ADIA claims regulator cash-grab

The ADIA says the TGA is making a grab for cash.
The ADIA says the TGA is making a grab for cash.

According to the Australian Dental Industry Association (ADIA), under the guise of deregulation, the Therapeutic Goods Administration (TGA) will increase charges by 30 per cent for many businesses that supply dental products. This is the direct impact of an ill-considered regulatory reform set to be approved later this week and opposed by the ADIA.

“At a time when the Australian Government is seeking to reduce small business compliance costs, the TGA is proposing regulatory reform that does the complete opposite by hiking-up the fees that it collects,” said Troy Williams, ADIA Chief Executive Officer.

The TGA is the nation’s regulator of medicines and medical devices which operates on a cost-recovery basis. A considerable portion of the TGA’s revenue is derived by businesses that pay to place entries on the Australian Register of Therapeutic Goods (ARTG), a listing of medical devices that can be lawfully supplied in Australia. Currently, the regulations allow a business to claim an exemption for the charge associated with putting a product on the ARTG if the sale of the product produces revenue of less than fifteen times the aforementioned charge. However, the proposed reform eliminates the exemption the moment the product is sold.

“The TGA said this proposal was not meant to cost the industry any extra, yet the result for the small businesses ADIA represents is different. The TGA looks set to pocket an additional 30 per cent as a result of this cash-grab from businesses in the dental industry,” Mr Williams said.

Significantly, the analysis that shows how much extra cash the TGA will collect was undertaken by the TGA itself. In a step that undermines the legitimacy of the regulatory reform, this analysis was not included in the Regulatory Impact Statement (RIS) prepared by the TGA in support of the proposal.

“The process to draft the RIS was clearly flawed when the TGA omitted its own data that showed that far from reducing compliance costs, the proposals being put forward allowed the TGA to collect more cash from small businesses in the dental industry,” Mr Williams said.

The outcome of the regulatory reform spells bad news for jobs in the industry as the viability of businesses that sell dental products will come into question. Patient treatment options will also be limited as the higher TGA fees are likely to result in some products being withdrawn.

“We are calling on the Australian Government to live up to its rhetoric about red-tape reduction and rethink this proposal that only serves to increase business compliance costs,” Mr Williams said.

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