Danelle R. Miller, JD

1. FDA Regulatory 101Advertising and Promotion of Medical Devices – Navigating the Maze of Promotional Regulation Danelle R. Miller, JD

2. Advertising and Promotion of Medical Devices: Navigating the Maze of Promotional Regulation • A look at the Case Study • Basic Legal Framework • Enforcement Trends • Compass for Compliance

3. A Look at the Case Study

4. Pedicle Screw Spinal System • Classification: 888.3070 • Can be Class II (Special controls) or Class III, depending on the indications for use • “indications for use” is a subset of intended use – the disease or condition the device will diagnose, treat, prevent, cure or mitigate, including the patient population for which the device is intended • Examples: fracture, dislocation, scoliosis, spinal tumor • Intended use for case: Intended to provide immobilization and stabilization of spinal segments in the thoracic, lumbar and sacral spine as an adjunct to fusion in the treatment of degenerative disc (e.g., in skeletally mature patients) • Assume class II

5. Basic Legal Framework

6. Basic Legal Framework • Food, Drug & Cosmetic Act • Federal Trade Commission Act • Lanham Act • Health Insurance Portability and Accountability Act & other privacy laws • Federal and state anti-kickback and disclosure laws • False Claims Act • Other: Sunshine Act and state reporting statutes, mail & wire fraud, Children’s Online Privacy Protection Act, First Amendment, product liability laws

7. Basic Legal Framework Food, Drug and Cosmetic Act (FDCA) • Prohibits “[t]he introduction or delivery for introduction into interstate commerce of any . . . device . . . that is adulterated or misbranded.” • Introduction into interstate commerce – not clearly defined, but guidance and warning letters suggest that a communication, an offer to sell, and of course, a sale, can trigger the statute • A device is deemed adulterated, for example, if it is a Class III device, and is introduced into interstate commerce without premarket approval • A device is deemed misbranded, for example, if: • Labeling is “false or misleading in any particular.” • Information required on labels or labeling is not conspicuous • Labeling does not bear (1) adequate directions for use; and (2) adequate warnings • The product is not cleared under 510(k) for marketing (if clearance is required)

8. Basic Legal Framework FDCA • “Labeling” and “intended use” are very broadly defined • “Labeling” includes package inserts, manuals, brochures, booklets, direct mail, catalogs, letters, exhibits, reprints, websites, trinkets, and other promotional “collateral” as well as oral statements by company representatives. • “Intended use” means the “objective intent of the persons legally responsible for the labeling of devices.” Determined by expressions or circumstances, including labeling claims, advertising, oral or written statements by company representatives.

9. Basic Legal Framework In short: • Thou shall not sell, offer to sell, or promote medical devices: • That are unapproved • Off-label • Based on false or misleading claims

10. Basic Legal Framework HOWEVER: • The law allows limited, legitimate, non-promotional “scientific exchange.” This includes: • Responses to unsolicited requests for information –Draft Guidance: Responding to Unsolicited Requests for Off-Label Information About Prescription Drugs and Medical Devices • Proactive dissemination of journal reprints • FDA Reprint Guidance 2009 (Revised Draft Guidance February 2014) • Guidance: Industry Supported Scientific and Educational Activities (1997) • The law remains gray, but FDA is likely to clarify.

11. Basic Legal Framework • The law also allows limited “pre-clearance” or “pre-approval” activities • Investigational device exemption (“IDE”) and investigational use only (“IUO”) products • Research use only products • Promotion of pending 510(k) products (guidance only)

12. Basic Legal Framework Federal Trade Commission Act • Declares unlawful “unfair or deceptive acts or practices in or affecting commerce.” 15 USC § 45 • Must have a reasonable basis for claims at the time claims are made. • For product and performance claims – “competent and reliable scientific evidence” • Level of evidence required depends on the claim made. • Ads may not be false or misleading • Considers “representations made or suggested” as well as the extent to which an ad omits material facts (this appears to be an increasing focus) • Increased activity with respect to endorsements and testimonials • Governs advertising of non-restricted medical devices, Internet

13. Basic Legal Framework Lanham Act • Allows competitors to sue for dissemination of inaccurate, false, misleading and/or untruthful statements about the safety or efficacy of your products or their products • Comparative claims and superiority claims often trigger Lanham Act concerns. Such claims must be supported by adequate evidence. Examples: • Our product is the most reliable on the market. • Our test is [more efficient, more precise, etc…] than our competitor’s test. • Cost comparisons

