Transparency is key for drug industry relationships

10 December, 2009

The Australian Competition and Consumer Commission has decided 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," said Graeme Samuel, the ACCC chairman.

"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. The ACCC acknowledges the improvements Medicines Australia has made around increasing transparency, and encourages Medicines Australia to continue to work with industry to increase transparency in other areas, including the provision of sponsorship provided to healthcare professionals to attend educational events by pharmaceutical companies.

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 Medicines Australia's Code 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 determination will be available from the ACCC website ( and by following the links to this matter.

Source: The Australian Competition and Consumer Commission