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.

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.

China's Medical Device Regulations Receive Notable Revisions

Significant Revisions to China's Regulations on the Supervision and Administration of Medical Devices (State Council Order No. 650)

China’s State Council released its new Administrative Regulation on the Supervision and Administration of Medical Devices March 7, 2014, which will be effective June 1, 2014 (the New Regulation).

The State Council Legislative Affairs Office worked more than six years revising the predecessor of the New Regulation (the Old Regulation), which had been effective since 2000. The revisions are intended to establish a more efficient and scientific regulatory regime for supervision and administration of medical devices. The New Regulation addresses research and development, clinical trials, product approvals, manufacturing, business operations, sales, and advertising. Generally, the New Regulation moderates the oversight of low-risk medical devices and strengthens the supervision on high-risk devices. The New Regulation, summarized in a full client alert written by Reed Smith attorneys Jay Yan, Gordon Schatz, Mao Rong, and Liu Yang, will have a significant impact on all medical device enterprises.

Revised Administrative Measures on Medical Device Quality – CFDA Seeks Comments by June 15

On May 15, CFDA released its Measures on the Supervision and Administration of the Quality of Medical Devices in Use for public comment. Under the measures, medical device operators will be required to establish a quality management system especially for Class III devices. Features of this proposed system cover the purchase of medical devices, an incoming stock inspection and recording system, an inbound and outbound management system, a daily maintenance and recording system, a quality traceability recording system, a management system for disposable medical devices, and a management system for contracts and technical documents for products. Comments are due to CFDA by June 15, 2014 at: 26 Xuanwumen West Street, Beijing, China 100053, and email: The proposal can be viewed here.

Navigating the Complicated, Yet Rewarding, World of Social Media

The social media phenomenon has radically transformed the ways in which commercial businesses promote their services and products. However, as a result, companies must consider potential legal risks from an entirely new angle. To become a successful user of social media, a company must draft, review, disseminate and enforce a social media policy that addresses potential legal issues while at the same time emphasizing positive exposure for the business.

For more information on how your business can utilize social media to maximum effect while exercising compliance with legal guidelines, see Reed Smith’s newly published Third Edition of its white paper on social media, “Network Interference: A Legal Guide to the Commercial Risks and Rewards of the Social Media Phenomenon (3rd Edition).” This updated guide now covers practical, action-oriented guidelines as to the state of law in both the United States and Europe, and is an invaluable resources for companies navigating the social media world.

Do You Know Where Your Pharmaceuticals Are From? Navigating the "Country of Origin" Question for Pharmaceutical Products

Drug and medical device manufacturers are often faced with difficult — and sometimes unexpected — challenges in sorting out the country of origin for their products, which are often sourced, processed and manufactured in multiple countries.

One would think it would be easy to answer the question, “What is a pharmaceutical product’s ‘country of origin’?” Unfortunately, as Jeffrey Orenstein and Lorraine Campos point out in “Origin of the Pieces: How to Determine a Pharmaceutical Product’s ‘Country of Origin,’” the answer to this question is not as simple as many would think – and the correct answer can depend on who is asking. Jeff and Lorraine’s article is published in the Spring 2014 edition of the Public Contract Law Journal.

Don't Forget: FDA Frequents Facebook

This post was written by Jillian Riley and Kevin Madagan

In only the second Untitled Letter of the year, FDA’s Office of Prescription Drug Promotion warned a Swiss drug company about statements the company made on its Facebook page. Notably, FDA became aware of the company’s Facebook promotion through its own monitoring and surveillance program.

The alleged violations themselves were straightforward and similar to more traditional advertising actions: failure to include risk information and omission of material facts. What makes this letter interesting is that the activity occurred on a social network. On its Facebook page, the company suggested consumers talk to their doctor if they have been diagnosed with the condition for which the drug at issue is indicated. Nowhere on the page did the company warn consumers about the risks associated with the product – risks serious enough to require a boxed warning on the label. Neither did the company include any discussion about limitations of the drug’s use. FDA requested the company immediately cease this promotional activity – and the company has complied. The Facebook page at issue is no longer active.

The takeaway here is to remember that FDA’s advertising and promotion rules apply regardless of how or where you promote your product.  You must assume that all activity on social media networks, including Facebook and others, will be scrutinized by the FDA.

There are HOW many calories in that? FDA Proposes First Overhaul to Food Label in 20 Years - Comment Opportunity

 This post was written by John Feldman and Jillian Riley

Today FDA announced long-awaited changes to the iconic Nutrition Facts label for foods.  According to FDA, the goal of the proposed changes is not to tell consumers what they should or should not be eating, but to expand and highlight the information consumers need most to make a well-informed food choice.

