answers to questions from investors about regulation of pharma online advertisining
DESCRIPTION
John Mack answers questions from investors interested in buying stocks of online health sites. These questions were submitted by an Internet research team at a major regional brokerage and investment banking firm that provides investment advisory services to individual investors and professional money managers. A conference call with the investors will follow and this presentation will be updated afterward.TRANSCRIPT
FDA,SocialMedia,&OnlinePharmaAdver7sing
John MackPublisher, Pharma marketing News &Pharma Marketing Blog@pharmaguy on [email protected]
AnswerstoQues7onsfromInvestors
Introduc7on
InvestorswhoownstocksorwhoarethinkingofbuyingstocksofmajoronlineHealthsitesareworried.Theyhavelotsofques7onsaboutFDA'splansforregula7ngdrugpromo7onontheInternet.
Asweknow,whenFDAregulates,marketsreact.WhenFDAsentoutthose14NOVleOers,forexample,brandedpaidsearchenginemarke7ngbypharmaexperienceda"Prompt,Precipitous,&Prolonged"Plummet(seehere).Thatcouldhavebeenjustacoincidence;IhaveheardthatGoogleisworriedaboutanoveralldeclineinpaidsearchengineadver7sing.
Anyway,anInternetresearchteamatamajorregionalbrokerageandinvestmentbankingfirmthatprovidesinvestmentadvisoryservicestoindividualinvestorsandprofessionalmoneymanagersinvitedmetospeaktosomeoftheirclientsviaconferencecallabouttherecentFDApublichearingontheInternetanditsrepercussions.
Thefollowingarethefirstroundofques7onstheyhaveaskedpriortothecallandmyanswers.
3
AreasofInterest/Ques7ons
FDAHearingsBackground− WhydidtheFDAholdpublichearings?− WhatistheFDAtryingtoaccomplish?− Whatisthe7melineforFDAac7on?− IstheFDAtrea7ngtheInternetasjustanothermedialikeprintorTVoraretheytrea7ngtheInternetasanewmedium?
KeyTakeawaysfollowingtheFDApublichearings– Whatarekeytakeawaysfromthehearings?– Dothepharmacompanieswantregula7onregardingonlineadver7singandifsowhy?
– Arepharmacompanieswai7ngforregula7onbeforeintroducingonlinemarke7ngcampaigns?
4
AreasofInterest/Ques7ons(cont’d)
FutureRegula7on− HowwilltheFDAdefinewhatpla^ormsandpar7cipantswillbegovernedbyFDAregula7on?
− Followingthehearings,arepharmacompaniesaremoreinclinedtoadver7seonlinenoworwaitforFDAguidelines?
EmergingOnlineAdver7singFormats– Areanyofthenewformsofsearchadseffec7veandlikelytoreceiveFDAapproval?
– Doyouexpectpharmaadver7serstoreturntopaidsearch?– Whatonlineadver7singtrendsyou’veseenfrompharmacompaniesinrecentmonths?
– Whatnewtrendstoyouexpectinonlineadver7singandsocialmediainthefuture?
BackgroundWhydidFDAholdpublichearings?InApril,2009,FDAsentout14NOVle:ersregardingsearchengineadverAsing.Thesele:ersshotdowntheso‐called“one‐clickrule,”whichpharmamarketerswereapplyingtopaidsearchads.ThatrulestateditwasOKtomenAonabrandnamedruganditsindicaAonwithoutmenAoninganysideeffectsaslongasthefullprescribinginformaAon(PI)wasoneclickaway.BecauseofthatacAonFDAreceivedalotofcomplaints.SoonaTerthat,Icalledforapublichearingonmyblog.Therestishistory!Whataretheytryingtoaccomplish?FDAtypicallyholdsPart15hearingsaspartofitsprocesstodeterminewhetherornotnewguidanceshouldbeissuedand/orwhatresearchmayneedtobedoneinordertofulfilltheirmission.Thatbeingsaid,thereisnoguaranteethathavingapublicmeeAngwillleadtonewguidance.MyviewisthatFDAalreadyhaddecidedthatnewguidanceisrequiredandthattheyneedtostartthecommentprocess,whichwasveryhasAlyputtogether.Itwaswell‐organizedwithregardtologisAcs,butpoorlyadverAsedandorganizedintermsofensuringthatallstakeholdershadavoice.
