Dietary Supplement Advertising-August 15, 2016
August 15, 2016
Please find below the latest edition of our monthly newsletter specifically for our clients marketing dietary supplements.  We hope this helps you stay out in front of regulatory challenges. See past issues here.

FTC DEVELOPMENTS 

Doggone Statistics
BY KATIE BOND AND JOHN VILLAFRANCO
 
The FTC recently announced a settlement over advertising claims for dog food. Why should supplement makers care? One: you might sell pet supplements. Two: the FTC’s argument why the claims fail is one that it makes in many cases involving health-related claims for humans.
 
The dog food maker had claimed that a study it conducted showed that, with its dog food and proper care, dogs were able to live longer than their breed’s typical lifespan. The dog food maker also claimed that several specific dogs in the study lived 30% longer. The FTC alleged that these claims were misleading given that the dog food maker’s evidence “consisted primarily of results from a single study,” and those results “showed no significant difference in the median age at death of dogs in the study relative to the typical age at death of dogs of the same breed.” The FTC, in effect, argued that, where the “typical age at death” is acting as the control, there was no between-group statistical significance.   
 
Regardless of what’s being tested, the FTC often argues that there should be between-group statistical significance in order for the testing to be considered reliable. In its guidance on dietary supplement advertising, the FTC states, “Statistical significance of findings is [] important. A study that fails to show a statistically significant difference between test and control group may indicate that the measured effects are merely the result of placebo effect or chance.”

LEGISLATION
Congress Passes National GMO Disclosure Law


The U.S. House of Representatives recently passed S. 764, a Senate-initiated bill establishing a national uniform standard for labeling of bioengineered foods, sometimes referred to as genetically modified foods or GMOs. The law will prevent a patchwork of state standards by preempting inconsistent state laws such as Vermont’s controversial labeling rule, which took effect on July 1 of this year.
 
The bill provides for a national uniform standard for the disclosure of bioengineered foods. Recognizing that label space is limited, in addition to allowing disclosure in text or a symbol on the label, the bill would alternatively allow disclosure through a digital link to a website (i.e., QR code or similar technology). This policy, as we previously wrote, was the result of a compromise between Senate Agriculture Committee Chairman Sen. Pat Roberts and Committee Ranking Member Sen. Debbie Stabenow, and the bill passed both houses with bi-partisan support.
 
The bill establishes some general contours for the disclosure rules, such as a policy that meat will not be considered bioengineered solely because the animal consumed bioengineered feed, and a carve out for foods served at restaurants. However, specific standards will be set by the Department of Agriculture, which is required to issue implementing regulations within two years of the law’s passage.  We will be closely monitoring those developments.

FDA DEVELOPMENTS

Cross-Border Undercover Sting Operation Results in Criminal and Civil Action for Supplement Sellers


 
The U.S. government kicked up its FDCA enforcement in July, as the U.S. Department of Justice announced that it was separately charging three individuals with criminal interstate trafficking of different unapproved drugs. Each of the three individuals was also the subject of a civil case brought by DOJ, which they have now agreed to settle by entry of consent decrees of permanent injunction.  Two of the companies are also subject to the consent decrees. (Both FDA and DOJ are tasked with civil and criminal enforcement under the FDCA. FDA typically initiates enforcement by identifying potential cases and referring them DOJ. Even when the DOJ leads the enforcement action on FDA’s behalf, FDA will often stay involved in the case.)
 
While the newly announced cases might sound like extreme examples – involving supplements marketed for treating serious diseases including herpes, cancer, Alzheimer’s, diabetes, and AIDS – they are salient reminders of the government’s criminal authority over unapproved drug claims. One case in particular has an interesting set of facts, involving a website that wasn’t quite scrubbed of drug claims, plus a cross-border sting operation. 

In 2011, FDA and the Federal Trade Commission issued a joint warning letter to Flor Nutraceuticals regarding the sale of its Herpaflor supplements. FDA took issue with the company’s claims that its products could treat herpes and cold sores and could prevent outbreaks; FDA considered these unapproved drug claims. The FTC, meanwhile, reminded the company that claims that a product can prevent, treat, or cure human disease must be supported by competent and reliable scientific evidence, including, when appropriate, well-controlled human clinical studies, substantiating that the claims are true at the time they are made. 
 
After the warning letter, the company modified the claims on its U.S. website so that it did not describe what the Herpaflor products are or purport to do. In other words, technically speaking, the website text did not contain any specific drug claims. However, the site referred to herpes outbreak prevention in the title of internal pages, so that the URL of a page made statements such as “Herpaflor Herpes Cold Sore HSV Outbreak Prevention Relief.” In addition, the website identified no other use for the products and misstated FDA policy on marketing unapproved drugs by assuring consumers that because of “regulatory requirements that affect the marketing of products such as Herpaflor … we can no longer provide descriptions of our products, or make any health claims for them”… “issue is the marketing of products, not their safety, so please do not be concerned.”
 
Meanwhile, according to DOJ allegations, a Canadian distributor continued to make the violative drug claims in Canada. So how did the U.S. government get a hook over the Canadian distributor’s marketing of the drug? By having a U.S. postal inspector posing as a consumer send an email to Defendants’ Canadian distributor, who responded by comparing Herpaflor favorably to Valtrex, a prescription herpes medicine. The government also documented shipments in interstate commerce to Canada, and a shipment to Washington, D.C.  
 
