Advertising during COVID? Beware the medicines watchdog 

What you need to know

• The medicines watchdog has been flexing its regulatory muscles and taking a more active role in addressing non-compliant advertising during the COVID-19 pandemic.  
• During 2019-20, the Therapeutic Goods Administration (TGA) issued 155 infringement notices for alleged breaches of the therapeutic goods advertising legislation or conditions of registration related to advertising. 51 of these infringement notices related to COVID-19.
• It is likely that advertising compliance will continue to be a priority for the regulator, even after COVID-19. 

What you need to do

• Be aware of the regulator's increased activity in this space. 
• Review your marketing material for any express or implied health claims including any direct or indirect references to the pandemic. 
• Any health or pandemic-related claims may result in your goods becoming subject to the therapeutic goods advertising rules even if they would not ordinarily be considered a medicine or medical device.

The pandemic has had a significant impact on advertising.  

The community focus on COVID-19 has inspired brands, with no prior expertise in the health space, to address or comment on the pandemic in their advertising.  However, brands which suggest that their products might be helpful in addressing issues associated with the pandemic may inadvertently make health claims which bring their products within the purview of the Therapeutic Goods Administration (TGA). 

Given the potential harm to the Australian public caused by misleading health claims, the TGA has been vigilantly monitoring pandemic-related advertising to ensure compliance with Australia's regulatory regime. 

The TGA plays hard ball during the pandemic

Since the onset of the pandemic, the TGA has issued a series of warnings urging caution on the part of advertisers when making therapeutic or health claims in respect of their goods.  These claims have the potential to turn ordinary consumer goods into "therapeutic goods" (e.g. medicines or  medical devices), and, therefore, bring the goods within the regulator's reach.

The TGA's aggressive public stance is reflected in its enforcement activity:

• On 24 April 2020, it issued two infringement notices (PINs) to celebrity chef Pete Evans' company, Peter Evans Chef Pty Ltd, totalling AU$25,200 for allegedly advertising a light emitting apparatus during a Facebook live stream as potentially containing a "recipe" for treating the "coronavirus".
• On 17 July 2020, it issued activewear behemoth, Lorna Jane, with three PINs totalling AU$39,960, for activewear it allegedly spruiked as being antiviral. The regulator found that the activewear products were "therapeutic goods" and that Lorna Jane implied they would prevent and protect against the virus (contrary to the fact). 
• On 31 July 2020, it issued five PINs totalling AU$63,000 to SGC Products Pty Ltd, for alleged advertising of Thymosin Alpha-1 and Thymosin Beta-4 peptides as a "breakthrough preventative treatment for coronavirus (COVID-19)". 
• On 28 August 2020, it issued PINs totalling AU$39,960, to Yarra Valley Cleaning Co in relation to a disinfectant product that was allegedly said to be effective against viruses. 
• On 1 September 2020, Markson Sparks was fined AU$26,640 for alleged unlawful advertising of the "Bionic Air Plasma Medical Device" in relation to COVID-19.

During 2019-20, the TGA has issued a total of 155 PINs for alleged breaches of the therapeutic goods advertising legislation or conditions of registration related to advertising. 51 of these PINs have been for non-compliant advertising related to COVID-19.

Given the increased risk of enforcement action, determining whether your products are subject to the therapeutic goods regime and the therapeutic goods advertising code is vital.

What is a therapeutic good?

The definition of "therapeutic good" in the Therapeutic Goods Act 1989 (Cth) (Act) is very broad.  Most goods are captured within the definition if health claims are made in relation to them, unless an exception applies (e.g. food products are exempt in some cases).  Health claims can include claims that a particular product is able to treat, monitor, diagnose or prevent an illness or injury, or more broadly, influence, inhibit or modify a physiological process in persons.

This definition of therapeutic good under the Act is broad enough to capture products that would not ordinarily be considered medicines or medical devices.  For example, Lorna Jane's activewear which was described as being "anti-virus activewear" was found to be subject to the therapeutic goods regime.  Similarly, the light emitting apparatus advertised by celebrity chef Pete Evans as containing a "recipe" for treating the "coronavirus" was also found to be subject to the regime.

In Australia, advertising for consumer goods, including therapeutic goods, must comply with the Australian Consumer Law.  The requirements particular to advertising therapeutic goods are specified in the Act, with additional requirements to advertising to the public in the Therapeutic Goods Advertising Code (No. 2) 2018 (Code).

It is an offence under the Act to market or supply a product that is a "therapeutic good" if it is not entered in the Australian Register of Therapeutic Goods (unless an exception applies).  It is also an offence to:

• make representations referring to COVID-19 without prior approval; and
• otherwise breach the Code. 

The Code prohibits advertising for a therapeutic good to claim that the therapeutic good is safe, harmless or without side-effects. The Code also requires advertising to be valid and accurate, in addition to being truthful, balanced and not misleading or likely to mislead. 

The maximum penalties which the regulator can obtain from an Australian court for a failure to comply with the Act and the Code are significant and include imprisonment and/or civil penalties of up to AU$11,100,000.  

The regulator is unlikely to commence proceedings for non-compliant advertising as a first step. Additionally, the maximum penalty is generally reserved for "the worst possible case" (eg, advertising to the public substances included in Schedule 4 to the current Poisons Standard). 

Currently, the regulator is more likely to issue PIN(s) than commence proceedings. The maximum amount for a PIN is AU$13,320 for corporations. The regulator will issue multiple PINs for multiple breaches. Separate advertisements, or the same advertisement repeated over multiple days, may result in multiple PINs. Though, in some cases, the regulator will not issue a PIN for every alleged breach, having regard to the need for a proportionate response to the non-compliance and the risk it poses.

Final note

The TGA's powers to address non-compliant advertising were enhanced in early 2018.  Since this time, the TGA has been active in addressing non-compliant advertising, including imposing PINs more frequently.

Brands should be aware that if they make health claims in respect of their goods, those goods may become subject to the therapeutic goods regime, despite not ordinarily bearing the characterisation of a medicine or medical device. It follows that brands may breach the Act and the Code if they do not include those goods in the ARTG and/or they refer to COVID-19.

While the TGA has focused on COVID-19 related advertising this year, we expect that the TGA will continue to be vigilant in investigating the veracity of health claims in the coming years. 

Authors: Nina Fitzgerald, Partner; Stevie Gough, Senior Associate; Ted Talas, Lawyer; and Stephen Klimis, Lawyer.