Functional foods – or foods often fortified with nutrients that offer functional benefits – are among the fastest-growing categories of foods, but as their popularity increases, so too does scrutiny over whether these foods truly provide all of their claimed health benefits. The U.S. Food and Drug Administration (FDA) and the Federal Trade Commission (FTC) have increased their enforcement efforts against these products, and it seems that nearly every week another food company is challenging its competitors’ claims in court or before the National Advertising Division (NAD).
Amid this flurry of activity over functional foods, our newsletter editors caught up with Ivan Wasserman, a partner in Manatt’s Advertising, Marketing & Media practice, who counsels national and international food, dietary supplement and cosmetics companies on the legal and regulatory aspects of marketing, and who has successfully challenged and defended numerous clients in proceedings before the NAD. Ivan provided much-needed clarity on the types of claims that are allowed when marketing functional foods and highlighted the key issues companies should consider before embarking on a new campaign.
Editors: Now more than ever, the FDA and FTC are cracking down on the marketing and advertising of drugs, foods and functional foods. To kick off our discussion today, could you bring us up to speed on the definitions of these three closely related products?
Wasserman: The short answer is that the FDA looks at a product’s intended use. If a company claims its product is a food, or its label says so, or oral statements used by a salesperson suggest the product is a food, then it is. However, if a company claims that the product is intended to diagnose, cure, mitigate, treat or prevent disease, then it is a drug. Similarly, medical foods are formulated to be consumed or administered under the supervision of a physician and are intended for the specific dietary management of a disease or condition. Functional foods do not actually have a legal definition different than regular food; however, the conventional definition is any food that claims to have an additional “functional” benefit beyond simply supplying nutrition.
Editors: Given the slight variation between these definitions, it almost seems that there could be overlap between how these foods are characterized and marketed. Can companies sell functional foods as medical foods?
Wasserman: Despite how similar these may seem, the definition of “medical foods” is extremely narrowly construed by the FDA. Historically, claims about medical foods flew under the radar, but the new FDA leadership under the Obama Administration is now taking enforcement very seriously. For example, Bioenergy was marketing a food product called Corvalen as a “medical food” to treat conditions including fibromyalgia, chronic fatigue syndrome and cardiovascular disease. In November 2010 the FDA said the company could not make medical claims about this product because a recognized food regime to treat these specific illnesses does not exist. This action again demonstrates that “medical foods” are construed as a very narrow category.
Editors: If you work at a company and are preparing to launch a new functional food product – say, probiotic yogurt or eggs fortified with Omega-3 – what types of information must you place on your product’s label, and what information should you omit?
Wasserman: The FDA requires certain mandatory label information – such as the net quantity of contents, ingredient lists, nutrition labeling, allergen labeling, name/address of the manufacturer – and additionally, there are certain types of claims that you may voluntarily include on your label under very specific requirements. Certain health claims – or those that talk about disease risk reduction – are allowed for specific foods. However, the claims must either use the exact language the FDA has permitted for specific foods by regulation (known as “authorized health claims”), or the company must petition the FDA to make a health claim, after which the FDA may decide to issue an “enforcement discretion” letter laying out the specific conditions for making this claim (called “qualified health claims”).
Additionally, the FDA permits foods to use what are known as “structure/function claims.” These are claims about the effect of a food on the structure or function of the body. Such claims are allowed so long as the statement does not claim to diagnose, cure, mitigate, treat or prevent a disease, which would bring it under the classification of a drug. Companies must be careful, however, about implied “drug/disease” claims. For example, pictures of organs could be construed as beyond a structure/function claim and therefore fall outside of the scope of a functional food.
Editors: It seems that manufacturers and marketers of functional foods are on the defensive as of late. What changed with respect to regulatory enforcement efforts?
Wasserman: You’re correct. The FDA previously hadn’t been that active in going after functional foods. This changed dramatically under the new FDA leadership in the Obama Administration, starting in mid-2009 and continuing through the present time. For example, in February 2010 the FDA sent out 17 Warning Letters regarding label violations for unauthorized drug claims and nutrient content claims. Simultaneously, the agency sent an open letter to the industry stating that it was scrutinizing conventional foods that were making these types of claims.
Editors: Now that we’ve covered food labeling, could you elaborate on how advertising claims involving functional foods are regulated?
Wasserman: The FDA and FTC have joint jurisdiction over claims for food products. The FDA regulates from the labeling perspective, whereas the FTC evaluates advertising claims. These lines are getting blurred, however, particularly as companies increasingly make certain health claims on their Web sites. Both agencies assert jurisdiction over the Internet, and if you are making a claim on your Web site, you should worry about both. Further complicating the regulatory landscape impacting functional foods are the FTC’s settlement agreements with Iovate and Nestlé, which were entered into on July 14, 2011. Previously, when advertisers settled with the FTC, they would sign a document agreeing not to make the claims at issue again unless they have competent, reliable scientific evidence; however, exactly what that required was not expressly stated. Per the July 14 Orders, if Iovate and Nestlé wish to make certain claims again, they must have competent, reliable scientific evidence consisting of at least two clinical studies on the same or an equivalent product completed by independent researchers.
Editors: Did this settlement effectively change the level of support required for making advertising claims about functional foods moving forward?
Wasserman: No one knows for sure whether the FTC meant to create a new standard that every company must comply with, or whether the standards articulated in the Orders are applicable just to certain claims made by the companies subject to the Orders. The FTC is on record stating that it has not changed its standard going forward. On the other hand, it would behoove any advertiser to meet this heightened standard, as clearly it is one that the FTC considers to constitute competent, reliable scientific evidence for claims for a functional food.
Editors: Could you leave us with a final few words of wisdom and takeaways for advertisers and marketers of functional food products?
Wasserman: The No. 1 takeaway is to know the rules. They are complicated and long, but you should be very familiar with them before selling a product as a functional food. Secondly – and this is key – have good science and don’t oversell. Make sure express and implied claims are consistent with what your science shows, and if your studies are limited to populations (for example, age), make sure your claims are so limited. Lastly, extra care and caution should be put into marketing any functional foods specifically targeted to children. Functional foods for kids are in the highest-risk category and are at the top of the enforcement agenda. You must ensure your science is buttoned down.