The announcement of this case in particular should is a reminder about potentially aggressive enforcement of the FDCA, including when a company attempts to use web search tools or foreign affiliates to skirt FDA restrictions. 


NAD CASES

A Tour of NAD Takes on Claims
BY KATIE BOND

The NAD recently reviewed claims for an omega-3 supplement. See Prevention Pharmaceuticals, Inc., NAD Case No. 5966 (July 2016). The NAD found that the advertiser had solid data for a variety of content and purity claims. The NAD, however, concluded that some claims overstated the underlying evidence. 
 
The case provides a reminder of several positions that NAD routinely takes on certain types of claims: 
  • Claims, like, “Free of heavy metals.”  “In determining when the presence of trace levels of a substance [will] prevent[] an advertiser from claiming its product is free of that substance, NAD considers (1) the reasonable expectations of the consumer, and (2) the applicability of the regulatory framework and/or industry standards.” 
     
  • Unqualified Superiority Claims (e.g., “Helps manage the body’s inflammatory response more than any other omega-3 supplement”).  The NAD takes the position that “[i]n order to make a market wide superiority claim, an advertiser should identify the dietary supplement products that comprise a majority of the current marketplace (usually 70-80%, based on sales data).” 
     
  • Health Benefit Claims.  In the NAD’s view, health benefit claims “should be supported by competent and reliable scientific evidence, generally defined as methodologically sound and statistically significant (p≤.05) human clinical trials with consumer relevant results.” The NAD will generally reject in vitro testing as sufficient evidence for a health benefit claim unless that there is evidence that the in vitro results “could reasonably be extrapolated to humans.”  
     
  • Claims Based on Ingredient Studies.  According to the NAD, “While advertisers may make properly qualified claims based on ingredients in their supplements, those ingredients must be present in [the] products in the same amount, formulation, and route of administration as the underlying ingredient studies.” 
The third bullet reflects that the NAD, like the FTC, continues to expect human clinical studies for an extremely wide variety of health-related claims. In general, for any disease claim or cause-and-effect claims (e.g., lose weight, improve memory), the NAD and FTC demand at least one clinical study. Relying on lesser evidence requires careful execution and careful compilation of the relevant support in order to decrease risk and maximize a company’s chances to win a challenge.

 
Lifestyle Blogging, Supplement Dust, and Third Party Liability
BY KATIE BOND

The NAD recently took a swipe at Goop, the lifestyle blog founded by Gwyneth Paltrow. To make “GP’s Morning Smoothie,” Goop had recommended using “dust” dietary supplements, such as Action Dust and Brain Dust, both sold by Moon Juice. With its usual mix of practical – if also luxurious – wisdom, Goop advised, “Choose your Moon Juice dust depending on what the day holds ahead . . . brain dust before a long day at the office, sex dust before a date, etc.” The blog hyperlinked to a purchase page that made additional claims about the dust. 
 
Because Goop agreed to permanently discontinue the dust claims, the NAD closed the case. In announcing the closing, the NAD took its turn at wisdom noting, “The advertising marketplace is changing and advertisers are increasingly using third parties, including endorsers, influencers, and affiliate marketers, to reach consumers. . . .The obligation to insure advertising claims are truthful extends beyond the manufacturer of the product to affiliates who market it.” 
 
The FTC and the NAD both occasionally go after third parties arguing that they are equally liable for false advertising as the manufacturer who creates the product and claims. Courts, however, have found that there is a difference in the level of culpability.
 
As we’ve discussed before, the FTC often cites the 1970s case, Porter v. Dietsch, to support the proposition that retailers may be held liable for false advertising. In that case, the FTC found a retailer liable for disseminating deceptive ads for a weight loss product even though the retailer hadn’t participated in creating the product or ads. The Seventh Circuit affirmed the FTC’s findings on liability, but significantly narrowed the FTC’s order. The narrowed order applied only to future advertising for weight loss products made by the same manufacturer, rather than any future advertising for any weight loss product. The court pretty clearly had misgivings with treating the retailer just like the manufacturer, even though it found that both are subject to the FTC Act. The court observed that “the extent of a party’s culpability has an important bearing . . . on the nature of the relief that should be granted.”
 
Courts – particularly, the Ninth Circuit – have been even more reluctant to find liability on the part of celebrities who repeat a manufacturer’s claims. In FTC v. Garvey, the Ninth Circuit found that Steve Garvey lacked the requisite knowledge of the falsity of claims he made for a weight loss supplement. More recently, the Ninth Circuit dismissed a case against Joe Theismann for his endorsement of a prostate supplement. The court reasoned that Theismann couldn’t be a “seller” for the purposes of California false advertising laws because he never held title to the products he promoted.
 
Whether you’re a third party swept up in a case or a manufacturer sweeping in third parties, it’s helpful to know what the real story is on third party liability. 

CONTACTS 
 

John Villafranco

Partner
Washington, DC
(202) 342-8423
Email

Sarah Roller
Partner
Washington, DC
(202) 342-8582
Email

Kristi Wolff
Partner
Washington, DC
(202) 342-8805
Email 

Katie Bond
Senior Associate
Washington, DC
(202) 342-8537
Email