Compliance Lessons for Pharmaceutical and Medical Device Companies - Misleading and deceptive conduct in advertising pharmaceuticals
Friday 7 October 2016 / by Alison Choy Flannigan and Nicholas Heinecke posted in Business, Corporate & Commercial Health Aged Care & Life Sciences Technology Law

The Neurofen Case - Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Limited (No 4) [2015] FCA 1408

Most readers of this article would be familiar with the Nurofen specific pain products, each being labelled Nurofen Back Pain, Period Pain, Migraine Pain, or Tension Headache, as these products have been marketed in that manner in Australia since about 2006.

Most readers would also appreciate that Nurofen, or for that matter ibuprofen lysine, is very effective at treating these types of pain.

In Australian Commission and Consumer Commission v Reckitt Benckiser (Australia) Pty Limited (No 4) [2015] FCA 1408, the Federal Court held that Reckitt Benckiser (Australia) Pty Limited (Reckitt Benckiser), in the form of the above packaging:

  • engaged in conduct that is misleading or deceptive, or is likely to mislead or deceive, in contravention of section 18 of the Australian Consumer Law (ACL) which is Schedule 2 to the Competition and Consumer Act 2010 (Cth); and
  • engaged in conduct that is liable to mislead the public as to the nature, the characteristic or the suitability for their purpose of the products in the Nurofen Specific Pain Range within the meaning of section 33 of the ACL, by representing that each product in the Nurofen Specific Pain Range:
    1. was specifically formulated to treat the particular type of pain specified on the packaging relevant to that product;

    2. solely or specifically treated the particular type of pain specified on the packaging relevant to that product,

when in fact each contained the same active ingredient, the Australian Register of Therapeutic Goods (ARTG) approved the same indications for the range, each product was of the same formulation and no product in the range was any more or less effective than the others.

Further, and not helpful for the defence of the Nurofen case, the Nurofen website contained a product comparison page with headings like “relieve pain with the right types of pain medication”. The website questionnaire then directed users to a recommendation for one of the various specific pain relief products. The website was also found to be conduct in contravention of sections 18 and 33 of the ACL in the same way as the packaging.

Orders were made for Reckitt Benckiser to:

  • be restrained from advertising their products in such a manner;
  • to publish corrective notices;
  • to comply with a compliance program, including:
    • to appoint a compliance officer;
    • to instruct the compliance officer to conduct a consumer protection law risk assessment;
    • to prepare a risk assessment report;
    • to issue a compliance policy;
    • ensure that the Compliance Program includes a consumer protection law complaints handling system capable of identifying, classifying, storing and responding to consumer protection law complaints;
    • engage in staff training;
    • ensure that the Compliance Officer reports to the Board and/or senior manager every 12 months on the continuing effectiveness of the Compliance Program;
    • provision to the ACCC of the Compliance Policy, an outline of the Complaints Handling System and Staff training materials and induction materials; and
    • implement promptly and with due diligence any recommendations of the ACCC.

This case is a timely reminder of the importance of compliance with not only the Australian Consumer Law but also the Therapeutic Goods Advertising Code (Code).

Importantly, under the Code an advertisement for therapeutic goods must comply with the statutes and common law of the Commonwealth, States and Territories (clause 4(1)(a)), such as the ACL. The Code approaches the test of whether an advertisement is not in conformity with the Code in terms of the “probable impact upon the reasonable person to whom the advertisement is directed”.

Clause 4(2)(c) of the Code requires that an advertisement “must not mislead, or be likely to mislead, directly or by implication through emphasis, comparisons, contrasts or omissions”, which adding the test of probable impact upon the reasonable person, greater care when advertising therapeutic goods is required than non-therapeutic goods subject only to the ACL.

This case highlights the type of compliance measures each and every pharmaceutical and medical device company should already have in place. Often, it is better to have an independent review of compliance on a periodic basis. The Holman Webb Health, aged care and life sciences team can provide a life sciences compliance programme, and training programme for staff, for a fixed fee. A compliance training session is offered to existing clients for no charge as a value add. For further information, please contact Alison Choy Flannigan or Nicholas Heinecke.

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