Medicines Australia's Code of Conduct

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The Medicines Australia’s Code of Conduct is a voluntary self-regulatory code of conduct develop by Medicines Australia (MA), the peak drug industry body. MA states that the code sets "the standards for the ethical marketing and promotion of prescription pharmaceutical products in Australia. It complements the legislation requirements of the Therapeutic Goods Regulations and the Therapeutic Goods Act."[1]

Key Provisions of the Code

Against the background of controversy over the provision of lavish hospitality for doctors at exotic conference venues, key provisions of the code of conduct relate to what the industry considers to be acceptable standards of food, drinks, accomodation and travel expenses, the sponsorship of doctors to attend events and the location of meetings.

Section 6.2 of the code governing "hospitality" states:

"6.2.1 Any hospitality provided by companies either directly or by sponsorship or assistance to the organisers of educational meetings, must be secondary to the educational purpose.
6.2.2 For educational meetings directly organised by, and the responsibility of companies, all hospitality must be consistent with the professional standing of the delegates. Meals provided at an educational meeting should not be extravagant or exceed standards which would meet professional and community scrutiny. No entertainment* should be provided."[2]

Section 6.5 of the code on "Sponsorship of Healthcare Professionals" states:

"The selection criteria for sponsorship to allow healthcare professionals to attend educational meetings must be based solely on their interest in the area of medicine being discussed and their ability to communicate any relevant information to Australian healthcare professionals to enhance the quality use of medicines. (See also Section 7 Sponsorship)";[3] and

Section 6.6 on "venue selection" states:

"Educational meetings organised by or the responsibility of companies must be held in venues suitable for the attainment of the primary objective of enhancing medical knowledge and the quality use of medicines in Australia. The choice of venue must be able to successfully withstand public and professional scrutiny and conform to professional and community standards of ethics and good taste."[3]

The 2006 Code Revisions

In July 2006 the Australian Competition and Consumer Commission (ACCC), the government competition regulator, approved Medicines Australia's application for the re-authorisation of its voluntary code of conduct on marketing. However, in its final determination the ACCC responded to submissions on its draft report from some doctors and consumer groups and accepted there was a need for greater disclosure of drug company funding of 'educational' events for doctors.

The ACCC decided to authorise the code but on condition that each member company complete a monthly report including details of the venue, purpose of the event, the hospitality provided, the number of attendees and the total cost of the function. Each company would then be required to submit the data to Medicines Australia at the end of each six month period. Medicines Australia is obliged to make the completed table by each member company publicly available within three months of the end of the preceding six month period.

The ACCC also provides that the Monitoring Committee established under the code may request further information from companies "such as a copy of the invitation" sent to invitees where it "suspects a potential breach of the code."

"If the Monitoring Committee is not satisified that the conduct of the member company with regard to the meeting would withstand public or professional scrutiny (or otherwise considers that it may breach the Code of Conduct), it will refer a report in relation to the meeting, and the member company's response, to the Code of Conduct Commitee as a complaint."

ACCC Chairman Graeme Samuel said consumers should be able to decide whether "drug companies are crossing the boundaries of proper ethical behaviour in dealing with the medical profession."[4]

Reaction To The New Disclosure Provisions

The initial reaction from Medicines Australia was muted. In a media statement it welcomed the new code but obliquely referred the the condition requiring disclosure of courting doctors. "The ACCC's authorisation includes a condition that requires careful consideration by Medicines Australia. Medicines Australia will consider the condition before making any response," it stated in a media release.[5]

Subsequently, an unnamed spokesperson for MA told The Australian that the first the group heard about the amendment was the same day it was revealed that Roche had spent $A65,000 on a conference dinner for 200 doctors. "Obviously MA would be deeply concerned if the authorisation from the ACCC varied as a result of an unproven allegation without giving the independent committee the opportunity to assess that complaint," the MA spokesperson said. (See Roche's $ 65,000 Dinner For Australian Doctors for further information).

