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Advertising: Sanctions and penalties
The TGA has the power to use a range of compliance and enforcement tools to address non-compliant advertising of therapeutic goods. Advertisements must comply with the requirements outlined in the Therapeutic Goods Act 1989 (the Act) and the Therapeutic Goods Advertising Code (the Code).
Compliance and enforcement tools
These tools range in seriousness depending on a number of factors, including the nature of the breach, the advertiser's attitude towards compliance, history of non-compliance and potential risk to the public. Compliance and enforcement action can be taken whether the advertisement was brought to our attention through a formal complaint or by other means.
Note: there are multiple references to 'penalty units'. As of 1 July 2017, the value of a penalty unit is $210. This amount may increase on 1 July 2018. The value of a penalty unit is listed in the Crimes Act 1914.
Some of the tools available to the TGA include:
The TGA will send educational material, in the form of an 'obligations letter' to the advertiser. In some situations, the TGA may visit the advertiser to provide educational information. The advertiser will need to make appropriate changes to their advertisement in order to comply with all relevant therapeutic goods advertising requirements and ensure no further compliance action. They should also implement procedures to avoid future non-compliance.
SAMPLE Advertising Obligations letter
The TGA may refer any practice concerns to state or territory health departments and/or the Australian Health Practitioner Regulatory Agency.
The advertiser will be asked to amend the advertising to ensure compliance with the relevant therapeutic goods advertising requirements and respond to the TGA within a specified timeframe.
The TGA will confirm that the advertising has been made compliant and may take further compliance action where the advertiser has failed to address compliance issues identified in the warning letter.
Substantiation notices may be used to request information to establish the person responsible for an advertisement or to obtain information to substantiate claims made in an advertisement.
On receipt of a substantiation notice from the TGA, the recipient will need to provide the information requested.
If an advertiser fails to comply with a substantiation notice, the TGA may publish a warning notice under section 42DY or prosecute the advertiser under section 42DS, which carries a maximum penalty of 500 penalty units (in 2017-18, this is $105,000). The provision of false or misleading information in response to a substantiation notice can also be prosecuted with a maximum penalty of 1000 penalty units and/or 12 months imprisonment. The TGA may also pursue civil action for the provision of false or misleading information (section 42DT).
The advertiser may be directed by the Secretary of the Department of Health to take steps to address non-compliant advertising and/or retract or correct the advertising.
Failure to comply with a direction may result in criminal prosecution or civil proceedings (see below).
Directions will be published on the TGA website.
An advertiser can request a review of a direction issued under s.42DV.
Where the TGA suspects that there has been a breach of the legislation in relation to the advertising of the therapeutic goods, a public a written notice can be issued to the public containing a warning about the advertised goods, provided it is satisfied that it is in the public interest to do so.
The TGA can also issue a public warning notice if an advertiser has failed to comply with a substantiation notice and it is in the public interest to do so.
Infringement notices will have a maximum 12 penalty units* for an individual or 60 penalty units* for an incorporated body for non-compliant advertising.
In 2017-18, this will result in fines of $2,520 for an individual and $12,600 for an incorporated body.
Multiple infringement notices can be issued, depending on the number of non-compliances identified.
The advertiser will need to address the non-compliant advertising that resulted in the infringement notice in order to avoid future criminal or civil proceedings.
Instead of pursuing court action, the TGA may accept the offer of an enforceable undertaking from an advertiser who believes they have, or are likely to have, breached an offence or civil penalty provision in the TGA legislation.
If the TGA accepts the undertaking, the advertiser is bound by the terms agreed to in the undertaking.
The terms of the undertaking may include mandatory training of staff employed by the advertiser and steps needed to ensure compliance of any future advertising.
A breach of the terms can result in the matter being referred to the Federal Court where orders can be made under Section 42YL(5) of the Act.
If convicted by a court for advertising non-compliance (including failure to comply with a direction from the Secretary), it can impose penalties of:
- Imprisonment for 5 years or 4,000 penalty units*, or both, where the use of the goods in reliance on the advertisement has resulted in, will result in, or is likely to result in, harm or injury to any person; or the use of the goods in reliance on the advertisement, if the goods were so used, would result in, or would be likely to result in, harm or injury to any person.
- Imprisonment for 12 months or 1,000 penalty units*, or both.
- 100 penalty units* for strict liability offences (where intent does not need to be demonstrated).
Offences by corporations can also attract a 5x multiplier.
Multiple advertising offences may be pursued. There is also provision for continuing offences (i.e. increased penalties for each day of non-compliance following notification of compliance issues).