Recent Regulatory Actions on Advertisement Disclosures

Reed Smith attorneys Kevin Madagan and Keri Bruce were recently quoted in the January 21st edition of Compliance Week in an article titled “FTC, FDA Take Closer Look at Disclosures,” which discusses recent actions by the Federal Trade Commission (FTC) and Food and Drug Administration (FDA) concerning advertisement disclosures. The FTC launched Operation Full Disclosure in fall 2014, involving the distribution of warning letters to more than 60 companies across “a wide range of industries” for allegedly failing to properly disclose information in their advertisements. In the article, Kevin and Keri note that the letters are a reminder to all companies, even those that did not receive letters, to review their disclosures.

The FDA also recently announced that its “fair balance” doctrine may be amended to only require companies to recite or print a product’s most prominent and common side effects during television commercials. While such changes would undoubtedly be welcomed by pharmaceutical manufacturers, it could actually result in the FDA paying more attention to drug disclosures to ensure their continued effectiveness. Kevin also comments that there is precedent of the FDA following the FTC’s lead in such matters, and the crackdown on advertisement disclosures could end up involving both agencies.

To read the article, click here.

FDA Releases Planning Board's Report on National Medical Device Postmarket Surveillance System

FDA has released the Medical Device Postmarket Surveillance System Planning Board’s report, Strengthening Patient Care: Building an Effective National Medical Device Surveillance System, which outlines recommended steps toward achieving the National Medical Device Postmarket Surveillance System (MDS) and strategies for implementation. For more information, see http://blogs.fda.gov/fdavoice/index.php/2015/02/moving-toward-a-national-medical-device-postmarket-surveillance-system/.

Public Consultation Examines Potential Confidentiality Issues with New European Clinical Trial Regulations

Since January 21, the European Medicines Agency (EMA) has been holding a public consultation on the new European Clinical Trial Regulations (CTRs), which are intended to streamline the application process for clinical trials and increase the availability of information and results. However, the CTRs have met with some concerns regarding commercial and patient confidentiality. As described by Reed Smith attorneys John Wilkinson, Nicola Maguire and Adam Lewington in “European Clinical Trial Regulations Public Consultation – Confidentiality Concerns,” the new CTRs propose two exceptions for the disclosure and publishing of clinical trial information on the EMA’s publically accessible portal and database. These exceptions would allow clinical trial sponsors to withhold information that could compromise economic interests or be classified as identifiable personal data. The public consultation concludes today (February 18), with results of the consultation being published thereafter.

To read the client alert, click here.

Insurance Coverage Considerations for Alleged Mislabeling of Herbal and Dietary Supplements

The New York Attorney General recently ordered four major retailers to stop selling herbal supplements that it alleged did not contain labeled ingredients or contained ingredients not explicitly identified on the labels. Companies throughout the supply chain may wish to examine their insurance policies and evaluate whether or not they are properly covered in the event of investigative, enforcement and/or litigious actions. Reed Smith attorneys Brian Himmel, Traci Rea, Evan Knott and Robert Deegan discuss the insurance options available for companies in the supply chain in “Pursuing Insurance Coverage for Alleged Mislabeling of Dietary and Herbal Supplement Products: A ‘Holistic’ Prescription.” Insurance policies which might provide coverage are commercial general liability (CGL), directors and officers liability (D&O), errors and omissions liability (E&O), and product recall policies. The authors also urge companies facing potential issues to consider whether notice should be given to insurers with policies potentially providing coverage, even if no formal claim or lawsuit has been filed.

To read the client alert, click here.

3D Printing Raises Novel Questions About Potential Product Liability

Over on the Drug & Device Law blog, our Reed Smith colleague Jim Beck (aka “Bexis”) has done some deep thinking about possible product liability implications relating to the 3D printed medical devices. With 3D printing, the traditional medical device model – design and manufacture by the manufacturing company, and use or implantation by medical providers in a medical setting – may not fit exactly. Specifically, Jim asks, who is the manufacturer when a medical device is created via 3D printing? The owner of the 3D printer? The designer of the software used to make the 3D device? The manufacturer of the 3D printer? As 3D printing continues to make inroads in health care settings, additional legal issues like this are sure to emerge. Read Jim Beck’s full post here.

False Advertising Claims & The First Amendment

Over on Reed Smith’s AdLaw by Request blog, attorney Caroline Klocko discusses the U.S. Court of Appeals for the District of Columbia Circuit’s January 30th ruling that the Federal Trade Commission (FTC) can prohibit POM Wonderful LLC from advertising that its products are effective in combating illnesses and conditions such as heart disease, prostate cancer and erectile dysfunction. In making the decision, the appeals court rejected POM Wonderful’s stance that under the First Amendment, the company’s advertisements and claims are protected. The court also ruled that the support of one clinical trial is necessary before POM Wonderful can make any subsequent claims of disease-fighting effectiveness – a number that deviates from both the initial amount imposed on POM Wonderful by the FTC (two) and the amount requested by POM Wonderful in its appeal (zero).

