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DTC in FocusGuest Columnist

Transforming Data Compliance into a Competitive Edge: The Role of AI in Aligning DTC Marketing and Regulatory Goals

May 16, 2025 0

In the rapidly evolving landscape of direct-to-consumer (DTC) pharmaceutical marketing, data compliance has traditionally been viewed only as a necessity— which is often perceived as a constraint on marketing-driven growth, personalization, and operational agility.

The advent of artificial intelligence (AI) is revolutionizing this perspective, positioning data compliance as a strategic asset that enhances marketing effectiveness, improves data integrity, and reduces risk. Today’s AI technology not only automates and streamlines first-party data collection and handling but also facilitates collaboration, customized reporting, and stakeholder-specific recommendations.

The Evolving Landscape of DTC Pharmaceutical Digital Marketing and Media

In early 2023, the pharmaceutical industry surpassed the technology sector to become the second-largest industry in advertising spending, increasing its share to 14% of total ad expenditures, second only to the retail industry. This significant investment underscores the industry’s commitment to direct consumer engagement as the engine for marketing-driven growth. However, it also amplifies the challenges associated with ensuring that marketing strategies comply with stringent regulatory standards.

A recent study of the data compliance risks on pharmaceutical websites by the Association of National Advertisers (ANA) and Compliant[1] found that many healthcare and pharma websites failed to meet minimum standards for consumer data collection, consent, and data sharing. Companies like Better Help[2], Costco[3], and many others have found themselves in regulatory and legal crosshairs. Even industry associations have been targeted and found guilty by regulators[4], leaving marketers with no choice but to look for ways to own data compliance themselves.  This has led to a need for new tools to increase efficiency and accuracy in this critical area.

Without ethical guidelines and proper controls, large-scale consumer data collection, processing, and activation expose brands to significant liability and risk—often with minimal transparency or governance.

The rise of AI has expanded data compliance capabilities across multiple applications in the digital marketing business, including the ability to now build, create, analyze, enhance, and interact with consumer data in real-time in a “safe” and consistent manner. Done well, AI can empower marketing, technology, and compliance teams to operate together with greater precision and impact. AI’s ability to integrate compliance workflows with data optimization across websites, media campaigns, and cross-media applications adds unprecedented value for the DTC marketing process.

AI-Driven Data Compliance: A Strategic Asset

Traditional consumer data compliance processes in pharmaceutical marketing are often manual and time-consuming, leading to delays and inefficiencies. And while more than 70% of brands rely on agencies and partners to be educated and act in a legal and ethical fashion, less than one in four used automation to audit and verify data compliance across their digital marketing supply chain[5].

AI helps address these challenges by enabling detailed data compliance testing, verification and remediation across various digital platforms, including websites, applications, and media campaigns. AI-driven tools ensure real-time adherence to regulatory requirements, enabling marketing teams to execute privacy-first media campaigns swiftly and confidently.

Jamie Barnard, CEO of COMPLIANT, emphasizes, “Leveraging AI-driven data compliance is both a sword and a shield. Done right, it can transform this complex subject from a regulatory and business barrier into a competitive advantage. It allows DTC marketers to innovate confidently, technology teams to reduce time allocated and compliance teams to sleep well at night. And it saves money from fines and resources, making the CIO and CFO happy”

Enhancing Data Integrity and Media Quality

In DTC pharmaceutical paid media, the collection and utilization of first-party data are crucial for effective consumer engagement. Finding and marketing to consumers in the healthcare space presents some unique regulatory and legal challenges – not the least of which is privacy and data integrity.

AI-powered compliance platforms continuously audit data collection points, consumer interactions, consent frameworks and other quality metrics to ensure media campaigns are accurate, relevant, and compliant with privacy regulations. This helps both the customer and the company by leading to:

  • Improved Targeting: Ensuring that marketing efforts reach the appropriate audience segments.
  • Enhanced Personalization: Delivering tailored content that resonates with individual consumer needs.
  • Increased Consumer Trust: Demonstrating a commitment to data privacy and security.

Pete Dannenfelser, a pioneer in digital healthcare marketing communications, notes, “The unexpected value add of the integration of AI in compliance processes is that it not only mitigates risk, but also elevates the quality of our data, enabling more precise and impactful marketing efforts. This not only leads to better marketing, but delivers higher quality, more appropriate messaging for the customer.”

Fostering Continuous Collaboration Between Teams

AI facilitates seamless collaboration between compliance and marketing teams by providing unprecedented transparency and control, real-time insights, and automated reporting. This continuous alignment reduces the need for multiple meetings and streamlines communication, allowing teams to focus on strategic initiatives and objectives.

Shailee Vimadalal, a partner at ZS Associates, observes, “Implementing robust AI-driven compliance solutions fosters greater transparency and control, enabling marketing and compliance teams to work in harmony towards shared objectives.”

