One click is enough: satisfying FDA's fair balance in the highly-regulated marketplace.

• Author: Gray, Randy

1. INTRODUCTION II. BACKGROUND & DISCUSSION A. FOOD AND DRUG ADMINISTRATION REGULATION EXPLAINED B. THE ONE-CLICK RULE AND THE ADVENT OF WARNING LETTERS C. GENESIS OF THE ONE-CLICK RULE D. WARNING LETTERS E. FRA's PUBLIC MEETINGS REGARDING INTERNET ADVERTISING F. FDA GUIDANCE ON THE PRESENTATION OF RISK INFORMATION IN DIRECT-TO-CUSTOMER ADVERTISING G. FDA's FIRST SOCIAL MEDIA GUIDANCE III. OTHER HIGHLY-REGULATED INDUSTRY MODELS A. FINANCIAL SERVICES B. INSURANCE C. COMMUNICATIONS CONCLUSION "Our social [media] tools are not an improvement to modern society; they are a challenge to it." (1)

1. INTRODUCTION

   As famously stated in Mark Zuckerberg's 2008 F8 Conference keynote address, and posted on every press release since, "Facebook's mission is to give people the power to share and make the world more open and connected." (2) It is primarily this interconnectedness and sharing mentality that has taken over the United States and the world. Facebook boasts that over one billion people actively use its social network. (3) Twitter reports 100 million active users. (4) LinkedIn touts 187 million active users, (5) And upstart location-based check-in social network Foursquare announced 25 million active users. (6) The implication of all of this: social media is here to stay.

   Social media has lasting power not only due to the numbers of large players and upstarts, but also because it has permeated our society and the way we interact with each other. (7) Social communication is part of almost every modern industry, from financial services with Bank of America's "Small Business Community," (8) to telecommunications customer service with "@ComcastCares," (9) to medical services with the advent of a private social network for physicians like Sermo. (10) Companies have rushed into social media to communicate better with consumers. (11) Consumers not only expect companies to operate in social spaces, (12) but according to The Center for Client Retention survey, consumers look more favorably upon those who provide information and respond to social media-based inquiries. (13)

   This Note will first lay out the history of social media in the highly-regulated pharmaceutical and medical device manufacturing industry. This Note will describe the background of the Food and Drug Administration's (FDA) promised action regarding guidance or regulations associated with social media. This Note will also describe the backlash the industry has received from the FDA by way of stern warning letters requiring strict adherence to outdated regulations rather than innovative use of Internet-based technologies to apprise consumers of the adverse effects of pharmaceutical products. This Note will further describe the FDA's statutory remit, how they have carried it out to date, and will evaluate how other highly-regulated industries regulate social media in terms of information presentation and use of links. Throughout the entirety of this Note, the author will argue that the industry-initiated "One-Click Rule" should be enough to satisfy the FDA's specific statutory fair-balance advertising requirement. Further, this Note will distinguish the Internet from traditional advertising mediums, and advocate for the promulgation of an evolved regulatory scheme as opposed to guidance documents due to the unique character of the Internet.

2. BACKGROUND & DISCUSSION

   Companies in highly-regulated industries have had a particularly difficult time engaging in social media from a legal and compliance perspective. (14) Highly-regulated companies have been more resistant than others to engage in social media as a result of the potential for noncompliance with existing laws and regulations. (15) Some industry regulatory bodies, like the Financial Industry Regulatory Authority (FINRA), have provided guidance to help the industry engage with consumers. (16) Despite contemplating social media regulations since 1996, the FDA--the pharmaceutical and medical device manufacturing regulatory body--has not issued any specific regulations for the industry to follow regarding social media. (17) Instead, it has been the FDA's policy to attempt to regulate the industry's use of the social media through letters complaining of their promotional activity. (18)

   Despite the FDA's inaction to date, consumers continue to use online resources, and social media in particular, to find health-related information.

