By Dr Teresa Nicoletti, Partner and Helaena Short, Lawyer

Media coverage of the advertising reforms for therapeutic goods appears to have precipitated strong reaction to the enhanced sanctions and penalties which have been introduced to manage non-compliance. Several other advertising reforms to be implemented shortly which are intended to streamline the requirements for medicines and medical devices and will give the TGA direct oversight over advertising complaints and related matters. Overall, the reforms represent a significant step forward for the industry and, in our view, will improve the quality and clarity of therapeutic goods advertising in Australia. 

The advertising of therapeutic goods to the public is subject to a complex legal and regulatory framework comprising the Therapeutic Goods Act 1989 (Act), the Therapeutic Goods Regulations 1990, the Therapeutic Goods Advertising Code (Code), the Poisons Standard, the Competition and Consumer Act 2010 and other instruments.

The Expert Review of Medicines and Medical Devices Regulation, chaired by Emeritus Professor Lloyd Sansom AO (Sansom Review), examined Australia’s medicines and medical devices regulatory framework and processes in 2015 and included a critical review of the advertising framework for therapeutic goods.

In light of several recommendations arising from the Sansom Review, the Federal Department of Health made a commitment to implement several changes to the regulatory framework for the advertising of therapeutic goods between 2018 and 2020.

The advertising reforms which have arisen from the Sansom Review include the following:

1. Enhanced sanctions and penalties

Royal assent was granted to the Therapeutic Goods Amendment (2017 Measures No. 1) Bill 2017 on 5 March 2018, which amended and enhanced the sanctions and penalties  that may be imposed for advertising offences under the Act, in order to more effectively deter inappropriate and misleading advertising of therapeutic goods. There are now civil and criminal offences under the Act for the promotion of off-label use of a therapeutic good, [1] not obtaining pre-approval for advertisements where required, [2] general advertising offences, [3] non-compliance with the Code [4] and failure to comply with a notice for substantiation or direction from the TGA. [5]

To confirm, despite advice published online that suggests the amended sanctions and penalty provisions will have effect from 1 July 2018, [6] the amendments have already been incorporated into the Act and have been in effect since 6 March 2018.

In our view, the amendments introduced by the Bill will create a higher standard of medicine and medical device advertising in the long term – even after pre-approvals are no longer required and the advertising framework becomes predominantly self-regulatory. Although in isolation the enhanced penalties and sanctions may seem harsh, in our experience, the TGA does not impose penalties and sanctions lightly, and would likely not take such enforcement action unless sponsors show disregard for, or wilfully or knowingly breach, their regulatory obligations.

2. New Advertising Code

In light of several recommendations of the Sansom Review relating to the Code, a significantly amended version of the Code was released for consultation between 29 March and 27 April 2018. The new Code seeks to simplify and clarify the minimum standards for all advertisements of therapeutic goods which are directed at the general public. With an anticipated implementation date of 1 July 2018, the finalised version of the Code is expected to be released shortly. We will provide more information about the new Code and a comparative analysis with the current Code in an upcoming article.

3. New complaints handling

In agreement with other recommendations of the Sansom Review, the existing vehicle for advertising complaints handling – the Complaints Resolution Panel (CRP) – has been abolished in favour of a new, streamlined complaints handling process which was anticipated to take effect from 1 July 2018. Importantly, however, the TGA is currently still assessing all of the submissions which were received in relation to the proposed new process and therefore expects to continue working on its development throughout the second half of this year. On this basis, it is not clear at this stage when the new process for complaints handling will be implemented.

In any event, having regard to the considerable inconsistencies and inefficiencies arising from the existing framework and the CRP’s involvement in the review of advertising complaints (which we have previously discussed), a more streamlined and efficient system for the management of therapeutic good advertising complaints is well overdue.

4. Abolishing pre-approvals

In anticipation of improved advertising quality and reduced non-compliance, Schedule 6 of the Therapeutic Goods Amendment (2017 Measures No. 1) Bill 2017 ensures that the requirement for advertisements appearing in traditional media (e.g. television, radio, newspapers, magazines, billboards) to be pre-approved will be abolished as of July 2020. This is a key step towards the predominance of self-regulation in the advertising space and affords advertisers and sponsors greater independence. For completeness, however, pre-approvals will continue to be required until 30 June 2020 and whichever version of the Code is in effect when the approval is granted will apply until that date.

Concluding remarks

The Sansom Review identified several ways to improve and clarify the interface and synergies between the market approval of therapeutic goods and advertising requirements, and to enhance and streamline the advertising framework specifically, to facilitate and improve compliance and the management of complaints. The Department of Health has committed to several key advertising reforms which have the potential to improve the quality and availability of information for consumers, so that they can make informed decisions about their purchases and health.

Although in isolation the enhanced sanctions and penalties which were implemented in March this year appear to be onerous, in conjunction with the gradual broadening of the self-regulatory approach to therapeutic good advertising, the reforms are intended to work synergistically to encourage compliance and improve advertising quality all-round.

We appreciate the challenges which sponsors and advertisers may face over the transition period(s) but are confident that the advertising reforms continue to drive the industry toward a more effective, centralised and efficient advertising management framework.

[1] ss 22(2), (3), (5) and 21B (4); ss 32BJ (2A)-(4) and 32BL; ss 42ML and 41MLB.

[2] s 42C.

[3] ss 42DL and 42DLB.

[4] ss 42DM and 42DMA.

[5] ss 42DS, 42DT, 42DW and 42DX.

[6] See: https://www.lexology.com/library/detail.aspx?g=96659e96-9074-462d-ab2a-0a11719c8137; and http://www.pharmainfocus.com.au/news.asp?newsid=13503. Please note that the statement “Lawyers from Clayton Utz have said a new section introduced into the TGA’s Act and set to be implemented next month…” is incorrect. The penalties and sanctions introduced (or amended) by the Therapeutic Goods Amendment (2017 Measures No. 1) Bill 2017 took effect on 6 March 2018.