Session 2: Constraints on Commercial Speech and the First Amendment
Moderator: Richard Cleland, Assistant Director, Federal Trade Commission, Bureau of Consumer Protection
Tracing the FTC’s Line Between Advertising and Free Speech
Katie Bond, Senior Associate, Kelley Drye
FTC can only go after commercial speech. A person who works for a company that makes super-organic kale chips. Talking on NPR about healthy lunches for schools; health benefits of kale. A person who works at a company that makes lacrosse helmets; takes to Twitter after seeing a story they think grossly mischaracterizes the concussion-preventing technology. Commercial speech? Current FTC approach seems to say yes and yes, which is concerning.
Law on commercial speech: Three main principles: (1) Va. Bd. of Pharm.: drug price advertising; didn’t need definition, but said in passing that it is speech that merely proposes a commercial transaction. (2) Then you started to see advertorial-type publications. Egg trade group published editorials on eggs and heart disease. Seventh Circuit: science was a matter of public debate; but yes, it proposes a commercial transaction at its core, even if it touches on a matter of public debate. (3) SCt looks at protected speech + commercial speech, but not voluntary mixing—state regulation of charitable fundraisers that required disclosure from professional fundraisers. Inextricably intertwined: can’t regulate as commercial speech.
FTC v. POM: FTC didn’t address inextricably intertwined. They’ve taken action against situations similar to the hypos. Went after a company selling green coffee diet products, with lots of websites/ads, but also an appearance by company owner on Dr. Oz show. Didn’t get inextricably intertwined standard coming in. Proposed a commercial transaction, but didn’t address whether that was inextricably intertwined. By contrast: journalist’s editorial questions about Uber & responses that journalist decided to print are inextricably intertwined, so it’s fully protected speech. Companies and company employees have a right to comment in matters of public debate, but the forum in which they can do so may be shrinking given FTC guidance—media/social media. Could be a person who works for a food company, talking about nutrition; employee of gunmaker who wants to be part of debate on gun violence; ob-gyn who provides abortions but wants to be part of the debate. Would they still participate if they thought their spontaneous comments would be treated like commercial speech?
Rebecca Tushnet, Professor, Georgetown University Law Center
First note: abortion is different. The reason ob-gyns don’t talk on camera is (1) death threats, and (2) regular 1A doesn’t apply even to their noncommercial speech; maybe more protection for them, both physically and in 1A terms, is the one thing that we can agree on.
When discussing commercial speech, I like to discuss the Stevens concurrence in Central Hudson: Justice Stevens proposed a functional definition. When protecting the consumer transaction, gov’t has very wide scope for action; when regulating speech to achieve some other objective, like decreasing violence, it must satisfy stringent standards. So the answer to whether many of these scenarios are commercial speech is properly: it depends on what the gov’t is trying to regulate. If it’s trying to decrease the amount of shoe shopping by limiting how many shoe ads can run, no. If it’s trying to decrease consumer deception in the market for shoes, then the answer is yes.
Speech standards are not just a one way ratchet, though it looks like now. Speech that isn’t even commercial speech: warranties, contracts, tort liability for failure to disclose. If you expand the 1A too broadly, you get problems.
Speech proposing a commercial transaction: far too narrow, as Court itself has recognized. Reason to believe and buy = enough even if there’s no offer that can be completed by acceptance. Not just point of sale. California Supreme Court’s context-based definition in Nike v. Kasky has some useful features: Because the messages in question were directed by a commercial speaker to a commercial audience, and because they made representations of fact about the speaker’s own business operations for the purpose of promoting sales of its products, we conclude that these messages are commercial speech for purposes of applying state laws barring false and misleading commercial messages.
Very few of the paper’s examples, if any, involve commercial speech inextricable from political or fully protected speech. No law of man or nature requires you to discuss homemaking with selling plastic bins—that’s the SUNY v. Fox case—and equally true that no law of man or nature requires you to pitch drugs on morning news shows, which is in general fully protected speech. The Supreme Court made a special rule for charities, and that’s understandable because they have to ask for money to be charities—a better way to say it is that asking for money isn’t always proposing a commercial transaction, as we know from political situations. The inextricably intertwined argument is not a good fit for profit-seeking companies that sell goods and services.
Why worry: Consumers frequently treat advertising as less credible than editorial content. Social proof—people think that a claim is more credible because it comes from another person or people like them. This is why promoters say that word of mouth is the best way to sell—when advertisers themselves believe that, maybe we should believe them.
