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2010-2011-2012-2013
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
THE SENATE
Therapeutic Goods Amendment (Pharmaceutical Transparency) Bill 2013
EXPLANATORY MEMORANDUM
(Circulated by authority of Senator R Di Natale)
THERAPEUTIC GOODS AMENDMENT (PHARMACEUTICAL TRANSPARENCY)
BILL 2013
OUTLINE
The Therapeutic Goods Amendment (Pharmaceutical Transparency) Bill 2013 is being
introduced in order to safeguard the integrity of prescribing medicines in Australia. The
integrity of Australia's health system is of paramount importance in maintaining quality of
care and the sustainability of health expenditure. It is important that we maintain this integrity
and ensure that pharmaceutical companies are not having undue influence on the prescribing
habits of doctors through gifts and other inducements disguised as education. This bill seeks
to regulate this behaviour.
Currently the marketing of regulated pharmaceuticals to consumers is banned under the
Therapeutic Goods Act 1989. However, drug companies are free to communicate with the
doctors that prescribe medicines. While doctors need up-to-date information on new
therapies, drug companies have the added incentive of maximising the number of
prescriptions written for some medicines. This can lead to aggressive marketing and lobbying
of doctors under the guise of education.
In the past this has included flying doctors to events in tropical locations overseas, paying for
them to attend congresses and seminars held at 5-star resorts next to golf courses and hosting
lavish lunches and dinners for prescribers. Other pharmaceutical company largesse includes
appointing influential doctors to advisory boards and lucrative speaking engagements,
including at overseas events.
This behaviour has tarnished the reputation of the pharmaceutical industry. There is some
acknowledgement by the industry that perceptions of undue influence on prescribing patterns
do exist, and there is some momentum to limit this behaviour and improve the image of their
profession. A recent update to the Medicines Australia Code of Conduct strengthened the
restrictions on these sorts of promotions. However, the Code does not, for instance, specify
that medical practitioners who receive any form of largesse from drug companies should be
named. The Code only covers members of Medicines Australia and participation is voluntary.
The proposed Act will replace the industry code with legislation that sets more stringent
restrictions on the interactions between pharmaceutical companies and physicians that
minimises the opportunity to provide inducements and thereby unduly influence prescribing
behaviours. The bill forbids payment for doctors to travel or attend education seminars and
scientific conferences domestically and overseas, bans the sponsorship of educational
meetings intended for Australian doctors outside Australia, limits gifts and overly lavish
hospitality, and requires full reporting of any fees paid to prescribers outside the company.
NOTES ON CLAUSES
Clause 1 - Short Title
1. This is a formal provision specifying the short title.
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Clause 2 - Commencement
2. This clause indicates that the Act will commence the day it receives Royal Assent.
Clause 3 - Schedules
3. This clause provides that an Act that is specified in a Schedule is amended or repealed as
set out in that Schedule, and any other item in a Schedule operates according to its terms.
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Schedule 1 - Amendment of Therapeutic Goods Act 1989
Item 1
This item amends the title of Chapter 5 of the Act to make reference to inducements.
Item 2
This item inserts several new sections into the Act which define new offences related to the
provision of money, services, or other possible inducements to medical practitioners by
pharmaceutical companies.
Proposed section 42DQ inserts definitions used in new sections.
Proposed section 42DR specifies that certain inducements are prohibited and provides a
penalty for making such inducements.
Proposed subsection 42DR(1) has regard to seminars or conferences that take place overseas
and makes it an offence for a pharmaceutical company to arrange or sponsor a conference or
educational seminar for Australian doctors that takes place overseas. It does not prohibit
companies from hosting events within Australia, or for hosting events overseas that are not
aimed primarily at Australian prescribers (doctors), nor does it prohibit Australian doctors
from attending events outside Australia. This is intended to curtail the possibility of hosting
an educational event in a tropical or otherwise exotic location which may act as an
inducement.
