Pharma’s digital marketing in crosshairs, as FTC’s plan to curb ‘commercial surveillance’ gains steam

An FTC proposal to tamp down on surveillance marketing is getting a boost from Planned Parenthood and others seeking limits on the use of health data.

(Photo credit: Getty Images).

Abortion rights groups were among those expressing support last week for a Federal Trade Commission proposal to regulate data-driven “surveillance marketing.” Among the digital tactics they’re urging the agency to tamp down on is the use of health information by pharma and medical marketers.

The Federal Trade Commission gave notice in August that it was exploring rules to regulate what it considers harmful commercial surveillance and lax data security. At that time, the agency also put out a call for comment, which expired last Tuesday.

The proposed rulemaking “may be one of the most important outcomes possible for the next two years during the Biden administration,” said Jeffrey Chester, executive director for the Center for Digital Democracy, whose group was one of about 120, out of 11,000 submitted according to the online docket, that opined on health or healthcare marketing.

“This is the first FTC in decades that’s poised to enact serious rules to regulate how data-driven advertising operates in the United States,” Chester said, “Especially in ways where sensitive information affects people.”

Indeed, Biden appointee and FTC chair Lina Khan, who’s made no secret of her ambitions to rein in Big Tech, has also shown she’s not afraid of using litigation to keep marketing in check. Additionally, the agency is suing ad-tech firm Kochava over its practice of collecting and selling health services location data.

As to why CDD filed a comment, Chester said that the FTC is looking for examples of how data-driven marketing affects consumers, as well as its human costs. 

“Pushing people to adopt prescriptions and other kinds of remedies or choose particular places for surgery, infiltration of electronic health records to influence prescribers — all these things are happening on a daily basis,” he said.

A ‘stunning array of contexts’

The FTC defines commercial surveillance as the business of collecting, analyzing and profiting from information about people. This can incentivize companies to collect vast troves of consumer information.

Firms collect personal data on individuals “at a massive scale and in a stunning array of contexts,” Kahn said in an earlier announcement about the proposed rulemaking. In light of this, her agency wants to form a public record to decide whether there’s a need for rules and, if so, what they could look like.

Companies use algorithms and automated systems to analyze the data they collect, FTC explained. They profit by selling information through a large — yet opaque — market for consumer data, using it to place behavioral ads, or leveraging it to sell more products.

However, that’s not always in the public’s best interest. The FTC is concerned that such practices may discriminate based on race, gender, religion or age, harming consumers’ ability to obtain housing, credit or employment.

Firms in the data-brokering industry, for example, have been amassing and selling troves of information on pregnant people for years, with many selling it in the form of prenatal marketing lists. Various politicians have tried to coerce them to curb such practices, but there’s no law prohibiting the aggregators. 

In fact, the entire data-brokering industry has come under fresh scrutiny ever since the Supreme Court’s June decision in Dobbs v. Jackson Women’s Health Organization, which overturned Roe v. Wade and the Constitutional right to an abortion. The worry is that this consumer health data may be weaponized by states with abortion bans.

Some see the FTC’s suit against Kochava both as a response to Dobbs and a way for the agency to put some hard lines around the way data brokers collect and sell information. 

Health marketing among comments

CDD, in its comments, took aim at some of the practices employed by health and medical condition marketers. Pharma companies and drug store chains claim that such commercial data-driven marketing is privacy-compliant. 

“In truth, it reveals how vulnerable U.S. consumers are to having some of their most personal and sensitive data gathered, analyzed and used for targeted digital advertising,” the group argued.

Pharma advertisers and medical marketers, CDD added, are broadly deploying the latest tactics that leverage data to track and target the public. These include “identity graphs,” artificial intelligence, surveilling-connected and smart TV devices, to permission-based first-party data and cookie-less targeting.

CDD’s comments go on to explain how programmatic ad platforms help advertisers finely tune HCP audiences or build DTC segments using digitally targetable medical conditions, like acute myeloid lymphoma, ADHD or brain cancer.

“Programmatic advertising enables you to really pinpoint individuals and now follow them around wherever they go on their devices,” said Chester. 

Marketers, he contended, “have absolutely no right to classify anyone as a potential target to such a serious and tragic medical condition. Yes, people need access to information and they do independent reviews. But the system is unfair.”

It also costs taxpayers, he argued. According to eMarketer, U.S. prescription drug spending will continue to rise through 2026, totaling $730.5 billion, based on the growing number of people with one or more chronic conditions.

“We believe that responsible use of contextual advertising should be explored to replace today’s dominant surveillance (programmatic) marketing system,” CDD wrote.

Planned Parenthood, pointing out that data security and patient privacy are “more important than ever” post-Roe, argued for the confidentiality of all data related to accessing healthcare. This includes web searches for providers or services, visits to educational health websites, searches for directions using a search engine, website or smartphone as well as location data and phone calls, texts or emails to clinics. 

“As states criminalize abortion and gender-affirming health care, and seek to limit access to contraception, all of this information, if not protected, may end up being used in legal cases against patients and providers,” warned the abortion rights group.

The American College of Obstetricians and Gynecologists also chimed in on that score, too, arguing for “explicit mention or consideration of sensitive data” in the rules as it pertains to reproductive healthcare and abortion.

ACOG said it “has significant concerns regarding the use of sensitive information such as location and health data to undermine the provision of evidence-based medicine and jeopardize patient privacy and safety.”

Other comments to the proposal advocated for even broader limits on use of healthcare and healthcare-related data as a way to protect patient privacy.

“The FTC should not limit the kind of personal data that they regulate,” wrote PharmedOut, which examines industry influence on medicine. As their rationale, the authors cited the relative ease with which marketers can re-identify people when “purportedly anonymized patient information” is sold by hospitals to private companies for the purpose of targeting patients with treatment options or to study patient behavior.

Health data typically are sold to brokers from upstream sources, such as hospitals, tertiary care facilities, labs or MRI centers.

“The data is initially confidential in order to comply with HIPAA, but once patient data is delinked from names, it is no longer protected under HIPAA and the selling of patient information is legal,” PharmedOut noted, adding that the once de-identified data can later be molded into identifiable profiles.

“Anonymization is not a technically meaningful term,” Justin Sherman, a senior fellow at Duke’s Sanford School of Public Policy who runs the school’s data broker project, has asserted

“It’s going to be bloody”

Chester predicted that the FTC will cite the operations of health marketers in its proposed rules, due out sometime next spring. 

The “unexamined role” of pharma and health marketing companies that use digital marketing tools and approaches is “a problem that’s been going on for a long time,” he said. “I can’t think of a more sensitive example of how our digital marketing systems are out of control than highlighting the role of health and medical marketing and data.” 

The process of reining this in — to borrow a health metaphor — “is going to be bloody, but it can be done,” he added, “so that it’s not today’s digital health Wild West, but allows for a safe, vibrant Main Street, as well.” 

The FTC, through a spokesperson, declined to comment on this story. Several other industry groups, including the Coalition for Healthcare Communications, could not be reached in time for comment.

This story first appeared on mmm-online.com. 


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