Page 51 - RetailWorld-May2021-Tobacco-Updated

COSMETICS OR THERAPEUTIC GOODS? Retailers must be wary when promoting or selling a cosmetic or wellness product if they make representations or claims regarding therapeutic use, as overstepping the mark may be costly. FBy Bird & Bird Partner Lynne Lewis, Senior Associate Shariqa Mestroni and Associate Katrina Dang. or many people, a silver lining 1989 act, manufacturers and distributors • You don’t state that the product is of weathering out the Covid-19 of these products are still expected to “TGA approved” as this implies an pandemic in lockdown was a comply with the Australian Consumer Law endorsement by the TGA. An appropriate renewed focus on self-care (ACL) – Schedule 2 of the Competition way to express that your product is listed and wellness. and Consumer Act 2010. By way of is to say, “Included in the ARTG”. Given the growth in the beauty and personal care sector in Australia in 2020, it’s unsurprising that revenues in this sector are expected to reach almost $7.8 million in 2021.1 In light of businesses looking to expand their offerings into the beauty and personal care sector, we examine some of the potential legal and regulatory hurdles and pitfalls they may face in advertising and selling their products. Cosmetic versus therapeutic good The difference between a cosmetic and a therapeutic good may be obvious in some cases. However, the Therapeutic Goods Act 1989 and regulations have a much broader application than people may realise. The regulatory regime not only applies to prescription medicines, biologicals, and medical devices, but also any product that is promoted to consumers as being for a “therapeutic use”. In broad terms, “therapeutic use” is defined in the act as diagnosing, assisting with, or preventing an injury or ailment. If a product has a therapeutic use, it’s likely to be classified as a therapeutic good. Manufacturers or distributors cannot sell, promote, or distribute therapeutic goods unless they first register that product on the Australian Register of Therapeutic Goods (ARTG), subject to complete or partial exemptions. For instance, hair dyes and dental whiteners are completely exempt, while sunscreens, acne treatments and anti-dandruff shampoos can, in some cases, be partially exempt from the listing requirement. The advertising of ARTG-listed products falls under the Therapeutic Goods Administration’s (TGA) responsibilities. At the other end of the spectrum, cosmetic products are designed to be used on any external part of the body, or inside the mouth, to change the body’s odour or appearance, cleanse it, and keep it in good condition or protect it. Although cosmetics are not regulated under the example, any misleading and deceptive representations about a cosmetic product would contravene the ACL, which carries significant penalties for corporations ($1.1 million per contravention to the greater of $10 million or three times the value of the benefit obtained or 10 per cent of annual turnover). Many products sit in the middle of the spectrum and serve dual purposes. They are therefore regulated. Examples include sunscreens, anti- dandruff products that claim to cure dandruff, and anti-acne skin care products that are claimed to reduce or heal acne. Falling foul of the TGA The TGA reports that in 2019/2020, it received 2227 complaints about advertisements of therapeutic goods.2 This represented a 52 per cent increase from the previous year and resulted in the TGA issuing 155 infringement notices totalling $1.6 million.3 The TGA attributed this to an increase in non-compliant advertising in relation to Covid-19. For example, the TGA issued two infringement notices totalling $25,200 to the company of celebrity chef Pete Evans, for promoting a BioCharger device which the company claimed could be used in relation to the “Wuhan coronavirus”. The device was promoted on the company’s website and on Facebook with unsubstantiated claims that the device is “proven to restore strength, stamina, coordination and mental clarity”. Advertising therapeutic goods When advertising a therapeutic good, it’s important to keep in mind that: • Product claims must be valid, accurate, truthful, balanced and not misleading. You must be able to provide evidence to substantiate the claim. • If an ad contains a scientific or clinical claim, you must identify the researcher and financial sponsor, if that information is known or should reasonably be known. • The ad must support the safe and proper use of the therapeutic good and be consistent with its ARTG entry. • Endorsements cannot be made in ads by health professionals, medical researchers or employees of government authorities, hospitals or health care facilities. What about the ACCC? In addition to the TGA, the ACCC has actively investigated companies that make misleading and deceptive claims, especially in relation to Covid-19. By way of example, in December 2020, the ACCC began Federal Court proceedings against Lorna Jane Pty Ltd in relation to its alleged false or misleading claims about its ‘Anti-virus Activewear’ which the company claimed had a spray-on substance that eliminated and stopped the spread of Covid-19. This case is ongoing. Key takeaways • If you’re promoting or selling a cosmetic or wellness product, be cautious about making any representations or claims regarding therapeutic use, as you may be required to list the product on the ARTG and comply with the relevant regulatory requirements. • All advertising material relating to a cosmetic product – whether in electronic communications, through social media influencers, websites, or temporary social media stories – should be carefully reviewed to ensure no therapeutic claims are being made. When in doubt, it’s prudent to seek advice. • Whether or not a product is cosmetic or therapeutic, steer clear of any misleading and deceptive representations, especially relating to product efficacy and intended use. • Don’t make any restricted representations relating to Covid-19. References are available on request. LEGAL MAY, 2021 RETAIL WORLD 49