Healthcare advertising

Joel English, Managing Partner at BVK, presented further insight on health brand architecture at the SHSMD annual conference last week in Seattle.

Brand architecture defined.  Brand architecture is how all the pieces of a brand and its value promise fits together.  Healthcare brands can include many brands components.  Joel provided the following example of a fictitious health brand ecosystem:

  • Driver Brands:  Anchor University Hospital – part of True Health
  • Strategic Brands: Anchor Medical Group
  • Endorser Role: True Health
  • Silver Bullet:  Anchor Burn Care
  • Sub Brands:  Anchor Health Plan;  Anchor Visiting Nurses

Types of brand architecture.

  • Branded House.  The main, driver brand that drives other brand business units.  An example is Virgin and Virgin Mobile.
  • Hybrid Brands.   Both the main (endorser) brand and the sub brand play a driver role.  An example is Marriott, which has Residence Inn (by Marriott) and Courtyard (by Marriott).
  • House of Brands.   A house of brands is where there is an umbrella brand that owns several subordinate, individual brands.  An example is Unilever and all of its various consumer brands.

No matter what brand architecture is selected, it is advisable for health care systems and providers to take the following steps as an integral part of its naming taxonomy.

Trademark clearance.   For all names, slogans, and logos that will be used, a full trademark search should be conducted.  A proper search includes a search of the USPTO records as well as common law, unregistered third-party uses.  Why?  Because under U.S. law, trademark rights vest at use, not registration.  Therefore, a competitor could sue you for trademark infringement based on a federal registration or its own unregistered trademark use.

Apply for registration.   A determination should be made whether the trademarks to be adopted or used constitute protectable trademark matter.  If a qualified trademark attorney determines this is the case and that the search revealed no problematic third-party trademarks, then a federal trademark application should be prepared and filed.   Note that U.S. applications may be based on either existing use or a bona-fide intention to use in situations where the trademark and associated goods or services are still in development. 

Develop Brand Usage Guidelines.   Proper brand usage guidelines serve two purposes:  brand uniformity and legal protection and compliance.   Both are equally important to the well-being of a healthcare brand.

Editor’s Note:  To discuss brand clearance and protection for your health care brands, you may contact James Hastings at Collen.

Dietary supplement compliance is a complex matter, requiring broad vetting of not only packaging but also all advertising and marketing materials. Unfortunately, many manufacturers and distributors still leave themselves open to legal risk. All too often, they focus on Food and Drug Administration (FDA) requirements and miss a crucial step in dietary supplement compliance, namely adhering to Federal Trade Commission (FTC) requirements.

FDA vs FTC.  While both the FDA and FTC have authority over marketing dietary supplements, they have distinctly different legal responsibilities. The two agencies work together to determine which one or both would pursue government investigation of a dietary supplement that makes dubious or not fully supported claims. The FDA primarily looks at packaging, labeling, content, purity, and safety. Many manufacturers of dietary supplements focus primarily on the required disclaimers for labeling pursuant to the Dietary Supplement Health and Education Act of 1994. One of the well-known disclaimers is: “This statement has not been evaluated by the FDA. This product is not intended to diagnose, treat, cure, or prevent any disease.”

The FTC, however, has authority to go beyond the package and examine the truth and accuracy of all dietary supplements’ advertising and marketing material. Thus, all radio, tv, print, Internet, and social media campaigns must comply with Section 5 of the FTC Act. All claims must be truthful, not misleading, and substantiated. The FTC offers detailed guidance in its document, “Dietary Supplements: An Advertising Guide for Industry.”

Examples of Enforcement Actions.  Using unsubstantiated claims can have dramatic and costly results. In 2014, the FTC ordered Sensa’s marketers to pay more than $26 Million in redress to consumers who bought the supplement. The marketers, according to the FTC, had deceptively advertised that consumers could “sprinkle, eat, and lose weight” simply by using Sensa. In 2016, the FTC settled with the sellers of Supple, a glucosamine and chondroitin liquid settlement. The FTC alleged that the Supple sellers had falsely advertised the products’ ability to provide complete relief from arthritis and fibromyalgia joint pain. Part of the settlement included a $150 Million judgment.