Newswashing: if you can make your commercial speech noncommercial by finding a friendly person to repeat it—in return for free stuff, even—then that’s how many products will be sold. Video news releases: produced by companies, often provided to news stations with space so that the station’s own reporter can introduce the segment. False claims in such presentations can do more damage because the consumer doesn’t know that they are being sold to as opposed to informed. Also potential for unfairness/anticompetitiveness if endorsements are allowed without disclosure because only some businesses have the ability to get this kind of apparently unsolicited coverage.
Consider an FTC action not mentioned in the paper, but worth discussing:
Consumers who tuned in to programs like the Today Show, Daybreak USA, and local newscasts may have caught interviews with guests billed as “The Safety Mom,” a home security expert, or a tech expert. Among the products they reviewed was ADT’s Pulse Home Monitoring System. Describing it as “amazing” or “incredible,” they offered glowing details about its capabilities, safety benefits, and cost. ADT had paid the three spokespersons a total of more than $300,000 and provided two of them with free systems valued at $4,000 (not to mention free monthly monitoring) to tout the ADT Pulse Home Monitoring System. [clip!] This is an ad.
Especially since the FTC’s baseline here is just disclosure when the consumer might find the connection with the advertiser to be material, I think that’s the minimum necessary constraint. As for knowing when disclosure is required on social media and similar areas, I don’t think it’s actually that difficult. The FTC’s standard is: when the connection would be material to consumers. There’s a tendency among anti-regulatory types to treat consumers like incredibly savvy lawyers who scrutinize every claim carefully or discount it heavily, but then to treat the new wave of social media endorsers as fragile and easily confused. But—at least when the endorsers aren’t savvy as the Kardashians—they’re often just like the other people in their social circles—they find some things intuitive and some things confusing; they’re neither robots nor children. “I got this for free,” for me, falls on the intuitive side of a statement required by regulation.
In terms of chilling effect, I’m unconvinced that having to tell your endorsers to disclose their connections and having to possess substantiation for factual claims causes a chill worth caring about. This is, after all, the standard that must already be followed in conventional advertising, so if the advertiser wants to use a different method to make claims, it has to bring those standards with it to the new advertising method. If that’s costly given the nature of the new method, that’s a cost the advertiser simply must weigh. After all, the flip side of the argument is this: if the First Amendment requires us to allow a person to make unsubstantiated or even untrue factual claims to tout her employer’s product because she’s speaking on social media, why doesn’t it also require us to allow those same claims in a paid ad? Does it require us to continue to allow her claims when the post goes viral and 100,000 people see it? Or: If a person belongs to a multilevel marketing scheme and pitches her friends and family to buy from her, should we not call that commercial speech because it’s individualized?
Call for ever-more-elaborate standards to deal with ever more intricate scenarios invites gaming and evasion; FTC FAQs seem pretty sensible to me, covering common situations and trying to teach advertisers how to think about the next situation that pops up. There might be room for more FAQs as we go on, but the basic approach is sound.
Bond: there is room to do both—loosen up and allow legitimate public debate and go after fraudsters hawking wares through Dr. Oz.
The Promotion of Medical Products in the 21st Century
R. Alta Charo, Warren P. Knowles Professor of Law & Bioethics School of Law, and Dept of Medical History & Bioethics, University of Wisconsin
A long history of flimflam that did harm. Overpromising of remedies, sometimes to the detriment of other things that might have worked better. Sexuality, obesity, bowel movements; many of the patent medicines contained cocaine, heroin, or alcohol, so you felt better but didn’t get better. Some were genuinely dangerous; “snake oil” really did exist. That is still with us. Dietary supplement industry: homeopathy, constipation remedy that’s 40% alcohol: problem for alcoholics, teens—not something you necessarily check for on the label.
Fraud: had to prove intent; hard to get a handle on things before people were injured. 100s of deaths from “elixir of sulfanilamide”—because victims were children and because this was at the time of the rise of the regulatory state, had to at least prove safety (which is a relative issue: safe for what?). Still fraud-based; there’s an implicit representation that a product is fit for purpose, and if it’s unsafe that’s misbranding.
Thalidomide: prescribed offlabel during pregnancy. US was the only one w/o this scourge b/c Frances Kelsey, FDA, didn’t feel that the safety data were sufficient. For a long time, she was celebrated for this—led to a cautious approach, demanding high levels of proof for clinical trials. We prided ourselves on not being fast and careless. We now have a whiplash problem: FDA told that it’s alternately going too slow or too fast. Laetrile for cancer; HIV treatments for HIV. Now there are unexpected problems in postmarket period: nonsteroidal anti-inflammatories like Vioxx or diabetes/Avandia; now we’ve forgotten about those and demanded more speed. This is a repeated pattern. Reactive to latest tragedy; frustrating but real.
