ACCC authorises Medicines Australia code subject to strengthening individual reporting

24 April 2015

The Australian Competition and Consumer Commission is requiring Medicines Australia to strengthen its public reporting as a part of authorising edition 18 of its Code of Conduct (the Code) for five years. The Code sets the standards for the marketing and promotion of prescription pharmaceutical products in Australia by member companies.

In edition 18, Medicines Australia proposed a new reporting regime which requires reporting of ‘transfers of value’ (such as speaking fees, advisory board fees, or sponsorships to attend a conference) made to individual healthcare professionals. Medicines Australia has also imposed a $120 per meal cap on food and beverages (plus GST and gratuities). Expenditure on food and beverage will not be included in the reporting of transfers of value.

The reporting of payments by Medicines Australia member pharmaceutical companies to healthcare professionals will provide patients and healthcare professionals with some transparency in an area of potential conflicts of interest. Providing broad access to, and scrutiny of, this information could also assist to maintain community confidence in the pharmaceutical industry.

“The ACCC commends Medicines Australia for introducing transparency to payments provided to individual doctors by drug companies,” ACCC Commissioner Dr Jill Walker said.

“The ACCC and interested parties have been anticipating this change for a number of years now.”

The ACCC accepts that this new transparency regime is a significant and important change to the Code and focuses upon some of the most significant transfers of value.

“Having taken this crucial step, it is important to ensure that the significant benefits of the regime are realised. In this context, the ACCC is requiring the regime to be strengthened to ensure that all relevant transfers of value are reported and that the data is accessible,” Dr Walker said.

The ACCC has imposed a condition that enables reporting of all relevant transfers of value. This addresses the ACCC’s concern in its draft determination that if a doctor did not consent to the reporting then the individual payment would only be reported in aggregate. It also avoids healthcare professionals withdrawing their consent to reporting their details after receiving a transfer of value. Medicines Australia must amend the Code before 1 October 2016 to require the reporting of all transfers of value.    

The ACCC is also requiring the transparency reports compiled by Medicines Australia member companies to be published in a common accessible format and to be available for at least three years. Medicines Australia must also use reasonable endeavours to establish a central reporting system and provide six monthly reports on its progress in doing so. This will ensure that the data collected is accessible to patients and third parties (such as healthcare professionals, consumer and healthcare professional bodies, researchers, academics, and the media) and that the benefits of the new transparency regime are realised.

The ACCC has decided not to require Medicines Australia and its members to continue to report food and beverage expenditure. In reaching this view, the ACCC notes that food and beverage costs are secondary to the more direct transfers of value, a $120 per meal cap applies, and that ongoing reporting would impose a significant administrative burden on member companies.

However if the ACCC becomes aware that the removal of this reporting has led to significant (and unreasonable) increases in food and beverage expenditure, it may reconsider the need for the reporting of this expenditure.

On 17 October 2014, the ACCC released a draft determination proposing to grant conditional authorisation to Medicines Australia for five years, subject to requiring that all relevant transfers of value are reported. On 28 November 2014 a pre-decision conference was held at the request of the RACGP. On 4 December 2014, the ACCC granted interim authorisation to Medicines Australia to allow the continued operation of edition 17 of the code, while the review of edition 18 was underway. In February 2015, the ACCC consulted on five revised proposed conditions of authorisation.

Authorisation does not represent ACCC endorsement of a code. Rather, it provides statutory protection from court action for conduct that meets the net public benefit test and that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act (2010). Broadly, the ACCC may grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment.

Further information is available on the Public Register.

Release number: 
MR 66/15
Media enquiries: 
Media team - 1300 138 917