Is your ASX announcement advertising a therapeutic good?
The Therapeutic Goods Administration (TGA) recently released its Guidance for ASX announcements: Complying with therapeutic goods advertising requirements while also meeting continuous disclosure obligations (TGA Guidance). The TGA Guidance complements The Code of Best Practice for Reporting by Life Science Companies developed by AusBiotech and the Australian Securities Exchange (ASX), which should be read in conjunction with ASX Listing Rule 3.1 (Continuous Disclosure). The TGA Guidance is intended to remind companies that the regulatory obligations for advertising medicines, biologicals and medical devices continue to apply even when making ASX announcements or continuous disclosure announcements and to assist companies to meet those obligations.
The Therapeutic Goods Advertising Laws
Manufacturers and suppliers of therapeutic goods in Australia must comply with a rigorous regulatory framework when advertising therapeutic goods to consumers. Regulatory requirements for the advertising of therapeutic goods (whether medicines, biologicals or medical devices) are set out in several related pieces of legislation: the Therapeutic Goods Act 1989 (Cth) (Act), the Therapeutic Goods Regulations 1990 (Cth) and the Therapeutic Goods (Therapeutic Goods Advertising Code) Instrument 2021 (Cth) (together the Therapeutic Goods Advertising Laws). Under these laws, ‘advertising’ is defined very broadly and captures any promotional statement or pictorial representation in any medium (including on a manufacturer or supplier’s website) that directly or indirectly promotes the use of a therapeutic good.
The Therapeutic Goods Advertising Laws apply whether or not the product is available for sale to consumers, whether or not consumers are the intended audience of the publication and whether or not the product is available for supply in Australia.
The test for whether or not a statement or representation is promotional in nature (and therefore advertising) is an objective one and involves considering whether the material or format on its face appears to be designed to draw public attention to and promote the supply, sale, or use of the particular therapeutic good (the actual intention of those concerned in the publication is irrelevant). If factual material (such as an ASX announcement) is presented in close proximity to advertising material (e.g. the factual material and the advertising material are on the same page of a website), the TGA may consider both the actual advertising material and the factual material together to comprise advertising for the purposes of the Act. Accordingly, the recommendation in the ASIC Regulatory Guide 62 'Better disclosure for investors' that investor information should be posted in a separate area of a company’s website from promotional material about the company or its products is a helpful recommendation. Many companies have a separate landing page for investor information which is clearly labelled as such.
Under the Therapeutic Goods Advertising Laws there are a number of important advertising prohibitions which may not apply in other jurisdictions, notably prohibitions on:
- advertising prescription-only medicines and some Schedule 3 (pharmacist only) medicines
- advertising any therapeutic good that is not registered, listed or included on the Australian Register of Therapeutic Goods (ARTG)
- advertising for any indication or use that is not included in the registration, listing or inclusion of the therapeutic good on the ARTG (off label use)
- using certain restricted representations (references to serious forms of the disease) without prior approval from the TGA or using certain prohibited representations.
In recent activity by the regulator, the TGA imposed substantial penalties on several companies for the advertising of unregistered medicinal cannabis products on their websites, including for the use of restricted representations.
Intersection with ASX announcements
Life sciences companies that are ASX-listed companies or other disclosing entities subject to continuous obligations under the Corporations Act 2001 (Cth) may need to make announcements about new discoveries, research progress and outcomes, regulatory approvals and other price-sensitive market developments that overlap with the areas governed by the Therapeutic Goods Advertising Laws. It will be important to ensure that any announcements, which are commonly published on company websites and therefore publicly accessible, do not contravene the advertising requirements for therapeutic goods. Adverse regulatory actions may themselves impact the reputation of companies and pricing for securities.
The TGA’s guidance highlights the following matters to be considered by life sciences companies in their ASX announcements:
- ensuring that any information about therapeutic goods included in the announcement is necessary for the announcement (consistent with ASX guidance)
- ensuring that the content is factual, informational, complete and balanced (without being emotive or vague)
- avoiding the use of language that is clearly promotional in relation to a therapeutic good, such as superlatives 'highly effective' or 'dramatically reduces pain'
- particular care should be taken in reporting progress in research or outcomes of clinical trials.
In addition, companies should consider the proximity of the ASX announcements to other promotional information, such as links to the sites for purchasing the products.
Companies should be familiar with the requirements of ASX Listing Rule 3.1 and the guidance published by the ASX regarding that Rule, including the test for materiality in continuous disclosure and exceptions, including those relating to confidential or incomplete information.
Companies subject to continuous disclosure obligations in relation to announcements to the market should:
- Know your obligations under the ASX Listing Rules or the Corporations Act 2001 (Cth) and consider published guidance on those obligations.
- Be mindful of the fact that legal obligations to make announcements to the market do not negate your company’s obligations to comply with the Therapeutic Goods Advertising Laws – both apply.
- Carefully consider your announcements. If the announcement names a particular therapeutic good: is the information factual, accurate, complete and balanced? Does it contain any promotional statements or pictorial representations?
- Is it clear that the information is for the benefit of investors only?
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