Katarina Klaric, Principal, Stephens Lawyers & Consultants
Directors and officers of companies involved in the importation, marketing, advertising and supply of “therapeutic goods”[i] (including medicines, herbal medicines, supplements, medical devices and other goods marketed or advertised for “therapeutic use”[ii]) in Australia have a legal responsibility to be aware of the regulatory regime and are responsible for compliance with the Therapeutic Goods Act 1989 (Cth), the Therapeutic Goods Advertising Code and other relevant laws. Ignorance of the law is no excuse[iii].
Non-compliance with the Therapeutic Goods Act 1989 (Cth) (TG Act) or the Therapeutic Goods Advertising Code (TGA Code) can result in infringement notices and court proceedings being issued by the regulator against the company and its directors and officers.
Recent pecuniary penalties for contravention of the Therapeutic Goods Act by companies have ranged between $2 million and $22 million[iv]. In the case of contraventions by the company’s director(s) and officers, the penalties have ranged between $8,000 and $1,000,000[v].
Factors taken into account by a court in determining whether a company’s directors and officers are also liable for a breach of the TG Act include:-
- if the director(s) or officer(s) have actively aided, abetted, counselled or procured the company’s contraventions of the TG Act[vi]; and
- if the director(s) and officer(s) were in a position to influence the conduct of the company and have failed to take all reasonable steps to prevent the company’s contraventions of the Act in circumstances where [they] knew that the contraventions would occur.[vii]
A review of recent court decisions indicates that directors of companies involved in the unlawful importation, supply and advertising of therapeutic goods in contravention of the Therapeutic Goods Act, will not be able to avoid personal liability for civil liability and criminal prosecution, if they are involved in the day to day management of the company and its advertising campaigns and sale of products. The cases highlight the importance of:
- director’s understanding the regulatory framework for the importation, marketing and supply of therapeutic goods in Australia. Ignorance of the law in no excuse for non-compliance.
- director’s ensuring that proper compliance systems are in place to ensure regulatory compliance.
- director’s seeking expert advice from TGA regulatory consultants and/or lawyers.
- advertising and marketing campaigns being reviewed for regulatory compliance, before launch or publication on websites, social media or other media.
- regular education and training programs in relation to compliance with the Therapeutic Goods Act and other relevant laws for the company’s director’s, employees and contractors.
In Australia, Directors & Officers insurance policies generally exclude and will not cover civil penalties and criminal fines and penalties. Directors should check policies for liability covered and exclusions.
| Case Examples
Secretary, Department of Health v Oxymed Australia Pty Ltd (2021) FCA 1518 The director of the company Oxymed Australia Pty Ltd (Oxymed) was ordered to pay a penalty of $1 million dollars by the Federal Court of Australia for his involvement in the company’s contravention of the Therapeutic Goods Act in the supply and advertising of unregistered medical devices used to administer hyperbaric oxygen therapy[viii]. The director was involved in the day-to-day management of the company and its marketing and advertising campaigns including the posting of offending advertising material on the company’s website, Facebook page and also on his personal Linkedln page. The company, Oxymed, and its director failed to comply with warning notices issued by the regulator, Therapeutic Goods Administration (“TGA”) and continued to supply the unregistered medical device and post advertising material on the company’s website and social media sites. The director contended that the material he posted was not advertising but educational material including scientific literature and that the devices he was supplying did not require registration. The TGA issued infringement notices, followed by Federal Court proceedings against the company and its director seeking injunctive relief and imposition of pecuniary penalties for the contravention of the Therapeutic Goods Act. In the course of the court proceedings, the company and director admitted the breach of the law. The court also imposed a $2 million pecuniary penalty in respect of the company. _____________________________________ Secretary, Department of Health and Aged Care v Vapor Kings Pty Ltd [2023] FCA 1297 The Federal Court of Australia ordered the sole director and shareholder of Vapor Kings Pty Ltd (Vapor Kings) to pay $100,000 in penalties for his role in the company’s breaches of the Therapeutic Goods Act by advertising nicotine vaping products (the ‘Products’) on websites which, at all relevant times, were controlled and operated by him and the company. The director and the company admitted these facts. The court found that the contraventions were ‘serious’ and that the company and director had also continued to advertise and sell the Products for some months despite being warned by the TGA about alleged unlawful advertising[ix], resulting in numerous breaches of s 42DLB of the Act[x]. Justice Abraham found that the director was also liable for the company’s breaches of the TG Act as he had “aided, abetted, counselled or procured” the company’s breaches of the Act and had failed to “take all reasonable steps to prevent [Vapor Kings’] contraventions in circumstances where he knew that the contraventions would occur and was in a position to influence the conduct of”[xi] Vapor Kings and otherwise prevent it from breaching the Act. Vapor Kings was also ordered to pay a penalty of $4.9 million for unlawfully advertising nicotine vaping products in breach of the Therapeutic Goods Act 1989. |
In addition, where the actions of a company director are unlawful, the TGA can make a referral to the Office of the Director of Public Prosecutions for criminal prosecution and a criminal conviction and prison sentence may also follow.
