The pharma industry is still reeling over the flurry of 

 sent out by FDA last week to 14 pharma companies regarding their search engine advertising practices. In truth, few pharma companies have been vocal about their tactics when it comes to search advertising-the process of bidding for keywords to boost small text ads higher up in the ad list on search sites such as Google and Yahoo.

 that it is not responsible for the content on the pharma ads, as each pharma company has its own account and control panel by which specifies what each advertisement says and what URL it will link to.

Last week blogger John Mack noted that another online advertising stumbling block might be the use of redirect links. This is the process of forwarding a visitor from the link they clicked on to an alternate link or site. This is commonly done when a site changes its domain name or if the original URL is too long to print. 

Google’s Eric Obenzinger said that, with the exception of pharmaceutical firms, the search engine does not allow clients to use redirect links. In general, Google wants users to have as much information as possible before they click on links; this includes being able to see the exact site that they are going to visit. But FDA demands that pharma include only branded links if the rest of the ad makes no mention of disease state. 

“Our existing ad policy was to allow pharmaceutical marketers to use non-branded, visible URLs as long as they own the URLs, and as long as the URL works and redirects to a branded site,” Obenzinger said. “The exception has been made primarily due to the regulatory environment of pharmaceutical advertising.”

Google has yet to lobby FDA on this issue, but said that it was open to having a dialogue with the agency. FDA has stated that it won’t reach out to vendors or agencies, only the advertiser. Google declined to release the number of pharma firms it works with or the amount of ad clicks are generated. 

Not all marketers believe that redirects are the answer. David Ormesher, CEO of strategic marketing firm CloserLook, said that the practice is deceiving and could cast a bad light on pharma advertising on the Web. In the short term, he recommends pharma place an emphasis on unbranded health information sites. Rather than using a fully branded ad word or redirecting an unbranded URL to a branded site, pharmas should consider driving traffic to an unbranded site in order to funnel users to a branded Web site. 

“What FDA has done has had a chilling effect on pharma e-marketers, and certainly has been a major slapdown to the handful of innovators within pharma that have been pushing FDA to acknowledge Web 2.0 and social media,” Ormesher said. 

The main concern expressed by industry is the lack of guidance being offered by the government, and the need for FDA to step up and show some leadership. The general reaction is that FDA can’t set policy with negative rulings.

“Pharma has been asking the FDA and the search engine executives for guidance for several years,” said Mark Bard, president of Manhattan Research. “While a majority of the industry settled on the ‘one click rule’-appropriate risk information one click away-it’s clear that is not going to be accepted as the industry standard.” 

Articles

After last week’s flurry of FDA warning letters directed at companies marketing through search ads, industry is left wondering what can be done be done to target patients online?

Search Ad Warnings Leave Pharma in Online Void

This week, Boehringer Ingelheim announced the launch of its new unbranded Web site for sufferers of transient ischemic attack (TIA) or mini-stroke. Talk About TIA (www.talkabouttia.com) is a text-driven, simple to navigate Web site that features everything from a symptoms checklist to a risk analysis. However, beneath the education information is an interactive Flash tool called a Symptoms Map that shows visitors the areas of the body TIA can affect. The user simply chooses a male or female figure and clicks on pulsating pain points to read about potential symptoms.

“We try to be very patient-friendly because we know that there are a lot of sufferers who are undiagnosed,” said Bill Mok, director of marketing for Aggrenox at BI. “We created the Symptoms Map to get the signs and symptoms out there.”

The site was established in tandem with the National Stroke Association to serve the 240,000 people diagnosed with TIA, according to Mok. 

BI currently markets Aggrenox, an extended-release combination capsule (aspirin/dipyridamole), for stroke prevention after TIA, but chose to make the new site unbranded in order to reach more patients. The Aggrenox site is still active, and offers additional TIA information as well as risk indications. 

BI currently has no plans to include a social networking component on Talk About TIA; however, the company is accepting testimonials from patients to be posted in the future. 

 that BI will not purchase online keywords to promote the site, but is engaging in a traditional marketing campaign leveraging NSA’s network of physicians. 

