Life Sciences: product regulation and liability in Australia

Trends and developments

Legal developments

Are there any notable trends or recent legal developments in your jurisdiction’s pharmaceutical industry?

Medicinal cannabis laws have been extended to allow for the export of Australian-manufactured medicinal cannabis products. To protect Australian patients, it will be a condition of any licence authorising export that medicinal cannabis products be made available only after local demand is met.  

New therapeutic goods legislation also came into effect earlier this year. 

Legal framework

Legislation

What is the primary legislation governing medicinal products in your jurisdiction?

A ‘therapeutic good’ is widely defined to include medicines, medical devices, over-the-counter medicines and complementary medicines (among others). Therapeutic goods in Australia are regulated under the Therapeutic Goods Act 1989, the Therapeutic Goods Regulations 1990, the Therapeutic Goods (Medical Devices) Regulations 2002, as well as various standards set out in therapeutic goods orders and codes – for example, the Therapeutic Goods Advertising Code, which regulates advertisements to consumers. 

In most instances, cosmetic products are regulated separately under the Industrial Chemicals (Notification and Assessment) Act 1989.

Are any legislative changes proposed or expected in the near future?

The Therapeutic Goods Amendment (2017 Measures 1) Bill 2018 received Royal Assent on March 5 2018 and brought significant changes to the Therapeutic Goods Act. The changes to the regulatory framework for advertising of therapeutic goods will be implemented between 2018 and 2020.

Regulation

Which bodies regulate medicinal products in your jurisdiction and what is the scope of their powers?

The Therapeutic Goods Administration (TGA) is responsible for ensuring that therapeutic goods available for supply in Australia are safe and fit for their intended purpose.

The TGA has wide powers of enforcement and compliance actions, including suspension and cancellation of therapeutic goods from the Australian Register of Therapeutic Goods, criminal prosecutions and civil litigation for the recovery of civil penalties. Please see the “Compliance and Enforcement” section for further information.

Relevant industry bodies also include:

• Medicines Australia;
• Medical Technology Association of Australia;
• Australian Self Medication Industry; and
• Complementary Medicines Australia.

Are any other legal regimes applicable to the trade of medicinal products (eg, competition, international trade, data protection, consumer protection)?

 Yes – in particular, the Australian Consumer Law, which is contained in the Competition and Consumer Act 2010 (Cth). The Australian Consumer Law sets out (among other things) non-revocable consumer guarantees, product recall provisions and safety standards and orders that must be followed by both the manufacturer and supplier. Criminal and civil penalties apply. 

The Australian Consumer Law also provides general protections relating to the advertisement of goods to consumers. For example, a person must not, in trade or commerce:

• engage in conduct that is misleading or deceptive, or likely to mislead or deceive (Section 18 of the Australian Consumer Law); or
• make false or misleading representations about goods (Section 29).

Are any medicinal products exempt from regulation (eg, complementary and alternative medicines)?

No. However, exemptions are listed in the Therapeutic Goods Act and Therapeutic Goods Regulations. For example, particular goods are exempt from the operation of certain parts of the Therapeutic Goods Act (eg, need not be listed or registered in the Australian Register of Therapeutic Goods).  

Supply

Manufacture

What is the authorisation procedure for the manufacture of medicinal products in your jurisdiction?

Medicines

Chapter 3, Part 3-3 of the Therapeutic Goods Act 1989 sets out the manufacturing procedures for medicines and other therapeutic goods that are not medical devices. Generally, the steps in applying for a new licence or good manufacturing practice certification are as follows:

• complete a statutory declaration form (Certificate 38(1)(g));
• submit a manufacturing licence application to the Therapeutic Goods Administration (TGA) or good manufacturing practice certification application; and
• pay the relevant application fee.

It is the responsibility of the Australian manufacturer of therapeutic goods to apply for a manufacturing licence for an Australian manufacturing site. For therapeutic goods manufactured overseas, it is the responsibility of Australian sponsors to apply for good manufacturing practice certification of the overseas manufacturer.

Conditions may also be attached to licences. 

Schedule 7 of the Therapeutic Goods Regulations 1990 sets out the therapeutic goods that are exempt from complying with the Therapeutic Goods (Manufacturing Principles).

Medical devices

Chapter 4, Part 4-2 of the Therapeutic Goods Act sets out the manufacturing procedures (ie, essential principles for therapeutic goods that are medical devices).

