This presentation comes from the Seminar on Advertising of Therapeutic Goods and Services (and its Regulation), held in Sydney on 17 March 2016.

1. Essen%al Elements for Effec%ve
Regula%on of Therapeu%c Goods and
Services Claims
Bill Dee, FEMAG
Seminar on Adver5sing of Therapeu5c Goods and
Services (and its Regula5on)
Sydney, 17 March 2016

2. Cu=ng to the chase….this seminar is
about..
Ø Consumers’ health
Ø False & Misleading claims/rip-offs
Ø Need to send a strong message to the market that enterprises need
to have an effec5ve enterprise compliance system or take the
consequence of vigorous and )mely enforcement
Ø “It’s Time”-for a new compliance regime for Therapeu5c Goods
claims
Ø “Seizing the Zeitgeist” – regulators need to be “innova5ve and
agile” and who can be “disrup5ve” to scammers and shonky health
claimers
Ø Self interest-Michael Porter indicated that countries with robust
safety regula5on and enforcement have a compe55ve advantage
because consumers have more confidence in products from these
countries (e.g. milk powder)

3. The compliance pyramid

4. Drivers for compliance management system
- Why comply?
Ø Due Diligence Defence
Ø Reduc5on or elimina5on of nega5ve exposure
Ø Reputa5on protec5on
Ø Losing money ( lawyers fees, class ac5on( e.g. Nurofen))
Ø Enhancing risk management systems

5. BoGom of the pyramid-enterprise
compliance management system
• Structural ma*ers
Ø Top management commitment
Ø Someone responsible for driving compliance
Ø Alloca5on of responsibility
Ø Management supervision
Ø A system of documenta5on of all compliance material
Ø Regulatory risk assessment and controls
Ø Compliance plan
Ø A system of documenta5on of all compliance material.

6. BoGom of the pyramid-enterprise
compliance management system
• Opera/onal
Ø Opera5ng procedures ( see A_achment B of FEMAG
paper)
Ø Educa5on and training
Ø Regular communica5ons designed to secure compliance
Ø Access to expert advice

7. BoGom of the pyramid-enterprise
compliance management system
• Maintenance
Ø Monitoring systems
Ø Repor5ng systems
Ø Compliance failures iden5fied, their causes analysed
and rec5fica5on ac5on taken

8. Next level up-codes of conduct
• Structural ma*ers
Ø Governing body commitment
Ø Coverage
Ø Consulta5on
Ø Addressing consumer concerns
Ø Adequate resources
Ø Risk assessment
Ø Alloca5on of responsibility
Ø Appointment of a Compliance Officer/Manager
Ø Compliance calendar/Compliance plan
Ø A system of documenta5on of all compliance material
Ø Complaints handling

9. Next level up-codes of conduct
• Opera/onal
Ø Code administra5on
Ø Transparency
Ø Consumer awareness
Ø Industry awareness
Ø In house compliance including opera5ng procedures
Ø Educa5on and training
Ø Regular communica5ons designed to secure compliance
Ø Sanc5ons and other powers for non-compliance
Ø Independent review of complaints handling decisions
Ø Data collec5on
Ø Performance appraisal

10. Next level up-codes of conduct
• Maintenance
Ø Monitoring
Ø Accountability
Ø Review

11. The third level %er of the pyramid-civil
remedies
• Essen)al requirements for compliance
Ø Stopping the conduct
Ø Access to compensa/on
Ø Demonstrated adequate levels of compliance
Ø Punishment for persistent and/or deliberate wrongdoing
Ø Innova/ve approach to regulatory ac/on
Ø TGA, AHPRA working with the ACCC- the ACCC being a regulator
with stronger powers and a more asser5ve culture concerning
consumer protec5on
Ø Both organisa/ons making therapeu/c goods claims an
enforcement priority
Ø Using the most effec/ve regulatory tool in each given
circumstances ( e.g. stopping the conduct quickly and seeking fines
and giving such ac5on publicity to send a clear message to the
appropriate industry or profession)