Calories and Serving Size

The most notable changes involve the display. The proposed label emphasizes through font size and bold type the number of calories per serving size and the number of servings per container. In order to better capture how average Americans eat, FDA is also proposing changes to how serving sizes themselves are calculated. Gone will be the days where a pint of ice cream is four serving sizes; now FDA says it is two. FDA stresses that these proposed changes are based on current scientific thinking in the area of nutrition science and based on the most recent public health and nutrition surveys. The current nutrition Facts Panel, which has been in use for 20 years, relied on consumer consumption data from the 70s and 80s. American eating patterns have changed and FDA hopes these new labels will better reflect current consumption patterns.

Added Sugars

Another major change involves how the Nutrition Facts panel displays the amount of sugar contained in a food. The current label lists just “Sugars” which can refer to both naturally occurring and sugars added during the production process, the propose label requires “Added Sugars” to be a separately listed category which would include only those sugars added to the food during production.

Nutrient Content and % Daily Value Calculations

Other changes include updates for to how to calculate the Percent Daily Value for nutrients such as fiber and calcium, requirements to list nutrients such as Potassium and Vitamin D, and no longer requiring the label to include Vitamins A and C.

From a public health standpoint, the proposed changes raise three important and related questions:

  1. Will consumers read and understand the new information provided on the Nutrition Facts panel?
  2. Will the updated and highlighted information lead consumers to make better food choices? 
  3. Will those better food choices lead to better health outcomes?

The new Nutrition Facts panel has implications in the advertising world as well. Claims about nutrition content of foods are based on what the manufacturer is permitted to say in the Nutrition Facts panel. Changes to the panel necessarily mean changes to how food companies are permitted to advertise their products. We will certainly see a new wave of advertisers capitalize on foods with “No Added Sugars” but what other patterns should we expect?

The proposed rules are available here: Revision to the Nutrition and Supplement Facts Labels; and Serving Sizes of Foods That Can Reasonably Be Consumed At One-Eating Occasion, et. al

FDA will be accepting comments for 90 days.

FDA Issues Final Guidance on DHCP Letters

As mentioned on our Health Industry Washington Watch blog, the Food and Drug Administration issued a final guidance document on January 16, 2014 which provides specific recommendations on the content and format of Dear Health Care Provider (DHCP or “Dear Doctor”) letters. The recent guidance finalizes a draft guidance FDA published in November of 2010. To read the entire post, click here.

Keeping FDA Up-to-Date on Your Drug Company's Social Media Activity - Comment Opportunity

This post was written by Jillian W. Riley.

FDA has issued draft guidance addressing the unique challenges of drug promotion in the age of social media. Specifically, the draft guidance sheds light on how to comply with FDA’s postmarket submission requirements when interactive promotional media constantly changes. In laying out the criteria for how and when to submit interactive promotional media for postmarket review, FDA gives important insight into the type of social media promotion in which it is most interested.

What type of social media activity does FDA want to review?

The draft guidance provides several scenarios to consider when determining whether interactive promotional media should be submitted to FDA for review. The unifying theme appears to be the degree of control the firm can assert over the content of the website.

  1. The first scenario is where a firm is responsible for product promotional communications on sites that are owned, controlled, created, influenced, or operated by, or on behalf of, the firm. This specifically includes Twitter and Facebook. The central question becomes “whether the firm, or anyone acting on its behalf, is influencing or controlling the promotional activities in whole or part.” Regardless of the scope of the influence, if the firm can exert any influence, it is responsible for the scope of the content and needs to submit that content to FDA for review. If the content is both firm generated and user generated, FDA still wants to see it.
  2. The second scenario is where a firm is responsible for promotion on third-party sites. The same framework applies: whether the firm has any control or influence on the third-party site, regardless of the scope of that influence. FDA distinguishes here between sites where the firm has editorial, preview, or review privileges and sites where the firm only provides financial support and has no role in the information contained on the site, with only the former needing to be submitted for FDA review. As an example of content that needs to fulfill the postmarketing submission requirement, FDA discusses a firm making suggestions regarding the placement of its promotional message on an independent third-party site. When submitting this type of content for FDA review, FDA wants to see the firm’s content in addition to the surrounding pages so as to provide adequate context for FDA’s review.
  3. The third scenario is where a firm is responsible for content generated by an employee or agent who is acting on behalf of the firm to promote the firm’s product. This includes all user-generated content on any site if the user is acting on behalf of the firm. For example, a blogger writing on behalf of the firm or an employee or agent of the firm commenting on a third-party site about the firm’s product. FDA recommends transparency for this type of communication; disclosing the firm’s involvement on a site by clearly identifying the user-generated content of its employees or agents.

