Advertisers beware! New changes set to shake up Australian therapeutic goods advertising

By Dean Gerakiteys, Sheena McKie
03 Feb 2022
From 1 July 2022, advertisers must ensure that therapeutic goods advertising complies with the new requirements created by the Therapeutic Goods Advertising Code 2021.

After substantial consultation with industry stakeholders over the past 18 months, the new Therapeutic Goods Advertising Code 2021 (2021 Code) has been published and took effect on 1 January 2022.  The 2021 Code aims to provide greater clarity for advertisers of therapeutic goods by simplifying the language and structure of the Code.  However, it also introduces new requirements and prohibitions that have the potential to substantially impact the marketing campaigns of advertisers of therapeutic goods.  Advertisers have until 30 June 2022 to ensure that they comply with the 2021 Code.

Key changes introduced by the 2021 Code

The 2021 Code will require action by advertisers to address at least the following changes to the advertising requirements for therapeutic goods, each of which is addressed further below:

  • changes to mandatory statement and information requirements;
  • "clarification" to rules relating to testimonials and endorsements;
  • expansion of the categories for which samples may be provided; and
  • expansion of the interpretation of supporting "safe and proper use" of therapeutic goods.

As it has with past iterations of the Code, the Therapeutic Goods Administration (TGA) has published updated guidance material and will continue to do so over the coming months, and  also host webinars. The aim of these advertising education initiatives is to provide information and support to advertisers seeking to understand and meet their obligations under the 2021 Code, and their  guidance will be key to understanding the TGA's approach to regulating and enforcing the Code. 

1. Simplifying mandatory statement requirements for therapeutic goods

Part 4 of the 2021 Code deals with mandatory statements and other information which must be included in advertisements about therapeutic goods.  Following concerns raised during stakeholder consultations, the mandatory statement requirements have been simplified and the number of required mandatory statements reduced.  

Mandatory statements introduced by this Part of the 2021 Code do not apply to:

  • labels or patient information materials (consumer medicine information, instructions for use or patient information leaflets); or
  • advertisements comprising the name of the goods, a pictorial representation, price or point of sale of the goods, if they do not refer (expressly or by implication) to a claim relating to therapeutic use.

Plainly enough, the mandatory statements are not required to be added to patient information materials which are otherwise the subject of separate TGA oversight or legislative requirements, nor are they required where the advertisement comprises simply the name, price and an image of the goods.  The reference to "advertisements about therapeutic goods that comprise… (iv) the point of sale of the goods" is somewhat more difficult to understand [emphasis added]. 

Importantly, having regard to the 2021 Code and the TGA media release, mandatory statements applying to therapeutic goods advertising will differ depending on:

  • how the goods may be supplied (eg. where goods are only available from pharmacists, or are not available for purchase by the public).For example, a new mandatory statement applies to goods which are only available for supply through a health professional; and
  • whether purchases will be made in person or online. For example, if an advertisement facilitates the purchase or supply of a therapeutic good, and the good is not able to be physically inspected by the consumer before purchase, the advertisement must include a list of or link to any health warnings that apply to the medicine.

Advertisers will need to carefully consider existing and new material to ensure they include all mandatory statements.

2. Rules for testimonials and endorsements in advertising clarified

Under the 2018 Code, testimonials (a statement about a therapeutic good made by a person that claims to have used the good) were permitted in therapeutic goods advertising, provided they were genuine, verified, and typical of the results to be expected from use of the goods, and relevant disclosures about potential influence/ interest (valuable consideration or relationships) were made. They could not however be made by a person, or an employee or officer of a corporation, involved with the production, sale, supply or marketing of the goods.

Similar rules are included in Part 6 of the 2021 Code, including permitting the use of genuine unpaid testimonials in therapeutic goods advertising.  However, under the 2021 Code, it appears that paid or incentivised testimonials of any nature will now be prohibited, regardless of whether the financial relationship is disclosed. Advertisements must not contain a testimonial made by a person who is engaged in the production, marketing or supply of the goods ("relevant person"), which has been extended to include "influencers, direct sellers and other persons who have, or will receive, valuable consideration for making the testimonial". 

Since "engaged in" and "other persons" are not defined, it is unclear how far this prohibition extends; however, it has the potential to significantly disrupt the marketing approaches of many organisations which advertise medicines and medical devices directly to consumers.

3. More types of therapeutic goods that can be offered as samples

Part 7 and Annexure 2 to the 2021 Code expands the types of goods that may be provided either as a sample or together with an advertisement about therapeutic goods.  New additions to the list include face masks, hand sanitisers and COVID-19 rapid antigen tests.  Product samples must be entered in the Australian Register of Therapeutic Goods.  The TGA has indicated it will provide guidance about how requests for additions to the list will be assessed "in the interests of public health".

4. Expanding the rules for "safe and proper use"

Under the 2018 Code, advertising for therapeutic goods had to support the safe and proper use of therapeutic goods by presenting the goods in accordance with directions or instructions for use and not exaggerating product efficacy or performance. It could not include (relevantly) any claim or representation that the therapeutic goods are safe or cannot cause harm.

The 2021 Code revises this, introducing a new prohibition on advertising that causes or is likely to cause "undue alarm, fear or distress".  Introduction of this phrase follows feedback during stakeholder consultations which indicated that the 2018 Code did not adequately prevent advertisements from causing fear and anxiety in some consumers.  This has been a particular concern in the context of the COVID-19 pandemic, leading to opportunistic advertising (and evidenced by the TGA's increased enforcement action during FY 2021). According to the TGA's Consultation Paper, creating fear and distress is directed towards advertising claims that cause people to believe that they are suffering, or will suffer in the future, from a serious illness.  TGA guidance may make clearer the circumstances in which this new provision will apply.

Other parts of the new "safe and proper use" provision (section 9, 2021 Code) are similar to the "effect" provision in the 2018 Code.

Ensuring compliance with the Therapeutic Goods Advertising Code 2021

The 2021 Code came into effect on 1 January 2022.  Although the 2021 Code repeals and replaces the 2018 Code, a transitional period will apply until 30 June 2022, during which time advertisers will have the option to comply with either the 2021 Code or the 2018 Code.  From 1 July 2022, advertisers must ensure that therapeutic goods advertising complies with the requirements of the 2021 Code.

Please contact Clayton Utz if you would like any assistance or advice relating to the advertising of therapeutic goods or compliance with the Code.

Thanks to Alessandro Sobral for his help with this article.

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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.