Proposed subsection 42DR(2) is intended to otherwise place limits on overly lavish
hospitality. Specifically, subparagraph 42DR(2)(b)(i) specifies that the company may only
spend $100 per head on catering and entertainment, but subparagraph (2)(b)(ii) allows for a
higher value to be prescribed in regulations, to allow for inflation or adjustments that
otherwise fix the value in line with the educational purpose of these events.
Proposed section 42DS creates new offences related to unreported inducements provided by
pharmaceutical companies to medical professionals.
Proposed subsection 42DS(1) specifies that a pharmaceutical company cannot pay for a
medical practitioner to attend a conference or seminar, including travel or accommodation
costs, unless that medical practitioner is a representative of the company sponsoring the
event. In the event that a company does provide travel, accommodation or other recompense
to a medical practitioner to attend the event on their behalf, that compensation is a reportable
payment and must be reported under the requirements of section 42DT.
Proposed subsections 42DS(2) clarifies what it means for a sponsoring company to make a
payment to a registered medical practitioner, including paying for a practitioner to attend an
event, paying a fee, paying for research, making a donation or giving a gift.
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Proposed section 42DT outlines the new requirements regarding the reporting of payments to
medical practitioners.
Proposed subsection 42DT(1) specifies that regulated corporations, i.e. pharmaceutical
companies as defined in section 42DQ, must prepare an annual report and make it public.
Proposed subsection 42DT(2) specifies that for each reportable payment, as defined in
section 42DQ, the report must detail the amount, recipient, date, and the reasons the payment
was made. These reasons might include a description of services rendered in exchange for the
payment. The medical practitioners receiving the payments are to be named individually, as
specified in paragraph 42DT(2)(a)(ii).
Proposed subsection 42DT(3) specifies that the report is to be made public on the website of
the corporation, no later than 1 month after the end of the financial report and for 5 years
thereafter.
Proposed subsection 42DT(4) outlines in detail which payments constitute reportable
payments. This includes any fee or honorarium paid to a medical practitioner or his or her
employer; providing a service; paying travel or accommodation; providing funds to be used
for research; making a donation to charity or giving any gift with a value over $25.
Proposed subsection 42DT(5) provides exceptions to the above for medical practitioners who
are employees of the company or otherwise engaged by the company for the majority of their
time. The corporation does not have to report the remuneration of employees who are
registered medical practitioners, but must do so if those doctors are engaged on an ad hoc or
part-time basis.
The reporting requirements in section 42DT to do not apply to payments made to any
individual who is not a registered medical practitioner. These provisions are intended, in the
public interest, to discourage payments and other incentives that may unduly influence
prescribing behaviour, but not to otherwise place restrictions on commerce between drug
companies and individuals in the normal course of affairs.
Section 42DU specifies the penalty for failure to provide the report as required at 3,000
penalty units.
Item 3
Clause (1) specifies that sections 42DR and 42DS relating to prohibited inducements and
unreported inducements apply to acts or omissions beginning on 1 January 2014.
Clause (2) specifies that where an act contravening these sections is alleged to have occurred
between two dates, one of which is before 1 January 2014, it shall be considered to have
occurred before that date.
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Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act
2011
Therapeutic Goods Amendment (Pharmaceutical Transparency) Bill 2013
This Bill is compatible with the human rights and freedoms recognised or declared in the
international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny)
Act 2011.
Overview of the Bill
This Bill amends the Therapeutic Goods Act 1989 to place restrictions on the way that
pharmaceutical companies may interact commercially with doctors and creates the
requirement for more transparent reporting of such interactions.
Human rights implications
This Bill does not negatively impact on any human rights. Although it places some small
constraints on how pharmaceutical companies may compensate doctors, most interactions
continue to be allowed under new transparency rules and there are no restrictions on the
actions of individuals. These restrictions do not conflict with any of the rights enumerated
in the applicable treaties.
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