How should these materials be submitted to FDA when the social media sites change so frequently?

“FDA recognizes the challenges of submitting promotional materials that display real-time information” and provides a framework for how best to notify the agency of that promotional material.

  • “At the time of initial display, a firm should submit in its entirety all sites for which it is responsible.…” The firm should include annotations alerting FDA to which parts of the site are interactive and allow for real-time communications. Any subsequent changes should be submitted when those changes are made. FDA prefers to receive the submission in an archivable format that allows the agency to interact with the submission in the same way the end-user would. Screen shots or other visual representations are an acceptable alternative.
  • For third-party sites, at the time of the initial display, the firm should submit the home page of the site along with the interactive page within the site and the firm’s initial display.
  • “Once every month, a firm should submit an updated listing of all non-restricted sites for which it is responsible or in which it remains an active participant and that include interactive or real-time communications.” As long as the site does not restrict access, these monthly submissions do not need to include screenshots, because, presumably, FDA will be visiting these sites. Multiple sites and the corresponding document can be provided in one submission, with each site contained in separate document. Further, the firm should notify the agency when it ceases to be active on a particular site.
  • For restricted access sites, “a firm should submit all content related to the discussion” in order for FDA to conduct an adequate review. This may or may not include independent user-generated content. Screenshots or other visual representations of the actual site, including all interactive or real-time communications, should be submitted monthly.

Comments on the document, “Draft Guidance for Industry on Fulfilling Regulatory Requirements for Postmarketing Submissions of Interactive Promotional Media for Prescription Human and Animal Drugs and Biologics,” are due April 14, 2014.

Life Sciences Health Industry China Briefing - June 2012 (July 20, 2012)

This post was written by John Tan, Jay J. Yan, Mao Rong, Katherine Yang, and Gordon B. Schatz.

Reed Smith’s Life Sciences Health Industry China Briefing provides a summary of the monthly news and legal developments relating to China's Pharmaceutical, Medical Device, and Life Sciences/ Health Care Industries.

Pharmaceuticals, Medical Devices, Health Care & Life Sciences 


  • China's Compulsory License Rule Has Drug Companies On Edge (Law360 2012-06 12) — June 14, 2012

China's new patent regulations allowing the government to force drug companies to grant compulsory licenses for generic versions of their products if it is deemed to be in the "public interest" has the pharmaceutical industry worried about where China will draw the line, attorneys said. The new regulations issued by China's State Intellectual Property Office last month say the government can order compulsory licenses for generic drugs when there is a "national emergency or any extraordinary circumstances, or for public interest purposes." What constitutes the public interest is very much open to interpretation and appears to give the Chinese government broad leeway to order drug companies to allow generic versions of drugs that are still covered by patents.