Against this backdrop, offlabel promotion: we’ve watched expansion of protections for commercial speech and corporate speech in other contexts. Now companies can take advantage of safe harbors; respond to questions; distribute reprints (including with risk assessments that differ from FDA’s). Previously: had to prove to independent arbitrator, FDA, that risk/benefit profile was sufficient to justify approval before you could promote the drug for that purpose. Otherwise, could be used but not promoted. Burden of proof problem.
Which brings us to Amarin: Amarin had a statement that was really a nonstatement: truthiness: supportive but not conclusive research shows that consumption may reduce the risk of heart disease. How could that statement be falsified? Its only purpose is to suggest reduction in heart disease even though the evidence before the FDA suggested the opposite—that there was no reduction. They do that to get doctors to prescribe offlabel. That’s a statement about intended use. Even if there’s a single study, that doesn’t take account of the other studies that show the opposite. That’s a misleading omission.
What will be the incentive for anyone to prove safeness & effectiveness for secondary/tertiary uses? You take away the economic theory behind the way we regulate drugs to encourage research. There’s no logical stopping point: we might end up with postmarket remedies only/even a requirement of intent to deceive.
Subtle genetic/environmental components to disease are now being targeted; any component could be targeted by promotion but could still be highly misleading. It’s time to contextualize 1A against public health consequences of abandoning what worked well since Kelsey saved us from limbless children.
Discussant: Coleen Klasmeier, Partner, Sidley Austin
Shift of responsibility from FDA to courts seems to be ongoing; paper argues that this will result in less use of evidence & corresponding negative impacts on public health. How confident are we that clinical decisions are in fact currently based on the evidence that’s permitted by FDA? The way that clinical decisions occur isn’t the way the reg scheme seems to assume. Doctors don’t look at the FDA approved labeling and make decision; much messier, heterogeneous sources. A lot of those sources are based on standards of evidence that probably wouldn’t pass muster if FDA were to evaluate them. What’s our level of confidence/certainty that current decisions are effective?
How confident can we be that outcomes have improved in the years since FDA/DOJ began aggressively policing drug & medical device information? There was a period in the 1990s of more aggressive interpretation of statutory authority; less comprehensive in 1980s. Continuing education moves in 1990s were more ambitious: are we better off? Given how ubiquitous information is, does it even make sense to look back at horse and buggy days? [Um, given that vaccination levels are dropping to lows not seen in decades, I’ll go with yes.] Of course we shouldn’t make important policy decisions in a vacuum, but is that the right context to inform the policy decision? We have extensive provisions for mandatory posting of certain details on clinicaltrials.gov; lots of transparency mandates that are self- or government-enforced. Companies have to reveal their clinical data pretty quickly. [But if the 1A applies fully, that won’t be true.] Patients and payors also require real-time data; old-school assumption that info will be scrubbed and censored by the gov’t. Old-fashioned to say that some sources of information are allowed and others aren’t. Sorrell: that speaker discrimination isn’t ok under current law. Public discussion carries a responsibility to be authentic: a fuzzy concept: better have your facts straight. Gov’t shouldn’t need to preapprove.
“FDA doesn’t regulate practice of medicine”: no longer true b/c of expanded drug safety authority, as well as growth hormone and device authority. Pretty clear that FDA has a big legal problem on its hands b/c off-label use is legal. If the gov’t continues to permit the conduct, then how can you ban the speech about that conduct? Doesn’t make sense, amounts to a constitutional pathology.
Historical article doesn’t wrestle with constitutional issues—courts are supposed to wrestle with constitutional issues. Even in Caronia and Amarin, gov’t conceded that the statements were truthful and nonmisleading (though that may not have been true in Caronia)—if true, the case law would be hard to wrestle with. Mature regulatory scheme is on collision course with 1A, and the gov’t is not winning.
Options available to the gov’t: should talk about which option we will use. What will we do next? Rather than saying we should maintain the status quo.
Charo: How confident we are that doctors use FDA info? As a matter of policy, the fact they’re using info of varying levels of quality doesn’t mean we should eliminate the best quality info. How confident about health claims? Well, compare health supplement industry—a variety of things that are useless or affirmatively harmful—and now we’re talking about going down to that standard for pharmaceuticals!
Are we going to require each doctor to be academic reviewer, looking for methodologies, hidden conflicts of interest, etc.? That would further destroy the practice of information. Nothing stops people from getting realtime information. We want one really credible, independently verified source of info, so people aren’t always trying to evaluate the speaker and the source for chemo drugs.
