The Therapeutic Goods Administration (TGA) has successfully brought a claim against Peptide Clinics Australia Pty Ltd (Peptide Clinics) for non-compliance with the new advertising regime which includes higher penalties for therapeutic goods advertising offences.
On 23 July 2019, the Court imposed a penalty of AU$10 million on Peptide Clinics Peptide Clinics for contraventions of the Therapeutic Goods Act 1989 (the TG Act) and the Therapeutic Goods Advertising Codes.
The contraventions included:
- Advertising Schedule 4 prescription only substances (of the Poisons Standard) on its website, Facebook and Instagram pages which is prohibited in Australia.
- Offering for sale Schedule 4 substances over the phone by either a purported or actual medical practitioner.
- Making restricted representations without prior approval or permission by the TGA which referred to serious forms of cardio vascular disease, joint disease, bone, collagen and rheumatic disease.
- Making prohibited representations without prior permission by the TGA by referring to anxiety and depression in its advertising.
- Encouraging inappropriate use of substances or goods for anti-aging, body building, tanning/skin pigmentation, weight loss and hair loss purposes.
- Making unsupported claims in relation to peptides where expert evidence revealed there was no medical justification for using the peptides advertised by Peptide Clinics to treat the various 'conditions' referred to on its website.
Factors taken into consideration by the Court
The unlawful conduct of Peptide Clinics was exacerbated by the following factors:
- Peptide Clinics was given every opportunity by the TGA to address its concerns and correct its conduct. Peptide Clinics failed to do so and refused to make necessary changes to its website to conform to their obligations under the TG Act.
- Peptide Clinics was obstructionist and did not co-operate with the Secretary in the course of the proceedings.
- It was also revealed that Peptide Clinics was using 'certain medical practitioners to write prescriptions for its products that had previously had limitations placed on their medical licences which prevented them from providing substances like peptides'.
- The products sold by Peptides Clinics were expensive and the Court found that 'Peptide Clinics has deliberately and recklessly pursued its own financial self-interest at the expense of its legal obligations and the interests of public health'.
Determination of penalty
The Court reiterated that, typically, the object of the imposition of a civil penalty is deterrence so that the penalty imposed cannot be regarded as a mere cost of doing business. However, the fact that Peptide Clinics was in liquidation and has ceased trading was relevant given the object of specific deterrence was no longer enlivened.
The Secretary submitted whilst "...it is no longer necessary to deter Peptide Clinics from re-contravening, a penalty of this size would secure the objective of general deterrence by making it clear message that companies will not be able to profit from their wrongdoing".
Having regard to the numerous breaches of Part 5-1 of the TG Act (Advertising and Generic Information), the deliberate contravention by Peptide Clinics, the 12 month period of non-compliance and wide reach of the advertisements, the Court applied a totality principle in the 'mid-range' and imposed a penalty of AU$10 million.
Importantly, as the conduct occurred on digital platforms, the Court applied the continuing offence provisions in the TG Act and penalised Peptide Clinics for each day the non-compliant advertising appeared on its website.
This case is an important reminder to take notices received from the TGA seriously. Whilst the TGA will provide respondents with the opportunity to undertake corrective action, continued non-compliance of the TG Act and TGAC may result significant penalties.
It is essential for all businesses in the therapeutic goods arena to regularly review their websites for compliance with the TG Act and TGAC as the consequences of not doing so can be financially significant and potentially irreparable.
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