Tag Archives: compliance

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 ®
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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.

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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.

Forest Laboratories Signs on the Dotted Line… with Feds

More than 6 years of pre-penalty discussions between Forest Laboratories (“Forest”) and the U.S. Attorney’s Office for the District of Massachusetts culminated September 15  in an agreement that settles criminal and civil investigations by the government into the company’s activities.  Forest agreed to plead guilty to a single felony charge of misrepresentations to FDA inspectors during a 2003 plant visit, and two misdemeanor violations of the Food, Drug and Cosmetic Act.  The first misdemeanor charge was for distributing Levothroid® after the FDA told the company an NDA would have to be filed for the drug; and the second related to off-label promotion of Celexa® for treating pediatric patients.  The fines for these charges cost Forest $150 million, and the company also forfeited another $14 million in revenues.

On the civil side, Forest also settled claims under the False Claims Act and several whistleblower (qui tam) claims relating to distribution of Levothroid® and several years of off-label promotion of Celexa® and Lexapro® for pediatric uses.  The off-label promotion in this case related to an earlier formulation of Lexapro®; Forest later requested and received approval to promote a later formulation for pediatric use.  The total payout under these civil claims, including to the feds and state Medicaid programs, was $149 million.

As a commitment to future good behavior, the government also required that Forest operate under a Corporate Integrity Agreement for five years.  Nowadays, these agreements not only call for a compliance program to be put in place, but the government also wants key senior managers, not just the CEO, to monitor and oversee activities within their scope of responsibility, and to certify they have done what is required every year.  These leaders include the heads of Marketing, R&D and Human Resources, to name a few.   The Board of Directors is also required to retain an independent Compliance Expert to review and report on the effectiveness of the Compliance Program annually.

Interestingly, news that this drawn-out investigation has come to a point of resolution seems to have helped the company’s stock performance today.  Forest closed up 2.02% from yesterday’s trading at a respectable $31.27 per share.  This might have been helped by the news that the fines were well within the reserves the company had set aside to cover the financial damage from the legal proceedings.

Learn more about Baxam Law Group at www.baxamlaw.com.

Healthcare Powers of Attorney

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New HITECH Requirements for Reimbursement Eligibility

 On July 13, Secretary of HHS Kathleen Sebelius announced final rules under the Health Information Technology for Economic and Clinical Health (HITECH) Act of 2009.  HITECH was part of the stimulus bill, also known as the Recovery and Reinvestment Act of 2009 (ARRA).    

 The new rules came from different agencies within HHS.  In its first wave of this change, CMS issued rules setting minimum requirements for the “meaningful use” of electronic health records (EHR) technology.  Healthcare providers will be asked to meet a core group of 25 requirements (23 for hospitals) that HHS says will focus on the quality, safety and efficiency of care, engage patients and their families in care, and promote the security of electronically stored personal health information.  In addition to these, providers must select from a menu of additional requirements they will also commit to meeting in order to qualify for incentive payments.  More criteria for demonstrating meaningful use would phase in as EHR technology becomes more robust.  

 The government will also provide over $27 billion in financial incentives for provider compliance over the next 10 years.  Providers can begin registering for the incentive program in January 2011.  A physician could receive up to $44,000 from Medicare and $63,750 from Medicaid for switching to a certified EHR system and implementing the minimum requirements.  On the other hand, providers failing to meet these standards by 2015 could see their reimbursements for professional services “adjusted,” presumably downward.  

 To complement the CMS rules, the Office of the National Coordinator for Health Information Technology (ONC) also issued rules setting standards and a basic certification program for EHR software programs – to ensure that the software a provider buys from an approved provider will meet the minimum compliance requirements.  The agency expects certified software to become available in late 2010.