Slides - Food and Drug Law Institute

Slides - Food and Drug Law Institute

Compliance for Drug and

Biologic Products: Recent

Issues and Enforcement


John Manthei

Latham & Watkins LLP

FDLI Advertising and Promotion Conference

September 17, 2013

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Recent Issues and Enforcement Trends

• Issue #1 – Social Media

• Issue #2 – Web-Based Advertising

• Issue #3 – Securities Disclosures

Issue #1: Social Media

• “Forms of electronic communication through which users

create online communities to share information, ideas,

personal messages, and other content.” Merriam-

• Social Networking (e.g., Facebook, LinkedIn)

• Multi-Media Sharing (e.g., YouTube, Flikr, Podcasts)

• Blogs (e.g., Tumblr) and Microblogs (e.g., Twitter)

• Key Feature: User-Generated Content

• Old Media

• Static

• Standardized formats

• Required special skills to generate

• New Media

• Interactive

• Many distinct and constantly evolving formats

• Anyone and everyone can participate

Issue #1: Social Media

• Types of Digital Advertising and Promotion

• Owned/Sponsored Media

• Company and product websites and social media platforms

• Sponsored “disease awareness” sites at platforms

• Paid Media

• Web-based advertising

• Earned Media

• Online word-of-mouth

• Organic search results

• Hosted Media

• Patient and physician online communities

Issue #1: Social Media

• Unique Capabilities

• Immediacy

• Personalization

• Accessibility

• Unique Drawbacks

• Control

• Ownership

• Reliability

Issue #1: Social Media

• Where do physicians and patients look for health

information? Online!

• 24% of physicians use social media daily to scan or explore

medical information. 50% use it on a weekly basis and 70%

use it on a monthly basis.*

• Social medial marketing efforts focus on creating

content that encourages readers to share it within their

social network.

• Such word-of-mouth results are earned media rather than paid


*Brian S. McGowan, et al., Understanding the Factors that Influence the Adoption and Meaningful Use of

Social Media by Physicians to Share Medical Information, 14 J. Med. Internet Res. e117 (2012).

Issue #1: Social Media

• 1996: FDA held a public meeting and promised guidance on

promotion of FDA-regulated medical products using the Internet.

• FDA later suspended the guidance process indefinitely and simply

applied existing rules to the Internet space. Precedent was developed

through Warning Letters.

• 2009: FDA held a public meeting on promotion of FDA-regulated

medical products using social media and again promised specific


• FDA’s later release of its draft guidance on unsolicited off-label

information requests touched on social media, but only in this limited

context. Industry continues to wait.

• 2012: The Food and Drug Administration Amendments Act (2012)

now requires FDA to issue guidance on its policy toward Internet

and social media promotion no later than July 9, 2014.

• FDA has since issued Warning Letters on social media promotion, but

recently in August 2013, it cancelled a webinar addressing them.

Issue #1: Social Media

• Warning Letter Enforcement

• Several warning letters in recent years have cited companies

for statements made on social media platforms, including

Facebook, YouTube, and Twitter.

• Violations have centered on off-label statements and failure to

satisfy fair-balance advertising requirements.

• FDA’s stance: The Agency’s advertising and promotion

rules apply regardless of the medium used.

Issue #1: Social Media

• Enforcement Example: Facebook Warning Letters

• Novartis Pharmaceuticals (2010)

• FDA cited Novartis for its Tasigna drug website’s “Facebook

share” social media widget that generated Novartis-created

information that could be shared with Facebook users. FDA

found that the shared content was misleading for making

representations about the efficacy of Tasigna while failing to

communicate any risk information associated with use of the

drug. FDA also found that the shared content inadequately

communicated Tasigna’s FDA-approved indication and implied

superiority over other products.

• AMARC Enterprises Warning Letter (2012)

• FDA cited AMARC for using its Poly-MVA for Pets product

Facebook page to “like” an external post describing use of the

product for an off-label indication, along with making other webbased

off-label statements.

Issue #1: Social Media

• Compliance Tips

• Establish a clear corporate social media policy and provide

adequate training to employees.

• Ensure company posts are accurate, current, and contain

adequate disclosures.

• Ensure company posts do not discuss off-label or investigational


• If you plan to allow third-party content on company-hosted

media, ensure you maintain control to maintain compliance.

• Post a clear “Terms of Use” to alert users that content will be

reviewed and may be deleted.

• Monitor content to correct inaccurate information and follow-up

on off-label questions and potential adverse events.

Issue #2: Web-Based Advertising

• Upside: New Targeted Advertising Methods

• Paid search results

• Web content syndication

• Discussion boards and online communities

• Audience-specific print and multi-media capabilities

• Downside:

• Accountability for user-generated content

• Space restrictions in new media configurations

• Risks associated with instant communications

• Again: The Agency’s advertising and promotion rules

apply regardless of the medium used.

Issue #2: Web-Based Advertising

• Enforcement Example: “One-Click Rule” Warning


• In 2009, FDA rejected the idea of a “one-click rule” when it

issued warning letters to 14 companies in a single day for

failure to include risk information in banner advertisements

placed on Internet search engine pages.