12. Stopping the conduct in a %mely
manner - Nurofen case
• Started in 2010 when the promo5on of the Nurofen range of products
“targe5ng” migraine, back pain, tension headache and period pain was awarded
a CHOICE shonky award
• In June, 2011 Professor Paul Rolan put in a complaint to the CRP which was
upheld but Recki_ Benckiser (Australia) Pty Ltd declined to comply.
• Dr Ken Harvey put in another complaint in 2012
• TGA “Regula5on 9 order” followed in 2014
• Despite “assurances” given to the TGA the misleading promo5on con5nued and
in March 2015 the ACCC commenced legal proceedings which finally led to a
determina5on in December 2015 and new pack labels in 2016 a few weeks ago
• In short, 6 years to get a result!
• Similar 5me frames with other cases eventually taken up by the ACCC such as
Homeopathy Plus

13. Stopping the conduct in a %mely
manner - the solu%on
• The ACCC could:
Ø First-seek an injunc5on and a correc5ve adver5sement
immediately
Ø Then seek penal5es to send signals to the market ( and
make the bo_om of the pyramid work)
• Professions regulators could:
Ø Seek to stop offending conduct quickly ( include having
the power to refer to the ACCC where conduct is
misleading and/or substan5a5on evidence required)
Ø Establish fast track protocols with appropriate
regulators in egregious cases and those requiring urgent
ac5on

14. The third level %er of the pyramid-civil
remedies toolbox
Ø Civil pecuniary penal5es
Ø Substan5a5on no5ces
Ø An injunc5on to stop conduct (a court order)
Ø Correc5ve adver5sing
Ø Compensa5on orders
Ø Enforceable undertakings
Ø Disqualifica5on orders
Ø Infringement no5ces (penalty no5ce)
Ø Adverse publicity orders
Ø Safety warning no5ces
Ø Media releases
Ø Product liability and recalls provisions.

15. The third level %er of the pyramid-civil
remedies
• The role of the bo_om of the pyramid to work in this
space was summed up succinctly by Jus5ce Edelman
found in ACCC v Woolworths when he stated
that...“The penal5es I have imposed are designed in
broad terms to achieve specific and general deterrence
by requiring vigilance concerning quality management
procedures to ensure the accuracy of representa)ons
and effec)ve procedures for the recall or withdrawal
of products and the no)fica)on of the ACCC. This is
par)cularly so where products can affect consumer
safety (emphasis added) and the person deals in the
sale of large volumes of consumer products”.

16. Top of the pyramid-criminal penal%es
and licence suspension or cancella%on
• Criminal penal/es-where breaches are deliberate or
systemic. The maximum criminal and civil penal5es (fines)
for making false or misleading representa5ons are $1.1
million for businesses and $220,000 for individuals.
• Imposing condi/ons on, suspending or revoking a licence-
These ac5ons can be applied where the regulatory system
involves licensing and would again be available to the
regulator to use where there has been a deliberate,
systemic breach. Publicity about such ac5on by the
regulator sends a clear message to other in the industry to
make sure that they have robust compliance management
systems in place.

17. Cu=ng to the chase-%me for ac%on
1. Using a Therapeu5c Claims Commi_ee of Experts:
Ø Triage role
Ø Expert evidence provider
Ø Reference point
2. Therapeu5c good claims an enforcement priority for
regulators (e.g. TGA, ACCC etc.) and closer liaison
between regulators
3. Intelligent use of tools by regulators
Ø Stop the conduct quickly first
Ø Correc5ve adver5sing
Ø Get fines later-need a deterrent impact
Ø Promote the use of enterprise compliance management
systems
Ø Semng up an on-line monitoring team to constantly monitor
websites and remove offending sites

18. 4. Holding a therapeu5c goods and services claims
scan day ( ACCC already conducts scam watch
days)
5. Support amendment of ACL to include a general
duty of safety- this will drive
Ø the development of safety compliance management
systems at the enterprise level ( see Jus5ce Endelman’s
comments on slide 15)
Ø Building safety into design of product
6. Capacity Building-ACCC providing leadership by
including regulatory bodies including self
regulatory bodies in its inves5gators course
7. Have a review seminar on this topic in 2017

19. References
• Copy of the paper downloadable from
www.femag.org.au
• Copy of slides on www.medreach.com.au
• Any ques5ons-compliance@ozemail.com.au