Q&A: the promotion and sale of pharmaceuticals and medical devices in Australia


Promotion

Regulation

Summarise the rules relating to advertising and promotion of medicinal products and medical devices, explaining when the provision of information will be treated as promotional. Do special rules apply to online advertising?

‘Advertisement’ is broadly defined by the Therapeutic Goods Act and, in relation to therapeutic goods, includes any statement, pictorial representation or design that is intended, whether directly or indirectly, to promote the use or supply of goods, including whether on the labelling, packaging or any other information accompanying the package containing the goods (section 3).

Corporate or financial information describing a company’s area of business is not likely to be promotional in nature, although care must be taken in describing research and development efforts; for example, where products are unapproved or where information focuses on the benefits of a new, named medicine. Similarly, educational information will not be promotional in nature if it focuses, for example, on disease awareness and does not promote particular products or treatments.

Different rules will apply depending on the audience for the advertisement or promotion, and depending on the product itself. Industry codes (eg, the Medicines Australia Code of Conduct and the Medical Technology Association of Australia (MTAA) Code of Practice) govern the conduct of their members in their interactions with healthcare professionals. Promotional activity aimed at consumers (patients) is also prohibited in respect of certain therapeutic goods, such as prescription medicines. Any promotion of unapproved medicines, including ‘off-label’ indications or uses is also prohibited.

Advertisements directed to consumers must comply with Part 5-1 of the Therapeutic Goods Act and the Therapeutic Goods Advertising Code (No. 2) 2018 (TGAC) (it is an offence to breach the TGAC). The TGAC contains a range of specific prohibitions and requirements about the content of advertising material, including in relation to scientific and clinical representations, endorsements and testimonials, and the inclusion of warning statements.

In addition to the above, all advertising or promotional material must comply with the general prohibitions against misleading or deceptive conduct or false or misleading representations under sections 18, 29 and 33 of the Australian Consumer Law (Schedule 2 to the Competition and Consumer Act 2010 (Cth)).

Inducement

What regulations exist to discourage the provision of inducements to healthcare professionals to prescribe, sell, supply or recommend use of a particular medicinal product or medical device?

These are found in industry codes; specifically the Medicines Australia Code of Conduct and the MTAA Code of Practice.

The Medicines Australia Code of Conduct Edition 19 has recently moved to a principles-based approach to provide guidance to members about ethical standards and transparency of reporting. A new set of overarching principles (Part A of the Code) includes Principle 5: ‘Consistent with our ethical undertakings, nothing is offered or provided by a Company in a manner or with conditions that would have an inappropriate influence on the approval, recommendation, prescribing, and/or use of a product’.

Section 9.1 of Edition 11 of the MTAA Code of Practice (2020) provides that, in all dealings with healthcare professionals, a company must undertake ethical business practices and socially responsible industry conduct, and must not use any inappropriate inducement or offer any personal benefit or advantage to promote or encourage the use of its products.

Specific provisions in each Code relating to interactions with healthcare professionals and including, in the case of Medicines Australia, transparency reporting, also assist to discourage inducements that are not based on clinical data to healthcare professionals.

In addition, professional codes of practice apply to healthcare professionals that govern conflicts of interest in the provision of healthcare services to their patients. These codes will impact a healthcare professionals’ ability to accept any benefits that may be seen as influencing treatment decisions.

Reporting transfers of value

What requirements apply to recording and publishing details of transfers of value to healthcare professionals and organisations by companies marketing medicinal products or medical devices?

The industry codes govern the recording and publication of details of reportable payments and transfers of value provided by member companies to healthcare professionals. Since 2015, the Medicines Australia Code of Conduct has required member companies to collect information about healthcare professionals who have received payments or educational support through airfares, accommodation or registration fees. After the first year, reporting of this information by member companies became mandatory and was made publicly available. In August 2019, Medicines Australia launched a centralised reporting system.

The MTAA Code of Practice governs appropriate forms of support to healthcare professionals (eg, in respect of educational conferences, gifts, travel and accommodation) but does not have the same reporting requirements as Medicines Australia.

Enforcement of advertising rules

Enforcers

Describe the bodies involved in monitoring and ensuring compliance with advertising controls for medicinal products and medical devices, distinguishing between any self-regulatory framework and control by the authorities.

Until relatively recently, there was a Complaints Resolution Panel charged with the task of considering complaints about advertisements for therapeutic goods. It investigated complaints and, in some circumstances, would recommend action be taken by the Therapeutic Goods Administration (TGA). Since July 2018, the TGA has been responsible for considering all complaints about advertising of therapeutic goods. Complaints can be made online and are handled in accordance with the TGA’s advertising complaints handling policy. The TGA’s remit covers compliance with the Therapeutic Goods Act and the Therapeutic Goods Advertising Code (No. 2) 2018 (TGAC).

