Opinion: How the IVD legislation will impact Australian biotechs

The Therapeutic Goods Administration (TGA) has recently legislated amendments to the medical device regulations which mean that all in vitro diagnostics (IVDs), including laboratory developed tests, will need to be included on the Australian Register of Therapeutic Goods (ARTG) by July 1, 2014.

Under the new regulatory scheme all IVDs are required to be included on the ARTG before they can be supplied in Australia. Products that are on the market in Australia on or before June 30, 2010, will have a four year transition period to enable sponsors and manufacturers to make application for their inclusion. However after July 1, 2010, all new products will require ARTG inclusion before supply.

While IVD Australia is generally supportive of the move to global harmonisation of IVD regulation, it remains concerned at a number of aspects of the new regulations.

Firstly, there will be a dramatic increase in the cost of regulation. The TGA’s own estimate is that the cost over the first five years of the new regulations will be about $16 million. IVD Australia believes however that the direct cost to sponsors and manufacturers will exceed $20 million.

In addition most Australian sponsors and manufacturers will require additional staff and expertise to enable them to collect the documentation and make the necessary applications. Many of the documents required by the TGA will exist in electronic form only and may be scattered across a series of manufacturing sites.

Bringing these documents together to submit to the TGA within the specified 20 business days may prove to be a significant logistical exercise, especially for distributors who often handle products from multiple manufacturers.

This indirect overhead will add enormously to the costs of IVD companies in Australia, costs that will need to be recovered from pathology sector customers, and ultimately from the Australian community, possibly resulting in price increases to laboratories for some tests.

Secondly, IVD Australia is also very concerned that the cost of regulation, both direct and indirect, will cause sponsors to reassess the importation of marginal products. In the case of some assays the direct cost is likely to exceed $40,000 to include a single product on the ARTG.

Hence, whilst existing products may continue to be supplied during the transition period, IVD Australia is convinced there will be a significant number of products that will not be transitioned by June 2014, even allowing for the application of the TGA Low Volume/Low Value business rules. These may include products such as immunohaematology reagents, which, although of low usage, are critical to the determination of transfusion status.

Finally, while the regulations also capture ‘in-house’ or ‘laboratory developed’ tests, these will not, with the exception of high risk assays, be regulated to the same degree as commercial assays. Laboratories that develop their own assays for use within their laboratory group must comply with a recently introduced accreditation standard but will only be required to supply the TGA with a list of assays by June 2014 for incorporation on a register.

There will be no regulatory assessment of these products even at moderate risk level, unlike commercial equivalents.

As with the revised medical device regulations, the new IVD regulations propose an increased emphasis on post-market surveillance activities by the TGA. However, this is unlikely to commence in a major way until the end of the transition period.

While IVD Australia has worked assiduously with the TGA to address the industry’s concerns, it is convinced that the regulations will mean increased costs to industry, laboratories and the Australian community, and that there is certain to be a decreased level of investment in new instrumentation, new tests and in low usage older assays to the detriment of the Australian patient.

Dr Peter Harman is the CEO of IVD Australia, the peak body representing Australian sponsors and manufacturers of in vitro diagnostics. He has over 20 years experience in the in vitro diagnostics industry and has held senior management roles at St Vincents Hospital, Millipore Australia, Australian Laboratory Services (ALS) and Abacus ALS.