The NAD takes another swipe at Big Pharma

Boehringer Ingelheim was slapped by the NAD recently for making claims in its ads that it couldn’t support with evidence. OK, so the product was Dulcolax Stool Softener, and not one of Boehringer’s prescription products. The NAD’s enforcement efforts against large drug marketers bears watching, however, even if it has only gone after these companies on the OTC side until now. The NAD has investigated OTC drug marketers before. The NAD doesn’t generally bother with the prescription side because that is supposed to be regulated by the FDA. But I can tell you that the NAD is increasingly confident in its regulatory powers. In Monday’s Brandweek—not on the newsstands yet—you’ll read an interview with a prominent federal regulator praising the NAD’s work. How long will it be before the NAD is used by an imaginative RX company to stomp on the dubious claims of a rival? Knowing how litigious pharma is, I can't see the holdoff lasting forever.

Comments

[Bruce Grant]

This seems to be my day for legal-regulatory comments.

The National Advertising Division (NAD) of the Council of Better Business Bureaus is not a regulatory body. It is a private dispute-resolution mechanism set up to provide an alternative to litigation.

It is the forum in which virtually all disputes between national advertisers are resolved, but it has no legal authority or enforcement power other than the agreement of the disputants.

One of the reasons that disputants are so willing to submit to NAD decisions is that those who do not will find their cases referred to the appropriate regulatory body (FTC or FDA) who give great weight to NAD findings and have historically been very willing to bring enforcement actions against companies who do not comply with NAD rulings.

Now, as to which regulatory agency has authority over prescription drug ads, the answer is both do. Although FDA was granted explicit authority over Rx drug advertisng in the 1962 Kefauver-Harris Amendments to the Food Drug and Cosmetic Act of 1938, FTC has exceptionally broad statutory authority granted it under the original enabling legislation. Since 1954, however, the two agencies have operated under a Memorandum of Understanding in which FTC has ceded primacy in regulating the marketing of prescription drugs to FDA and FDA has ceded the regulation of OTC drug advertising to FTC.

So any dispute about Rx drug advertising that was brought to NAD to which one of the parties objected would just be referred to FDA (where it would have gone in the first place, absent an NAD action).