Martha Stewart, the FDA and the Era of Transparency

Posted by: in Healthcare Insights on July 29, 2010

Call them the “Martha Stewart Rules.”

In early 2002, a weekly newsletter called The Cancer Letter, published elements of a letter than the U.S. Food and Drug Administration had sent to ImClone, which was seeking to market its Erbitux cancer drug. The letter’s contents — which spelled out data shortcomings in exhaustive and technical detail — hadn’t previously been made public, and the bottom dropped out of ImClone’s stock. Insiders who had traded on the once-private information, including CEO Harlan Waksal and his friend Martha Stewart, ended up in jail. All because an FDA communication was kept secret.

Now, that may all be changing. The FDA, as part of a yearlong effort to be more transparent, in May released a series of 21 different proposals intended to make the agency’s actions clearer to consumers and stakeholders. Many of them are straightforward and commonsense: more information on recalls, better disclosure on inspections, and the like. But the one that may fundamentally change the way that the biopharma industry communications is “Draft Proposal 13,” in which the FDA’s transparency committee calls for the agency to not only announce when it decided not to approve a product (via a misleadingly titled “Complete Response Letter”), but detail the reasons for the decision.

This would be a massive change from the way business is currently conducted. While ImClone-level stonewalling isn’t standard, many companies take the view that the less said about regulatory setbacks, the better. Only rarely do companies actually release the text of their negative correspondence with the FDA.  If adopted, Draft Proposal 13 will fundamentally alter the way that companies talk about drugs that don’t sail through the FDA process. There will be no hiding: if additional studies are needed, that will be clear. If the agency is nervous about safety issues, that’ll be out there in black and white.

Fortunately, the best way to deal under the new rules will be exactly the same as the best way to deal with the old news. The more information that a company can provide, the better. Companies that can be as transparent with the FDA — if not more so — will earn the respect of the media, the trust of investors and the confidence of consumers. The only other option is to bet against the march toward transparency. That’s a dangerous path.

Just ask Martha.

By: Brian Reid

Brian Reid is a managing director at W2O Group, where he oversees influencer relations. He is a former journalist who believes content really is king.

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