Therapeutic Goods Amendment (Pharmaceutical Transparency) Bill 2013
Introduction
1.1
On 21 March 2013, on the recommendation of the Senate Selection of Bills
Committee, the Senate referred the Therapeutic Goods Amendment (Pharmaceutical
Transparency) Bill 2013 (the Bill) to the Senate Finance and Public
Administration Legislation Committee for inquiry and report by 17 June 2013.
The reason for referral was to receive evidence on the need for regulation of
pharmaceutical industry conduct with regards to interactions with the medical
profession, and the appropriateness of the provisions in the Bill that place
restrictions on these interactions.[1]
Conduct of the inquiry
1.2
The committee advertised the inquiry in The Australian newspaper
on 27 March 2013, and invited submissions by 19 April 2013. Details
of the inquiry, the Bill and associated documents were placed on the
committee's website.
1.3
The committee received 25 submissions, which are listed in Appendix 1. A
public hearing was held in Melbourne on 29 April 2013. A list of witnesses who
appeared at the hearing is at Appendix 2. Submissions and the Hansard
transcript are available on the committee's website at www.aph.gov.au/senate_fpa.
Overview of the Bill
1.4
The Bill is a private Senator's bill and proposes to amend the Therapeutic
Goods Act 1989 to place restrictions on the interactions between
pharmaceutical companies and medical practitioners with the aim to minimising
the opportunity to provide inducements and therefore unduly influence
prescribing behaviours.[2]
The Bill's Explanatory Memorandum (EM) outlines the current deficiencies in the
level of regulation of, and lack of transparency in, relationships between the
pharmaceutical industry and medical practitioners which the Bill proposes to
address:
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.[3]
1.5
The EM summarises the Bill's intended effect on the interactions between
pharmaceutical companies and medical practitioners as:
- forbidding payment for doctors to travel or attend education
seminars and scientific conferences domestically and overseas;
- banning the sponsorship of educational meetings intended for
Australian doctors outside Australia;
-
limiting gifts and lavish hospitality; and
- requiring full reporting of any fees paid to prescribers outside
the company.[4]
1.6
The pharmaceutical industry has acknowledged that there are perceptions
of undue influence on the prescribing behaviour of medical practitioners. In
response, self-regulated industry codes have been established by the
pharmaceutical industry representative bodies. The Medicines Australia code of
conduct (MA Code) sets the standards for the ethical marketing and promotion of
prescription pharmaceutical products by pharmaceutical companies in Australia.
The MA Code includes provisions which address the behaviour of medical
representatives and relationships with healthcare professionals. The EM notes
that the measures contained in the Bill are intended to replace the MA Code.[5]
Provisions of the Bill
1.7
Item 1 of the Bill amends the title of Chapter 5 of the Therapeutic
Goods Act to include the reference to 'inducements', amending the heading to
'Advertising, inducements, counterfeit therapeutic goods and product
tampering'.
1.8
Item 2 of the Bill inserts new sections into the Act which place
restrictions on interactions between pharmaceutical companies and medical
practitioners and define new offences in relation to the provision of money,
services, or other possible inducements.[6]
Civil penalties for prohibition of
certain inducements
1.9
Proposed subsection 42DR(1) makes it an offence for a pharmaceutical
company to arrange or sponsor a conference, convention, educational seminar or
other event to be held overseas, where it would be expected that the majority
of the people attending the event are registered medical practitioners. The EM
elaborates on the application of this proposed subsection:
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.[7]
1.10
Under this subsection, a pharmaceutical company found to contravene this
subsection would be penalised a maximum civil penalty of 600 penalty units.
1.11
Proposed subsection 42DR(2) intends to limit overly lavish hospitality
by pharmaceutical companies which may be seen as a possible inducement.[8]
This subsection would make it an offence for a pharmaceutical company to
provide hospitality, including paying for meals or entertainment, to registered
medical practitioners while they are attending an educational seminar or event
where the value of the hospitality provided is more than $100 per head, or if a
higher amount is prescribed in regulations, that amount. A maximum civil
penalty of 1200 penalty units is prescribed for contravening this subsection.
Civil penalties for unreported inducements
1.12
Proposed subsection 42DS(1) specifies that a pharmaceutical company cannot
pay a medical practitioner to attend a conference, convention, educational
seminar or other event, including paying for travel or accommodation costs, if
the medical practitioner is not representing the company or a sponsor of the
event. Pursuant to proposed subsection 42DS(2), a company is taken to have made
a payment to a medical practitioner if it does one or more of the following in
exchange for the practitioner to attend an event:
- pays a fee to the practitioner or the practitioner's employer;
- pays for medical research;
- makes a donation to a charity; or
- gives a gift of more than $25 in value to the practitioner or to
the practitioner's employer.
1.13
Contravention of this subsection carries a maximum civil penalty of 1200
penalty units.
Reporting requirements
1.14
Under proposed new section 42DT, pharmaceutical companies are required
to prepare and make public a report which provides details for each reportable
payment made by the company for each financial year. The EM states that:
The reporting requirements in section 42DT 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.[9]
1.15
For each reportable payment made by the company, the report is required
to provide detail of the amount or value, the name of the recipient, the date the
payment was made, and the nature of and reasons for making the payment. Under
subsection 42DT(2)(b), if a company does not make a reportable payment during
the financial year, it is still required to prepare a report with a statement
to that effect.