  • Beijing to Carry out Pilot Project of Separation of Dispensing from Prescription: Medical Service Fee up to 100 Yuan (Caixin Media 2012-05-19) — June 20, 2012
Following Shenzhen and Shanghai, Beijing will initiate the pilot project to cut off the relationship between the income of hospitals and drug sales. Beijing plans to cancel the price addition to lower drug price, and to cancel the registration fee and diagnosis fee, which will be replaced by the medical service fee. The medical service fee will be divided into four levels:  42 yuan for ordinary physicians, 60 yuan for deputy chief physicians, 80 yuan for chief physicians and 100 yuan for expert physicians. The medical insurance will reimburse 40 yuan for the medical service fee. In addition, Beijing Friendship Hospital, Beijing Chaoyang Hospital, and Beijing Children's Hospital will carry out the legal person governance mechanism in order to provide experiences for the further reform of public hospitals in Beijing.
  • Drug Company to Acquire Controlling Stake (China Daily 2012-06-28) — June 29, 2012
China Pharmaceutical Group Ltd, which derives almost half of its sales from antibiotics, will buy a maker of finished drugs from its controlling shareholder for HK$8.98 billion ($1.2 billion) worth of new stock and convertible bonds. The purchase of Robust Sun Holdings Ltd will reduce the company's reliance on drug intermediaries, bulk antibiotics, and vitamin C, which now account for 66 percent of its sales.
  • Investors Eye Chances in High-End Healthcare (Shanghai Daily  2012-06-19) — June 19, 2012
As demand for high-quality health care rises in China, venture capital and private equity companies are taking advantage of ample investment opportunities in the nation's private and specialized hospitals. There were 158 investment deals in the medical and health care sector last year, worth $4.14 billion, around the same amount as the total deals in the sector from 2006 to 2010, according to a report from the Zero2IPO research center. The report said 28 medical and health care companies were listed last year, raising $5.33 billion, and 12 of them were backed with VC or PE investment.  The State Council passed a medical reform plan in 2009 that promised to spend 850 billion yuan ($123 billion) by last year to provide universal medical services to the country's 1.3 billion people. "We treat private medical institutions equally (with public ones), and they can be included in the scope of basic medical insurance under certain conditions," said Li Jinghu, deputy director of the Institute of Social Security at the Ministry of Human Resources and Social Security. In April, the State Council issued a statement on deepening the medical system reform, which states that local governments are required to issue detailed regulations to encourage private capital into this industry, and to guide the restructuring of certain public hospitals. A total of 300 county-level hospitals will take part in a pilot program that will see them undergo reforms in finance, management and human resources, according to guidelines published on the central government's website in June.
  • CIRC Encourages Insurance Companies to Establish Medical Institutions to Expand Business (Caijing 2012-06-20) — June 21, 2012
China Insurance Regulatory Commission (CIRC) issued a Notice concerning Fulfillment of the Programs on Deepening the Medical Reform during the 12th Five-Year Period. According to the Notice, CIRC will conduct research on the feasibility and the effective way for insurance companies to establish medical institutions and become involved in the restructuring of public hospitals. In fact, the encouragement on insurance companies to invest in hospitals has been mentioned in the Opinions of State Council on Reform and Development in the Insurance Industry in 2006. Accordingly, China PingAn Insurance signed an agreement with the Longgang District Government of Shenzhen to establish a Chinese medicine hospital in Longgang last year as a pilot.
  • MOH and Medical Reform Office under State Council Respond to Questions on Opinions of Comprehensive Reform Pilot Project of Public Hospitals at County Level (National Development and Reform Commission 2012-06-15) — June 15, 2012
The State Council recently issued the Opinions concerning the Comprehensive Reform Pilot Project of Public Hospitals at County Level. The Opinions aim to ease the difficulties and the problems of expensive medical charges in the medical treatment for rural residents. The comprehensive system for the medical cost through drug-selling profits shall be eradicated. The pilot public hospitals at county level will be compensated through service charges and government subsidy. Each county (city) shall have one to two hospitals (including Chinese medicine hospital) at county level. The county (city) with more than 300,000 population shall have at least one Grade 2A hospital. Remote consultation, remote diagnosis, and distance education will be realized among hospitals at county level. In addition, excellent professionals will practice at county level hospitals through nurturing and offering preferential treatment.
  • 311 Counties to Pilot China's Hospital Reform (Xinhua News Agency 2012-06-27) — June 27, 2012
China has nominated 311 counties or county-level cities in a program to pilot reform of the country's public health care facilities, the Ministry of Health announced Tuesday. The national initiative includes 83 counties or county-level cities in East China, 136 in Central China, and 92 in West China, according to the ministry. The 311 counties or county-level cities are expected to undergo reforms in finance, management and human resources by 2015 to enhance their capacity.
  • First Wholly Taiwan-funded Hospital Opens (Shanghai Daily 2012-06-27) — June 27, 2012
The Chinese mainland's first wholly Taiwan-funded hospital opened in Shanghai yesterday. It is the first solely invested Taiwan hospital to receive the green light on the mainland after the Economic Cooperation Framework Agreement, or ECFA, was signed between the mainland and Taiwan authorities in 2010. Established by the Taipei-based Landseed International Medical Group, the Shanghai Landseed International Hospital, with a 150 million yuan (US$23.81 million) investment, is mainly aimed at Taiwanese, expatriates living in Shanghai, and locals with high-end health demands, hospital officials said.
  • Smiling Angel Children's Hospital To Go into Operation (Caixin Media 2012-06-24) — June 25, 2012
Beijing Smiling Angel Children's Hospital, the first private charity children’s hospital run by film star Li Yapeng, will go into operation July 1. The hospital will operate in nonprofit mode based on the Smile Angel Foundation. Given the current shortage of pediatricians, the hospital will provide medical services through the multi-site practice of the pediatricians from the public hospitals. Apart from the children from poor families, the hospital will also be opened to ordinary families. Some high-quality services will be charged highly accordingly. All the income will be used to develop the hospital in sectors including R&D and medical assistance, and there will not be dividends to the shareholders. The operation cost will be mainly from the social donations through charity dinners, small donations and other manners. 
  • China Medical Services Market to Hit $500B (Agencies 2012-06-25) — June 25, 2012
China needs to bolster its medical services and investors are ready to help, Bloomberg reported. The latest is Carlyle Group LP-backed Concord Medical Services Holdings Ltd, which last week completed a deal for a 52 percent stake in Chang'an Hospital, a 1,000-bed facility at the eastern end of the Silk Road, according to Bloomberg. China's medical services market is growing 18 percent annually and is projected to reach 3.16 trillion yuan ($500 billion) in 2015, Bloomberg reported, citing accountancy firm Deloitte China.

