Pharmaceutical chatbots are increasingly used to answer patient drug questions, but they carry significant regulatory and compliance risks. While the FDA has issued guidance on AI in drug development and medical devices, it does not yet provide a framework for patient-facing drug Q&A. That means chatbots that discuss side effects, dosing, or interactions exist in a gray zone, and any missteps could trigger FDA enforcement.

The FTC enforces truth in advertising and consumer protection. Misleading claims, impersonating a doctor, or offering unverified information can lead to investigations. Some states, like Illinois, Nevada, Utah, and New York, are adding additional requirements such as licensed supervision or mandatory disclosures.

The OIG and DOJ are also paying attention. If a chatbot steers patients toward off-label use that affects Medicare or federal healthcare claims, it could lead to fraud investigations. The DOJ’s new healthcare fraud task force has already targeted AI misuse in healthcare.

Studies show chatbots provide inaccurate drug information 5–13% of the time, often with confidence, and sometimes at a reading level too high for many patients. These errors can misinform or even harm users, and regulators focus on outcomes, not intent.

Best practices include disclosing that the chatbot is not medical advice, avoiding personalized dosing recommendations, auditing responses, implementing escalation paths to live healthcare professionals, and ensuring privacy and HIPAA compliance. With proper oversight, tools like Ceres can help document disclosures and escalation pathways, keeping innovation safe and compliant.

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Companies must maintain thorough records to meet FDA inspection requirements, including safety substantiation files, labeling proofs, ingredient documentation, and adverse event logs. Adverse event logs must be retained for six years (three for small businesses), while registration and product listing records require annual updates. Organized, accessible, and up-to-date records are essential not only for compliance but also for growth, due diligence, and investor confidence. Compliance is a strategic asset: clean, well-maintained files position a company as scalable and acquisition-ready, turning regulatory diligence into a competitive advantage.

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Darshan explores a critical question for life sciences companies: is your medical affairs team truly independent from commercial—or are you just pretending?

In this episode of KLF Deep Dive, Darshan highlights why organizational charts alone are not enough to satisfy regulators. He explains that regulators focus on conduct, process, and intent, not PowerPoint slides. Using the 2013 GlaxoSmithKline settlement as a cautionary example, he demonstrates how blurred lines between medical and commercial functions contributed to a $3 billion resolution. Advisory boards, medical information responses, and even scientific exchanges were scrutinized because they appeared promotional rather than purely scientific. The lesson is clear: medical affairs does not receive a free pass—regulators evaluate independence based on actual behavior, not just policy statements.

Darshan also addresses misconceptions around First Amendment protections, such as those recognized in the Coronia and Amarin cases. While these rulings allow certain truthful, non-misleading communications about off-label uses, they do not shield companies from regulatory risk when the intent behind medical affairs activities is commercial. Intended use begins long before promotional materials are drafted—it is reflected in team training, engagement strategies, patient targeting, and the creation of scientific content. If medical affairs is influenced by commercial goals, the safe harbor evaporates, leaving both the company and individuals exposed to liability under the False Claims Act, Anti-Kickback Statute, and other regulatory frameworks.

One practical solution Darshan emphasizes is leveraging tools like Ceres. Such systems enforce firewalls, track document access, and generate auditable evidence that medical affairs operates independently. This ensures that scientific exchange remains in medical’s hands, not commercial’s, providing defensible documentation when regulators inquire about separation.

Patient engagement is another critical area. While increasing patient education and support is essential, programs can inadvertently cross into promotional territory if they are influenced by sales objectives, target specific high-value prescribers, or prioritize commercial outcomes over educational goals. Properly designed, patient engagement is a compliance asset; improperly executed, it becomes a liability.

Darshan concludes with key questions medical affairs teams must ask themselves: Do we have documented processes that prove independence from commercial? Can we defend our workflows if regulators question intent? Are patient programs science-driven rather than sales-driven? Do systems like Ceres provide tangible evidence of separation, or do we rely solely on trust?

The overarching message: medical affairs is the conscience of the company, and its independence must be real, not performative. Blurring lines between commercial and medical functions carries severe consequences, from regulatory penalties to reputational damage. Companies must implement robust systems, governance, and culture to ensure genuine independence—because in today’s environment, pretending isn’t just risky; it’s potentially dangerous.

