The Medicines Australia Code of Conduct is a self regulatory scheme that regulates the marketing of pharmaceuticals in Australia.
To be effective the Code needs to be ‘authorised’ by the ACCC every few years. In a submission to the ACCC CHOICE has argued that the current version of the Code should not be authorised unless it is improved in a number of ways.
The Code should require full disclosure of the nature, purpose and amount of payments or other benefits to individual medical practitioners (as will required in the US from next year).
The penalties for breach of the Code should be significantly increased. The current maximum of $300,000 and average fine of $50,000 does not deter breaches of the Code given the commercial advantages that a breach can give them. The penalties pale into insignificance compared to recent fines handed out in the US, the largest of which is a $3 billion fine for GSK handed out by the US Justice Department.
CHOICE also pointed out the limitations of the self-regulatory approach:
The procrastination on [issues such as disclosure and improved sanctions] illustrate a fundamental problems of self-regulation; codes often lag behind consumer and health professional views due to the absence of these stakeholders from code revision committees. Codes also lag behind the views of progressive pharmaceutical companies because of the need for revisions to be approved by a majority of member companies. In addition, in Australia a plethora of therapeutic industry associations results in a variety of self-regulatory codes with code content, monitoring, complaint procedures and transparency varying greatly; it’s not a level playing field!
A further problem with self-regulatory codes is that they don’t apply to non-members; a major problem in certain areas of the Australian therapeutic goods industry. For example, earlier this year Ranbaxy Australia offered pharmacists A$14,648 of free Trovas (generic atorvastatin) stock; an offer that would appear to breach the codes of both the Generic Medicines Industry Association (GMiA) and Medicines Australia. However, as Ranbaxy Australia Pty Ltd was not a member of any self-regulatory industry association no complaint could be heard!
In 2011 a government “Working Group on Promotion of Therapeutic Products” 12 was set up to address these problems. Consumer and health professional representatives argued for one code, one efficient complaint (and monitoring) system and one set of effective sanctions applicable to all therapeutic claims and promotional activities regardless of the industry sector, media or target. This was to be administered by an independent Therapeutic Goods Promotion Agency comprised of all stakeholders. This concept was rejected by industry representatives.
The working group did recommend that each industry code should address common operation and governance areas in order to achieve greater consistency. In addition, to address the problem of non-members, they suggested that the government should make compliance with a code a condition of marketing approval. The latter was rejected by the government which first wants to evaluate the effectiveness of voluntary sign-up. Ironically the ACCC 2011 “Guidelines for developing effective voluntary industry codes of conduct” 5 notes that industry Codes tend to be more effective when the self-regulatory body comprises representatives of the key stakeholders, including consumers, consumer associations, the government and other community groups. Medicines Australia has yet to take this advice on-board. We ask the ACCC to add consumer and health professional representatives to the Code governing body as a “condition” for authorising the Code.
The submission was authored for CHOICE by Dr Ken Harvey