1.16
Under proposed subsection 42DT(3), the report must be made available on
the company's website within one month after the end of the financial year to
which it relates, and remain available for five years. Reportable payments by a
pharmaceutical company to a medical practitioner, who is not an employee or
consultant of the pharmaceutical company, are specified in subsection 42DT(4):
- payment for attending a conference, convention, educational
seminar or other event on behalf of the corporation;
- payment of to a medical practitioner or the practitioner's
employer;
- provision of a service to a medical practitioner or to the
practitioner's employer;
- payment for the travel or accommodation costs or related services
for a medical practitioner or to the practitioner's employer;
- payment used for medical research;
- a donation to a charity on behalf or in relation to the medical
practitioner; or
- a gift of more than $25 in value to the medical practitioner or
the practitioner's employer.
1.17
The failure of pharmaceutical companies to prepare and make public a
report under section 42DT attracts a maximum civil penalty of 3000 penalty
units.
Drafting errors in the Bill
1.18
The committee notes two errors in the Bill. To avoid any ambiguity in
the intention of the Bill, the word 'or' should be inserted at the end of
clauses 42DT(4)(a) and 42DT(5)(b).
Statement of compatibility with
human rights
1.19
In accordance with Part 3 of the Human Rights (Parliamentary
Scrutiny) Act 2011, the EM includes a statement of the Bill's
compatibility with human rights and freedoms recognised or declared in relevant
international instruments, declaring that the Bill does not negatively impact
on any human rights. The statement further acknowledges that:
Although it places some small constraints on how
pharmaceutical companies my 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.[10]
Background
1.20
The professional relationship between healthcare professionals and
therapeutic goods companies is currently governed by industry and professional
codes of conduct, not by government regulation.[11]
Over recent years, the Government has acknowledged public concern about the
promotion of therapeutic goods to healthcare professionals and the potential to
influence medical practitioners' management of health needs of patients. In
response, the Government has instigated consultation processes on these matters
to seek the views of relevant stakeholders and the public.
Position paper on the Promotion of
Therapeutic Goods
1.21
On 30 June 2010, the then Parliamentary Secretary for Health, the Hon
Mark Butler MP, released the Government's Position Paper on the Promotion of
Therapeutic Goods. The paper addressed public concern about the promotion
of therapeutic goods to healthcare professionals and the level of coverage of,
and inconsistency between, self-regulatory codes of conduct across the
therapeutic goods sector. The paper stated the Government's policy objective as
aiming:
...to ensure that decisions on management (including treatment)
options for health needs are based on sound clinical advice evidence, not
driven by incentives or other influences, and that self-regulatory codes of
conduct are effective in minimising the potential for any promotional
activities to compromise the quality use of medicines and to increase cost
pressures on the health system.[12]
1.22
Government consultation with stakeholders from industry, health
profession organisations and consumer groups revealed the following key issues:
- the need for high level principles underpinning sector specific
codes;
- ensuring compliance of both member and non-member companies of
industry bodies with relevant codes of conduct; and
- the structure of the complaints system.
1.23
While the paper stated that it was the Government's position to continue
to support self-regulation of industry conduct, including promotional
activities, it was found that reform of the existing arrangements was needed.
This was broadly accepted by the industry.[13]
The paper proposed that, in the first instance, 'industry strengthen and
standardise self-regulation through developing an industry framework for
universal adherence to consistent industry-wide codes based on a common set of
high level principles'. If these reforms were not implemented, a legislative
option would be considered by Government. The
paper also noted the need to ensure that the codes of conduct which apply to
healthcare professionals align with the standards expected of the therapeutic
goods industry.[14]
Working group on promotion of
therapeutic products – Report to Parliamentary Secretary Catherine King
1.24
A working group comprising industry stakeholders, representatives of health
professional organisations and consumers was established to consider responses
to the position paper. The working group was also tasked with developing a set
of high level principles as a basis for strengthening and aligning industry
codes of conduct.[15]
The subsequent report, entitled Working group on
promotion of therapeutic products – Report to Parliamentary Secretary Catherine
King, was released on 18 March 2011.
1.25
The working group considered the coverage of the industry codes, the
mechanisms for extending code compliance to non-members of associations, and the
need for alignment of the codes of conduct governing healthcare professionals
with industry codes, recognising the mutuality of these relationships. The
working group made 18 recommendations for government, industry and professional
health organisations.
1.26
The working group developed a high level statement of principles to be
incorporated into each industry code, as well as a statement of the obligations
on companies operating in the industry covered by the code. The statement of
principles provides that:
The Australian therapeutic products industry promotes the
concept of good health incorporating the quality use of therapeutic products
based on genuine consumer health needs and supported by the ethical conduct of
all parties. In this context the quality use of therapeutic products means:
- Selecting diagnostic and treatment
options wisely based on the best available evidence and the consumers' needs;
- Choosing suitable therapeutic
products if this is considered necessary; and
-
Using therapeutic products safely
and effectively.[16]
1.27
The working group specified the areas to be covered by the provisions of
therapeutic industry codes, as well as the obligations of companies operating
under the code. It was recommended that, as a condition of inclusion of a
product on the Australian Register of Therapeutic Goods, all applicants,
including those not a member of an industry association, be required to
nominate the relevant code of practice to which it will subscribe.[17]
1.28
To address the issue of bringing professional codes of conduct into
alignment with industry codes, the working group recommended ongoing engagement
with health professional organisations. The working group also recommended the
establishment of an advisory body comprised of representatives from industry,
healthcare professional organisations and consumer groups to oversee the
implementation of the recommendations of the working group report.[18]
TGA Reforms: A blueprint for TGA's
future
1.29
The Government incorporated its response to the working group's report
in the publication, TGA Reforms: A blueprint for TGA's future, which was
released in December 2011. Of the 18 recommendations made by the working group,
the Government supported five, did not support three, noted seven, and referred
three recommendations to relevant external bodies. The Government did not support
recommendations 5 to 7 which would have required new regulation and hence
departed from the self-regulatory model. The Government also did not support
recommendation 18 relating
to a review of the National Medicines Policy.[19]
1.30
The TGA Reforms report acknowledged that the promotion of therapeutic goods,
including pharmaceutical products, to medical practitioners through offering
inducements, has the potential to influence clinical decisions on grounds other
than the best interest of the patient. It further noted that industry codes of
conduct are effective in limiting unethical behaviour on the part of companies,
but that currently there is inconsistency across codes and that companies which
are not members of associations are not bound by these codes.[20]
1.31
The report stated that the Government's preferred position was to
maintain the self-regulatory framework and that it strongly supported the
harmonisation of codes across sectors through the incorporation of the
high-level principles developed by the working group on promotion of
therapeutic products.
