SOCIAL MEDIA FOR SUPPLEMENT MAKERS (PART II)

SEVEN GOOD REGULATORY HABITS FOR COMPANIES ONLINE

In the last post we learned that FDA enforcement against supplement and nutraceutical makers based on their social media activity is no longer a hazy nightmare.  It has emerged into our recent reality.  What can supplement or natural products makers do to protect themselves from an FDA enforcement action while maintaining a presence in social media?   Below are some suggestions that apply to social media interactions as well as to more traditional sales and marketing activity. As always, please consult a regulatory attorney for more comprehensive advice, or contact the FDA for more information that relates to your specific product.

1. Develop a Social Media Policy

Your company lawyer (if you have one) may not see the many casual interactions on the company’s social media pages. However, your social media managers will, so it is important that they understand the boundaries of engagement with fans and how to handle and respond to fan comments. Include a reporting process for any potentially problematic interactions. While social media has memory, the employees who use it on behalf of your business should be trained on what to post, what to report internally, and what to delete. Even if your company does not use social media, your staff should be fully trained on how to respond to customer feedback and the appropriate use of testimonials.

2. Avoid Even the Appearance of Reliance on Risky Testimonials

The consuming public, and especially those who use social media, look for the opinions of others before deciding to buy. As such, testimonials present a double-edged sword. On the one hand, they make marketing easier, but in the marketing of regulated products FDA views them as “long-arm” extensions of product promotion. Therefore, testimonials should be carefully managed. A testimonial can’t be repeated if it makes statements on behalf of the company that your staff could not directly say without breaking promotional rules. General endorsements, such as “I love this product!” may not cause an FDA inquiry, but an endorsement that says “This product cured my impotence” is probably unwise.

3. Labeling, Labeling, Labeling.

On or off social media, the first and most basic step any company can take is to vet its labeling for compliance with FDA regulations. Your labeling includes the container, the carton and any inserts or standalone literature that you distribute which has information about the product. It also includes your web sites and any information you post on social media information pages. Therefore, all these should be reviewed to ensure there are no assertions about your product (referred to as claims) that cross the line into the “forbidden garden” of drug promotion. Avoid claims that state the product treats, cures, mitigates or prevents disease. That is sometimes harder to do than it may seem for a natural products company. What if you want to talk about the benefits of a well known natural product, like garlic? There may be rules or exceptions that apply to specific ingredients and to the ways in which you plan to use them. You may therefore want to consult a regulatory lawyer to get help in formulating your labeling strategy.

4. Be Clear About FDA Approval Status

Simply put, don’t claim that your product is “FDA Approved” if it isn’t. It doesn’t matter if your product contains an ingredient that has been approved under an FDA monograph, or is Generally Recognized As Safe for the same use for which it’s included in your product. If the public could read your product label and think that you received approval from the FDA to market the product that is actually in the container when in fact you haven’t, you probably won’t get away with it.

5. Don’t Overreach

Saying I can practice medicine because I watch medical dramas on television, no matter how many I’ve watched over the years, wouldn’t get me hired as a physician because I can’t show any proof of my skill as a doctor! By the same token, overselling your product by claiming it has attributes you can’t prove will attract problematic attention from regulators. In many cases, companies that received warning letters were also engaged in other behaviors that FDA probably considered too egregious to ignore. The agency’s job is to protect the public, especially vulnerable populations, from products that make promises they have not been clinically shown to satisfy. With this in mind, take a look at your product line. If your lineup includes products with claims that unabashedly recite drug-like action, such as “fights infections,” “cures diabetes” or “inhibits tumor growth,” please immediately consider a full labeling review. The overall posture of your company and product lines might make a big difference in whether or not you become a target for immediate enforcement action.

6. Be Prepared To Support Your Claims With Good Data

If you’ve taken the time to develop clinical studies and lab test results, you may be able to back up specific claims about your product, but that data by itself won’t exempt your company from the requirement that all products claiming to be “drugs” must first be approved. But maybe your product will fall into one of FDA’s many monograph categories, or it might be appropriate to initiate some dialogue with the agency to determine whether you have enough data to secure formal approval. You should absolutely vet your claims with a regulatory attorney or the FDA before you proceed.

7. Pay attention to your manufacturing and quality control

This is not so much a social media issue, but it does present an area in which we have seen an increase in regulatory activity.

Deanna Baxam is an attorney at Baxam Law Group, LLC.

