April 1, 2013 – By John Kamp, Executive Director, Coalition for Healthcare Communication
While not directly about communication and marketing, last week’s oral argument in the U.S. Supreme Court in FTC v. Actavis regarding ANDROGEL could create a significant bottom line hit to our businesses. A decision against pharma would further shorten the patent protection period on many branded drugs.
Here is a quick summary of the important legal and practical issues and what to watch for as the decision moves to Congress.
1. If the Supreme Court agrees with the Federal Trade Commission that “pay for delay” settlements are presumably illegal, they will nearly halt.
2. The Supreme Court is not deciding here what the Constitution means – where they have final authority – but only is deciding what the current commercial statutes require. Even if the Supreme Court agrees with pharma that such settlements are presumed valid under the existing antitrust and competition laws, Congress could invalidate that presumption by changing the law. Three such proposals already have been introduced.
3. The legal struggle is over three legal principles. Laws favor all three – patent protection, settlements over litigation, and vigorous competition. There are no easy choices here for the Supreme Court.
4. The biopharma industry seems to have the legal advantage. The FTC has struggled for more than a decade just to get this case to the Supreme Court and has lost more challenges on the way than it has won. The law supports settlements over litigation, even in antitrust cases. Further, one Justice recused himself, requiring the FTC to get five votes out of eight to prevail.
5. Also, Justice Kennedy, often seen as the swing vote, suggested during oral arguments that if Congress made a drafting mistake enabling these settlements in the Hatch-Waxman statute upon which the decision rests, it is up to Congress, not the courts, to change the law.
6. However, the FTC argued vigorously that the “pay for delay” drug patent settlements create extraordinary profits for the private companies. Further, it argued, these harm consumers much more than in any other antitrust settlement situation. The FTC asserted that the settlements create a legal anomaly whereby the generic challenger can make more money by settling than by winning and marketing the generic product. That’s because the settlement protects the monopoly pricing rather than speeding competition and lower prices to consumers.
7. Pharma faced tough questioning from skeptical judges, but so did the government. There is a good chance that the Supreme Court will support settlements in its decision, but either way, Congress can change the Hatch-Waxman statute to disfavor them.
8. Meanwhile, the populist policy and politics favors drug cost savings, especially in the face of escalating healthcare costs and the need to control the growing deficit. Although the law seems to favor pharma, especially with the more conservative justices, the politics of less expensive drugs may be tougher, especially as the case moves to Congress.
9. Don’t count the industry out yet. Biopharma and device companies have an unusual ally in this fight: generic drug companies and their associations. Also, the Pharmaceutical Research and Manufacturers of America (PhRMA) and its allies have had some recent success reminding Congress that innovative drugs require patent protection and the profits that brings
to rebuild drug pipelines and enable the advance of modern medicine. Laws flying in the face of that common sense argument are not slam-dunks.
March 19, 2013 – Although the FDA has not yet issued its long-awaited social media guidance for the biopharma industry, whatever guidelines it drafts on this topic are likely to be informed by the staff guidance document issued last week by the Federal Trade Commission (FTC). The FTC’s new guidance, “.com Disclosures,” revises an FTC document issued in 2000 and, essentially, advises advertisers that online ad claims must be “clear and conspicuous” and that it is the message, not the medium that defines compliant ads. According to the guidance, “cyberspace is not without boundaries, and deception is unlawful no matter what the medium.”
“The FTC has led the way on these issues and continues to do so. Clearly, the FDA will recognize the leadership here and likely move forward similarly. I’m optimistic that we will see similar guidance soon from FDA’s Office of Prescription Drug Promotion,” noted John Kamp, Executive Director, Coalition for Healthcare Communication.
The updated FTC guidance emphasizes that consumer protection laws apply equally to marketers across all media, “whether delivered on a desktop computer, a mobile device, or more traditional media such as television, radio, or print,” according to an FTC press release. The FTC stated that if disclosures are needed to prevent an online ad claim from being deceptive or unfair, they must ensure that these disclosures are clear and conspicuous “on all devices and platforms that consumers may use to view the ad.”
As an article in The Wall Street Journal noted, “That means making room for full disclosure even in a 140-character tweet on Twitter. The agency suggested that marketers could flag Twitter ads by including ‘Ad:’ (three characters) at the beginning of the post or the word ‘sponsored’ (nine characters).” The FTC also clarified in the new guidance that disclosures should be “as close as possible” to the relevant claim,” which is a revision from the 2000 guidance, which called for disclosures to be “near, and when possible, on the same screen.”
