WebMD Health (WBMD)

depending on the nature of the violation. In addition, state attorneys general may bring enforcement actions for alleged unfair or deceptive advertising.

 

There are several administrative, civil and criminal sanctions available to the FDA for violations of the FDC Act or FDA regulations as they relate to labeling and advertising. Administrative sanctions may include a written request that violative advertising or promotion cease and/or that corrective action be taken, such as requiring a company to provide to healthcare providers and/or consumers information to correct misinformation previously conveyed. In addition, the FDA may use publicity, such as press releases, to warn the public about false and misleading information concerning a drug or medical device product. More serious civil sanctions include seizures, injunctions, fines and consent decrees. Such measures could prevent a company from introducing or maintaining its product in the marketplace. Criminal penalties for severe violations can result in a prison term and/or substantial fines. State attorneys general have similar investigative tools and sanctions available to them.

 

Any increase in FDA regulation of the Internet or other media used for DTC advertisements of prescription drugs could make it more difficult for us to obtain advertising and sponsorship revenue. In the last 15 years, the FDA has gradually relaxed its formerly restrictive policies on DTC advertising of prescription drugs. Companies may now advertise prescription drugs to consumers in any medium, provided that they satisfy FDA requirements. However, legislators, physician groups and others have criticized the FDA’s current policies, and have called for restrictions on advertising of prescription drugs to consumers and increased FDA enforcement. These critics point both to public health concerns and to the laws of many other countries that make DTC advertising of prescription drugs a criminal offense. Congress and the FDA have shown interest in these issues as well and there is a possibility that Congress, the FDA or the FTC may alter present policies on DTC advertising of prescription drugs or medical devices in a material way. We cannot predict what effect any such changes would have on our business.

 

Industry trade groups, such as the Pharmaceuticals Research and Manufacturers of America (PhRMA), have implemented voluntary guidelines for DTC advertising in response to public concerns. The PhRMA Guiding Principles for Direct to Consumer Advertisement of Prescription Medicines (referred to as the PhRMA Guidelines), which originally went into effect in January 2006, have recently been revised with an effective date of March 2, 2009. The PhRMA Guidelines address various aspects of DTC, including: balancing presentation of benefits and risks; timing of DTC campaigns, including allowing for a period for education of healthcare professionals prior to launching a branded DTC campaign; use of healthcare professionals and celebrities in DTC advertisements; and timing and placement of advertisements with adult-oriented content. PhRMA has also implemented a voluntary Code On Interactions With Health Care Professionals, adopted in 2009, with an effective date of January 1, 2009 (which we refer to as the PhRMA Code), that revised a predecessor Code from 2002. The new PhRMA Code, among other things: prohibits distribution of non-educational items (such as pens, mugs and other “reminder” objects typically adorned with a company or product logo) to healthcare providers and their staff; and prohibits company sales representatives from providing restaurant meals to healthcare professionals, but allows them to provide occasional meals in healthcare professionals’ offices in conjunction with informational presentations. The new PhRMA Code also reaffirms and strengthens statements in its predecessor that companies should not provide any entertainment or recreational benefits to healthcare professionals.

 

 

The Food and Drug Administration, or FDA, and the Federal Trade
Commission, or FTC, regulate the form, content and dissemination
of labeling, advertising and promotional materials prepared by,
or for, pharmaceutical or medical device companies, including
direct-to-consumer (or DTC) prescription drug and medical device
advertising. The FTC regulates over-the-counter drug advertising
and, in some cases, medical device advertising. Generally, based
on FDA requirements, regulated companies must limit advertising
and promotional materials to discussions of FDA-approved uses
and claims. In limited circumstances, regulated companies may
disseminate certain non-promotional scientific information
regarding product uses or claims not yet approved by the FDA.