Boehringer was one of the 14 pharma firms slapped with FDA warning letters last week for improper online search advertising. 

News Analysis

Rather than ignore its aging mini-stroke medication Aggrenox, BI has shifted marketing to education by launching an unbranded site dedicated to informing sufferers about transient ischemic attacks, better known as TIA.

Boehringer Ingelheim Launches New Site for TIA Sufferers

In this four-part series, we will discuss the importance and use of post-employment restrictions in the pharmaceutical and biotech industries.  Each part of the series will address a topic of interest, including:   

An      overview of post-employment restrictions 

Tips      on how to draft agreements containing post-employment restrictions to      maximize the protection they can provide for your trade secrets and      goodwill

How      to enforce post-employment restrictions against former employees and their      new employers (who are often direct competitors) 

Alternatives      to certain post-employment restrictions, such as trade secret statutes      and, unfair competition laws 

Part Two: How to Draft Effective and Enforceable Agreements

 
  In last week’s article, we discussed how companies in the biotech and pharmaceutical industries are particularly vulnerable to former employees misusing trade secrets and customer goodwill.  We also discussed how employers can protect their trade secrets and goodwill by requiring employees who are in a position to misappropriate them to sign agreements containing post-employment restrictions on their ability to compete, solicit customers, and/or hire employees.

But a “one size fits all” agreement will not suffice.  For the agreement to be enforceable and to provide as much protection as possible, it must adhere to several requirements: 

The employer must have a protectable interest

The restrictions should be tailored to the employee’s specific position

The agreement must be supported by consideration (i.e. something of value)

The restrictions must be reasonable in time and scope 

The restrictions should not be broader than necessary to protect the employer

Let’s examine these requirements one-by-one.

An employer cannot enforce post-employment restrictions against an employee unless the employer has interests worth protecting (such as trade secrets or goodwill).  If a company does not actually have any trade secrets or goodwill, or if an employee was not aware of or did not have access to the trade secrets/goodwill, the company will be unable to restrict the employee’s post-employment activities.  

Employers should not simply use one post-employment restriction agreement for all employees. Rather, only certain employees should be considered for agreements, and the restrictions should be tailored to the particular circumstances of each employee.  

For example, an employee in R&D might have intimate knowledge of a pharmaceutical company’s most important trade secrets, such as current research, pipeline products, clinical trial results, and future funding. A comprehensive agreement containing broad restrictions limiting such an employee’s post-employment activities may indeed be necessary and appropriate. On the other hand, it may not be appropriate to use the same restrictive provisions for a salesperson who has no access to or knowledge of such critical R&D matters. It is likely that post-employment restrictions are appropriate for a sales person, but the nature and scope of such restrictions should be tailored to the sales person’s interaction with his/her company’s most important customers, and should therefore be different from the restrictions placed on an R&D employee.  

On the other hand, it may not be appropriate for an employer to try to restrict the post-employment activities of an administrative assistant or staff member, who does not have access to his/her employer’s trade secrets or significant interaction with customers. 

Like any contract, agreements containing restrictions on employees’ post-employment activities must be supported by sufficient consideration.  “Consideration” means that the employee must receive something of value in exchange for entering into the agreement. In most states, agreements signed by employees upon hiring containing these restrictions are deemed to be supported by sufficient consideration.  The consideration the employee receives is his/her hiring.  

Many states, however, have ruled that agreements containing post-employment restrictions that employees enter into during the course of their employment lack consideration if the employees do not receive anything of value in exchange for signing the agreement.  These states have ruled that continued employment is not sufficient consideration.  So companies that want to maximize the enforceability of agreements containing post-employment restrictions should either (i) require for employees to sign the agreements at the time of their hire, or (ii) provide something of value to employees who sign the agreements during their employment.  Many employers satisfy (ii) by having employees sign the agreements as part of a promotion, salary increase, rollout of a stock plan, or payment of a discretionary bonus.  Other employers simply “buy” the agreements by agreeing to make a one-time payment to employees to who sign such agreements.  

