An order made in relation to the advertising of the Lifelixer product provides insight into the advertising complaint process of the Therapeutic Goods Administration (TGA), the TGA’s limited enforcement powers and how new enforcement powers sought by the TGA, if legislated, could impact compliance.
BACKGROUND TO THE DECISION
Lifelixer (Product) is a product sold by Lifelixer Pty Ltd (Lifelixer). In advertising the Product on its website, Lifelixer made a number of significant claims about how the Product could address a number of health-related issues (for example, it claimed the product could improve longevity and the immune system and be used to treat a number of mental illnesses, reduce breast cancer, prevent prostate cancer, heart attack and stroke).
The Therapeutic Goods Regulations 1990 (Regulation) empowers the Therapeutic Products Advertising Complaints Resolution Panel (Panel) to receive and consider complaints about advertisements for therapeutic goods. An anonymous complaint was made to the Panel about the advertisements for the Product on 21 March 2012.
DECISION OF THE PANEL
On 22 October 2012, the Panel made a decision requesting that the therapeutic claims made by Lifelixer about the Product be withdrawn and that a retraction notice be applied to the websites through which Lifelixer advertised the Product (www.lifelixer.com and www.lifelixer.com.au).
The Panel expressed a number of serious concerns about the advertisements for the Product in its decision, including that the advertisements:
- were for a therapeutic good that was not registered;
- made misleading claims not substantiated by clear and robust evidence;
- encouraged use of the product for a wide range of serious diseases;
- gave the impression that the products were infallible and that they would be effective in all cases of a number of conditions; and
- gave the impression that the Product has no side-effects.
The Therapeutic Goods Act 1989 (Act) requires a person who makes therapeutic claims to comply with the Therapeutic Goods Advertising Code 2007 (TGAC). Each of the concerns expressed by the Panel related to the requirements of the TGAC and relevant provisions of theTherapeutic Goods Act 1989 (Cth). To read the Panel decision click here.
The Panel requested that the representations made in the advertisements be withdrawn from publication, that Lifelixer publish a retraction on its website and that Lifelixer provide evidence of its compliance with the Panel's decision within 14 days. Lifelixer did not fully comply with the Panel’s decision. As we discuss in more detail below, this may be because the Panel itself has no power to enforce its decisions. The Panel’s decision effectively amounts to little more than a "request".
DECISION OF THE DELEGATE
On 31 January 2013, the Panel made recommendations to the delegate of the Secretary of the Department of Health (Delegate) to review the matter on the basis that Lifelixer had not complied with the Panel’s decision.
It was not until approximately one year later (on 13 January 2014) that the Delegate handed down its decision, making orders in line with the Panel’s requests. To read the Delegate’s decision click here.
The websites on which the advertisements were made remained active for several months (albeit with the therapeutic claims removed), before being recently taken down. However, the websites did not at any time appear to display the retraction notice that the Delegate ordered Lifelixer to publish for 90 days from the date of its decision. Accordingly, it appears that Lifelixer has not fully complied with the decisions of the Panel or the Delegate.
The Delegate’s decision follows a recent Panel decision involving therapeutic advertising by Chemist Warehouse (to read the Chemist Warehouse decision, click here). While that Panel decision has not yet been subject to a decision of the Delegate (it is unclear whether the Panel made recommendations to the Secretary of the Department of Health to make orders), it appears that Chemist Warehouse has also failed to comply with the Panel’s decision.
WHY THE NON-COMPLIANCE?
Non-compliance with requests made by the Panel, and even orders made by the Secretary or the Delegate, is not unusual.
In a publication by the TGA titled "Consultation Regulation Impact Statement: Regulating the advertising of therapeutic goods to the general public" (Impact Statement), the TGA acknowledged that:
- about 20% of advertisers/sponsors in relation to whom the Panel makes a request to rectify compliance issues fail to do so; and
- the current legislative framework does not provide for sanctions for failing to comply with an order of the Secretary.
