The Therapeutic Goods Administration has released a consultation paper for stakeholders detailing proposed amendments to the Therapeutic Goods Act to strengthen the way in which it deals with sanctions and penalties for non-compliance.
In October 2014, the Australian Government announced an independent review of the regulation of medicines and medical devices in Australia to be conducted by Emeritus Professor Lloyd Sansom AO, Mr Will Delaat AM and Professor John Horvath AO (Expert Panel). The Expert Panel has since delivered two reports, including 58 recommendations for reform.
The Therapeutic Goods Administration (TGA) has now released a consultation paper, "Consultation: TGA - Enhancing Sanctions and Penalties in the Therapeutic Goods Act 1989", specifically examining two of those recommendations (namely recommendations 28 and 57). The paper seeks stakeholders' views on proposed legislative reforms to the Therapeutic Goods Act which are intended to provide a much broader multi-layered approach to compliance and enforcement than is otherwise presently available under the Act.
Monitoring, investigation and enforcement
One of the major areas of proposed reform is the proposed adoption of the monitoring, investigation and enforcement provisions relating to infringement notices and injunctions in the Regulatory Powers "Standard Provisions" Act 2014(RPSPA).
The RPSPA provides for a framework of standard regulatory powers to be exercised by government agencies across the Commonwealth. Its key features include investigative powers and enforcement powers such as civil penalties, infringement notices, enforceable undertakings and injunctions. The Act currently allows for all of these regulatory tools except for injunctions and the TGA hopes that by enlivening the ability to seek an injunction, the reforms will allow serious advertising non-compliance to be addressed in a timely manner. The examples given are of purported cancer cures or infant vaccines.
The standard provisions in the RPSPA would have to be modified to maintain a number of current powers that are much broader than those that would otherwise be available by the verbatim adoption of the RPSPA.
The TGA also proposes amending the Act to include a tiered offence regime to address advertising non-compliance:
- "a new fault-based offence with an aggravating element (conduct that has or will result in harm or injury, or conduct likely to result in harm or injury) attracting a maximum penalty of 4,000 penalty units and/or 5 years imprisonment; or
- a new strict liability offence with no aggravating element attracting a maximum penalty of 100 penalty units with no term of imprisonment; or
the existing fault-based offence (with no aggravating element), which will be retained with the level of penalty increased, where appropriate, consistent with the level of penalties already in the Act applying to similar offences or to conduct that results or could result in similar consequences."
The TGA also hopes that proposed reforms to allow courts to impose civil penalty provisions up to either a maximum 5,000 penalty units for an individual or 50,000 penalty units for a corporation, will "act as an effective financial disincentive against non-compliance with regulatory requirements." The current value of a penalty unit is $180.
The TGA also proposes that "infringement notices will play a crucial part in [its] risk-based graduated regulatory response to address non-compliant advertising of therapeutic goods in a timely manner".
The TGA also proposes that it be given the power to issue substantiation notices similar to those available to the Australian Competition and Consumer Commission. A person served with a notice would be required to comply with the notice within 21 days.
While it is not proposed that those notices would require a person to prove that their claim or representation is true or not misleading, it is hoped that the information provided would, as a "preliminary investigative tool", allow the TGA to determine whether further investigation is warranted.
If a person does not respond to the substantiation notice or fails to do so within the compliance period, or provides false or misleading information or documents in response to the notice, the proposes various actions being available, including:
- commence criminal proceedings;
- commencing litigation; and
- issuing infringement notices and alternative for form a court action.
Significant penalties for non-compliance and/or the provision of misleading information are also proposed, ranging from 12 penalty units to 250 penalty units.
Public warning notices ‒ advertising
It is proposed to amend the Act to permit the TGA to issue public warning notices where it:
- has reasonable grounds to believe that an advertisement contravenes a provision of the Act;
- is satisfied that one or more people are likely to suffer detriment as a result of the advertisement;
- it is satisfied the it is in the public interest to do so.
These provisions are consistent with provisions the ACCC presently enjoys.
Standardising strict liability offences, complementing existing offences and strengthening existing aggravated criminal offences
The TGA also proposes removing the requirement of the "likelihood of harm or injury to any person" from each strict liability criminal offence in the Act so as to align all strict liability offences with the proposed amendments for strict liability offences in relation to advertising.
It also proposes amending the Act to include strict liability offences to "complement, where appropriate, existing 'stand-alone' criminal offences for matters such as breaches of conditions, licenses or permits."
Existing aggravated criminal offences would be strengthened to include an additional circumstances of aggravation of "likelihood of harm or injury to any person" for top tier criminal offences where:
- the use of the goods has resulted in , or will result in, or is likely to result in, harm or injury to any person; or
- the use of the goods, if the goods were used, would result in, or is likely to result in, harm or injury to any person.
This consultation closes on 31 May 2017.