The influencer market is booming: in 2022, the influencer industry reached USD16.4 billion, with this figure predicted to climb to over USD21 billion in 2023. Moreover, the vast majority of brands and companies today have a dedicated budget for influencer marketing. The appeal of influencer marketing is clear: the ability to get your message or product out to a large audience with the perceived backing of well-known or famous individuals can do wonders for your brand.
As we have discussed in recent posts, influencer marketing for all consumer goods, including cosmetics, food products and alcohol, is becoming more highly regulated in Australia. However, the level and extent of regulation of influencer marketing relating to therapeutic goods, such as medicines and medical devices, is higher than for all other consumer goods. Therapeutic goods are not treated in the same way as other consumer goods because they are intended to, amongst other things, prevent, diagnose, treat, or alleviate illnesses, diseases and injuries. Target audiences for this kind of marketing can also include vulnerable groups of people, and the consequences of misinformation about or misuse of therapeutic goods can be dire. As a result, the marketing of therapeutic goods in Australia (including where that marketing is conducted via influencers) is heavily regulated and, in many instances, the advertisement of therapeutic goods to the public is prohibited.
In this article, we consider the applicable principles governing the advertising of therapeutic goods in Australia and how this applies to influencer marketing. Given the extremely strict regulatory regime surrounding therapeutic goods advertising in Australia, and the significant penalties associated with non-compliance, companies wishing to use influencer marketing should carefully review any proposed advertising campaigns, and all marketing materials, when operating (or considering operating) in this space.
What are “therapeutic goods”, and how are they advertised?
The framework that regulates the advertising of therapeutic goods in Australia only applies to products that are “therapeutic goods”. The term “therapeutic goods” is defined by the Therapeutic Goods Act 1989 (Cth) (TG Act) as:
- Products that are, are represented to be, or are likely to be taken to be:
- for therapeutic use; or
- for use as an ingredient or component in the manufacture of therapeutic goods; or
- for use as a container (or part of a container) for therapeutic goods; and
- Products for which the sole or principal use is (or ordinarily is):
- a therapeutic use; or
- use as an ingredient or component in the manufacture of therapeutic goods; or
- use as a container (or part of a container) for therapeutic goods.
Pursuant to the definition of “therapeutic use”, therapeutic goods encompass products for use in humans in, or in connection with:
- Preventing, diagnosing, curing or alleviating a disease, ailment, defect or injury;
- Influencing, inhibiting or modifying a physiological process;
- Testing the susceptibility of persons to a disease or ailment;
- Influencing, controlling or preventing conception;
- Testing for pregnancy; and
- Replacement or modification of parts of the anatomy.
Therapeutic goods encompass a very broad range of products, from band-aids and sunscreen to vitamins, prescription medicines, stem cells, and pacemakers. The Therapeutic Goods Administration (TGA) is the regulator responsible for evaluating and monitoring the safety and efficacy of therapeutic goods in Australia.
An advertisement, for the purposes of the TG Act, is any statement, pictorial representation or design that is intended, whether directly or indirectly, to promote the use or supply of the goods, including when incorporated in labels, product packaging, or any material provided with the product packaging. Pursuant to this definition, any social media post that promotes the use, supply or sale of a therapeutic good would be considered an advertisement of therapeutic goods, and must therefore comply with all applicable laws, including the TG Act and associated regulations. The Codes and guidelines discussed in previous posts will of course apply, however so will the following laws which are specific to therapeutic goods.
Laws Governing the Advertisement of Therapeutic Goods in Australia
Relevantly, for those looking to use influencer marketing strategies, advertisements for therapeutic goods in Australia:
- Must not contain representations deemed “prohibited” or “restricted”;
- Must not advertise therapeutic goods containing substances listed as Pharmacist Only Medicines, Prescription Only Medicines or Controlled Drugs;
- Must not be misleading, deceptive, or likely to mislead or deceive (including under the Australian consumer law);
- Must not imply that the therapeutic goods are safe, without harm or side-effects, effective in all cases, a guaranteed cure, infallible, unfailing, magical or miraculous;
- Must not cause or be likely to cause undue alarm, fear or distress, or suggest that harmful consequences will result from the goods not being used;
- Must be accurate, balanced and only contain substantiated information;
- Must be consistent with the safe and proper use of the therapeutic goods; and
- Must contain relevant “required representations” and “mandatory statements”.
Everyone involved in the advertising of therapeutic goods must be aware of these requirements before advertising such products. Further, it should be noted that companies and influencers are responsible for anything posted on social media accounts that they manage, including comments by third parties, which must be actively monitored.
For marketing of prescription medicines in Australia, advertisements must also comply with the Medicines Australia Code of Conduct (which, as we noted above, are not permitted to be advertised to the public in Australia).
Influencer Marketing and Therapeutic Goods
As discussed, a social media post by an influencer that promotes the use, supply or sale of a therapeutic good will be considered to be an advertisement for therapeutic goods. In addition to the general requirements listed above, with which social media influencers and businesses must ensure compliance at all times, there are a number of additional requirements applicable specifically to influencer marketing campaigns.
The Therapeutic Goods (Therapeutic Goods Advertising Code) Instrument 2021 (TG Code) draws a distinction between testimonials and endorsements.
- An endorsement is a form of support, approval or sanction, for example, that celebrity X recommends product Y.
- A testimonial is a statement regarding a therapeutic good that is made by a person about their personal experience when using the particular good, for example, that celebrity X uses product Y to help relieve headaches, and it really helps them.
A testimonial or endorsement must not be inconsistent with the label for the therapeutic good or its instructions for use (e.g. it must not be inconsistent with the approved product information and indications for use for the therapeutic goods).
Advertisements for therapeutic goods must not contain a testimonial from anyone who has received payment of any kind (e.g. cash, discounts, free products, travel, or the promise of a future benefit) in exchange for the testimonial. Consequently, if an influencer has been paid (e.g. by the company / manufacturer) to promote the therapeutic good, they (and anyone else) cannot advertise it using that influencer’s testimonial. This is because the influencer is considered to be engaged in the marketing of the therapeutic good, and the use in advertising of testimonials from an individual engaged in the marketing of the product is expressly prohibited.
Social media influencers, even if they receive payment in any of the forms described above, can endorse therapeutic goods, provided they are not listed as an individual or entity that is prohibited from doing so (such as employees of a government authority, hospital or healthcare facility, or health practitioner) and the endorsement does not also contain a testimonial. There is a risk that an endorsement may be misleading if the influencer does not disclose that they were paid, such that it is best practice to include an indication that the post, image or video involves a paid partnership. Endorsements of this kind are common: for example, an image or video of an influencer holding or making use of a therapeutic good.
The popularity, status and reach of influencers, especially well-known celebrities, provides influencers, and companies wishing to make use of them, with a perfect advertising platform and the ability to reach millions of consumers with ease. However, as the name suggests, influencers have the potential to influence their audience to behave in a certain way, and can easily shift public perceptions and attitudes, including in relation to the use of therapeutic goods. This means social media posts about therapeutic goods should always be carefully considered for regulatory compliance. Influencers and businesses should be aware of the strict laws that govern the advertising of therapeutic goods in Australia, including through social media and, in particular, have a good understanding of the circumstances under which testimonials and endorsements are allowed or prohibited.