The National President of the Australian Medical Association, Dr Mukesh Haikerwal, was critical of the ACCC's new amendments. "If doctors do not learn about new life-saving and health enhancing drugs through the seminars put on by the pharmaceutical companies, then the patients will not be prescribed the best possible drug for the condition - it's as simple as that," he told ABC Asia Pacific.[6]

"Doctors will not be influenced by gifts or any sort of inducements by the pharmaceutical industry, including the provision of meals during educational activities," he said.[6] In another interview he said that "what we see is some legitimate educational work that is sometimes sponsored by pharmaceutical companies and sometimes by other means and we fear that some of those opportunities for learning may well be taken away."[7]

Subsequently a spokeswoman for the ACCC dismissed MA's attempt to portray the amendment as a 'knee jerk' reaction to the revelations of Roche's expensive dinner: "The ACCC reconsidered the code of conduct in light of the comments we received from the draft determination, which was issued well before the article. (We) had concerns about it and decided to toughen the code and Medicines Australia was advised about that before the article (in The Australian)."[8]

Medicines Australia Appeals Against Sunlight Amendment

Determinations of the Australian Competition and Consumer Commission (ACCC)'s can be appealed to the Australian Competition Tribunal within a 21 day period. In mid-August 2006 Medicines Australia announced its decision to appeal against the ACCC's decision to require disclosure of anonymised data on the funding of 'educational' events for doctors. "The condition imposed by the ACCC is being appealed due to the concern that it will create a layer of ineffective red tape for our small, medium and large companies that goes well beyond current monitoring measures, and has no precedent for other industries in Australia or the pharmaceutical industry globally that we are aware of," it stated in a media release.[9]

The following day The Age reported that a leaked internal Medicines Australia memo revlealed that the lobby groups had sought legal advice on whether it could "accept the condition now but seek to have it varied later". According to The Age the memo advised that members "should weigh up the likely negative perception of the industry and Medicines Australia" of a challenge against the provision compared to "the potential ongoing negative publicity that may occur every six months."[10]

Despite its initial objection to the amendment, the Australian Medical Association subsequently softened it position. "In the end, it is about the patient getting the right drug at the right time," Dr Haikerwal said. "We have our own ethical guidelines as to how to deal with the pharmaceutical industry and we think those guidelines need to be adhered to. Whether an initial layer of bureaucracy is of any benefit ... that's what the appeal is about and that's a matter for Medicines Australia to (sort out with the ACCC)," he told The Australian.[11]

A later communications plan by the PR and lobbying firm Parker & Partners, also leaked to The Age, described the rejection of the ACCC's disclosure proposal as creating "a long-term political problem for the industry." The plan identified 38 politicians, bureaucrats, journalists and people in the medical community to target with the industry's "key messages".[12] The Age did not report who was on the list. "While the current Government is in principle opposed to compulsory regulation, we cannot presume the political circumstances will not force their hand. In addition, the Labor Party will almost certainly look to compulsory regulation as a part of their policy platform for the next federal election," the plan stated.

The Release of the First "Educational Events" Report

In late March 2008, Medicines Australia released the first of what it described as "educational events" reports. In the accompanying media release, Medicines Australia revealed that the total number of events in the six month period to the end of December 2007 was 14,633. The total expenditure on the events was $A31 million of which $A16.4 million was spent on travel, accommodation and catering. The events were organised by 42 member companies of Medicines Australia and one non-member company.

Describing the reports as setting "a global precedent for the pharmaceutical industry", the drug industry lobby group stated that "the total number of attendances is 385,221, with an average hospitality cost of $43 per head."[13]

It also announced that "all educational events in the Medicines Australia report have been independently reviewed by the international consulting firm Deloitte" and that as a result of that review 52 of the 14,633 events "would be investigated for possible breaches of the Medicines Australia Code of Conduct."[13]

In the background notes accompanying the company reports, Medicines Australia stated that "Under the Code, the provision of personal gifts to doctors is banned. Entertainment is banned. The provision of lavish hospitality is banned."[14] In this, Medicines Australia were substantially overstating the specific provisions of the code. Section 3.11 of the code only states that "No items or services shall be offered or given to healthcare professionals unless they are sanctioned by one of" six other sections of the code.[15] The code does specify that in relation to "hospitality" provided at educational meetings that "No entertainment* should be provided"[16] and that "Interactions between companies and healthcare professional must not include entertainment."[17] However, there is no provision banning "lavish hospitality". For example, the provision of meals is only qualified by the subjective standard that they "should not be extravagant or exceed standards which would meet professional and community scrutiny."[18]

Not Lavish?