 

Information on our Web sites that promotes the use of
pharmaceutical products or medical devices is subject to the
full array of FDA and FTC requirements and enforcement actions
and information regarding other products and services is subject
to FTC requirements. If the FDA or the FTC finds that any
information on our Web site violates FDA or FTC regulations or
guidance, they may take regulatory or judicial action against us
or the advertiser or sponsor of that information. State
attorneys general may also take similar action based on their
state’s consumer protection statutes. Areas of our Web
sites that could be the primary focus of regulators include
pages and programs that discuss use of an FDA-regulated product
or that the regulators believe may lack editorial independence
from the influence of sponsoring pharmaceutical or medical
device companies. Our television broadcast advertisements may
also be subject to FTC and FDA regulation, depending on the
content. The FDA and the FTC place the principal burden of
compliance with advertising and promotional regulations on
advertisers and sponsors to make truthful, substantiated claims.

 

The Federal Food, Drug, and Cosmetic Act, or FDC Act, requires
that prescription drugs (including biological products) be
approved by the FDA prior to marketing. It is a violation of the
FDC Act and of FDA regulations to market, advertise or otherwise
commercialize such products prior to approval. The FDA allows
for preapproval exchange of scientific information, provided it
is nonpromotional in nature and does not draw conclusions
regarding the ultimate safety or effectiveness of the unapproved
drug. Upon approval, the FDA’s regulatory authority extends
to the labeling and advertising of prescription drugs offered in
interstate commerce. Such products may be promoted and
advertised only for uses reviewed and approved by the FDA. In
addition, the labeling and advertising can be neither false nor
misleading, and must present all material information, including
risk information, in a clear, conspicuous and neutral manner.
There are also requirements for certain information (the
“prescribing information” or “package
insert” for promotional labeling and the “brief
summary” for advertising) to be part of labeling and
advertising. Labeling and advertising that violate these legal
standards are subject to FDA enforcement action.

 

The FDA also regulates the safety, effectiveness, and labeling
of over-the-counter (OTC) drugs under the FDC Act either through
specific product approvals or through regulations that define
approved claims for specific categories of such products. The
FTC regulates the advertising of OTC drugs under the section of
the Federal Trade Commission Act that prohibits unfair or
deceptive trade practices. The FDA and FTC regulatory framework
requires that OTC drugs be formulated and labeled in accordance
with FDA approvals or regulations and promoted in a manner that
is truthful, adequately substantiated, and consistent with the
labeled uses. OTC drugs that do not meet these requirements are
subject to FDA or FTC enforcement action

depending on the nature of the violation. In addition, state
attorneys general may bring enforcement actions for alleged
unfair or deceptive advertising.

 

There are several administrative, civil and criminal sanctions
available to the FDA for violations of the FDC Act or FDA
regulations as they relate to labeling and advertising.
Administrative sanctions may include a written request that
violative advertising or promotion cease
and/or that
corrective action be taken, such as requiring a company to
provide to healthcare providers
and/or
consumers information to correct misinformation previously
conveyed. In addition, the FDA may use publicity, such as press
releases, to warn the public about false and misleading
information concerning a drug or medical device product. More
serious civil sanctions include seizures, injunctions, fines and
consent decrees. Such measures could prevent a company from
introducing or maintaining its product in the marketplace.
Criminal penalties for severe violations can result in a prison
term and/or
substantial fines. State attorneys general have similar
investigative tools and sanctions available to them.

 

Any increase in FDA regulation of the Internet or other media
used for DTC advertisements of prescription drugs could make it
more difficult for us to obtain advertising and sponsorship
revenue. In the last 15 years, the FDA has gradually
relaxed its formerly restrictive policies on DTC advertising of
prescription drugs. Companies may now advertise prescription
drugs to consumers in any medium, provided that they satisfy FDA
requirements. However, legislators, physician groups and others
have criticized the FDA’s current policies, and have called
for restrictions on advertising of prescription drugs to
consumers and increased FDA enforcement. These critics point
both to public health concerns and to the laws of many other
countries that make DTC advertising of prescription drugs a
criminal offense. Congress and the FDA have shown interest in
these issues as well and there is a possibility that Congress,
the FDA or the FTC may alter present policies on DTC advertising
of prescription drugs or medical devices in a material way. We
cannot predict what effect any such changes would have on our
business.

