Enforceable Undertakings for Compliance with the Therapeutic Goods Administration (TGA)

1. Purpose and Legal Basis

Enforceable undertakings are written, court-enforceable commitments by an individual or company to undertake specific activities or refrain from certain conduct. They serve as an important compliance tool under section 42YL of the Therapeutic Goods Act 1989 (the Act), allowing the Secretary of the Department of Health (delegated to TGA) to accept such offers as a relatively quick solution to encourage improved compliance arrangements or restrict activities to meet obligations under the Act, Therapeutic Goods Regulations 1990, and Therapeutic Goods (Medical Devices) Regulations 2002. Source: https://www.tga.gov.au/resources/guidance/making-offer-enforceable-undertaking-compliance

The primary aim is to protect public health and consumers, particularly where there is evidence of a breach but it may not be in the public interest to pursue civil or criminal action. They are generally not used for deliberate misconduct, fraud, or high recklessness. Source: https://www.tga.gov.au/resources/guidance/making-offer-enforceable-undertaking-compliance

These undertakings are similar to those under section 87B of the Competition and Consumer Act 2010, with guidelines drawing from ACCC practices. Source: https://www.tga.gov.au/resources/guidance/making-offer-enforceable-undertaking-compliance

2. When Enforceable Undertakings Are Offered or Considered

They can be offered in connection with any matter where the TGA has powers or functions under the legislation, including provisions carrying civil or criminal penalties, or regulatory sanctions such as suspension or cancellation from the Australian Register of Therapeutic Goods (ARTG). Source: https://www.tga.gov.au/resources/guidance/making-offer-enforceable-undertaking-compliance

TGA considers acceptance based on factors including: public acknowledgment of breach and corrective need; inadvertent nature of conduct; senior officer knowledge; cooperation with investigations; history of breaches or complaints; protection of public from harmful conduct; likelihood of compliance; and prospects for timely resolution. Source: https://www.tga.gov.au/resources/guidance/making-offer-enforceable-undertaking-compliance

TGA weighs circumstances such as deliberate falsification, public health impact, seriousness, compliance attitude, company size (implying robust programs), and potential for economical resolution. The list is not exhaustive. Source: https://www.tga.gov.au/resources/guidance/making-offer-enforceable-undertaking-compliance

3. Requirements for the Content of an Offer

The offer must be in writing, clear, unambiguous, and enforceable, with specific promises of future behavior so non-compliance is evident. It should detail: the nature of alleged non-compliance; sustainable ways to address it; and exact resolution proposed. Source: https://www.tga.gov.au/resources/guidance/making-offer-enforceable-undertaking-compliance

Typical inclusions: acknowledgment/admission of breach; commitment to cease conduct and not recommence for a period; establish compliance policy with senior responsibility; destroy non-compliant goods at own expense with TGA certification; future compliance commitments (possibly with expert help); adherence to Therapeutic Goods Advertising Code (No.2) 2018 with corrective advertising; acknowledgment of public publication on TGA website per subsection 42YL(3); voluntary nature; no derogation from TGA rights. Source: https://www.tga.gov.au/resources/guidance/making-offer-enforceable-undertaking-compliance

May also involve monitoring via periodic audits, reporting breaches/defaults with explanations and measures, and providing information to TGA. Source: https://www.tga.gov.au/resources/guidance/making-offer-enforceable-undertaking-compliance

TGA generally does not accept offers denying breach, imposing conditions on TGA, or containing self-serving statements. Source: https://www.tga.gov.au/resources/guidance/making-offer-enforceable-undertaking-compliance

4. Process for Making and Accepting an Offer

Any entity believing they may have breached can voluntarily offer at any time, even during investigations or proceedings. Offers are discussed with the assigned TGA officer, but investigators cannot accept—decision rests with senior TGA Executive (e.g., Deputy Secretary HPRG as delegate). Source: https://www.tga.gov.au/resources/guidance/making-offer-enforceable-undertaking-compliance

TGA cannot demand or compel offers but may suggest them. Terms are settled for regulatory outcomes. Acceptance occurs upon execution by the promisor and acceptance by the delegate, effective from that point until a specified date or anniversary. Source: https://www.tga.gov.au/resources/guidance/making-offer-enforceable-undertaking-compliance

Acceptance is discretionary and not a binding precedent; TGA reserves rights to pursue other actions. Source: https://www.tga.gov.au/resources/guidance/making-offer-enforceable-undertaking-compliance

5. Monitoring, Breach Consequences, and Publicity

Upon acceptance, TGA monitors via reports, audits, or visits, potentially with partners. If breached, TGA may apply to the Federal Court for orders including: directing compliance; payment of financial benefit gained to the Commonwealth; compensation; or other orders. Breach of court orders may constitute contempt. Source: https://www.tga.gov.au/resources/guidance/making-offer-enforceable-undertaking-compliance

Undertakings are published on the TGA website and remain public even after compliance or expiry. Source: https://www.tga.gov.au/resources/guidance/making-offer-enforceable-undertaking-compliance

6. Variation and Withdrawal

Promisors may apply to vary or withdraw with TGA consent under section 42YL(2). Variations are negotiated if circumstances change, but must preserve the original spirit. Agreed variations are published, with originals retained. Source: https://www.tga.gov.au/resources/guidance/making-offer-enforceable-undertaking-compliance

7. Additional Notes and References

A template example includes definitions, background, acknowledgments, specific undertakings (e.g., cease activities, remedial steps, monitoring/reporting, costs), and execution clauses. Source: https://www.tga.gov.au/resources/guidance/making-offer-enforceable-undertaking-compliance

Related resources: ACCC Guidelines on enforceable undertakings (https://www.accc.gov.au/about-us/publications/guidelines-on-accc-approach-to-court-enforceable-undertakings); ISO 19600:2014 Compliance management systems (https://www.iso.org/standard/75080.html). Guidance last updated 23 October 2024. Source: https://www.tga.gov.au/resources/guidance/making-offer-enforceable-undertaking-compliance