• Essential principles – for a medical device to be supplied in Australia, it must be demonstrated that the manufacturer has complied with the essential principles. Six general essential principles apply to all devices (under Section 41CA of the Therapeutic Goods Act and Schedule 1 of the Therapeutic Goods (Medical Devices) Regulations 2002). A further nine essential principles about design and construction apply to devices on a case-by-case basis (Schedule 1, Part 2 of the Therapeutic Goods (Medical Devices) Regulations).
• Approval process – manufacturers prepare the necessary technical documentation and declaration of conformity. It is the sponsor’s responsibility to lodge an application to include the medical device in the Australian Register of Therapeutic Goods. Chapter 4, Part 4-5 of the Therapeutic Goods Act sets out the requirements for including medical devices in the register. For a sponsor to register the medical device in the Australian Register of Therapeutic Goods, it must:
  • ensure that it has received the manufacturer’s evidence that demonstrates that the manufacturer has an appropriate quality management system in place to manufacture the medical device. This is required for all applications except Class I devices;
  • submit a new application with the TGA;
  • make a declaration in accordance with Section 41FD of the Therapeutic Goods Act (including compliance with the essential principles above); and
  • submit the application and pay an application fee.

What is the fee for obtaining authorisation?

Fees for obtaining manufacturing authorisation differs according to the type of therapeutic goods.

The annual charges for manufacturing licences are regulated under the Therapeutic Goods (Charges) Act 1989 and Therapeutic Goods (Charges) Regulations 1990. Additional fees, such as inspection fees, are outlined in Schedules 9 and 9A of the Therapeutic Goods Regulations.

What is the validity period for authorisation?

A manufacturing licence commences on the day specified in the licence and remains in force until it is suspended, cancelled or revoked. Once revoked, a new licence must be sought to continue to manufacture therapeutic goods. Section 41 of the Therapeutic Goods Act sets out the situations in which a licence may be revoked or suspended.

Where a licence has been revoked, a person may make a written request within 90 days for the revocation to be withdrawn (Section 41AAAA(1) of the Therapeutic Goods Act).

How robust are the standard good manufacturing practices followed in your jurisdiction?

Section 36 of the Therapeutic Goods Act allows the minister for health to determine which manufacturing principles apply to therapeutic goods manufacturing.

Depending on the type of therapeutic good, different codes of good manufacturing practice apply:

• Medicines – the Therapeutic Goods (Manufacturing Principles) Determination 2018 specifies that medicinal products supplied in Australia must meet the Guide to Good Manufacturing Practice for Medicinal Products published by the Pharmaceutical Inspection Cooperation Scheme (PIC/S).  
• Human blood and tissues – the Code of Good Manufacturing Practice for Human Blood and Blood Components, Human Tissues and Human Cellular Therapy Products applies to blood, human tissues and human cellular therapy products manufacturers that undertake the collection, processing, testing, storage, release for supply and quality assurance of human blood and blood components, human tissues and human cellular therapy products.  
• Medical devices – medical devices are subject to conformity assessments that are used to ensure the high quality of medical devices.

What are the consequences of failure to obtain manufacturing authorisation and/or follow good manufacturing practices?

A person must not carry out any step of the manufacturing process without a valid licence. Failure to comply is a criminal offence (Section 35 of the Therapeutic Goods Act) and civil penalties also apply (Section 35A).

Breaching a condition of a licence is a criminal offence (Section 35B) and civil penalties also apply (Section 35C).

Further, manufacturers of medicines and biologicals are regularly inspected by the TGA using a risk-based approach to ensure compliance with good manufacturing practice standards. The TGA has powers of entry, searches and warrants set out in Chapter 6, Part 6-2 of the Therapeutic Goods Act.

Distribution

How are the distribution and storage of medicinal products regulated?

The PIC/S Guide to Good Manufacturing Practice for Medicinal Products specifies the distribution and storage of medicinal products.

Further, the Code of Good Wholesaling Practice sets out distribution and storage requirements for medicines.

Import and export

How are the import and export of medicinal products regulated?

N/A

General requirements

Medicines

Medicinal products must be listed or registered in the Australian Register of Therapeutic Goods before they can be supplied in the Australian market, and imported into or exported from Australia. Offences apply.

The import or export of narcotic, psychotropic and precursor substances subject to Regulation 5 of the Customs (Prohibited Imports) Regulations 1956 and Regulation 10 of the Customs (Prohibited Exports) Regulations 1958 is prohibited unless the importer or exporter holds a licence and permit issued by the Drug Control Section.

Medical devices

For medical devices, sponsors wanting to import and export medical devices into and from Australia must comply with the Therapeutic Goods Act and the Therapeutic Goods (Medical Devices) Regulations. Offences apply.

Before a sponsor can import a medical device into Australia, they must ensure that the medical device has been included in the Australian Register of Therapeutic Goods for supply in Australia.

