1 General – Medicinal Products
1.1 What laws and codes of practice govern the advertising of medicinal products in Canada?
The federal Food and Drugs Act (the "FDA") establishes the main regulatory framework and provides the basic criteria for the lawful advertising of drugs in Canada. As a general rule, the FDA provides that no person shall advertise any drug in a manner that is false, misleading or deceptive or is likely to create an erroneous impression regarding its character, value, quantity, composition, merit or safety.
The FDA also sets out, in part through the listing of drugs in various Schedules, more specific rules with respect to advertising certain types of drugs – namely:
- There is a prohibition against
advertising drugs on the Prescription Drug List to the general
public as a treatment, preventative or cure for any of the
diseases, disorders or abnormal physical states referred to in
Schedule A of the FDA, which includes a broad list of
conditions deemed sufficiently serious as to warrant this exclusion
(including acute anxiety state, asthma, cancer, congestive heart
failure, depression, diabetes and hypertension). There is also a
prohibition against advertising the following drugs to the general
public as a treatment or cure for any Schedule A condition (but
unlike the case for Prescription Drug List drugs, preventative
claims are allowed in each case by special exemption
Regulations under the FDA):
- "Schedule D" drugs (i.e., "biologics" manufactured from animals or microorganisms which include vaccines/ immunising agents, blood and blood components, and gene therapies);
- so-called "ethical" drugs (i.e., drugs that under the FDA do not require a prescription but that are generally prescribed by a medical practitioner (such as a few emergency use products like nitroglycerine) and certain unscheduled, nonprescription, professional use products like MRI contrast agents and hemodialysis solutions); and
- so-called "non-prescription" or "unscheduled" drugs (i.e., over-the-counter ("OTC") drugs) and natural health products ("NHPs") which include vitamins and minerals, herbal remedies, homeopathic medicines, traditional medicines, probiotics, and other products like amino acids and essential fatty acids;
- As discussed more fully in question 6.2 below, direct-to-consumer ("DTC") advertising of prescription drugs is limited to name, price and quantity; and
- As discussed more fully in question 6.1 below, DTC advertising of OTC drugs and NHPs is also subject to the detailed guidelines in the Consumer Advertising Guidelines for Marketed Health Products ("CAGs").
Furthermore, some advertising that is not prohibited is nevertheless restricted under the FDA. For example, the FDA and its Regulations set limits on the advertising of any drug manufactured, sold or represented for use in the prevention of conception. The federal Controlled Drugs and Substances Act ("CDSA") and its Regulations set out further rules specific to advertising narcotics including (i) a prohibition on any advertisement to the general public respecting a narcotic, and (ii) a requirement that any permitted advertisement of a narcotic must display the symbol "N" clearly and conspicuously.
The FDA and CDSA are administered by Health Canada, the national regulatory authority for drug advertisements. It provides policies to regulate drugs, puts in place guidelines for the interpretation of the Regulations, and oversees regulated drug advertising activities. There are three Canadian advertising pre-clearance agencies ("APAs") that provide voluntary drug advertising material review services to advertisers and advertising agencies – namely, the Pharmaceutical Advertising Advisory Board ("the PAAB"), Advertising Standards Canada ("ASC") and MIJO.
APAs use Health Canada guidance documents and, where applicable, their own codes of advertising to ensure that drug advertising materials submitted to them comply with the FDA, the CDSA, and the respective Regulations. They review advertising for consistency with the Health Canada-authorised product monograph or terms of market authorisation ("TMA") and to verify that the advertising is accurate, balanced, evidence-based, does not expand upon or conflict with the TMA, and reflects current and best practices. In the case of the PAAB and ASC, they also offer independent complaint-resolution and appeal procedures and administer sanctions and remedial measures according to their own internal codes. During the pre-clearance review of a drug advertisement, or during the processing of a complaint or appeal, APAs may request clarification from Health Canada. Health Canada works in collaboration with APAs, but always reserves the right to enforce the drug advertising provisions contained in federal law whether or not the advertisement has been pre-cleared by an APA.
