Therapeutic goods advertising in the spotlight with the TGA's proposed new consumer complaints handling system

By Colin Loveday, Greg Williams, Caitlin Sheehy and Jessica McMahon

07 Jun 2018

From 1 July, a new, streamlined complaints handling process for the advertising of therapeutic goods to consumers will come into effect.

With the impending introduction of a new complaints handling process under the reforms to the Therapeutic Goods Act 1989 (Cth), companies in the therapeutic goods space are about to be dealing with the Therapeutic Goods Administration (TGA) even more. 2018 will be the year to brush up on administrative law.

Australian Government changes to the regulation of Therapeutic Goods

The Australian Government recently announced a range of reforms to the regulatory framework governing the manufacture, marketing and supply of therapeutic goods in Australia. These reforms, introduced off the back of the Government's September 2016 Response to the Review of Medicine and Medical Devices Regulation, address a range of issues in the therapeutic goods space, from adverse event reporting to advertising reform and implementation of recent changes to the European Union medical device regulatory framework.

Most of the reforms will be introduced through the Therapeutic Goods Amendment (2017 Measures No. 1) Bill 2017, which received Royal Assent on 5 March 2018 and contains changes to the Act. In a series of articles, we will canvass each of the key reforms to the therapeutic goods regulatory framework. This article will consider the proposed amendments to advertising of therapeutic goods, including the new complaints handling process for advertisements to consumers, which is to be introduced on 1 July 2018.

A streamlined consumer complaints handling process for therapeutic goods advertisements

From 1 July 2018, the TGA will become the single body responsible for handling complaints about advertising of therapeutic goods to consumers. By directing all complaints through one body, the Government is hoping to reduce complexity around the process and encourage greater consistency in decision-making.

Currently, there is a co-regulated system of controls in place for handling complaints about the advertising of therapeutic goods to consumers.

The Complaints Resolution Panel (CRP), which is established under Division 3 of the Therapeutic Goods Regulations 1990 (Cth), is presently the main complaints handling body. It receives, considers and determines complaints about advertisements directed to consumers in "specified media" or broadcast media, which includes television, radio, the internet, newspapers, magazines, displays (except inside individual shops) and cinematographic film.

The Therapeutic Goods Advertising Code Council (TGACC), which is also established under Division 3 of the Regulations, also plays a role in the regulation of advertising. It is responsible for the currency of the Therapeutic Goods Advertising Code which governs the regulation of advertising of therapeutic goods to consumers.

The Therapeutic Goods Legislation Amendment (2018 Measures No. 1) Regulations 2018 abolish both the CRP and the TGACC (by removing Division 2 and 3 of the Regulations), with effect from 1 July 2018.

Will industry-bodies still have a role to play in handling consumer complaints about therapeutic goods advertisements?

Industry complaints panels in each sector of therapeutic goods (for example, prescription medicines etc) largely address complaints about advertisements directed to healthcare professionals (section 42AA of the Act).

Under the proposed reforms, section 42AA of the Act remains in place, which means industry complaints panels will continue to handle these types of complaints.

Exactly what role the existing players in this space will have under the new regime may become clearer following the closure of the Public Consultation on 4 June 2018 and when the revised Code is finalised and released.

How far can the TGA go in rectifying any advertising contraventions?

Under the reforms, a new section 42DV ("Directions about advertisements or generic information") has been introduced into the Act. The section empowers the TGA to issue directions about advertisements or generic information if it is satisfied that there has been a contravention of the Act, the Regulations or the Code. The TGA can direct the person apparently responsible for the advertisement of therapeutic goods, or for causing the advertising of therapeutic goods, to do one or more of the following:

  • cease the advertisement;
  • make a retraction;
  • make a correction;
  • recover any advertisement that is still in circulation;
  • destroy the advertisement; or
  • cease making a particular claim or representation made by the advertisement. 

In the event of non-compliance with a direction, the TGA can cancel the registration or listing of the therapeutic goods if it considers non-compliance (or a breach in relation to the Code) to be significant.

Contravention of a section 42DV direction is a strict liability offence, with penalties ranging from 100 penalty units (equating to $21,000 as at May 2018) to 5 years imprisonment and/or up to 4000 penalty units (equating to $840,000 as at May 2018) if use of the goods, would result in, or would be likely to result in, harm or injury to any person (section 42DW of the Act).

However, the Bill makes it clear that a section 42DV direction is an "initial decision" pursuant to section 60 of the Act and therefore reviewable by the Minister of the Department of Health.

Before these reforms are introduced on 1 July 2018, the TGA has indicated that it will establish a transition arrangement with the current CRP to minimise inconvenience to complainants.

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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.