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15 Oct 2020

Year of change ahead for Therapeutic Goods Advertising Framework, following Review

By Greg Williams, Caitlin Sheehy, and Alexandra Finch

The review's recommendations call for clear industry communication on the Therapeutic Goods Administration's priorities for compliance with laws governing the advertising of therapeutic goods.

In this article, we examine the recent review of the impact of therapeutic goods advertising reforms . For industry, the recommendations are intended to facilitate a shift to a self-regulatory mode of governance in this space.  For the Therapeutic Goods Administration (TGA), the review cements its position as the single body responsible for managing complaints and reinforces the appropriateness of its arsenal of penalties and sanctions to deter unlawful advertising.

The 2020 Review

During 2014 and 2015, the Expert Panel Review of Medicines and Medical Devices Regulation (MMDR) conducted a review of the regulatory framework for medicines and medical devices, including the framework for the advertising of therapeutic goods (2015 Review).  The 2015 Review resulted in 58 recommendations (7 of which related to advertising) to streamline the regulation of therapeutic goods by removing unnecessary duplication and supporting the TGA and industry in the transition to a self-regulatory mode of governance for therapeutic goods advertising.  The Australian Government supported 56 of the recommendations, including all 7 of the advertising recommendations.

What followed were amendments to both the Therapeutic Goods Advertising Code (Code) and the Therapeutic Goods Act 1989 (Cth), resulting in:

  • a more streamlined consumer complaints handling system, centrally managed by the TGA as the single body responsible for handling complaints about advertising of therapeutic goods to consumers; and
  • new enforcement and penalty provisions, including tiered offences for prohibited advertising, tough civil penalty provisions, and new powers for the TGA to, among other things, issue directions about advertisements if it is satisfied that there has been a contravention of the Act, the Therapeutic Goods Regulations or the Code.

The 2020 Review, led by Ms Rosemary Sinclair AM, assessed the impact of the reforms arising from the 2015 Review, focusing on 6 areas:

  • Amendments to the Code: whether, as a result of these changes, there is greater consistency between requirements for medicines and medical devices, together with increased clarity and objectivity in compliance and enforcement;
  • The TGA as the single body responsible for handling complaints: whether the consolidation of complaints handling processes through the TGA has reduced complexity in the complaints process;
  • Expanded penalties and sanctions: whether these amendments are an effective tool in deterring inappropriate and misleading advertising;
  • Consumer and industry education program: whether the TGA has been effective in developing and distributing educational information concerning the amendments to the advertising framework;
  • Development of the TGA's performance indicators for managing advertising complaints: assessing the suitability of the performance indicators for ensuring the right outcome for consumers; and
  • Stakeholder engagement in relation to therapeutic goods advertising: assessing the nature of the engagement between the TGA and stakeholders in more effectively building shared responsibility for achieving improved compliance outcomes.

In short, the 2020 Review found that:

  • in the period immediately following the introduction of the reforms, the TGA's emphasis was on informing and assisting industry with the changes to the advertising framework.Its focus should now shift to achieving compliance priorities and the aims of the reform program;
  • reforms to the Code have improved understanding of its provisions to enable industry compliance, however there are opportunities for further refinement using examples of the TGA's decisions on the application and interpretation of Code provisions that are considered by industry to be ambiguous;
  • the TGA's broadened suite of penalties and sanctions is appropriate to achieve compliance and it should now seek to gain experience in utilising the enforcement tools available to it;
  • the TGA is the most appropriately equipped body for managing complaints about therapeutic goods advertising, holding the relevant scientific and regulatory expertise;
  • the TGA had effectively developed and distributed information to industry about the advertising reforms and it should now adopt a more strategic approach to information distribution that aligns with key regulatory outcomes;
  • there is opportunity for improving the TGA's Key Performance Indicators (KPIs) and priorities for its complaints management, shifting from a focus on timeliness of processes to consumer outcomes; and
  • while the TGA has expended considerable effort in engaging with a broad range of industry stakeholders with respect to therapeutic goods advertising activities, more focused engagement opportunities should be pursued to build shared responsibility for achieving compliance.

22 recommendations were made by the 2020 Review, including:

  • the development and publication of Compliance Priorities and Education Priorities, both of which would be reviewed annually and informed by consultation with stakeholders;
  • the development of information-sharing protocols to facilitate information sharing with relevant regulators (such as the Australian Competition and Consumer Commission) on complaints and information concerning cross-sector products or issues;
  • the development of clear guidance on the TGA's use of its broadened compliance powers, in particular its use of more punitive measures;
  • refocusing of the Therapeutic Goods Advertising Consultative Committee (TGACC) on improved consumer outcomes, including a refresh of its objectives and role and responsibilities;
  • the implementation of an enhanced complaints handling system that focuses on improved compliance outcomes through intelligence gathering, triaging and integrated response with other relevant regulators; and
  • improved mobilisation of the media in publicising compliance actions, modelled on the TGA's engagement with the media during COVID-19.

All 22 recommendations were accepted by the Australian Government.

Implementation of the 2020 Review recommendations

Most of the 2020 Review's recommendations will be implemented over the course of the next year, with the August 2020 TGACC meeting considering proposed advertising compliance priorities, together with proposed KPIs aimed at measuring the effectiveness of compliance measures. In the August 2020 TGACC meeting, the TGA invited TGACC members to provide feedback on the proposed compliance priorities and committed to provide further information on the approach used to determine the proposed compliance priorities.  The TGACC also indicated that further work was required on the KPIs. 

Once published, companies should familiarise themselves with the compliance and education priorities to ensure ongoing compliance with the Code and the Act.

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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.