Medicines companies are businesses that make and sell medicines. This guide uses the term medicine to include any type of product used in the treatment and prevention of disease or health problem. The terms medicines companies and pharmaceutical companies are often used interchangeably. There is an important distinction, however; for example research-based pharmaceutical companies undertake additional activities including the initial research, discovery and clinical trials to create new medicines.
For more information on the types of medicines companies see the links below. For other important definitions please see the glossary section of the website.
Types of medicines companies
| Research-based pharmaceutical companies | These are the most common type of company a health consumer organisation will encounter. A research-based pharmaceutical company is one which invests in research, development and manufacturing of new medicines. Most of the medicines produced by research-based pharmaceutical companies are prescription only. These companies generally have offices in Australia, but their head office may be overseas, for example many are in Europe, the USA or Asia. Medicines Australia is the industry association that represents research-based pharmaceutical companies. All members of Medicines Australia must adhere to the Medicines Australia Code of Conduct.
To learn more about research-based pharmaceutical companies visit www.medicinesaustralia.com.au. |
| Generic pharmaceutical companies | Generic pharmaceutical companies manufacture and sell off-patent medicines (‘generic medicines’). Once a medicine loses patent protection, for which the international standard is 20 years, it can be manufactured and sold by a generic medicines company as well as the originator company (‘the research-based company’). Originator companies may have a division that makes generic medicines or generic versions of their products that have lost patent protection.
The Generic and Biosimilars Medicines Association (GBMA) represents a section of the generics industry, and the GBMA has its own Code of Practice. To learn more about generic medicines companies, visit www.gbma.com.au |
| Consumer medicines companies | These companies may be a division of a pharmaceutical company or a standalone company. They generally produce non-prescription products that are available at pharmacies like cough medicine and pain killers. Consumer medicines are also referred to as self-medication or over the counter (OTC) medicines.
Companies that produce these medicines are represented by the Consumer Healthcare Products Australia , which has its own Code of Practice. To learn more about self-medication, consumer medicines or over the counter medicines companies, visit www.chpaustralia.com.au. |
| Complementary medicines companies | Complementary medicines (also known as ‘traditional’ or ‘alternative’ medicines) include vitamin, mineral, nutritional supplement, herbal, aromatherapy and homoeopathic products.The complementary medicines industry is represented by the Complementary Healthcare Council of Australia (CHC), which has a Marketing and Supply Code of Practice.To learn more about complementary medicines companies, visit www.chc.org.au. |
| Medical device companies | Medical device companies make healthcare technologies and equipment such as instruments, machines, appliances software of materials used in treatment, diagnostics and medical imaging that are often sold to hospitals and other healthcare practices.
The devices industry is represented by the Medical Technology Association of Australia (MTAA), which has its own Code of Practice. To learn more about device companies, visit www.mtaa.org.au. |
Departments and roles within a pharmaceutical company
Health consumer organisations and individuals who are looking to collaborate with pharmaceutical companies should keep in mind that most have several departments that work with health consumer organisations.
These departments may include:
| Medical | Medical advisers, medical scientific liaison (MSLs), clinical researchers, medical information, doctors and pharmacists.
These people interact with healthcare professionals, focusing largely on clinical trials and reviewing medical and marketing information to ensure accuracy. They tend to be the best source of information about specific products. |
| Market Access | Health economists, pricing managers, regulatory managers.
These people support the registration and reimbursement of medicines, and write and assist with submissions to the relevant government bodies (the Therapeutic Goods Administration and the Pharmaceutical Benefits Advisory Committee). |
| Corporate Affairs | (also known as External Affairs or Public Affairs or Communications)
Stakeholder relationship managers, patient relations managers, communications managers. These people manage the reputation of the company with external stakeholders, for example, government, health consumer organisations, professional associations and media. |
| Marketing and Sales | Product managers, sales representatives.
The marketing department manages a proportion of the company’s budget to develop materials that are used to provide information to doctors and other health care professionals about medicines. |
| Legal and Compliance | Lawyers, compliance managers.