At the center: what is it that constitutes misleading? That’s a huge gray zone. That nonstatement is viewed as nonmisleading b/c it’s so empty. But the court in Amarin tried to rewrite the FDA’s own language. The FDA wanted to say “the available evidence doesn’t show …” the court said that you couldn’t say that b/c it implied that the evidence showed otherwise. Forces you to rely on the court’s view of the evidence—costly as well as wrong. That worries me. [Me too! Innumeracy is a huge problem in courts, including In re Pearson.]
Cleland: Should Amarin finish its trial, if these claims are currently blessed by the court? What if the trial comes out badly?
Klasmeier: Amarin affirmed that it was continuing on with the study. Broader question of incentives in view of entitlement to make qualified claims: this concern that research endeavor will be gutted is overblown; there are lots of reasons other than regulatory approval to do these studies. Payors drive clinical decisions and payors want data. There’s also value in demonstrating to regulator your entitlement to make a claim. [Ah, but which regulator? The court or the FDA?] These cases should be troubling to people who care about FDA regulation, but they don’t represent what the established players are doing. [Neither did the dietary supplement industry; neither did Google represent what newspapers were doing.] They want the FDA to remain relevant.
Cleland: I’m not sure the battle will be decided by the core of the industry. The outliers will want to drive stakes into the heart of the regulation.
Klasmeier: that may be. But you’ll always have that challenge no matter what improvements you make. [Unless you uphold the scheme.] Would rather try to improve 1A and 5A treatment [5A!] by FDA.
Charo: Hope you’re right, but we already are seeing disturbing indications in light of the fact that most research isn’t definitive for a long time. Worlds of opportunities for selective reporting. Genetic testing: tried to market tests for indications that were absolutely not proven, but claimed to be relevant to clinical outcome. Tempted to use incomplete indicators; as long as someone can say there’s one study that says the product might be useful, we’ll have this promotion problem and consumers/drs are not in a good position to evaluate that.
Cleland: Postmarket surveillance as an option?
Klasmeier: one of the options, but not the core industry’s choice. Industry position is docketed w/FDA. More finely reticulated regulatory scheme, more responsive to different stakeholders, w/central role for FDA. Nobody that I know is talking about taking FDA approved labeling out of the mix of info available to doctors. We’re talking about data from Phase III clinical studies of a new use of an oncology drug, where FDA hasn’t yet received the supplemental application but the data results are published; or where NIH does a study of every atypical antipsychotic.
Charo: but those can already be distributed.
Klasmeier: you’re lumping everything into the category of offlabel marketing, though the FDA does distinguish offlabel promotion from permissible information of offlabel info. Standards aren’t clear enough about whether your speeck is on the OK side of the line. The Justice Dep’t is also running around with FDCA theories of liability that don’t always accord with what FDA says. E.g., FDA just proposed a rule saying that knowledge of offlabel use isn’t enough, but Justice is prosecuting someone right now on that theory. Together, a huge incentive for self-censor. A ton of thoughtfully presented information w/robust data sources, sometimes important to reinforce FDA labeling, not getting out there. We’re not talking about flimflam.
Q: offlabel marketing to doctors/consumers. Even more problematic to market to consumers? Dr serves as intermediary but marketing to consumers still has effect.
Charo: The rules are different b/c of the absence of dr as intermediary. Another avenue of analysis. Consumer isn’t even arguably in position to act as arbiter. There is a real distinction in how ads to consumers are done. We do know DTC ads work to get consumers to ask, and the structure of medical services means that doctors, given a choice of what patient wants and what doctor might have prescribed, is likely to say “sure.”
Klasmeier: TV ads are very responsible—tell you to contact your doctor. Harnessed by the FDA as additional information source to patients. Celebrex: when it came back after the COX-2 scandal, the DTC ad was 2 minutes long, full of contextual claims. That product still does some people good.
Q: would it be legally defensible to have a listener based restriction? Amarin: P said it was going to doctor w/its message.
Klasmeier: wouldn’t be defensible to go to consumers. Industry recognizes that “it’s just different” practically and politically if not legally. I’m personally uncomfortable with that distinction. Anyone who has a kid knows they have to be a savvy consumer. Doesn’t feel right that I can’t get all the information. [Lochner! Smart people will do well, sorry about the rest of you.]
Charo: Doctor adds a safety factors to otherwise dangerous drugs.
RT: Strict/heightened scrutiny is not “is this good policy.” That is one reason why the core industry will not set the rules if we get Sorrell. It is very difficult to imagine how the Amarin standard would allow restrictions on DTC to stand.
Klasmeier: No one’s talking about Lochnerizing the First Amendment. [Other than some of the panelists on panel 1, but ok.]