Why Your "Physician-Only" Ads Aren't Safe from Regulators

 In this episode of the KLF Deep Dive, Darshan Kulkarni sits down with Phyllis Marcus, Vice President of the National Advertising Division (NAD) and former FTC veteran. They unpack the complex "grey area" where healthcare professional (HCP) communications bleed into the public consumer space. Phyllis reveals why labeling an ad "For Healthcare Professionals Only" may no longer protect a company from regulatory scrutiny and explains the NAD’s role as an independent adjudicator in high-stakes pharmaceutical disputes. If you are navigating the intersection of FDA, FTC, and NAD jurisdictions, this masterclass in advertising law is essential listening. 

Transcript

SPEAKER_00 0:00

Welcome back to the KLF Deep Dive. I'm here with Phyllis Marcus. You've seen her before. She was on here with us, I want to say a couple of weeks ago, and she was kind enough to talk to us about her perspective from the NAD. She works with the NAD, she does not necessarily represent the NAD. I just want to be clear about that. Not neither of us is giving legal advice. However, this is supposed to be educational. Phyllis, tell us a little bit about you.

SPEAKER_01 0:22

Well, um, I am the vice president of the National Advertising Division at BBB National Program. So I do work directly with the NAD, but you're right, Darshan, that today the views that you and I will be expressing are our own because I'm sure we'll go down certain paths, um, surmise certain things, and kind of unpack other things. Um, I previously was a law firm partner for a decade, and before that, I spent almost two decades at the Federal Trade Commission doing consumer protection, enforcement, and regulatory work.

SPEAKER_00 0:58

Let me ask you a really simple question because you use the word consumer, which is very interesting to me. Because do you see from your perspective, from the vantage point of being at the NAD, that the FDA and the FTC are looking at the needs of consumers? And the word consumer implies a sort of um end user who decides what product they buy. So is it still consumer or is there a different balance you look at? How does that kind of, from your vantage point, how does that make sense?

SPEAKER_01 1:26

So I I can answer this question in two ways.

SPEAKER_00 1:29

Okay.

SPEAKER_01 1:30

Um, who is a consumer is not solely um the end lay person on the street. And we at the NAD have a number of cases where we look at the relevant consuming audience, and healthcare practitioners can be one of the relevant consuming audiences. In addition, based on newer advertising techniques, and soon enough we're not even going to be able to say that digital advertising is so new, but um with the proliferation of digital advertising, lay consumers are likely to see advertising messages, even if the original intended audience was a set of professionals. So when companies put messaging on their websites, for example, or use social media to disseminate messages, the broader consuming public is ingesting that information. And um, they aren't just cabineting their exposure to the commercials that people see on TV that are intended, you know, only for the end user. So um that is that's a long answer to the consuming public. We can protect and look at healthcare professionals as one consuming public, and we can look at the broad array of materials in making our determinations in protecting regular consumers.

SPEAKER_00 3:12

How do you reconcile those two when you're saying as as as is reality that patients or lay consumers will access both?

SPEAKER_01 3:23

Well, perhaps one of the links is in looking at what is then communicated from healthcare practitioners down to the public for whom a particular medication is being prescribed. So if the messaging that is coming from a company is potentially deceptive or misleading, and then it is being passed along to consumers, that is problematic. And so we have not shied away from challenges that have been brought before us where a portion of the advertising assets are directed to healthcare practitioners. I'll give you an example. We had a pair of cases, challenges brought by Sanafi against Galderma for Galderma's marketing of an eczema drug called nemluvia. And the two cases involved slightly different claims and different mechanisms of advertising. So the first case, which I'll call nemluvia one, involved website advertising, direct to public, and um assets directed to healthcare practitioners. We did not say that the healthcare practitioner advertising was off limits for our consideration. And I apologize if you guys see my camera moving up. I'm putting it back down. Now, the second case, Nemluvio 2, involved solely a commercial. And so that was direct to consumer advertising. Um, again, same product, same two companies bringing the challenges, different advertising media, uh, same analysis brought by us. Because to be honest with you, you know, what we're missing in this discussion is the reality of how communications to healthcare practitioners um make it into the marketplace. They also are available online. And so how do you mean you can search? There are websites, and um, they are accessible to the viewing public as well. And so um you you're right, we are not parsing these two things. This is enjoying our content, we'd love to hear more. Please like, comment, share, and find more. Now, I'll turn the tables on you and ask. Um, in the FDA context, then, um, how are how is the FDA viewing those same materials?