14. Basic Legal Framework HIPAA and other Privacy Laws • Protects patient identifiable information from disclosure and use • State privacy laws may be more restrictive than federal HIPAA • May impact collection of patient information and some marketing activities • Example: Inadvertent “release” of patient names • Implicates wireless technologies and communications

15. Basic Legal Framework Federal and State Anti-kickback and Disclosure Laws • The Federal Anti-kickback law provides: Anyone who knowingly and willfully receives or pays anything of value to influence or reward the referral of federal health care program business – including Medicare and Medicaid – may be guilty of a felony • Punishable by up to five years in prison, criminal fines, civil penalties, and exclusion from Medicare and Medicaid • Extremely broad in scope and interpretation • Office of Inspector General Compliance Guide provides interpretation • AdvaMed Code of Ethicssets forth the medical device industry’s views • Some states have broad statutes; some have given ethics statements the force of law (California) • Increasing trend to shut down “gift-giving”, and for disclosure of payments to HCPs (Massachusetts, Vermont, others) • Federal Sunshine Act

16. Basic Legal Framework False Claims Act • Makes liable anyone who presents a false claim or causes a false claim to be presented to a government agency • Cases suggest a company can “cause” a false claim to be submitted by off-label promotion or payoffs (Parke-Davis), false and misleading claims, or quality systems problems. • The government’s heavy hammer • Returns nearly $20 for every $1 invested in health care-related FCA investigation and prosecution • Usually brought as a qui tam action • Expands enforcement beyond FDA

17. Basic Legal Framework False Claims Act • Cases suggest that the courts may be chipping away at the unbridled breadth of the False Claims Act • U.S. ex. rel Bennett v. Medtronic (S. D. Texas, September 2010): Medtronic argued that the relators did not meet the Federal Rule of Civil Procedure 9(b)’s heightened pleading requirement for fraud because they failed to identify the “who, what, when, where, and how” of the alleged fraud. • The court agreed – “the relator’s complaint does not sufficiently allege that by promoting off-label use, Medtronic caused the submission of false claims and is liable under the FCA.” • U.S. ex rel. Fair Laboratory Practices Assoc. v. Quest Diagnostics, Inc., Unilab Corp., et al., (S.D.N.Y April 2011). The Court dismissed a qui tam complaint that was based on confidential information disclosed by former general counsel.

18. Basic Legal Framework False Claims Act • However, it is still a powerful path for qui tams and the government. • Qui tam cases are on the rise. • Qui tams may be current or former employees, contractors, competitors (Quest, Tenet) • Interesting take-over defense: To avoid a take-over by Community Health Systems, Tenet Healthcare filed complaint with SEC saying that CHS bilked Medicare of more than $280 mil between 2006 and 2009. Tenet hoped this would spur an investigation into CHS that derailed the take-over.

19. Enforcement Trends

20. Enforcement Trends • Federal enforcement is very aggressive. • False Claims Act: In FY 2013, DoJ recovered $38 billion in FCA civil settlements and judgments. Second largest annual recovery in history. • Total recoveries under False Claims Act since January 2009 -- $17 billion, nearly half of total recoveries in last 27 years (high priority for Obama Administration) • $1.3 billion in criminal fines, forfeitures, restitution, and disgorgement, and 16 criminal convictions under the FDCA in 2013. • Additional recovery in criminal fines and state portions of Medicaid claims.

21. Enforcement Trends • OIG and DoJ also are holding individuals accountable. • Responsible Corporate Office Doctrine (“RCO”) – FDCA. Allows government to hold a corporate officer criminally liable without proving intent. (United States v. Park and United States v. Dotterweich) • DoJ is going after any person at any level who is responsible for encouraging or performing improper marketing – from CEO, to Regulatory, to sales and marketing representatives • DOJ says will take into account whether people are doing their best or close to their best to be compliant, but not one of the criminal referral factors listed in the FDA Regulatory Procedures Manual (§6-5-3). Also, repeat violations not required. • Exclusion from federal health care programs an option for the government • Questions of constitutionality may arise if government gets overly zealous.