| Recent Prosecutions
On 17 March 2023, Christopher Ramsey, the sole director of AusLabs, Smart Labs and iSARMs, was sentenced at Downing Centre Local Court (Sydney, NSW) to 2 years imprisonment and fined $300,000 for his role in the manufacture, supply and advertising of illegal SARMs (Selective Androgen Receptor Modulators) and nootropic products[xii]. SARMs are experimental (and purportedly performance enhancing) medicines which have not been approved for human use in Australia – and are, accordingly, prescription-only medicines. Mr Ramsay and his companies pleaded guilty to over 200 offences of the Therapeutic Goods Act 1989 following the TGA’s investigation which resulted in the seizure under warrant of manufacturing materials for illegal SARMs and nootropics. The seizure included a product supplied by Aus Labs and iSARMs which contained the Schedule 10 ingredient, Cardarine, a substance banned in Australia due to being a potential carcinogen.[xiii] Mr Ramsey’s sentence was served by way of an intensive corrections order. He was also ordered to complete 750 hours of community service and received an additional $1,100 fine for possession of a tablet press. Mr Ramsey’s three companies also received significant fines totalling $2,225,000. ____________________________________________ On 7 June 2024, Ryan Gregory McTeigue, the sole director of Elite Labs Pty Ltd (trading as Elite SARMS) was sentenced to 2 years imprisonment for his role in the unlawful manufacture, supply, advertising and export of performance and image enhancing therapeutic goods[xiv]. Mr McTeigue had relocated overseas during the TGA’s investigation in 2018. He was subsequently arrested and charged upon his return to Australia in 2023. Mr McTeigue’s sentence was suspended for two years upon entering into a written undertaking that he be of good behaviour for a period of 2 years, with an additional condition that he not export, manufacture, advertise or supply therapeutic goods[xv].
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Authored by Katarina Klaric, Principal, Stephens Lawyers & Consultants; The contribution of Rochina Iannella, Lawyer, in researching and authoring the Case Examples is acknowledged.
© Stephens Lawyers & Consultants. Updated February 2026
This update is not intended to be a substitute for obtaining legal advice.
For further information contact:
Katarina Klaric
Principal
Stephens Lawyers & Consultants
Melbourne Head Office
Level 40, 140 William Street, Melbourne VIC 3000
Phone: (03) 8636 9100; Fax: (03) 8636 9199
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[i] See definition of ‘therapeutic goods’ in section 3 (1) of the Therapeutic Goods Act 1989 (Cth)
[ii] See definition in ‘therapeutic use’ in section 3 (1) of the Therapeutic Goods Act 1989 (Cth)
[iii] In Secretary, Department of Health v Oxymed Australia Pty Ltd (2021) FCA 1518 at [251] Rofe J states that “It is the responsibility of anyone who wishes to engage in a business which involves the use of therapeutic goods or the provision of health services to be aware of the applicable statutory scheme, the conduct that is prohibited, and to comply with the relevant regulatory requirements established under the TG Act, from the time they start the provision of those services, if not before.”
[iv] Secretary, Department of Health v Medtronic Australasia Pty Ltd [2024] FCA 1096; Secretary, Department of Health v Enviro Tech Holdings Pty Ltd (2022) FCA 865; Secretary, Department of Health v Oxymed Australia Pty Ltd (2021) FCA 1518
[v] Secretary, Department of Health v Oxymed Australia Pty Ltd (2021) FCA
[vi] Secretary, Department of Health v Oxymed Australia Pty Ltd (2021) FCA per Rofe J; Secretary, Department of Health v Enviro Tech Holdings Pty Ltd (2022) FCA 865 per Hespe J
[vii] Secretary, Department of Health and Aged Care v Vapor Kings Pty Ltd [2023] FCA 1297 per Abrahams J at [8]
[viii] See Summary of Secretary, Department of Health v Oxymed Australia Pty Ltd (2021) FCA 1518 in article.
[ix] Australian Government, Department of Health, Disability and Ageing, Therapeutic Goods Administration, Media Release, 27 October, 2023 – ‘Vapor Kings Pty Ltd and a Director penalised a total of $5 million for advertising nicotine vaping products’
[x] Secretary, Department of Health and Aged Care v Vapor Kings Pty Ltd [2023] FCA 1297 [35]
[xi] Ibid. [8]
[xii] Australian Government, Department of Health, Disability and Ageing, Therapeutic Goods Administration, Media Release, 28 March 2023 – ‘Company director sentenced to 2 years imprisonment with personal and company fines of over $2.5 million for selling illegal SARMs’
[xiii] Australian Government, Department of Health, Disability and Ageing, Therapeutic Goods Administration, Media Release, 8 November, 2022 – ‘Aus Labs, Smart Labs, iSARMs and Director Christopher Ramsey plead guilty to over 200 charges for illegal manufacture, supply and advertising of SARMs and nootropics’
[xiv] Australian Government, Department of Health, Disability and Ageing, Therapeutic Goods Administration, Media Release, 7 June, 2024 – ‘Individual sentenced for offences against the Therapeutic Goods Act‘; ‘https://www.tga.gov.au/news/media-releases/individual-sentenced-offences-against-therapeutic-goods-act’
[xv] Ibid.