Before a sponsor can export a medical device from Australia, the device must:

• be included in the Australian Register of Therapeutic Goods for supply in Australia;
• be included in the Australian Register of Therapeutic Goods as an export-only medical device; or
• be exempt under Item 1.2, Part 1, Schedule 4 of the Therapeutic Goods (Medical Devices) Regulations.

When exporting medical devices from Australia, the sponsor must comply with the regulatory requirements of the importing country and should contact the relevant embassy, high commission or consulate for advice on that country’s importation requirements. More information on the export of medical devices is contained in Part 2, Section 17 of the Australian Regulatory Guidelines for Medical Devices.

Are parallel imports permitted in your jurisdiction?

Yes. Parallel imports (also known as grey or direct imports) are permitted into Australia. However, therapeutic goods imported into Australia must comply with the relevant customs and quarantine rules discussed in the import and export requirements above.

Subject to certain conditions, an individual may import a three-month supply at one time (at the maximum dose recommended by the manufacturer) of unapproved therapeutic goods into Australia under the Personal Importation Scheme. The TGA has published guidance on personal importation on its website.

Sale and purchase

What rules govern the dispensing, sale and purchase of medicinal products?

The Pharmacy Board of Australia has published guidelines for dispensing medicines. These guidelines have been developed by board under Section 39 of the Health Practitioner Regulation National Law. They provide guidance to pharmacists with regard to the dispensing of medicines set out in the legislation or a registration standard.

Are there any restrictions on the online sale and purchase of medicinal products?

Yes.

Poisons standard

The Poisons Standard includes provisions for, among others, the sale, supply and possession of poisons in general that are intended to be adopted for use in each jurisdiction of Australia. Poisons are classified according to the schedules in which they are included, with varying regulatory controls according to their classification.

Direct and internet marketing

Advertisements for therapeutic goods must comply with the Therapeutic Goods Act, the Therapeutic Goods Regulations, the Therapeutic Goods Advertising Code and the Australian Consumer Law under the Competition and Consumer Act 2010.

Regarding direct marketing and internet marketing, a minimum requirement (including, but not limited to mandatory warning statements) is for advertisements to contain a full list of the active ingredients. Where the product name is also the single active ingredient, the pack shot displaying the product name will be sufficient to meet this requirement (Section 6(3)(c)(i) of the Therapeutic Goods Advertising Code).

Advertising offences and their penalties are located at Section 42DL of the Therapeutic Goods Act.

It is an offence for a person to claim, by any means, that the person or another person can arrange the supply of therapeutic goods unless the goods are registered or listed, exempt or are subject of an approval or authority under Sections 19 and 19A (exemptions apply) (Section 22(6) of the Therapeutic Goods Act).

Under the Australian Consumer Law, a person must not, in trade or commerce, supply (which includes supply or re-supply by way of sale) or offer for supply consumer goods if those goods do not comply with a safety or information standard (Sections 106(1) and 106(2), Section 136(1), Sections 203(1) and 203(2)).

Named patient supply

What rules govern named patient supply of pre-launch medicinal products?

Patients and doctors can access unapproved therapeutic goods through either:

• the Special Access Scheme; or
• the authorised prescriber.

Special Access Scheme

The Special Access Scheme allows a healthcare practitioner to import or supply an unapproved therapeutic good for a single patient on a case-by-case basis. There are three pathway categories:

• Category A is a notification pathway for patients who are seriously ill with a condition from which death is reasonably likely to occur within a matter of months, or from which premature death is reasonably likely to occur in the absence of early treatment (Section 18A of the Therapeutic Goods Act).

• Category B is an application pathway for patients that do not fit the Category A definition and where the unapproved good is not deemed to have an established history of use and cannot therefore be accessed through Category C (Section 19(1) of the Therapeutic Goods Act).
• Category C is a notification pathway that allows health practitioners to supply goods that are deemed to have an established history of use without first seeking prior approval (Section 19(7A) of the Therapeutic Goods Act).

Authorised prescriber A medical practitioner may be granted authority to become an ‘authorised prescriber’ of a specified unapproved therapeutic good (or class of unapproved therapeutic goods) to specific patients (or classes of recipients) with a medical condition (Section 19(5) of the Therapeutic Goods Act).

Clinical trials

Authorisation

What is the authorisation procedure for conducting clinical trials in your jurisdiction?

