State AGs Make Bayer’s Yaz DTC Advertising Subject to FDA Prior Approval; $20M in Corrective Advertising Also Required

February 12, 2009

By J.P. Ellison –

Twenty-Seven Attorneys General have given FDA prior approval authority over Bayer’s Direct-to-Consumer (“DTC”) television and print advertising for its prescription oral contraceptive Yaz, and also required to company to run a $20 million corrective advertising campaign as part of a settlement agreements with the states (see press releases here and here).

The AGs were able to achieve this result even though the FDC Act is clear that the enforcement of the FDC Act can only be brought in the name of the FDA (the provision in FDC Act § 310 which allows States to bring actions relating to food did not apply here).  Though FDA “collaborated” with the state AGs and thus was a seemingly willing third party beneficiary of the settlement agreements, it was not a party to the litigation.

This is somewhat curious because, while the AG’s apparent leverage for the 2009 settlements came from earlier 2007 settlements with Bayer concerning its drug Baycol (see here and here), the AG press releases plainly state that the impetus for their actions was  an October 2008 FDA Warning Letter to Bayer concerning two Yaz TV spots.

The FDA Warning Letter alleges violations of the FDC Act, which one would think the FDA would enforce through agency action.  It’s equally clear that FDA’s position is that Warning Letters, like the one that Bayer received, are not final agency action.  FDA’s Regulatory Procedures Manual states that “[a]Warning Letter is informal and advisory . . . . [T]he agency does not consider Warning Letters to be final agency action on which FDA can be sued.”  So while FDA never took final agency action, the states did, and FDA has prior approval authority as a result.

While this settlement was announced shortly after President Obama took office and could be seen as a rollback on the Bush era FDA preemption doctrine, it seems likely that this settlement was agreed to in principle prior to the Administration change.  Thus, given the expectations for this administration, one can only expect increased state AG and FDA collaboration in the coming months.