The Federal Trade Commission (FTC) recently resolved deceptive advertising charges with Chemical Free Solutions, LLC and Dave Glassel, related to their marketing of the Best Yet! cedar oil-based solutions that claim to eliminate bed bugs and head lice infestations.  (We previously reported when the FTC first made the charges.)  The Commission voted 3 to 1 to approve the settlements, which are particularly noteworthy for the split among the Commissioners about requiring that the marketers obtain preapproval from the Food and Drug Administration (FDA) prior to making future claims related to their head lice treatments.      

Under the settlement agreements, in addition to significant judgments of $185,205 and $4.6 million, the marketers are prohibited from making deceptive claims related to the performance and efficacy of Best Yet!, including that the product by itself is effective in stopping bed bug infestations, that it is effective in preventing such infestations, and that it is more effective than other products at stopping or preventing infestations.  They are also enjoined from claiming that Best Yet! is effective in treating head lice infestations unless the representation is not misleading and the product is preapproved by the FDA.  The settlements also prohibit the marketers from misrepresenting endorsements or affiliations, including endorsements from or affiliations with government entities, and from misrepresenting the results of studies or tests.

The Commissioners’ statements highlighted a notable divide on the decision to require the settling marketers to obtain FDA approval before making claims about the effectiveness of their head lice treatments. 

  • In a joint statement, Chairwoman Ramirez and Commissioner Brill distinguished these settlements from the FTC’s recent decision in POM Wonderful (which we previously blogged about here) in which the Commission declined to impose an FDA pre-approval requirement.  Specifically, they explained that because the FDA regulates both new and existing head lice treatments, “requiring the defendants to have FDA pre-approval as substantiation for future claims is particularly appropriate as it harmonizes their obligations under the FDCA and the FTC Act.”  They also explained that because the consequences of a false claim, which include the increased risk that head lice infestations will spread, are high here, the cost of complying with FDA requirements is outweighed by the potential for considerable economic costs and consumer harm.
  • In a separate statement, Commissioner Wright indicated  that he believes “FDA pre-approval provisions should play a very limited role in FTC orders” and that his approval of such requirements in the settlements was based on a “combination of unique circumstances.” 
  • In her dissenting statement, Commissioner Ohlhausen expressed her concern that the FDA pre-approval requirements impose “such a high bar for these types of claims in general [that they] may ultimately prevent useful information from reaching consumers in the marketplace.”  She expressed her opinion that the pre-approval requirement “sends the wrong signal to parties trying to ascertain the level of substantiation required to make health-related claims, especially after our explicit rejection of such a provision in POM Wonderful.”

Marketers of products that make health claims should pay close attention to these settlements.  In particular, the FTC’s willingness to impose FDA pre-approval requirements in the case of a head lice treatment, where it declined to do so in Pom Wonderful which involved claims related to heart disease, prostate cancer, and erectile dysfunction, may signal that the level of  substantiation required for health claims is still in flux.

This case also serves as a reminder that companies must keep an eye on other regulatory requirements imposed by other agencies, including the FDA, which has jurisdiction over treatments used to control head lice on humans, and the Environmental Protection Agency (EPA), which has jurisdiction over products that are marketed with claims to control bed bugs.  The EPA does not require premarket registration of certain pesticides that are formulated using “minimum risk” active ingredients (including cedar oil) and certain inert ingredients, although such products may not be marketed with false or misleading labeling.  In December 2012, however, EPA published a proposed rule that would revise the minimum risk exemption by clarifying which active ingredients are covered by the exemption.  Advertisers and manufacturers of pesticides that are currently subject to this exemption should monitor future developments at the EPA to ensure that they continue to be in compliance with EPA regulations.