Dietary supplement legal review could save your company

If you want to sell healthcare products online, the legal hurdles can be steep. 

Enforcement and Liability Risks

Manufacturers of health products can get in legal trouble, if claims do not meet all the specified criteria or in any respect can be considered deceptive, false, or misleading.

The risks come not only from because FDA, FTC and other government agencies (such as the state attorney general) can take enforcement action.  Or the National Advertising Division (“NAD”) of the Better Business Bureau or private plaintiffs can sue.

Chiropractic Clinic Under DA Fire–A Sad but True Story

A chiropractic clinic put an ad in a local paper for laser therapy services.  Although the chiropractor did not face any flak from the state chiropractic board, she received an enforcement letter from the district attorney for false advertising.  The chiropractor responded that all she had done was to copy the text she had received from the manufacturer.

The DA did not buy the defense and did not care about the manufacturer, who was located in another state.  He had set his sights on the chiropractic professional corporation.  And that’s when the client hired a lawyer.  The ensuing battle took months to resolve, and many pages in which the chiropractor cited the scientific evidence supporting her claims, and the DA disputed all the conclusions.  Finally, the chiropractor withdrew the ad.  There was no further legal fallout; but the cost of prevention–having the ad reviewed before publishing it–would have been far less.

This is a great quote – sad but true:

Options are limited for companies once they are in government’s crosshairs. Legal challenges to government prosecutions are expensive, costing hundreds of thousands of dollars in litigation costs. The government has far greater bargaining power compared to the manufacturer. Unfortunately, might is right. Short of litigation, a company will find itself enjoined from business, relabeling, and/or destroying its product, or worse, subject to criminal penalties.

(this is from Mark DuVal & Mark Gardner, Advertising and Promoting Dietary Supplements: How to Avoid Being Consumed by Government Prosecutors, FDLI (September/October 2011), p. 17).

As I used to say in early networking days, “don’t roll the dice – get legal advice!”

The DA is not the only tenacious fighter a company might have to face among enforcement authorities.  Tangoing with FTC can, among other things, result in an FTC judgment that requires the company to disgorge all profits – i.e., in all practicality, denude the company of its revenues and consign its dreams to the ash-heap of history.

So What’s Involved?

Dietary supplement legal review focuses on analyzing dietary supplement claims, labeling, and substantiation (the evidence required to make a health claim).

These tasks can vary in scope and cost, depending on many factors, including:

• the number of dietary supplements involved
• the type of dietary supplement product
• the number and nature of claims being made for each supplement
• the dietary supplement ingredients (and whether any are active ingredients in OTC drugs, for example; or, on the other side of the spectrum, new dietary ingredients (NDIs) that require a new dietary ingredient notification to FDA
• the labels on the dietary supplement bottles and packages
• the amount of marketing content requiring review (online or in print)

Quick Overview of Some relevant Dietary Supplement Law

Here are some basic rules to keep in mind.

Misbranding: Under the Dietary Supplement Health Education Act of 1994 (the “DSHEA”), is illegally “misbranded” if, among other things: its labeling is false or misleading in any particular; the container or packaging is misleading or fails to contain the information required by federal law; or it makes inappropriate claims.

The term “labeling” means all “labels” and other written, printed, or graphic matters (1) upon any article or any of its containers or wrappers, or (2) accompanying such article. The term “label” is further defined to mean “a display of written, printed, or graphic matter upon the immediate container of any article.”

Disease claims v. structure/function claims: Disease claims are impermissible under the DSHEA; structure/function claims are allowed.

A disease claim is a claim to diagnose, cure, mitigate, treat, or prevent disease. Disease claims (also known as “drug claims”) require prior approval by FDA and may be made only for products that are approved drug products. “Disease” is defined as “damage to an organ, part, structure, or system of the body such that it does not function properly (e.g., cardiovascular disease), or a state of health leading to such dysfunctioning (e.g., hypertension); except that diseases resulting from essential nutrient deficiencies (e.g., scurvy, pellagra) are not included in this definition.” Examples of disease claims include: “shrinks tumors.”

