|Footnotes for this article are available at the end of this page.
It’s not clear whether the prescription drug company was channeling Electric Light Orchestra’s 1979 hit or The Animals’ 1966 song, but “Don’t Bring Me Down” was the attitude when the company declined to participate in a case before the National Advertising Division (NAD), of BBB National Programs.1 Specifically, ViiV Healthcare, manufacturer of a single-tablet HIV treatment medication, decided not to respond to a competitor challenge from Gilead Sciences before NAD related to ViiV’s comparative advertising. NAD referred the matter to FDA and the Federal Trade Commission (“FTC”) for review.
- The advertising industry established NAD and the National Advertising Review Board (“NARB”) in 1971 as an independent system of self-regulation to build consumer trust in advertising. NAD reviews national advertising in response to third-party challenges or on its own initiative.
- Here, ViiV said it would not participate in the NAD proceeding because it contended that FDA, not NAD, is the appropriate party to evaluate its prescription drug claims.
- ViiV pointed out that that it had earlier provided FDA with advance notice of its claims and advertising materials for the drug, and that it had implemented FDA’s comments to its submissions prior to airing the challenged television advertising. ViiV, therefore, contended that the challenge sought only to second guess FDA and apply different standards than those specified in FDA regulations.
- NAD responded, in part, that it regularly reviews advertising claims for FDA-regulated products, which ViiV acknowledged.
- Gilead, a market leader in the space, took issue with ViiV’s express and implied claims, claims it believes consumers may rely on to make important decisions about their HIV medications. Its supporting evidence included self-regulation body and court decisions from other jurisdictions abroad, which may have been a factor in ViiV’s decision to not participate in the NAD proceeding.
- This is the second case in recent weeks where a prescription drug company brought an NAD challenge for competitive advertising it believed was unlawful. We prepared a Bulletin in the first case. It’s too early to say if two is a trend, but we have received more client inquiries about the prospect of proceeding to NAD (and essentially skipping FDA and the courts) in unfair and deceptive advertising situations.
- Participating in an NAD case is voluntary, and an NAD decision does not have the force of law. However, most do participate and NAD will publish its determination, which many companies abide by, respecting the self-regulation process (and possibly to avoid having the matter boil over into more expensive and drawn out litigation).
- While a company is not required to participate in an NAD case, it must remember that failure to engage may result in a referral to FDA or FTC, as was the case here. Whether a regulatory body will act adversely against a company that does not respond to an NAD challenge will be fact specific, but the consensus is that these agencies give deference to NAD referrals and review such challenged advertising more intensely, as opposed to when a complaint is raised by a self-interested drug competitor.
- If a company does not participate in the NAD process, and if agency action is delayed or insignificant, a challenger may still proceed to litigate the issues in court, seeking damages and injunctive relief.
- As we have written in our Bulletins and advised clients, one must seriously consider, based on the specific facts, whether it is advisable to participate in an NAD proceeding. A company might decide, to paraphrase ELO, that it won’t be brought down by the NAD to participate, and “you [FTC] got me thinking that I’m wasting my time.” However, this is a decision that must be considered carefully . . . or else.
 NAD Case No. 7199 (April 17, 2023). See https://bbbprograms.org/media-center/dd/viiv-healthcare-referral.