There are two ways unapproved therapeutic goods may be imported or supplied in Australia for use in a clinical trial:

• Clinical Trial Notification (CTN) scheme – a notification process whereby the Australian clinical trial sponsor notifies the Therapeutic Goods Administration (TGA) of the intent to sponsor a clinical trial involving an unapproved therapeutic good. The sponsor must complete an online form and pay a fee.  
•  Clinical Trial Exemption (CTX) scheme – an approval process whereby the Australian clinical sponsor applies to the TGA for approval to supply unapproved therapeutic goods in a clinical trial. The sponsor must submit a paper-based CTX application form and pay a fee.

Sponsors must ensure that all of the relevant approvals have been made before supplying the unapproved therapeutic goods in the clinical trial.

Clinical practices

How robust are the standard good clinical practices followed in your jurisdiction?

The therapeutic goods legislation requires that the use of therapeutic goods in a clinical trial conducted under the CTN and CTX schemes accord with the following:

• the National Statement on Ethical Conduct in Human Research (2007), in accordance with the National Health and Medical Research Council Act 1992;  
• the Note for Guidance on Good Clinical Practice (CPMP/ICH/135/95), an internationally accepted standard for the designing, conducting, recording and reporting of clinical trials;  
• the Note for Guidance on Clinical Safety Data Management: Definitions and Standards for Expedited Reporting (CPMP/ICH/377/95), an internationally accepted standard for the reporting of important clinical safety information principally arising during clinical development of medicines; and  
• ISO 14155 Clinical Investigation of Medical Devices for Human Subjects – Good Clinical Practice.

The TGA also has clinical efficacy and safety guidelines on its website.

Reporting, disclosure and consent

What are the reporting and disclosure requirements for the results of clinical trials?

The endorsing Human Research Ethics Committee is responsible for monitoring clinical trials.  Sections 3.3.19 to 3.3.22 of the National Statement on Ethical Conduct in Human Research and Chapter 5.5: Monitoring approved research set out the reporting and monitoring requirements. For example, sponsors must report serious adverse drug reactions, serious unexpected suspected adverse reactions and serious adverse device events (Section 3.3.20(b)(ii)).

The TGA also has the power to inspect clinical trial sites and search, examine, measure, record or document any information with respect to the trial (Regulation 12AC of the Therapeutic Goods Regulations 1990).

What are the informed consent obligations with respect to clinical trial subjects?

Chapter 2.2 of the national statement sets out the general requirements for consent. The guiding principle for researchers is that a person’s decision to participate in research is to be voluntary and based on sufficient information and adequate understanding of both the proposed research and the implications of participation (Section 2.2.1).

Insurance

What are the insurance requirements for clinical trials?

Institutions must be satisfied that trial sponsors have made the indemnity or insurance and compensation arrangements required by:

• the Note for Guidance on Good Clinical Practice of the Committee for Proprietary Medicinal Products and International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use (CPMP/ICH) (CPMP/ICH-135/95);
• ISO 14155 Clinical Investigation of Medical Devices; and
• the TGA (Section 3.3.24 of the national statement).

Institutions must also have arrangements to compensate participants for harm resulting from negligence in research (Section 3.3.25 of the national statement).

Data protection

What data protection issues should be considered when conducting clinical trials?

Researchers’ use of data from databanks must comply with conditions specified by the providers of the data researchers (Section 3.2.3 of the National Statement).

Researchers must also ensure that the use of personal information complies with the Privacy Act 1988.

Marketing authorisation

Authorisation

What is the marketing authorisation procedure for medicinal products in your jurisdiction?

The Therapeutic Goods Amendment (2017 Measures 1) Bill 2018 (Bill) repealed Chapter 5, Division 2 of the Therapeutic Goods Act 1989 (Therapeutic Goods Act) and consequently removed previous requirements for approval of certain advertisements. The changes in the bill were introduced to address the inconsistencies in the types of therapeutic goods and media that require advertising pre-approval. Approvals are required for restricted and prohibited representations.

Saving provisions have also been introduced (Section 42DKA of the Therapeutic Goods Act).

What criteria are considered in granting marketing authorisation?

Restricted representations

Approval or permission for the use of specified restricted representations in specified advertisements about specified therapeutic goods can be made by the secretary under Section 42DF or 42DK(1).

The Therapeutic Goods Regulations 1990 further state that an application for approval of an advertisement is made and the prescribed fee is paid, the secretary must approve the advertisement if he or she is satisfied that it:

• complies with the Therapeutic Goods Advertising Code;
• contains no prohibited representation (whether explicitly or by necessary implication) about the goods;
• contains a required representation about the goods;
• contains no unacceptable presentation of the goods within the meaning of Regulation 3A (ie, likely to result in those goods being mistaken or confused with confectionary or toys); and
• contains no restricted representation about goods which have not been approved or permitted under Sections 42DF and 42DK(1) of the Therapeutic Goods Act (Regulation 5G of the Therapeutic Goods Regulations).

