Aligning a Product s Marketing, Regulatory and IP Plans
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1 Aligning a Product s Marketing, Regulatory and IP Plans CLIENT ALERT September 8, 2017 Raymond A. Miller millerra@pepperlaw.com Barry H. Boise boiseb@pepperlaw.com Jessica A. Rickabaugh rickabaughj@pepperlaw.com Megan E. Bowers bowersm@pepperlaw.com Pierre E. Queiroz de Oliveira queirozp@pepperlaw.com This article was published in Law360 on September 8, Copyright 2017, Portfolio Media, Inc., publisher of Law360. It is republished here with permission. Patent protection can be critical for health care products, including medical devices, prescription drugs, dietary supplements and software as a medical device (SaMD). Although a precise regulatory pathway is not always clear, innovators initial development choices may influence how the product is regulated and protected. Innovators must decide whether to spend the tremendous time and money required to bring a drug or device to the market as a regulated product as opposed to a dietary supplement, cosmetic or unregulated consumer product. The product s marketing plan could impact THIS PUBLICATION MAY CONTAIN ATTORNEY ADVERTISING The material in this publication was created as of the date set forth above and is based on laws, court decisions, administrative rulings and congressional materials that existed at that time, and should not be construed as legal advice or legal opinions on specific facts. The information in this publication is not intended to create, and the transmission and receipt of it does not constitute, a lawyer-client relationship. Please send address corrections to phinfo@pepperlaw.com Pepper Hamilton LLP. All Rights Reserved.
2 both regulatory and exclusivity strategies. Innovators should consider how they will position their product in the market and whether their exclusivity strategy aligns with their marketing strategy. Take, for example, the question of whether to market a product that includes a dietary ingredient as a dietary supplement or a drug. This decision will heavily influence the type of patent protection that will prove most valuable. A few of the many questions innovators should ask at the outset include: What are the intended marketing claims? These claims will dictate whether a formulation should be viewed as a dietary supplement or a drug. What type of intellectual property protection is most valuable? Deciding whether to develop a dietary supplement or a drug will impact what type of patent claims will be most valuable for protecting the product. Note the important distinction between patent claims and marketing claims. Will patent term extension (PTE) be available? PTE may be available for a drug (as well as certain medical devices). Will there be regulatory exclusivity? Drugs are often afforded regulatory exclusivity (e.g., new chemical entity status). If the product will be a dietary supplement, will it contain a new dietary ingredient? The answer will determine which direction to take with the FDA before the product launch and the amount of development required to support those regulatory submissions. Intellectual Property Considerations Consider, as an illustrative example, an omega-3 composition for preventing cognitive decline. If a company chooses to position the omega-3 composition as a drug, its most valuable patent protection may not lie in a composition-of-matter claim (i.e., a patent claim covering the molecules themselves). This is because composition-of-matter claims for natural molecules often are not patentable. Even if formulation claims are patentable for a particular drug, they may not be particularly valuable; a generic competitor could modify the formulation to work around the patent claims and show mere bioequivalence
3 to enter the market. To complement composition-of-matter or formulation claims, the company should pursue method-of-use claims (i.e., patent claims that cover a particular way to use or administer the composition, rather than the composition itself) or patent claims directed to a specific indication. The company must also ensure that the patent claims and the planned product labeling match at every stage of development. The company should consider whether PTE will be available, along with tightly guarding its trade secrets and other know-how to inhibit potential competitors when possible. In contrast, if the company chooses to market the omega-3 composition as a dietary supplement, the method-of-use claims appropriate for a drug would be of little value because the product cannot be marketed for the diagnosis, cure, mitigation, treatment or prevention of cognitive decline. Rather, method-of-use claims directed to improving or maintaining brain health would be valuable. Formulation claims may also be highly valuable because marketing a unique, patented formulation may simultaneously satisfy FDA and FTC marketing requirements and provide patent protection. The company should also recognize that PTE will not be available. A similar divergence exists when choosing between a medical device and an unregulated consumer product. Consider, for example, a device designed to assess a baby s wellbeing as she sleeps. At the outset, the innovator should consider whether the product will be marketed as a baby heart monitor (a medical device) or simply a sound amplification tool to ease parents concerns as their baby sleeps, which would not be regulated as a medical device. This decision is similar to that of marketing a new formulation as a drug in the omega-3 example, where the marketing choice dictated what type of patent protection would be most valuable. Here, if the product is intended to be a baby heart monitor, method-of-use claims might be highly relevant (along with any claims to new mechanical features), if the methods of use track with the product s labeling. The company should consider whether PTE will be available for its particular medical device. On the other hand, if the innovator chooses to position the device as an unregulated consumer product, the relevant questions are similar to those for a dietary supplement. For example, will the product satisfy premarket approval requirements? Will it contain health-related claims? Aside from any regulatory issues, do the product s patent claims align with its marketing claims? The claims made together with a risk assessment will dictate whether the product is regulated by the U.S. Food and Drug Administration.