The PAAB is recognised by Health Canada as the APA for advertising material for all healthcare products directed to healthcare professionals. It is an independent multidisciplinary body that administers the PAAB Code of Advertising Acceptance (the "PAAB Code"), which was updated in 2012 and, in its new form, will be effective on July 1, 2013 with a one-year transition period. The PAAB also provides advisory opinions on DTC messages for prescription drugs and on educational material discussing a medical condition or disease.
Like the PAAB, ASC provides advisory opinions on DTC drug advertising and DTC drug information materials. It is an independent, national, not-for-profit, advertising self-regulatory body that administers the Canadian Code of Advertising Standards (the "ASC Code"), which applies to all categories of advertising. As well, ASC has notified Health Canada that it has publicly selfattested to meeting Health Canada's recommended criteria for the pre-clearance of DTC advertising material of OTC drugs and NHPs.
Like ASC, MIJO has notified Health Canada of its public selfattestation to meeting Health Canada's criteria for pre-clearing DTC advertising of OTC drugs and NHPs.
Pharmaceutical manufacturer industry associations have also established self-regulation regimes. Most notably, Canada's Research-Based Pharmaceutical Companies ("Rx&D") has prescribed a Code of Ethical Practices (the "Rx&D Code") for its members. Likewise, the Canadian Generic Pharmaceutical Association ("CGPA") has had a Code of Marketing Conduct (the "CGPA Code") governing the sale of generic pharmaceutical products in Canada (although the CGPA Code currently applies only in the provinces of Ontario and Quebec). Furthermore, the Canadian Association of Medical Publishers ("CAMP") has Guidelines for General Advertising, Supplied Advertising Inserts, & Journal Supplements (the "CAMP Guidelines"), which apply to all advertising appearing in publications directed to healthcare professionals.
Of course, more general laws regarding advertising also apply. These laws include the federal Competition Act and various provincial consumer protection statutes.
1.2 How is "advertising" defined?
The FDA defines "advertising" very broadly to include any representation by any means for the purpose of promoting directly or indirectly the sale or disposal of any drug.
Health Canada has issued guidelines entitled The Distinction Between Advertising and Other Activities (the "HC Ad Guidelines") to clarify the definition of advertising under the FDA. In particular, the HC Ad Guidelines seek to clarify the distinction between advertising and activities that are not primarily intended to promote the sale of a drug (e.g., education, scientific exchange, labelling and shareholders' reports). The distinction is drawn by determining the primary purpose of the message. The primary purpose is determined by looking at a variety of factors, including the context in which the message is disseminated, the primary and secondary audiences, the provider of the message, the sponsor of the message, the influence exerted by a manufacturer, the frequency or repetition of the message and, of course, the actual message content. The ASC Code defines advertising as any message in which the content is controlled directly or indirectly by the advertiser, expressed in any language and communicated in any medium to Canadians (except media originating outside of Canada, and packaging, wrappers and labels) with the intent to influence their choice, opinion or behaviour.
The PAAB Code applies to all communications in which claims, quotations and references are made, and provides specific rules for the various defined "Advertising/Promotion Systems" ("APSs").
1.3 What arrangements are companies required to have in place to ensure compliance with the various laws and codes of practice on advertising, such as "sign off" of promotional copy requirements?
The PAAB requires, in reviewing for pre-clearance a proposed advertisement to healthcare professionals, the advertiser to complete a submission form that indicates "approval" by the advertiser's medical/regulatory/compliance department. By this "sign-off", the advertiser confirms that the advertisement is consistent with the approved TMA and that the claims in the advertisement are supported by references that meet the standards of the PAAB Code. Neither ASC nor MIJO require such formal pre-clearance "sign-off".
1.4 Are there any legal or code requirements for companies to have specific standard operating procedures (SOPs) governing advertising activities? If so, what aspects should those SOPs cover?
See question 1.3 above. In a related vein, Health Canada requires ASC to implement SOPs for the pre-clearance of therapeutic comparative advertising claims, to help advertisers ensure that their claims are consistent with Health Canada requirements. There are currently three SOPs describing the steps that the ASC's Consumer Drug Section will follow to evaluate a therapeutic comparative claim and to determine whether it is compliant with Health Canada's Therapeutic Comparative Advertising Directive and Guidance Document: (i) Efficacy; (ii) Onset/Duration of Action; and (iii) Side Effect Profile/Safety Information.