Indeed, when practical, the FTC would like advertisers to incorporate relevant limitations and qualifying information into the underlying claim, rather than have a separate disclosure qualifying the claim. Where that is not possible, the agency continued to caution advertisers that they should avoid using hyperlinks
for disclosures and that “required disclosures about serious health and safety issues are unlikely to be effective when accessible only through a hyperlink.”
The FTC’s hyperlink restrictions could very likely be adopted by the FDA. Industry attorney Arnie Friede, a former FDA associate chief counsel, told Pharmalot.com that “the FDA can certainly hang its hat on this language to say that even the FTC rejects disclosures via hyperlink of important health and safety information, e.g., ‘fair balance’ information.”
The FTC also asks marketers to avoid “conveying such disclosures through pop-ups, because they are often blocked” and states that if a disclosure is necessary to prevent an advertisement from being deceptive, unfair or otherwise violative of a Commission rule, and it is not possible to make the disclosure clearly and conspicuously, “then that ad should not be disseminated. This means that if a particular platform does not provide an opportunity to make clear and conspicuous disclosures, then that platform should not be used to disseminate advertisements that require disclosures.”
In the final analysis, the FTC concludes, “the ultimate test is whether the information intended to be disclosed is actually conveyed to consumers.”
Yadron, Danny and Ovide, Shira; “FTC Says Tweet Ads Need Some Fine Print,” The Wall Street Journal
(March 12, 2013)
 Silverman, Ed; “Will FDA Emulate FTC Online Ad Guidance?” Pharmalot.com (March 13, 2013).
March 28, 2012 – Industry members needing another reason to join the fray of companies participating in the Digital Advertising Alliance’s (DAA’s) voluntary consumer privacy protection program got a big one this week: The Federal Trade Commission’s (FTC’s) final report on protecting consumer privacy. In the report, the FTC recommends that companies begin adopting its best practices to protect consumers online; the Commission also asks Congress to consider enacting legislation covering general privacy, data security and breach notification, and data brokers.
“If companies adopt our final recommendations for best practices – and many of them already have – they will be able to innovate and deliver creative new services that consumers can enjoy without sacrificing their privacy,” said FTC Chairman Jon Leibowitz. Indeed, the FTC, the U.S. Department of Commerce and the White House praised the DAA and its members Feb. 23 for their efforts – including DAA’s Self-regulatory Program for Online Behavioral Advertising and its “Your Ad Choices” public education advertising campaign – to protect consumers’ privacy online.
The final FTC privacy report, issued March 26, expands on a report issued by the agency in December 2010 by asking companies handling consumer data to implement specific recommendations for protecting privacy, as follows:
- Privacy by Design – Companies should build in consumers’ privacy protections at every stage in developing their products. These include reasonable security for consumer data, limited collection and retention of such data, and reasonable procedures to promote data accuracy.
- Simplified Choice for Businesses and Consumers – Companies should give consumers the option to decide what information is shared about them, and with whom. This should include a Do-Not-Track mechanism that would provide a simple, easy way for consumers to control the tracking of their online activities.
- Greater Transparency – Companies should disclose details about their collection and use of consumers’ information, and provide consumers access to the data collected about them.
Leibowitz indicated that although many companies are on board with these recommendations, it may be necessary for Congress to step in. “We are confident that consumers will have an easy to use and effective Do Not Track option by the end of the year because companies are moving forward expeditiously to make it happen and because lawmakers will want to enact legislation if they don’t,” Leibowitz said.
To that end, the FTC “urges individual companies and self-regulatory bodies to accelerate the adoption of the principles contained in the privacy framework, to the extent that they have not already
done so,” according to an FTC press release.
The FTC will be active in five key areas over the next year, the report states: (1) Do Not Track; (2) mobile services; (3) data brokers; (4) large platform providers; and (5) enforceable self-regulatory codes.
“To the extent that strong privacy codes are developed, the Commission will view adherence to such codes favorably in connection with its law enforcement work,” the report states. However, the FTC states that it “will also continue to enforce the FTC Act to take action against companies that engage in unfair or deceptive practices, including the failure to abide by self-regulatory programs they join.”
Feb. 23, 2012 – At a White House meeting held today to unveil the blueprint for the Obama Administration’s “Consumer Privacy Bill of Rights,” the Digital Advertising Alliance (DAA) and its members were praised by White House, Department of Commerce and Federal Trade Commission officials for their efforts during the past three years to protect consumers’ privacy online. These efforts include the DAA’s Self-regulatory Program for Online Behavioral Advertising and last month’s “Your Ad Choices” public education advertising campaign.