SPEAKER_00 6:14

So it's not just the FDA, it's also the DOJ, right? Because uh technically OIG. But um the FDA will generally comment on and they'll add uh discuss claims made in direct-to-patient uh stuff. They will not typically get into direct-to physicians as much. On the other hand, you will see settlements from OIG that involve physicians because physicians have then taken, have switched their roles. So in those cases, the DOJ takes the position that you weren't acting as a physician in that role, you were acting as a salesperson who just happened to wear a white coat. Um, so that's how that distinction has been parsed. There are guidances from the FDA, for example, the SIUU guidance, um, and which is the scientific exchange guidance, and then there's the one called the CFL or the consistent of the label guidance, which do get into it. There's a whole bunch of discussion about whether that applies in the context of actual HCP communications, because the question is can the government regulate that in the same way? Because that goes into, again, First Amendment discussions. So I might argue that that is still a sales discussion and how to do it properly because the FDA has lost a bunch of court cases starting from about 2012 on the regulation of this type of discussion. So it's a it's a very interesting, nuanced argument. And I think a lot of people, and I know practitioners who disagree on exactly this point.

SPEAKER_01 7:49

So and I will I will I will tell you, um, our role is different. We are not a government entity, we are an independent, not-for-profit, self-regulatory organization. And so some of those constraints that you're describing do not apply.

SPEAKER_00 8:09

Let me ask you this. So when you're in a position where you are helping guide companies who are saying, you know what, no, no, this is HCP versus non-HCP, how do you begin to explain to companies that I don't care? Uh it's this, it's a different audience. We're not uh an agency.

SPEAKER_01 8:31

So um, so we are not uh a guidance offering body. Um, we are uh adjudicators, essentially, of disputes between companies. And so um part of the answer is an easy answer. I'm not developing guidance except in the context of the cases that we issue and the decisions that we draft. And so from the viewing public that is familiar with the body of cases that we've issued at the NAD, um a discerning reader will see that certain of our cases will involve um uh advertising statements made to healthcare practitioners. Um, parties do have an ability to make jurisdictional arguments before us, but our criteria is that the the claim or claims have to be national in nature and advertising in nature. And so if they pass muster, they are both national and they are advertising, we will review them.

SPEAKER_00 9:41

But but what constitutes advertising in that situation?

SPEAKER_01 9:44

Well, I'm not um because you and I are talking, I'm not gonna pull up the document right now, but we do we do have a uh a definition of of what is advertising. And so um, you know, I'm not in private practice any longer. If I were, those questions um would be brought to me by clients and uh and we would talk through them. But we're serving a different role at the NAD, and um, and I'm thankful then that I don't have to answer some of these questions that you're bringing.

SPEAKER_00 10:15

Fair enough. I eat need to go subscribe to the NAD database, find out a little bit more.

SPEAKER_01 10:20

And and you know, for for those listeners, um, and I may have said this in our last discussion, but it can't be said enough. If you want to understand what is happening in the world of advertising, subscribe to our press releases. And if you've got um the means to do it, I would say um become a paying subscriber to our online archive. It is a treasure trove going back decades of our written decisions. Um there are easy ways to search and find those decisions, and you can see really in-depth analysis about um how we make our recommendations and determinations. So that's my plug.

SPEAKER_00 11:07

Now, let me ask you a burgeoning area that people are playing around with and they're trying to understand how to analyze this. The standards that the FDA uses for a compounding pharmacy, and one might argue they don't have the same jurisdiction because the FTC does, not the FDA, because of the whole prescription thing. Um, is that different? And what is the FTC's jurisdiction? Because we all know about that in our company memo, which outlined their jurisdiction.

SPEAKER_01 11:42

The the agreement that you're talking about is from the 1970s, if I'm not mistaken. That's why. Um and it's memorandum of understanding between the FDA and the FTC, and it's long been in place. And the FTC has other MOUs with other agencies where there's overlap. And so um, the two agencies kind of divided up the world at the time, and the FTC took um over-the-counter labeling and advertising, and the FDA took prescription drug labeling and advertising, and I believe that split remains. Now, when the NAD gets involved, and we we have gotten involved in prescription drug advertising. Um, so our jurisdiction is different than the FTC's jurisdiction. We're not an agency, we're an organization and non-governmental at that.

SPEAKER_00 12:43

So, what does the word discontinue claims mean in this case?

SPEAKER_01 12:48

So we expect permanent discontinuance of the claims that were in the challenge. And so um it sounds kind of formulaic and rigid, but um, the challenger submits a complaint to us. We don't go out and find other potentially problematic claims. So it is up to the challenger to identify the claims that they want us to review. The target of the um challenge has the option of saying, we're looking at these claims and we are going to permanently discontinue them. A party can agree to adhere to our recommendation, which is keep the claim in the marketplace because you've substantiated it, modify the claim in some way because we think it can be modified, or discontinue the claim because it cannot be made without it, it cannot be made in a truthful and non-deceptive manner. So it's these claims, this recommendation, and we match them up. We don't have any more expansive power to say and don't uh make any health-related claims in the marketplace or don't make any um other claims relating to this product and its efficacy. We just look at what was brought before us in the complaint and judge those claims.

SPEAKER_00 14:13

So interesting to me because there I'm thinking of like 15. I've been writing notes down as you can tell, and I have like a bunch of questions. But at the end of it, is there like a settlement agreement or a order or how how do you put down the five agreements?