While Medicines Australia were keen to emphasise its figure of $43 per head for hospitality averaged across all events, media reports identified a range of big budget events that were buried in the hundreds of pages of data. Among the specific events identified were:

  • Roche Products spent $511,791 on a three-day weekend hepatitis symposium attended by 337 specialists at Melbourne's Grand Hyatt hotel. Of the cost, $415,000 was spent on hospitality; [19][20]
  • Sanofi Aventis "reported spending $15,181 including $12,470 on hospitality to inform 30 pharmacists about changes to the Pharmaceutical Benefits Scheme during a three-hour event at the National Press Club", the Canberra Times reported. (Sanofi Aventis claimed that 60 pharmacists had attended and that the total cost was lower than the earlier estimated cost.)[21]
  • AstraZeneca spent over $514,000 on a weekend seminar at Crown Casino in Melbourne that was attended by 220 gastroenterologists; [19]
  • Pfizer "spent $340,000 on a cardiovascular forum for 220 specialists in Sydney"; [19]
  • Wyeth "spent $333,000 sending 178 psychiatrists to an $1800-a-head event on Sydney".[19]

Articles and Resources


  1. Medicines Australia, "Code of Conduct: What is the Code of Conduct?", accessed March 2008.
  2. Medicines Australia, Code of Conduct - Edition 15, June 2006, page 95.
  3. 3.0 3.1 Medicines Australia, Code of Conduct - Edition 15, June 2006, page 98.
  4. "Tougher reporting under revised drug companies code", Media Release, July 26, 2006.
  5. "ACCC Authorises Medicines Australia Code of Conduct", Media Release, July 26, 2006.
  6. 6.0 6.1 Australian Medical Association, "ACCC Falls for Media Beat-Up On Pharmaceutical Education", Media Release, July 26, 2006.
  7. Karen Barlow, "ACCC implements new code of conduct for doctors", AM, ABC Radio National, July 27, 2006.
  8. Joseph Kerr, "Tougher code on freebies a 'kneejerk'", The Australian, July 28, 2006.
  9. "Medicines Australia committed to Code of Conduct; Will appeal the condition imposed by ACCC", Media Release, August 16, 2006.
  10. Annabel Stafford, "Drug firms fight move to reveal spending on doctors", The Age, August 17, 2006.
  11. Matthew Franklin, "Medicos' reversal on free lunches", The Australian, August 18, 2006.
  12. Annabel Stafford, "Backlash over doctor entertainment feared", The Age, November 14, 2006.
  13. 13.0 13.1 "Medicines Australia sets world-first in transparency", Media Release, March 28, 2008.
  14. Medicines Australia, "Educational Event Reports", March 2008.
  15. "Code of Conduct - Edition 15", June 2006, page 70.
  16. "Code of Conduct - Edition 15", June 2006, page 96.
  17. "Code of Conduct - Edition 15", June 2006, page 130.
  18. "Code of Conduct - Edition 15", June 2006, page 132.
  19. 19.0 19.1 19.2 19.3 Ben Packham, "$500000 seminar at Crown for drug giant", Herald Sun, March 28, 2008.
  20. David Mark, "Report exposes drug companies' lobbying expenses", ABC Online, March 27, 2008.
  21. Danielle Cronin, "Drug firms splurge on doctors", Canberra Times, March 28, 2008.

Other SourceWatch Resources

External links

Medicines Australia Materials

ACCC Website With Medicines Australia Draft Code, Submissions and Final Code 2005/2006

Australian Competition Tribunal Decision

Australian Medical Association Materials

General Links