TGA's low value turnover exemption scheme under review

The Therapeutic Goods Administration (TGA) has announced a review of the low value turnover exemption scheme (LVT scheme), which exempts cost recovery fees on products with low turnover.

Usually the TGA levies annual charges on entries in the Australian Register of Therapeutic Goods to recover the costs of regulatory functions which cannot be reasonably assigned to individual businesses, or where such assignment would act as a deterrent to the effective regulation of therapeutic goods.

These annual charges fund post-market regulatory activities such as the monitoring of product safety and of sponsor compliance with regulatory obligation. The charges vary for different classes of therapeutic goods, based on product risk.

The LVT scheme, introduced in 1990, allows an exemption from payment of annual charges for entries where the annual turnover is less than or equal to 15 times the annual charge for that register entry.

The TGA has commenced a policy and operational review of the LVT scheme. The first stage is the release of the ‘Review of the Low Value Turnover Exemption Scheme’ consultation paper, which presents discussion and options to generate feedback. It is acknowledged that changes to the LVT scheme would have varying impacts across individual sponsors. Some of the questions to be considered in the review include:

• Is there a contemporary policy need for an LVT scheme?
• Are there other policy options available to address the policy need?
• Is there a problem with the operation of the current LVT scheme?
• What are the policy options and what is the net benefit of each of those options?
• How compatible is each option with other government policy such as the Australian Government Cost Recovery Guidelines and competition policy?

Given the potential impact on a broad range of charges, sponsors and products, it is important that each sponsor consider the impact of the current LVT scheme on their product/s and the potential impact of changes to the LVT scheme.

The LVT scheme was established to support manufacturers of small volume products, small start-up companies, herb growers and small companies making medical appliances whose turnover on a number of product lines might only be a few hundred or a few thousand dollars.

The consultation documents can be found at http://tga.gov.au/newsroom/consult-ocs-lvt-exemption-140410.htm#about.

Interested parties should respond by close of business on Friday 23 May. Feedback will be released following consideration of submissions