1.5 Must advertising be approved in advance by a regulatory or industry authority before use? If so, what is the procedure for approval? Even if there is no requirement for prior approval in all cases, can the authorities require this in some circumstances?
Drug advertisements may be reviewed and pre-cleared by one or more APAs in accordance with their respective mandates. For details, see question 1.1 above. Each APA is an independent entity that is expected to obtain voluntary compliance with federal drug advertising laws, and when not obtained, the matter can be returned to Health Canada, which retains ultimate authority for compliance and enforcement. Although use of these voluntary advertising preclearance regimes is not mandatory, it is strongly encouraged by Health Canada.
1.6 If the authorities consider that an advertisement which has been issued is in breach of the law and/ or code of practice, do they have powers to stop the further publication of that advertisement? Can they insist on the issue of a corrective statement? Are there any rights of appeal?
The PAAB may withdraw clearance at any time and request suspension of publication if a complaint to the PAAB has been upheld, medical advice suggests the advertisement may constitute an imminent or significant health hazard, new significant information has come to light, or there has been an error or omission of fact. The PAAB must provide a written letter to the advertiser detailing the rationale for withdrawal of clearance and a schedule setting out by what date use of the material is to cease. A decision to withdraw clearance may be appealed to a PAAB review panel. The PAAB Code outlines the appeals process. ASC does not explicitly have the power to stop further publication of advertisements that breach the ASC Code. However, ASC enforces compliance by advising exhibiting media of an advertiser's failure to co-operate with an ASC decision and requesting the media's support in no longer exhibiting the advertising in question. Furthermore, ASC may publicly declare that the advertising in question, and the advertiser who will be identified, have been found to violate the ASC Code. Both the complainant and the advertiser are entitled to appeal any decision. The ASC Code outlines the appeals process.
1.7 What are the penalties for failing to comply with the rules governing the advertising of medicines? Who has responsibility for enforcement and how strictly are the rules enforced? Are there any important examples where action has been taken against pharmaceutical companies? To what extent may competitors take direct action through the courts?
Failure to comply with the legislative requirements for drug advertising in Canada is a criminal offence, punishable by up to two years' imprisonment and/or a fine of up to CAD $5,000,000. Additionally, a person who knowingly makes a false or misleading statement to the Minister of Health or who recklessly causes a serious risk of injury in contravening the Act or its regulations could face a higher fine or up to five years in jail.
The Minister of Health is responsible for enforcing the FDA. When Health Canada receives a complaint about a drug advertisement, it will take compliance and enforcement action as required using a risk-based approach. See question 1.8 below for more detail. In practice, criminal enforcement of the rules is infrequent in light of the Minister's power to refuse drug licences or otherwise create regulatory difficulties for non-compliant drug manufacturers. Various codes provide mechanisms for the resolution of complaints between competing manufacturers. Sanctions for violations of the PAAB Code may include a direction to publish corrective notices in annual reports, newsletters or websites, or to issue public letters of apology. Violations of the Rx&D Code will be published on the Rx&D website and subject to a fine of CAD $25,000/$50,000/$75,000 for the first/second/third violation, respectively, within a 12-month period. Upon the third violation, the Chief Executive Officer of the offending company will also be required to appear before Rx&D's board of directors, at which time the CEO must provide a detailed explanation of the violations and a comprehensive written action plan to ensure remediation. Each additional violation after the third one results in publication of the infraction on the Rx&D website and a fine of CAD $100,000. While each unique violation of the Rx&D Code normally counts as one violation, Rx&D's Industry Practices Review Committee ("IPRC") has the discretion, for the purpose of setting penalties, to count any violation as two violations if the IPRC determines that such violation was a "deliberate" contravention – defined as a contravention clearly not in compliance with one or more of the Rx&D Code's guiding principles. Compliance with sanctions is a condition of continued membership in Rx&D. Similarly, the CGPA has the power to impose penalties on advertisers who breach the CGPA Code which include a fine of CAD $15,000/$40,000/$100,000 for the first/second/third offences, respectively, within a 12-month period.