   [In 2008, o]ver 60 million U.S. adults use[d] Health 2.0 resources, which encompass a variety of social media and other Web 2.0 resources: health-related blogs, message boards, health-related chatrooms, posting health content online (such as: writing or commenting on a health-related blog, adding or responding to a topic in a forum or group, or creating health-related web pages, videos or audio content), and online patient support groups. (19) This number has dramatically increased over the years. A twelve-month study conducted from 2010 through 2011 found:

   26 percent of U.S. adults have used their mobile phones for health information or tools in the past 12 months, according to [a] ... Cybercitizen Health[R] U.S. 2011 study from pharmaceutical and healthcare market research company Manhattan Research. ... The mobile health population has more than doubled since 2010, when 12 percent of consumers conducted health activities on their mobile phones. (20) Pharmaceutical and medical device manufacturers have attempted to engage in social media much to their chagrin. The FDA has come down hard on companies engaging in social media by sending warning letters (21) and issuing fines. (22) Although pharmaceutical and device manufacturer pundits offer commentary that the "majority of letters received [by industry companies] regarding social media, such as YouTube or Facebook, have focused on issues with the message not the medium," (23) it is precisely the medium that drives the message consumers desire to hear.

   1. FOOD AND DRUG ADMINISTRATION REGULATION EXPLAINED

      The FDA serves as the governing body regarding the advertisement of pharmaceutical and medical device manufacturing. (24) The FDA clarifies its definition of advertisements via regulation. (25) Of particular significance is that the governing act requires a "brief summary relating to side effects, contraindications, and effectiveness" and the summary must be a "true statement." (26) The relevant act indicates that a statement will not be considered true if it fails to meet any of three requirements: 1) "It is false or misleading with respect to side effects, contraindications, or effectiveness," (27) 2) does not present a "fair balance" between the information related to the side effects and contraindications of the product as set against the drug's effectiveness, (28) and 3) "It fails to reveal facts material in the light of its representations or material with respect to consequences that may result from the use of the drug as recommended or suggested in the advertisement." (29) Of particular note is the second requirement of the presentation of a "fair balance" of the product claims as balanced against the side effects of the drugs, and the requirement that this balance is achieved when "the presentation of true information relating to the side effects and contraindications is comparable in depth and detail with the claims for effectiveness or safety." (30) It is precisely this requirement that has been the cause of major confusion for online advertisers since the consumerization of the Internet in the middle of the 1990s. (31)

      Explicated further, the "true statement" required must be stated or displayed depending upon the type of medium used through which the information is communicated. (32) Certain types of advertisements are exempt from this brief summary of adverse effects requirement. (33) These exempt advertisements include reminder advertisements, (34) advertisements of bulk sale drugs, (35) and advertisements for prescription-compounding drugs. (36)

      Although there is specific mention of television, radio, and print advertising--and no mention of the Internet marketing--the FDA has stated it has jurisdiction over all advertising and labeling regarding promotion of prescription drugs given that Internet promotion is substantially similar to other mediums of advertising. (37) The Federal Trade Commission (FTC), which shares the remit of advertising regulation, agrees that the FDA has this responsibility. (38)

   2. THE ONE-CLICK RULE AND THE ADVENT OF WARNING LETTERS

      Through consumers' increased interest in obtaining health-related information online, marketers first responded through purchasing search engine advertisements that allowed marketers to target information to consumers based upon what they search. This typically results in information about a company's brand as it relates to symptoms or conditions as the search terms. The FDA investigated this form of marketing for noncompliance, and issued fourteen warning letters regarding sponsored links, search advertisements, and social media.39 This hard-line stance was significant to the industry as it was the first time the FDA took a stance regarding this unique form of marketing. It is quite significant in looking forward to the future of social media marketing as well, given the need to use links to provide additional information due to spatial constraints in the medium. As stated by comScore Vice President John Mangano in 2010, "[t]he shift is important because it means the uncoupling of brand and condition in searches." (40)

   3. GENESIS OF THE ONE-CLICK RULE

      The FDA's fourteen separate warning letters in one day was in response to marketers' use of the industry-initiated "One-Click Rule." It is helpful to first understand the genesis of the rule in order to put its function in context. This rule established that the use of a link in web-based content was enough to satisfy the fair-balance advertising requirement by placing consumers as close as possible to...