KEN HARVEY. The TGA, KPI’s and the budget surplus

Oct 24, 2019

On 3 February 2018 Health Minister Hunt stated, “the TGA will be adequately resourced and staffed to manage complaints from July 1, 2018”. Instead, during 2018-19, 74 TGA staff positions were lost to boost the government’s Aged Care initiatives in a government zero sum game, presumably to assist the desired budget surplus. Consequently, of 121 high priority complaints, only 26 (21%) met their time to closure KPI (60-90 days).

Last week, on behalf of Choice, I presented, “An evaluation of the first 12 months of the TGA’s new advertising system” to the Therapeutic Goods Advertising Code Council. The TGA also provided their first Therapeutic Goods Advertising Compliance Annual Report.

In 2018-19 the TGA’s new complaint portal received 2436 complaints. Of these, 1601 (66%) were completed during the reporting period. Around 95% of these complaints were classified as “low priority” and closed by sending the advertiser an “obligations letter” with no follow-up.This despite that fact that many complainants had detailed new breaches of the Therapeutic Goods Act and Advertising Code by advertisers who had numerous upheld complaints under the old Complaint Resolution Panel system.

The TGA did not regard any of these complaints as having formal Code breaches (“this is not regulatory action at law”). For example, one obligation letter I obtained agreed with the allegation made by the complainant; the advertisement was in breach of s.42DL(12) of the Therapeutic Goods Act 1989. This breach of the Act attracts both civil and criminal penalties, but they were not applied. The letter went on to say, “The TGA will not be pursuing this complaint any further at this time”.

I believe it’s disingenuous for the TGA to say that low priority complaints have not broken the law; why else would specific breaches of the Act and Code be detailed in the obligations letter and action such as, “Requested removal”, “Sent for internal review” and “Educational campaign” be tabulated in their annual report?

The low priority accorded some complaints was hard to understand. For example, complaint AC-E7JS15BB/2018 was submitted on 03/08/2018 and closed a few days later by a “Compliance Notice sent with educational material”. This product won a 2017 Choice “Shonky” award, was the subject of a scathing N.Z. Consumer review and an upheld CRP complaint (26/03/2018) that was sent to the TGA by the CRP, for non-compliance. The product continues to be promoted today.

The TGA reported that 97% of 1480 classified as “low priority’ met their KPI (time to close: 90% in 20 days). Clearly, there is little difficulty in meeting this KPI if complaints classified as “low priority” are closed by merely sending an obligations letter with no follow-up. Time-based KPIs should be based on when compliance was achieved, not when a case was conveniently closed by “tick and flick”.

For most complaints (those classified as “low priority”) the TGA only publishes the reference number and “action taken” with no information provided about the complaint, product, advertiser, or the TGA’s own assessment. This provides much less transparency than old CRP system. The CRP sent every complaint they judged breached the Code to the advertiser, in full, for a considered response. They then published on their website, details of the advertisement, the offending claims, the name of the product and sponsor, and a complete determination of claims alleged to breach the Code, often running into many pages. This was educational for the complainant, the advertiser, consumers and industry.

The main problem with the old system was that the CRP lacked the power to penalise advertisers who breached the Code (and law). This is why the TGA was given enhanced investigative and compliance powers under the new system.

However, these new powers are not being applied. There were many higher priority cases in which serious breaches of the Act were found that could attract both civil and (strict liability) criminal penalties. However, only one court case resulted. This did produce a $10 million fine but, given the company went into liquidation, the Commonwealth gained no recompense from the legal fees incurred pursuing this case.

Research on the old CRP system showed that several large companies consistently broke the law, presumably because the profit that accrued from this behaviour far outweighed the negligible risk of penalties being applied. These companies, and many others, continue to offend.

My presentation documented numerous complaints submitted to the TGA in July and August last year, given a higher priority classification, that have yet to be dealt with. These include complaints about ineffective weight loss products such as “FatBlaster” and “FatMagnet”, ineffective hangover products that implicitly encourage unsafe drinking such as “Recoverthol” and “medical foods” such as “Neurofolin” purporting to manage depression.

If the public is to be protected from misleading and deceptive advertising of therapeutic goods then the TGA must be adequately staffed by people with appropriate expertise. In addition, much greater use of strict liability penalties is required to ensure that the penalties for non-compliance are greater than profit that comes from breaking the law.

I concluded my presentation by saying, “The critique by Royal Commissioner Haynes on regulators of the financial services industry is equally applicable to the TGA. A failure to enforce the law undermines the authority of the regulator whose fundamental responsibility is to do just that. It also encourages others to break the law, leading to a race to the bottom and consumer detriment”.

I have recommended that Choice writes to Minister Hunt about these matters.

Ken Harvey is Associate Professor, School of Public Health and Preventive Medicine, Monash University.

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