 

Industry trade groups, such as the Pharmaceuticals Research and
Manufacturers of America (PhRMA), have implemented voluntary
guidelines for DTC advertising in response to public concerns.
The PhRMA Guiding Principles for Direct to Consumer
Advertisement of Prescription Medicines (referred to as the
PhRMA Guidelines), which originally went into effect in January
2006, have recently been revised with an effective date of
March 2, 2009. The PhRMA Guidelines address various aspects
of DTC, including: balancing presentation of benefits and risks;
timing of DTC campaigns, including allowing for a period for
education of healthcare professionals prior to launching a
branded DTC campaign; use of healthcare professionals and
celebrities in DTC advertisements; and timing and placement of
advertisements with adult-oriented content. PhRMA has also
implemented a voluntary Code On Interactions With Health Care
Professionals, adopted in 2009, with an effective date of
January 1, 2009 (which we refer to as the PhRMA Code), that
revised a predecessor Code from 2002. The new PhRMA Code, among
other things: prohibits distribution of non-educational items
(such as pens, mugs and other “reminder” objects
typically adorned with a company or product logo) to healthcare
providers and their staff; and prohibits company sales
representatives from providing restaurant meals to healthcare
professionals, but allows them to provide occasional meals in
healthcare professionals’ offices in conjunction with
informational presentations. The new PhRMA Code also reaffirms
and strengthens statements in its predecessor that companies
should not provide any entertainment or recreational benefits to
healthcare professionals.

 

depending on the nature of the violation. In addition, state attorneys general may also bring enforcement actions for alleged unfair or deceptive advertising.

 

There are several administrative, civil and criminal sanctions available to the FDA for violations of the FDC Act or FDA regulations as they relate to labeling and advertising. Administrative sanctions may include a written request that violative advertising or promotion cease and/or that corrective action be taken, such as requiring a company to provide to healthcare providers and/or consumers information to correct misinformation previously conveyed. In addition, the FDA may use publicity, such as press releases, to warn the public about false and misleading information concerning a drug or medical device product. More serious civil sanctions include seizures, injunctions and consent decrees. Such measures could prevent a company from introducing or maintaining its product in the marketplace. Criminal penalties for severe violations can result in a prison term and/or substantial fines. State attorneys general have similar investigative tools and sanctions available to them as well. The National Association of Attorneys General has formed a Prescription Drug Task Force that has been active in addressing issues related to prescription drugs.

 

Any increase in FDA regulation of the Internet or other media for DTC advertisements of prescription drugs could make it more difficult for us to obtain advertising and sponsorship revenue. In the last 15 years, the FDA has gradually relaxed its formerly restrictive policies on DTC advertising of prescription drugs. Companies may now advertise prescription drugs to consumers in any medium, provided that they satisfy FDA requirements. However, legislators, physician groups and others have criticized the FDA’s current policies, and have called for restrictions on advertising of prescription drugs to consumers and increased FDA enforcement. These critics point both to public health concerns and to the laws of many other countries that make DTC advertising of prescription drugs a criminal offense. Scrutiny of DTC advertising increased after Vioxx^® was withdrawn from the market due to potential safety concerns in September 2004. Industry trade groups, such as the Pharmaceuticals Research and Manufacturers of America, have implemented voluntary guidelines for DTC advertising in response to public concerns. The FDA has been actively considering revisions to its DTC advertising policy. In November 2005, it hosted a two-day public meeting to solicit input on the impact of DTC advertising on the public health and, as recently as January 2006, announced that it will propose a study on the impact of price incentives, such as coupons, in DTC advertising. In January 2007, the FDA published a report announcing the formation of a new advisory committee of experts and consumer representatives that will monitor the FDA’s policies for risk communication. Intended to improve communication to patients of important safety information about drug products, the advisory committee may become a forum for addressing concerns about DTC advertising. Congress has also shown interest in the issue. Despite recent industry efforts to address the issue, there is a reasonable possibility that Congress, the FDA or the FTC may alter its present policies on DTC advertising of prescription drugs or medical devices in a material way. We cannot predict what effect any such changes would have on our business.