22. Enforcement Trends • FDA • Increased CDRH advertising/promotion staff • Focus on both enforcement and policy • Focus continues to be on low-hanging fruit: • Corporate and product websites and links • Trade shows • Inspections • Social Media (Facebook, youtube, Twitter) • Other – product inserts, warranties, instruction manuals, promotional brochures, quotes by company officials in mainstream media, scientific articles

23. Warning Letters (2011-2014 YTD)Promotional / Website Review

24. Enforcement Trends • Violations: • Promotion of unapproved products • Promotion of class I product that triggers need for clearance or approval • Promotion of off-label uses of cleared or approved devices (expansion of indication or new intended use) • General vs. specific uses for cleared devices • Superiority claims • Implied claims – through links or graphics • Testimonials

25. Enforcement Trends 2013 Promotion-Related Warning Letters • Notable website warning letters: • High profile -- 23andMe (from OIR) for marketing their Personal Genome Service (PGS) without premarket approval. • Website states PGS provides, “health reports on 254 diseases and conditions” “first step in prevention” that enables users to “take steps toward mitigating serious diseases” such as diabetes, breast cancer, coronary heart disease . . . • Concerns that patient will not receive appropriate treatment based on inaccurate results. Some patients could over treat based on false positives. • FDA lost its patience. FDA points out that after many interactions, 23andMe has not only expanded PGS’s uses, but has never provided evidence for the original intended uses. • Ever wonder if FDA takes notice of medical gadgets advertised on TV? • Makers of “Wax-Vac” received a warning letter for marketing their product without approval. • 3 warning letters issued to makers of accessories to class II products where there was no premarket approval for the accessories.

26. Enforcement Trends 2013 Promotion-Related Warning Letters • Promotional violations resulting in warning letters also found during inspections. • 7 instances where product claims found in Owner’s / User’s manuals / Instructions for Use/ Pack Inserts were outside of the cleared intended use. • FDA found “SnoreEx” labeling contained misleading statements. “SnoreRX SN 9.0 is FDA approved for snoring only,” created “an impression of official approval of a device due to clearance of a premarket notification submission.” This device was not approved by the FDA, but was cleared through a 510(k). • Alpha Medical was warned about false and misleading labeling. Package label states, “Manufactured in the U.S.A. . .” but product is manufactured elsewhere. • High profile global issue – three manufacturers making “BPA-free” claims, (BPA is banned in certain countries), received warning letters. FDA believes it is not possible to reliably assure absence of these allergens/toxins.

31. Developing a “Compass” for Compliance

32. Compass for Compliance: Directions for Staying on the Right Path • Direction #1: All promotional labeling and advertising must be accurate, truthful, and not false or misleading. • Do not omit material information • Do not present information in a way that could mislead. Examples: • Unsupported claims, claims called into question, or claims inconsistent with literature • Comparative claims not based on head-to-head trials • Testimonials • Graphics or layout

33. Compass for Compliance • Direction #2: Make sure all communications are consistent with “intended uses” and approved or cleared indications (stay “on-label”). • Communications must be consistent with labeling and data supporting a PMA or 510(k) • Claiming “specific” rather than “general” intended use can be off-label • Claiming different indication, different stage of disease, or different intended outcome typically will be off-label • Ex: Stimplus Pro TENS device. Cleared for “symptomatic relief of chronic, intractable pain and from acute post-surgical and acute post-traumatic pain.” Promoted for smoking severance, eating disorders, stress and insomnia. • If new data comes to light – make sure you update those claims (Quest)

34. Compass for Compliance • Direction #2: Make sure all communications are consistent with “intended uses” and approved or cleared indications (stay “on-label”) – cont. • Exception: Scientific Exchange • Response to unsolicited requests for information – Draft Guidance • Question must be specific • Response must be narrow, objective and balanced, accurate • Disclaimers apply • May limit to technical/scientific personnel • Documentation important • Public response may include only contact information • Proactive dissemination of off-label information (cleared/approved products only) – very limited exception; specific rules apply that require attachments and disclosures, and limit audience • Independent Education Programs v. Open Audience Communications • Special rules for analyte specific reagents (ASRs) • Application to our case study: New indications for use? New population (e.g., children?) What about if remove “adjunct to fusion?”

35. Compass for Compliance • Direction #3: Do not promote unapproved products • Specific rules apply to communications and availability of: • Research Use Only (“RUO”) Products • Investigational Device Exemption (“IDE”) Products • Investigational Use Only (“IUO”) Products • Pending 510(k) Products

36. Compass for Compliance • Direction #4: Ensure claims are adequately supported • Must have a reasonable basis for all claims • More and more, government expects competent and reliable scientific evidence, at a minimum (studies) • Substantial evidence or clinical experience • Evidence must exist at the time a claim is made • Applies to comparative claims, as well • Warning Letter: Pharmacia & Upjohn (“mere presentation of each [contact lens] specifications implied superiority claims”] • “Comparative claims, in general are only appropriate if there are data resulting from head to head comparative studies”