This post is provided for information purposes only. It is not intended as a substitute for consultation with a qualified attorney.  Copyright 2014, Baxam Law Group, LLC. All rights reserved, please repost with attribution.
Baxam Law Group, LLC
Law For Today’s Business ®
Find us on the web at: www.baxamlaw.com
Facebook: Baxam Law Group
Twitter: @innovationlawyr

SOCIAL MEDIA FOR SUPPLEMENT MAKERS (PART I)

The “Like” With A Bite – FDA Warning Letter Puts Supplement Makers On High Alert

Companies have come to recognize social media as an important communication venue for   engaherbalcapsulesging consumers, who are spending more and more time online. In the more informal world of social media, product makers and retailers work hard at being interactive and approachable. It is generally accepted that exchanging dialogue with a company’s fans or audience on social media pages leads to a more positive overall perception of the company and its products.

The primary desired result of social media engagement is to build relationships that encourage brand loyalty. In building such relationships, using the language and communication style of the audience is one of those intangible yet incredibly important factors that contribute to social media success. Businesses looking to use social media keep these motivations top of mind. In practical application, companies will often hire social media managers to monitor their accounts on platforms such as Facebook® and Twitter®. The kinds of engagement that build relationships with an audience include “liking,” commenting on or re-posting (i.e. republishing) fan posts. On more traditional web sites, companies have included testimonials about services or products on blogs and product information pages.

Against this backdrop, the US Food and Drug Administration recently issued a warning letter to a Utah-based herbal supplement maker. The warning stated that the company, Zarbee’s, Inc., made promotional claims through social media interactions and postings which suggested their natural products were intended for use as drugs. The FDA’s definition of the term “drugs” includes any substance which is intended for treatment, cure, mitigation or prevention of disease, the disease in this case being coughs and colds.

According to the warning letter, the company endorsed or promoted personal testimonials from Facebook users on its page. As examples, the letter listed “Likes” and comments made by the company in response to page visitors:

  • “Liked” the comment: “…[product name] …I received the free sample…and…gave it to my daughter…I could not believe how well it worked! She was recently diagnosed with ADHD and put on medication…causing insomnia…”
  •  “Liked” the comment: “Love Zarbee’s this is the only medicine we use for our 2 year old. Colds and congestion clear up in 2 days.”
  • “Liked” the comment: “Received the sample for allergy relief and my husband had a terrible problem with allergies…he was very impressed on how well it worked for him…”
  • Commented, “Thank you for writing this!!! We love to hear that we have helped people…”
  • Commented, “… [W]e switched that item out with our [product name] which works great!!!”

FDA also noted posts the company had made on its own, and stated these posts provided additional evidence that the products were intended for use as drugs:

  • [Product name] extract…helps thin and loosen wet mucus coughs….
  • “Dark honey [an ingredient used in [product name] and [product name]… is clinically proven to calm coughs and sore throats in children…”.

It is not new in the world of regulatory law and science that statements which suggest a product acts like a drug will be reviewed as drug claims, and that such statements could call into question the approval status of the product as a drug. However, FDA’s observation that “liking” a third party’s comment on social media equates to an endorsement or promotion has not so far been a frequent occurrence. This letter highlights the risks for food, drug and cosmetics (and maybe even medical device) makers who use social media.  Most social media managers have used the Like button without giving much thought to government regulations. Under these circumstances, a random Like could cost the company a lot, yet not having a social media presence is also undesirable.

Once the FDA determines that a company has made claims that a product is intended for use as a drug or that it acts like a drug, the company is exposed to a threat of prosecution for selling an unapproved drug. Also, if the labeling for the product does not conform to the Food, Drug and Cosmetic Act and the regulations, it could be deemed misbranded. FDA alleged that the Zarbee’s social media statements risked violations for being unapproved drugs and for misbranding. 

[A warning letter is a notice that requires a response and further action. Unless the threat to public health and safety is immediate and significant, a warning letter is usually the first action that FDA takes, and if sufficient remedial actions are taken other enforcement may be averted.]

What can supplement or natural products makers do to protect themselves from an enforcement action?   I’ll discuss that in Part II of this two-part blog post.

Deanna Baxam is an attorney at Baxam Law Group, LLC. This post is provided for information purposes only. It is not intended as a substitute for consultation with a qualified attorney.
Copyright 2014, Baxam Law Group, LLC. All rights reserved, you are free to re-post with attribution.
Baxam Law Group, LLC
Law For Today’s Business ®
Find us on the web at: http://www.baxamlaw.com
Facebook: Baxam Law Group
Twitter: @innovationlawyr

Atlanta Law Firm Overcomes Trademark Opposition

March 5, 2014

Baxam Law Group, LLC, a law firm based in Duluth, Georgia, today announced the settlement of a trademark dispute that was initiated in the United States Patent and Trademark Office (USPTO) over the firm’s application for registration of its service mark, LAW FOR TODAY’S BUSINESS.  The opposition (a dispute proceeding in the USPTO) was filed by Howard & Howard, PLLC, a Michigan-based law firm. Today’s agreement resolves all disputes between the two firms and allows each firm to continue using and to register its respective marks without interference from the other.

