Healthcare products – what products can influencers now promote?

Since July 1, 2022, the Advertising on therapeutic products Coded (the “Advertising Code”) becomes mandatory. For companies currently taking advantage of the broad reach of influencers in their advertising campaigns, this is a significant shift from the status quo and may have unintended consequences for the regulatory classification of the products they promote.

What exactly has changed?

The most significant change in the Advertising Code is that the rules that apply to manufacturers, brand owners and sellers of therapeutic products will now also expressly apply to “marketing”. In other words, influencers will now be as regulated as pharmaceutical companies in their promotion of therapeutic products.

This would not be a major change were it not for the prohibition of “testimonials” by anyone engaged in the “marketing” of goods. Since the main marketing tactic used by influencers is that of testimonials (“I took this and I feel great!”), this will significantly inhibit the value that influencers can bring to the promotion of therapeutic products.

It should be noted that an influencer will only be subject to the advertising code if they receive “meaningful compensation” for their promotion. However, “valuable consideration” is a broad term including (most obviously) money, but also non-monetary items such as services, gifts (i.e. free products) and opportunities. So unless their testimonial is purely free and the influencer hasn’t even received the product to try, then their testimonial will now be banned.

Above all, the ban applies independently if a payment is disclosed or if the testimony is genuine. The current industry trend of “advertised” or “sponsored” hash tagging will no longer get you over the line.

Brand ambassadors are safe…ish

It should be noted that “endorsements” of therapeutic products by influencers (as long as the influencer in question is not a healthcare professional or hold themselves out as qualified to diagnose, treat or prevent a disease, condition, defect or injury) are still permitted so long as the endorsement does not amount to testimony.

This means that influencers can be brand ambassadors for a therapeutic good, as long as their endorsement does not reference the influencer’s personal experience using the good. Again, this will significantly limit the “influence” in the market of the majority of influencers.

Even where a recommendation is permitted by the Advertising Code, other aspects of the Code will now apply to the promotion. For example, mandatory statements regarding directions for use, the context of any therapeutic claims, and statements regarding traditional use will apply… which are hardly conducive to the spontaneous and natural promotions fostered by social media.

Is it limited to therapeutic goods?

Whether this has an impact on your business depends on whether or not the products being promoted are “therapeutic goods”… to some extent. “Therapeutic goods” are generally defined as goods which can treat a disease or goods which are said to be able or capable of being taken for therapeutic purposes. Generally, they fall into three main categories: drugs; biological and medical devices. It is particularly important for products commonly promoted by influencers that the definition of “therapeutic good” can extend to complementary medicines, dietary supplements and traditional remedies.

And if, from a legal point of view, the advertising code only applies to the promotion of therapeutic products, that does not mean that it will not have an impact on the promotion by influencers of medical products. other health-related products, such as food and cosmetics.

First of all, the Advertising Code will not prevent suppliers of therapeutic goods from wanting to use the marketing power of social media influencers. This may lead these suppliers to promote products that are similar to therapeutic goods but which are not in fact therapeutic goods (at least from a regulatory point of view). For example, garlic powder when encapsulated is expressly classified as a therapeutic product. But when simply in powder form, garlic powder is clearly a spice and as such should be regulated as a food.

Second, there is a lot of confusion in the industry around the regulatory overlap between food, cosmetics and therapeutic products. There are many products on the market that currently rank as do not being a therapeutic good and therefore may continue to use influencers to promote their products (subject to compliance with their own regulations, such as the Australian Consumer Law, the Australia and New Zealand Food Standards Code and Consumer Goods Disclosure Standard (Cosmetics)).

However, the very definition of a “therapeutic good” extends to products that are represented as being for “therapeutic use”. This means that simply marketing a product in a certain way could result in a product being unexpectedly regulated as a “therapeutic good”. For example, encapsulated products containing nutrient-dense food ingredients (such as freeze-dried meat or vegetable powders) may be classified and marketed as “dietary supplements” and not as therapeutic products. However, if an influencer marketing campaign presented these products as being for “therapeutic use”, these types of products could suddenly find themselves under review by the Therapeutic Goods Administration.

What does this mean for your business?

Advertisers of therapeutic products who intend to use influencers or testimonials in their campaigns should carefully consider the strategy they offer. In fact, you should probably avoid this altogether. Even if you have used influencers in the past advertise, you must remove all paid or incentive testimonials that are currently online and accessible before July 1, 2002, even if they were uploaded before that date. In other words, don’t wait for the new Code to come into effect; it would be wise to take advantage of the transition period and ensure that your marketing campaigns are compliant.

For suppliers of food and cosmetic products, the advertising code can be a boon in some respects (in that it should not apply to these products). However, now that the Advertising Code has become mandatory, it should prompt strict guidelines in How? ‘Or’ What influencers promote food and cosmetics, especially from all angles of health. Otherwise, the promotion of a product by an influencer could lead to the legal reclassification of the product from an authorized food or cosmetic to a non-conforming therapeutic product.

Maria J. Book