Putting It All Together Better Practices Around Monitoring

Putting It All Together: Better Practices Around Monitoring And Auditing Promotional Activities John Manthei March 27, 2008 Latham & Watkins operates as a limited liability partnership worldwide with an affiliated limited liability partnership conducting the practice in the United Kingdom and Italy. ©Copyright 2008 Latham & Watkins. All Rights Reserved.

Best Audit Practices • • • Management "Buy In“ To Compliance Multi-Discipline Approach Standard Operating Procedures Know the Law, and use it to Your Competitive Advantage! Monitor FDA Enforcement Trends and Agency Pronouncements

Medical Device Advertising and Promotion • Standards Vary Depending on the Medium, and Who, What, Where, and Why - Cleared or Approved Indications for Use Product Labeling Direct to Consumer Advertising Disease Awareness Communications The Internet "Off Label" Communications General versus Specific Intended Uses Pre-approval Promotion of Investigational Devices Clinical Trial Recruitment Continuing Medical Education Programs Comparative and Superiority Claims Comparative Pricing Investor Communications

Direct to Consumer Advertising • • Enforcement priority at FDA’s 1999 Final DTC Prescription Drug Advertising Guidance (1999) Draft Guidance for Industry: Consumer-Directed (DTC) Broadcast Advertising of Restricted Devices (March, 2004) Consumer Directed Advertisement (DTC) must include a “brief statement of the intended uses. . . and relevant warnings, precautions, side effects, and contraindications. ” See 21 U. S. C. 352(r)(2)).

Disease Awareness Communications • • • Disease Awareness Communications involve educational information about a specific disease or condition, but do not mention a specific device. Disease Awareness Communications have become a critical component of medical device marketing and promotion. FDA’s Draft Guidance • Attempts to clarify the line between Disease Awareness Communications that are outside of FDA’s jurisdiction, and product promotion activities subject to its jurisdiction. Disease Awareness Communications • The company, or product need not be mentioned to trigger FDA’s authority • Continuing Medical Education (CME) Programs • Educational materials for training, orientation, and product launch

The Internet • FDA has not developed a guidance, or policy specific to internet advertising. However, CDRH compliance personnel frequently monitor the Web, and FDA has aggressively enforced its standards that apply to all advertising and product labeling. General Guidelines • Treat the internet the same as other media. • You are responsible for links on your Website – no “off-label” promotion. • All product-specific websites for prescription drugs must be submitted to FDA at the time of first use. • Establish separate links for U. S. and EU approvals. • Securities filings.

General v. Specific Intended Uses • • • FDA Modernization Act of 1997 Guidance for Industry: General/Specific Intended Uses (November 4, 1998) The Guidance is intended to help manufacturers answer the following questions: • Under what circumstances is a device with a new, specific indication for use likely to be found to be substantially equivalent to a device legally marketed for a general indication for use? • Conversely, when does a specific indication for use become a new intended use that requires submission of a PMA to establish the safety and effectiveness of the device?

Off-Label/Preapproval Communications • • The dissemination of information on unapproved or off-label uses and medical devices implicates competing policy and legal considerations: • Devices may be promoted only for FDA-cleared or approved indications • FDA prohibits off-label or preapproval promotion because the safety and effectiveness of indications have not been established (i. e. , new diseases, anatomic sites, subpopulation). • FDA does not regulate physicians’ off-label use of a device within “the practice of medicine” • FDA recognizes the need for scientific exchange between physicians and investigators regarding new products and uses. • Constitutional protection of speech under the First Amendment. Draft Guidance on Good Reprint Practices for the Distribution of Medical Journal Articles on Unapproved New Uses of Approved of Cleared Devices (February, 2008)

Off-Label and Preapproval Communications • • • Response to a Unsolicited Requests Regulatory Safe Harbor (Journal articles) device Investigational Products Recruitment for Clinical Trials Continuing Medical Education

Medical Devices: Draft Guidance on Reprint Distribution • Primary Differences between expired Section 401 and Draft Guidance – • The draft guidance does not bar the use of clinical research conducted by another manufacturer without permission, and does not currently require manufacturers to submit copies of the publication to the FDA prior to dissemination. • The Draft Guidance does not require submission of PMA supplement.

