Fees
Proposal to Increase Fees Payable under the
Medicines Act 1981 and Misuse of Drugs Act 1975
14 December 2005
Dear Chief Executive
PROPOSAL TO INCREASE FEES PAYABLE UNDER THE MEDICINES ACT 1981 AND MISUSE OF DRUGS ACT 1975
The purpose of this letter is to seek stakeholder comment by Friday 24 February 2006 on proposals to increase fees payable under the Medicines Act 1981 and Medicines Regulations 1984.
Background
The New Zealand Medicines and Medical Devices Safety Authority (Medsafe)
is a business unit of the Ministry of Health responsible for administering the
Medicines Act 1981 and Medicines Regulations 1984, and parts of the Misuse of
Drugs Act 1975 and Misuse of Drugs Regulations 1977. Its functions are funded
from Crown funding and third party revenue collected from fees set under the
Medicines Act 1981 and the Misuse of Drugs Act 1975.
The Medicines Act provides for the charging of fees in relation to applications for licences and for the approval of new and changed medicines and clinical trials. The schedule of fees payable is contained Regulation 61 of the Medicines Regulations 1984. With the exception of the fee for a licence to operate a pharmacy, the fees were set in 1991 and have remained unchanged since that time.
Regulation 61A of the Medicines Regulations 1984 provides that the Director General of Health may waive or refund, in whole or in part, a fee otherwise payable under Regulation 61. In exercising this power the Director General is obliged to have regard to the degree of complexity and time required to consider an application, and the interests of public health in New Zealand.
The Misuse of Drugs Act 1975 provides for the collection of fees in relation to applications for licences. The fee currently payable is $10 (excl GST), and has remained unchanged since being set in Regulation 3 of the Misuse of Drugs Regulations 1977. Regulation 3 of the Misuse of Drugs Regulations 1977 also allows for a fee to be waived at the discretion of the Director-General.
The fees collected under the Medicines Act and Misuse of Drugs Act in most cases fall well short of recovering the cost of the activity to which they relate. Costs have increased significantly since the fees were set as a result of increases in operating costs and the cost of specialised technical advice, changes in the nature and complexity of applications, and changes in international best practice for the regulation of medicines.
Although the fee for a licence to operate a pharmacy was set more recently, experience has shown that the current fee is set below the actual cost of determining an application.
It is therefore proposed to increase fees to levels that reflect the actual costs of performing the regulatory functions to which fees apply.
The proposed fees
Medsafe has undertaken a review to identify the level of fees needed to
achieve cost recovery whilst maintaining consistency with the 'Guidelines for
Setting Charges in the Public Sector' issued by the NZ Treasury in December
2002 (available at www.treasury.govt.nz/publicsector/charges/).
Consistent with current practice, it is proposed that an automatic fee waiver will be applied in respect of certain types of applications for consent to distribute new or changed medicines so that the fee is reduced from the maximum amount payable (as specified in the regulations) to a level that reflects the cost of doing the work for an application of that type. The actual fee payable after application of the waiver is shown in the table below.
The following tables show the current and proposed fee for each application type. All fees shown are GST inclusive.
Table 1: Fees for licences under the Misuse of Drugs Act 1975
| Licence type | Current fee | Proposed fee |
|---|---|---|
| Licence to deal in Controlled Drugs | $11.25 | $ 945 |
| Licence to possess Controlled Drugs | $11.25 | $ 945 |
| Licence to import Controlled Drugs | $11.25 | $ 190 |
| Licence to export Controlled Drugs | $11.25 | $ 190 |
Table 2: Fees for licences under the Medicines Act 1981
| Licence type | Current fee | Proposed fee |
|---|---|---|
| Licence to manufacture medicines | $3,800 | $13,750 |
| Licence to pack medicines | $300 | $845 |
| Licence to sell medicine by retail | $50 | $845 |
| Licence to sell medicines by wholesale | $300 | $1,054 |
| Licence to hawk medicines | $70 | $845 |
| Licence to operate a pharmacy | $950 | $1,030 |
Table 3: Fees for applications under the Medicines Act 1981 for approval of new and changed medicines and clinical trials
| Application type | Current Fee (GST inc) | Proposed Fee (GST inc) |
|
|---|---|---|---|
| Application for consent to distribute a new medicine | $15,300 | $122,625 | |
| Note: the current and proposed waivers have been applied to derive the fees in the shaded boxes | Innovative chemical or biological medicine | $15,300 | $122,625 |
| Generic medicine | $7,800 | $43,875 | |
| Non-prescription medicine | $7,800 | $7,650 | |
| Application for provisional consent to distribute a new medicine | $5,000 | $8,437 | |
| Notification of a material change to a medicine | $1,600 | $3,200 | |
| Note: the current and proposed waivers have been applied to derive the fees in the shaded boxes | Major change | $1,600 | $3,200 |
| Minor Change | $400 | $800 | |
| Self-assessable change | $200 | $400 | |
| Application for approval of a clinical trial | $2,800 | $9,843 | |
How to make a submission
Medsafe welcomes feedback on the proposal to increase fees. Please send your submission to:
Medsafe Fees Consultation
Ministry of Health
PO Box 5013
Wellington
OR
feesproposal@medsafe.govt.nz
The closing date for submissions is Friday 24 February 2006
Please ensure that you provide an email address to which acknowledgement of receipt of your submission can be sent.
Submissions may be released under the Official Information Act 1982. Any information you do not want made public should be sent separately and clearly marked CONFIDENTIAL.
Once the analysis of submissions has been completed and final decisions taken on the content of the updated regulation, the outcome will be notified on the Medsafe website (www.medsafe.govt.nz). To subscribe to an automatic email notification of website updates, please go to the "Regulatory" section of the Medsafe website, click on the "subscribe" button at the bottom of the screen and follow the instructions.
Yours sincerely
David Nicholson
Transition Manager
MEDSAFE