In today’s video, we return to FTC substantiation rules and talk about the dilemma substantiation causes for dietary supplement and cosmetics companies, as well as how to break through.

I’m Michael H. Cohen, founding attorney of the Cohen Healthcare Law Group. We’ve advised over a thousand healthcare industry clients on healthcare and FDA legal issues, including many companies with medical devices, dietary supplements, cosmetics, and OTC drugs. We’ve counseled companies on how to position their marketing claims so as to mitigate the risk of FDA and FTC enforcement, and we’ve counseled them when they have run afoul of FDA and FTC rules.

As we’ve said, when it comes to compliance with legal advertising rules, dietary supplement, cosmetics and marketing companies face a dilemma.  The more aggressive the marketing, the bigger the likely compliance challenges; and the stricter the compliance, the less effective the marketing.

Today we’ll discuss three things:

1. The notion of “100% compliant.”
2. The scope of enforcement and its consequences.
3. Some high-danger claims.

First, the notion of 100% compliant. 

Some healthcare industry clients say they want to be “100% compliant,” but they don’t always mean that.  If you’re a physician in a small clinical practice, you might want to be as compliant as possible, and reduce the risk of potential Medical Board discipline and lawsuits; and as legal counsel we can help you mitigate risk.

If, on the other hand, you’re a healthcare startup, you might be more industry in pushing the industry envelope, and, keeping up with your competitors. We advise these clients as well.

And some of our large dietary supplement and cosmetics and medical device clients feel the FDA is just plain evil – like Evil Corp in Mr. Robot – the rules suck, the Agency sucks, they aren’t going to pay attention, and if they get a warning letter from FDA, well, so be it, at least they are being true to what they believe.

We can certainly empathize.  Yet, from a risk management perspective, the best quote here is from Clint Eastwood in Dirty Harry, when he says: …. “Are you feeling lucky?  Are you?”

Second, the scope of FDA enforcement and its consequences. 

As we’ve said before, FDA can choose not to give you a warning letter, and to step up enforcement instead.  And even the FDA warning letter will require you to take huge compliance steps, which could well tank your current marketing plans.  As well, other enforcement agencies as well as private plaintiffs can piggyback off the FDA warning letter with their own actions.

FTC’s penalties are often even more draconian.  In a settlement with Skechers USA, the FTC charged that the company made deceptive claims that its sneakers would help consumers lose weight and strengthen and tone various body parts.  According to the FTC, those claims lacked substantiation by randomized, controlled clinical trials.  The settlement: 40 million dollars.

Third, some high-danger claims.  Here are some of the claims FTC says will likely incur extra enforcement scrutiny:

• Claims that the product is ‘clinically proven.’
• Claims about evidence (and the evidences do not meet FDA’s rigorous criteria above).
• Claims about expected results.
• Claims about mechanism or scientific process.

So, for example, before you put on your product website, “clinically proven,” take a pause and realize you are upping the likelihood of federal enforcement.

And if you think you’re making things better by proclaiming all the scientific benefits of your health and wellness product, you might actually be making things worse.  If you cannot back up these claims by competent and reliable scientific evidence, FTC may find a substantiation issue.  And, the more you try to explain the mechanism of action—how ingredient X causes result Y—the greater the potential gap between your explanation and what FTC requires for you to substantiate the claim.

Thanks for watching.  Here’s to the success of your healthcare venture, we look forward to speaking with you soon