Answers to Questions from Investors about Regulation of Pharma Online Advertisining

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John Mack answers questions from investors interested in buying stocks of online health sites. These questions were submitted by an Internet research team at a major regional brokerage and investment banking firm that provides investment advisory services to individual investors and professional money managers. A conference call with the investors will follow and this presentation will be updated afterward.

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Answers to Questions from Investors about Regulation of Pharma Online Advertisining

  1. 1. FDA,
Social
Media,
&
Online
Pharma Adver7sing Answers
to
Ques7ons from
Investors John Mack Publisher, Pharma marketing News & Pharma Marketing Blog @pharmaguy on Twitter johnmack@virsci.com
  2. 2. Introduc7on Investors
who
own
stocks
or
who
are
thinking
of
buying
stocks
of
major
online Health
sites
are
worried.
They
have
lots
of
ques7ons
about
FDA's
plans
for regula7ng
drug
promo7on
on
the
Internet. As
we
know,
when
FDA
regulates,
markets
react.
When
FDA
sent
out
those
14 NOV
leOers,
for
example,
branded
paid
search
engine
marke7ng
by
pharma experienced
a
"Prompt,
Precipitous,
&
Prolonged"
Plummet
(see
here).
That could
have
been
just
a
coincidence;
I
have
heard
that
Google
is
worried
about an
overall
decline
in
paid
search
engine
adver7sing. Anyway,
an
Internet
research
team
at
a
major
regional
brokerage
and investment
banking
firm
that
provides
investment
advisory
services
to individual
investors
and
professional
money
managers
invited
me
to
speak
to some
of
their
clients
via
conference
call
about
the
recent
FDA
public
hearing
on the
Internet
and
its
repercussions. The
following
are
the
first
round
of
ques7ons
they
have
asked
prior
to
the
call and
my
answers.
  3. 3. 3 Areas
of
Interest/Ques7ons FDA
Hearings
Background − Why
did
the
FDA
hold
public
hearings? − What
is
the
FDA
trying
to
accomplish? − What
is
the
7meline
for
FDA
ac7on? − Is
the
FDA
trea7ng
the
Internet
as
just
another
media
like
print
or TV
or
are
they
trea7ng
the
Internet
as
a
new
medium? Key
Takeaways
following
the
FDA
public
hearings – What
are
key
takeaways
from
the
hearings? – Do
the
pharma
companies
want
regula7on
regarding
online adver7sing
and
if
so
why? – Are
pharma
companies
wai7ng
for
regula7on
before
introducing online
marke7ng
campaigns?
  4. 4. 4 Areas
of
Interest/Ques7ons
(cont’d) Future
Regula7on − How
will
the
FDA
define
what
pla^orms
and
par7cipants
will
be governed
by
FDA
regula7on? − Following
the
hearings,
are
pharma
companies
are
more
inclined to
adver7se
online
now
or
wait
for
FDA
guidelines? Emerging
Online
Adver7sing
Formats – Are
any
of
the
new
forms
of
search
ads
effec7ve
and
likely
to receive
FDA
approval? – Do
you
expect
pharma
adver7sers
to
return
to
paid
search? – What
online
adver7sing
trends
you’ve
seen
from
pharma companies
in
recent
months? – What
new
trends
to
you
expect
in
online
adver7sing
and
social media
in
the
future?
  5. 5. Background Why
did
FDA
hold
public
hearings?
In
April,
2009,
FDA
sent
out
14
NOV
le:ers regarding
search
engine
adverAsing.
These
le:ers
shot
down
the
so‐called
“one‐ click
rule,”
which
pharma
marketers
were
applying
to
paid
search
ads.
That
rule stated
it
was
OK
to
menAon
a
brand
name
drug
and
its
indicaAon
without menAoning
any
side
effects
as
long
as
the
full
prescribing
informaAon
(PI)
was one
click
away.
Because
of
that
acAon
FDA
received
a
lot
of
complaints.
Soon aTer
that,
I
called
for
a
public
hearing
on
my
blog.
The
rest
is
history! What
are
they
trying
to
accomplish?
FDA
typically
holds
Part
15
hearings
as
part of
its
process
to
determine
whether
or
not
new
guidance
should
be
issued and/or
what
research
may
need
to
be
done
in
order
to
fulfill
their
mission.
That being
said,
there
is
no
guarantee
that
having
a
public
meeAng
will
lead
to
new guidance.
My
view
is
that
FDA
already
had
decided
that
new
guidance
is required
and
that
they
need
to
start
the
comment
process,
which
was
very hasAly
put
together.
It
was
well‐organized
with
regard
to
logisAcs,
but
poorly adverAsed
and
organized
in
terms
of
ensuring
that
all
stakeholders
had
a
voice. Do
you
have
different
answers
or
comments
to
add?
See
hOp://bit.ly/8z8JZM
  6. 6. Background
(cont’d) Next
Steps/Timeline?
Unofficial
comments
from
FDA
