Proposed consumer advertising code puts therapeutic goods advertising in the spotlight

By Greg Williams, Richard Abraham and Jessica McMahon

05 Jul 2018

A primary driver behind the changes in the 2018 Code is to provide more objective tests to determine breaches of the Code.

This is the second in a series of articles canvassing key reforms to the therapeutic goods advertising regulatory framework, most of which will be introduced through the Therapeutic Goods Amendment (2017 Measures No. 1) Bill 2017 (which received Royal Assent on 5 March 2018).

We've previously discussed the new complaints handling process introduced under the reforms to the Therapeutic Goods Act 1989 (Cth). In this article, we will consider changes to the definition of "advertisement", and proposed amendments to the Therapeutic Goods Advertising Code 2015. The definitional change has already taken effect. The proposed amendments to the Code are due to take effect on 1 January 2019.

Definition of "advertisement"

The advertising of therapeutic goods to the public is strictly regulated – indeed some therapeutic goods cannot be advertised to the public.

The TGA aims to ensure that where marketing and advertising of therapeutic goods to consumers is permitted, it is conducted in a manner that promotes the quality use of therapeutic goods, is socially responsible and does not mislead or deceive the consumer.

As the way in which we communicate and consume information evolves, the TGA (and indeed the legislature) must review the way in which it defines concepts such as "advertising". As part of the recent changes, the existing definition of "advertisement" pursuant to section 3(1) in the Act has been repealed, and replaced with a new definition of "advertise".

The Explanatory Memorandum to the Bill observes that the amendment recognises of the changing nature of the way in which therapeutic goods have been advertised in recent years. The new definition of "advertise" covers material intended to promote the use or supply of the goods. The definition is wide enough to include indirect promotion of the use or supply of relevant therapeutic goods and makes it clear that the advertising provisions under the Act also extend to packaging, labelling and information supplied with a therapeutic good.

The Explanatory Memorandum also states that test as to whether material advertises therapeutic goods continues to be an objective one: that is, whether the material, on its face, appears to be designed to draw the public attention to and promote the supply, sale or use of a therapeutic good.

Changes to the Therapeutic Goods Advertising Code

In late March the TGA released a draft Therapeutic Goods Advertising Code 2018 for public consultation up until 27 April 2018. The Code is created under section 42BAA of the Act and is administered by the TGA, and works in conjunction with the Act and the Therapeutic Goods Regulations 1990 to regulate the advertising of therapeutic goods.

The TGA originally proposed that the 2018 Code would come into effect on 1 July 2018. However, following public consultation, the TGA announced that while it would have the Draft 2018 Code prepared and registered by 1 July 2018, it would not commence until 1 January 2019. The Therapeutic Goods Advertising Code 2018 was made on 29 June 2018. Upon commencement on 1 January 2019, it will repeal and replace the current Code.

A primary driver behind the changes in the 2018 Code is to provide more objective tests to determine breaches of the Code. It is thought that this will support the broadened sanctions and penalties which form part of the broader reforms introduced through the Bill and to address the inconsistencies between medicines and medical devices (where appropriate).

Below are some of the most significant amendments the 2018 Code makes to the current Code:

  • Inclusion of the new definition of "advertise" in line with the new definition under the Act.
  • Amendments to the concept of "accuracy" for the advertising of therapeutic goods, including making clear that any advertising must be consistent with the entry for the therapeutic goods in relation to that inclusion on the Australian Register of Therapeutic Goods.
  • Removal of the requirements for comparative advertising under paragraph 4(5) of the Code as the TGA has suggested, this will be dealt with in guidelines to the 2018 Code.
  • Clarification of the prohibition on advertising therapeutic goods to children, being that advertising must not be "primarily directed" to children.
  • Clarification in relation to "direct" and "internet" marketing, with the latter being changed to goods that are not available for physical examination by the consumer before purchasing, and what such advertising must contain.
  • Clarification of the requirements of using a testimonial in an advertisement for a therapeutic good, including a requirement for the disclosure where any valuable consideration has been provided to the person giving the testimonial or where the person is a relative or associate of an individual who is involved with the production, sale or supply of the goods.
  • Inclusion of a new provision for a health warning to be included on a label or instruction for use if the therapeutic good may lead to death, hospitalisation, or treatment from a medical practitioner for injury, disability, incapacity or impairment.
  • Inclusion of a new provision in relation to advertisements for complementary medicines to disclose any claim based on evidence of a history of traditional use.
  • Inclusion of a new provision in relation to the requirements for the advertisement of any sunscreens.
  • Amendments to the provisions in relation to prohibited representations and restricted representations, including moving the "public interest criteria" currently applied in Appendix 6 of the Code to the body of the 2018 Code and the removal of Appendix 6.

What's next? The transition period

One of the reasons for the TGA delaying the commencement of the 2018 Code until 1 January 2019 was to enable a transition period. During this period, the TGA will provide educational material to the public and companies about the changes, including guidance documents, face to face training, webinars and an online module training program (which will be certified).

During a recent webinar, the TGA confirmed:

  • during the transition period, complaints in relation to advertising approved before 1 January 2019 will be assessed under the Code; but
  • the new tiered system of penalties and sanctions, which form part of the broader reforms introduced through the Bill, will be applied if there is a breach of the Code, by virtue of section 42DM of the Act.

The TGA will also be publishing guidance documents to accompany the 2018 Code, which it suggests will focus on advertising of complementary medicines and restricted representations as these were some of the main concerns which came out of the public consultation process.

Although the TGA has introduced the 2018 Code to make the regulation of advertising therapeutic goods clearer, we will continue to monitor the practical effects of the 2018 Code to see whether in fact, this is the case.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.