Australian therapeutic goods self-regulation fails the test

In 2009, the U.S. Institute of Medicine produced a report titled, “Conflict of Interest in Medical Research, Education, and Practice”. The report noted that,

“While collaborations between industry and health professionals are desirable, widespread financial ties bring significant risks of undue influence on professional judgements, potentially jeopardizing the integrity of medical research, education, clinical practice and public trust in medicine.


The report recommended,

“The U.S. Congress should create a national program that requires pharmaceutical, medical device, and biotechnology companies and their foundations to publicly report payments to physicians and other prescribers, biomedical researchers, health care institutions, professional societies, patient advocacy and disease-specific groups, providers of continuing medical education, and foundations created by any of these entities”.

The resulting U.S. Open Payments (the Physicians Payment Sunshine Act) set a new benchmark in transparency, mandating full public disclosure of these relationships in the United States with data collection commencing August 2013 and public reporting by September 2014.

In Australia, the Australian Competition and Consumer Commission (ACCC) raised the issue of disclosing payments to individual healthcare professionals in its consideration of edition 16 of Medicines Australia Code in 2009. This issue was raised again in many submissions to Medicines Australia and the ACCC concerning edition 17 of the Code in 2012.

As a result, the ACCC limited the authorisation of edition 17 of Medicines Australia Code to 2 years, rather than the 5 years sought, in order to encourage Medicines Australia to improve transparency around payments to individual health care professionals.

Edition 18 of Medicines Australia Code has now been submitted to the ACCC for authorisation. It “encourages” healthcare professionals to consent to disclosure. However, it also allows them to opt-out of disclosure while retaining the financial and related benefits of their interaction with member companies. As Senator Richard Di Natale noted, “The voluntary nature of disclosure makes the Code next to meaningless. It’s like making a breathalyser voluntary for drink drivers”.

Medicines Australia Code is weak because other therapeutic goods industry associations have not adopted transparency provisions in their own self-regulatory Codes and many have also opted out of ACCC Code authorisation (and thus being subjected to ACCC persuasive powers). In addition, there are increasing numbers of non-members of therapeutic goods industry associations (for example, the Indian generic company Ranbaxy Australia) who are not bound by any self-regulatory Code. Furthermore, Australian health professional organisations have also failed to address &/or incorporate transparency provisions in their own Code.  It’s therefore not surprising that many members of Medicines Australia were worried that attempting to force full disclosure would put them at a competitive disadvantage with other therapeutic goods companies, especially generic companies.

Medicines Australia argue that disclosing transfers of value from those health professionals who consent (and lumping together the total value of benefits received and the numbers of those who do not) is an incremental improvement (and public benefit) on the previous Code and thus their latest Code should be authorised.

The alternative view is that the ACCC should not provide a fig-leaf of respectability to edition 18 of Medicines Australia Code by authorising the flawed outcome achieved. Rather they should defer authorisation and refer this mess back to where the responsibility lies: the Regulatory Policy & Governance Division of the Australian Department of Health, the Therapeutic Goods Administration (TGA) and the government, all of whom have failed to address the limitations of self-regulation.

A number of counties such as France, Portugal and Turkey have now embraced government regulation of transparency in addition to the USA. I also believe that Australian legislation is required to make transparency (and other ethical considerations) a condition of market authorisation by the TGA.

The ACCC has called for submissions on this matter which close on August 1, 2014. It’s your opportunity to have your say on the proposed arrangements.


Dr Ken Harvey is adjunct associate professor in the School of Public Health and Preventive Medicine, Monash University. He represented the Consumer Health Forum Medicines Australia’s Transparency Working Group and Code Review Panel.