The inclusion of these high-level principles into industry
specific codes of conduct is a continuing process and the Government will
consider the feasibility of establishing a committee to evaluate the work of
industry bodies. Further changes will be considered if it is found that there
is a need to provide greater encouragement to non-members of industry
associations to nominate and sign up to an appropriate industry code, including
the TGA seeking notification of a sponsor's nominated code of conduct at the
point of including a product on the ARTG [Australian Register of Therapeutic
Goods].[21]
Implementation of the working
group's recommendations
1.32
The Government allocated $1.4 million in funding over four years to support
the implementation of the working group's recommendations which the Government
had previously noted would benefit from some support. These included:
...supporting stronger self-regulation, better communication
and shared systems for complaints reporting, and establishing an implementation
advisory group to guide further work on implementing the recommendations.[22]
1.33
In July 2012, the Government released the paper, Delivering reforms –
Implementation plan for TGA Reforms: A blueprint for TGA's future, which
provided a high-level overview of the implementation of the working group's
recommendations.
1.34
The Government established a Codes of Conduct Advisory Group in
January-February 2013. The Advisory Group has representatives from industry
associations, health professional and consumer organisations. The advisory group
is responsible for overseeing a number of projects including:
- an independent review of the uptake of the high level principles
set out by the Working Group in industry's codes of conduct;
- development of shared information systems and a common complaints
portal;
- liaison and discussion with health professional organisations in
relation to alignment of industry and health professional codes;
- mechanisms to improve the coverage of codes of conduct; and
- an independent evaluation of the effectiveness of the overall
self-regulatory framework.[23]
National Medicines Policy
1.35
The Government's National Medicines Policy was launched in 1999 to bring
about better health outcomes for all Australians, particularly in regard to
people's access to, and wise use of, prescription and non-prescription medicines.
Its framework is based on partnerships between Governments, health educators,
health practitioners, and other healthcare providers and suppliers, the medicines
industry, healthcare consumers, and the media, working together to promote the
objectives of the policy.
1.36
The National Prescribing Service is described as the implementation arm
of the National Medicines Policy to assist prescribers and patients in the
quality use of medicines through education and prescriber feedback.[24]
Pharmaceutical industry
self-regulation
1.37
Two main industry groups represent the pharmaceutical industry in
Australia: Medicines Australia and the Generic Medicines Industry Association
(GMiA). Medicines Australia has 54 member companies which supply 86 per
cent of the medicines that are available to Australians through the
Pharmaceutical Benefits Scheme.[25]
GMiA is a representative body of generic medicine suppliers in Australia. GMiA
member companies predominantly manufacture and/or sell generic medicines in the
Australian market and/or manufacture generic medicines for export.[26]
GMiA has 18 members, including five full members who supply approximately 90
per cent of the non-original generic medicines to the Australian market.[27]
1.38
The following outlines the codes of conduct for both Medicines Australia
and GMiA.
Medicines Australia
1.39
Medicines Australia has established a code of conduct (MA Code) which
sets out the standards of conduct for the activities of companies when engaged
in the promotion of prescription pharmaceutical products used under medical
supervision as permitted by Australian legislation. Established in 1960, the MA
Code has undergone regular review by Medicines Australia 'to ensure it
continues to reflect current community and professional standards and current
government legislation.'[28]
1.40
The most recent update of the MA Code, Edition 17, was authorised by the
Australian Competition and Consumer Commission (ACCC) for two years on 20 December
2012 and came into effect on 11 January 2013.[29]
During the authorisation consultation process, the ACCC noted that the MA Code
provides public benefits by providing greater transparency on the relationships
between pharmaceutical companies and healthcare professionals. The ACCC stated
that the MA Code could go further in ensuring that community expectations now,
and in the future are met. The ACCC further noted that:
The ACCC encourages Medicines Australia to look for ways to
address the concerns that have been raised during the ACCC's consultation
process. These include improving the accessibility of reports and the
complaints process and considering disclosure of payments made to individual
healthcare professionals.[30]
1.41
To ensure the MA Code is amended in a timely manner, the ACCC only
granted authorisation of the Code for two years, and not the five year period
sought by Medicines Australia. On authorising[31]
the code, the ACCC stated that it had given member companies of Medicines Australia
two years to improve transparency of payments and sponsorship made by
pharmaceutical companies to individual healthcare professionals. Commissioner
Sarah Court further advised that:
Improving transparency around payments to individual doctors
will play an important role in promoting community confidence in the integrity
of these payments to healthcare professionals.[32]
1.42
Significant changes to Edition 17 of the MA Code include the requirement
that companies are now to provide:
- aggregate amounts of all payments made to healthcare
professionals for advisory boards and consultancy arrangements;
- attendance and speaking at medical conferences and educational
events; and
- sponsorships for consumer organisations including the value of
non-monetary support.[33]
1.43
Complaints and appeals under the MA code are overseen by the Code of
Conduct Committee and the Code Appeals Committee which are responsible to the
Medicines Australia Board.[34]
The monitoring of member companies is undertaken by the Medicines Australia
Monitoring Committee. This committee proactively monitors selected promotional
material and conduct of companies on a regular and ongoing basis. At the end of
each financial year, the Monitoring Committee also reviews the educational
meetings and symposia provided by member companies. Medicines Australia makes
the companies' completed reports available on its website within three months
of the end of each six month period.[35]
1.44
The MA Code only covers members of Medicines Australia and membership of
the organisation is voluntary.