Doyouhavedifferentanswersorcommentstoadd?SeehOp://bit.ly/8z8JZM
Background(cont’d)NextSteps/Timeline?UnofficialcommentsfromFDApersonnelplusthehastyconveningofthepublichearingsuggestthatDRAFTguidancewillbereleasedbytheendof2010.ATerthattherewillbeanothercommentperiodbeforeFINALguidancewillbereleased.Iexpectthattheprocesswillbefasterthaninthepast,unlessFDAdecidestobiteoffmorethanitcanchew.Inthatcase,itwilltakealongAmetoissueanyguidanceanditwillbeoutofdateassoonasitispublished.Amuchbe:erapproach,IMHO,wouldbetotackleafewissuesataAme.FDAcould,forexample,issueguidanceregardingspacelimitaAonsimposedbycertaintoolssuchasTwi:er(andotherSMS,text‐basedapps)andservicessuchassearchengineads.FDAcouldofficiallysancAonthe"one‐clickrule"inthesecasesaslongascertaincriteriaweremet,suchasproposedbyGoogleandPhRMA.
THISISNOTYOURFATHER’SFDA:
Expectfasterresponse,moretransparency.
FDAmayaccepthelpwithresearchandfromworkinggroupstohelpdecidewhatissuestofocusonfirst,etc.
Doyouhavedifferentanswersorcommentstoadd?SeehOp://bit.ly/8z8JZM
Background(Cont’d)WillFDAremain“mediaagnos7c”ortreattheInternetasanewmedium?ManypresentersatthehearingmadethepointthattheInternetandsocialmediaaredifferentandIMPORTANTtothepublichealth.TheInternet,forexample,isaccessedfirstbyconsumersseekinghealthinformaAon‐‐beforeaskingtheirdoctorseven.Inhisclosingremarks,TomAbrams,DirectorofFDA'sDivisionofDrugMarkeAng,AdverAsing,andCommunicaAons(DDMAC),said"whatwehaveheardis[theInternetis]adifferentmedium.”AsfarasIknow,thisisthefirstAmethatanyoneattheFDAhassaidthat.Usually,theFDAsaysit's"media‐agnosAc."Inotherwords,FDAregulaAonsapplytoallmediaanddonothavetobemodifiedforanyparAcularmedium.Thatthinking,however,wasappliedonlytotheInternet.Thereisprecedentforissuingmedia‐specificguidance:the1997“adequateprovision”guidelineforbroadcastTVads;ie,abriefstatementaboutmajorriskscantaketheplaceofenArePIaslongas“adequate provision” was made to reference a toll-free phone number, a Web site, ora current issue of a magazine that contains a print ad where the full safetyinformation could be found.
Doyouhavedifferentanswersorcommentstoadd?SeehOp://bit.ly/8z8JZM
KeyTakeawaysTheFDAisawarethattheInternetandsocialmediacanhaveanimpact‐‐posiAveornegaAve‐‐onpublichealthanditsregulaAonsmayplayamajorroleAppingthescalesonewayortheother.
ThedrugindustryismoreafraidofbeingleToutoftheconversaAonthanitisofFDAissuingguidelinesthatrestricthowitcanengageintheconversaAon.Anyguidanceisbe:erthannoneatall.
Theindustryneedsandwantsthe“one‐clickrule,”especiallyforsearchenginemarkeAng(SEM),whichworksbestwithbrandedads.
SomegoodideaswerepresentedatthehearingssuchasGoogle’snewstandardsforproductclaimpaidsearchads,whichwilllikelybeapprovedbytheFDA.Bayer/YAZisalreadyusingthenewGoogleformat,whichisinbetatest.Otherpharmacompaniesmayfollowthatlead.
Doyouhavedifferentanswersorcommentstoadd?SeehOp://bit.ly/8z8JZM
FutureRegula7onFollowingthehearings,arepharmacompaniesaremoreinclinedtoadver7seonlinenoworwaitforFDAguidelines?Mostcompaniesarelikelytowaitandseewhat,ifany,guidelinestheFDAissuesbeforeiniAaAnganyriskyonlinecampaigns;ie,brandedsearchadsusingGoogle’sstandards,brandedTweets,andopenlyengaginginconversaAonswithconsumersonsocialmediasites.ItappearsthatpharmacompaniesareincreasingtheamounttheyarespendingononlinedisplayadverAsingaccordingtothelatestTNSMIdata;ie,thisspendingmorethantripledto$221millioninQ1throughQ3,2009vsthesameperiodin2008,accordingtoDTCPerspecAves.ThistypeofadverAsingisnotlikelytobethesubjectoffutureFDAguidelinesanditisasimplema:ertoensuretheycomplywithexisAngregulaAons.Theremaybemoreadvancedandexpensivetypesofadsthatemployrolloversandothertechniquesthathelppresentmorebenefitsaswellasfairbalanceasrequired.
Doyouhavedifferentanswersorcommentstoadd?SeehOp://bit.ly/8z8JZM