Responsive to Whom? A Critical Analysis of Risk-Based and Responsive Regulation and its Application to Australian Pharmaceutical Industry

Author: Rhiannon Bandiera

Bandiera, Rhiannon, 2018 Responsive to Whom? A Critical Analysis of Risk-Based and Responsive Regulation and its Application to Australian Pharmaceutical Industry, Flinders University, College of Business, Government and Law

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For close to two decades, Australia’s national drug regulatory authority, the Therapeutic Goods Administration (TGA), has used both risk-based and responsive regulation theory in the regulation of the prescription and non-prescription medicines industry. These theories have been pivotal to the formation of a regulatory regime, as well as an entire field of academic scholarship, which has emphasised working cooperatively with regulated entities when non-compliance first occurs, and using deterrents only as a last resort, in order to persuade regulated entities to comply. However, data indicate that rates of non-compliance in the Australian prescription and non-prescription medicines industry are greatest in those aspects of the regime which are most reliant on these persuasive techniques and where fewer deterrents are used. For instance, in the complementary medicines sector, which largely operates under a self-regulatory arrangement, as many as 90% of products have been found to contain quality, safety, and efficacy issues. This finding led the Australian National Audit Office (2011, p. 17) to conclude that TGA regulation in this space ‘has been of limited effectiveness’.

Using a combination of Marxist and Foucauldian theory within an ontological framework of critical realism, this thesis argues that an emphasis on compliance-based regulatory techniques, like risk-based and responsive regulation, has contributed to the formation of a regulatory regime congruent with neoliberal rationalities of government that aim to limit forms of market intervention by non-market forces detrimental to the accumulation of capital. In a qualitative thematic analysis, encompassing 451 submissions to public consultations and interviews with 18 participants, this thesis explores the reasons why the pharmaceutical regulatory regime in Australia, underpinned by the theories of risk-based and responsive regulation, has failed to generate compliance from sponsors. The thesis finds that the limited capacity of the regulator to act on non-compliance, and lack of opportunities for meaningful democratic participation within the regime by other non-market forces, is a direct consequence of this hybrid risk-based and responsive regulatory framework, which not only suffers from issues of incompatibility, but has rendered non-market forces less able to intervene in the regime in ways which are contrary to the interests of capital. This lack of intervention by non-market players has ultimately allowed the regime to become organised around the interests of the dominant hegemony. This thesis concludes with a discussion on the key elements necessary for enhancing the current regime, why this has not (and will not) be achieved within the current climate of neoliberalism, and why a truly alternate regime of regulation is necessary.

Keywords: Risk-Based Regulation, Responsive Regulation, Corporate Crime, State-Corporate Crime, Pharmaceutical Industry, Therapeutic Goods Administration

Subject: Criminal Justice thesis

Thesis type: Doctor of Philosophy
Completed: 2018
School: College of Business, Government and Law
Supervisor: Associate Professor Marinella Marmo