 

Continuing Medical Education.  Activities and information provided in the context of a medical or scientific educational program, often referred to as continuing medical education or “CME,” usually are treated as non-promotional and fall outside the FDA’s jurisdiction. The FDA does, however, evaluate such CME activities to determine whether they are independent of the promotional influence of the drug or medical device sponsor and whether they are promotional activities subject to the FDA’s advertising and labeling requirements. To determine whether a company’s activities are sufficiently independent, the FDA looks at a number of factors related to the planning, content, speakers and audience selection of such activities. To the extent that the FDA concludes that such activities are not independent of a manufacturer, such content must fully comply with the FDA’s requirements and restrictions regarding promotional activities. If any CME activity we provide is considered promotional, we may face regulatory action or the loss of accreditation by the Accreditation Council for Continuing Medical Education (or ACCME), which oversees providers of CME credit.

 

Our CME activities are planned and implemented in accordance with the Essential Areas and Policies of ACCME and other applicable accreditation standards. In September 2004, ACCME revised its standards for commercial support of CME. The revised standards are intended to ensure, among other things, that CME activities of ACCME-accredited providers are independent of providers of healthcare goods and services that fund the development of CME. ACCME required accredited providers to implement these standards by May

2005. Implementation has required additional disclosures to CME participants about those in a position to influence content and other adjustments to the management and operations of our CME programs. We believe we have modified our procedures as appropriate to meet the revised standards. However, we cannot be certain whether these adjustments will ensure that we meet these standards or predict whether ACCME may impose additional requirements.

 

In the event that ACCME concludes that we have not met its revised standards relating to CME, we would not be permitted to offer accredited ACCME activities to physicians and other healthcare professionals, and we may be required, instead, to use third parties to accredit such CME-related services on Medscape from WebMD. In addition, any failure to maintain our status as an accredited ACCME provider as a result of a failure to comply with existing or new ACCME standards could discourage potential sponsors from engaging in CME or education related activities with us, which could have a material adverse effect on our business.

 

During the past several years, educational programs directed toward physicians, including CME, have been subject to increased governmental scrutiny to ensure that sponsors do not influence or control the content of the program or otherwise use such programs for improper purposes. For example, as part of an ongoing investigation of the sponsorship of CME activities, the U.S. Senate Finance Committee has been examining the role of the ACCME. The Committee has inquired regarding, among other things, how ACCME ensures that its guidelines are followed and CME activities are independent of influence from sponsors. Additionally, in response to governmental and industry initiatives, pharmaceutical companies have been developing and implementing internal controls and procedures that promote adherence to applicable guidelines, regulations and requirements. In implementing these controls and procedures, different clients of WebMD may interpret the regulations and requirements differently and may implement procedures or requirements that vary from client to client. These controls and procedures may negatively impact the volume and types of CME services that we offer by:

 

 

In addition, future changes to existing regulations or accreditation standards, or to the internal compliance programs of potential clients, may further discourage, significantly limit, or prohibit clients or potential clients from engaging in educational activities with us, or may require us to make further changes in the way we offer or provide educational programs.

 

and FDA regulation depending on the content. The FDA and the FTC place the principal burden of compliance with advertising and promotional regulations on advertisers and sponsors to make truthful, substantiated claims. If the FDA or the FTC finds that any information on our Web site violates FDA or FTC regulations, they may take regulatory or judicial action against us or the advertiser or sponsor of that information. State attorneys general may also take similar action based on their state’s consumer protection statutes.

 

Drug Advertising.  The Federal Food, Drug, and Cosmetic Act, or FDC Act, requires that prescription drugs (including biological products) be approved for a specific medical indication by the FDA prior to marketing. It is a violation of the FDC Act and of FDA regulations to market, advertise or otherwise commercialize such products prior to approval. The FDA does allow for preapproval exchange of scientific information, provided it is nonpromotional in nature and does not draw conclusions regarding the ultimate safety or effectiveness of the unapproved drug. Upon approval, the FDA’s regulatory authority extends to the labeling and advertising of prescription drugs offered in interstate commerce. Such products may only be promoted and advertised for approved indications. In addition, the labeling and advertising can be neither false nor misleading, and must present all material information, including risk information, in a balanced manner. Labeling and advertising that violate these legal standards are subject to FDA enforcement action.