Howard & Howard’s opposition alleged that registering Baxam Law’s mark would lead to a likelihood of confusion in the marketplace and dilution of Howard & Howard’s own trademark registrations, which included the phrase LAW FOR BUSINESS.  Baxam Law counterclaimed that the phrase LAW FOR BUSINESS is generic and therefore its registration by Howard & Howard as a service mark in the USPTO should be canceled.

According to Baxam Law’s principal, Deanna Baxam, “This settlement vindicates our uninhibited right to use LAW FOR TODAY’S BUSINESS as a unique identifier for our fresh, contemporary model of client-focused, high quality and value-conscious services.  We’re a twenty-first century law firm.”

Baxam Law specializes in providing intellectual property, healthcare and related legal services to corporations, research organizations and entrepreneurs.

Find Baxam Law on Facebook and Twitter.

U.S. AND NINE STATES WILL SHARE WELLCARE SETTLEMENT MONEY

The U.S. Department of Justice announced settlement of its claims against healthcare insurer, WellCare Health Plans, Inc., on April 3.  The federal government and nine other states, including Georgia, will share in penalty payments of $137.5 million to as much as $252.5 million.  The company will also bear the costs of implementing a Corporate Integrity Agreement and repairing the damage to its reputation damage inside and outside the company. Yes, compliance failures are always expensive.

These days there seems to be growing demand for accommodations in white-collar jails, too.  Several corporate officers were indicted, as has been the case with a number of healthcare fraud investigations in recent years.   This is also another case in which a company lawyer, this time the general counsel, was among those indicted for criminal conduct.  This is a trend that is of great interest to healthcare lawyers, for obvious reasons.  It is further confirmation that the days of the company lawyer being completely insulated from responsibility for the actions of his or her corporate clients are over.

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Here are excerpts from the press release:

WASHINGTON – WellCare Health Plans Inc. will pay $137.5 million to the federal government and nine states to resolve four lawsuits alleging violations of the False Claims Act, the Justice Department announced today. WellCare, based in Tampa, Fla., provides managed health care services for approximately 2.6 million Medicare and Medicaid beneficiaries nationwide.

     The lawsuits alleged a number of schemes to submit false claims to Medicare and various Medicaid programs, including allegations that WellCare falsely inflated the amount it claimed to be spending on medical care in order to avoid returning money to Medicaid and other programs in various states…  knowingly retained overpayments it had received from Florida Medicaid for infant care; and falsified data that misrepresented the medical conditions of patients and the treatments they received.

Additionally, it was alleged that WellCare engaged in certain marketing abuses, including the “cherrypicking” of healthy patients in order to avoid future costs; manipulated “grades of service” or other performance metrics regarding its call center; and operated a sham special investigations unit.

The settlement requires that WellCare pay the United States and nine states – Connecticut, Florida, Georgia, Hawaii, Illinois, Indiana, Missouri, New York and Ohio ….

Read the entire press release.

Baxam Law Group is an Atlanta area law firm that serves clients in intellectual property and healthcare law matters. Connect with Baxam Law on Facebook or on Twitter @innovationlawyr.

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Inventor, artist or author? Learn the ba

Inventor, artist or author? Learn the basics of IP protection. Free webinar May 16, noon EST. http://ow.ly/a2CGK

PROMETHEUS AND THE INNOVATOR’S REWARD

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The mythical figure, Prometheus, stole fire from Zeus and gave it to mortals. As punishment, he was strapped to a rock and an eagle ate his liver every day, for each day he grew a new liver and was plucked apart by the eagle all over again. It was the punishment that never ends.

Today, the United States Supreme Court handed down a decision that could have long-term negative consequences for innovators.  The decision ended a patent dispute between the Mayo Clinic Foundation and Prometheus Laboratories, a Nestle subsidiary that makes and sells a diagnostic test to help doctors observe patient’s response and figure out the correct medication dosage for Crohn’s disease.  Mayo’s doctors had previously used the Prometheus test, until they came up with a modified version. Mayo stopped using the Prometheus test and decided it wanted to sell its own version. Prometheus didn’t appreciate the competing business venture and sued. The Court of Appeals for the Federal Circuit, which specializes in patent issues, found Mayo had infringed Prometheus’ patents, but today the Supreme Court disagreed.