Prohibited representations

Section 42DK(2) of the Therapeutic Goods Act, as replaced by the bill, states that the secretary, if satisfied that the representations are necessary for the appropriate use of the goods, may by writing permit the use of specified prohibited representations:

• on the label of specified therapeutic goods;
• on the package in which specified therapeutic goods are contained; and
• on any material included with the package in which specified therapeutic goods are contained.

Further, the secretary may, by writing, permit the use of specified prohibited representations in specified advertisements about specified therapeutic goods if he or she is satisfied that the representations are necessary in the interests of public health (Section 42DK(3) of the Therapeutic Goods Act). This permission will be subject to certain conditions specified in the permission (Section 42DK(4) of the Therapeutic Goods Act).

What is the fee for obtaining marketing authorisation?

The fees for an application for pre-approval of an advertisement for therapeutic goods are set out in Items 17 and 17A in Schedule 9 of the Therapeutic Goods Regulations. A summary of the schedule of fees can be found on the Therapeutic Goods Administration website.

What is the validity period for marketing authorisation?

Each approved advertisement is given an approval number on the date of approval. The approval number expires two years from the date that it is given (Regulation 5J(3)) of the Therapeutic Goods Regulations.

What are the consequences of failure to obtain marketing authorisation?

The new Section 42DL(7) of the Therapeutic Goods Act contains the offence provision relating to restricted representations in advertisements about therapeutic goods.

Section 42DI empowers the secretary, by written notice, to withdraw the approval of the use of a restricted representation. Paragraph 42DI(1)(c) provides additional ground for the revocation of an approval for the use of a restricted representation, where the use of the restricted representation is permitted under Section 42DK(1).

Pharmacovigilance

Monitoring

What post-market monitoring mechanisms are in place to ensure the ongoing safety and efficacy of medicinal products after marketing authorisation has been granted?

Strict monitoring requirements are in place to ensure the ongoing safety and efficacy of medicinal products supplied on the market.

Obligations include:

• ensuring that therapeutic goods – including medical devices – are registered in or listed on the Australian Register of Therapeutic Goods;
• reporting any adverse events to the Therapeutic Goods Authority (TGA);
• keeping records pertaining to the reporting requirements and safety for the medicine at issue pursuant to Section 28(5)(ca) of the Therapeutic Goods Act (Therapeutic Goods Act); and
• responding to any requests made by the TGA for additional information fully and within the specified timeframe pursuant to Section 31(1) of the Therapeutic Goods Act.

The TGA has published guidance on the pharmacovigilance responsibilities of medicine sponsors on its website.

Data protection

What data protection issues should be considered when conducting pharmacovigilance activities?

The TGA collects therapeutic goods information and may release this information to, among others, the following:

• the World Health Organisation, authority of the Commonwealth (Section 61(2) of the Therapeutic Goods Act);
• a state or a territory that has functions relating to therapeutic goods (Section 61(3) of the Therapeutic Goods Act); and
• a third-country national regulatory authority that has national responsibility for therapeutic goods (Section 61(4) of the Therapeutic Goods Act).

Sponsors should be aware of the regulations surrounding the privacy of information. For example, an organisation generally needs an individual's consent before it can collect that individual’s health information. Health information about an individual is classified as ‘sensitive information’ (Section 6 of the Privacy Act 1988). All private sector providers are covered by the Australian Privacy Principles.  

Pricing and reimbursement

Pricing

Are there rules governing the pricing of medicinal products in your jurisdiction?

Pharmaceutical Benefits Scheme The Pharmaceutical Benefits Scheme lists all of the medicines available to be dispensed to patients at a government-subsidised price. The scheme is part of the wider scheme managed by the Department of Health and administered by the Department of Human Services. The scheme is available to all Australian residents who hold a current Medicare card.

Price information code of practice

The Price Information Code of Practice published by the Therapeutic Goods Authority (TGA) in 2006:

• sets out the conditions under which information about the price of prescription medicines and certain pharmacist-only medicines may be provided to the general public; and
• provides a mechanism by which such information, consistent with the National Medicines Policy and the Quality Use of Medicines Principles, can be provided that will enable consumers to consider the price of a medicine when deciding where to obtain their medicine.

Reimbursement

What is the structure for state reimbursement of medicinal product costs?

Current patient fees and charges

From January 1 2018 an individual may pay up to A$39.50 for most Pharmaceutical Benefits Scheme medicines or A$6.40 if the person holds a concession card. The Australian government pays the difference. The amount of co-payment is adjusted for inflation on January 1 each year.

