Cost recovery questions and answers

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General questions

Why are application fees increasing?

To bring application charges back in line with the long-standing 40 per cent cost recovery target, fees will be increased in three phases from 1 July 2013.

To give industry time to adjust, the increase will be spread across three phases over a two and a half year period.

What is the timing of the changes to application fees?

  • From 1 July 2013, application fees returned to 30 per cent cost recovery
  • From 1 July 2014, application fees returned to 35 per cent cost recovery
  • From 1 January 2015, application fees will return to the target level of 40 per cent cost recovery.

Why are the levy rates being reduced?

The increase to application fees and the full recovery of the cost of compliance of veterinary products with Good Manufacturing Practice (GMP) allow the existing levy rates to be reduced. Registrants will pay less in levies, which, for those registrants who sell their product, will largely offset or fully offset the increased application fees.

What is the commencement date of fees and charges flowing from the better regulation reforms?

The better regulation reforms have a commencement date of 1 July 2014.

If I submit my application on 31 December 2014 will I have to pay the increased fee?

Electronic applications received by the APVMA before midnight AEST on 31 December 2014 will not incur the increased fee.

Electronic applications received by the APVMA after midnight AEST on 31 December 2014 will incur the increased fee.

Hard copy applications received from 1 January 2015 but postmarked on or before 31 December 2014 will not incur the increased fee.

Are these changes—the application fee increase, the levy rate reduction and the new cost recovery arrangements for GMP—related to the better regulation reforms?

No. These fees are totally unrelated to the better regulation reforms. The reforms were outlined in a cost recovery impact statement that was published in November 2012.

Good Manufacturing Practice (GMP) questions

Why are new fees and charges being introduced for the cost of compliance with GMP?

Under the previous arrangements, only a very small proportion of the cost of compliance with GMP was recovered through the Manufacturers’ Licensing Scheme, and none of the costs of assessing GMP compliance of imported products were recovered.

The new arrangements are consistent with Australian Government cost recovery principles and remove the existing cross-subsidisation of costs.

The APVMA worked directly with a number of veterinary medicines industry groups to develop an alternative cost recovery framework under which the full cost of compliance with GMP is recovered from those who participate in the scheme.

As the full cost of compliance with Good Manufacturing Practice will be recovered from those who participate in the scheme, there will be an increase in costs for manufacturers. For those manufacturers who are also registrants, the cost increase will be either fully or partially offset by a reduction in the levy rates for sales of the products. It should also be noted that registrants of products manufactured outside of Australia will also now significantly contribute to the cost of running the Overseas GMP Scheme.

When will the new fees and charges take effect?

The APVMA’s new cost recovery arrangements commenced on 1 July 2013. These arrangements cover the period of 1 July 2013 to 30 June 2015. Under these new arrangements, the charges associated with GMP will increase to allow the APVMA to recover close to 100 per cent of the costs associated with administering GMP.

Who will be affected by the changes?

Manufacturers located in Australia who apply for or hold a licence to manufacture veterinary chemical products issued by the APVMA will be affected by changes to licence application fees, licence variation fees and annual licence fees.

What is the APVMA doing to assist low income manufacturers?

Manufacturers who hold a licence to manufacture veterinary chemical products and who provide the APVMA with satisfactory evidence that the total notional wholesale value of the chemical product(s) manufactured under the licence in the previous financial year was less than $50 000 will be eligible to apply for a fee reduction of 50 per cent. In practice, this will mean that category 1 manufacturers and multi-category manufacturers who meet the eligibility criteria will only be required to pay an annual fee of $3750 for the financial year in which they are eligible. Single-category manufacturers who meet the criteria will only be required to pay $2500, and category 6 manufacturers who meet the criteria will only be required to pay $900, for the financial year in which they are eligible.

This change in the fees will also result in a decrease in the amount payable by product registrants in levies, which will assist in reducing some of the costs involved in maintaining product registration.

Will I still receive a concession if I hold a Therapeutic Goods Administration licence or National Association of Testing Authorities accreditation?

The fee concession related to this licence and this accreditation will no longer be available. However, the APVMA will continue to accept appropriate evidence of GMP compliance issued by the Therapeutic Goods Administration and the National Association of Testing Authorities. The rationale for this change is that the APVMA’s processes are inherently the same, regardless of who carries out a facility inspection: pre-audit information is supplied to the auditor, the audit report is reviewed and licensing decisions are made. While there are some savings in respect to monitoring of progress of corrective actions (which is left to the other licensing agency) those savings are offset by the need for the APVMA to participate in inter-agency audit coordination and quality assurance activities. Dual licence and accreditation holders will be charged the applicable GMP audit assessment fee based on their manufacturing operations. They will also be eligible to apply for the small manufacturers’ concession.

Will I still be required to pay the auditor when I undergo an audit?

Yes, you will still be required to pay the auditor for the audit when it is conducted. These new fees will cover the work undertaken by the APVMA and will cover the cost of monitoring timely conduct and closure of all audits for Australia-based manufacturers, preparing pre-audit information for auditors, reviewing audit reports, addressing disputes, answering manufacturer queries, updating licences for routine changes (such as changes to personnel), and where necessary, initiating compliance enforcement action. These activities are undertaken on behalf of all manufacturers, with audits of each manufacturer conducted approximately every 18 months.

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