 

The FDA regulates the safety, effectiveness, and labeling of over-the-counter drugs, or OTC drugs, under the FDC Act either through specific product approvals or through regulations that define approved claims for specific categories of such products. The FTC regulates the advertising of OTC drugs under the section of the Federal Trade Commission Act that prohibits unfair or deceptive trade practices. Together, the FDA and FTC regulatory framework requires that OTC drugs be formulated and labeled in accordance with FDA approvals or regulations and promoted in a manner that is truthful, adequately substantiated, and consistent with the labeled uses. OTC drugs that do not meet these requirements are subject to FDA or FTC enforcement action depending on the nature of the violation. In addition, state attorneys general can also bring enforcement actions for alleged unfair or deceptive advertising.

 

There are several administrative, civil and criminal sanctions available to the FDA for violations of the FDC Act or FDA regulations as they relate to labeling and advertising. Administrative sanctions may include a written request that violative advertising or promotion cease and/or that corrective action be taken, such as requiring a company to provide to healthcare providers and/or consumers information to correct misinformation previously conveyed. In addition, the FDA may use publicity, such as press releases, to warn the public about false and misleading information concerning a drug or medical device product. More serious civil sanctions include seizures, injunctions and consent decrees. Such measures could prevent a company from introducing or maintaining its product in the marketplace. Criminal penalties for severe violations can result in a prison term and/or substantial fines. State attorneys general have similar investigative tools and sanctions available to them as well. The National Association of Attorneys General has formed a Prescription Drug Task Force that has been active in addressing issues related to prescription drugs.

 

Any increase in FDA regulation of the Internet or other media for DTC advertisements of prescription drugs could make it more difficult for us to obtain advertising and sponsorship revenue. In the last 15 years, the FDA has gradually relaxed its formerly restrictive policies on DTC advertising of prescription drugs. Companies can now advertise prescription drugs to consumers in any medium provided that they satisfy FDA requirements. However, legislators, physician groups and others have criticized the FDA’s current policies, and have called for restrictions on advertising of prescription drugs to consumers and increased FDA enforcement. These critics point to both public health concerns and to the laws of many other countries that make DTC advertising of prescription drugs a criminal offense. Scrutiny of DTC advertising increased after Vioxx^® was withdrawn from the market due to potential safety concerns in September 2004. Industry trade groups, such as the Pharmaceuticals Research and Manufacturers of America, have implemented voluntary guidelines for DTC advertising in response to public concerns. The FDA has been actively considering revisions to its DTC advertising policy. In November 2005, it hosted a two-day public meeting to solicit input on the impact of DTC advertising on the public health and, as recently as January 2006, announced that it will propose a study on the impact of price incentives, such as coupons, in DTC advertising. Congress has also shown interest in the issue. Despite recent industry efforts to address the issue, there is a reasonable possibility that Congress,

the FDA or the FTC may alter its present policies on DTC advertising of prescription drugs or medical devices in a material way. We cannot predict what effect any such changes would have on our business.

 

Continuing Medical Education.  Activities and information provided in the context of a medical or scientific educational program, including CME, are not regulated by the FDA if they are non-promotional. The FDA does, however, evaluate such activities to determine whether they are independent of the promotional influence of the drug or medical device sponsor or whether they are promotional activities subject to the FDA’s advertising and labeling requirements. To determine whether a company’s activities are sufficiently independent, the FDA looks at a number of factors related to the planning, content, speakers and audience selection of such activities. To the extent that the FDA concludes that such activities are not independent from a manufacturer, such content must fully comply with the FDA’s requirements. If the FDA or other regulatory agency finds that an educational program violates the applicable requirements, we may face regulatory action or the loss of accreditation.

 

During the past several years, educational programs directed toward physicians, including CME, have been subject to increased scrutiny to ensure that sponsors do not influence or control the content of the program. In response to governmental and industry initiatives, pharmaceutical companies have been developing and implementing internal controls and procedures that promote adherence to applicable regulations and requirements. In implementing these controls and procedures, different clients may interpret the regulations and requirements differently and may implement procedures or requirements that vary from client to client. These controls and procedures:

 

 

In addition, future changes to existing regulations or accreditation standards, or to the internal compliance programs of potential clients, may further discourage or prohibit potential clients from engaging in educational activities with us, or may require us to make further changes in the way we offer or provide educational programs.