Authored by Katarina Klaric, Principal, Stephens Lawyers & Consultants
As from 1 July 2022, advertising of therapeutic goods must comply with the new Therapeutic Goods Advertising Code 2021, which came into effect on 1 January 2022 (with a 6 month transition period which ended on 30 June 2022) [i]. In addition, all advertising of therapeutic goods must comply with the Australian Consumer Law.
Advertising compliance for therapeutic goods in Australia is complex requiring consideration of a number of different advertising laws administered by different regulators. Knowing the advertising laws that apply to the marketing and advertising of a particular product or services is critical to avoid breaches resulting in fines and court proceedings.
Therapeutic Goods Advertising Code 2021
The Therapeutic Goods Advertising Code 2021 prescribes the minimum requirements for advertising therapeutic goods to consumers in Australia. Suppliers of therapeutic goods cannot avoid compliance with the Therapeutic Goods Advertising Code by using websites hosted on servers located outside of Australia for the advertising and supply of therapeutic goods to consumers in Australia.
The key parts of the Therapeutic Goods Advertising Code 2021 include:
1. The general requirements for advertisements[ii] about therapeutic goods to ensure that advertisements are accurate, balanced and not misleading and promote the safe and proper use of the goods; are consistent with any indication(s) or intended purpose(s) specified on the Australian Register of Therapeutic Goods (ARTG); and are consistent with public health campaigns.
Advertising claims representing the goods “as safe, without harm, or side effects or effective in all cases, or a guaranteed cure; or infallible, unfailing, magical or miraculous”, are prohibited[iii].
Scientific or clinical representations may be used in advertisements, but must be expressed in a way that it is readily understood by the audience to whom it is directed and must be consistent with the body of scientific and clinical evidence applicable to the goods[iv].
Advertisements may refer to scientific or clinical research, however the advertisements must provide a proper citation for the research, the researcher has to be identified and financial sponsors of the research have to be identified where known or ought to be known to the advertiser[v].
2. Mandatory statements and other information requirements[vi] for advertisements
The Code specifies the different statements and information that are required to be included in advertisements for therapeutic goods that are only available from pharmacists[vii] and therapeutic goods that cannot be purchased by the general public and are only supplied to health professional[viii]. Short form advertisements are also required to include a mandatory statement[ix].
In the case of on-line sales, where therapeutic goods health warnings on labelling and packaging cannot be physically viewed prior to purchase, the advertisements must include relevant health warnings and other information specified in the Code[x].
3. Additional requirements for specific therapeutic goods
In the case of analgesic, complimentary medicines, sunscreens and therapeutic goods relating to weight management, the Code specifies additional requirements for the advertising of these goods[xi].
Complimentary medicines advertisements containing one or more claims based on traditional use must include a prominently displayed or communicated statement in the advertisement about the reliance on traditional use[xii].
Therapeutic goods advertisements that make any claim relating to weight management:
- must include prominently displayed or communicated statements or visual representations that promote the need for a “ healthy energy controlled diet and physical activity”; and
- must not include any reference or depiction suggesting that the therapeutic goods will correct or reverse the effects of overeating or over-consumption of food or drink; and
- must not contain visual representations, statistics or testimonials of individuals that are not consistent with the results that would be expected to be achieved on an average of consumers of the goods[xiii].
4. Testimonial and endorsements
Testimonials and endorsements can be used in therapeutic goods advertisements provided they comply with the requirements of the Code and are not made by certain individuals and organisations who are prohibited from providing testimonials and endorsements[xiv]. Persons prohibited from making testimonials include those who are involved in the production, marketing and supply of therapeutic goods and this includes influencers, direct seller and other persons who will or have received valuable consideration for making a testimonial, and family members[xv].
The Therapeutic Goods Administration (TGA) has published Guidance on the application of the Therapeutic Goods Advertising Code in relation to testimonials and endorsements in advertising[xvi].
The TGA publishes information and resources to assist manufacturers, importers and other suppliers with advertising compliance.
Advertising Compliance Programs required for Advertising of Therapeutic Goods
Advertising of therapeutic goods requires compliance with the Therapeutic Goods Advertising Code, the Australian Consumer Law and other laws. The complexities of these laws requires businesses and advertisers to have effective internal advertising compliance programs that:
- Provide a good understanding of the Therapeutic Goods Act and Therapeutic Goods Advertising Code, the Australian Consumer Law and other relevant laws that apply to the advertising of therapeutic goods including prohibitions and restrictions on advertising of therapeutic goods and exemptions that apply.
- Enable the individuals to assess and determine whether a product is a “therapeutic good” and subject to compliance with the Therapeutic Goods Act and Therapeutic Goods Advertising Code.
- Provide information in relation to the ARTG listing or registration requirements for products that are “therapeutic goods”.
- Provide for continuous monitoring of guidelines, warnings and releases issued by the TGA and the Australian Competition and Consumer Commission relating to advertising and supply of therapeutic goods or consumer goods.