Some states have found agreements containing post-employment restrictions to be invalid if the employee’s position changed after initially signing the agreement. These courts have ruled that a change in position requires a new or modified restriction and/or new consideration. Therefore, if an employer promotes an employee who is party to an agreement containing post-employment restrictions, the employer must require the employee to either affirm his/her existing agreement or sign a new agreement. 

Courts have sought to balance protection of an employer and imposition on the employee by enforcing post-employment restrictions only to the extent that they are “reasonable in time and scope.”  While the limitations on these restrictions are case- and fact-specific, there are certain rules of thumb:

Restrictions that prohibit the specific activity for a period of one to three years are usually found to be reasonable, but the nature of the protectable interest is the determining factor. For example, if a company’s pricing and marketing plans are changed every three to six months, it will be difficult to have a court enforce a restriction of more than one year on an employee that had access to that information.

Restrictions are usually found to be reasonable in scope if they cover a geographic area that is similar to the geographic area previously serviced by the employee, or if there is a valid business reason to expand them, such as the nature of the protectable interest.  So if a sales employee’s territory is New England, but the pricing and marketing information to which he/she has access is national, a court may find that a post-employment restriction that covers the entire nation is reasonable and appropriate.

No Broader than Necessary to Protect the Employer. 

Post-employment restrictions that seek to cover an entire industry-particularly if the industry and the companies in it are diverse and only a few of them compete “head to head”-may be difficult to enforce. In the same vein, a restriction that prevents an employee from working for a “competitor” in any capacity whatsoever, without any regard for the employee’s prior position or the information to which the employee was exposed, runs the risk of being found unenforceable as overly broad.

Some courts will “blue-pencil” certain terms of post-employment restrictions that are either unreasonable in time and scope or overly broad, in effect rewriting them in a manner that protects the prior employer’s interest and allows the employee to take a new position.  But employers should not count on this, because many courts will not do it, and those that do usually only make modest changes.  

 If the agreement is overly broad, unreasonable in time and scope, or is viewed by the court as seeking to restrain “ordinary competition,” it is likely that the agreement will not be enforced, or will be enforced in a manner that does not fully protect either the employer’s interests or its expectations.

How to draft enforceable post-employment restriction agreements that will protect trade secrets and customer goodwill.

Part 2: Post-Employment Restrictive Covenants

Johnson & Johnson, last week, announced that it will eliminate approximately 900 sales reps in its Ortho-McNeil-Janssen division. The good news is that through attrition and hiring freezes the company was able to reduce the number of job losses.  J&J is not providing the actual number of employees being eliminated; however, the 900 positions that were impacted represent approximately 6 percent of the total US Johnson & Johnson pharmaceuticals workforce. 

This announcement is part of J&J’s larger strategy to respond to the current political and economic environment, as well as the changes in the healthcare environment.

“There are a significant number of new players that have very specific requirements and very specific definitions of value,” said Kara Russell, spokeswoman for Ortho-McNeil-Janssen. “In the past, the prescribing physician was the primary focus. And while the prescribing physician remains incredibly important, they to have been more selective and more specific about where, how, and what information they want to receive regarding pharmaceutical products.”

The tactic is in line with the rest of the pharma industry, as companies are looking to scale back the bloated sales forces of the last decade and streamline the number of reps on the street. “It’s a new strategy to approach these new stakeholders with what they want and how they want it-making sure we understand [that],” Russell told 

Johnson & Johnson has yet to announce its full restructuring strategy, and is still in the process of actively assessing what it will look like. “As part of our evaluation, we determined that the size of our US sales force could be decreased, so we took that action,” Russell said. 

Ortho-McNeil-Janssen markets a number of products across the CNS and internal medicine space, including products such as Concerta, Risperdal, and Ultram ER.

In an effort to realign its sales division to reflect the current pharma environment-smaller, faster, better-Johnson & Johnson is trimming its sales force.

Pharmaceutical Executive-04-15-2009

Search Ad Warnings Leave Pharma in Online Void

Boehringer Ingelheim Launches New Site for TIA Sufferers

Part 2: Post-Employment Restrictive Covenants

J&J Eliminates 900 Sales Positions