On 24 April 2015, the Australian Consumer and Competition Commission (ACCC) granted authorisation for Edition 18 of the Medicines Australia Code of Conduct (Code). This edition of the Code significantly strengthens the current reporting requirements and comes with the condition that before 1 October 2016 the Code will be further amended to include a requirement that member companies will need to ensure that a transfer of value or benefit will be able to be individually reported.

By way of background, the Code prescribes the standards for ethical marketing and promotion of prescription pharmaceutical products in Australia, acting to compliment legislative requirements found in the Therapeutic Goods Act 1989 (Cth) (TGA) and the Therapeutic Goods Regulations 1990 (Cth). It includes provisions which govern standards for appropriate advertising, the behaviour of pharmaceutical representatives and relationships with healthcare professionals (HCPs). It is revised on a triennial basis to ensure that it is a reflection of current community and professional standards and given that it concerns anticompetitive practices, it must be authorised by the ACCC. 

The most notable amendment to Edition 18 of the Code is the new and expanded transparency regime, which includes more rigorous disclosure requirements. The ACCC has previously made a number of strong statements as to the level of transparency they expect in future editions of the Code to impose, so it did not come as a surprise that the revisions made to edition 18 of the Code focused on moving towards increased transparency, particularly in relation to benefits provided by companies to HCPs. Further, it was not an unexpected turn of events when the ACCC refused to grant approval to the new edition of the Code unless certain amendments were made to further increase transparency. After a number of months of uncertainty, the ACCC has approved the new edition of the Code subject to an important condition. That condition is discussed further below. 

Pursuant to edition 18 of the Code, all “transfers of value” from pharmaceutical companies to individual HCPs will need to be reported. “Transfers of value” is defined as a transfer of anything that would have a value to the recipient from the perspective of general community standards and value. It would include such things as speaking fees, advisory board fees, or sponsorships to attend a conference. Under the new reporting regime, a report for a ‘transfer’ must indicate the HCP’s name, a description of the service or event and an itemised account of the payment and/or value of the “transfer.” However, where a HCP refuses to give consent to the disclosure then the individual payment can be reported in aggregate. 

In their draft determination handed down on 17 October 2014, the ACCC were critical of the ability to circumvent the disclosure requirements by only reporting the aggregate value of the transfer if consent was not given by the HCP. Accordingly, the ACCC has imposed a condition that before providing a benefit to a HCP, a member company will need to ensure that the benefit will be able to be individually reported. The condition is not effective immediately, rather requiring Medicines Australia to amend the Code before 1 October 2016 to mandate the reporting of all transfers of value.

The new edition of the Code also includes a number of other significant amendments in relation to the provision of benefits to HCPs, including a maximum cap of $120 on the cost for meals and beverages (excluding GST and gratuities) provided by a company to a HCP within Australia. Given the introduction of this maximum limit, the new transparency model does not require reporting of food and beverages provided to HCPs.

From a practical perspective, the new disclosure regime may reduce the readiness of HCPs to accept ‘transfers of value’ (and arguably achieve the purpose behind the transparency provision). However, the more pressing concerns are the legal ramifications of mandatory disclosure. The regime is likely to present substantial data privacy issues for companies, particularly given the HCP data will be made publicly available. This will certainly be an issue that companies will need to look at closely to ensure compliance with Australia’s Privacy Act.