Transparency Working Group
1.45
Following its adoption of Edition 17 of the MA Code, Medicines Australia
established the Transparency Working Group comprising representatives of
industry, professional medical bodies and consumers groups, to develop measures
and policies to further enhance transparency of payments and other transfers of
value between healthcare professionals and the pharmaceutical industry.[36]
The Transparency Working Group expects to present its final recommendations by
June 2013.[37]
1.46
Dr Ken Harvey, the CHOICE representative on the Transparency Working
Group, provided an update on the group's progress:
It has developed principles applicable to all therapeutic
goods companies and all health professions, not just doctors. These include
providing access to information in a single, public repository, enabling the
information to be audited and validated by healthcare professionals and
companies, and supported by an educational process to assist all parties to
interpret the information in context. It is envisaged that member companies
could commence recording payments made to individual health care professionals
from Jan 1, 2015 with public reporting in 2016.[38]
Generic Medicines Industry
Association (GMiA)
1.47
GMiA introduced its Code of Practice on 1 March 2010 and was granted
authorisation by the ACCC on 3 November 2010. GMiA stated that:
The Code formalises the commitment to GMiA members to a
system of best practice self-regulation and ethical supply of generic medicines
to the Australian community in compliance with applicable laws and standards.[39]
1.48
In addition to covering relationships with stakeholders and promotional
and marketing activities, the GMiA Code also covers the manufacture, supply and
distribution, safety, product availability, research and regulatory activities,
and corporate governance. Under section 15 of the Code, the Code Administration
Committee prepares an annual report which reviews the operation of the Code.
1.49
In comparison to the MA Code, GMiA further advised on the effectiveness
of the Code:
GMiA rejects any suggestion that its Code is any less
rigorous or capable of self-regulation than the Medicines Australia Code. The
GMiA Code specifically reflects the unique operating environment of suppliers
of generic medicines and sets out the best practice standards, aligned with
that unique operating environment required of all members...during the three
years that GMiA has administered the Code, GMiA has received only five
complaints.[40]
Medical practitioners' professional
standards
1.50
The medical profession is currently regulated by the Medical Board of
Australia, supported by the Australian Health Practitioner Regulation Agency
(AHPRA). AHPRA supports 14 national health professional boards in their primary
role of protecting the public and managing the registration processes for
health practitioners and students. On behalf of the Boards, AHPRA also manages
investigations into the professional conduct, performance or health of
registered health practitioners, except in NSW where this is undertaken by the
Health Professional Councils Authority and the Health Care Complaints
Commission.
1.51
The professional conduct of health practitioners and students is guided
by the Codes and Guidelines and Registration Standards of their relevant health
profession. The conduct of medical practitioners is governed by the Medical
Board of Australia's Good Medical Practice: A Code of Conduct for Doctors in
Australia. Section 8.11 of the code deals with conflicts of interest. In
relation to interactions with pharmaceutical companies, it specifies that good
medical practice involves:
8.11.4 Recognising that pharmaceutical and other medical
marketing influences doctors, and being aware of ways in which your practice may
be being influenced.
8.11.6 Not asking for or accepting any inducement, gift or
hospitality of more than trivial value, from companies that sell or market
drugs or appliances that may affect, or be seen to affect, the way you
prescribe for, treat or refer patients.
8.11.7 Not asking for or accepting fees for meeting sales
representatives.
8.11.8 Not offering inducements to colleagues, or entering
into arrangements that could be perceived to provide inducements.
1.52
Any person can notify AHPRA with concerns relating to the conduct of a
registered health practitioner or student on the Medical Board of Australia's
Code.
1.53
A number of professional medical bodies have also established guidance
for members on ethical relationships with industry.
Overseas experience
1.54
The committee was provided with examples of recent developments overseas
where the interactions between therapeutic goods companies and healthcare
professionals have undergone reform.
1.55
In the United States, the Physician Payment Sunshine Act was passed in
2010 by the US Congress as part of the Patient Protection and Affordable Care
Act and became operational earlier this year. It requires pharmaceutical and
device companies to report to the Centers for Medicare and Medicaid Services
all payments, or other transfers of value, made to individual doctors and
teaching hospitals that total more than US$100 per year. The first instalment
of transparency reports will be published by the Centers to a public website on
30 September 2014.[41]
1.56
The Dutch have established a central register (managed by an independent
foundation) to record the financial relationships between healthcare
professional, healthcare institutions and the pharmaceutical industry. All
financial relationships exceeding €500
are entered in the register and this will be open to the public on 25 April
2013.[42]
In Denmark, companies have been required to declare their payments to doctors
since 2008, while doctors in Scotland have to declare payments received from
companies themselves.[43]
Issues raised during the inquiry
1.57
While supporting the broad intent of the Bill, most submitters did not
support its passage through the Parliament in its current form. The Department
of Health and Ageing (DoHA), pharmaceutical companies, industry and health professional
bodies were generally opposed to the Bill and advocated for continuing with the
self-regulation model. However, it was conceded by some opposed to the Bill, that
the current self-regulation model could be strengthened by some legislative
reform, for example, to require companies to adhere to an industry code through
the product registration process.
