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Regulator Performance Framework: Self-assessment Report, July 2018 to June 2019

2018-19 Performance Reporting

20 December 2019

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KPI 3 - Actions undertaken by regulators are proportionate to the regulatory risk being managed

Measures/metrics Evidence (performance in 2018-19)

KPI 3.1

Regulators apply a risk-based, proportionate approach to compliance obligations, engagement and regulatory enforcement actions.

We have implemented a new advertising complaints handling framework underpinned by a risk-based model for the categorisation of complaints. This model assists us to concentrate our time and efforts on the advertising matters that represent the greatest risk to public health and safety. During this period, 2,436 cases have been generated from complaints and 1,601 cases were closed.

Cases assessed as having a low risk to public health and safety are generally handled using an educative approach and closed quickly. For the 1,480 cases categorised as low, 1,057 Regulatory Obligations letters were sent informing advertisers of alleged non-compliance and providing them guidance to rectify their advertising and assist with future compliance.

For the cases categorised as medium risk, we issued a number of warning letters and in some cases guidance letters. Both types of letters require action and response. Infringement notices with a financial penalty were also issued to two advertisers.

Court action was taken against one advertiser in a high risk case, resulting in a $10 million penalty against the company, reflecting the very real danger to public health and safety posed by the conduct of the advertiser.

We prioritise matters that pose a risk to public health and safety. A case of advertising claiming to treat a serious condition that generally requires diagnosis and ongoing treatment by a medical professional was categorised as critical. The advertiser was directed to immediately cease advertising of a product after eight serious breaches of the Therapeutic Goods Act 1989 and the Advertising Code were identified. When this did not occur, regulatory action was escalated and a directions notice was issued to the advertiser to permanently cease advertising of the product. The advertiser subsequently complied.

3,271 compliance investigations in relation to the supply, manufacture, import or export of therapeutic goods were finalised, and 1,069,946 units of non-compliant goods were destroyed during this time. Outcomes of compliance activities are further detailed in the 2018-19 Annual Performance Statistics Report.

Laboratory test results continue to be published in the Database of TGA Laboratory Testing Results on the TGA website. The database provides the results of testing of 380 products from the November 2018 release, and 467 products from the May 2019 release. In early 2019 the TGA started the periodic publication of more detailed reports related to specific testing projects. These reports provide additional context and detail regarding significant testing projects undertaken by the TGA Laboratories.

Self‑assessed rating: Met

KPI 3.2

Regulators' preferred approach to regulatory risk is regularly reassessed. Strategies, activities and enforcement actions are amended to reflect changing priorities that result from new and evolving regulatory threats, without diminishing regulatory certainty or impact.

We continue to work with other agencies to identify threats to the Australian public and Australian market, including participating in the international Operation Pangea every year which targets the trafficking of illicit pharmaceuticals and medical devices.

We have established a Compliance and enforcement hub on the TGA website to provide a central location for information on our compliance approach and our compliance actions and outcomes. The hub contains information about our compliance activities and educational resources, and provides an avenue for reporting suspected non-compliant activity.

Our Regulatory Compliance and Risk Committee meets six times a year. It operates as a community of practice for identification and consideration of improvements to compliance frameworks, and facilitates data and information sharing across the compliance streams. The committee also prepares the annual compliance plan.

We have established an internal Enforcement Committee to ensure a consistent and appropriate approach to higher level enforcement actions.

Self‑assessed rating: Met

KPI 3.3

Regulators recognise the compliance record of regulated entities, including using earned autonomy where this is appropriate. All available and relevant data on compliance, including evidence of relevant external verification is considered.

We review risks associated with monitoring and compliance and streamline activities to minimise impact on regulated entities.

The risk-based model that underpins the new advertising complaints handling framework enables us to focus resources on the advertising matters that represent the greatest risk to public health and safety. The model describes the actions the TGA may take when dealing with non-compliance, noting that the most serious sanctions (such as court action) are reserved for the most egregious cases. The model recognises that where the advertiser has not previously come to our attention and their advertising does not pose a threat to public health or safety or target vulnerable consumers, then an educational approach is the best course of action.

We evaluate the level of risk to determine the classification and level to which a recall is undertaken. We consider the significance of the hazard, the channels by which the goods have been distributed, and the level to which distribution has taken place. The levels include consumer level, retail level, hospital level or wholesale level.

Recall actions vary depending on the deficiency of the therapeutic good and the risk the deficiency poses to public health and safety. Out of the 666 recalls issued for medicines, medical devices and biologicals undertaken during the reporting period, 91 were Class I (can or have resulted in serious injury or death to patients or users), 477 were Class II (potential to cause illness, injury or result in mistreatment) and 98 were Class III (issues may not pose a significant hazard to health, but action potentially required).

We use a risk-based approach to the selection and prioritisation of products for testing within the Laboratories Branch, with an aim to investigating the potential risk of non-compliance, and to monitor continuing compliance if required. Development of the testing plan is governed by a risk management framework based on ISO 31000:2009 - Risk management - Principles and guidelines.

We also employ a risk-based approach to the frequency of facility inspections. Manufacturer performance at inspection is categorised as good, satisfactory, marginal and unacceptable with further granularity provided by applying a high, medium or low risk rating. These ratings are applied when setting the date for reinspection. The compliance outcomes from inspections overall have shown an increase in satisfactory compliance with less marginal compliance inspection results.

Self‑assessed rating: Met

External validators called for due consideration prior to enacting reforms to ensure that impacts to industry are always fully realised, and that the level of regulation is proportionate to the regulated products. This comment was made by industry groups representing manufacturers and sponsors of lower-risk products. Feedback noted that that our risk-based approach continues to be in line with the Australian regulatory framework and international best practice, and that the enforcement actions of the revised Therapeutic Goods Advertising Code is a good example of such.

Identified opportunities for improvement

We will continue to apply a proportionate, risk-based approach to our monitoring and compliance activities. We commit to ongoing collaboration with law enforcement in our states and territories as well as at a national and international level.

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