Life Sciences Health Industry China Briefing - May 2012 (June 14, 2012)

This post was written by John Tan, Jay J. Yan, Mao Rong, Katherine Yang, and Gordon B. Schatz.

Reed Smith’s Life Sciences Health Industry China Briefing provides a summary of the monthly news and legal developments relating to China's Pharmaceutical, Medical Device, and Life Sciences/ Health Care Industries.

Some important developments during May include:

  • Introduction of Administrative Measures on Clinical Application of Antimicrobial Drugs
  • Two Agencies Crack Down on Violent Crime Against Medical Personnel
  • Medical Insurance Reimbursement for Hospitalization to Reach 75% of Total Expenses During 12th Five-Year Plan
  • Foreign Medical Workers to Receive TCM Training in Shanxi 
  • MOH Requires Class B and Higher Hospitals to Establish Security Offices
  • China to Expand Medical Payment Reform
  • SFDA Campaign to Regulate TCM Raw Material Market
To read the full briefing by Reed Smith China team members, click here.


Life Sciences Health Industry China Briefing - February 2012 (March 13, 2012)

This post was written by Jay J. Yan, Mao Rong, Zack Dong, Katherine Yang, Joyce Sun, Sara Lai and Gordon B. Schatz.

Reed Smith’s Life Sciences Health Industry China Briefing provides a summary of the monthly news and legal developments relating to China's Pharmaceutical, Medical Device, and Life Sciences/ Health Care Industries.

Some important developments during February include:

  • Release of the 12th Five-Year Plan on Drug Safety and Standards
  • SFDA: Concentrated Rectification Action in National Drug Manufacturing and Distribution Sectors
  • Twelve Ministries: Crackdown on Serious Illegal Advertisement Broadcasting
  • SFDA: Electronic Drug Supervision Plan from 2011 – 2015
  • MOH: Administrative Measures on Health Card for Residents (for Trial Implementation)
  • MOH: Revised Diseases Classification and Code

To read the full briefing by Reed Smith China team members, click here.

FDA Launches "Bad Ad Program" to Help Health Care Providers Detect, Report Misleading Drug Ads

This post was written by Areta Kupchyk and Kevin Madagan.

On May 11, 2010, the U.S. Food and Drug Administration (FDA) launched a new initiative – the “Bad Ad Program” – designed to educate health care practitioners about their role in ensuring that prescription drug advertising and promotion is truthful, and not misleading. With the launch of this program, FDA, through the Division of Drug Marketing, Advertising, and Communications (DDMAC), a division within FDA’s Center for Drug Evaluation and Research, is now actively seeking to “collaborate with health care professionals” to increase the effectiveness of the agency’s marketing and advertising surveillance program. DDMAC is responsible for assuring prescription drug information is truthful, balanced, and accurately communicated, and guarding against false and misleading advertising and promotion through comprehensive surveillance, enforcement, and educational programs.

FDA introduced the Bad Ad Program through a dedicated website, an educational brochure for practitioners (Truthful Prescription Drug Advertising and Promotion: The Prescriber’s Role), and a letter from FDA Commissioner, Dr. Margaret Hamburg, introducing practitioners to the program.

“I am asking you to help FDA in our efforts to stop misleading prescription drug promotion,” states the Commissioner in her letter. “The Bad Ad Program can only succeed with your collaboration. Your help in this effort will be most beneficial to FDA in helping to ensure that prescription drug promotional information is accurately communicated to the medical community.” 

The Bad Ad Program website encourages health care practitioners to “play an important role” for FDA by “recognizing and reporting” misleading advertising and promotion. FDA wants practitioners to be “aware of the many advertisements and promotions that [they] see every day,” and help FDA stop violations by “reporting activities and messages” that may be false or misleading. 

