Background
CDA Clinics QLD Pty Ltd, trading as CDA Express, advertised cannabidiol products through its website, blog posts and Facebook page between April and July 2021. The advertisements promoted CBD products for serious diseases and conditions, referred to prescription-only CBD substances and offered products that were not entered on the Australian Register of Therapeutic Goods.
The Secretary of the Department of Health and Aged Care sought declarations, pecuniary penalties and costs against CDA and its sole director, Dr Benjamin David Ngahuia Jansen. CDA initially argued that its website formed part of a doctor-supervised assessment and treatment process excluded from the advertising provisions by s 42AA(4) of the Therapeutic Goods Act 1989 (Cth), but later entered liquidation and did not participate at the hearing. Dr Jansen ultimately admitted CDA’s contraventions and his involvement in them.
The Court’s Holding
The Court held that CDA contravened s 42DLB(1) by making prohibited representations about conditions including cancer, gonorrhoea and mental illnesses; making unapproved restricted representations about serious conditions including epilepsy, chronic pain and autism; advertising CBD substances covered by Schedules 3, 4 or 8 of the applicable Poisons Standards but not Appendix H; and advertising therapeutic goods not entered on the Australian Register of Therapeutic Goods. The s 42AA(4) exclusion did not apply because the advertisements were not advice or information given directly to patients by health practitioners during treatment.
The Court also held that Dr Jansen aided, abetted, counselled or procured CDA’s contraventions and was therefore involved under s 42YC. As sole director, he oversaw CDA’s operations and participated in reviewing, editing and approving the website. The Court imposed a $6.5 million penalty on CDA and, after independently finding the parties’ agreed proposal appropriate, a $450,000 penalty on Dr Jansen. It also ordered CDA to pay the Secretary’s relevant costs and Dr Jansen to pay $20,000 in costs.
Key Takeaways
- Online material promoting therapeutic goods can constitute advertising even when presented through a healthcare business’s patient-access process.
- The direct-to-patient treatment exclusion does not protect material made broadly available to consumers rather than provided by a practitioner in the course of treating an individual patient.
- A director who controls and approves unlawful advertising may incur personal accessory liability without intending or appreciating that the conduct is unlawful.
Why It Matters
The decision underscores the substantial penalties available for advertising prescription-only or unregistered therapeutic goods and making claims about serious conditions without the required approval. The Court treated CDA’s integrated website, blog and social-media content as a commercial strategy rather than isolated mistakes, and emphasized that the conduct continued after regulatory intervention.
For directors and healthcare businesses, the ruling shows that clinical involvement or an online intake process does not automatically take promotional content outside Australia’s therapeutic-goods advertising regime. Personal participation by senior management can also produce significant individual penalties.