Advertising to and interactions with healthcare professionals are largely dealt with by the industry associations (ie, the industry self-regulates by reference to Codes of Conduct). Although non-members are not bound by the relevant Codes, those Codes are considered to be best practice. It is also possible for non-members to submit to the complaints handling processes of the industry associations (usually more likely with complaints by competitors as a pre-litigation step).

Sanctions

What are the possible financial or other sanctions for breach of advertising and promotional controls for medicinal products or medical devices?

The TGA has a range of compliance and enforcement tools to deal with breaches of the advertising and promotional controls in the Therapeutic Goods Act and TGAC. The sanctions or penalties that may be imposed will depend on the seriousness of the breach, whether the advertiser has shown a willingness to engage with the TGA and meet its concerns, and the potential risk to the public (including, for example, where unapproved medicines or prescription medicines are promoted directly to consumers).

The tools available under the Therapeutic Goods Act include substantiation notices (section 42DR of the Act), requiring an advertiser to provide information to substantiate claims made in the advertisement; or directions (section 42DV) by which the TGA may direct a person to cease the advertisement, make a retraction or correction or cease making a particular claim or representation. More serious avenues include public warning notices, infringement notices or commencing proceedings. The TGA may also accept enforceable undertakings from an offender.

Pricing and reimbursement

Pricing

What are the controls imposed on pricing of medicines and medical devices and reimbursement by national social security systems that are applicable to manufacturers, distributors and pharmacists?

The Pharmaceutical Benefits Scheme (PBS) is a scheme by which the Commonwealth government subsidises the cost of prescription medicines listed on the Schedule of Pharmaceutical Benefits. Australian residents who hold a current Medicare card and certain overseas visitors (with whom Australia has reciprocal arrangements) are eligible to access the PBS. The government (with the help of the Pharmaceutical Benefits Advisory Committee, an independent statutory body) considers which products are selected for inclusion on the PBS, based on the effectiveness and cost of the therapy, including by comparing this with alternative therapies.

Pricing of drugs and medicinal products on the PBS depends on the stage in the life cycle of the medicine (ie, whether there is more than one brand of the medicine listed on the PBS) and how long it has been listed. The relevant legislation is the National Health Act 1953 (Cth), which sets out a series of statutory price reductions (including anniversary price reductions and price reductions that apply upon the listing of the first bioequivalent or biosimilar brand of the drug). Other price reductions may be applied by policy (reference pricing policy) where drugs are therapeutically linked (eg, because drugs are listed on the PBS with regard to appropriate comparators).

Where there is more than one drug that is bioequivalent or biosimilar listed on the PBS, price disclosure may apply. This is also based on the legislation, and may involve price reductions based on real-world data about usage of the products, including any other discounts or benefits provided in association with the supply of the medicine.

There are certain special arrangements that apply to particular drugs and impose specific regimes in relation to, for example, dispensing fees and other markups relating to the supply chain. These include efficient funding of chemotherapy arrangements.

Medical devices may be included on the Prostheses List, which relates to private health reimbursement of certain medical devices.

Sale and supply

Regulation

Are there special rules governing the dispensing or sale of particular types of medicinal products or medical devices?

There are rules that apply both at a federal level and a state or territory level. The Poisons Standard (current version June 2021), which has been adopted by each state and territory, represents a compilation of decisions reflecting how medicines and other poisons should be treated. The Schedules include Schedules 2 (Pharmacy Only), 3 (Pharmacist Only), 4 (Prescription Only), 8 (Controlled Drug) and 9 (Prohibited Substance). The applicable Schedule may also govern how particular products may be advertised to consumers (eg, prescription-only medicines can only be advertised to health professionals, and not directly to consumers).

Commonwealth legislation governs pharmacy location rules (where and how close together pharmacies can be situated), as well as how, by and to whom Pharmaceutical Benefits Scheme prescriptions can be written and dispensed. State and territory legislation governs the wholesaling, retailing and handling of medicinal products. State or territory licences must be held in each state or territory in which the handling or wholesale of medicinal products takes place.

Online supply

What laws and guidelines govern online dispensing, sale and supply of medicinal products and medical devices?

The online dispensing, sale and supply of medical products and medical devices will depend on the product in question. Historically, Pharmaceutical Benefits Scheme (PBS) or other medicines available on prescription-only could not be supplied through online prescription, dispensing and sale, partly because those medicines cannot be directly advertised to consumers and partly because of requirements relating to how a PBS prescription is written.

Before the covid-19 pandemic, the Department of Health was already in the process of moving towards the introduction of electronic prescribing. The National Health (Pharmaceutical Benefits) Regulations 2017 (Cth) have been updated to permit the writing of electronic prescriptions for PBS medicines. The framework supporting electronic prescribing has been facilitated by legislative amendments at a state and territory level (and the statutory basis for electronic prescribing differs across jurisdictions).


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