Transparency is key for drug industry relationships

The Australian Competition and Consumer Commission has issued a draft determination proposing to grant authorisation for five years to Medicines Australia's 16th edition of its Code of Conduct. The Code sets standards for the marketing and promotion of prescription pharmaceutical products in Australia.

The Code provides, among other things, a standard to address potential conflicts of interest from unrestricted relationships between pharmaceutical companies and healthcare professionals, which may harm consumers, for example, through inappropriate prescribing by healthcare professionals.

The Code prohibits pharmaceutical companies from providing entertainment and extravagant hospitality to healthcare professionals, with the requirement that all benefits provided by companies successfully withstand public and professional scrutiny.

"One important way in which the potential for conflicts of interest is addressed is through the public disclosure of any hospitality, including costs, providing transparency around the relationship between member companies and healthcare professionals. This goes to the Code's effectiveness," ACCC chairman, Graeme Samuel, said today.

"The requirement for public disclosure was imposed by the ACCC as a condition of authorisation of the previous version of Medicines Australia's Code and was confirmed on appeal by the Australian Competition Tribunal."

Edition 16 of the Code fully incorporates the public reporting requirements as stipulated by the ACCC and the Tribunal.

Through the consultation process there have been calls for Medicines Australia's Code, or similar standards that address the potential for conflicts of interest, to apply to generic drug manufacturers and across the industry more broadly.

However the ACCC is not able, through this authorisation, to require non-members of Medicines Australia to comply with this or a similar Code.

Authorisation provides protection from court action for conduct that might otherwise raise concerns under the competition provisions of the Trade Practices Act 1974. Broadly, the ACCC may grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment.

The ACCC's draft determination will be available from the ACCC website (www.accc.gov.au/AuthorisationsRegister) and by following the links to this matter.

The ACCC invites submissions from interested parties in relation to the draft determination before making its final decision. Parties wishing to make submissions should do so by 2 November 2009. Please refer to the website for further information about making a submission to the ACCC.