4 Accordingly, device or apparatus patent claims may be more valuable for an unregulated consumer product than method-of-use claims. In each example, the product s position in the market helps focus the innovator s regulatory and exclusivity efforts. The company should also recognize that PTE will not be available. Choreographing each of these considerations to form an effective, unified marketing and exclusivity strategy requires deliberate and delicate efforts at all stages of product development. Each aspect, described in more detail below, should be considered simultaneously, and the strategy must be revisited early and often. Regulatory Considerations FDA Regulation of Dietary Supplements As innovators consider their marketing claims alongside the attendant IP strategy, it is useful to look at examples of permissible and impermissible claims. Dietary supplement manufacturers may make various types of marketing claims if they can support them with scientific evidence and if they follow appropriate regulatory procedures. Permissible claims may include health claims (e.g., diets low in sodium may reduce the risk of high blood pressure, a disease associated with many factors ), which require the FDA s advanced authorization and must be supported by scientific consensus. Other potential claims may describe the role of a dietary ingredient intended to affect the structure or function in humans (e.g., calcium builds strong bones or antioxidants maintain cell integrity ). While the FDA regulates drug advertising and labeling, the Federal Trade Commission (available at and the FDA work together to regulate a manufacturer s advertising and marketing claims about dietary supplements. Therefore, a manufacturer s statements about a dietary supplement must satisfy both FTC and FDA standards and guidance. The FDA has primary responsibility for claims on supplement labeling and packaging, while the FTC has primary responsibility for supplement claims in advertising, including print and broadcast advertisements. Examples of Marketing Claims That Convert Dietary Supplements Into Drugs Under the Food, Drug, and Cosmetic Act, marketing or labeling claims that suggest the diagnosis, cure, treatment or prevention of disease render a product a drug. Of course,
5 marketing a drug without FDA approval can subject the innovator to both criminal and civil liability and product seizure. For example, earlier this year, the FDA sent DSE Healthcare Solutions a warning letter accusing the company of marketing its dietary supplements as unapproved drugs. The FDA said DSE s product labels and websites included claims that its dietary supplements could diagnose, cure, mitigate, treat or prevent urinary and prostate conditions. DSE s claims for its Urinozinc Prostate Health Formula included: Pumpkin seed extract [an ingredient in the product]... provides key nutrients for an enlarged Prostate. If you re a man and are experiencing the symptoms of an enlarged prostate... URINOZINC may be right for you. Similarly, the FDA objected to DSE s claims that its product Prelief could help prevent or reduce bladder symptoms caused by certain foods. The product label stated that [t]aking Prelief... can often stop [foods] from causing painful bladder symptoms. The website included testimonials of patients who believed that the product reduced their bladderrelated pain. DSE s website also included a link to medical articles about the potential medicinal benefits of the primary ingredient in Prelief. The FDA objected to this promotion because the articles were evidence of [DSE] products intended use as drugs. The FDA was also concerned that DSE s promotion could cause patients to self-diagnose and selftreat conditions that should be managed by a physician. Examples of Marketing Claims That Convert Unregulated Consumer Products Into Medical Devices The FDA and the FTC monitor the marketing claims of mobile apps, irrespective of whether the FDA is exercising enforcement discretion. State attorneys general also have begun investigating these products claims. In early 2017, the New York attorney general announced settlements with health app developers for misleading claims and irresponsible privacy practices that violated the state s consumer protection laws. See, e.g., Boise, et al., AGs Weave Themselves Into Patchwork Of Digital-Health Regs., Law 360 (April 13, 2017). Included in those settlements was Matis Ltd., which marketed My Baby s Beat, a baby heart monitor app that claimed it allowed a pregnant user to monitor her fetus heartbeat by holding her smartphone to her stomach while running the app. See id.
6 Had Matis Ltd. foreseen its alleged violation of consumer protection laws, it could have crafted both its marketing strategy and its regulatory and IP strategies to work in concert to maximize the product s value while minimizing the risk of running afoul of such regulations. Premarket Planning for Marketing Claims and Patent Protection A product s marketing claims will drive both regulatory and IP decision-making and need to be well coordinated. Patent claims covering the product or mirroring appropriate marketing claims may provide greater protection from competitors. This is particularly important because, in contrast to new drugs and medical devices, there is no framework for marketing or regulatory exclusivity for dietary supplements or unregulated consumer products in the United States. Patent protection around formulations, methods of use and manufacturing techniques are particularly important for providing a market advantage for dietary supplements, just as patent protection around devices is particularly important for providing a market advantage for unregulated consumer products. Outside counsel with both regulatory and IP capabilities can be instrumental in planning and executing complementary IP, regulatory and marketing strategies. Innovators and their counsel alike should revisit these issues frequently throughout the stages of product development. Ray Miller and Barry Boise are partners in Pepper Hamilton s Health Sciences Department, a team of 110 attorneys who collaborate across disciplines to solve complex legal challenges confronting clients throughout the health sciences spectrum. Jessica Rickabaugh is of counsel, Megan Bowers is a patent agent, and Pierre Queiroz de Oliveira is an associate in the Health Sciences Department. Berwyn Boston Detroit Harrisburg Los Angeles New York Orange County Philadelphia Pittsburgh Princeton Silicon Valley Washington Wilmington pepper.law
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