Premiums

A price premium (or brand premium) may apply to some medicines as an additional payment to the supplier of the specified brand of a Pharmaceutical Benefits Scheme medicine.

Advertising and labelling

Advertising

How is the advertising of medicinal products to healthcare professionals and the general public regulated in your jurisdiction?

Advertising to the general public

Advertisements for therapeutic goods must comply with the Therapeutic Goods Act 1989 (Therapeutic Goods Act), the Therapeutic Goods Regulations 1990, the Therapeutic Goods Advertising Code 2015 and the Australian Consumer Law under the Competition and Consumer Act 2010.

The Therapeutic Goods Amendment (2017 Measures 1) Bill 2018 replaces the definition of ‘advertisement’ with the definition of ‘advertise’.

‘Advertise’, in relation to therapeutic goods, includes make any statement, pictorial representation or design that is intended, whether directly or indirectly, to promote the use or supply of the goods, including where the statement, pictorial representation or design: is on:

• the label;
• the package in which the goods are contained; or
• any material included in the package in which the goods are contained.

While references to ‘publish’ or ‘broadcast’ have been removed, definitions of ‘broadcaster’ and ‘datacaster’ (as defined in the Broadcasting Services Act 1992) have been introduced.

Advertising to healthcare professionals

Medicines Australia’s Code of Conduct sets the standards for the ethical marketing and promotion of prescription pharmaceutical products in Australia. The code complements the legislative requirements of the Therapeutic Goods Regulations and the Therapeutic Goods Act. Medicines Australia members must abide by the Code of Conduct. Pharmaceutical companies that are not members of Medicines Australia are encouraged to accept and observe the code, which outlines requirements relating to the educational and promotional material directed at healthcare professionals (Sections 1 to 4 of the Code of Conduct).

The advertising of medical devices to healthcare professionals is prescribed in the Medical Technology Industry Code of Practice administered by the Medical Technology Association of Australia (MTAA). The Code of Practice sets out self-regulatory standards that are compulsory for MTAA members, and that all industry participants are urged to observe. Section 8 of the code applies to advertisements directed to healthcare professionals and those responsible for purchasing medical technology.

Health Practitioner Regulation National Law

Section 133 of the Health Practitioner Regulation National Law provides that a person (including a body corporate) must not advertise a regulated health service or a business that provides a regulated health service in a way that:

• is false, misleading or deceptive, or is likely to be misleading or deceptive;
• offers a gift, discount or other inducement to attract a person to use the service or the business, unless the advertisement also states the terms and conditions of the offer;
• uses testimonials or purported testimonials about the service or business;
• creates an unreasonable expectation of beneficial treatment; or
• directly or indirectly encourages the indiscriminate or unnecessary use of regulated health services.

‘Regulated health service’ means “a service provided by, or usually provided by, a health practitioner” (Section 133(4)). Breaching Section 133(1) of the Health Practitioner Regulation National Law carries a maximum penalty of A$5,000 in the case of an individual and A$10,000 in the case of a body corporate. 

Each state has its equivalent version of the Health Practitioner Regulation National Law.

Guidelines The Australian Health Practitioner Regulation Agency’s Guidelines for Advertising Regulated Health Services were jointly developed by the national boards under Section 39 of the Health Practitioner Regulation National Law. The guidelines aim to help practitioners and others understand their obligations when advertising a regulated health service.

Do any special rules apply to online advertising of medicinal products?

The online advertisement of medicinal products is captured under the broad definition of ‘advertisement’. The Therapeutic Goods Advertising Code specifies that in relation to direct and internet marketing, a minimum requirement (among others, including but not limited to mandatory warning statements) is for advertisements to contain a full list of the active ingredients. Where the product name is also the single active ingredient, the pack shot displaying the product name will be sufficient to meet this requirement (Section 6(3)(c)(i) of the Therapeutic Goods Advertising Code).    

Labelling

What are the packaging and labelling requirements for medicinal products?

Packaging and labelling requirements differ according to the type of therapeutic good.

Labelling is regulated under the following instruments:

• Therapeutic Goods Order 91 – Standard for labels of prescription and related medicines (TGO 91);
• Therapeutic Goods Order 92 – Standard for labels of non-prescription medicines (TGO 92);
• Therapeutic Goods Order 69 – General requirements for labels for medicines (TGO 69) (however, a four-year transition period has been provided for the implementation of TGOs 91 and 92 which, together, will eventually replace TGO 69 on September 1 2020;
• Therapeutic Goods Order 37 – General Requirements for Labels for Therapeutic Devices;
• Therapeutic Goods Order 87 – General Requirements for the Labelling of Biologicals;
• Standard for the Uniform Scheduling of Drugs and Poisons (applies to medicines, drugs and poisons);
• Required Advisory Statements of Medicines Labelling; and
• Therapeutic Goods Order 80 – Child-resistant Packaging Requirements for Medicines.

