Will FDA/FTC Substantiation Rules Blow Your Supplement Company Up?

Will FDA/FTC Substantiation Rules Blow Your Supplement Company Up?

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In today’s video, we discuss how FDA and FTC substantiation rules can ensnare, derail, and detonate dietary supplement and cosmetics companies.   

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.  

Will FDA and FTC substantiation rules blow up your dietary supplement or Cosmetics Company?  They well could.  Can you avoid this fate?  Perhaps. 

Here’s what you need to know. 

First, “substantiation” refers to the legal requirement, imposed by the FDA and the FTC that you have evidence to back up, or prove, any claims you make for your health and wellness product. 

Second, the legal standard for substantiation in the healthcare industry is very high.  According to the FDA and the FTC, all advertisers of health and wellness products must have “competent and reliable evidence” in order to substantiate their claims.  Typically, this requires controlled, randomized, double-blind human clinical studies with statistically significant results. 

Third, you can’t make claims to treat diseases if you don’t have the evidence; and, your marketing should be reviewed by FDA legal counsel, because even the way you use keywords can get you in trouble.  For example, one company was selling health foods and so-called “health packs.”  On its website, the company used metatags such as “diabetic cure” and “diabetes treatment.”   

FTC came in and said that the company had no scientific proof that its products could in fact cure or treat diabetes. 

Aside from the fact that FDA does not allow you to make drug claims for a dietary supplement, these claims were flawed because they lacked, substantiation. 

FTC not only penalized the company; it also imposed a two-million-dollar judgment against the company’s principals. 

Fourth, it’s bad enough that the FDA and/or the FTC could come in, seize your products, force you to stop sales, and impose huge penalties on your company and on you.  Once either of these agencies intervenes, it’s also likely that you will see enforcement action by other agencies, such as the State Attorney General or even a City Attorney.  And, it’s more likely that some opportunistic private plaintiff will take aim with a lawsuit. 

Recently, one of our dietary supplement clients emailed us a demand letter they had just received from exactly one such opportunistic private plaintiff.  The plaintiff—let’s call him Joe—had bought a bottle of X in the grocery store.  It turns out that Joe’s lawyer had just read online that our client had received a warning letter for FDA, and that warning letter said that our client had not made proper claims about X.   

Joe’s lawyer, being opportunistic, now demanded a lot of money and, that the company recall the product.  The lawyer alleged various violations of state law, including unfair business practices. 

Who knows, maybe the lawyer even got Joe to go and buy product X as an excuse to launch the lawsuit.  The cost of the product was under $20.  The cost to the client to defend the action … well, the client was not happy.   

It would have been better and smarter to have avoided the FDA warning letter in the first place. 

And among other things, that means paying attention to substantiation issues. 

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

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