FTC Dannon Settlement Expands Substantiation Requirements

As we have previously reported in connection with the FTC's settlement with Nestle and Iovate as well as the POM Wonderful lawsuits, the Federal Trade Commission continues to expand its enforcement of health claims by makers of food and dietary supplements. In this instance, the FTC settlement with The Dannon Company resolves claims the company made with respect to certain health claims for Activia Yogurt and DanActive dairy drink that contain probiotics. The settlement, which took effect on February 3, 2011, is consistent with the recent prior expansive FTC settlements while even further expanding the substantiation requirement for essentially equivalent products.

The agreed upon Consent Order governs yogurts, dairy drinks, and probiotic foods. Under the agreement, Dannon agreed to stop claiming that Activia relieves temporary irregularity, unless the representation is non-misleading and the advertising expressly states that that eating three servings a day is required to obtain the benefit, or unless Dannon has competent and reliable scientific evidence that the benefit can be achieved from eating less than three servings a day.

While the FTC claims a flexible standard for substantiation, it is expressly requiring at least two well-designed studies covering claims for temporary irregularity and slow intestinal transit time. For essentially equivalent products, the Order includes new ingredient testing standards regarding differences in ingredients impeding or inhibiting the effectiveness of the ingredients. The Order will permit reliance on substantiation for products that are "essentially equivalent" -- a product that contains the identical ingredients, except for inactive ingredients (e.g., inactive binders, flavors, preservatives, colors, fillers, excipients), in the same form and dosage, and with the same route of administration (e.g., orally, sublingually) -- with a significant substantiation obligation. However, the company must be prepared to demonstrate that the amount of additional ingredients, combination of additional ingredients, and any other differences in formulation are unlikely to impede or inhibit the effectiveness of the ingredients in the essentially equivalent product, a standard the FTC had previously expressed in litigation but not part of formal policy.

Additionally, consistent with other prior recent settlement, even though the FDA was not part of the matter, the Order prohibits making of people avoid catching colds or the flu, unless the claim is approved by the Food and Drug Administration.

The Dannon FTC settlement is in addition to a multi-state settlement the company reached with thirty-nine states in December 2010. In the state settlement Dannon agreed to pay $21 million as well as an agreement to certain injunctive terms.

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