SPEAKER_01 14:28

You know, now we get technical. Um, for those of you who want to go access our online archive as subscribers, you'll see this. I mean, we have a format in which we write our decisions, we set forth who the parties are, we describe what the claims are that have been identified that are the subject of the challenge, and we go item by item or uh bucket by bucket and we analyze them based on the substantiation and the arguments that the advertiser has presented to us and whether there are any counterarguments presented by the challenger. So in each section of our decision, we will make a recommendation as to that bucket of claims. And as I said, it's either that we found that those claims can be substantiated and they should remain, or the claims need to be modified or discontinued. At the end of our decision, we summarize all of those recommendations. So if you were only reading one part of the decision, you know, rip off the conclusion and take that as your guide sheet. Now, advertisers have the opportunity to submit, and it is part of the written decision, what we call an advertiser's statement. So in that advertiser statement, um, the advertiser is required to say right off the bat, at the beginning of that advertiser statement, they may say, while we heartily disagree, we will comply. Um, or uh we can't live with this, and therefore we will not comply. So we require the advertiser to state right uh at the outset what they're going to do with our recommendations. We then say, as a result of the advertiser's decision not to comply, we will be referring this case to the appropriate regulatory or oversight agencies. And in the case of digital media, we also refer to the platforms on which the advertising has appeared. So there's not a settlement agreement per se, but the advertiser is required to state whether they will adhere to our recommendations or not. Now, these um the NAD decisions on our recommendations are not enforceable by law. They don't carry the same power that uh, for example, an agreement of voluntary compliance might, um, or a consent order or decree coming out of one of the agencies. Again, we're an independent, not-for-profit, voluntary, self-regulatory organization.

SPEAKER_00 17:16

A campaign can be two months long and then they're moving and shifting, and someone comes in and says, discontinue. We were that was three claims, that was three ads ago or three program, three programs ago. How does the NAD combat this issue of they're just moving too quickly? And go ahead.

SPEAKER_01 17:39

Yeah, so we're reviewing claims and the claims come in the context of ads, but even if an ad comes down, our analysis applies to the claim. So if the same claim appears, even in a different form, new media campaign, new month, that claim will be the subject of our decision.

SPEAKER_00 18:06

Can and can a company, for example, a pharmaceutical company, go to court with this and go, hey FDA, and you guys might refer them. Would the FDA use this as the basis of misbranding or not quite?

SPEAKER_01 18:20

So it's possible. Um we refer so that the regulatory agencies can consider under their own statutory and regulatory authority whether the advertising at issue violates those laws. Court now take action under our authority on the basis of the NAD's analysis. Um I'll give you an example of a somewhat recent case that um where the NAD's the fact of the NAD's determinations was cited as a part of a regulatory authority's determination to bring a lawsuit. Several years ago, we faced uh we entertained a challenge involving JBS, the major meat processor. Um, and we determined that their claims relating to um net zero achievement, and I believe that the claim was net zero by 2040, that the company did not have a substantial basis for making those claims and an actionable plan to get there. Now, subsequently, the New York Attorney General brought suit against JBS. And um the NAD's action was raised in the recitation of facts um in the complaint. So not the causes of action section, but in the factual part of um of the complaint, and so that is an example of where our action has led to formal enforcement action.

SPEAKER_00 20:27

Follow our page on LinkedIn. I I first of all I agree with you, but I'm actually thinking about two scenarios. So the first one is I think you guys actually had NED had a settlement involving a pharma, two pharma companies were battling over the same claim. Uh, I forget which which companies they were. Um, but it was interesting because I think you guys came out and said, in one version, the the consumer version is not okay, but the HCP version is. But the interesting part was the FDA then root came out and said, we don't find either of these to be acceptable, and we're gonna um we're going to do it again. I I wonder if that was part of the basis, saying we can't depend on the NAD, but this is our independent assessment.

SPEAKER_01 21:10

So so that can happen as well. There is an independent analysis that occurs. Um, we do try to conform. The application of the laws is not because it's NAD created. I mean, if there is regulatory guidance, if there is a regulation that applies, we will borrow from that to our analysis. Do they always align? It's it's possible that they don't, um, or that one or the other of us um is viewed as more or less lenient in the particular context.

SPEAKER_00 21:50

As usual, Philosophers, we'd love to have you back again. And this was amazing. Uh, how can people reach you or the NAD if you have questions? And we'll put that in the show notes as well.

SPEAKER_01 21:58

Sure. Well, um My email is uh pmarcus at bbbbnp.org. Um, we have a wonderfully accessible website, um, bbbnp.org, I believe, is our website. Um, you will find a host of information, both about the national advertising division, but about all of the self-regulatory programs that we administer at the organization. Um, there's links to our procedures. You can find our press releases, our annual report, and if you're if you're so inclined and you're ready, um, there is a link to how to file a challenge before us.

SPEAKER_00 22:43

Well, thank you so much for coming on. This was an absolute pleasure. And I'm sure we'll see you again soon.

SPEAKER_01 22:49

Sounds good.

SPEAKER_00 22:52

Called, click or email.