Editor’s Note: The promotional review process requires a critical balance between ensuring materials achieve business goals and complying with regulatory constraints. There often can be friction on the promotional review committee (PRC) between the marketing team and participants representing medical, legal and regulatory issues. But in the end, everyone has the same core objective—optimizing commercial success while keeping the company safe.
How can you reduce conflict on the PRC and work together efficiently across different functions to achieve a common goal? What are the Food and Drug Administration (FDA) regulations you need to keep top of mind when evaluating messaging—and how does the Federal Trade Commission (FTC) come into play for life sciences advertising? What are best practices for “fighting fair” on the PRC—and reaching the optimal result? Manatt provided the answers at a recent webinar, presented through PharmaVOICE. In part 1 of our article summarizing the webinar, published in the November “Health Update,” we discussed promotional review committee (PRC) procedures, the legal/regulatory framework, the players and their roles, PRC best practices, and recent warning and untitled letters. Part 2 of our summary, below, provides an overview of FTC law; the interaction between the FTC, the FDA and state attorneys general; and a review of pertinent cases.
To view the full webinar (and earn CLE), click here to access it free, on demand. To download a free copy of the presentation, click here.
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Around 2013, there were a number of off-label marketing cases brought by state attorneys general. State law prohibiting deceptive statements and deceptive product marketing were the driving forces behind these cases. Under the deception theory, there is no need to establish that a drug manufacturer’s marketing caused any harm. The state just needs to persuade a jury that the promotion was deceptive in some way. Therefore, it is an easier path than product liability. The industry has said, however, that state allegations of deceptive marketing amount to overreach because there is little evidence patients have suffered any harm from the alleged conduct.
The FTC and Deception
The FTC Act, enacted in 1914, prohibits unfair and deceptive trade practices. Over the years, several states enacted what are referred to as “little FTC Acts,” patterned after the FTC law.
The FTC has issued a formal statement of its position on how it would interpret and enforce the deception theories under the FTC Act:
- First, there must be a representation, omission or practice that is likely to mislead the consumer.
- Second, the FTC examines the practice from the perspective of a consumer acting reasonably in the circumstances.
- Third, the representation, omission or practice must be a “material” one. The basic question is whether the act or practice is likely to affect the consumer’s conduct or decision with regard to the product or service. If so, the act or practice is material and consumer injury is likely, since the consumer is likely to have chosen differently were it not for the deception.
It is important to note that there is no need for literal falsity and no need to prove intent. It is the overall net impression the promotion gives to consumers that counts.
Memorandum of Understanding Between the FTC and the FDA
In the early seventies, the FTC and the FDA entered into an interdepartmental memorandum of understanding (MOU 22307108003). Key provisions include:
- Section III A. With the exception of prescription drugs, the FTC has primary responsibility with respect to the regulation of the truth or falsity of all advertising (other than labeling) of foods, drugs, devices and cosmetics.
- Section III B. The FDA has primary responsibility with respect to the regulation of the truth or falsity of prescription drug advertising.
- Section III C. The initiation of proceedings involving the same parties by both agencies shall be restricted to those highly unusual situations where it is clear that the public interest requires two separate proceedings.
The FTC and the FDA do work together and frequently coordinate on issuing warnings. For example, in January 2018, they sent joint warning letters to several companies about their marketing of treatments used to address opioid addiction. In October 2018, the two agencies focused jointly on promotions for stem cell therapies that claimed the treatments could cure everything from cerebral palsy to autism to macular degeneration.
Simeon Management Corp. v. FTC
Simeon Management Corp. v. FTC (579 F. 2d 1137 (9th Cir. 1978)—which focused on advertisements of weight loss treatments—deals with concerns that consumers have the perception that prescription drugs (and even nonprescription drugs) receive heightened government scrutiny. Therefore, consumers are more likely to trust promotional claims about medications.
In Simeon, the FTC found that some consumers reasonably believe that the government exercises control over the promotion and use of prescription drugs. This belief is intensified by the advertisements’ representations that the weight loss treatments are safe, effective and medically approved. Therefore, the representations may reasonably lead consumers to the mistaken belief that the claims of safety and effectiveness are based on the FDA’s determination rather than on the advertiser’s opinion.
The FTC further found that, given the public’s belief that the government strictly regulates drugs, the fact that the drug lacked FDA approval for weight loss may materially affect the consumer’s decision to undergo treatment. Accordingly, the FTC declared that the failure to disclose that the weight reduction treatments involved injecting a drug that did not have FDA approval for such use renders the advertisements deceptive and therefore in violation of the FTC Act.
Examples of Cases Brought by State Attorneys General
There are several cases around deceptive practices that have been brought by state attorneys general.
Examples include:
- The Washington attorney general brought a case against a surgical mesh manufacturer. The heart of the case was not that something was wrong with the mesh. The key issue was that the manufacturer had information about issues with the mesh’s effectiveness and resulting complications that it did not communicate to doctors. Therefore, doctors could not properly evaluate its use for specific patients. The case resulted in a $9.9 million settlement.
- Multiple states joined in a case around problematic hip implants. The case resulted in a $120 million settlement, as well as court-ordered requirements that all future advertising claims had to be substantiated and documented by scientifically trained personnel. The court also required that any financial connection between the company and the parties substantiating the claims had to be disclosed. In addition, the court required the company to update its materials as new information becomes available, implement a mandated internal review process and regularly go through any customer complaints. In these types of cases, negotiating the monetary settlement is frequently the easy part of the process. The challenge is in putting together the extensive details governing future marketing efforts.
With the average family spending more on healthcare than on taxes, state attorneys general are becoming increasingly willing to use their authority in the healthcare arena.
Note: To view our full webinar on promotional review best practices (and earn CLE), click here to access it free, on demand. To download a free copy of the presentation, click here.