1.58
Some submitters also indicated that consideration of the Bill provided an
opportunity to canvass a number of issues in regard to the current arrangements
and possible models to govern the interactions between health professionals and
pharmaceutical companies which may impact on prescribing behaviour.[44]
Importance of ethical relationships
between pharmaceutical companies and medical practitioners
1.59
The potential effects of inducements from pharmaceutical companies, such
as funding for travel and conference attendance, payment for consultancies, and
sponsored lectures, on the behaviour of medical practitioners was outlined by
Dr Ken Harvey. The effects included uncritical uptake of newer, expensive and
less-well evaluated products and underutilisation of more cost-effective drugs
and medical devices; distortion of published medical evidence by influencing
how clinical studies are designed and conducted and which studies are
published. Dr Harvey concluded that:
This can have the overall result of "stacking the
deck" in favour of new and expensive treatments and has been shown to lead
"key opinion leader" doctors to advocate such treatments despite the
lack of robust evidence about their safety. These influences can cause rapid
take-up of new treatments with disastrous consequences when adverse effects
(followed by product withdrawal) become apparent on much larger scale than
would have occurred by more prudent use. The cost and safety implications of
these distortions for our health system, which are under ever-increasing
pressure to continue to meet the aspirations and expectations of an ageing
population, are significant.[45]
1.60
The importance of transparency about relationships between
pharmaceutical companies and medical practitioners for patients was noted by
the Australian Medical Association (AMA) which commented:
Patients need to make well-informed decisions about their
healthcare that includes taking account of their healthcare provider's
involvement with pharmaceutical companies. This is enshrined in medical practitioner
regulation in Australia.[46]
1.61
The committee also received evidence from a number of pharmaceutical
companies and industry bodies which also acknowledged the importance of
transparency in their relationships with parties they engage with and the
community expectation for increased transparency.[47]
For example, Pfizer Australia advised:
We recognise that transparency and the trust it cultivates is
essential in both the development and delivery of healthcare and is the
cornerstone which fosters trust between government, industry, healthcare
professionals and patients.[48]
1.62
Medicines Australia stated that it strongly supported the policy
objective of safeguarding the integrity of health care professionals'
interaction with patients. It further stated that providing greater
transparency about companies' interactions with healthcare professionals 'will
give the community greater confidence that the independence of health professionals
in making recommendations and decisions about treatment is not compromised by
those interactions'.[49]
1.63
Consumers Health Forum of Australia (CHF) advised that there was strong
support for the objectives of the Bill among its members and that it had long
held concern with regard to the promotion of therapeutic goods to health
professionals by industry. CHF noted that:
...the ethical promotion of therapeutic goods is essential if
consumers are to be confident that their health professionals' decisions are
based only on the consumers' best interests, rather than on inappropriate
incentives or marketing strategies.[50]
1.64
The Government has acknowledged public concern about the promotion of
therapeutic goods and DoHA commented that the 'Government's objective is to
ensure health needs decisions are based on sound clinical evidence rather than
incentives, promotions or other influences that might compromise the quality
use of therapeutic products as well as increasing costs to the health system'.[51]
1.65
Although there was generally consensus among submitters to the inquiry
on the need to safeguard the prescribing practices of medical practitioners by
ensuring that pharmaceutical companies do not impose undue influence through
their interactions with practitioners, there was some divergence of views on
the most effective way to achieve this. A number of submissions raised concerns
with the regulatory approach proposed by the Bill. Most submissions supported continuation
of the self-regulation model which was considered to be effective, and
particularly pointed to current reforms processes underway to further
strengthen the current model. There was also some support for moves toward a co-regulation
approach to deal with some weaknesses identified with the current model.
Concerns about the Bill
1.66
Evidence received addressed concerns with the timing of the legislation,
its limited application, possible restrictions of appropriate interaction
between companies and medical practitioners and lessening of existing
requirements under the MA Code.
Timing of the legislation
1.67
A number of submitters argued that the timing of the Bill is not
appropriate as there are reform processes currently underway. These processes
are aimed at addressing some of the concerns which have been raised with the
current self-regulation model and include reforms arising from reviews sponsored
by the Government, and the expected reforms to the MA Code arising from the
work of its Transparency Working Group.
1.68
Following recent consultation processes, the Government has confirmed
its approach to continue with the self-regulation model at this stage. Considerable
progress has been made following the release of the report of the Working Group
on Promotion of Therapeutic Products. As noted earlier, the Government
supported a number of recommendations from this report and has allocated
funding to assist industry in the implementation of these reforms to support
stronger self-regulation, better communication and shared systems for
complaints reporting. Further support has been provided by the establishment of
the Codes of Conduct Advisory Group, as noted earlier, to oversee the
implementation of a number of the reforms.
