Recent actions by the Federal Trade Commission (“FTC”) against food and supplement marketers have substantial significance for companies advertising products that claim to provide weight-loss, health-promotion, or diseaseprevention benefits. In particular, the FTC is now imposing a requirement of at least two, independently performed, well-controlled, human clinical studies for products that make select weight-loss and health-promoting claims. The agency is also using proposed consent decrees to enforce the requirement of obtaining approval from the U.S. Food and Drug Administration (“FDA”) for disease-prevention claims. The following summarizes the steps signaling the FTC’s new policy regime, litigation risks the new regime presents, and the steps companies can take to protect themselves in light of it.
The FTC’s long-standing rule, announced through numerous consent decrees and enforcement thereof, was that “competent, reliable, scientific evidence” must substantiate claims about the efficacy and safety of foods, dietary supplements, and OTC drugs. See, e.g., Dietary Supplements: An Advertising Guide for Industry, Bureau of Consumer Protection Division of the FTC, at 3 (Apr. 2001), available at http://business.ftc.gov/documents/bus09-dietarysupplements- advertising-guide-industry. What constituted such evidence was determined on a case-by-case basis according to the standards set by the relevant scientific community. In three recent cases, however, the FTC has departed from this standard and drawn a line of requiring at least two clinical studies.
Moreover, another significant aspect of the following cases is that the FTC is now adding an FDA pre-approval requirement in consent decrees that have broad applicability to all of a company’s products (a so-called “fencing in” provision).
Iovate . Iovate Health Sciences, a manufacturer of OTC dietary supplements, entered into a settlement with the FTC in July 2010, agreeing to pay $5.5 million to settle charges over advertisements. The advertisements concerned two supplements, which allegedly claimed to aid weight-loss, and five supplements, which allegedly claimed to reduce or prevent colds, infections, and allergies. The settlement prohibits Iovate from making “weight-loss” claims unless they are supported by “competent and reliable scientific evidence,” which the FTC defined as “at least two adequate and well-controlled human clinical studies of [the products], conducted by different researchers, independently of each other, that conform to acceptable designs and protocols and whose results, when considered in light of the entire body of relevant and reliable scientific evidence, are sufficient to substantiate that the representation is true.” The settlement also not only enjoined Iovate from making the disease-prevention claims on the five supplements without FDA approval, but went further to prohibit non-FDA-approved disease-prevention claims (and implied such claims) on any of Iovate’s supplements.
Nestle . About an hour after the Iovate settlement was publicized, the FTC announced it had entered into a consent decree with Nestle HealthCare Nutrition over Nestle’s BOOST Kid Essentials drink products. Nestle allegedly claimed the drinks provided a variety of health benefits, including preventing the risk of upper respiratory tract infections (such as colds and flu viruses), and reducing diarrhea and absences from school. The decree enjoins Nestle from making upper respiratory tract infection claims (on any drink product, not just the Boost drinks) without FDA approval, and from making the diarrhea and absences from school claims without “competent and reliable scientific” evidence, again defined as “at least two adequate and well-controlled human clinical studies.”
POM. The FTC sought to enforce its new standard against POM Wonderful, LLC (“POM”), the maker of POM Wonderful 100% Pomegranate Juice and POMx supplements. The FTC charged POM with making false and unsubstantiated claims that such products prevent or treat heart disease, prostate cancer, and erectile dysfunction. POM sued the FTC in the United States District Court for the District of Columbia on September 13, 2010, seeking a declaration that the FTC’s new standard of requiring two human clinical studies and FDA approval for implied disease claims is invalid. The complaint alleges that the FTC “specifically advised” POM that it is applying the new standard to POM and the food and dietary supplement industry as a whole. According to POM, by enforcing the new standard, the FTC exceeded its jurisdiction and powers, violated its own rulemaking procedures and the Administrative Procedure Act, acted arbitrarily and capriciously, and violated POM’s First Amendment right to free speech and Fifth Amendment right to due process. The FTC responded with its own administrative complaint on September 27, 2010, charging that POM violated federal law by making deceptive disease-prevention and treatment claims.
Implications for Consumer Health Product Marketers
Although no one can predict the outcome of POM’s lawsuit, it is clear that the substantiation needed for marketing consumer health products is likely to change. With that change comes a variety of additional risks, including but not limited to the following:
Consumer Fraud Risks. Greater FTC scrutiny and enforcement actions will undoubtedly increase the likelihood of private consumer litigation, given that it is now commonplace for plaintiffs’ counsel to routinely sweep websites like the FTC’s. Although FTC rules and regulations are not privately enforceable, state law provides several private vehicles for challenging alleged consumer fraud, such as claims for breach of warranty or contract, common law fraud, unjust enrichment, and violations of consumer protection legislation. In fact, some state consumer protection acts make violation of an FTC regulation a per se violation of state law. See, e.g., Fla. Stat. § 501.203(3). Thus, representations that are subject to but do not meet the FTC’s new “two clinical trials” standard for health-promoting or weight-loss claims could subject their makers not only to FTC liability, but also to liability to private litigants. Such litigants may seek additional remedies not available to the FTC, such as punitive or multiplied damages and attorneys’ fees. The new FTC standards could also prompt increased attention and/or enforcement actions by state attorneys general.
Product Liability Risks. The FTC’s new “two clinical trials” requirement opens the door to potential product liability claims as well, including tort claims of negligent testing or design.
Definitional Risks. The lack of clarity in the FTC’s new standards presents several problems for consumer health product manufacturers as they formulate their marketing plans. One such noteworthy open question is to what claims or products the FTC’s new standards will apply. For example, the FTC required two well-controlled, human clinical trials for claims that a children’s drink would reduce absences from school and that a dietary supplement aids weightloss, whereas in the Iovate settlement, by contrast, the FTC did not require the support of two clinical trials for a category of undefined, “other health-related claims.” Similarly, although an FTC official recently stated that the agency will not require the support of at least two clinical studies for all claims, this official did not resolve the uncertainty about which claims prospectively will be subjected to the two studies minimum standard and which will not. Another unanswered question is whether cosmetics will be subject to the new “two clinical trials” standard. Questions might also arise regarding what in the view of the FTC constitutes “different researchers” or “independent performance” of clinical studies. In addition, the FTC may take a broader interpretation of what is an “implied” disease-prevention claim (thereby requiring FDA approval) than a company might expect. For example, will the FTC now consider a claim that a product “supports breast health” an implied claim that the product prevents breast cancer?
What Marketers of Consumer Health Products Can Do Now?
If the FTC’s new standards take hold, many companies’ current or planned marketing campaigns for consumer products are likely to lack the type of substantiation the FTC now appears to be demanding. Despite uncertainty at this point about the scope of the FTC’s new focus, the FTC Commissioners unanimously approved the Iovate, Nestle, and POM enforcement actions, indicating a clear policy shift by the agency. Accordingly, companies contemplating a marketing campaign for a food, OTC drug, supplement, or even cosmetic product that directly or indirectly touts health-promoting, disease-prevention, or weight-loss benefits would be well advised to undertake a review of the FTC’s recent actions toward similar products or claims. Experienced FTC and product liability counsel can help identify such actions, as well as assess potential risks with new or existing product claims, suggest approaches that may satisfy the FTC or at least lower the company’s exposure level, and discuss potential clinical trial designs and the process for securing FDA approval.