With clarity comes responsibility: major changes to the Therapeutic Goods Advertising Code

The long-anticipated refreshed Therapeutic Goods Advertising Code came into effect on 1 January 2022 (refreshed Therapeutic Goods Advertising Code)

With it comes a raft of important changes to the regulation of therapeutic goods advertising.[1]  

Changes include clarifying permitted use of testimonials, simplifying mandatory statement requirements, expanding the list of approved samples (while also confirming the prohibition on providing unapproved samples) and a new ban on advertising that is likely to cause fear, alarm or distress.  

Anyone involved in advertising therapeutic goods – from manufacturers and suppliers to advertising agencies – should revisit marketing claims and review their 2022 advertising strategy.

While significant work will be required to ensure ongoing compliance, the changes address long running concerns about the complexity of the previous Code and provide welcome clarity on key issues.

The changes come following a lengthy TGA consultation process with industry participants and reflect feedback from the Therapeutic Goods Advertising Consultive Committee as well as recommendations of the earlier Sinclair independent review.  The changes are aimed at improving the clarity and consistency of application of provisions of the Therapeutic Goods Advertising Code (No. 2) 2018 (2018 Code) that many advertisers had long thought unclear, inconsistent and at times, very difficult to apply.

Below we outline the key changes that advertisers should be aware of as they finalise their marketing strategies for the coming year.

Limiting influencer touting - prohibition on paid or incentivised testimonials

Social influencers are an increasingly important way for advertisers to reach consumers and naturally,  advertisers of therapeutic goods have also looked to influencers to promote their products.

Unfortunately, the 2018 Code left advertisers scratching their heads over the application of provisions relating to testimonials to social influencers.  In particular, the 2018 Code prohibited advertising that used testimonials from persons “involved in the production, sale, supply or marketing of the goods”.  At the same time, the 2018 Code required that advertisements disclose any valuable consideration for giving the testimonial. One rule seemed to contradict the other.  

The New Code clarifies the position.  

• Paid or incentivised testimonials, regardless of whether any payment is disclosed, or the testimonial is genuine, are prohibited.
• While genuine unpaid testimonials are permitted, under the New Code, influencers, direct sellers and anyone else who receives “valuable consideration” for their testimonial are taken to be persons “involved with the production, sale, supply or marketing of the goods” (and therefore prohibited from providing testimonials).
• “Valuable consideration” is broad and would include non-monetary items such as services, gifts, opportunities, or any other incentive. During a webinar on 17 February 2022, the TGA indicated that all advertising that includes paid or incentivised testimonials that is currently live and accessible (including on social media) will need to be taken down by 1 July 2022, even if uploaded prior to that date.
• Brand ambassadors can endorse a therapeutic good (that is, provide an expression of support for a product or brand) provided the endorsement does not refer to the person’s personal experience using the good (which would amount to a testimonial). Endorsements must also meet specific requirements under the New Code.  For example, if the endorsement refers to health benefits, the endorsement must be typical of the benefit that can be expected from the goods when used in accordance with the label and the approved indication and use.
• The New Code also prohibits endorsements by particular people and organisations, including brand ambassadors who represent themselves as having expertise or qualifications in a health-related field, current and former health practitioners, and medical researchers.

Advertisers of therapeutic goods who intend to use influencers or testimonials in campaigns should carefully consider their proposed strategy.

Streamlining mandatory statement requirements

The New Code reduces the number of mandatory statements that are required and clearly specifies the circumstances in which they are required.  This provides clarity and simplicity in circumstances where the labyrinthine, duplicative and overly complex requirements in the 2018 Code left advertisers struggling to assess compliance. 

The New Code streamlines mandatory statement requirements by:

• clearly setting out the mandatory statements that must be included in particular types of advertisements (that is, short form advertisements and advertisements relating to goods that are only available from pharmacists and that are not available for supply to the general public);
• making clear the circumstances in which mandatory statements, health warnings and other information must be included in other advertisements about medicines, medical devices, and other therapeutic goods. Advertisements that facilitate purchases of therapeutic goods that cannot be inspected prior to purchase (such as advertising on websites, mobile applications, social media, mail order and from call centres) must also comply with additional requirements; and
• specifying additional mandatory statement requirements that apply to analgesics, sunscreens and therapeutic goods for use in weight management.

Some may be disappointed that social media advertisements are excluded from the simplified mandatory statements that apply to “short form advertisements”.  Indeed advertisers have long been frustrated about the space that is required in social media posts for mandatory statements.  However, while short form advertisements exclude social media, the New Code does clarify that where advertising relates to goods that cannot be inspected prior to purchase and health warnings apply to the good (that is, contraindications, warnings, precautions or restrictions are required), it is now clear that it is acceptable for advertisers to include a link to those health warnings.  An example of this would be a link that takes consumers to a webpage that lists health warnings

It will be important for advertisers to make sure mandatory statements are consistent with the new rules.  This will likely require a comprehensive review of all advertising relating to products that consumers cannot physically inspect prior to purchase.

Keeping clear of fear - safe and proper use requirements are strengthened

The New Code bolsters the safe and proper use requirements by prohibiting advertisements that cause, or are likely to cause, undue alarm, fear or distress. This would include claims that unnecessarily reinforce a need for the advertised product by suggesting that a particular condition will lead to pain or a serious ailment.

Advertisers should closely consider their messaging in-light of this new provision and, in particular, the TGA’s increased focus on public vulnerability to alarm, fear and distress in the current COVID-19 climate.

Clarifying and expanding sampling requirements

Under the New Code, it is clear that providing a sample of a therapeutic good amounts to advertising of that therapeutic good so as to be prohibited unless identified exemptions apply.  Previously, only expressly prohibited “offers” of a sample were clearly non-compliant.

The New Code also defines a “sample” to mean any goods given for free, however does not include a ‘buy one get one free’ offer (provided that the free therapeutic goods are the same as the purchased therapeutic goods).

Despite the new restrictions on samples generally, the list of goods that may be offered as samples has been significantly expanded.  The list includes COVID-19 related products such as rapid antigen tests, disinfectants, face masks and hand sanitisers as well as blood glucose strips, nicotine replacements therapies, oral hygiene products and female hygiene products.

It will be important to check goodie bags to make sure any therapeutic goods that have been included or will be provided as freebies are included on the approved samples list.

Other changes

In addition to these key changes, the New Code:

• expands the general prohibition on advertising to children over 12 years to include goods containing a substance included in Schedules 2, 3 4 and 8 of the Poisons Standard;
• restricts former health professionals from providing a testimonial or endorsement;
• no longer provides for prohibited representations (that are now only provided for in the Therapeutic Goods Regulations 1990); and
• expands the prohibition on comparative advertising to include comparisons with therapeutic services that suggest comparator services are harmful or ineffectual.

Where to from here?

Advertisers have until 30 June 2022 to transition to the New Code. 

The overhaul of the Therapeutic Goods Advertising Code promises to provide clarity, increase compliance and minimise cost.  However with clarity comes added responsibility. Advertisers would be wise to make the most of the transitional period to make sure marketing campaigns are compliant with the New Code before 30 June.

Our team has experience advising on advertising regulations for therapeutic goods in Australia and can assist clients in their transition to the New Code.

[1] Therapeutic Goods (Therapeutic Goods Advertising Code) Instrument 2021