FDLI symposium part 2: First Amendment/Commercial Speech

Session 2: Constraints on Commercial Speech and the First
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
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
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
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
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
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
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
“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
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
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.]

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