- Pharmaceutical companies should be increasingly wary of implementing aggressive educational campaigns and should familiarise themselves with their compliance obligations.
- This is especially relevant in light of new reporting requirements for healthcare educational forums and Medicines Australia's more rigorous approach to Code compliance.
The US and New Zealand are currently the only industrialised countries that allow Direct to Consumer advertising ("DTC"). As most of you will be aware, DTC advertising of prescription-only products is prohibited in Australia. The prohibition is achieved via the Therapeutic Goods Act 1989 ("TG Act") and Medicines Australia's ("MA") Code of Conduct.
Critically however, there is a distinction between "promotion" and "education" as the latter is permitted by the Code provided it meets certain requirements, for example, the need for educational material to be "current, accurate and balanced". Issues also exist in relation to "ask your doctor" advertising which fall outside of the scope of this article.
It is obviously within a company's best interests to rigorously pursue its marketing interests within the scope of the "educational material" allowance under the Code. The business advantages of active marketing must however be balanced against compliance with the Code and general legal risk. Code compliance is important because breaches can have significant ramifications: fines of up to $200 000 apply for severe breaches, and the reputational risk is also significant.
Aggressive educational "advertising" can also expose a pharmaceutical company to general legal risks, including actions filed by competitors under section 52 of the Trade Practices Act 1974 ("TPA") and the state and territory fair trading equivalents. Educational campaigns must be scrutinised in light of the additional advertising obligations under the TPA, specifically exercising particular care when including comparative advertising. Remedies available for TPA breaches include damages, injunctions and even potentially corrective advertising. The potential media and reputational impact of a finding of illegal conduct should not be underestimated.
Designing an educational advertising' campaign
There are a number of factors pharmaceutical companies should consider when seeking to introduce an educational campaign and to strike a balance between marketing benefits and legal risks. Under the Code, permissible educational material includes:
- patient information about a medical condition that might include examples of treatment but without specific reference to a product; and
- general information about medical advances in healthcare.
It is important to note however that the Code Committee has, in recent years, taken an increasingly rigorous and strict attitude towards enforcement of the Code and, arguably, has narrowed the gap between permissible educational interactions and prohibited promotional advertising.
An example where a company may be tempted to issue a media release is where there is a "scientific breakthrough". Experts may also be encouraged to provide comment to the media, for example, if a condition is thought to be under-diagnosed in the community.
One example which illustrates the Committee's growing intolerance towards the intrusion of promotion into educational campaigns is one of the Committee's decisions regarding media releases. Significantly, the release was not issued by a pharmaceutical company but by the Australian New Zealand Breast Cancer Trials Group (ANZBCTG), but the company funded the development and distribution of the media release in association with a public relations company. The Committee considered:
"That although [the company] had not had editorial control of the media release, nor any input into the content, it had funded the logistics for the issue of the media release in the knowledge that the ANZBCTG intended issuing the release about the particular clinical trial results. [The company] therefore had some responsibility for the media release."
The Committee held that the specific media release promoted a prescription medicine to members of the general public and therefore breached section 9.4 of the Code. The omission of risks associated with the product resulted in a lack of balance and was therefore in breach of section 1.1 of the Code. The sanctions imposed included a fine of $60 000. The Committee concluded that the company "had failed to exercise adequate control over organisations it had funded, in the knowledge that the funding provided was going to be used to issue a general media release that would be favourable to its product."
The lessons to be learnt about educational campaigns from this recent decision are:
- firstly, language must be balanced and not "promotional", for example companies should avoid terms and phrases such as "landmark study", "definitive proof" and "has revolutionised"
- secondly, risks of a product must be included to ensure a balanced educational campaign; and
- thirdly, that pharmaceutical companies are also potentially responsible for any media releases issued by any of their funded bodies or associated organisations.
Another example of the increasing susceptibility of pharmaceutical companies to serious sanctions by the Code Committee is a recent decision by the Committee concerning an article in Readers Digest that included information on arthritis treatments and referenced the information to the Product Information and Consumer Medicines Information for a prescription-only medicine.
Significantly, the company advised the Committee that the article was originally intended for a healthcare audience and that it was an "unfortunate oversight" that the referencing had not been adequately changed. The Committee was concerned that:
"This oversight' demonstrated a lack of risk management procedures within the company and sought confirmation in writing that [the company would] ensure appropriate procedures& [are in place]."
The Committee found moderate breaches of sections 9.4 and 9.5.2 of the Code and "a seemingly flagrant disregard for the Code." The Company was ordered to pay a fine of $100 000.
This decision serves as a timely reminder that the Committee:
- is prepared to issue the most severe sanctions even when the Code breaches are inadvertent; and
- will not tolerate failures in companies' risk management systems.
A common feature of the marketing landscape of the industry is the interaction between health consumer organisations ("HCO") and pharmaceutical companies. Pharmaceutical companies are asked to sponsor and sometimes establish high-profile patient support groups.
The Code Committee has recently severely enforced breaches of the Code in these settings. A complaint lodged with the Code Committee alleged that materials that were distributed at a MS Conference promoted a prescription medicine to members of the general public. Significantly, the Committee recognised the importance of the relationship, stating:
"Members emphasised that they did not have concerns with a pharmaceutical company sponsoring a health care organisation event or other reputable educational events."
The Committee also held however that it was the company's responsibility to ensure that its activities and materials complied with the Code, not that of the MS conference organisers. The Committee fined the company $150 000 for a number of "serious breaches in relation to the promotion of an unapproved indication for a prescription medicine to the public."
It is an important reminder that pharmaceutical companies should be mindful of the fact that members of the general public attend HCO events and, consequently, the prohibition on advertising applies.
Recent regulatory developments
In line with the recent trend of increasing scrutiny of the promotional activities of pharmaceutical companies, the disclosure provisions of the Code have taken practical effect, with the first independent Educational Event Report released on 28 March 2008 on the MA website.
In a news release accompanying the Report, MA announced that "52 medical education events would be investigated for possible breaches of the Medicines Australia Code of Conduct." MA has been quick to use this opportunity to present itself as a rigorous regulator with, in its own words, "a zero-tolerance approach to breaches of the Code of Conduct." (Click here to learn more about the Report)
MA stated its commitment to a transparent and tough Code of Conduct in light of the 2007 Competition Tribunal's decision and has continued to indicate its intention to rigorously oversee the marketing campaigns of pharmaceutical companies in Australia. This hard-line approach has not occurred spontaneously but rather correlates with recent community and regulatory pressures. Recent decisions by the Code Committee demonstrate the increasingly hard-line and rigorous approach being adopted by MA.
In this time of increasing scrutiny and maximum sanctions, it is important for pharmaceutical companies to familiarise themselves with their compliance obligations under the Code, their general legal obligations and ensure that they balance opportunities for marketing against general legal risk. As companies find themselves responsible for a broader range of educational and promotional material, it becomes even more important for risk management and legal compliance procedures to ensure activities are both legal and of limited risk.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.