1.69
Following its most recent code authorisation process through the ACCC,
Medicines Australia has been responsive to suggestions that its Code needs to
provide for more transparency. It formed the Transparency Working Group to
undertake a consultative process to further implement changes to provide for
greater transparency. The committee was advised that this Group's work is well
advanced and is expected to report by June 2013. Group member, Dr Ken
Harvey provided a copy of the principles drafted which, if adopted in the final
report, will apply to reporting transfers of value between all therapeutic
industry groups and all health professionals, which include:
- reporting the monetary transactions and transfers of value by
individual, identified healthcare professional and company in a form that is
readily accessible and meaningful to the public;
-
providing access to the information in a single, public
repository, that is readily searchable;
- enabling the information to be audited and validated by
healthcare professionals and companies; and
- support through an educational process to assist all parties to
interpret the information in context.[52]
1.70
Medicines Australia advised that the final transparency model is
expected to be incorporated into Edition 18 of the MA Code which will be
submitted to the ACCC in July 2014 for authorisation. Medicines Australia also
noted that implementing a transparency model was complex, but progress was well
advanced and the agreed model should be implemented within the next year and a
half.[53]
1.71
The AMA highlighted the importance of the Transparency Working Group processes
in the design and implementation of a public register. It asserted that the Transparency
Working Group's recommendations, which will feed into the ACCC authorisation process,
should continue unimpeded to:
- Ensure that any public register is
designed to provide patients with access to useful information that is relevant
to their healthcare decisions;
- Evaluate how patients access and
use the information;
-
Measure the cost of public
reporting against the benefits to patients; and
- Revise the reporting arrangements
if required.[54]
1.72
While acknowledging the importance ensuring public confidence in the
prescribing practices of medical practitioners, the DoHA argued that the
Government did not consider that there is substantial evidence to demonstrate
that interactions between parties are negatively impacting on prescribing
practices and patient care in Australia at present. Mr Peter Woodley, DoHA,
commented:
I guess we are aware of anecdotal evidence. I am not sure that
it amounts to a substantial body of coherent evidence. Nevertheless, the
government has chosen to respond. It recognises that this is an issue that
needs to be addressed and at this point has chosen to go down a self-regulatory
route with the prospect, if you like, that if by 2015–16 it does not work it
will consider other options. So, on that basis, I guess there are some concerns
that the consequences may, ultimately, be to the detriment of the consumer.[55]
1.73
Dr Steven Hambleton, Federal President, AMA, confirmed that the AMA
was not aware of particular instances of pharmaceutical companies having undue
influence over medical practitioners at present. However, he went on to comment
that because of reports of overseas instances, the AMA supported increased transparency
around that relationship to ensure confidence is maintained.[56]
Limited application of the Bill
1.74
Submitters commented that the application is limited to interactions
between pharmaceutical companies and registered medical practitioners. DoHA
noted that the amendments would apply to 'regulated corporations' that import,
manufacture or supply 'regulated pharmaceutical products'. Under Part 3-2 of
the Therapeutic Goods Act these are listed or registered medicines included on
the Australian Register of Therapeutic Goods. This means that the relationships
between other therapeutic goods companies and health professionals are excluded
from coverage:
It does not include medical devices or biologicals on the
Register, thus excluding promotional activity undertaken by companies that
import, manufacture or supply these therapeutic goods.[57]
1.75
A number of submitters were of the view that other companies in the
therapeutics sector should also be subject to similar disclosure.[58]
It was suggested that other industries, such as medical device companies,
should be subject to similar restrictions and disclosure requirements to those
imposed on pharmaceutical companies in regard to their interactions with healthcare
professionals. Similarly, the Bill fails to recognise the importance of a
regulatory model which applies to other healthcare professionals who may be
subject to possible inducement through relationships with therapeutic
companies. These included, for example, pharmacists, laboratory scientists,
theatre nurses, and radiographers.[59]
1.76
Pfizer Australia noted that, if passed, the narrow focus of the Bill
'has the danger of leading to a piecemeal, inconsistent combination of
self-regulation and government regulation', where some therapeutic goods
sectors and healthcare professions would not be covered under the proposed
regulations.[60]
1.77
The AMA also commented on the limited application of the Bill and stated
that if it was a 'genuine attempt to safeguard patients and maintain the
integrity of Australia's health system and the sustainability of health
expenditure', then the Bill should apply to all health practitioners and all
industry organisations involved in the sale or promotion of health related
products.[61]
Dr Hambleton explained the importance of a broad application further:
There are lots of other relationships that warrant
transparency. Thinking about pharmacy, for example, the Department of Health
and Ageing, in 2006, advised the AMA that only three per cent of PBS
prescriptions had the 'do not substitute' box ticked by the doctor on the
prescription, yet there are a lot of products going into particular brands. So
it is true; the pharmacist does make the most decisions about which brand of
medicine is to be dispensed...It may well be that brand decisions are not made by
the practitioner, and we do need to make sure that we are spending
appropriately. If there is a reason a particular brand needs to be prescribed,
the medical practitioners are not indicating that except in very small
circumstances.
