Advertisers beware! Ensuring compliance with the new Therapeutic Goods Advertising Code in Australia

Base requirements

Fundamentally, advertisers and marketers of therapeutic goods must ensure that advertisements are accurate, balanced and not misleading or likely to be misleading and only contain information that is substantiated prior to advertising. The advertisement must not be inconsistent with any indication or intended purpose accepted in relation to the registration of the therapeutic good on the Australian Register of Therapeutic Goods. Also, it must not contain any representations that the therapeutic good is infallible, without harm or side-effects, or is effective in all cases.

The TGAC 2021 introduces a prohibition on any advertisements about therapeutic goods that cause, or would be likely to cause, undue alarm, fear or distress, or contain a representation to the effect that harmful consequences may result from the therapeutic good not being used. The inclusion of this provision is apt given the influx over the past 2 years of advertisements for therapeutic goods relating to COVID-19, which appeal to public anxiety surrounding the pandemic. Any references to COVID-19 in advertisements for therapeutic goods is a restricted representation and is not permitted without the Therapeutic Goods Administration’s (TGA) approval.  However the introduction of this ban on advertisements that cause undue fear or distress gives the TGA greater scope to clamp down on sensational advertisements.

Testimonials and endorsements – including influencers

The TGAC 2021 also clarifies the TGA’s stance on testimonial advertisements. Any paid or incentivised testimonials of therapeutic goods are banned under the TGAC 2021. An incentive includes any valuable consideration that is provided such as gifts, services or other non-monetary incentives. Paid testimonials from influencers and direct sellers are banned under the TGAC 2021. However, paid endorsements are permitted but the person or entity providing the endorsement must not speak about their personal experience using the therapeutic good as this amounts to a testimonial.

The clarification on paid testimonials in the TGAC 2021 implements a clear ban on the common use of paid influencer marketing by advertisers of goods such as sunscreens, vitamins and supplements. The TGA actively monitors advertisements of therapeutic goods within the market and actively engages in enforcement activities by issuing infringement notices and fines. Advertisers of therapeutic goods should ensure that by 30 June 2022, it ceases the practice of paid influencer marketing of therapeutic goods.

Providing samples

Providing free product samples to customers is an effective form of marketing. However, when it comes to therapeutic goods advertisers are prohibited from providing free samples as part of their advertising. This ban does not apply where the free sample being provided is listed in Annexure 2 of the TGAC 2021 which includes disinfectants, face masks and gloves, hand sanitisers, oral hygiene products, sunscreens, tampons and wound care dressings. 

Conclusion

The changes implemented in the TGAC 2021 clarify and expand upon the regulatory position relating to advertising of therapeutic goods. In particular, the practice of using paid influencer advertising to promote therapeutic goods on social media. Although there is a transitional period until 30 June 2022 to ensure compliance with the TGAC 2021, advertisers and marketers should be mindful that any advertising material currently in development for publication after 30 June 2022 complies with the TGAC 2021.