The Court’s reasoning in today’s opinion was that no one should be allowed to patent tests that observe the human body’s natural response to illness or treatments.  But is it really that sweepingly simple?  Imagine, if you will, the many diagnostic tests used to observe patient responses to treatments on a daily basis, and there are indeed many.  For example, we use diagnostic tests to measure blood glucose response to medication and to administer workplace drug screens everyday.  Other tests, like the PSA for prostate cancer, are used to detect diseases.  Now imagine that the makers of these products knew beforehand they could have no intellectual property protection for the years of research and expensive testing they put into developing them. Would we still have the same number of sophisticated and ever-improving tests that we have today?

There is absolutely nothing wrong with an innovator earning money as the reward for creativity, effort and investment.  Beyond Prometheus, other innovators who put money and time into developing better tests to support healthcare were not helped by this outcome.  This decision may in the short term lower costs for the diagnostic aspect of mass-market healthcare, but in the long run it could slow the process of innovation.  Quite simply, the analysis will be: Why put time into developing it if I can’t make money from it?

Unlike the story of Prometheus, the eagle won’t be able to gobble up the innovators’ vitals forever.

Baxam Law Group is an Atlanta area law firm that serves clients in intellectual property and healthcare law matters. Connect with Baxam Law on Facebook or on Twitter @innovationlawyr.   RETURN TO HOME.

Whistleblower Claims – Corporate Land Mines

From that delicate balance between preserving the public good and the right of private action has emerged that most persuasive, and potent, moderator – the whistleblower claim.  In our laws, the purpose of whistleblower provisions has been to enable employees, representatives and even business partners to report behavior that has harmed or could potentially cause harm to the interests of the government or the public it serves.  The underlying rationale is that reporting this behavior removes the potential harm,  punishes the offenders and makes an example of their behavior as a deterrent against future bad acts, therefore “blowing the whistle” should be encouraged and the person or persons who do it should be rewarded.  Over the years, several well-recognized statutory programs based on federal law have included whistleblower provisions. These include the Occupational Health and Safety Act, the Internal Revenue Service Code and the Fair Labor Standards Act.  State laws are also armed to respond to whistleblower complaints.

For example, a $327 million judgment against drugmaker, Johnson & Johnson, under the South Carolina Unfair Trade Practices Act was just reported to have been upheld.  A whistleblower claim triggered this case, which has so far led to lawsuits by multiple states alleging that their Medicare and Medicaid programs have been defrauded.  The South Carolina  fine was calculated by assessing $4,000 for every “Dear Doctor” letter the company sent to physicians claiming that the drug was better than the competition and $300 for every sample it gave away to healthcare professionals.

But it’s not just big pharmaceutical companies that have been caught in the dragnet of a whistleblower complaint.  In the healthcare arena, the threat is very real for distributors of durable medical equipment and for physicians, physician assistants and nurse practitioners who participate in treating patients and reporting the services provided.  Outside of healthcare, recent whistleblower claims were filed by Alcohol, Tobacco and Firearms (ATF) agents (click link for story), to report violations of the Occupational Health and Safety Act, the Internal Revenue Service Code and the Fair Labor Standards Act.

Here are some useful tips for handling whistleblower scenarios.  For employers:

  • Develop and communicate a procedure for reporting potential compliance violations that is confidential, responsive and can be accessed by employees outside the regular chain of command. Maintain confidentiality as much as possible, and inform the employee of the outcome of your investigation.
  • Carefully address any complaints raised by employees that involve potential violations of federal or state law, and document the resolution.
  • Often, companies do not know the identity of the whistleblower until the indictment as been unsealed.  Even if you receive this information, do not take any personnel action against an employee or business partner because they filed a whistleblower complaint.

For employees:

  • If possible, discuss your concerns with your managers, or if you feel uncomfortable about doing so, with your company’s compliance officer.
  • Continue to observe the rules and requirements of which you are aware while the investigation is progressing, and to do your job.
  • You may choose not to raise the issue internally and report it directly to the government, usually with the assistance of a qui tam lawyer. Supporting facts are very important to substantiate a whistleblower complaint, so be prepared to present information that would adequately support your case in court.

Federal and state whistleblower cases may request civil and/or criminal penalties and often disqualify companies or persons found guilty from participating in government fee-for-service or procurement programs.  The fines are usually high and are a significant source of revenue for cash-strapped government agencies as well.   The number of these cases, especially in the healthcare field, has been increasing and the trend is expected to continue.

Additional links: http://www.whistleblowers.gov/, http://bit.ly/sxFL6V , http://www.irs.gov/compliance/article/0,,id=180171,00.html,

Baxam Law Group, LLC advises clients on business, intellectual property and healthcare law matters. Visit us on FacebookFollow us on Twitter.