These people review the way the company operates within national and international law; as well as the company’s internal Code of Conduct. Where the company is a member of Medicines Australia, they also need to ensure compliance with the Medicines Australia Code of Conduct. They will likely be involved in monitoring and approving grants and other funding. |
| Finance / Accounts Payable | These people pay invoices related to grants. Please note, finance and accounting systems may often be complex and differ between companies. |
Interactions between health consumer organisations and pharmaceutical companies usually are conducted by the corporate affairs department with support from the other departments. If the company does not have a corporate affairs department, health consumer organisations’ contact with the pharmaceutical company is likely to be with the medical department in the first instance.
Governance and compliance of pharmaceutical companies
Pharmaceutical companies are closely regulated by Australian legislation. The laws provide a framework that ensures companies operate to the highest ethical standards and practices. In addition, the research-based pharmaceutical industry established its own Code of Conduct setting standards for ethical marketing and promotion of prescription medicines in Australia. This is known as the Medicines Australia Code of Conduct. The code complements the many legislative regulations for the pharmaceutical industry that are set by our government. Abiding by the Code is compulsory for members of Medicines Australia, but it is voluntary for all other medicines companies.
The Australian pharmaceutical industry has worked collaboratively with health consumer organisations for many years to provide information and support to help health consumers and their carers understand and manage their health and wellbeing.
Over the last decade there has been increased attention around the world on business conduct and compliance. For example, data security laws and regulations related to how businesses collect and retain personal information continue to increase every year. International accounting standards have been revised to state that all expenditure, without exception, must appear in the financial statements of an organisation.
In addition, under the Code of Conduct, Medicines Australia member companies are required to declare any benefit provided to individuals and organisations. Details of what must be reported and the timelines for supplying this information is set out in the Code of Conduct. The periodic report documents the interactions with health consumer organisations such as: what are the objectives of these interactions; how is the money spent in funding the activities; what are the outcomes; and, do health consumers benefit?
These are important questions and everyone involved must have confidence in the answers.
Pharmaceutical companies have their own internal legal and compliance processes to assist in enforcing ethical requirements and legislation that may be additional to the existing requirements placed on these companies externally, such as reports to Medicines Australia to comply with the Code of Conduct.
The pharmaceutical industry understands that there is an obligation to ensure that any support provided does not lead to a conflict of interest and works to ensure their partnerships and relationships are compliant with all ethical conditions and legislation.
Regulation of pharmaceutical companies
It may be helpful to remember that pharmaceutical companies are businesses. A fundamental driver of most pharmaceutical companies in Australia is based on the medicines they develop being listed on the Pharmaceutical Benefits Scheme (PBS). Under the PBS the patient pays a proportion of the cost of the PBS medicine known as a co-payment, which is below the actual price of the medicine; and the Federal Government covers the greater, remaining portion of the cost (that is, the government subsidises the cost of the medicines). This system ensures Australian patients get access to medicines at an affordable price. There are two types of co-payments; a general co-payment for Medicare eligible patients and another lower co-payment for concessional patients.
The safety of the patient is one of the four key objectives of the National Medicines Policy, the framework within which pharmaceutical companies work with the Australian Government. The industry is tightly regulated and closely monitored by local and international regulators. The Therapeutic Goods Administration (TGA) assesses which therapeutic goods are safe and effective for Australian patients based on the Therapeutic Goods Act, a set of regulations that inform what medicines can be sold in Australia. There are other regulatory authorities around the world, such as the U.S. Food and Drug Administration (FDA), European Medicines Agency (EMA) and Medsafe in New Zealand. The TGA also regulates the advertising of approved therapeutic goods via the Therapeutic Goods Advertising Code. Under this code, prescription medicines are not allowed to be advertised or promoted directly to consumers (that is, the general public) in Australia.
The Medicines Australia Code of Conduct complements the legislation of the Therapeutic Goods Regulations and the Therapeutic Goods Act. It sets standards for the ethical marketing and promotion of prescription medicine products in Australia and adherence to this is compulsory for Medicines Australia member companies; for all other medicines companies, compliance to this code is voluntary. The Code of Conduct is reviewed periodically by all stakeholders, including health consumers. The Working Together Guide is referred to in the Code of Conduct.
Each individual pharmaceutical company will likely have its own Code of Conduct also. This is set by the head office of the company, usually based overseas to ensure compliance with local and international legislation. There may be times when, due to this difference, a pharmaceutical company negotiating a potential partnership may insist on additional conditions in an agreement.