The Bad Ad Program will be rolled out in three phases. In Phase 1, DDMAC will engage health care practitioners at specifically-selected medical conventions in 2010 and partner with specific medical societies to distribute educational materials. At these conferences, DDMAC reviewers will be speaking with practitioners regarding how to recognize misleading prescription drug promotion and how to report any potential violations to FDA. Phases 2 and 3 will expand the FDA’s collaborative efforts and update the educational materials developed for Phase 1. 

FDA Issues Proposed Rule Governing Major Statements in Television and Radio Advertisements

This post was written by Paul Sheives, Areta Kupchyk and Kevin Madagan.

FDA has released a proposed rule that would amend the regulations affecting direct-to-consumer (“DTC”) advertisement regulations to implement a provision of the Food and Drug Administration Amendments Act of 2007. The change in regulations would require DTC television or broadcast advertisements of prescription drugs to place the “major statement” in a “clear, conspicuous and neutral manner.” Under the regulation, FDA would use the following standards to determine whether the information meetings the clear, conspicuous and neutral requirement: 1) information is presented in language that is readily understandable by consumers; 2) audio information is understandable in terms of the volume, articulation, and pacing used; 3) textual information is placed appropriately and is presented against a contrasting background for sufficient duration and in a size and style of font that allows the information to be read easily; and 4) the advertisement does not include distracting representations (including statements, text, images, or sounds or any combination thereof) that detract from the communication of the major statement.

To learn more about FDA's proposed rule on DTC advertising, please read our full alert.

FTC (Revised) Endorsement Guides Go Into Effect

As noted by our colleagues at Legal Bytes, on December 1, 2009, the revised "Guides Concerning the Use of Endorsements and Testimonials in Advertising" released by the Federal Trade Commission ("FTC") came into effect. Washington, D.C. partner John P. Feldman, an authority in advertising regulations and compliance, recently outlined some considerations every advertiser should take into account in his memo, "FTC Endorsement Guides (Revised) - Some Thoughts As They Become Effective." To read John's full analysis, click here.

Legal Bytes has been following new developments regarding the FTC's Guidelines since November 2008. In case you missed any earlier updates, you can refer back to them here: FTC Testimonial and Endorsement Guides Stimulate Industry Comment (March 2009); a presentation given at the University of Limerick on the subject entitled "Trust Me, I'm a Satisfied Customer: Testimonials & Endorsements in the United States," which you can download (If You Didn't Make It to Ireland ...); Ghostwriters: Medical Research or Paid Endorsers (and are they mutually exclusive?) and Rights of Publicity - Wake Up and Smell the Coffee! (both in August 2009); and FTC Releases Updated Endorsement & Testimonial Guidelines and Reed Smith Analysis of the New FTC Endorsement and Testimonial Guidelines (both in October 2009).

FDA's Emerging Internet Policy: Themes and Recommendations From Public Hearing on Promotion of FDA-Regulated Medical Products Using the Internet and Social Media Tools

This post was written by Areta Kupchyk, Kevin Madagan, and Paul Sheives.

Following a decade-long hiatus, the Food and Drug Administration (“FDA”) appears ready to finally address industry Internet communications. FDA’s Center for Drug Evaluation and Research (“CDER”) in collaboration with other divisions within FDA, held a two-day hearing on November 12th and 13th to help the Agency determine how the statutory provisions, regulations, and policies governing advertising and promotional labeling should be applied to product-related information on the Internet and emerging technologies.

Much has changed since 1996, the last time FDA held a public hearing on this topic. The Internet is now widely used as a medium for companies to disseminate information about their products, and the Internet's ability to facilitate communication and collaboration has substantially evolved over the last few years primarily as a result of a second (Web 2.0) and now third (Web 3.0) generation of Internet development and website design. The inherent flexibility and intelligence of Web 2.0 and 3.0 is great for society, but also fraught with risk for an FDA-regulated industry that must carefully control its interactions with consumers and health care practitioners. Indeed, the industry has largely avoided using Web 2.0 out of fear that any social media use may result in FDA enforcement action. 

Given the above, it is not surprising that FDA’s hearing was a welcome relief to many. Even though the hearing technically was only an information gathering exercise for FDA, it was an important opportunity for industry leaders and stakeholders to contribute to FDA’s emerging Internet policy. This Client Alert provides a brief summary of the major themes and recommendations from the presenters at the hearing.

In addition, please see a related commentary on the blog Adlaw by Request (“FDA Seeks To Understand Social Media”). Adlaw by Request is a blog designed to provide regular news on advertising law developments in the United States and elsewhere, with practical commentary and analysis from Reed Smith’s Advertising, Technology and Media (ATM) practice.