To read the full post, click here.

Federal Trade Commission Fines Manufacturers of Weight Loss Supplement $9 Million for Alleged Deceptive Advertising

By a vote of 3-2, the Federal Trade Commission (FTC) decided to fine Genesis Today, Inc. and Pure Health, LLC, manufacturers of a green coffee bean extract (GCBE), in the amount of $9 million for making claims that using GCBE could allow consumers to lose body weight and fat. As detailed by Reed Smith attorneys Sulina Gabale and Matthew Kane in a post on our AdLaw by Request blog, the FTC alleges that the companies’ advertised claims of potential weight loss benefits from using GCBE were deceptive and resulted from a flawed research study. However, the two dissenting FTC commissioners wrote that the amount of the fine was unjustified, namely because it incorporated sales attributed to televised statements by the companies’ founder Lindsey Duncan as well as Dr. Mehmet Oz that were constitutionally protected and non-commercial in nature.

To read the full post, click here.

U.S. Congressional Committees Address Drug And Device Approval

As mentioned on our Health Industry Washington Watch blog, committees in both the House of Representatives and Senate last week addressed the speed at which medical innovations are approved and available for patient use. The House Energy and Commerce Committee’s “21st Century Cures Act” discussion draft, released on January 27, 2015, is a wide-reaching bill that includes provisions regarding drug and device approval, clinical trials, Medicare coverage, and drug safety, among others. The Senate Health, Education, Labor and Pensions Committee’s “Innovation for Healthier Americans: Identifying Opportunities for Meaningful Reform to Our Nation’s Medical Product Discovery and Development” report, released on January 29, 2015, poses questions about effective targeting of government resources, the Food and Drug Administration approval process, clinical trial requirements, public-private partnerships, biomedical research, and U.S. regulations vs. international regulations.

Feedback is being accepted on both the House draft bill and the Senate report. There is no specified deadline for comments on the House draft; comments on the Senate report are due by February 23, 2015.

To read Debra McCurdy’s entire post, click here.

FTC Offers Privacy and Security Guidance for Medical Devices in 'Internet of Things' Report

This post was written by Frederick Lah and Sulina Gabale.

On January 27, the FTC issued a 71-page Staff Report on the privacy and security issues with the Internet of Things. As we’ve noted in our previous blog posts, the Internet of Things (“IoT”) refers to the growing ability of everyday devices to monitor and communicate information through the Internet. This is especially relevant in the life sciences industry, to which the IoT may bring potentially revolutionary advances. For example, insulin pumps and blood-pressure cuffs that connect to a mobile application may enable people to monitor their own vitals, without having to visit a doctor’s office. The recent FTC Staff Report follows up on the FTC’s public workshop over concerns with the IoT, as well as the FTC’s first enforcement action brought in September 2013.

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As 3D Printing Emerges, Legal Considerations and Challenges Arise

The January 25, 2015 edition of the Pittsburgh Post-Gazette featured an article in which Reed Smith partner Chris Healy commented on the dramatic rise in popularity of 3D printing technology and the legal issues that have come about – and may arise in the future – as a result of this trend. The article, “3D Printing Advances Open Up Frontier of Legal Fights,” highlights a number of legal areas in which potential disputes involving 3D printing may arise, including product liability, intellectual property and contracts. In fact, there have already been several instances of intellectual property disputes involving alleged “3D piracy,” in which one party attempts to commercially sell a 3D printed product possibly covered by a patent or copyright owned by another. Chris notes that jurisdictional issues may be complex for any 3D printing disputes that head to court – a 3D printed product may be conceived in one state, programmed in another, and printed in a third – and it will be the responsibility of the courts to decide where a particular dispute should be heard.

A Call for Explicit Requirement of Ascertainability in Class Actions

Over on the Drug & Device Law blog, Reed Smith partner Jim Beck (aka “Bexis”) makes a case for adding an explicit ascertainability requirement to Fed. R. Civ. P. 23 (Rule 23), presently under examination by the federal Advisory Committee on Civil Rules for possible amendment. Bexis points out that many courts already (properly) impose an implicit requirement that any proposed class be ascertainable—that is, have a class definition that allows the proposed class members to be readily be identified without detailed individualized inquiries. Adding an explicit ascertainability requirement would bring further rigor to class procedure, give litigants certainty about who is meant to be bound by any class judgment, and require the rejection of any prospective class action where the court cannot “readily identify the class members in reference to existing objective criteria.” Read the full post here.