Under the general false and misleading advertising provisions of the Competition Act, a significant administrative monetary penalty ("AMP") may be ordered for non-criminal offences. For individuals, the maximum AMP is CAD $750,000 for the first order and CAD $1 million for each subsequent order, while for corporations, the maximum AMP is CAD $10 million for the first order and CAD $15 million for each subsequent order. For criminal offences (serious false and misleading representations made knowingly or recklessly, such as fraudulently promoting counterfeit cancer drugs), the maximum term of imprisonment is 14 years. A false or misleading representation is subject to action under the Competition Act even when made to the public outside Canada (e.g., through online or social media advertising), or in a non-public setting (e.g., by a sales representative). However, enforcement against drug companies on the basis of a Competition Act false and misleading advertising claim is rare given the other avenues available with specialised industry knowledge.
1.8 What is the relationship between any self-regulatory process and the supervisory and enforcement function of the competent authorities? Can, and, in practice, do, the competent authorities investigate matters drawn to their attention that may constitute a breach of both the law and any relevant code and are already being assessed by any self-regulatory body? Do the authorities take up matters based on an adverse finding of any self-regulatory body?
Although APAs and self-regulatory organisations may assume pre-clearance responsibilities, Health Canada retains ultimate regulatory authority with respect to federal drug advertising laws. Moreover, Health Canada acts as an advisor to the PAAB and is an ex officio observer on the PAAB's board of directors. Also, Health Canada has access to the complaints and appeals procedures under the PAAB Code and ASC Code. The flow of information between Health Canada and the APAs, their respective roles, and the adjudication of complaints and processes to submit requests for clarification are all outlined in the Health Canada's Guidance Document – Health Canada and Advertising Preclearance Agencies' Roles Related to Health Product Advertising. Annually (usually in April), Health Canada meets with APAs to discuss topical issues and common concerns in health product advertising. Each meeting's record of discussions is posted on the PAAB's website (usually by July).
The underlying principle behind Health Canada intervention or involvement is a perceived breach of federal drug advertising laws. With respect to the advertising pre-clearance process, Health Canada will review advertisements when they contravene federal drug advertising laws and may present an imminent or significant health hazard, or when the contravening advertising arises from a failure of the self-regulatory system as a result of wilful nonparticipation in, or non-compliance with, the PAAB or ASC Codes. The PAAB and ASC are expected to refer such matters to Health Canada. Even if advertising materials are approved by the PAAB, Health Canada can ask that they be held back and not used if Health Canada is concerned that the materials pose a health threat under federal drug advertising laws.
The same principles apply to the self-regulatory complaints and appeals processes. The PAAB and ASC will bring complaints to the attention of Health Canada where, in their judgment, the complaint relates to advertising that contravenes federal drug advertising laws and presents an imminent or significant health hazard, or contravenes such laws and the self-regulator has been unable to bring about compliance (again, through wilful non-participation or non-compliance with the self-regulatory system). Complaints concerning the promotion of unapproved drugs are sent to Health Canada for investigation should they be sent to a self-regulatory body in error. Issues raised for consultation with Health Canada are limited to claims or attributes that would require pre-market review and authorisation.
1.9 In addition to any action based specifically upon the rules relating to advertising, what actions, if any, can be taken on the basis of unfair competition? Who may bring such an action?
Features of drugs, such as their colour and shape, are entitled to protection under Canadian law. An action for unfair competition may be brought under the common law action of passing off, or under the federal Trade-marks Act. Individuals, trade associations and companies may have standing to initiate legal proceedings for unfair competition.
The Supreme Court of Canada has noted that competing laboratories must avoid manufacturing and marketing drugs "with such a similar get-up that it sows confusion in the customer's mind". Nevertheless, in order to be entitled to protection, it is necessary to show that the "trade dress" has acquired "secondary meaning", and that the unauthorised use of a similar trade dress has caused or is likely to cause confusion. In addition, it may be necessary to defend the trade dress against an attack that it is functional or offers a safety advantage. Manufacturers may argue that an overriding concern with respect to the colour, shape and size of a drug is safety, and that making drugs look similar as opposed to distinct
To read the article in full please click here.
This article appeared in the 2015 edition of The International Comparative Legal Guide to: Pharmaceutical Advertising; published by Global Legal Group Ltd, London.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.