Price hikes: Aussie nutra industry body disagrees paying for regulator’s new building, IT transformation

The CMA was responding to Australia’s health products regulator, the Therapeutic Goods Administration’s proposal in raising its charges for the upcoming financial year starting from July 1.

The Therapeutic Goods Administration (TGA) has been recovering the costs of performing its regulatory duties from the industry over the years.

For the upcoming financial year, the TGA has set up three key proposals, including an increase to fees and charges by an indexation factor of 5.2 per cent, to which the CMA is agreement with.

However, the industry association is against two other proposals.

No to new building charges ​

First, the CMA is against the idea of having the industry cover half of the TGA’s new building and laboratory fit out costs.

Doing so will require the industry pay an additional 4.12 per cent to all annual charges, including manufacturing licences, medicines and biologicals annual charges.  

The CMA believes that the government should be paying instead, adding that the additional charges were not made known to the industry prior to TGA’s relocation.

The regulator moved to the new building at Fairbairn, Canberra last year.

“CMA opposed an increase in charges to cover a loan made to the Department to support the move of the TGA building and laboratory to the Fairbairn site, emphasising that these costs should be paid by Government, and that this impact on industry charges had not been raised prior to the Department’s decision to move to the new site.” ​

The new facility is said to allow reconfiguration and efficiency in the laboratory spaces, in turn facilitating more efficient workflows for testing.

It is also said to be equipped with enhanced security for test samples, in turn improving the handling and tracking of products sent to TGA for analysis.

The additional payment is set at AUD$4.85 million (US$3.28m) annually to be paid to the landlord for 15 years.

The Department of Health and Aged Care, which TGA is a part of, has agreed to let TGA pay 70 per cent of the fees, with the remaining to be absorbed by the Department.

No to digital transformation charges ​

Second, the CMA disagrees with paying additional annual fees to support the regulator’s digital transformation and upgraded adverse event management system.

To support these initiatives, annual fees would be raised by 3.57 per cent for six financial years, with a 1.78 per cent increase imposed for the first and sixth financial years, while the years in between would see the full increase of 3.57 per cent.

The CMA is opposing the plan because the costs were covered by the regulator’s Special Account cash reserve – which was paid by the industry in the past.

The Adverse Event Management System costs AUD$2.2m, while the digital transformation system costs AUD$14.7m and is said to reduce regulatory burden and costs for businesses.

However, the CMA pointed out that such reductions were not confirmed for complementary medicine applicants or listed medicine users.

Furthermore, it argued that the transformation had not decreased regulatory burden and has in fact “largely made the TGA website and systems more difficult to use and find information”.​

The TGA is still in the midst of collecting public feedback which closes on March 20.

The CMA has called on its members to provide feedback to it by March 15.