“While privacy remains one of the most challenging issues in the Internet age, the Coalition for Healthcare Communication, through its work with the American Association of Advertising Agencies, is proud to be part of the solution announced by the White House today to enable consumers to better exercise their privacy and marketing preferences,” said Coalition Executive Director John Kamp. “Much still remains to be done, including urging all Web publishers, agencies and clients to take full advantage of the DAA’s self-regulatory program in order to create a more robust and trustworthy Internet marketplace,” he added.
The DAA also announced today that it will immediately begin work to recognize browser-based choices with a set of tools by which consumers can express their preferences under the DAA principles.
“The Administration, Congress, and the FTC have been pushing the business community for several years to make sure consumers are aware of the information practices occuring online and providing choices to consumers regarding the collection and use of information about them,” said DAA General Counsel Stu Ingis. “The DAA is an embodiment of leading companies responding to this call.”
For more information on this groundbreaking news, see the press release from the 4A’s, released at noon today: http://www.aaaa.org/news/press/Pages/022312_daa_whitehouse.aspx
Jan. 27, 2012 – The Digital Advertising Alliance (DAA) last week launched its “Your AdChoices” public education campaign to inform consumers about interest-based advertising and how to take greater control of their online privacy. This campaign follows several years of work by industry association leaders to develop and implement cross-industry best practices and effective solutions for the collection and use of advertising data.
The self-regulatory program and ad campaign respond to the increasing consumer angst about privacy and multiple proposals by Congress, the Federal Trade Commission and the Department of Commerce to limit online tracking and targeting by marketers.
“The Internet is THE marketing tool of our age, but if we don’t respect consumer privacy preferences, consumers and the government will shut us down,” said John Kamp, executive director of the Coalition for Healthcare Communication.
“The self-regulatory program created by the DAA and this ad campaign put us on the right track. However, we must deliver on our promise both by helping consumers fully understand the advantages to them of digital tracking and by respecting their decisions to opt out when they wish,” Kamp commented.
The Coalition opposes mandatory “Do Not Track” provisions introduced in multiple pieces of legislation crafted by the Congress in 2011, but also strongly supports industry self-regulation that enables easy consumer opt-outs of unwanted tracking and marketing. [For more information about the DAA program, go to: http://www.aboutads.info/.]
Currently, more than 400 companies participate in the DAA’s Self-Regulatory Program for Online Behavioral Advertising – including many top-20 global advertisers.
“Because medical data is particularly sensitive, medical marketers must be among the first to adopt the self-regulatory program and show our customers that we can be trusted to deliver useful information while respecting their privacy,” Kamp asserted.
“With widespread industry adoption of the [program] principles, the DAA remains committed to informing consumers about interest-based advertising, online data collection and use, and the simple way they can exercise control over their Web viewing data,” said Peter Kosmala, DAA managing director. “This highly creative public education campaign is an important step in that ongoing process.”
However, the threat of Congressional or federal agency regulation remains real. The advertising industry is expecting a final report on online privacy from the FTC and the White House is putting together its own report on digital privacy during 2012. The DAA’s consumer education campaign may be criticized in these reports for not sufficiently stressing the opt-out function.
Based on extensive consumer research, the campaign videos were created pro bono by MRM of Salt Lake City, part of McCann World Group. The first part of the campaign stresses how online advertising can result in advertising more targeted to individual consumer interests, leading some to object. A Jan. 19 article in The New York Times was critical of the videos because they “fail to mention … that users can opt out of being the target of personalized ads.” Writer Tanzina Vega states in the Times that “far from encouraging users to opt out, the ads emphasize how information that advertisers gather actually can improve the quality of the ads users see online.”
“The Times criticism is not completely fair,” according to Kamp, “but it is indicative of the skepticism out there. We must do this right and well, and the clock is ticking. What we don’t want is an EU-like privacy regulatory scheme which mandates informed consent for use of any cookies on a consumer brouser. That could kill much effective U.S. marketing.”
May 27, 2011 — As Congress considers six pieces of pending legislation introduced to protect consumers’ privacy online – all but one of which recommends mandatory “Do Not Track” provisions – the Senate Committee on Commerce, Science & Transportation last week held a hearing to discuss whether Do Not Track also should be expanded to mobile device marketing.
