 2 years
on basis of $0 turnover
A significant administrative saving for both industry and the TGA
TGA Business Services improvements

6. Proposed changes from LVT to 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
• Annual charge invoices only issued for non-exempt entries
• Annual charges would reduce for:
– non-biologic prescription medicines, and
– medical devices class IIa and above
• Waivers available on public health/financial viability grounds
TGA Business Services improvements

7. Waivers proposal for waiver option under ACE
Waiver criteria
• public health risk if product
is removed from the ARTG
• no reasonable alternatives
available
• product becomes financially
unviable if annual charge
applies
Available for
registered medicines,
biologicals, devices
class IIa or higher and
IVD class 2 or higher
Annual
application
Decision by a
TGA delegate
Decision
appealable
Waiver refused,
annual charge
payable
TGA Business Services improvements

8. Proposed compliance activities
• Audit and compliance assurance program
• 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
• Criminal Code applies
• Exempt and waived entries published on the website
TGA Business Services improvements

9. Proposed sponsor actions
• Self-declaration of $0 turnover by 22 July each year
first declaration in July 2016
• Payment of annual charges by 15 September each
year
• Notify commencement of turnover at any time
TGA Business Services improvements

10. Plans for key dates
June 2015
Advice to sponsors on existing entries, other communications and website material
1 July 2015
ACE 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
TGA Business Services improvements