The TGA’s relative lack of enforcement powers in relation to non-compliance with the TGAC can be contrasted with the wide range of enforcement powers available to the Australian Competition and Consumer Commission (ACCC) in respect of contraventions of the Australian Consumer Law.
Several of the alleged contraventions by Lifelixer related to claims which the Panel and the Delegate considered to be misleading or deceptive and therefore those claims could have been more effectively or conveniently dealt with by the ACCC.
While the Panel does have the ability to refer an advertising complaint to a regulator like the ACCC where it involves a matter that could be more effectively or conveniently dealt with by the regulator, it does not appear that such referrals are commonly made.
It is also important to acknowledge that criminal offence provisions exist under the Act, including for advertising offences and failures to comply with the TGAC. So why doesn't the TGA initiate criminal prosecutions for contraventions of the TGAC?
The answer to this question is unclear, but may involve a combination of factors including:
- criminal proceedings having to be initiated in consultation with the Commonwealth Department of Public Prosecutions;
- the higher standard of proof required for criminal proceedings (civil offences must be proved “on the balance of probabilities”, whereas criminal offences must be proved “beyond reasonable doubt”); and
- not all non-compliance is sufficiently serious to warrant a criminal prosecution.
WHAT ENFORCEMENT POWERS WOULD THE TGA LIKE TO HAVE?
In its Impact Statement, the TGA suggested that the following enforcement powers may assist in improving compliance:
- powers to apply to a court for interim or permanent injunctions to promptly restrain a person from publishing or broadcasting contravening advertisements (in this regard, the TGA has referred to the powers available to the ACCC to seek injunctions under the Australian Consumer Law);
- civil penalties (at present the unavailability of civil penalties may effectively encourage non-compliance) (by way of example, in respect of Lifelixer’s contraventions relating to the making of therapeutic claims for a product which was not included on the Australian Register of Therapeutic Goods, the TGA proposes a civil penalty of up to 50,000 penalty units, which presently equates to around $8.5 million); and
- substantiation and warning notice powers, including the power to publish public warning notices in relation to dangerous advertising claims (these are also powers available to the ACCC in particular circumstances).
The TGA invited submissions in relation to the above proposals and submissions closed on 19 July 2013.
On 12 March 2014 the TGA publicised that it had received a total of 1276 submissions, with the majority being from complementary-therapy practitioners in response to Proposal 6 (“Advertising directed to health professionals”, which proposed that only appropriately qualified health professionals be exempted from the advertising requirements). According to the TGA, most of these submissions rejected this proposal and supported maintaining the current system. Apart from confidential submissions, the remaining submissions, can be viewed at the followinglink.
The TGA is now considering the submissions and possible amendments to the advertising framework. The large number of submissions received by the TGA show that the TGA’s proposals are of great interest to those involved in the therapeutic goods industry.
The enforcement powers sought by the TGA are clearly designed to address the gap in enforcement power that presently exists between the very limited sanctions available to the Panel and the Secretary on the one hand and the serious criminal offences under the Act on the other.
The Lifelixer and Chemist Warehouse matters demonstrate the willingness of the Panel and the Secretary to take such enforcement action as is currently available to them against advertisers that make claims in advertisements that contravene the TGAC.
While the grant of the enforcement powers sought by the TGA may assist in protecting consumers against obvious and apparently flagrant breaches of the Act and the TGAC (as was the case with the Lifelixer product), it will also likely alter the risk assessment for companies in engaging in activities or making claims which are less obviously likely to contravene the TGAC or the Act.
WHAT ABOUT CLAIMS MADE IN RESPECT OF FOOD PRODUCTS?
For businesses marketing food, it is also important to be aware of the regulation of nutrition content and health claims under the Australia New Zealand Food Standards Code (see here for our article on changes to that regime which will become mandatory from January 2016).
A range of nutrition content and health claims may be made in relation to foods under the new Food Standard 1.2.7. However, businesses need to be careful to adhere to the limits imposed by Standard 1.2.7.
Businesses should ensure that they do not inadvertently bring their activities within the application of the Act and the TGAC by making therapeutic claims about their foods.