personnel
plus
the
hasty
convening
of the
public
hearing
suggest
that
DRAFT
guidance
will
be
released
by
the
end
of
2010.
ATer that
there
will
be
another
comment
period
before
FINAL
guidance
will
be
released.
I
expect that
the
process
will
be
faster
than
in
the
past,
unless
FDA
decides
to
bite
off
more
than
it can
chew.
In
that
case,
it
will
take
a
long
Ame
to
issue
any
guidance
and
it
will
be
out
of
date as
soon
as
it
is
published.
A
much
be:er
approach,
IMHO,
would
be
to
tackle
a
few
issues
at a
Ame.
FDA
could,
for
example,
issue
guidance
regarding
space
limitaAons
imposed
by certain
tools
such
as
Twi:er
(and
other
SMS,
text‐based
apps)
and
services
such
as
search engine
ads.
FDA
could
officially
sancAon
the
"one‐click
rule"
in
these
cases
as
long
as
certain criteria
were
met,
such
as
proposed
by
Google
and
PhRMA. THIS
IS
NOT
YOUR
FATHER’S
FDA: Expect
faster
response,
more
transparency. FDA
may
accept
help
with
research
and
from
working
groups
to
help
decide
what issues
to
focus
on
first,
etc. Do
you
have
different
answers
or
comments
to
add?
See
hOp://bit.ly/8z8JZM
  7. 7. Background
(Cont’d) Will
FDA
remain
“media
agnos7c”
or
treat
the
Internet
as
a
new
medium? Many
presenters
at
the
hearing
made
the
point
that
the
Internet
and
social media
are
different
and
IMPORTANT
to
the
public
health.
The
Internet,
for example,
is
accessed
first
by
consumers
seeking
health
informaAon
‐‐
before asking
their
doctors
even.
In
his
closing
remarks,
Tom
Abrams,
Director
of
FDA's Division
of
Drug
MarkeAng,
AdverAsing,
and
CommunicaAons
(DDMAC),
said "what
we
have
heard
is
[the
Internet
is]
a
different
medium.”
As
far
as
I
know, this
is
the
first
Ame
that
anyone
at
the
FDA
has
said
that.
Usually,
the
FDA
says it's
"media‐agnosAc."
In
other
words,
FDA
regulaAons
apply
to
all
media
and
do not
have
to
be
modified
for
any
parAcular
medium.
That
thinking,
however,
was applied
only
to
the
Internet.
There
is
precedent
for
issuing
media‐specific guidance:
the
1997
“adequate
provision”
guideline
for
broadcast
TV
ads;
ie,
a brief
statement
about
major
risks
can
take
the
place
of
enAre
PI
as
long
as “adequate provision” was made to reference a toll-free phone number, a Web site, or a current issue of a magazine that contains a print ad where the full safety information could be found. Do
you
have
different
answers
or
comments
to
add?
See
hOp://bit.ly/8z8JZM
  8. 8. Key
Takeaways The
FDA
is
aware
that
the
Internet
and
social
media
can
have
an
impact
‐‐ posiAve
or
negaAve
‐‐
on
public
health
and
its
regulaAons
may
play
a
major
role Apping
the
scales
one
way
or
the
other. The
drug
industry
is
more
afraid
of
being
leT
out
of
the
conversaAon
than
it
is
of FDA
issuing
guidelines
that
restrict
how
it
can
engage
in
the
conversaAon.
Any guidance
is
be:er
than
none
at
all. The
industry
needs
and
wants
the
“one‐click
rule,”
especially
for
search
engine markeAng
(SEM),
which
works
best
with
branded
ads. Some
good
ideas
were
presented
at
the
hearings
such
as
Google’s
new standards
for
product
claim
paid
search
ads,
which
will
likely
be
approved
by
the FDA.
Bayer/YAZ
is
already
using
the
new
Google
format,
which
is
in
beta
test. Other
pharma
companies
may
follow
that
lead. Do
you
have
different
answers
or
comments
to
add?
See
hOp://bit.ly/8z8JZM
  9. 9. Future
Regula7on Following
the
hearings,
are
pharma
companies
are
more
inclined
to
adver7se online
now
or
wait
for
FDA
guidelines? Most
companies
are
likely
to
wait
and
see
what,
if
any,
guidelines
the
FDA
issues
before iniAaAng
any
risky
online
campaigns;
ie,
branded
search
ads
using
Google’s
standards, branded
Tweets,
and
openly
engaging
in
conversaAons
with
consumers
on
social
media sites.
It
appears
that
pharma
companies
are
increasing
the
amount
they
are
spending
on online
display
adverAsing
according
to
the
latest
TNS
MI
data;
ie,
this
spending
more
than tripled
to
$221
million
in
Q1
through
Q3,
2009
vs
the
same
period
in
2008,
according
to
DTC PerspecAves.
This
type
of
adverAsing
is
not
likely
to
be
the
subject
of
future
FDA
guidelines and
it
is
a
simple
ma:er
to
ensure
they
comply
with
exisAng
regulaAons.
There
may
be
more advanced
and
expensive
types
of
ads
that
employ
rollovers
and
other
techniques
that
help present
more
benefits
as
well
as
fair
balance
as
required. Do
you
have
different
answers
or
comments
to
add?
See
hOp://bit.ly/8z8JZM

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