Where a label or package is also in the form of an advertisement, it must also comply with:

• the Therapeutic Goods Act;
• the Therapeutic Goods Regulations;
• the Therapeutic Goods Advertising Code; and
• the Australian Consumer Law.

How is the promotion of off-label use regulated?

The promotion of unapproved therapeutic goods is prohibited and it is an offence to supply a therapeutic good that is not listed on or registered in the Australian Register of Therapeutic Goods (unless an exemption applies) (Section 19B of the Therapeutic Goods Act). Under Section 19B of the Therapeutic Goods Act, in some circumstances, it is a criminal offence for a person to supply therapeutic goods in Australia that are neither listed nor registered.

Generally, penalties vary depending on (among other things) whether the use of the goods will result, has resulted or is likely to result in harm or injury to any person; however, harm is not an essential factor  – a person commits an offence if he or she supplies therapeutic goods in Australia that are neither listed nor registered (Section 19B(4) of the Therapeutic Goods Act).

Executive officers may also be personally liable in certain circumstances (Section 54BA of the Therapeutic Goods Act). Penalties include imprisonment and/or fines. Certain offences are offences of strict liability and exceptions apply. 

The Therapeutic Goods Amendment (2017 Measures 1) Bill 2018 clarifies that:

“A person does not commit an offence by claiming to be able to arrange the supply of goods, that the person can supply, or by claiming that another person can arrange the supply of goods that the other person can supply, if the goods are subject to any relevant exemption, approval or authority under the Act.” (Emphasis added.)

Therefore, claims made to healthcare professionals regarding unapproved therapeutic goods provided under the Special Access Scheme and by authorised prescribers may soon be permitted.

Relations with healthcare professionals

Gifts and incentives

What rules apply to the provision of gifts, discounts and other incentives to healthcare professionals?

Section 133(1)(b) of the Health Practitioner Regulation National Law states that a person must not advertise a regulated health service or a business that provides a regulated health service in a way that offers a gift, discount or other inducement to attract a person to use the service or the business, unless the advertisement also states the terms and conditions of the offer.

The Medical Board of Australia has published the Code of Conduct for Good Medical Practice that specifies that good medical practice involves:

• not asking for or accepting any inducement, gift or hospitality of more than trivial value from companies that sell or market drugs or appliances or provide services that may affect, or be seen to affect, the way you prescribe for, treat or refer patients (Section 8.11(6)); and
• not encouraging patients to give, lend or bequeath money or gifts that will benefit themselves directly or indirectly (Section 8.12(2)).

Liability

Defect products

How can a liability claim for a defective medicinal product be brought?

Generally, product liability claims may be brought under the following:

• common law tort of negligence; or
• breach of the Australian Consumer Law.

Negligence

Generally, a person may be found to be negligent in failing to take precautions against a risk of harm if:

• the risk was foreseeable (ie, the person knew or ought to have known about it);
• the risk was not insignificant; and
• in the circumstances, a reasonable person in the person's position would have taken those precautions.

Each state and territory in Australia has its own civil liability legislation.

Australian Consumer Law

A consumer may bring an action under the Australian Consumer Law. A person is a ‘consumer’ if he or she acquires goods or services that are priced at less than A$40,000. A person is also a ‘consumer’ if he or she acquires goods or services that are priced at more than A$40,000, but these goods or services are of a kind ordinarily acquired for personal, domestic or household use or consumption (Section 3 of the Australian Consumer Law).

Consumer guarantees

Actions may be brought under the Australian Consumer Law for a breach of the following guarantees:

• Guarantee as to acceptable quality (Section 54).
• Guarantee as to fitness for any disclosed purpose (Section 55).
• Guarantee relating to the supply of goods by description (Section 56).

Safety standards Actions may be taken against a person who, in trade or commerce:

• supplies (which includes supplies or re-supplies by way of sale) or offers for supply consumer goods that do not comply with a safety or information standard (Sections 106(1) and 106(2), Section 136(1), Sections 203(1) and 203(2) of the Australian Consumer Law); or
• manufactures, possesses or has control of consumer goods that do not comply with a safety standard (Section 106(3)).

Safety defects

Actions may be taken against a manufacturer for goods with safety defects (Sections 138, 139 and 140). 

Class actions

Part IVA of the Federal Court of Australia Act 1976 and Division 9.3 of the Federal Court Rules 2011 provide a regime for commencing class actions in the Federal Court (Section 33C of the Federal Court of Australia Act).

