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FTC Expands Claim Substantiation Requirements in Two Settlements

In two recent settlements announced the same day, the Federal Trade Commission has expanded the type of substantiation required for a marketer making certain health claims.

In two recent settlements announced the same day, the Federal Trade Commission has expanded the type of substantiation required for a marketer making certain health claims. In those instances, the FTC requires that the claims be backed by at least two adequate and well-controlled human clinical studies. Moreover, under those settlements, certain disease or illness claims must now first be pre-approved by the Food and Drug Administration.

Traditionally, marketers were required to possess "competent and reliable evidence" for health claims. This was generally interpreted as "tests, analysis, research studies or other evidence based on the expertise of professionals in the relevant area, that has been conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted in the professions to yield accurate and reliable results." These settlements seek to change that standard in favor of a "gold" standard of double-blind placebo controlled studies for certain types of claims.

The Settlements

One settlement involved food giant Nestlé, S.A regarding claims that it made for its probiotic product BOOST Kids Essential. The product was advertised as protecting users from colds and flu by strengthening the immune system to reduce absences from school. The other settlement involved Health Sciences USA Iovate companies, and their marketing of supplements that cause weight loss or treat and prevent colds, flu, allergies and Hay Fever.

Under the Nestlé settlement, the company agreed to substantiate probiotic and nutritionally complete drink claims relating to the reduction of absences from daycare or school due to illness by having at least two adequate and well controlled human clinical studies of the product. Such studies are defined as "a human clinical study conducted by persons qualified by training and experience to conduct such study. Such study shall be randomized, and, unless it can be demonstrated that blinding or placebo control cannot be effectively or ethically implemented given the nature of the intervention, shall be double blind and placebo-controlled." For other health claims for covered products, Nestlé must possess "competent and reliable scientific evidence that is sufficient in quality and quantity based on standards generally accepted in the relevant scientific fields, when considered in light of the entire body of relevant and reliable scientific evidence, to substantiate that the representation is true." Furthermore, Nestlé is required to obtain pre-approval from the FDA for any covered product that it will reduce the risk of colds and flu. Under this provision, therefore, respondent cannot make a claim of cold or flu risk reduction unless the FDA has issued a regulation authorizing the claim based on a finding that there is significant scientific agreement among experts qualified by scientific training and experience to evaluate such claims, considering the totality of publicly available scientific evidence.

The Iovate settlement has some similarities and differences. Here, any claims that a drug or dietary supplement is effective in the diagnosis, cure, mitigation, treatment, or prevention of any disease, must be made in accordance with an FDA OTC drug monograph or new drug application or under the Nutrition Labeling Act of 1990. Under the settlement, any weight loss claims must be substantiated by two double-blind well controlled human clinical studies. To the extent Iovate relies upon studies of an "essentially equivalent product" for substantiation (a product having the identical active ingredients in the same form and dosage and route of administration), it must be in a position to substantiate that the amount and combination of any additional ingredients is unlikely to impede or inhibit the effectiveness of the ingredients in the product. Other health claims must be supported by "competent and reliable scientific evidence that is sufficient in quality and quantity based on standards generally accepted in the relevant scientific fields, when considered in light of the entire body of relevant and reliable scientific evidence, to substantiate that the representation is true."

Iovate agreed to pay $5.5 million on sales of over $45 million, a substantial amount less than gross sales, and without being subjected to an avalanche clause. While the FTC is obligated to treat companies the same, it is notable that the multinational giant Nestlé was not required to pay a single cent. The Nestlé settlement is subject to public notice and comment prior to acceptance.

Why is this Important?

The FTC has always frowned upon disease claims, it is again trying to formalize that policy in settlements. By prohibiting claims regarding the prevention of colds, flu, allergies or diseases, whether or not the claim is truthful and not misleading, unless the claim is first approved by the FDA, the FTC has made it much harder for marketers to make health related claims for dietary supplements. Also, by changing the required standard for weight loss and certain other health-related claims from "competent and reliable evidence for health claims, to two well controlled human studies, the FTC is assuring that only that wealthiest companies will be able to market products with health claims relating to weight loss, colds and illnesses.

The settlements also raise the issue as to whether the FTC has found a way to work around the various courts rejection of the FTC's attempt to require the "gold" standard of double-blind placebo controlled studies. Whether by doing so voluntarily in settlements will result in the uniform adoption of the gold standard will remain to be seen. However, the agency is trying to establish a standard that goes well beyond its formal policy and if adopted uniformly to other health claims will create a very high barrier to entry that will preclude small businesses from entering the marketplace and stifle innovation on products Americans want.

Dietary supplement marketers should nevertheless strongly consider the types of health claims that they are making, the bona fides of the substantiation they are relying upon, and when the studies are not on the exact product, being sure that they can prove that the differences in the products would not impact safety or efficacy.

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