- Provide for on-going training and education in respect of compliance with advertising laws including the Therapeutic Goods Advertising Code and Australian Consumer Law.
- Require review of advertising material by internal or external legal experts prior to publication to ensure advertising compliance with relevant laws.
Case Example involving Breaches of Therapeutic Goods Act and Australian Consumer Law
The recent advertising and marketing campaign of Lorna Jane’s “LJ Shield – Anti-Virus Activewear” provides an example of how an advertising campaign can result in breaches and penalties being imposed under both the Therapeutic Goods Act and the Australian Consumer Law.
The Therapeutic Goods Administration (TGA) issued infringement notices totalling $39,969.00, for contravention of the Therapeutic Goods Act and Therapeutic Goods Advertising Code. The TGA alleged that Lorna Jane Pty Ltd (Lorna Jane), by advertising its active wear as “Anti-Virus Activewear” and as providing protection against infectious diseases like COVID-19, had represented its active wear as a “therapeutic good” and therefore had to comply with Therapeutic Goods Act and the Therapeutic Goods Advertising Code. All therapeutic goods require TGA approval and listing on the Australian Register of Therapeutic Goods (ARTG), before they can be marketed and supplied in Australia. Lorna Jane had failed to seek approval from the TGA before making the claims[xvii].
Lorna Jane and its director Ms Clarkson, also had court proceeding commenced against them by the Australian Competition and Consumer Commission (ACCC) for making false or misleading representation in contravention of sections 18, 29 and 33 of the Australian Consumer Law, in connection the promotion and supply of its product as “LJ Shield -Anti-Virus Activewear”. The Federal Court of Australia ordered Lorna Jane to pay $AU5million in penalties for the contravention[xviii]. In the course of the court proceeding, Lorna Jane made a number of admissions – including:-
- It falsely represented that its LJ Shield Activewear “eliminated”, “stopped the spread” and “protected wearers” against viruses including COVID-19”.
- It made the misleading representation on its website, Facebook and Instagram, media releases, emails and in-store signage.
- It falsely represented that it had a scientific or technological basis for making the ‘anti-virus’ claim about its LJ Shield Active Wear;
- Its director, Ms Clarkson had authorised and approved the promotional material and had been involved in crafting the words and developing the imagery for the marketing campaign[xix].
Authored by Katarina Klaric, Principal, Stephens Lawyers & Consultants
© Stephens Lawyers & Consultants. 20 June 2022 (updated 19 July 2022).
This update is not intended to be a substitute for obtaining legal advice.
For further information contact:
Katarina Klaric
Principal
Stephens Lawyers & Consultants
Suite 205, 546 Collins Street
Melbourne VIC 3000
Phone: (03) 8636 9100
Fax: (03) 8636 9199
Email: [email protected]
Website: www.stephens.com.au
All Correspondence to:
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Melbourne VIC 8007
[i] The Therapeutic Goods Advertising Code 2021 provided a 6 month transition period which ended on 30 June 2022. During the transition period advertisers could comply with either the Therapeutic Goods Advertising Code 2018 or the Therapeutic Goods Advertising Code 2021.
[ii] Therapeutic Goods (Therapeutic Goods Advertising Code) Instrument 2021; Part 3- General Requirement,
[iii] Ibid, Section 9(1)
[iv] Ibid, Sub-sections 11(1) and (2)
[v] Ibid, Section 11(3)
[vi] Ibid, Part 4 – Mandatory Statements and other required information.
[vii] Ibid, Section 15
[viii] Ibid, Section 16
[ix] Ibid, Section 17
[x] Ibid, Sections 19, 20 and 21.
[xi] Ibid, Part 5-Additional requirements for advertisements about particular therapeutic goods.
[xii] Ibid, Section 23(2)
[xiii] Ibid, Sections 23(3) and (4). “Weight management” is defined broadly and includes weight loss, weight control, weight maintenance, measure reductions, clothing size reduction and hunger suppression.
[xiv] Ibid, Part 6 – Testimonial and Endorsements, Section 24
[xv] Ibid, Section 24(4)
[xvi] Testimonial and endorsements in advertising. Guidance on applying the Therapeutic Goods Advertising Code 2021, Australian Government, Department of Health, Therapeutic Goods Administration, June 2022
[xvii] https://www.tga.gov.au/media-release/lorna-jane-fined-almost-40000-alleged-advertising-breaches-relation-covid-19 and-anti-virus-activewear.
[xviii] Australian Competition and Consumer Commission v Lorna Jane Pty Ltd [2021] FCA 852; Whilst the ACCC had originally joined Ms Clarkson as a respondent to these proceedings, the parties agreed (by consent) that the proceedings against Ms Clarkson should be dismissed.
[xix] ACCC Media Release- “Lorna Jane pays $5million over false ‘anti-virus active wear’ claims” -23 July 2021