Life Sciences and Health Care Industries Reap the Benefits of 3D Printing

This post was written by Colleen Davies and Lisa Baird.

The past few years have seen 3D printing – a process that involves the creation of a three-dimensional object from a pre-conceived design – evolve from a futuristic idea into a multi-billion dollar business, and few industries have benefitted more from this technology than life sciences and health care. 3D printing has been used to create models of medical devices, body parts and organs that medical professionals can use in planning treatments. For example, the 3D printing company Stratasys recently debuted its newest printer specializing in the creation of dental applications, including veneer and denture try-ins.

Perhaps the most palpable application of 3D printing in the health care industry has been through the creation of surgical models. As detailed in a recent article in CNET Magazine, doctors at Miami Children’s Hospital used 3D printing to create a scale model of a 4-year-old girl’s heart. The girl, who suffers from a life-threatening heart condition, required a complicated and inventive surgery to fix the issue. The physicians were able to use the printed model to plan the surgery, which was ultimately performed successfully on the 4-year-old patient. Similar models have been printed of a stone-obstructed kidney and an infant’s skull, each of which aided doctors in preparation for a successful surgery.

The surge in 3D printing does raise speculative questions regarding product liability. Liability questions about this technology are only now being asked, and certainly have not yet been answered. For example, this article in LawyerMade Magazine raises hypotheticals about strict products liability for products created by 3D printers.

As this new manufacturing technology continues to be adapted and adopted in more and new settings, the novel legal issues will bear watching as they emerge.

Drug Disposal Ordinance: Supreme Court Writ Filed

This post was written by Gary Jeffrey and Charlene Chen.

On December 29, 2014, the Pharmaceutical Research and Manufacturers of America (“PhRMA”), the Biotechnology Industry Organization (“BIO”), and the Generic Pharmaceutical Association (“GPhA”) jointly filed a Petition for a Writ of Certiorari (Case No. 14-751) with the United States Supreme Court, asking for review of a case with widespread implications for pharmaceutical manufacturers and distributors throughout the nation. The Writ seeks reversal of the Ninth Circuit’s decision, PhRMA v. County of Alameda, No. 13-16833, 2014 WL 414407 (9th Cir. Sept. 30, 2014), which affirmed the constitutionality – under the dormant Commerce Clause – of Alameda County’s Safe Drug Disposal Ordinance, enacted in July 2012.

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New Jersey Enacts Data Privacy Law for Health Insurance Carriers

A newly-enacted law signed by New Jersey Governor Chris Christie requires health insurance carriers in that state to adequately protect the personal information of individuals, with failure to do so being classified as a violation of the New Jersey Consumer Fraud Act (NJCFA). According to “New Jersey Requires Encryption for Health Insurance Carriers; May Open Door to Class Action Suits over Violations Under State Consumer Protection Law,” a post on Reed Smith’s Global Regulatory Enforcement Law Blog written by partners Paul Bond and Brad Rostolsky, the established connection between this new law and the NJCFA means that health insurance carriers should follow its requirements closely in order to avoid possible violations and fines. As a practical matter, business associates of New Jersey health insurance carriers should be considered on notice that this new encryption requirement may start to flow down contractually to business associates through the terms of business associate agreements.

To read the full post, click here.

County Ordinances Place Responsibility for Collection of Unwanted Pharmaceuticals on Manufacturers

The Alameda County (CA) Safe Drug Disposal Ordinance (Alameda County Code Chapter 6.53, §§ 6.53.010-6.53.120) is one of several county-wide regulations across the United States to enforce the establishment of and/or participation in Product Stewardship Plans on the part of pharmaceutical manufacturers, with the ultimate goal of collecting unwanted drugs for purposes of disposal. The Alameda County Ordinance consists of two components: the establishment and maintenance of secured drug “disposal kiosks” at multiple locations around the county, and the creation and dissemination of “outreach” materials to make consumers and retailers aware of the program and locations of the kiosks. Reed Smith attorneys Gary Jeffrey and Charlene Chen discuss these ordinances – particularly the one enacted in Alameda County – in “Counties Seek To Implement Drug Disposal Ordinances.” While Gary and Charlene commend the goal of safe drug disposal, they criticize the Alameda County Ordinance as being “ill-conceived and arbitrary,” citing the lack of regulation for county officials to enforce the Ordinance, as well as other potential issues such as environmental effects and worker health and safety.

To read the client alert, click here.