FDA warns in its Overview of Dietary Supplements: “a product sold as a dietary supplement and promoted on its label or in labeling as a treatment, prevention or cure for a specific disease or condition would be considered an unapproved—and thus illegal—drug. To maintain the product’s status as a dietary supplement, the label and labeling must be consistent with the provisions in the Dietary Supplement Health and Education Act (DSHEA) of 1994.”

A structure/function claim describes the role of a substance intended to maintain the structure or function of the body, or general well-being from consumption of a nutrient or dietary ingredient. Unlike disease claims that cause products to be regulated as drugs, structure/function claims do not require pre-approval by FDA. Structure/function claims can include a statement that describes the “general well-being” a consumer can attain from the consumption of a nutrient or dietary ingredient. An example of a structure-function claim is: “Calcium builds strong bones.”

In essence, the goal is to craft a claim that falls within the structure/function category, does not fall into the disease claim category, yet provides a competitive marketing advantage.

10 ways a statement can be a disease claim: To clarify what makes a statement an impermissible disease claim (i.e., a claim that the product will diagnose, mitigate, treat, cure, or prevent disease), FDA clarifies such a statement, explicitly or implicitly, claims that the product does one of the following 10 things:

1. Has an effect on a specific disease or class of diseases;
2. Has an effect on the characteristic signs or symptoms of a specific disease or class of diseases, using scientific or lay terminology;
3. Has an effect on an abnormal condition associated with a natural state or process, if the abnormal condition is uncommon or can cause significant or permanent harm;
4. Has an effect on a disease or diseases through one or more of the following factors:
   1. The name of the product;
   2. A statement about the formulation of the product, including a claim that the product contains an ingredient (other than an ingredient that is an article included in the definition of “dietary supplement” under 21 U.S.C. 321(ff)(3)) that has been regulated by FDA as a drug and is well known to consumers for its use or claimed use in preventing or treating a disease;
   3. Citation of a publication or reference, if the citation refers to a disease use, and if, in the context of the labeling as a whole, the citation implies treatment or prevention of a disease, e.g., through placement on the immediate product label or packaging, inappropriate prominence, or lack of relationship to the product’s express claims;
   4. Use of the term “disease” or “diseased,” except in general statements about disease prevention that do not refer explicitly or implicitly to a specific disease or class of diseases or to a specific product or ingredient; or
   5. Use of pictures, vignettes, symbols, or other means;
5. Belongs to a class of products that is intended to diagnose, mitigate, treat, cure, or prevent a disease;
6. Is a substitute for a product that is a therapy for a disease;
7. Augments a particular therapy or drug action that is intended to diagnose, mitigate, treat, cure, or prevent a disease or class of diseases;
8. Has a role in the body’s response to a disease or to a vector of disease;
9. Treats, prevents, or mitigates adverse events associated with a therapy for a disease, if the adverse events constitute diseases; or
10. Otherwise suggests an effect on a disease or diseases.

FDA further clarified these categories, with examples, in Regulations on Statements Made for Dietary Supplements Concerning the Effect of the Product on the Structure of Function of the Body (Jan. 6, 2000). FDA stated that claims can be “easily understood by consumers” to refer to a disease even if the statement does not in fact mention the disease. For example, the statement, “controls blood sugar in persons with insufficient insulin” would be considered an impermissible disease claim as it could easily be understood to refer to treatment of diabetes.

FDA also noted: “For example, depending on how it was used in a product’s labeling, a scientific reference entitled ‘Using Ingredient X For Diabetes’ could constitute a claim that the product can diagnose, mitigate, treat, cure, or prevent diabetes, without using any of these specific terms.” Id., p. 1025.

In these regulations, the FDA also discussed the extent to which referring to scientific information could create an impermissible disease claim:

[T]he use in labeling of a publication title that refers to a disease will be considered a disease claim only if, in context, it implies that the product may be used to diagnose, treat, mitigate, cure, or prevent disease. Highlighting, bolding, using large type size, or prominent placement of a citation that refers to a disease use in the title could suggest that the product has an effect on disease. Placing a citation to a scientific reference that refers to a disease in the title on the immediate product label or packaging will be considered a disease claim for that product. The agency will also consider whether the cited article provides legitimate support for the express structure/function statement made for that dietary supplement. Enhancing the bibliography with citations to scientific references that refer to a disease in the title and that have no reasonable relation to the statement made will be considered a disease claim. Similarly, the agency will consider whether citations are to bona fide research.

