The FTC's "Beefed Up" Definition of Competent and Reliable Scientific Evidence and POM's Counter-Offensive
Perhaps the quickest way to draw FTC scrutiny is to tout the health or disease prevention benefits of a dietary supplement or food product. The FTC has recently gone after Kellogg Company for claims that its Frosted Mini-Wheats® cereal improved kids' attentiveness and that its Rice Krispies® cereal boosted their immunity and against Airborne for claims that its product could prevent colds or flu. In order to settle actions brought by the FTC, companies typically pay significant amounts in consumer redress and agree not to make claims regarding the health benefits of their products unless they possess "competent and reliable scientific evidence." For decades, "competent and reliable scientific evidence" was defined in FTC consent decrees as:
[T]ests, analyses, research, studies, or other evidence based upon 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 to yield accurate and reliable results.1
Significantly, no set number of studies or researchers or even type of study ( e.g ., the "gold" standard of a double-blind, placebo-controlled study) was required. Companies could rely on foreign studies, animal studies and studies conducted on product ingredients and similar, but different products, provided the study was conducted in an objective manner by someone qualified to do so, using procedures generally accepted to yield accurate and reliable results.
In the wake of recent court setbacks2 , beginning in the fall of 2009, the FTC began advising the food and supplement industry that it would be "tightening up" the definition of "competent and reliable scientific evidence" to, in the FTC's words: (1) make it easier to enforce; (2) better harmonize it with laws and regulations administered by sister agencies ( e.g . FDA) and (3) address situations where a single piece of research, although conducted according to established protocols, achieved results inconsistent with the weight of scientific evidence in the relevant field.3 True to its word, in July 2010, the FTC unveiled its new, more stringent definition of "competent and reliable scientific" evidence in a consent decree that it negotiated with Nestle Health Care Nutrition, Inc. ("Nestle").4
I. The Nestle Consent Decree
In July 2010, the FTC announced that it had entered into a consent decree with Nestle in connection with its Boost® Kid Essentials drink products. According to the FTC, Nestle claimed the drinks provided a variety of health benefits, including preventing the risk of upper respiratory tract infections (including 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, which was now defined as:
[A]t lease two adequate and well-controlled human clinical studies of the product, or of an essentially equivalent product, 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.
"Essentially equivalent" is defined as:
a product that contains identical ingredients, except for inactive ingredients (e.g., binders, colors, fillers, excipients), in the same form and dosage, and with the same route of administration (e.g., orally, sublingually) as the Covered Product; provided that the Covered Product may contain additional ingredients if reliable scientific evidence generally accepted by experts in the filed demonstrates that the amount and combination of additional ingredients is unlikely to impede or inhibit the effectiveness of the ingredients in the Essentially Equivalent Product."
In other words, the FTC is now requiring certain claims be substantiated by: (1) two clinical studies; (2) that should be evaluated in light of the entire body of scientific evidence and (3) conducted on the same or a substantially equivalent product by different researchers, independently of each other. In addition, the FTC is also requiring that certain disease or illness claims first be pre-approved by the Food and Drug Administration.
Importantly, the two-well-controlled-clinical-trials requirement is limited in scope - it does not apply to all efficacy and performance claims; rather, the traditional FTC standard of competent and reliable scientific evidence still applies to those claims. For example, the Nestle Order requires at least two studies as substantiation for claims regarding reduction of the duration of diarrhea and reduction of daycare or school absences due to illnesses. However, it imposes the traditional "competent and reliable scientific evidence" standard, not the "two-study minimum," standard with respect to all other claims regarding the health benefits, performance or efficacy of a nutritional drink (with the exception of the reduction of the risk of upper respiratory infections claim, which now must be approved by the FDA).
Only time will tell whether the FTC intends to modify its substantiation policy concerning dietary supplement claims and other health-related representations generally, or if it will continue to evaluate claims on a case-by-case basis and tailor consent decrees to require heightened substantiation for only those claims that are the principal focus of the FTC's complaint - as it appears to have done with Nestle. What is clear, however, is that if a company has been making aggressive claims regarding the health benefits of a particular product, the FTC will undoubtedly require the heightened "two study" standard be part of any consent decree it negotiates with the company. The company will have to make a business decision to either agree to the narrowly tailored language or litigate. At least one company - POM Wonderful, LLC ("POM") - has decided to litigate.
