Indemnity politics

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Insurance companies have modified their medical indemnity policies—excluding protection in instances where imported Therapeutic Goods have been unlawfully imported.
Insurance companies have modified their medical indemnity policies—excluding protection in instances where imported Therapeutic Goods have been unlawfully imported.

With insurance companies modifying indemnity policies regarding imported medical devices, there is another hidden cost of cheap imports. Amanda Lohan explains

Some Australian dentists, concerned about the rising cost of home-grown dental products, have turned to alternative online and international channels for more affordable options. With changes to medical indemnity insurance, however, the costs of such products may prove far greater than they seem.

Since the first half of 2012, insurance companies have wised up to the increasing prevalence of imported dental product falling outside the requirements of the Therapeutic Goods Act (Cth) 1989. As with illegal music and movie downloads, the system has been slow to catch up those skilled in exploiting the system—however, medical indemnity insurers are determined to make up for lost time.

The result, according to Troy Williams, CEO of the Australian Dental Industry Association, has been a “natural alignment of a dental professional’s statutory and professional obligations”. In other words, insurance companies across the board have modified their medical indemnity policies—excluding protection in instances where imported Therapeutic Goods have been unlawfully employed.

With the requirement to disclose all product changes, it’s something you may have noticed creep through in correspondence from your insurance provider. It’s usually a slight modification to policy wording, introducing the definition of approved Therapeutic Goods to an existing clause. The change may have been barely detectable, but it could amount to a whole lot—particularly if you have already imported and used goods falling outside the regulations.

Since 1989, the Therapeutic Goods Act has dictated minimum standards for dental product and Therapeutic Goods available in Australia. Administering this Act is the Therapeutic Goods Administration (or TGA), an Australian government body forming part of the Department of Health and Ageing. The TGA undertakes a range of assessment and monitoring activities to ensure Therapeutic Goods are of an acceptable standard, inspecting and auditing production facilities around the world to ensure ongoing compliance and quality.

The TGA requires that Therapeutic Goods be entered on the Australian Register of Therapeutic Goods (ARTG) before they are able to legally be supplied in Australia. This database, established under the Therapeutic Goods Act, provides a fully searchable list of approved product. While there is no ‘naughty’ list to speak of, the ARTG ‘nice’ list names every single approved Therapeutic Good in Australia.

Williams says that the Australian Dental Industry Association provides one source of businesses committed to supplying quality, compliant dental product. Dentists can also conduct their own individual research, using the TGA’s website to determine whether a product has been declared safe (and lawful) for distribution in Australia.

What in this room is on the TGA’s ‘approved’ list?
What in this room is on the TGA’s ‘approved’ list?

Collectively, insurance providers have noted the unlawful importation of goods as an increasingly risky omission in their policies, and they’ve been quick to pass the buck to their clients. “If a dentist wants to use product that is sourced outside the regulatory framework administered by the TGA, it’s only natural that insurers would be concerned,” says Williams, highlighting the basis of the driving force behind the change.

It is a change that has seen product costs for dentists and end users grow, as manufacturers strive to meet the stringent requirements of the TGA. While Williams acknowledges the elevated cost of compliant product, he also says that this can largely be attributed to statutory compliance costs for the manufacturers and suppliers; costs which include thousands of dollars’ worth of application and evaluation fees payable to the TGA (over and above the costs directly associated with maintaining an acceptable degree of quality).

While these costs in some cases have become significant, Williams explains how the alternative could prove much worse. “Although it is possible to alleviate the impact of this by ignoring reputable Australian suppliers, perhaps by purchasing online, the risks are very significant,” he says.

The risks and related costs Williams speaks of include management of customs and quarantine restrictions, as well as civil and criminal penalties associated with the direct importation and use of non-compliant dental products. With, arguably, the world’s strictest quarantine restrictions, Australia’s borders have proved impenetrable for many, and individuals looking to exploit the system may find it far more trouble than it’s worth.

Then again, while these costs have applied since the legislation came into place, it is the lack of insurance protection that could expose dentists to the biggest financial risk of all. Medical indemnity insurance policies typically cover civil liability in the case of negligent errors, acts or omissions resulting in harm. In the absence of such protection, civil penalties and personal liabilities could prove financially devastating.

It is not just the direct financial costs, however, that render ‘cheap’ imports an increasingly risky option. Since the TGA’s main goal is to promote the safety, quality and reliability of Therapeutic Goods, it stands to reason that the risk of harm resulting from the use of unapproved goods would be far greater than that for approved goods (not to mention the clear case for negligence attaching to their use).

The message is clear: Those who choose to operate outside the legislative framework will find they no longer have the protection of their insurance. The buck stops here.

What is a Therapeutic Good and are we covered?

For the purposes of dental procedures, the definition of ‘Therapeutic Goods’ includes products associated with the following activities:

  • Preventing, diagnosing, curing or alleviating a disease, ailment, defect or injury
  • Influencing inhibiting or modifying a physiological process
  • Testing the susceptibility of persons to a disease or ailment

Note: Some products, even though they may technically meet the definition of a Therapeutic Good, are declared not to be Therapeutic Goods under section 7 of the Therapeutic Goods Act 1989.
To check whether a Therapeutic Good is approved for supply in Australia, go to www.ebs.tga.gov.au, and search by product name, licence, active ingredients, ‘sponsor’ (supplier), or manufacturer.

 

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