Wesfarmers-backed InstantScripts fined $742,500 for prescription drug ads
Key Points
- The TGA has fined Wesfarmers-backed InstantScripts $742,500 for prescription drug ads.
- Wesfarmers says the actions happened before it acquired the start-up for $125m in June.
- Founder and former CEO Dr Asher Freilich left the business at the time of the acquisition.
The national medical board has fined a Wesfarmers-backed “instant” telehealth start-up for unlawfully advertising prescription-only medications on its popular website.
Melbourne-based InstantScripts has been fined $742,500 for allegedly promoting the supply of medications such as antibiotics, insulin, blood thinners, and blood pressure and cholesterol medications.
InstantScripts allows customers to obtain prescriptions for more than 300 medicines online mostly by filling out questionnaires that are reviewed by doctors and, if approved, can be sent “in minutes”.
Medical entrepreneur Asher Freilich was an investment banker before turning to medicine. AFR
Wesfarmers – through its Australian Pharmaceutical Industries arm – acquired the five-year-old company for $135 million in June.
A Wesfarmer’s spokeswoman noted the allegations relate to promotions that arose before the grocery giant’s acquisition.
“Wesfarmers Health identified these historic issues in its due diligence and has taken steps to address the TGA’s concerns,” the spokeswoman said in a statement.
“InstantScripts recognises it is the responsibility of health professionals, in consultation with patients, to determine appropriate treatment options, including in respect of prescription medications.”
The TGA fine comes after InstantScripts founder and chief executive officer Asher Freilich was slapped with conditions regarding his registration last year.
Dr Freilich left the business at the time of the acquisition, but a search of the government’s register of medical practitioners still lists conditions on his medical practicing licence.
ASIC searches reveal Dr Freilich sold almost 300,000 ordinary InstantScript shares into the acquisition, but retains a parcel of 86,900 preference B shares. Dr Freilich declined to comment on the TGA fine.
The Therapeutic Goods Association has now issued 45 infringement notices to InstantScripts, which total $742,500, and has said the company breached the Therapeutic Goods Act.
“Advertising directly to consumers could create an inappropriate demand for these medicines by patients and lead to unnecessary or harmful prescribing,” the government body said in a statement.
The business was founded by Dr Freilich, a banker at Citi and New York’s Piper Jaffray who retrained as a doctor. It was backed by investors including Perennial Private Investments, Microequities Asset Management and Bailador Technology Investments.
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