Nondisclosure of Financially Sensitive Information #I92-1 (blue book memo) (Text Only)

This guidance was written prior to the February 27, 1997 implementation of FDA’s Good Guidance Practices, GGP’s. It does not create or confer rights for or on any person and does not operate to bind FDA or the public. An alternative approach may be used if such approach satisfies the requirements of the applicable statute, regulations, or both. This guidance will be updated in the next revision to include the standard elements of GGP’s.

Integrity Memorandum G92-1

    Director, Office of Device Evaluation (HFZ-400)
    
    Nondisclosure of Financially Sensitive Information
     
    Office of Device Evaluation Review Staff
    
        
    Purpose  
    
    The purpose of this memorandum is to clarify ODE's current policy 
    concerning the disclosure or use of financially sensitive 
    information.  
    
    Background
    
    There has been increasing concern over the release or use of 
    financially sensitive information concerning agency actions on 
    submissions to FDA, including those to ODE.  This financially 
    sensitive information may be used by investors and others for the 
    purpose of making decisions to buy or sell the stock of the firm 
    that is the subject of the information or to buy or sell the stock 
    of its competitors.
    
    In response to these concerns, FDA contracted with the law firm of 
    Kutak, Rock and Campbell to study this matter and the firm has 
    provided  FDA a draft final report commonly known as the "Strasser 
    Report".  The report contains many recommendations, including, but 
    not limited  to:

      -    new regulations dealing with employee disclosure of  such 
           information;
    
      -    broader FDA disclosure of such information to the public;
    
      -    improved employee training on these matters;
    
      -    improved employee reporting of financial ownership of 
           outside interests;
     
      -    additional publication of advisory committee activities;
    
      -    the use of confidentiality agreements with other agencies 
           prior to disclosure of sensitive information; and,
     
      -    increased liaison with securities enforcement agencies.
   
    The agency ultimately will adopt policies, procedures, or 
    regulations to implement some or all of the recommendations 
    contained in the final report.  Until that time, ODE will follow 
    the policy set forth below concerning financially sensitive 
    information.  These policies are not entirely new and have, by and 
    large, been followed by ODE staff for years.
    
    "Financially Sensitive Information"
    
    The Strasser Report contains the following working definition of 
    "financially sensitive information":
    
                ... non-public information which could be reasonably 
                expected to influence an investment decision by one 
                having knowledge of the information,  We include 
                within this definition pre-market approvals, status of 
                pending applications and petitions, identification of 
                matters to be presented to advisory committees, 
                activities related to seizures and recalls, the 
                results of research activities, and other similar 
                agency  actions.
    
    This is the best definition available at this time and we offer it 
    to you for your guidance.
    
    Policy 
    
    As a general rule, ODE staff may disclose financially sensitive 
    information concerning FDA/ODE actions only to FDA and other DHHS 
    employees.  If financially sensitive information is being supplied 
    to an FDA employee outside of the Office of Device Evaluation and 
    the Office of Compliance and Surveillance, the recipient should be 
    reminded that the information is sensitive and may only be 
    disclosed to authorized individuals.  Reviewers should discuss 
    requests for financially sensitive information from employees in 
    other DHHS agencies with their supervisors.  Such information 
    should be disclosed only in the conduct of official business and 
    after the recipient has been reminded that the information is 
    sensitive and may only be disclosed to authorized individuals.  
    From time to time, staff may be called upon to disclose such 
    information to employees of federal agencies in other departments; 
    this should be done only after discussing such disclosure with the 
    office of the Director.                           
    
    Staff should never disclose such information to anyone outside the 
    federal government.  Furthermore, staff should not discuss any 
    agency activities with members of  the financial community, e.g, 
    stock brokers, market analysts, financial advisors, etc.
    
    For your information, I am attaching a copy of the June 6, 1991 
    memorandum from Commissioner Kessler to all employees concerning 
    the handling of sensitive and confidential information.  In this 
    memorandum, the Commissioner offered the following guidance:
    
              I want to reemphasize that in your dealing with outside 
              individuals, you must use extreme caution to prevent 
              disclosing privileged information that has come into 
              your possession by virtue of your government position, 
              or that you have overheard or read through proximity to
              other government employees.  Outside individuals may 
              include representatives from trade associations, the 
              regulated industry, stock analysts, industry 
              consultants, or attorneys representing any of 
              these groups or individuals.  The review status of 
              product approval applications (including New Drug 
              Application, Abbreviated New Drug Application, New 
              Animal Drug Application, Food Additive Petitions, 
              510(k)s, Pre-Market Applications), internal discussions 
              about regulatory decisions, and recommendations about 
              proposed or pending enforcement actions are some 
              examples of information that must not be disclosed.  In 
              addition, FDA employees must use discretion to avoid 
              giving advice or information that could be considered as 
              preferential treatment to certain companies or 
              individuals.  If you are at all uncertain about the 
              appropriateness of providing information on specific 
              issues or matters to outside individuals, you should 
              refrain from doing so, and then discuss the matter with 
              your supervisor.
    
    
    Effective Date
    
    This memorandum is effective immediately.
    
    
    
              
                                                Robert L. Sheridan
    
    Attachment