The FTC is not the only player in town. The Council for Responsible Nutrition works collaboratively with the National Advertising Division of the Better Business Bureau (NAD) to ensure dietary supplement compliance with Section 5 standards. The NAD has investigated supplements over and over, recommending that sellers revise their advertising claims if they do not have sufficient clinical evidence. If a dietary supplement marketer does not comply with the NAD’s guidance, the NAD is likely to turn the matter over to the FTC.

Legal Vetting Best Practices.  Health marketers should be aware of the following dietary supplement compliance considerations:

* When creating marketing and advertising for a dietary supplement, let qualified legal counsel vet your materials for FTC and FDA compliance.

* Remember that both implied and express claims must meet the legal standards for commercial speech.

* Your clinical evidence requires careful legal analysis based on the advertising claims. It may not be sufficient to support your marketing claims if it does not match typical consumer experience or does not follow certain scientific standards.

* The FTC also often finds problems with consumer testimonials and expert or celebrity endorsements. Your marketers should ensure they fully understand the FTC’s requirements in these areas.

If you are a manufacturer, distributor, or marketer of dietary supplements and want to know more about legal requirements for advertising and selling these products, please contact Kyle-Beth Hilfer, Esq. 

Responsible health marketing compliance starts with proper employee training.

Who needs training.   If you and your company are a provider of health and wellness products and services, you are obligated to comply with various health marketing laws.  This includes health systems, hospitals, clinics, and physician practices.  It also applies to the marketing of health products and solutions to the general public, such as medical and long-term care insurance, nutritional supplements, fitness products, and natural remedies and personal care.

Applicable laws and regulations.  There are several federal laws and regulations regarding the proper advertising and marketing of healthcare solutions.  Some help protect your own brand and marketing efforts, while others help you mitigate the risk of infringing the rights of third-parties, including patients and competitors.  These include:

  1.  HIPAA Marketing rules.  The HIPAA Marketing Rules are promulgated by the U.S. Department of Health and Human Services.  The Rules give patients and consumers important controls over whether and how their protected health information (PHI) is used and disclosed for marketing purposes.  The rule generally requires covered entities to obtain permission to use PHI for marketing purposes, subject to certain exceptions.
  2.  Stark Law.  The Stark Law governs physician referrals.  Under the law, physicians are prohibited from referring patients to receive “designated health services” payable my Medicare or Medicaid to entities which the physician or immediate family member has a financial relationship.  Certain exceptions may apply.
  3. Lanham Act.  The Lanham Act governs the laws of trademark and unfair competition.  Prior to adopting a new brand name, slogan, or logo design, health providers need to properly clear the trademark to ensure that it is available for use and registration.   After a clearance search and opinion is provided and approved, it is recommended that the entity file a trademark application with the United States Patent and Trademark Office.
  4.  Copyright Act.   The most common, and potentially costly area of compliance if not followed, is copyright law.  Under the U.S. Copyright Act, copyrightable subject matter such as stock photos,  images, illustrations, and marketing copy and brochures are protected from unauthorized use.  The law also applies to the unauthorized distribution of copyrighted materials to fellow employees or colleagues, such as medical journals, articles, or other content for which your company has no subscription or license.
  5. FTC Regulations.   The U.S. Federal Trade Commission is the primary agency that enforces advertising laws and regulations.  The Federal Trademark Commission Act (FTCA) prohibits false and deceptive advertising, and other unfair trade practices.   Companies that offer and market healthcare solutions are obligated to substantiate all the material health and other claims made in their marketing and advertising.

Penalties for non-compliance.   The penalties for violations of law due to not having a health marketing compliance program can be severe.  Examples include injunctions, destruction of marketing collateral, monetary damages, and in some cases, treble damages and an award of attorney’s fees to the prevailing party for intentional acts.  This is separate and apart from the costly legal fees and disruption to business and reputation that may result from non-compliance.

Editor’s Note:  If you are a healthcare provider or marketer of health and wellness products, setting up a proper health marketing compliance program need not be complicated.  To discuss your compliance program education and monitoring needs, please contact James Hastings.