AAF Government Report

June 23, 2011

Clark Rector Jr., Executive Vice President – Government Affairs

Dwayne Fitzhugh, Federation Intern

U.S. Supreme Court Affirms 1st Amendment Protection for Commercial Speech

The U.S. Supreme Court has affirmed a lower court decision striking down a Vermont law that banned the sale, license, or exchange of prescriber-identifiable (“PI”) data to market or promote prescription drugs, and barred pharmaceutical manufacturers from using PI data for such marketing and promotion, unless the prescriber consented, i.e., “opts in,” to such use. All patient information is removed from the data prior to use. The court agreed that the law in question went too far in unnecessarily restricting protected commercial speech. AAF joined in an amicus brief urging the Court to strike down the law.

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FDA Unveils New Ad Warnings

AAF and other advertising industry representatives are spreading the word in Congress about the serious problems with the Interagency Working Group’s so-called voluntary nutrition principles for foods marketed to children under the age of 18, which set virtually impossible to reach standards for foods, and would be treated as de facto rules rather than “voluntary” standards. The House Appropriations Committee recently approved a Financial Services Bill which includes the following language:

None of the funds made available in this Act may be used by the Federal Trade Commission to complete the draft report entitled ‘‘Interagency Working Group on Food Marketed to Children: Preliminary Proposed Nutrition Principles to Guide Industry Self-Regulatory Efforts’’ unless the Interagency Working Group on Food Marketed to Children complies with Executive Order 13563.

Executive Order 13563 requires that all proposed federal rules receive a cost-benefit and other analyses to determine if they will accomplish their stated purposes.

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FDA Unveils New Ad Warnings

The U.S. Food and Drug Administration has release new warning labels for all cigarette advertising and packaging beginning in September, 2012. The labels must be placed in the upper portion of each advertisement and occupy at least 20% of the area of the advertisement. In January, the AAF submitted comments to the FDA arguing that the warnings go far beyond what is permitted under First Amendment protections for commercial speech. The precedent for similar warnings in advertising for other disfavored products is very troubling. A constitutional challenge to the Family Smoking Prevention and Tobacco Control Act, which set the stage for the new warnings, is ongoing. The 6th Circuit is scheduled to hear oral arguments on the challenge on July 27.

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Privacy Bills Released

Senators Al Franken, D-Minn. and Richard Blumenthal, D-Conn. have introduced legislation S. 1223 that would require companies to receive express written consent from consumers before sharing the users location with third parties.

Rep. Mary Bono Mack, R-Calif., has released a discussion draft of the Secure and Fortify Data Act (SAFE Data Act), which would establish uniform national standards for data security and data breach notification. The measure would require notification to the FTC and consumers within 48 hours of the time that a breach has been secured and scope of the breach assessed. The bill would not apply to those companies that are covered by the security provisions within the Gramm-Leach-Bliley Act, or the Health Insurance Portability and Accountability Act. While sympathetic to the goals of the measure, the AAF is concerned that the strict 48 hour time frame may be unrealistic in many instances. The industry will work with Congress to try to craft a solution that is workable for businesses while providing adequate protection to consumers.

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