Proper labeling of products regulated by the FDA is extremely crucial. Improper labeling could cost a company millions of dollars (if not billions) in litigation, bad publicity, decrease in stock value, and shareholders’ derivative suits. If managers and executives of regulated companies are not careful, they can attract personal liability for improper marketing (Park Doctrine).
Labeling of an FDA-regulated product must comply strictly with its ‘intended use,’ as approved by the FDA. If it is not within the strict bounds of the use approved by the FDA, a company can be held liable for promoting a product for non-approved use, or off-label marketing. Often times, the FDA’s investigation of a company for its off-label marketing practices leads to a viral chain of litigation under different laws and theories, including enforcement actions under the False Claims Act and Anti-Kickback Statute, enforcement action by the Federal Trade Commission (FTC), and actions under state laws for improper marketing.
The FDA defines labeling as “labels and all other written, printed, or graphic matter 1) upon any article or any of its containers or wrappers, or 2) accompanying such article.” This definition is interpreted very broadly by the FDA and covers all perceivable marketing and sales promotion. The FDA will look for evidence of intended use in package inserts, directions for use, companies’ websites, sales talks, promotional brochures, practitioner office visits, and trade show displays.
The “practice of medicine exemption” permits only physicians to prescribe or use drugs or devices for different, unapproved uses as part of their practice of medicine. Regulated companies must remain cautious in every interaction and exchange of information with a prescriber. All information on off-label use shared with a physician must comply with good reprint practice, which, among other things, requires that the information be objective and not promotional.
There has been constant case law development in this area affecting the liability exposure of the regulated industry. Any mistake can be fatal. If you are a member of the regulated industry, we recommend, at the very least, formal training of your sales staff; vetting your website claims, including links to other websites and webpages; and drafting, reviewing, and updating your marketing policies and procedures. If avoiding the liability becomes impossible, hopefully the record of the steps you take to prevent improper marketing of your product might help in mitigating the damages.