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Under the Modernization of Cosmetics Regulation Act (MoCRA), reporting serious adverse events to the FDA is now mandatory. Companies must report serious incidents—such as hospitalizations, infections, disfigurement, or medically treated allergic reactions—within 15 business days. They must also maintain records of all adverse events for six years (or three years for small businesses).

Practically, this requires setting up a system to capture and assess customer complaints, determine seriousness, and document actions taken. Beyond compliance, this serves as a safety and trust mechanism—helping protect consumers, prevent regulatory actions like warning letters or recalls, and strengthen brand credibility.

For further guidance, contact the Kulkarni Law Firm.

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Darshan Kulkarni highlights that to stay compliant with the FDA, companies don’t need an exhaustive set of SOPs—just the essential ones. Inspectors primarily focus on SOPs covering informed consent, adverse event reporting, drug/device accountability, source documentation, PI oversight, protocol deviations, and record retention. He emphasizes keeping SOPs concise, practical, and enforceable, training staff consistently, and expanding them only as operational needs grow.

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The boundary between scientific exchange and marketing in payer presentations is increasingly blurred, creating significant compliance and enforcement risks. While payers demand real-world evidence, comparative studies, and economic models beyond FDA-approved labeling, manufacturers must ensure all shared information is truthful, non-misleading, properly contextualized, and backed by competent and reliable scientific evidence.

Key pitfalls include:

1. Cherry-picking data without balanced limitations.
   
   
2. Economic models presented without caveats or assumptions.
   
   
3. Future indications framed as imminent rather than investigational.

Crossing into promotion can trigger FDA, FTC, OIG, DOJ, and plaintiff scrutiny, with false claims liability a real risk. To mitigate exposure, companies should:

• Use clear disclaimers and transparent disclosures.
  
  
• Involve compliance early in deck preparation.
  
  
• Document rationale, recipients, and underlying assumptions.
  
  
• Maintain audit trails through tools like Ceres Tracking.

The DOJ’s healthcare fraud task force has prioritized this area, making compliance essential not only to avoid regulatory letters but also subpoenas, litigation, and treble damages. Proper safeguards—including playbooks, legal review, and compliance monitoring—protect companies from costly enforcement actions.

Bottom line: Scientific exchange with payers is permitted and necessary, but once it drifts into marketing, companies face severe legal and financial consequences.

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In this episode, Darshan Kulkarni speaks with Dae Lee about the growing conflict between pharmaceutical manufacturers and pharmacy benefit managers (PBMs) — and how it’s reshaping the U.S. drug supply chain.

They unpack the recent dispute involving AstraZeneca, which alleges discrepancies between the number of branded claims submitted by pharmacies through PBMs and the rebates invoiced by those PBMs. The issue shines a spotlight on how PBMs control formulary access and drug distribution, often requiring manufacturers to pay hefty rebates to ensure their products are covered — a “pay-to-play” model that impacts pharmacies, patients, and drug pricing transparency.

Dae explains how PBMs, through vertically integrated structures and rebate aggregators, dominate prescription benefit management, often retaining portions of rebates meant for plan sponsors. Manufacturers like AstraZeneca, meanwhile, face limited visibility into claims data and have no direct contractual relationship with dispensing pharmacies — making it difficult to reconcile payments or validate rebates.

The conversation also delves into the consequences for independent pharmacies, who are subject to increasing audits, lower reimbursements, and complex purchasing requirements dictated by PBMs. While eliminating PBMs altogether may be unrealistic, both Darshan and Dae agree that growing regulatory scrutiny and transparency reforms could help rebalance the system.

Takeaway: PBMs’ influence reaches every corner of the prescription drug market. For pharmacies and manufacturers alike, maintaining strong records, understanding rebate structures, and preparing for evolving regulations are essential steps toward fairer and more transparent operations.

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The FDA has criticized the industry for not taking advertising and promotion seriously and is now cracking down, as evidenced by hundreds of non-compliance letters. This raises the question: if similar scrutiny applied to clinical research, what would stand out first? Likely areas include proper informed consent, accurate recordkeeping, and potential upticks in physician enforcement. While this use of AI in research compliance hasn’t fully emerged yet, AI is already being applied in promotion oversight and will likely accelerate compliance monitoring. Industry now needs to identify and tighten key processes to stay ahead as AI scales enforcement.

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