Australia’s drug regulator, the Therapeutic Goods Administration, has dropped its investigation into newspaper advertisements taken out by the former federal politician Clive Palmer that described a drug unproven in the treatment of Covid-19 as a “cure”.

In March, the TGA confirmed it was looking into Palmer’s two-page ad in the Australian and on Facebook that stated the drug, hydroxychloroquine, when combined with another medication could “wipe out the virus in test tubes”. The ad also quoted the leader of a clinical trial, Prof David Paterson, saying it was not a stretch to describe the drug as a cure. Drug advertising rules state any therapeutic claim made in relation to novel coronavirus must be supported by appropriate evidence and must not mislead.

The ad said Palmer had agreed to personally fund the acquisition or manufacture of 1m doses “to ensure all Australians would have access to the drug as soon as possible”. On Tuesday, Palmer paid for another series of ads in News Corp papers stating he had since bought 32.9m doses of the drug. The federal government confirmed Palmer has a “written arrangement” with the government to acquire the drug for the national medical stockpile.

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The Therapeutic Goods Administration said neither the latest ads nor the previous ones were being investigated. “Assessment of Mr Clive Palmer’s advertisements have been concluded and enforcement action is not warranted,” a TGA spokesman said. “The information was assessed as not intended to promote the sale of the product.”

The latest advertisements ran in newspapers including the Daily Telegraph and the Mercury, and said hydroxychloroquine was Australia’s best hope for Covid-19 sufferers. The Royal Australian College of General Practitioners has warned against viewing the drug as a treatment. The college president, Dr Harry Nespolon, said “trials are ongoing and my understanding is that they are not looking particularly promising”.

“The problem here is that people may think that a cure is imminent and be lulled into a false sense of security so that they don’t exercise social distancing responsibilities,” Nespolon said. The drug can also cause severe and life-threatening side-effects.

The University of Queensland’s Prof David Paterson, who Palmer quoted in his first series of ads as describing the drug as a cure, said his comments had been taken out of context.

“My comments that the drugs could be a potential treatment or cure for Covid-19 were based on previous research on coronaviruses such as Sars and preliminary data from China and Singapore on Covid-19,” Paterson told the Guardian on Monday. “To formally establish the efficacy and safety of these drugs large clinical trials are needed.”

The university edited its original press release online on 18 March about the clinical trial, in which Paterson described the treatment as a “potential cure for all”, to remove that statement.

On 16 March, Paterson had appeared on The Project. When asked by Waleed Aly if it was correct to describe the drug as a “cure” rather than just a treatment, Paterson responded: “Absolutely.”

There are no approved treatments for Covid-19. Patients are given supportive care, for example ventilation, if breathing significantly deteriorates. A retrospective study of Covid-19 hospital patients given hydroxychloroquine in the US found no benefit from the drug, either alone or given in combination with an antibiotic. The study found patients treated with hydroxychloroquine alone had a higher mortality rate.