II. POM Takes on the FTC
The FTC sought to enforce its new standard against POM, the maker of POM Wonderful 100% Pomegranate Juice and POMx supplements. On September 13, 2010, however, POM sued the FTC in the United States District Court of the District of Columbia seeking a declaration that the FTC's new standard of requiring two human clinical studies is invalid. The complaint alleges that the FTC had represented to POM and announced to the supplement industry through the published consent order against Nestle that the FTC has adopted a "new standard" and set requirements that it is universally applying against food and dietary supplement companies to determine whether an individual or company is engaged in deceptive advertising.5 POM contends that this new standard being invoked by the FTC is "directly contrary to over twenty (20) years of FTC food advertising rules and regulations, " Id. POM further contends that by requiring health claims pass muster under the Food, Drug & Cosmetic Act, FTC is impinging on FDA's authority and violating POM's freedom of speech and its First and Fifth Amendment Rights.6 POM contends that, to its detriment, it had relied on the FTC's long-standing policies and rules and it had "invested tens of millions of dollars in funding independent research and in establishing a research program to better understand and promote the nutritional qualities and health benefits of pomegranates."7 In essence, POM is arguing that the FTC has put out new, obligatory advertising standards not by going through the formal rule making process - which would give the industry a chance to have input - but by publishing the consent decree that it entered into with Nestle.8
On the one hand, POM makes valid points. Companies ought to be able to reasonably rely on government standards so that they can decide how to allocate their resources. That is why federal agencies are required to undertake formal rule-making procedures and to allow businesses time to respond to proposed rules and, if necessary, modify their practices in advance of the rules' implementation.
On the flip side, however, POM is basically disputing a non-existent standard, since the FTC is - at least at this point - considering claims on a case-by-case basis through consent orders and not via rulemaking. For the dietary supplement industry, which relies heavily on its ability to make health claims when appropriate, heavy repercussions could result from the POM litigation. If POM loses, the FTC will be able to point to a federal court decision upholding the more stringent "two-study" standard, in any future rule making or other proceeding.
III. What this Means for Advertisers and Manufacturers of Dietary Supplements
FTC has always frowned on disease claims, and is merely formalizing 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. Changing the required standard from "competent and reliable scientific evidence" to two well-controlled human clinical studies strongly suggests that animal studies and studies conducted on individual ingredients will be discounted by the FTC. It also means that only companies with the substantial resources needed to sponsor two human clinical studies will be able to market products making health claims.
In sum, dietary supplement makers should consider the types of health claims that they are making, the support that they are relying upon and when the studies are not on the exact product, whether they can demonstrate that any differences in the products would not impact safety or efficacy.
2 In 2007, the FTC brought a compliance action against Lane Labs-USA, Inc. alleging that the company had violated consent decrees that it negotiated with the Commission in 2000, and sought to have the company held in contempt. In 2009, the District Court of New Jersey denied the FTC's motion and the FTC appealed. In October 2010, the Third Circuit reversed the District Court's decision and remanded the matter for a more detailed, claim specific review.
3See, The FTC's Advertising Priorities , Mary K. Engle, Associate Director for Advertising Practices, U.S. Federal Trade Commission, Arnold & Porter Roundtable Breakfast Series, October 22, 2009.
4See, In re Nestle Healthcare Nutrition, Inc . File No. 092 3087.
5POM Wonderful LLC v. The Federal Trade Commission , Case No: 1:10-cv-01539 (September 13, 2010), ¶ 5.
6Id. , ¶ 10.
7Id ., ¶ 9
8 The FTC responded with its own administrative complaint on September 27, 2010, charging POM with violating federal law by making deceptive disease-prevention and treatment claims. The FTC's complaint challenges claims made by POM regarding its products' ability to reduce the risk of prostate cancer, decrease arterial plaque, improve blood flow, reduce blood pressure and cure erectile dysfunction.
The views and opinions expressed in this article are those of the author and do not necessarily reflect those of Sills Cummis & Gross P.C.