How programmatic firms deal with complex pharmaceutical laws

Programmatic is prone to complexity. So too is Big Pharma. So when the pharmaceutical industry deploys programmatic technology, routine business can get especially complicated.

Because the pharma industry is regulated more than most, pharma brands and their vendors must tread carefully when they set up automated campaigns. To stay compliant with the law while targeting relevant consumers, pharma marketers use medical websites as audience proxies, indirectly target based on related conditions and employ whitelists to limit the websites their ads appear on.

“When you get to health care, there are a few extra layers of concern,” said Brad Rosenhouse, group vp of programmatic for health care media agency Publicis Health Media. “On top of that, there is the ethics and responsibility to not do things that are too creepy or invasive.”

If left unchecked, programmatic advertising can place brands on websites that can be damaging to their image. This can be especially problematic in the pharmaceutical industry, where poor brand safety can result in not just embarrassment but also violation of governmental regulations.

Laws such as HIPPA mandate that pharma companies can’t use first-party data to link known identifiable individuals to their medical conditions. That means Pfizer can’t obtain data that says John Doe has erectile dysfunction (ED) and use that data to serve Doe an ad for Cialis or Viagra. Sources told Digiday that pharma clients are also restricted in how they follow people around the web because many forms of retargeting can result in violations of the regulations on identifying users by their conditions. Despite these stipulations, pharma marketers have found ways to reach probable customers online.

“A lot of [the targeting] is based on contextual targeting in lieu of audience data,” said Dan Raffe, director of programmatic at ad software developer Centro.

As a proxy for health condition, Raffe said that pharma advertisements can be placed next to related content. An example would be a Viagra ad appearing in an article about ED. However, most sources agreed that pharma companies can’t legally or ethically track that user around the web and continue to serve him ED ads on other webpages. In other words, the content can be targeted — the user can’t.

Rosenhouse said that online pharma advertising regulations can be vague and leave lots of room for interpretation. When data is tied to a cookie or other digital identifiers, the legal and ethical permissibility varies case by case.

“The last thing you want to do is put your client in hot water with the FDA,” Rosenhouse said. “We take a conservative approach in what we advise our clients to do.”

Another workaround involves using third-party data to indirectly target users with similar conditions, said Charles Cantu, CEO of Huddled Masses. For example, Viagra can’t directly target people based on whether or not they have ED. But Viagra could theoretically target people who have had heart problems, and people with cardiac disease symptoms tend to be older, and older people are more prone to have ED.

This workaround can increase the probability that Viagra is reaching a person with ED. But it can also come off as disease mongering and increase the scope of websites that a brand appears on, which can be problematic for pharma companies.

Marc Goldberg, CEO of verification firm Trust Metrics, said that pharma companies are usually proactive about brand safety and that many of them deploy whitelists to limit their ads from reaching undesirable webpages. And Kelly McMahon, vp of global demand operations at video ad platform SpotX, suggested that pharma brands concerned about brand safety could use programmatic direct deals rather than open real-time bidding.

“In anything that is highly regulated, it’s just important to draw clear boundaries around what is OK and not OK,” said Jay Friedman, COO at programmatic company Goodway Group. “Once that is done, automating within those is easy.”

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