Eileen McMahon has written a series of columns for the The Chronicle of Healthcare Marketing, answering questions submitted by readers.
"One of our company’s leading products only has a couple of years of patent life left in Canada. We are now engaged in “life cycle management” (LCM) discussions. What are some legal LCM strategies?"
Life cycle management can be applied to various regulated products, such as drugs, foods, natural health products, cosmetics and devices. The legal strategies associated with LCM can involve (i) patents; (ii) agreements; (iii) regulatory; (iv) marketing, advertising and branding; and (v) pricing. For patents, a company would consider whether to file additional patent applications for improvements to the product (for example, new formulations, new uses, new methods of manufacture, new combinations of the product or new dosage forms for the product). Alternatively, the company could consider whether to buy or in-license patents from other persons and leverage those patents in LCM strategies. Agreements also play a role in LCM. Exclusive supply agreements and exclusive sale agreements, giving customers sufficient benefits to justify the exclusivity without patent protection, play a role in preserving exclusivity in the marketplace. New regulatory filings associated with the product, some of which may confer data protection or other regulatory protection, can also extend the life cycle. Marketing, advertising and branding strategies as well as patient support programs can leverage loyalty and bolster exclusivity.
Complying with applicable laws is also part of an LCM strategy. For example, trashing the brand of a competitor in comparative advertising is an invitation for a lawsuit, as are pricing agreements that are offside pricing and competition laws. These are a few areas in which legal issues enter into LCM.
"During the Christmas holidays, I travelled to another country and had no problem bringing back prescription drugs that are not available in Canada. In hindsight, maybe I should have brought back more. Can I do so when I go away next time?"
You are likely referring to the ability of consumers to import prescription drugs for personal use. In practice, Health Canada considers that importing less than three months’ supply of prescription drugs does not contravene the Food and Drugs Act and Regulations. Health Canada's guidance documents discourage the importation of drugs by mail or courier. It also considers the importation by a physician of prescription drugs for his or her patients to be outside the personal-use exemption. Health Canada determines that volumes comprising less than three months’ supply qualify for the personal-use exemption because that volume suggests that the consumer is importing the drugs for his or her own use, not for sale under the Food and Drugs Act and Regulations. Importing a quantity of more than a three-month supply suggests that the consumer may be importing for the purpose of resale (i.e., not for his or her own use). So, yes, you can bring back prescription drugs when you travel next time, but be sure that the quantity is less than three months’ supply and the drugs are in their original packaging.
"If we market our company’s products in social media, are the laws less stringent? Everyone knows that social media is more relaxed than traditional advertising media."
The same laws that apply to advertising products in traditional media (print, point of sale, web) generally also apply to social media. That means that your in-house lawyers will likely want to be involved in any proposed marketing initiative to confirm that the advertising complies with applicable advertising laws and standards, that your company’s IP is being used properly, and that your marketing is not defaming anyone and is not infringing any other company’s IP.
"Surely I can use social media for my own use (Twitter, Facebook, YouTube) and don’t need to check with my company’s lawyers?"
If you are using social media entirely for personal use on your own time, then there is likely no issue. However, if you are using social media in a way that refers directly or indirectly to your work, to your company or to your company’s products, or you are using social media while you are at work, then you may want to do some checking. You will want to check whether your company has a social media policy and whether it restricts the use of social media while you are at work. Also, if you are posting your views on social media, your company will likely want to ensure that you are making clear that you are offering your personal views (not speaking for the company) and that you are aware of your nondisclosure obligations (no disclosure of confidential information, trade secrets and inside information of the company). For your own protection, you will want to avoid disparaging any other company or competitors.
I’ve heard that Canada’s Food and Drugs Act is a "criminal law." What does this mean?
This means that if you contravene the Act, you could go to prison. The prison terms range from three months to three years, and the fines range from $500 to $5,000. By comparison, these fines and sentences are much lower than corresponding fines and sentences imposed in the United States. Greater penalties are imposed under the Act for offences related to food, compared with those relating to drugs.
How often do Canadians get jailed for contravening the Food and Drugs Act?
This is very rare. Usually Health Canada will enforce the Act in other ways, including (i) issuing a "stop-sale" and "stop-import" order; (ii) cancelling the regulatory approval; (iii) issuing a press release regarding non-compliance and cor rective action; (iv) requiring corrective action (e.g., in the form of a recall). Although fines and imprisonment are rare, they have occurred on occasion.
Give some examples of drug cases in which persons have been charged for violating the Food and Drugs Act.
Health Canada’s Compliance and Enforcement Policy indicates that criminal charges will be laid if a product or activity can be linked to any of the following criteria: (i) it creates a health risk; (ii) it is continuing in nature; (iii) it was premeditated, indifferent, reckless or a marked departure from a reasonable standard of care; (iv) other enforcement activities have proven unsuccessful.
Criminal prosecution is rarer in Canada than in the United States. One of the few cases in which criminal charges were laid was "the tainted blood" case. Armour Pharmaceutical was a U.S. company that manufactured a blood coagulate product used to treat hemophiliacs. The product was distributed in Canada by the Canadian Red Cross. After a large number of hemophiliacs who used the product were infected with HIV, several people were accused of criminal negligence and common nuisance—namely, a senior Armour officer, the director of the Bureau of Biologics in Canada, the chief of the Blood Products Division and the national director of the Blood Products Services of the Canadian Red Cross. The charges were laid under Canada’s Criminal Code, rather than under the Food and Drugs Act. The court acquitted all the persons who had been charged.
In other cases, during the years 2008-2011, several persons were charged under the Act for the illegal sale of Viagra. None were convicted, however.
The Olympics are on television as I write this question. It would be great to associate our company (or our company’s products) with the next major sports event taking place in Canada (e.g., Pan American Games). If our company wants to use this event to leverage a marketing campaign, do we need approval from the Pan American Games’ organizers?
There are several persons who own rights to various trademarks associated with the Pan American Games. These persons include the Pan American Games Society and The Toronto Organizing Committee for the Games. Organizers of major international sporting events (such as the Olympics and the Pan Am Games) vigorously enforce their trademark rights. If your company were to use the trademarks without a licence from the owners, your company would likely receive a "cease and desist" letter from the owners of the trademarks, alleging that your company is infringing their trademark rights. To avoid that kind of dispute, your best option would be to approach the organizers to determine if there is an opportunity to sponsor the games and, in exchange, receive certain rights to advertise or use the trademarks associated with the games.
Our company has recently acquired a new product that has health benefits. But the product is regulated as a "novel food." What does this mean?
Canada’s "Novel Food Regulations" regulate foods prepared by new processes, foods that have no history of safe use or foods prepared through genetic engineering. These foods require preapproval before they are sold in Canada. (This is unlike most other foods, which do not require preapproval before they are sold.) The types of foods approved under these regulations range from yogurt containing plant sterols to new types of insect-resistant corn and soybeans to the Flavr Savr tomato.
I understand that some companies allow their sales staff to answer questions regarding off-label uses whereas other companies refer those questions to their medical staff. Why the different approach?
The Food and Drugs Act and Regulations prohibit a company from marketing a product for a use for which it is not approved (i.e., prohibit off-label promotion). So as soon as there is any off-label inquiry, even if the inquiry is unsolicited, there is a risk that the response or the ensuing discussion will be perceived to be offlabel promotion. For that reason, some companies require that their medical staff deal with all unsolicited off-label inquiries.
The answers provided in this column are based on limited information and do not constitute legal advice or the opinions or position of Torys LLP.
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