• The one-click rule emerged as industry’s way of addressing

spatial constraints on websites and social media – instead of

providing all information up front, a company would provide a link

to the necessary fair-balance advertising requirements.

• In its anti-one-click warning letters, FDA cited companies for

sponsored links that it found were misleading for making

representations about drug efficacy but failing to communicate

any risk information in the advertising space.

Issue #2: Web-Based Advertising

• Enforcement Example: Search Results Warning Letters

• M.D.R. Fitness (2013)

• FDA cited M.D.R. for its website’s search function. Typing wellknown

disease names like “cancer” or “diabetes” into the website’s

search field returned a list of the company’s dietary supplement

products. FDA stated that the search results demonstrated that

M.D.R. was promoting its dietary supplement products for conditions

that caused the products to be unapproved drugs under the statute.

• Herbal Papaya (2013)

• FDA cited Herbal Papaya for its meta tags used to bring consumers

to its website through Internet searches. Examples of the company’s

meta tags targeted consumers looking for products to prevent or

treat various disease, such as “Papaya Leaf Tea treat Cancer.” The

meta tags served as evidence that the company was promoting its

papaya leaf dietary supplements with unapproved drug claims.

Issue #2: Web-Based Advertising

• Compliance Tips

• Ensure your internal advertisement and promotional labeling

review program is attuned to developing issues in the new

media space.

• Seek external review of your program for further guidance on

advertising compliance.

• Internal review should ensure that web-based advertising,

regardless of format, is:

• accurate, current, and not misleading;

• fairly balanced; and

• free of any statements on off-label or investigational issues.

Issue #3: Securities Disclosures

Food and Drug Administration

• Responsible for protecting and promoting the public health

through ensuring the safety and efficacy of regulated products

and advancing new medical treatments.

• Securities Exchange Commission

• Responsible for protecting the investing public and

maintaining the integrity of the securities markets.

• Both agencies require regulated firms’ public

statements to be truthful and non-misleading.

• Both agencies must keep up with new forms and

increasing speeds of communication in the digital age.

Issue #3: Securities Disclosures

• SEC’s Regulation FD

• When an issuer discloses material nonpublic information to

certain individuals or entities—generally, securities market

professionals, such as stock analysts, or holders of the

issuer’s securities who may trade on the basis of the

information—the issuer must make public disclosure of that


• The rule aims to promote the full and fair disclosure.

• But the fact that SEC has jurisdiction over a corporate statement

does not preclude action by FDA.

Issue #3: Securities Disclosures

• The Seminal ImClone Case

• In 2001, rejected ImClone Systems’ BLA for its cancer drug

Erbitux after initially granting fast-track and accelerated

approval status. Before the rejection, ImClone had issued

increasingly positive securities statements which caused its

stock price to rise substantially. The rejection caused the

stock to plummet and investors claimed they were mislead.

• The case lead to a congressional inquiry, an insider-trading

investigation, and civil lawsuits. Many questioned how the

FDA and SEC could have prevented misleading statements to

the investment community.

Issue #3: Securities Disclosures

• Rules of Thumb for Press Releases and Corporate


• FDA is unlikely to object to a disclosure that is required under the

securities laws

• BUT embellishment and gratuitous information may attract FDA’s


• ESPECIALLY if the statements focus on positive information about a

product while omitting negative and/or risk-related information

• AND FDA maintains a centralized procedure for referring to the SEC

statements by FDA-regulated firms that may be false or misleading

• SEC may scrutinize disclosures about FDA-related events to

prevent stock price manipulation

• E.g., if the filing of an NDA is material, so is its rejection

• Securities disclosure requirements are only “an excuse” if a

company has publicly traded securities!

Issue #3: Securities Disclosures

• FDA Enforcement Example: Medtronic Warning Letter (2010)

• FDA cited Medtronic (a publicly traded company) for a September 2006

press release located on the company’s website that announced the

availability of a new device in the United States when the applicable

510(k) for the product was not cleared by FDA until March 2007. In

addition, the press release made several claims for which the company

had not obtained marketing clearance or approval.

• SEC Enforcement Example: BioChemics Securities Fraud Suit


• SEC filed an enforcement action against BioChemics, Inc., a

biopharmaceutical company, along with its CEO, for making false

statements to investors about collaborations with major pharmaceutical

companies and the status and results of drug trials of the company’s

main product.

• The case remains ongoing. SEC is seeking injunctive relief,

disgorgement, and civil penalties, as well as securities-related debarment

orders against the individuals involved.

Issue #3: Securities Disclosures

• Compliance Tips

• Implement internal review procedures to ensure public

statements are accurate, complete, and not misleading

pursuant to both SEC and FDA requirements.

• Review procedures should ensure consistency between

statements to the investment community and to FDA.

• When drafting public statements subject to SEC and FDA


• Be complete and accurate in characterizing trial results.

• Do not omit or mischaracterize relevant communications from

FDA (e.g., clinical holds, safety concerns).

• Do not get out in front of FDA by implying or stating that a

developmental product is safe and effective for an indication that

is still investigational.

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