In a landmark ruling, the Federal Court of Australia has fined Medtronic Australasia Pty Ltd a record $22 million for the unlawful supply of therapeutic goods. The Court has also ordered that Medtronic pay $1 million as a contribution to the TGA’s legal costs.
The case involved the unauthorised distribution of 16,267 units of the Infuse Bone Graft Kit from September 2015 to January 2020.
The Court’s judgment comes after the Therapeutic Goods Administration (TGA) commenced proceedings against Medtronic in August 2021.
The fine is the largest ever imposed under the Therapeutic Goods Act 1989.
Breach of TGA regulations
The case revolves around the Infuse Bone Graft Kit, which was entered in the Australian Register of Therapeutic Goods (ARTG) for supply with a separately packaged spinal cage (the LT Cage). The entry in the ARTG did not allow the Kit to be supplied without the LT Cage. Medtronic unlawfully supplied the Kit without the LT Cage.
“Medtronic profited from the supply of thousands of units of the Kit in circumstances where the safety and efficacy of the Kit had not been established by the Secretary. In the absence of that evaluation, Medtronic put the health and safety of patients at risk, and undermined the integrity of the regulation of therapeutic goods in Australia,” TGA’s lawyer wrote in the initial legal filing.
The Court also cited Medtronic’s continued non-compliance over several years, despite being aware of the conditions set by the ARTG.
Broader industry implications
Professor Anthony Lawler, Deputy Secretary of the Department of Health and Aged Care and head of the TGA, said that “this significant penalty serves as a reminder to sponsors and others in the therapeutic goods industry to take their obligations seriously.
“Medicines and medical devices supplied to Australians must be assessed by the TGA for safety, efficacy, and performance in the exact way they will be supplied to patients. This protects Australians by ensuring they have access to the safest products available.
“The TGA’s highest priority is to protect the health and safety of the Australian public”.
The regulatory scheme is critical to the health and safety of Australian consumers and this landmark ruling sends a strong message the TGA remains vigilant in investigating suspected unlawful activity.
The record penalty serves as a cautionary reminder of the significant consequences of non-compliance with therapeutic goods regulations. The range of compliance and enforcement tools available include substantial fines and criminal or civil court action.