Real-World Application of AI-Driven Data Compliance in Digital Marketing and Media

Today, data compliance platforms are removing risk and enhancing marketing performance for leading consumer brands worldwide.

Consider a pharmaceutical company launching a new DTC campaign. With an AI-driven compliance platform, the company can:

  1. Confidently Activate Consented First Party Data : AI ensures that first-party data collection methods comply with privacy laws, maintaining data integrity.
  2. Ensure Compliant Media Buying: AI ensures the impressions, audiences and media purchased through agencies/DSPs and from digital media vendors (publishers, SSPs and other 3rd party data sources) are properly consented and have higher data integrity.
  3. Facilitate Cross-Functional Collaboration: Real-time compliance transparency, controls and insights promote a unified approach to campaign development which delivers greater trust and confidence to the organization.

This integration not only expedites campaign launches, but also helps ensure that all regulatory requirements are met, thereby enhancing the campaign’s overall integrity and effectiveness.

The Return on AI-driven Compliance

By embedding AI into compliance processes, pharmaceutical companies can transform a traditionally manual, reactive function into a proactive strategy that drives business value. The benefits include:

  • Operational Efficiency: Streamlining compliance tasks reduces time-to-market for new campaigns.
  • Risk Mitigation: Proactively identifying and addressing compliance issues minimizes the likelihood of regulatory penalties, lawsuits or reputational damages.
  • Enhanced Outcomes: Marketing-driven growth is predicated on finding the right customer, and serving them creative ads in context and with consent. Using data integrity and compliance metrics becomes an additional KPI.

Actionable Steps for DTC Marketers

To leverage AI-driven data compliance in digital media effectively, DTC marketers should:

  1. Assess Current Data Compliance Processes: Identify areas where AI can automate and enhance existing workflows.
  2. Invest in AI-Powered Compliance Tools: Select platforms that offer real-time monitoring and analysis of marketing activities.
  3. Promote Cross-Functional Collaboration: Encourage ongoing communication between marketing and compliance teams to align objectives.
  4. Stay Informed on Regulatory Changes: Utilize AI tools and services to monitor and adapt to evolving regulations, ensuring continuous compliance.

By adopting these strategies, pharmaceutical companies can turn compliance into a catalyst for innovation and a significant competitive advantage in the DTC marketing landscape.

Conclusion

The integration of AI into digital media data compliance marks a pivotal shift in DTC pharmaceutical marketing.

By automating compliance tasks, creating transparency among teams, enhancing data integrity standards, and fostering collaboration between marketing, IT and compliance teams, AI can transform compliance from a regulatory obligation into a strategic growth opportunity.

Pharmaceutical companies that embrace AI-driven compliance solutions are better positioned to navigate the complex regulatory environment, drive innovation, and achieve sustained success in the competitive DTC market.

 

Sources:

[1] 2024 ANA Compliant Website Benchmark Report (LINK)

[2] FTC Better Help announcement (LINK)

[3] Costco sued for Facebook pixel placement on Pharmacy homepage (LINK)

[4] IAB TCF framework judged illegal (LINK)

[5] ANA Compliant report

Ian Wolfman

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DTC in FocusGuest Columnist

FOFO: Fear of Finding Out and the Impact of the Washington My Health My Data Act on Pharmaceutical Company Compliance

August 12, 2024 0

The recently passed Washington My Health My Data (MHMD) Act stands as a significant legislative milestone, reshaping data requirements for pharmaceutical companies and raises a new specter of non-compliance. Against a backdrop of increasing regulatory scrutiny and privacy concerns, understanding the implications of the MHMD Act is a critical first step and learning that they may not be in compliance is weighing on the minds of CEOs, CMOs and Chief Privacy Officers (CPOs) across the industry. Compliance Officers are asking what the impact of the MHMD Act will be, and, more importantly, how can they ensure that their companies are aligned with changing regulations?

 

What is the Legislation?

Enacted on March 31, 2024, the Washington My Health My Data Act represents a comprehensive framework aimed at enhancing health data ownership and privacy. Key provisions of the MHMD Act include obtaining explicit authorization from consumers before selling or sharing their health data, expanding the definition of health data to encompass various aspects of physical and mental health, increased transparency regarding data privacy practices, and stricter accountability measures in case of breaches or violations including enforcement actions by the Attorney General and private litigants.

 

Of course, the MHMD Act has profound implications for pharmaceutical companies, reshaping their approach to data privacy and compliance. In an industry characterized by stringent regulations and waning consumer trust, adherence to the MHMD Act is critical for several reasons, not the least of which being Regulatory Compliance. Healthcare companies operate within a complex regulatory landscape, subject to oversight from federal agencies such as the FDA, FTC and DEA. The MHMD Act introduces additional compliance requirements, necessitating proactive measures to ensure adherence and avoid negative PR and costly penalties.