“I think anyone who uses a mobile device has an expectation of privacy, and sadly that expectation is not always being met,” Committee Chairman Sen. John D. “Jay” Rockefeller IV (D-W. Va.) said in a statement. “As smart phones become more powerful, more personal information is being concentrated in one place. These devices are not really phones—they are miniature computers.”
Testifying before the Committee, David C. Vladeck, director of the Federal Trade Commission’s Bureau of Consumer Protection, said that mobile device applications and ads that allow for the collection of consumer information “need to provide meaningful disclosure in a small screen environment” to prevent the invisible collection and sharing of consumer data with multiple partners.
Vladeck commended Rockefeller and fellow committee member Sen. John Kerry (D-Mass.) for the two consumer privacy bills they have introduced. “Although the [FTC] has not taken a position on whether to recommend legislation in this area, the Commission strongly supports the goals of Sen. Rockefeller’s Do Not Track legislation and supports the approach laid out in that bill,” Vladeck said. Kerry’s bill does not call for a Do Not Track mechanism.
He added that the Commission “is committed to protecting consumers in the mobile sphere through law enforcement and by working with industry and consumer groups to develop workable solutions that protect consumers while allowing innovation.”
Acknowledging that industry is trying to self-regulate online behavioral advertising both online and in mobile device marketing, Vladeck indicated that the adoption of self-regulation has been rather slow. “Until advertisers agree to be bound by [self-regulation] – actually signing up and making this happen – I think the business community knows that at some point, sooner or later, there will be a Do Not Track requirement,” he told the Senate Committee.
“Whether we are conducting marketing activities online or through mobile device apps, industry must get its act together and begin self-regulation – quickly and in large numbers – if we are going to mandatory Do Not Track regulation,” said Coalition for Healthcare Communication Executive Director John Kamp. “We can’t ‘wait and see’ any longer – the time to get on board is now.”
The Coalition opposes mandatory Do Not Track provisions and believes that consumer privacy and robust Internet commerce is better served by self-regulation (www.AboutAds.com) that enables easy consumer opt-outs of unwanted tracking and marketing.
May 17, 2011 — Widespread industry participation in online behavioral advertising (OBA) self-regulation is the only way for the program to succeed and for advertisers to stave off federal regulation of behavioral marketing practices, according to Dick O’Brien, head of the 4A’s Washington office and moderator of an OBA educational Webinar for ad agencies.
“Do it now,” said John Kamp, executive director of the Coalition for Healthcare Communication. “Agencies, publishers and medical companies must get on board today to make the self-regulation program work. If this program is not widespread and visible soon, Washington will mandate a ‘do-not-track’ program that will be a disaster for us, our clients and the public.”
The 4A’s Webinar, “A Complete ‘How-To’ Guide for Ad Agencies Implementing the New Industry Online Behavioral Advertising Program,” features presentations from John Montgomery, COO, GroupM; Josh Berman, director, Trading Strategy, GroupM; and Lee Peeler, president, National Advertising Review Council, Better Business Bureau. [View the free Webinar and learn more about OBA self-regulation at: http://www.aaaa.org/events/webinars/media/Pages/051011_dc_behavioral.aspx]
The Webinar speakers explain the genesis of the AboutAds.com program and why it is so important for agencies and clients to participate now. They also cover the core principles of the program, who is covered, program icon implementation, entities’ roles and responsibilities, approved providers to assist companies, and program costs.
“The core of this sound, robust program is transparency and choice,” O’Brien said. “To keep government legislation away,” more entities must sign on for program implementation, he asserted.
May 13, 2011 – In the span of one week, two new bills calling for “Do Not Track” provisions were introduced in Congress, increasing the pressure on lawmakers to address the various versions of Do Not Track legislation that have been introduced during the past few months.
On May 9, Sen. John D. “Jay” Rockefeller IV (D-W. Va.), Chairman of the Senate Committee on Commerce, Science, and Transportation, introduced the “Do-Not-Track Online Act of 2011,” a bill that is designed to empower consumers to opt out of having their activities tracked online. This bill calls for a mandatory browser-based Do Not Track mechanism and would set time limits regarding how long a company could keep any data that is collected online.
“Recent reports of privacy invasions have made it imperative that we do more to put consumers in the driver’s seat when it comes to their personal information,” Rockefeller said in introducing the bill. “I believe consumers have a right to decide whether their information can be collected and used online. This bill offers a simple, straightforward way for people to stop companies from tracking their movements online.”
