ACCC imposes strict transparency provisions on updated Medicines Australia Code of Conduct

Roll-out of a new edition of Medicines Australia’s Code of Conduct has struck a roadblock, with the ACCC requesting that Medicines Australia amend the Code to include additional transparency requirements.  The ACCC released a draft determination on 17 October indicating that it will not grant approval of the new edition of the Code unless those amendments are made.  The proposed amendments are aimed at increasing transparency regarding gifts and benefits from member pharmaceutical companies to doctors – so-called ‘transfers of value’.

Transfers of value are commonly made to doctors as reward for:

  • speaking at, or attending, educational events;
  • consultancy services provided in relation to, for example, preparation of promotional materials or product position papers, educational events and training; and
  • participation in market research.

If implemented, the proposed amendments will require member pharmaceutical companies to publically report all transfers of value by naming the individual doctor and the details of the reward given.  If prior consent to such disclosure is not given, or such disclosure is not reasonably expected by the doctor, the transfer of value cannot be made.

In its submission to the ACCC, Medicines Australia had proposed reporting individual transfers of value only where the member company has received informed consent from the recipient doctor.  Otherwise, the proposal was for members to report such transfers of value in aggregate.  The ACCC rejected this proposal on the basis that it would undermine transparency, as in the event consent is not granted, an interested party (such as a consumer) will only be able to see the total amount transferred, without the ability to know the identity of the individual recipient doctor.

Why is ACCC authorisation needed?
ACCC authorisation is important to the success of the Code.  Authorisation allows Medicines Australia to engage in conduct that might otherwise contravene provisions of the Competition and Consumer Act 2010 (Cth): for example, imposing sanctions upon member companies who have breached the Code.  The ACCC grants authorisation where it considers the benefit to the public of granting authorisation outweighs public detriment.  The ACCC considers the benefits to the public of having the Code include: protecting the public from inappropriate advertising, setting consistent standards for medical and promotional material, and providing the potential for greater transparency around the relationships between pharmaceutical companies and healthcare professionals.1

ACCC authorisation for the current edition of the Code expires on 11 January 2015.  Statutory protection conferred by authorisation will lapse unless the ACCC has granted authorisation for the new edition by this date.  The ACCC has indicated that if amended as it has requested, authorisation will be granted for five years.

Medicines Australia response
At this point, it is not clear whether Medicines Australia will agree to the ACCC’s proposed amendments; it has stated that it will consult member companies before providing a response.  Medicines Australia is required to respond to the ACCC by 7 November 2014.

Medicines Australia’s Code of Conduct establishes the standards of conduct that must be met by its member companies when engaged in the promotion of prescription pharmaceuticals.  For a copy of the current edition of the Code, click here.

We will watch future developments with interest.



1. Australian Competition & Consumer Commission, Draft Determination – Applications for revocation and substitution of authorisation lodged by Medicines Australia Limited in respect of the Medicines Australia Code of Conduct edition 18, 17 October 2014