 

Identifying the source of one’s FOFO: Fear of Finding Out

 

Pharmaceutical companies, their agencies, and internal compliance have always been a critically important part of program execution, but the stakes have just gone up. In fact, in this new compliance environment, one could now consider a proactive approach to data compliance management as a competitive advantage for the business. Specifically, the companies with the right approach and toolset to automate workflow, will have a new competitive advantage whenever engaging in marketing programs and at all digital consumer touchpoints. It also means the end of FOFO, because finding out about your level of compliance shouldn’t be a fearful situation.

 


Shailee Vimadalal, a partner at ZS Associates is a global management consulting and technology firm specializing in transforming healthcare and beyond said about these marketplace changes, “The Washington My Health My Data Act (MHMD) brings a renewed focus on consumer consent for data use by the US pharmaceutical industry. This necessitates investments in personal data collection and handling practices to ensure greater transparency, commitment, and control for the consumers on how their data and how it is being used. Implementing a robust consent and preference management solution can be a strategic step for pharma companies to navigate this evolving landscape.”

 

In the pharmaceutical industry, ignorance is never an acceptable reason for being out of compliance. In addition, once a company becomes aware of an issue, its leaders are obligated to act. 

 

This draws a direct line from the CEO to the office of Compliance and across to the head of IT as Data Management challenges begin to emerge. Pharmaceutical companies handle vast amounts of sensitive patient data, including clinical trial results, medical records, and adverse event reports. Laws like this touch even simple “request more information” type functionality on product websites and extend throughout all brand digital media. Compliance with the MHMD Act requires attention to robust data management systems to safeguard the privacy and security of this information.

 

This Washington act will also impact Marketing Practices. The MHMD Act’s provisions for consumer authorization and data-based targeting have significant implications for pharmaceutical marketing strategies. Companies must ensure compliance with opt-in requirements and adopt data privacy-centric approaches to these campaigns while ensuring strict compliance with data-usage disclosures. In other words, proactive and skillful compliance in marketing workflows will become a key strategic and tactical competitive advantage for pharmaceutical brands in 2024.

 

Pete Dannenfelser, a pioneer of digital healthcare marketing communications, offers insights into the impact of the MHMD Act on pharmaceutical company compliance. “The industry’s historical commitment to conservatism and caution may make change easier. But the consequences of non-compliance underscores the importance of leveraging tools to assess the current state of a company’s digital platforms and readiness for what’s next.” 

 

Dannnfelser goes on to say, “While these newly enacted requirements will hit the entire industry, pharmaceutical companies operating under Corporate Integrity Agreements (CIAs) must be able to act quickly to uphold stringent compliance standards. Non-compliance with the MHMD Act could jeopardize adherence to CIAs, leading to severe consequences.”

 

Amidst the challenges posed by the MHMD Act, Dannenfelser recommends leveraging new AI-powered digital tools to navigate compliance requirements effectively. In fact, adding these powerful new tools to workflow should foster a competitive advantage, not only in day-to-day tactical execution, but also with strategic planning in a rapidly evolving new regulatory environment.

 

“Advertisers can only effectively manage what they can measure, so optimal integration of compliance standards into workflows become an essential element of all digital media campaigns and web properties,” says Jamie Barnard, CEO of COMPLIANT, the industry leader in AI SaaS compliance software.

 

A.I. algorithms analyze vast amounts of data to assess compliance risk levels, identifying potential areas of non-compliance and guiding companies in prioritizing remediation efforts. These learnings can help pharmaceutical companies create comprehensive compliance roadmaps, outlining steps to ensure compliance with data privacy regulations, opt-in requirements, and data-based marketing practices. Beyond that, AI technologies enable real-time monitoring of compliance activities, allowing companies to detect and address compliance issues promptly and proactively, minimizing the risk of regulatory violations and associated penalties. As any seasoned Rx marketer can tell you, a little proactivity can go a long way when dealing with regulatory bodies. 

 

 

The Washington My Health My Data Act ushers in the next era of significant regulatory data requirements with far-reaching implications for the healthcare industry among others. So, what should pharmaceutical companies be doing now to manage FOFO and stay ahead of this and other emerging data laws?

 

  • Embrace A.I.-driven tools to reactively assess active current content and proactively review new digital assets.

 

  • Adopt proactive compliance strategies leveraging tools and revising policies to be flexible enough to change with new laws.

 

  • Respond quickly when issues are identified – oftentimes, the remediation is not as intimidating as it seems, especially if repeatable processes and guidance is enacted.

 

Ian Wolfman & Pete Dannenfelser