House Co-chairmen of the Bi-Partisan Congressional Privacy Caucus Rep. Edward J. Markey (D-Mass.) and Rep. Joe Barton (R-Texas) also introduced a bill on May 6 that amends the Children’s Online Privacy Act of 1998 to “extend, enhance and update the provisions relating to the collection, use and disclosure of children’s personal information and establishes new protections for personal information of children and teens,” according to a press release.
The “Do Not Track Kids Act of 2011” aims to protect children on the Internet, which is “their new 21st century playground,” Markey said. It calls for parental consent of the collection of children’s information and would establish a “digital marketing bill of right for teens.”
These two bills join four other privacy bills introduced previously by Sen. John Kerry (D-Mass.)/Sen. John McCain (R-Ariz.), Rep. Cliff Stearns (R-Fla.), Rep. Jackie Speier (D-Calif.), and Rep. Bobby L. Rush (D-Ill.). Of these bills, the Kerry/McCain bill is the only privacy legislation that does not call for a Do Not Track mechanism.
The Coalition for Healthcare Communication opposes mandatory Do Not Track provisions and believes that consumer privacy and robust Internet commerce is better served by self-regulation that enables easy consumer opt-outs of unwanted tracking and marketing. As such, the Kerry/McCain bill is the most palatable to industry “because it recognizes the value of self-regulation,” said John Kamp, the Coalition’s executive director. “We want to be able to move forward to protect consumers in a more collaborative way,” he added.
April 14, 2011 – “The Commercial Privacy Bill of Rights Act of 2011,” introduced Tuesday by Sen. John Kerry (D-Mass.) and Sen. John McCain (R-Ariz.), would establish a framework to protect consumer information online but stops short of calling for a “Do Not Track” provision that has been the hallmark of other recently proposed legislation.
“When the bill comes to the Senate floor, there will be amendments, and someone may offer an amendment on [Do Not Track],” Kerry said at an April 12 press conference to announce the bill. However, he indicated that such a provision was excluded because it affected industry support for the legislation and added that he believes “the robustness of the opt-out” set forth in the bill “will answer concerns about Do Not Track.”
The Coalition for Healthcare Communication opposes mandatory Do Not Track provisions. The Coalition believes that consumer privacy and robust Internet commerce is better served by self-regulation enabling easy consumer opt-outs of unwanted tracking and marketing. “The Coalition and the 4As have led the development and implementation of a voluntary program – www.AboutAds.info – which is building a system to help Web users understand when they are being tracked online and allows them to opt out as needed,” said John Kamp, Coalition executive director. “We’re delighted the draft bill recognizes this effort.”
In crafting the bill (see Commercial Privacy Bill of Rights Text), which would put in place rules to regulate the collection, use and dissemination of consumer data and guide the Federal Trade Commission (FTC) in enforcing such protections, Kerry and McCain sought to strike a balance between consumer protections and the value of online advertising, Kerry said at the press conference.
“Many consumers enjoy the ability to receive targeted advertisements or visit Web sites that are free because they are completely ad-supported, but consumers must have control over how their data is used,” Kerry said. “We believe consumers and businesses will benefit from having a framework” for that communication and information exchange.
McCain noted in a statement that the bill “does not allow for the collection and sharing of private data by businesses that have no relationship to the consumer for purposes other than advertising and marketing. It is this practice that American consumers reject as an unreasonable invasion of privacy.”
Kerry also made clear that business interests were considered as well as consumer interests. “We produced this legislation with great sensitivity to the marketplace and to the economy,” he said. “Plenty of companies collect data and use it with high ethical standards and they use that data to innovate and tailor the services that they deliver to the clients they serve,” he added.
Specifically, the bill sets forth the following consumer privacy rights:
- The right to security and accountability: collectors of information must implement security measures to protect the information they collect and maintain;
- The right to notice, consent, access and correction of information; and
- The right to data minimization, constraints on distribution, and data integrity.
The Safe Harbor provision defined in the bill would allow the FTC to approve nongovernmental organizations to oversee voluntary safe harbor programs that would have to achieve protections at least as rigorous as those enumerated in the bill. Incentives for enrolling in a safe harbor program would include allowing safe harbor participants to design or customize procedures for compliance and to be exempt from some of the bill’s requirements.
“If we have to have legislation in this area,” Kamp said, “the Kerry/McCain bill’s safe harbor provision at least would allow our self-regulatory program to move forward.”
Recognizing that many companies are making significant investments in consumer privacy protections even in the absence of new laws, Kerry said that forging ahead in a collaborative manner shows that industry “knows that [consumer privacy protection] doesn’t just make business sense – it’s the right thing to do.”