Legal Insights

Cautionary tales from the advertising of therapeutic goods during the COVID 19 pandemic

By Angela Wood & Sophie Vo

• 19 November 2020 • 7 min read

During the COVID-19 pandemic, we are reminded of the importance of marketing goods in a manner that is socially responsible, and compliant with the regulatory framework for therapeutic goods. Since March 2020, a number of businesses have been fined by the Therapeutic Goods Administration (TGA) for making claims about their products or services relating to the prevention and treatment of COVID-19.

The TGA also published the final report on its review of the therapeutic goods advertising framework in June this year, which noted some key lessons from the COVID-19 pandemic. The TGA recognised that responses to non-compliant advertising should be:

  1. Timely – through sanctions and penalties
  2. Public – to raise awareness and improve deterrence
  3. Strategic – through education programs

Organisations should therefore be cognisant of their obligations under the therapeutic goods framework to protect their public reputation and to avoid financial penalties.

Therapeutic claims

A product may not, on its face, appear to be a therapeutic good (compared to a drug or medical device), but where claims are made regarding its ability to prevent or alleviate certain conditions, the product would “likely to be taken to be for therapeutic use” and hence be captured by the Therapeutic Goods Act 1989 (Cth) (Act) as a “therapeutic good”. This was clearly illustrated when the TGA fined Lorna Jane for its “anti-virus activewear” which is discussed further below.

Therapeutic goods are generally required to be entered in the Australian Register of Therapeutic Goods (ARTG) to be both legally supplied and advertised in Australia. Additionally, given the seriousness of COVID-19, any representations about it, whether express or implied, are “restricted representations” under the Act, meaning approval or permission is required from the TGA for any reference to it in promotional materials.

TGA’s early warnings and consequent sanctions

Back in March, relatively early into the COVID-19 pandemic, the TGA published a warning to consumers about false and misleading advertising of products that claim to prevent or cure COVID‑19. The TGA also warned advertisers that it would take action in relation to illegal advertising of therapeutic goods, and that it was monitoring non-compliance.

Despite the TGA’s warnings, the following entities, among others, have been fined for advertising breaches:

  • Oxymed Australia Pty Ltd was fined $63,000 for advertising hyperbaric oxygen therapy chambers for the treatment of COVID-19, and is now required to defend proceedings brought by the TGA in the Federal Court of Australia. Because Oxymed Australia did not pay the five infringement notices issued by the TGA nor remove the non-complying advertisements from the Oxymed Australia website, the TGA commenced proceedings to seek an injunction to restrain the advertising and orders for the payment of the penalties.
  • Yarra Valley Cleaning Co was fined $39,960 for advertising its ‘Sanitise IT’ disinfectant product as being 99.9999% effective against viruses, including COVID-19, which the TGA found to involve making “prohibited representations”.
  • Lorna Jane was fined almost $40,000 for advertising “anti-virus activewear”. Its promotional material said that “viruses and bacteria that come into contact with [LJ Shield particles] have their outer shells pierced and they die”. Furthermore, it made implicit representations about the effectiveness of the activewear against COVID-19.
  • Chemforce was fined $63,000 for advertising RibaMin as a medicine that is effective against COVID-19, and for implying that it is recommended or approved by the United States Food and Drug Administration.
  • Pete Evans Chef Pty Ltd was fined $25,200 for representations made in a live stream video that a BioCharger device could cure COVID-19, which the TGA alleges had no apparent foundation.

Consistently, in the promotion of their goods, the above organisations made therapeutic claims without their good being entered in the ARTG, nor having received approval from the TGA for making restricted representations about COVID-19. Furthermore, some of the companies made representations that were allegedly false or misleading.

Notably, Yarra Valley Cleaning Co’s promotion of ‘Sanitise IT’ made references that were “prohibited representations”, which is distinct from the “restricted representations” made by the other organisations. The Therapeutic Goods Advertising Code and Therapeutic Goods Regulations 1990 (Cth) specifically prohibit representations regarding the effect of disinfectants against viruses. Although the Secretary of the Department of Health has temporarily permitted representations about the effectiveness of disinfectants against COVID-19, those disinfectants must be entered in the ARTG, which Yarra Valley Cleaning Co did not do.

In comparison to the above organisations, Hanes Australia Pty Ltd has not been sanctioned or penalised for its promotion of the Bonds HeiQ Viroblock face mask. The product has been included in the ARTG as a medical device, and on the Bonds website, there are clear explanations about how wearing a mask helps reduce the risk of becoming infected and spreading infections, but does not guarantee protection (including against COVID-19). Bonds additionally distinguishes their masks from P2/N95 masks used by healthcare workers and medical first responders. These additional steps would have put the company in a stronger position for demonstrating compliance with the TGA's requirements and the Australian Consumer Law.

Key lessons

The TGA has demonstrated active enforcement of the therapeutic goods advertising framework during the COVID-19 pandemic, and its observations from the recent review of the framework would suggest that a public and strict approach to imposing sanctions and penalties on organisations would continue beyond the pandemic.

It is crucial that organisations are aware of their obligations when making claims that could be interpreted as being about the therapeutic qualities of a product.

The key takeaways from the TGA’s activities over the course of the COVID-19 pandemic so far are as follows:

  1. Determine whether the product is a therapeutic good - Organisations should carefully consider whether the product they are marketing to the public is a “therapeutic good”, as a product is a “therapeutic good” where it would be likely to be taken to be for a therapeutic use (for example, by suggesting that the product could alleviate or prevent a condition).
  2. Enter therapeutic goods in the ARTG - Therapeutic goods must be entered in the ARTG, unless a specific exemption applies to the good, for it to be supplied and advertised in Australia.
  3. Obtain approval or permission for restricted representations - In the advertising of therapeutic goods to the public, organisations should be cautious about making references to COVID-19, whether express or implied, as restricted representations require the approval or permission of the TGA. Similarly, organisations should carefully consider whether they are making representations regarding disinfectants, or the treatment, cure or prevention of sexually transmitted diseases, HIV AIDS and/or HCV, as such references may be prohibited representations that similarly require the permission of the TGA.
  4. Advertise using current and correct information - Advertisements should avoid creating false or misleading impressions, but should include current and correct information. This may be in the form of disclaimers, but disclaimers cannot be relied upon as an excuse for a message that is misleading overall. It should be noted that in addition to the powers of the TGA, the Australian Competition and Consumer Commission can take action for advertising to consumers that is considered to be misleading and deceptive.

By Angela Wood & Sophie Vo

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