 FDA/FTC Heightened Scrutiny of Weight Loss Claims: While proper weight loss claims can be considered structure/function claims, obesity statements are disease claims; further, FDA and FTC have actively enforced DSHEA rules with respect to such claims. Areas of particular enforcement have included claims:

• About weight loss without proper diet or exercise;

• About fat absorption, fat burning, and fat blocking;

• That a product is “clinically proven.”

FTC has identified areas of concern in Red Flag: Bogus Weight Loss Claims, cautioning that “misleading weight loss advertising is everywhere, preying on consumers desperate for an easy solution.”

In 2003, FTC hosted a seminar on weight-loss fraud, which included the agency’s assessment of weight loss claims associated with dietary supplements.   FTC’s expert panel, comprised of 10 bariatric physicians, medical doctors, and weight loss experts from across the United States, addressed weight loss claims.

FTC specifically rejected claims that: (1) a product can cause weight loss or fat loss to specific areas of the body; (2) that thermogenic agents, or similar substances, can result in increased metabolism; and (3) that dietary ingredients can block fat or promote weight loss through the blockage of absorption of fat, calories, or other nutrients.

FTC therefore starts with an assumption that consumption of dietary supplements, without substantial changes to diet and exercise, alone is inadequate to cause statistically significant (or material) weight loss. That regulatory history adds to the substantiation burden. If ad copy contains “clinically proven” claims (or “establishment” claims), for example, one must ensure that those studies are of high methodological quality sufficient to meet FTC’s rigorous standards. In short, the FTC has explained that requirement as follows:

[T]wo randomized and controlled human clinical trials (RCTs) of the Covered Products that are randomized, well controlled, based on valid end points, and conducted by person qualified by training and experience to conduct such studies. Such studies shall also yield statistically significant results, and shall be double-blinded unless Respondents can demonstrate that blinding cannot be effectively implemented given the nature of the intervention.

See Order, In re POM Wonderful LLC, et al., FTC Docket No. 9344 (Jan. 10, 2013), at 2.

In general, claims present proper structure/function claims when they use terms such as “stimulate,” “maintain,” “support,” “regulate,” or “promote” in association with a body system, organ, or function affected by the supplement.   In addition, “use as part of your weight loss plan” is acceptable.

OTC Drug Regulation: Although dietary supplements are regulated as foods and (assuming no disease claims are made) not drugs, it is also helpful to review over-the-counter (“OTC”) drug regulation of ingredients and therapeutic categories, as these can sometimes indicate additional regulatory requirements for product labeling, depending on the ingredient or the claim.

For example, there are specific regulations for new drugs offered for hair loss prevention, oral wound healing, nail-biting or thumb-sucking deterrents, prevention of nocturnal leg muscle cramps, and so on. Within these regulations, there are requirements for drug products containing active ingredients offered over-the-counter (OTC) for certain uses.

This includes OTC drug products for topical acne, diarrhea, antiperspirant, cold/cough/allergy/bronchodilator/antiasthma, dandruff, analgesia (including fever blister, cold sore, diaper rash, and poison oak), laxative, antifungal, antimicrobial, and so on.

In addition, it is useful to review the OTC Ingredient List and the Status of OTC Rulemakings (which is organized by Therapeutic Category). The reason is that either ingredients used in the dietary supplement formulation, or, the therapeutic category itself, may fall under OTC regulation. The Ingredient List also lists specific OTC monographs applicable to specific active ingredients (for example, eucalyptus oil—cough/cold (antitussive).

New dietary ingredients: The manufacturer or distributor of a “new dietary ingredient” (NDI) (a dietary ingredient that was not marketed in the United States before October 15, 1994) must submit a premarket notification to FDA at least 75 days before introducing the supplement into interstate commerce or delivering it for introduction into interstate commerce, unless the NDI and any other dietary ingredients in the dietary supplement “have been present in the food supply as an article used for food in a form in which the food has not been chemically altered.”

At this level of review, we have not checked the ingredients in any of the proposed products, to ascertain whether any constitute an NDI.