FDA Discusses Social Media Advertising Regulation for the Life Sciences Industry

This post was written by Dana Blanton.

On November 12 and 13, 2009, the FDA hosted public hearings to vet the potential need for regulation of prescription pharmaceutical and medical device marketing on social media outlets such as YouTube, Wikipedia, Facebook, and Twitter. The FDA specifically sought input on these five questions: (1) For what online communications are manufacturers, packers or distributors accountable? (2) How can manufacturers, packers, or distributors fulfill regulatory requirements in their Internet and social media promotion, particularly when using tools that are associated with space limitations and tools that allow for real-time communications? (3) What parameters should apply to the posting of corrective information on Web sites controlled by third parties? (4) When is the use of links appropriate? and (5) Questions specific to Internet adverse event reporting.

The hearings attracted both internet and ethical drug and device industry giants, as well as nonprofit organizations seeking to gain a better understanding of what will certainly be a new frontier for advertising these regulated products. The FDA's existing regulations for print and television advertising are widely considered unsuitable for social media outlets, some of which allow for no more than 140 characters per post--far too few to include FDA-mandated safety information--and most of which allow for uncensored layperson commentary sometimes indistinguishable from manufacturer content. As a result, pharma and medical device representatives reported, drug and device companies have been reluctant to venture into the social media advertising field. Meanwhile, media and marketing firms offered pre-packaged advertising solutions and industry critics suggested that the FDA and pharmaceutical and device companies should bear the burden of correcting misinformation on third party websites and blogs. The FDA will consider the commentary and determine whether guidelines should be promulgated.

Information on the hearing, including background, further information regarding the five issues presented, a link to transcripts of the FDA's 1996 hearing on internet advertising and other information may be found in the Federal Register Notice for the hearing and transcripts of the November 12 and 13, 2009 hearings will be available by approximately December 13, 2009.

Prescription Drug and Medical Device Promotion Article Published in AHLA Health Lawyers Weekly

The article on "Prescription Drug and Medical Device Promotion – New FDA Draft Guidance on Presenting Risk Information" by Reed Smith lawyers Areta Kupchyk, Frederick Branding, Jennifer Goldstein and Kevin Madagan (previously discussed in this post) has now been published in AHLA's Health Lawyers Weekly (log in required).

Vermont Enacts Revised HCP Disclosure Requirements, Gift Ban

This post was written by Matthew Wetzel.

On June 9, 2009, Vermont’s governor signed S. 48, a new law that revises the state’s current pharmaceutical marketing disclosure requirements. The new statute expands the application of Vermont’s current requirement that pharmaceutical manufacturers annually disclose certain expenditures made in connection to interactions with Vermont health care professionals. Under the new law, the disclosure requirement now also applies to medical device companies. Further, the new law adds a ban on certain items and expenditures that was not included in the previous version. Notably, this gift ban goes into effect July 1, 2009.

For more information, please read Reed Smith's full alert summarizing the revised Vermont law, including key dates for compliance.

Prescription Drug and Medical Device Promotion - New FDA Draft Guidance on Presenting Risk Information

This post was written by Areta Kupchyk, Frederick Branding, Jennifer Goldstein and Kevin Madagan.

On May 27, 2009, the Food and Drug Administration (“FDA”) announced the availability of a draft guidance titled “Presenting Risk Information in Prescription Drug and Medical Device Promotion” (“Draft Guidance”). The Draft Guidance sets forth the standards FDA intends to consider when evaluating promotional pieces to determine whether they effectively communicate risk information in a non-misleading manner. Under the Food, Drug & Cosmetic Act (“FDCA”) and FDA’s implementing regulations, promotional materials making claims about a product are deemed misleading if they fail to disclose certain information about the product’s risks. FDA is accepting comments on the draft through Aug. 25, 2009. Reed Smith’s full alert provides a brief outline of the Draft Guidance and identifies issues for possible comment to FDA.

Advertising of medicinal products versus freedom of expression of a journalist - European Court of Justice Decision dated 2 April 2009 (C-421/07) "Frede Damgaard"

The European Court of Justice ("ECJ") recently had the opportunity to opine on limits on the scope of advertising for medical products in the European Union, when a journalist who had reprinted factual information about a pain medication sold in Norway but prohibited in Denmark, was made an example under Danish legal provisions prohibiting advertising for medicinal products that are not lawfully marketed in Denmark. As exmplained by Paule Drouault-Gardrat, Julie Gottenberg and Juliette Peterka in "Advertising of medicinal products versus freedom of expression of a journalist - European Court of Justice Decision dated 2 April 2009 (C-421/07) 'Frede Damgaard' " (available also in French), the ECJ concluded the issue was a matter for the national court in the first instance, relying in part on a line of French cases holding that any publication praising the merits of a medicinal product must be considered as advertising whomever its author, regardless of whether the manufacturer sought or paid for publication.

