Agency Vs. Class Action in Advertising Litigation Regulatory Compliance
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D R U G A N D M E D ICAL DEVICE Agency vs. Class Action in Advertising Litigation Regulatory Compliance By Laurie Webb Daniel Defenses Uniform standards Plaintiffs’ lawyers usually like to piggyback on agency in regulation are at action. They have been doing it for years in the securities, risk from piggyback antitrust, and product liability arenas. Not satisfied with litigation. traditional causes of action, creative lawyers recently have blended legal theories under the gen- The Advertising Watchdogs: eral rubric of consumer protection law in Official and Self-Proclaimed an attempt to recover staggering amounts The Food and Drug Administration even where no injury can be shown. They (“FDA”) is the official advertising watchdog have chosen a big target: prescription drug for the pharmaceutical industry. Although labeling and marketing practices. Ironi- the Federal Trade Commission (“FTC”) is cally, however, governmental regulation of tasked with preventing deceptive advertis- consumer communication in this industry ing for other health care products, see 15 is turning out to be an excellent platform U.S.C. §52, it is the FDA that must determine for defense instead of the free ride expected whether prescription drug labeling is “false by the plaintiffs’ bar. or misleading.” See 21 U.S.C. §355(b)(1); 21 As plaintiffs’ lawyers dip into their melt- C.F.R. §314.125(b)(6). Through its Center ing pot of theories, the industry can turn to for Drug Evaluation and Research (CDER), traditional but evolving legal principles to the FDA also oversees advertising, market- keep consumer litigation in line with sound ing, and promotional materials relating to social policy. This article analyzes several prescription drugs. See 21 U.S.C. §352(n); defenses grounded in the common sense see also id., §§321(n), 331(a), 352(a); 21 notion that it is the job of the Food and C.F.R. §§202.1(e)(4)(i)(a); 314.81(b)(3)(i). Drug Administration, not lay tribunals, to It is CDER’s responsibility “to assure that make sure that pharmaceutical information prescription drug information provided is accurate and not misleading. The article by drug firms is truthful, balanced, and then discusses how to lay the groundwork accurately communicated.” See http://www. for shaping these defenses in future appel- fda.gov/cder/handbook/advertis.htm (last vis- late decisions in drug advertising cases. ited 3/10/2006). CEDR accomplishes this through a comprehensive surveillance, enforcement, and education program. n Laurie Webb Daniel leads the Appellate Team of Holland & Knight LLP. Id. CDER’s “Division of Drug Marketing, Her practice focuses on complex litigation involving business, competition, Advertising, and Communications” or and medical liability issues. Based in Atlanta, she has appeared in courts “DDMAC” pays particularly close attention nationwide, including the United States Supreme Court. Ms. Daniel is a fre- to advertising through internet and other quent commentator for DRI and other organizations. “direct-to-consumer” or “DTC” channels. 20 n For The Defense n April 200 © 2006 DRI. All rights reserved. See http://www.fda.gov/cder/handbook/pol_guid. In addition to the federal regulators and sory Committee on the Federal Rules of htm (last visited 3/10/2006). PhRMA, there are others who claim to pro- Civil Procedure in connection with the The FDA’s supervision of drug advertis- tect the public from inaccurate medical addition of Rule 23(f) to permit discre- ing is not a rubber stamp process. There is information. These are the champions of tionary appeals of class certification orders, scrutiny by various professionals, includ- state consumer fraud and unfair competi- class actions often raise the specter of unde- ing social scientists and regulatory coun- tion statutes—the state attorneys general served “potentially ruinous liability.” The sel. See Direct to Consumer Advertising of and the plaintiffs’ bar. While the attor- high costs and risks of class action litiga- Prescription Drugs: Exploring the Conse- neys general act in an official capacity as tion can impact the availability of drugs and quences: Hearing before the Senate Spe- parens patriae for the benefit of the pub- other medical products just as regulation by cial Comm. on Aging, 108th Cong. (2003), lic, the private lawyers are self-designated available at 2003 WL 56336398. The agency prosecutors who stand to reap tremen- provides specific guidance to drug com- dous personal profit if they can survive the panies that submit proposed advertising. dispositive motion and class certification The FDA has the ability Id. When the FDA determines that adver- stages of their litigation. The highly moti- tising is misleading, it issues warning let- vated plaintiffs’ bar does not suffer from a to consider the views of ters, which are posted on the FDA website. lack of creativity. When they cannot prove See http://www.fda.gov/cder/warn/ (last visited actual injury from pharmaceutical infor- the public at large, as 3/10/2006). The FDA website notes that the mation, they try to imbue consumer pro- warning letters can result in subsequent tection statutes with presumptions from well as scientists and interaction between the FDA and the recip- securities fraud and other areas of the ient of the letter, and the letters themselves law. See, e.g., New Jersey Citizen Action v. industry participants. reflect the agency’s insistence on correc- Schering-Plough Corp., 842 A.2d 174,178– tive action. Id. The public warning letters, 79 (N.J. Super. App. Div. 2003); see also Erin therefore, serve to regulate the particu- T. Welsh and Steven A. Karg, The Recent the FDA can. See Senate Comm. on Com- lar recipient and to provide guidance to all Expansion of Traditional Products Lia- merce, Sci., & Transp., Prod. Liab. Reform industry participants. bility—Personal Injury Claims Into More Act of 1997, S. Rep. No. 105-32, at 7 n. 60, 10 Advertising in the pharmaceutical indus- Complex Claims and Investigations, ALI- (1997) (noting the decline in availability of try also is checked by a self-regulating mech- ABA Course of Study, Products Liabil- certain medical products and information anism: the PhRMA Guiding Principles on ity: Pharmaceutical and Medical Device due to threat of product liability costs). Direct to Consumer Advertisements about Issues (August 18–19, 2005), SL038 ALI- Because of the highly specialized nature Prescription Medicines (“PhRMA Guide- ABA 347. One fact that they cannot cir- of this industry, however, the regulation lines”). Available at http://www.phrma.org/files/ cumvent, however, is the pre-existing and of information relating to drugs and other DTCGuidingprinciples.pdf. “PhRMA” is the acro- extensive regulation of drug labeling, pro- medical products should be left to people nym for the Pharmaceutical Research and motion, and advertising by the FDA. In the who have the technical experience needed Manufacturers of America, which is a leading consumer protection context, they have no for an informed assessment of whether a industry association that represents many good answer to the question: Isn’t regula- statement is accurate or misleading. See pharmaceutical and biotechnology compa- tion by the FDA enough? Pennsylvania Employee Benefit Trust Fund v. nies. The preamble to the PhRMA Guidelines, Zeneca, Inc., 2005 WL 2993937 at *5 (D. Del. which went into effect in January 2006, artic- Regulation by Litigation 2005). Unlike lay juries and judges, the FDA ulates the industry’s goal of voluntary com- Is Bad Social Policy has the expertise to back up such decisions. pliance with FDA regulation in particular If you want to shape the law through appel- Id. Further, by conducting public hearings, and with truthfulness in general. late decisions, you need to explain to the the FDA has the ability to consider the views First and foremost, we have a responsi- courts why your position makes sense. of the public at large, as well as scientists and bility to ensure that our DTC commu- You need to show that social policy is on industry participants. In contrast, a court nications comply with the regulations your side. When medical information is or jury can consider only admissible evi- of the Food and Drug Administration involved, there are compelling reasons why dence presented by the particular litigants (FDA). In general, the FDA requires all consumer class actions are bad from a pol- in the case, a restriction that increases the DTC information: icy standpoint. chances of arbitrary results. • To be accurate and not misleading; There is no doubt that class action lit- The use of private litigation in multiple • To make claims only when sup- igation can function as de facto regula- jurisdictions to regulate the flow of medi- ported by substantial evidence; tion simply because the stakes are so high. cal information also destroys uniformity, • To reflect balance between risks and “[R]egulation can be as effectively exerted and thus frustrates one of the principal rea- benefits; and through an award of damages as through sons for giving the FDA authority to establish • To be consistent with the FDA- some form of preventive relief.” San Diego national standards for marketing prescrip- approved labeling. Bldg. Trades Council v. Garmon, 359 U.S. tion drugs. The public, as well as the industry, Id. 236, 247 (1959). As explained by the Advi- benefits from uniform standards, consis- For The Defense n April 200 n 21 D R U G A N D M E D ICAL DEVICE tently applied. See Brief of United States, 2004 pharmaceutical drugs are available labeling and advertising should have uni- WL 1143720 at *25, filed in Horn v. Thoratic to the American public should not be form application nationwide, which can Corp., 376 F.3d 163 (3d Cir. 2004). shifted away from the Food and Drug be achieved only through federal preemp- Finally, allowing the plaintiffs’ bar to Administration into the hands of plain- tion of state law.