Substantiation: In addition to making a valid structure/function claim and avoiding a disease claim, the manufacturer must:

(1) have substantiation that such statement is truthful and not misleading;

(2) include a required disclaimer in the labeling (“This statement has not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure, or prevent any disease.” FDCA §403(r)(6). The statement must be “prominently displayed and in boldface type”); and(3) notify FDA no later than 30 days after the first marketing of the product that the manufacturer is making the statement in accordance with the applicable regulation. The requirements for this submission are in 21 CFR § 101.93(a).

With regard to substantiation, the FDA uses the FTC’s standard of “competent and reliable scientific evidence” (see below). In determining whether this standard has been met, the FDA considers four issues:

1. The meaning of the claim(s) being made.
2. The relationship of the evidence to the claim.
3. The quality of the evidence.
4. The totality of the evidence.

 Federal Trade Commission (FTC) Requirements: The Federal Trade Commission Act (“FTCA”) prohibits “unfair methods of competition” and “unfair or deceptive acts or practices.” The Federal Trade Commission (“FTC”) works with the FDA to ensure that consumers get accurate information about products, including dietary supplements. With regard to products regulated as foods, the FTC prohibits “any false advertisement” that is “misleading in a material respect.”

Accordingly, while the FTC shares jurisdiction with the FDA over labeling and claims, the FTC additionally monitors to ensure that food advertisers do not engage in unfair or deceptive acts or practices. Similarly, the FTC monitors advertisements about dietary supplements to ensure that they are truthful and not misleading, and are substantiated.

The FTC applies a two-step process: (1) identify all express and implied claims that the ad conveys to consumers; and (2) assess the scientific evidence to see whether it is adequate to support the claims that are being made. In assessing the implied claims, the FTC looks to the “net impression” conveyed by all elements of an ad, including the text, product name, and depictions.

The FTC also requires that disclosure of any necessary qualifying information be presented clearly and prominently so that it is actually noticed and understood by consumers. Similarly, where there are limited studies, and there are “significant limitations to each of the studies and a better controlled study is necessary to confirm whether the effect is genuine:” Disclosure of qualifying information must be clear and prominent.

Like the FDA, the FTC has a substantiation requirement. Advertisers must “adequate support for their claims.” Specifically: “Under FTC law, before disseminating an ad, advertisers must have a reasonable basis for all express and implied product claims. What constitutes a reasonable basis depends greatly on what claims are being made, how they are presented in the context of the entire ad, and how they are qualified.” The FTC looks to several factors including:

1. Type of product (e., products related to consumer health or safety require greater substantiation).

2. Type of claim (claims that are harder for consumers to assess require more substantiation; this includes “health claims that may be subject to a placebo effect or technical claims that consumers cannot readily verify for themselves”).

3. Benefits of a truthful claim.

4. Cost/feasibility of developing substantiation for the claim.

5. Consequences of a false claim (including physical injury if the consumer relies on an unsubstantiated claim of therapeutic benefit).

6. Amount of substantiation that experts in the field believe is reasonable (the FTC looks to “accepted norms in the relevant fields of research” including those developed by a government or authoritative body).

FTC typically requires that claims about the efficacy or safety of dietary supplements be supported with “competent and reliable scientific evidence.”

FTC defines “competent and reliable scientific evidence” as: “tests, analyses, research, studies, or other evidence based on the expertise of professionals in the relevant area, that have been conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted in the profession to yield accurate and reliable results.”

State law: State law also regulates drugs, devices and cosmetics. For example, the Sherman Food, Drug and Cosmetic Laws target packaging, labeling, and advertising. In general, California law parallels federal definitions o foods and drugs, and has similar rules prohibiting misbranding.

California has general rules prohibiting false advertising (false or misleading statements), as well as rules prohibiting false advertising of any food and advertising of any food.

California specifically regulates dietary supplements, and dietary supplement labeling and advertising. California also has specialized rules such as requirements applicable to retail establishments that sell certain designated dietary supplements.

Next Up

In subsequent posts, we’ll apply some of these rules to some dietary supplement products to show how some careful strategic legal thinking can potentially save a company from regulatory catastrophe.