Business Investment Barriers Under Parliamentary Review
28th May 18
ADIA has advised a parliamentary enquiry reviewing impediments to business investment how the TGA’s proposed medical devices tax will make it harder for businesses in the dental industry to grow.
Key Issues For The Dental Industry —
The House of Representatives Standing Committee On Economics is undertaking and inquiry into impediments in investment. In a submission prepared with the support of member businesses, the Australian Dental Industry Association (ADIA) has provided advice about how a new medical devices tax proposed by the Therapeutic Goods Administration (TGA) provides a new barrier to investment.
Suppliers and manufacturers of dental products must pay the TGA a range of fees, charges and taxes to be able to lawfully supply products into the Australian market. These cumulative fees erode what would otherwise be investment capital and reduce the incentive to invest in new and innovative products.
The TGA has proposed to impose, from 1 July 2018, a new $530 application fee — effectively a one-off medical devices tax - for each low-risk (Class 1) medical device entry a business adds to the Australian Register of Therapeutic Goods (ARTG). The ARTG is the list of medical devices and medicines that may be lawfully supplied in Australia. This is in addition to the annual tax of $80 (increasing to $90 from 1 July 2018) that a business pays every year to maintain the entry.
In dentistry, most Class 1 (low-risk) surgical instruments are made from high-quality metals that allow them to be sterilised then reused. Such products are therefore sold in relatively small volumes and, owing to their relatively straightforward design and construction, do not have a high selling price.
ADIA members businesses have said that in order to absorb the cost of this new fee they must reduce investment. The fee will add to the cumulative burden that all medical device suppliers face. Australian manufacturers and exporters in particular will be forced to curtail investment.
In a submission to the parliamentary enquiry, ADIA tendered advice that the new fee will also create a significant barrier to market entry for entrepreneurs investing in new dental supply businesses which will be forced to pay $530 for every low-risk product entry. In order to compete in the dental product supplier sector, it is typically necessary for businesses to offer a wide range of products. A new business may need to apply for twenty to fifty low-risk medical device entries from the outset. This means that new businesses face an additional upfront cost of $10,600 to $26,500. ADIA’s submission can be downloaded from the link below:
Beyond the issue of the proposed medical devices tax, ADIA acknowledged in its submission that the TGA was working to reduce regulatory red-tape arising from a series of reforms associated with the review into medicines and medical device regulation. Recent changes include greater flexibility in approval pathways for medical devices would improve the efficiency of market approval in Australia without compromising on the safety, quality, efficacy or performance of medical devices. The TGA has also acted to provide an expanded range of approval pathways, particularly with respect to the recognition of assessment reports made in comparable regulatory jurisdictions to that of Australia will significantly cut unnecessary red-tape, reduce compliance costs, and improve market access to quality and safe therapeutic goods.
In actively lobbying for reform, ADIA is working towards a regulatory framework for dental products that is based on a risk management approach designed to ensure public health and safety, while at the same time freeing industry from any unnecessary regulatory burden.
Member Engagement —
ADIA provides leadership, strategy, advocacy and support. Our members set our agenda, fund our activities and directly benefit from the results. With respect to the Association's work to support to reduce red-tape faced by the dental industry the team in the ADIA national office receive advice and guidance from members serving on the ADIA-TCPC Trade & Commercial Policy Committee and the ADIA-PRPC Product Regulation Policy Committee.
Further Information —
To keep up to date with the latest market statistics subscribe to the Twitter feed @AusDental or follow us on Facebook at www.facebook.com/dental.industry. Alternatively, you can contact the Association via email at firstname.lastname@example.org or by telephone on 1300 943 094.
Currency Of Information & Disclaimer —
This update was issued on 28 May 2018 and please note that changes in circumstances after the publication of material or information may impact upon its accuracy and also change regulatory compliance obligations. The statements, regulatory and technical information contained herein are believed to be accurate and are provided for information purposes only. Readers are responsible for assessing its relevance and verifying the accuracy of the content. To the fullest extent permitted by law, ADIA will not be liable for any loss, damage, cost or expense incurred in relation to or arising as a result of relying on the information presented here.
This publication is available for your use under a Creative Commons Attribution 3.0 Australia licence, with the exception of the ADIA logo, images and where stated.
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5th Mar 18
The TGA is proposing to levy for the first time an application fee for placing Class 1 medical devices on the Australian Register of Therapeutic Goods (ARTG), a proposal that will significantly add business compliance costs.