Display of Medical Devices • • CDRH recognizes the need for hospitals and practitioners to “preview” new, potentially complex and expensive medical technology. Companies may display devices with a pending 510(k) or IDE at medical trade shows or conventions: • Label stating “not available for sale in U. S. ” • May not take orders or train on device prior to clearance/approval • May not display off-label uses of cleared device • No regulatory mechanism to display device with PMA pending

Clinical Trial Recruitment • Investigator recruitment through notices, publications, displays, direct mailing and announcements in medical conferences on publications: • • • Identity of sponsor How to apply Study obligations

Clinical Trial Recruitment Subject recruitment advertisements • Identity of investigator and / or research facility • Conditions and purpose of study • Summary of eligibility criteria • List of benefits - Not imply favorable outcome - Not identify benefits beyond those in informed consent - Not claim “new treatment” without explaining product is investigational • Time commitment required • Contact information

Continuing Medical Education • • • Most CME programs (80%) are sponsored by drug and device companies. • Industry supported scientific and educational activities (ISSEA) FDA considers sponsorship of an ISSEA discussing the company’s (or a competitor’s) product to be subject to labeling and advertising requirements. FDA’s regulation of ISSEA has been the subject of considerable controversy and confusion. • Final guidance on ISSEA issued in November 1997 • Subject to First Amendment challenge • Guidance reinstated on appeal

ISSEA Final Guidance • Activities controlled or substantially influenced by funding companies: • • • Must satisfy FDA requirements, including full disclosure and fair balance Must disclose interest in product, sponsorship of event and state that use is not approved Activities that are “independent” of the funding companies are not subject to FDA regulation

ISSEA Final Guidance (Cont’d) • Factors FDA considers in determining “independence” • • • Control over content and selection of presenters Disclosures (funding, content, etc. ) Focus Relationship between provider and supporting company Providers involvement in sales / marketing Multiple presentations Audience selection Discussion opportunities Dissemination of information after the program Ancillary promotional activities Complaints No one factor is definitive.

Comparative and Superiority Claims • FDA generally discourages claims comparing one product to another. • • • Concerns about validity of comparison Limited or “apples-to-oranges” comparisons CDER and CDRH take similar but not identical approach to comparative claims for drug and devices.

Comparative and Superiority Claims: Devices • • • Comparative claims must be based on reliable scientific data Comparative Requires at least one study directly comparing the two products The study must be presented in its entirety identifying both areas of superiority and any areas on inferiority

Comparative and Superiority Claims: Price Advertising • Manufacturers and distributors may advertise prices so long as it is not false or misleading and does not address safety or effectiveness • must include all charges and specifics (i. e. : product strength, dose, form, model, etc. ) • Cost effectiveness and comparative claims must generally be based on clinical trials

Investor Communications: FDA Standards • • Although investor communications do not constitute advertising in the traditional sense, FDA has consistently held that they are subject to the same regulatory constraints as statements made to consumers and the medical community. In practice, FDA recognizes that investor communications are not primarily intended to promote a product to physicians or consumers, and has not aggressively exercised enforcement authority against firms for statements made in communications solely directed at investors.

SEC Requirements • • • Section 11 of the 1933 Securities Act and Section 10 b, Rule 10 b-5 and Section 17 a of the 1934 Act make it unlawful in a securities transaction to: • Make untrue statements of material fact • Omit material facts that would make statements not misleading acts Primary liability for issuers knowingly suppressing or recklessly disregarding material omissions or misstatements Secondary liability for assisting issuer or other primary party in violation (reasonable due diligence)

Investor Communications • • Recent investor climate has resulted in an increase in the amount and level of detail regarding clinical and regulatory status in investor communications. Investor communications include: • Annual and other periodic reports • Prospectuses • Initial Public Offerings (S-1) • Press Releases • All other securities filings and materials disseminated to the investor community

Strategies for Compliance • • • Press releases and S-1 s are likely to receive both FDA and SEC scrutiny. Don’t get out in front of FDA. • Don’t say your product is safe and effective until FDA says it’s safe and effective Be complete in discussing interim clinical trial results. • If you are announcing results after 10 patients in a 500 patient trial, tell the whole story about the trial. • If results are favorable but not statistically significant – say so.

Strategies for Compliance (Cont’d) • • Be balanced • Don’t overstate favorable results or studies or omit unfavorable ones. Statements to FDA and the investment community should be consistent. • Accurately characterize stage of clinical development or regulatory status. • Description of endpoint or indication should be precise. • Clearly describe regulatory process.