Massachusetts Releases Final Drug and Device Marketing Restrictions and Disclosure Requirements

This post was written by Matthew E. Wetzel

On March 11, 2009, the Massachusetts Department of Public Health (the “Department”) released final regulations that impose restrictions on pharmaceutical and medical device manufacturers’ sales and marketing activities. The final regulations—which implement section 14 of the Massachusetts Act to Promote Cost Containment, Transparency and Efficiency in the Delivery of Quality Health Care (the “Act”)— also require companies to file annual disclosures of all fees, payments and economic benefits paid to health care professionals that total $50 or more.

Massachusetts now joins seven other jurisdictions that have issued similar requirements. Currently, California and Nevada both require manufacturers to adhere to restrictions on marketing activities, and the District of Columbia, Maine, Minnesota, Vermont and West Virginia all mandate periodic disclosures of payments and other economic benefits to health care professionals. Massachusetts, however, has the broadest regulations in two regards. First, Massachusetts is the only state to include both a marketing code of conduct that is specifically enumerated in detail in the regulations as well as annual financial disclosure obligations. Other jurisdictions require adherence to a marketing code or disclosure, but not both. Second, Massachusetts is the first state to require financial disclosure from medical device companies. Financial disclosure requirements in other states currently only apply to pharmaceutical companies.

For additional details regarding the final Massachusetts marketing restrictions and disclosure requirements, including a list of key dates for compliance and a chart detailing marketing restrictions, please see Reed Smith's full alert (.PDF), "Massachusetts Releases Final Restrictions on Drug and Device Marketing Activities, Annual Financial Disclosure Requirement."

Pharmaceutical Package: Safe, Innovative and Accessible Medicines and A Renewed Vision For the Pharmaceutical Sector

This post was written by Paule Droualt-Gardrat, Juliette Peterka and Julie Gottenberg.

On December 10, 2008, the European Commission published a series of political measures and legislative proposals, the so-called “Pharmaceutical Package.” This series included the “Communication on a renewed vision for the pharmaceutical sector,” which reflected on ways to improve market access and develop initiatives to boost European Union (“EU”) pharmaceutical research. Through the Pharmaceutical Package, the European Commission aims to make pricing and reimbursement more transparent, increase the development of pharmaceutical research within the EU, improve the safety of medicines worldwide, and reinforce cooperation with international partners.

The European Commission has published three separate sets of proposals amending Directive 2001/83/EC on the Community Code of medicinal products and Regulation 726/2004 on medicinal products obtained through centralized procedures:

1.  A proposal amending Directive 2001/83 as “regards information to the general public on medicinal products subject to medical prescription” (Information to patient);
2.  A proposal amending Directive 2001/83 and a proposal amending Regulation 726/2004 as “regards pharmacovigilance” (The EU pharmacovigilance system); and,
3.  A proposal amending Directive 2001/83 as “regards the prevention of the entry into the legal supply chain of medicinal products which are falsified in relation to their identity, history or source” (Counterfeit Medicines).

Read Reed Smith's full alert outlining proposed amendments to Directive 2001/83/EC and Regulation 726/2004.

Testimonials and Endorsements: Complying with the FTC Guides in Light of Proposed Changes

This post was written by John P. Feldman and Anthony E. DiResta.

One of the most frequent strategies employed by advertisers is to let the consumer hear about the advertised product or service from a third party, someone other than the advertiser itself. At its root, an endorsement or testimonial when used in advertising is the advertiser’s way of saying, “Don’t just take my word for how wonderful my product or service is, listen to this unbiased person whose opinion you should rely upon to make a purchasing decision.” The Federal Trade Commission (FTC or Commission) originally published Guides Concerning the Use of Endorsement and Testimonials in Advertising (The Guides) in 1972. The Guides have not been updated since 1980. In January, 2007, the FTC sought comments on proposed modifications and updates to the Guides. In particular, the Commission sought comments on whether so-called “disclaimers of typicality,” statements like “Results not typical” or “Your results may vary,” should continue to be a valid way to communicate that a testimonial does not represent experiences consumers will generally achieve with the advertised product or service.

Click here to view the alert.