So, yes, transparency would be important on a broader basis.[62]
1.78
The University of Sydney suggested that definitions of the parties to
which the Bill applies may be problematic and unintentionally exclude or
include certain groups. It was explained that the definition of 'registered medical
practitioner' does not necessarily cover all prescribing professionals:
The bill as drafted is not aligned with the current
relationship between medical registration and the authority to prescribed. Not
all "registered medical practitioners" have that authority; and not
all prescribers are "register medical practitioners" – for example,
dentists also prescribe.[63]
1.79
The University of Sydney also raised concern with the definition of
'regulated corporation' in the Bill suggesting that it may capture universities
that import regulated pharmaceuticals for medical research or to conduct
clinical trials on behalf of international pharmaceutical companies, exposing
them to the penalties and regulatory requirements intended for that industry. If
the Bill is not intended to apply to universities in this way, it was
recommended in the submission that consideration be given to specifically
exclude these parties.[64]
Publication of transaction details
1.80
Some submitters who supported improved transparency suggested that the requirement
under proposed section 42DT for publication of reports on company websites was
unhelpful to consumers. While having this additional information available to
the public would be an improvement to transparency, a far more helpful
mechanism for consumers would be for all information to be available in a
single public repository.[65]
1.81
The proposal for a single repository was also supported by pharmaceutical
companies. For example, Pfizer noted that through the current Medicines
Australia review process of the MA Code, consumers had expressed a preference
for access to information about interactions between healthcare professionals
and companies on one centrally located website in an accessible and searchable
format.[66]
1.82
Ms Deborah Monk, Medicines Australia, commented that a single repository
was being considered:
Certainly one of the principles that the transparency working
group has developed is the concept that the repository of the data needs to be
centralised...that could be on the Medicines Australia website, the TGA website
or APRA's website. The concept is that it needs to be centralised, so that it
is the one place that you go to find that information.[67]
1.83
Pfizer also noted that the Bill failed to provide a mechanism for
doctors to check the validity of the details of reports which are required to
be provided on company websites under section 42DT of the Bill.[68]
1.84
DoHA also raised concern with the lack of detail in the Bill with regard
to the monitoring and enforcement of section 42DT:
The assumption may be that the TGA would have a supervisory
role in enforcement. The TGA's current enforcement powers are not designed or
adapted to detect, enforce and prosecute contraventions of the type proposed.
As well as requiring additional amendments to the Act, development and
implementation of such a monitoring and enforcement role would require
significant resources and would result in additional costs to industry through
TGA's cost recovery arrangements.
While the TGA could ascertain whether the required report had
been published on the company's website within the statutory timeframe, it
would not be within the current powers of the Secretary of the Department of
Health and Ageing under the Act (and therefore the TGA) to require the company
to provide information that might demonstrate the accuracy of the report or
whether it had been prepared "in accordance with" proposed section
42DT (as required by proposed subsection 42DU).[69]
Appropriate interaction between
companies and medical practitioners
1.85
Submitters argued that the Bill would preclude appropriate interaction
between companies and medical practitioners with Ms Maguire, GlaxoSmithKline
stating that:
The measures outlined in the bill will have a detrimental
impact on the pharmaceutical company's ability to support valuable medical
education for healthcare professionals. Medical education is critical to ensure
quality use of medicines in the best interests of patients. Patients want to
their doctors to know how medicines work and how to use them.[70]
1.86
As a consequence, it was argued that medical education provided by
pharmaceutical companies should be continued.[71]
The Australian Medical Association endorsed this position:
It is equally important to recognise that interactions
between medical practitioners and pharmaceutical and medical companies are a
necessary and legitimate part of ensuring that patients have access to new and
improved medicines, treatments and medical devices that save lives and improve
the quality of life for Australians with illness.
Australians enjoy world class health care because medical
practitioners are actively engaged in the development of, and fully informed
about, new or improved medicines, treatments and devices. Australian medical
practitioners' engagement with international colleagues and experiences improve
patient outcomes in Australia.[72]
1.87
It was further noted by some submitters that the current MA Code already
provides a number of restrictions on the hospitality provided at these events
to ensure they are conducted in an ethical and professional manner. Mr McDonald
commented, for example, 'when a new medicine is being launched or there is an
update on the medicine there is a proper educational process that follows the
code and meets the requirements of the code'.[73]
1.88
A number of pharmaceutical companies also noted their belief that
healthcare professionals who they work with should be fairly compensated for
the service and expertise they provide.[74]
Ms Maguire commented further:
We believe it is appropriate to fairly compensate healthcare
professionals for the legitimate and important insights and expertise into the
medical care that they provide. While some might argue that healthcare
professionals should fund their own education, it is not realistic in practice.
Doctors come from all walks of life and it is appropriate that we support them
to continue to gain new knowledge in an incredibly complex and evolving field.[75]
1.89
Two other areas where it was considered that the Bill may impact on
appropriate interactions were in relation to clinical trials and university
partnerships. Mr Geoff McDonald, GlaxoSmithKine, noted that clinical trials
involve meetings with participants that usually do not take place in Australia.
Mr McDonald added:
The ability for them to interact and talk about where the
research is going, what modifications they have to make et cetera is important.
Out of that, as a medicine progresses, because we are not able to do any
promotion until we have approval, those individuals who have been involved and
working closely with those drugs over x number of years are the people we would
use for education locally.[76]
1.90
While the University of Sydney supported the broad intent of the Bill,
it raised concern that, in its current form, it will impact on the legitimate
activities of Australian universities in partnership with pharmaceutical
companies. It was noted that the quality of Australia's health and medical
research relies on the engagement and collaboration between universities,
medical research institutes, clinicians, and industry partners. However, the
Bill may effect this engagement:
We are concerned that the Bill will unintentionally diminish
industry's capacity and willingness to collaborate with Australian
universities, and to sponsor legitimate university-led education and research
initiatives. Ultimately this would affect the capacity of universities to
disseminate the findings of their researchers and to provide training to health
professionals.[77]
Comparison with the existing MA Code
1.91
A number of submitters observed that some aspects of the Bill imposed
restrictions that were less stringent than those currently in place under the
MA Code.[78]
For example, Pfizer Australia noted that section 43DS(2) which relates to the
forms of payment to a doctor had a higher threshold than the current MA Code.
