Regulation and Pricing in the Pharmaceuticals Industry


Only therapeutic goods approved by the Therapeutic Goods Administration (TGA) can be sold in Australia. The TGA, a business unit of the Australian Government Department of Health, is responsible for ensuring therapeutic products available in Australia are of an acceptable standard.

Legislative control over the standard of therapeutic goods is provided by the Therapeutic Goods Act 1989. This provides a uniform, national regulatory system which safeguards the community from substandard, unsafe or ineffective therapeutic goods.

The TGA carries out a range of assessment and monitoring activities to ensure that the quality, safety and efficacy of therapeutic goods available in Australia is of an acceptable standard, equal to that of comparable countries. At the same time, the TGA aims to ensure that the Australian community has access to therapeutic advances. Overall control of the supply of medicinal drugs in Australia is exerted through five main processes:

  • The pre-market evaluation and approval of products intended for supply in Australia
  • The development, maintenance and monitoring of the systems for listing of medicines
  • The licensing of manufacturers
  • Post market surveillance
  • The assessment of medicines for export.

Under the approval process, medicinal drugs (including prescription, over-the-counter and complementary medicines) are required to be included in the Australian Register of Therapeutic Goods (ARTG). Medicines that have a higher risk must be ‘registered’. In the case of prescription drugs, this usually requires manufacturers or importers to provide comprehensive scientific data to establish the quality, safety and efficacy of a product. Teams of professional staff carry out independent assessments of the data. The main considerations are pharmaceutical chemistry and toxicological studies undertaken prior to the conduct of clinical trials, and assessment of data from extensive clinical trials. Medicines that have a lower risk must be ‘listed’ on the ARTG. The TGA will assess listed medicines for quality and safety but not efficacy.

The Advisory Committee on Prescription Medicines is a committee, which advises the TGA on prescription drugs. This may include advice on the suitability for the prescription medicine’s inclusion on, or removal from, the ARTG.  

In assessing the licensing of manufacturers the TGA assesses candidates in line with Good Manufacturing Practice (GMP) requirements. Before a licence is granted, manufacturers are inspected to ensure their production procedures comply with internationally recognised GMP principles. TGA inspectors regularly inspect licensed Australian manufacturers to ensure that necessary standards are maintained.

Overseas manufacturers of drugs imported into Australia are required to operate to standards equivalent to those expected of Australian manufacturers. They are either subject to similar licensing requirements in their own country or audited by TGA inspectors where necessary.

Post marketing surveillance concentrates on checking products already on the Australian market through systems of adverse drug reactions and problem reporting, laboratory testing, and surveillance of product advertising. There are a variety of mechanisms for this task including the Advisory Committee on the Safety of Medicines

For more information on these bodies visit the TGA's website.

Listing and Pricing

All prescription drugs approved by the TGA can be sold (on prescription) in Australia; however, most prescription drugs in Australia are supplied through the Pharmaceutical Benefits Scheme (PBS). The Australian Government subsidises PBS medicines so as to allow Australian patients access to medicines for a low standardised patient co-payment.

Once a drug has received TGA approval its sponsor (the manufacturer or supplier of the drug) may seek to list their drug on the PBS.

To be listed on the PBS a drug must receive a positive recommendation from the Pharmaceutical Benefits Advisory Committee (PBAC). The PBAC is an independent expert body established under the National Health Act 1953 and its membership includes medical practitioners, pharmacists, consumers and health economists. The PBAC assesses a sponsor's clinical evidence to determine the need for the drug, the efficacy of the treatment against alternatives and the cost effectiveness of the drug compared against alternative treatment.

A more detailed overview of the timing and stages of the listing and pricing processes is available from the PBS website.

Contact us 

For enquiries regarding this website or further information on the pharmaceuticals industry pleases contact:

Health Technologies Section  
Advanced Technologies Branch
Department of Industry, Innovation and Science  
GPO Box 9839
Canberra ACT 2601



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