37. Compass for Compliance The Federal Trade Commission is getting tougher on substantiation of claims, and is becoming more aggressive in enforcement: • Examples: • Skechers: $40 million for deceptive and unfounded claims that sneakers help consumers lose weight, strengthen and tone buttocks, legs, and ab muscles. Studies called into question based on lack of independence, altered and incomplete data • Reebok: $25 million for deceptive advertising practices, claims that wearing shoes could tone leg muscles. Claims based on a trial that involved only 5 subjects • Lessons Learned: • Restitution as deterrent. Not only did companies have to stop making claims, they had to pay restitution (refunds and disgorgement • Hard line on proof of claims. For health claims, could require randomized, controlled, blinded studies • Correlation and reliability critical. Study results must correlate to claims; study design and data must be reliable; and individual or entity conducting study must be independent of the advertiser. • Covers all media – print, broadcast, Internet, social media

38. Compass for Compliance • The definition of “competent and reliable scientific evidence” in flux: • In In the Matter of POM wonderful LLC et al., an administrative law judge (“ALJ”) rejected FTC’s theory that the company was legally required to have double-blind, randomized placebo-controlled clinical trials to make health benefit claims. POM had claimed its products would treat, prevent or reduce risks of certain diseases and conditions, including heart disease and prostate cancer. • The ALJ upheld FTC’s standard of “competent and reliable scientific evidence” to support such claims, and agreed that it would include clinical studies. However, the ALJ clarified that the standard does not require double-blind, randomized, placebo-controlled clinical studies. • FTC likely will appeal the case to the FTC commissioners.

39. Compass for Compliance What issues do you see and what evidence would you expect? • Rated #1 in satisfaction for system reliability, performance, training and response time. • Gives you an edge on posterior capsule opacification (“PCO”). • The Gold Standard in Middleware. • Has been proven to reduce the occurrence and slow the development of senile cataracts. • Eliminates testing errors. • Most of the Top 10 hospitals use [our product] in their emergency rooms to improve efficiency. • Doctors prefer our products 2 to 1. NOW . . . LETS APPLY WHAT YOU HAVE LEARNED SO FAR . . .

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42. Compass for Compliance • Direction #5: Treat the Internet and social media the same as any other promotional labeling or advertising. • Governed by FTC and FDA – the same rules apply • Stay “on-label” • Beware of links to content on “off-label” uses or unapproved products • At least 2-clicks “rough” guideline • Consider disclaimers when leaving your website • Global websites and links raise special concerns • Disclosures are important – be honest • Social media (e.g., twitter, blogs) raise additional issues (e.g., complaints, scope of responsibility, “public” responses to unsolicited requests) • Two draft guidances from OPDP on Internet/Social Media Platforms issued in June 2014 • Sponsored links – subject to rules on advertising (fair balance, required disclosures)

43. Compass for Compliance • Direction #6: Avoid promotional activities that change the form, fit or function of a product, or raise regulatory obligations • Anything that impacts the characteristics or configuration of a product is suspect. • Regulatory obligations may arise, for example, from: • “Repackaging” the product (case, bag, etc…) • “Relabeling” – stickers • Co-promoting with another product (intentionally or inadvertently) • Expansion of intended use • Creating a “system”

44. Compass for Compliance • Direction #7: Hold meetings at appropriate locations. • “Modest” – actual and perceived (no resorts) • Lunches, dinners, lodging, travel, receptions • Conducive to effective exchange of information • Suitable for the legitimate meeting purpose • Focus on business, not entertainment

45. Compass for Compliance • Direction #8: Do not give anything of value to encourage purchases or referrals of your products. • “Modest” dinners, lunches, OK if accompanied by business (except in some states) • Separate charitable donations, research and educational grants from sales and marketing • Stay in “Safe Harbors,” examples: • Legitimate Discounts/Rebates • Personal Services • Remember reporting obligations will apply

46. Compass for Compliance • Direction #9: Take compliance seriously – OIG expects it. • Compliance program that includes promotional policies and practices. Use most recent corporate integrity agreements as a guide. • Training, training, and more training! • Define accountabilities and responsibilities (management, employees) – Make it matter • Monitor compliance – comprehensive compliance program • Content approval • Compliance hotline • Audits and investigations • Take action when noncompliance occurs • Retraining • Discipline • Termination

47. Compass for Compliance • Direction #10: Work with your marketing teams – use compliance to improve marketing efforts. • Consistent, well-thought out messaging helps compliance – and builds frequency. • Approved messaging and claims list • Compliance requires planning ahead – which allows time for interaction and creativity. • Pushing past a “noncompliant” first choice often leads to a better choice

48. Questions?

49. Doing now what patients need next