The Bill stipulates that a gift of less than $25 is acceptable and is not
reported, however the existing MA prohibits any form of gift, whatever the
value.[79]
1.92
The submission from Janssen-Cilag Pty Ltd presented a table comparing
selected amendments proposed in the Bill with the existing standards set out in
the MA Code which they believe already address a number of the concerns raised
in the Bill. For example, the submission states that the existing provisions in
the MA Code relate to the interactions with healthcare professionals, including
the content of promotional materials; whereas the Bill seeks to regulate just
one aspect of pharmaceutical companies' interactions with physicians, that is
financial interactions.[80]
Efficiency and cost effectiveness
of self-regulation
1.93
A number of submissions raised concern about the additional costs that
would be imposed on companies to comply with, and the government to administer,
the proposed regulations under the Bill. It was suggested to the committee that
self-regulation is both more efficient and cost effective.[81]
1.94
Medicines Australia noted that self-regulation is self-funded. It
pointed out that industry currently funds the education, training, monitoring
and enforcement mechanisms that underpin the MA Code and no tax payer funds are
required for support.[82]
1.95
The Medical Technology Association of Australia (MTAA) and IVD Australia
submission also noted that an industry code is more efficient and effective
than one dealt with under a regulatory regime:
All compliance processes bring with them an added cost which,
in the case of companies working in the health sector, will result in
additional burdens to sponsors of therapeutic products. These costs will be
passed on to health product purchasers, thereby adding cost to the health
system with no perceivable additional benefit.[83]
1.96
This view was endorsed by Dr Hambleton who commented that the AMA did
not support the introduction of any mechanism which increased costs:
...any extra regulation, if it increases red tape, is something
the AMA has stood against in many fora. We have a first-rate health system. We
have some of the best outcomes in the world. We do not want to tie up the
doctors at the front line of care in red tape...There are other health
professions which warrant transparency measures because at the end of the day
if there are increased costs because of red tape or increased costs because of
education expenses which are not covered by other avenues, as we have discussed
earlier, there is going to be an input cost of the medical care and that input
cost will ultimately be transferred to the patients.[84]
1.97
The University of Sydney also noted in its concern about the increased
regulatory burden on affected parties if the Bill proceeds, including
universities. It also raised whether a regulatory impact assessment had been
conducted to assist in the consideration of the proposed reforms under the
Bill.[85]
1.98
However, not all evidence supported self-regulation. It was noted that
those companies which did not belong to an industry association were not
subject to the relevant industry codes of conduct. Dr Harvey provided the
committee with an example in the generic industry in relation to a new generic
companies, particularly from India. Dr Harvey stated:
...the particular company concerned has not joined an industry
association. They did not join the Generic Medicines Industry Association.
They were offering a substantial inducement of free stocks to
pharmacists to preferentially dispense their product, which is against some of
the principles—and, indeed, the letters of the law—in the Medicines Australia
code and the GMiA code: thou shalt not induce a practitioner to influence their
prescribing or dispensing of a particular drug. So a complaint was put in. The
company concerned were asked if they would be happy with the GMiA adjudicating
and, not surprisingly, they declined to have it heard. That is the problem with
self-regulation of industry codes: those outside it are not touched at all.[86]
Support for co-regulation model to
strengthen existing industry codes
1.99
The committee received evidence from a number of individuals and
organisations which proposed a co-regulatory approach in some areas to
strengthen the existing self-regulation model.[87]
In particular, a number of submitters endorsed Recommendation 5 of the Working
Group on the Promotion of Therapeutic Products:
The Working Group recommends that TGA include on its
application forms (whether electronic or paper) a requirement for an applicant
to nominate the relevant code of practice to which it will subscribe, as a
condition of registration/listing on the ARTG.
1.100
In its response to the Working Group's report, the Government did not
support this recommendation, noting the preference to maintain an emphasis on
self-regulation. However, it further noted that:
If after codes have been updated, further encouragement is
required for non-members to nominate a code, the Government will consider
further legislative measures including the TGA seeking this information.[88]
1.101
Medicines Australia stated that it supported a hybrid model: that the
Therapeutic Goods Act is amended to provide that it should be a condition of
registration that a particular company follow a self-regulatory code. In
addition, Medicines Australia further stated that all of these self-regulatory
codes should come up to the standard of the Medicines Australia code of
conduct.[89]
1.102
Dr Ken Harvey suggests there is a precedent for this approach with
regard to the sponsors of prescription generic medicines must agree to comply
with certain parts of the MA Code when they sign the TGA letter of marketing
approval.[90]
Conclusion
1.103
The committee acknowledges that it is important that health consumers
are confident that the medical practitioner, from whom they are seeking
assistance and advice, maintains an ethical and transparent relationship with
pharmaceutical companies. The committee notes that since 2010 this relationship
has been the subject of examination and consideration. Recommendations have
been made to the Government to improve transparency of this relationship. The
Government has responded by funding the implementation of some of the
recommendations including the strengthening of self-regulation through industry
codes of conduct.
1.104
The committee considers that it is appropriate that the relationship
between medical practitioners and pharmaceutical companies be regulated through
industry codes. Further, the committee notes that some aspects of the Bill are
weaker than the existing Medicines Australia code of conduct. The committee therefore
does not support the Bill.
Recommendation 1
The committee recommends that the Therapeutic Goods
Amendment (Pharmaceutical Transparency) Bill 2013 not be passed.
Senator Helen Polley
Chair
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