Most marketers spend a lot of time on the creative aspects of the job – perfecting positioning, tweaking touches and massaging messaging, just to name a few. But, while you’re channeling all that creativity into your campaigns, don’t forget another important aspect of marketing – compliance.
Companies in all industries face an ever-growing and increasingly complex web of regulations that extend into every business function, including marketing, advertising and promotion. In the United States, there are thousands of both federal and state statutes governing their actions. Inadvertently breaking the law is no excuse, and willfully ignoring it can bring the wrath of the government and the courts down on your head. But pharma and medical device companies are even more heavily regulated, and their marketing practices have been intensely scrutinized in recent years.
Since 2003, pharmaceutical manufacturers have paid more than $7.7 billion in off-label drug use penalties alone. One company paid fines of $600 million after pleading guilty to a misdemeanor for aggressively promoting off-label uses for one of its drugs and financially rewarding top users of the products. Physicians received payment under the guise of serving on advisory boards but, instead, were paid for listening to company presentations given in resort settings. Another manufacturer settled a similar suit for $81 million in 2010 and pleaded guilty to a misdemeanor charge of misbranding a drug after paying physicians to recommend 27 off-label uses for one of its anti-seizure drugs. A third company was ordered to pay a record $1.2 billion in criminal penalties, plus another $1 billion in civil penalties for continuing to promote off-label use of several drugs after being told by the FDA to stop the practice. The company was also found guilty of giving kickback payments to doctors in the sale of nine other drugs, among other practices.
Now two new marketing-related sets of regulations are making their debut. The first is a set of FDA-issued guidelines for social media and other online marketing channels. Called “Responding to Unsolicited Requests for Off-Label Information About Prescription Drugs and Medical Devices,” these guidelines would allow comprehensive answers to unsolicited questions about off-label drug use through private communications with individuals, but would not allow detailed discussions on social media like Twitter or Facebook. Instead, pharma companies would be required to tell inquiring individuals to contact them directly for more information. Additionally, the answers they provide would have to be non-promotional in nature and come from someone other than a sales or marketing employee.
The second new piece of legislation is the Physician Payments Sunshine Act. This law requires drug and medical device manufacturers and suppliers to report any “payments or transfer of value” to doctors and teaching hospitals of $10 or more, as well as aggregate payments of $100 or more in a given year. While product samples and educational materials are exempted, virtually everything else — from lunches and coffee mugs to travel, entertainment, speakers’ and consultancy fees — is covered. Unknowingly failing to report covered payments carries penalties ranging from $1,000 to $10,000 per unreported transaction, with a maximum of $150,000 per year. Knowingly failing to report can get you fined $10,000 to $100,000 per incident, up to $1 million per year.
Because marketers often outsource key functions like fulfillment, they need to make sure their business partners are up to speed on regulatory compliance, as well as policing their own internal policies and procedures. At minimum, you should be looking for a fulfillment vendor who offers:
- The ability to capture, index, securely store, archive, and retrieve all versions of both paper and electronic documents (including email and instant messaging).
- An online ordering system that controls user access and ordering privileges and ensures that all required disclosures and addenda accompany any marketing materials ordered
- Reports and auditing tools to track and manage inventory and records management programs (and, in light of the Physician Payments Sunshine Act, the value of all items shipped, as well as cumulative records of shipments to any particular site or individual)
- Timely on-site or off-site destruction that protects confidential information by using modern shredding equipment, highly secure processes and certification of destruction to create a legal audit trail.
As the old saying goes, “an ounce of prevention is worth a pound of cure.” That’s advice pharma marketers can take to the bank.
Iron Mountain will demo some of its Intelligent FulfillmentTM solutions for pharmaceutical and biomedical manufacturers at INTERPHEX 2012, May 1-3, in New York City. Register as our guest and receive free exhibit hall admission and 15% off conference passes.