Which parties can be held liable for a defective medicinal product?

Manufacturers

Actions may be taken against the manufacturer for goods with safety defects (Sections 138, 139 and 140 of the Australian Consumer Law). Certain defences and exceptions apply (including those in Section 142). The Australian Consumer Law specifies the timeframes for commencing defective goods actions (Section 143).

The Australian Consumer Law provides that a consumer can also recover damages (directly) from the manufacturer of goods (Sections 271(1) and 271(3)). Recoverable damages are specified in Section 272(1)).

Suppliers By action against a supplier, consumers may recover damages for any loss or damage suffered due to non-compliance with the guarantee if it was reasonably foreseeable that he or she would suffer such loss or damage as a result of such a failure (Section 259(4) of the Australian Consumer Law). In certain circumstances, the manufacturer indemnifies the supplier for those damages (Section 274(1).

The Australian Consumer Law provides a supplier affected by non-compliance with a consumer guarantee a right to indemnification for those costs by the manufacturer (Section 274(1)) (ie, manufacturers are liable where the supplier incurs costs by complying with a statutory guarantee). This right is in addition to the consumer’s right to recover directly from the manufacturer (Section 272).

Remedies

What remedies are available to successful claimants?

Negligence

If a claim is brought under negligence, a successful claimant may be entitled to damages for:

• past and future economic loss;
• gratuitous attendant care services;
• loss of capacity to provide domestic services;
• loss of superannuation entitlements; or
• non-economic loss.

Australian Consumer Law

If Chapters 2, 3 or 4 of the Australian Consumer Law are contravened, a person who has suffered or is likely to suffer loss or damage is entitled apply for compensation (Section 237 of the Australian Consumer Law).

Chapter 5, Part 5-4 of the Australian Consumer Law sets out the remedies relating to guarantees, including requiring the supplier to remedy the failure within a reasonable timeframe (Section 259(2)). Under Section 261 of the Australian Consumer Law, if the consumer requires the supplier to remedy the failure (where the failure is minor), the supplier may:

• repair the goods;
• replace the goods with identical goods; or
• refund the amount paid by the consumer.

Exclusion and limitation

On what grounds can liability be excluded?

Negligence

A claim in negligence will be unsuccessful unless all of the elements are established – in particular, that the damage was caused by the alleged negligence.

Australian Consumer Law

Defences for offences relating to safety defects can be found in Section 142 of the Australian Consumer Law, while defences for offences relating to safety standards under Chapter 4 of the Australian Consumer Law can be found in Sections 207 and 208 (regarding safety and information standards).

What preventive steps can be taken to limit liability?

Suppliers and manufacturers are encouraged to comply with the federal therapeutic goods legislation, as well as any relevant state and territory laws.

Compliance and enforcement

Enforcement

What measures are in place to enforce the laws governing medicinal products?

Chapter 5A of the Therapeutic Goods Act 1989 contains the enforcement provisions that allows the Therapeutic Goods Authority (TGA) to:

• commence civil proceedings (Section 42Y) or criminal proceedings (Section 42YH);
• seek injunctions (Part 5A-4);
• issue infringement notices (Part 5A-2); or
• accept enforceable undertakings (Section 42YL). 

The TGA also has administrative powers for entry, searches and warrants (Part 6-2 of the Therapeutic Goods Act).

Executive officers of a body corporate may also be held personally liable for certain offences (Sections 54B and 54BA of the Therapeutic Goods Act).

Further, the TGA also has powers of suspension and cancellation of therapeutic goods and devices from the Australian Register of Therapeutic Goods. Sections 29D and 30 of the Therapeutic Goods Act outline the circumstances where the secretary may suspend or cancel the registration or listing of therapeutic goods. Provisions relating to biologicals are included in Part 3-2A, Divisions 6 and 7 and those relating to medical devices are found in Chapter 4, Part 4-6 of the Therapeutic Goods Act..

Dishonest practices

What mechanisms are in place to combat bribery, fraud, collusion, counterfeiting and other dishonest practices in the pharmaceutical sector?

Part 5-2 of the Therapeutic Goods Act sets out offences dealing with counterfeit therapeutic goods.

There is a penalty of seven years’ imprisonment or a fine of A$420,000, or both. An executive of a body corporate may also be personally liable under this section (Section 42E(1) of the Therapeutic Goods Act). Civil penalties also apply for an individual (A$1.05 million) or body corporate (A$10.5 million) (Section 42EA of the Therapeutic Goods Act).

Section 42EB of the Therapeutic Goods Act sets out circumstances where there may be relief from liability for certain contraventions relating to dealing with counterfeit therapeutic goods.