The makers of medical products and the medical practices that recommend or prescribe those products need to be careful their advertising doesn’t misrepresent the health benefits of those products. The Federal Trade Commission (FTC) regulates the truthfulness of medical claims of many different businesses including those who work in the healthcare industry.
In December 2022, the FTC released its Health Products Compliance Guidance. Whether the failure to comply with these guidelines will automatically result in an FTC action remains to be seen. Healthcare companies and medical practices should consult with experienced healthcare compliance lawyers to understand how the guidelines apply to their business/practice, the consequences of non-compliance, and what proactive steps to take. In addition, retailers should also take steps to fully understand how the new FTC guidelines apply to their business model.
According to New Hope Network:
“Retailers could benefit from proactively evolving their purchasing requirements, contracts and supplier assurance documentation to ensure compliant health claims on their inventory. This could not only reduce their risk of being targeted by federal regulators or class-action lawsuits, but more importantly, could distinguish them from competing retailers in the eyes of shoppers by removing products with misleading health claims from their shelves.”
Four areas of concern for retailers when selling healthcare products such as dietary supplements are:
1. Is the retailer responsible for claims made on the labels of the products?
One recent class action lawsuit alleges that Amazon is selling illegal drugs “masquerading as therapeutic dietary supplements” whose labels make “unapproved disease claims.” In another lawsuit, Whole Foods Market was sued for “measurable levels of antibiotics found in beef products on their shelves that were labeled antibiotic-free.”
These sales may violate the terms of the FTC Health Product Compliance Guidance:
“Before disseminating an ad, advertisers must have adequate substantiation for all objective product claims conveyed, expressly or by implication, to consumers acting reasonably.”
Retailers should consult with skilled healthcare professionals to understand when and how sellers should review the product labels of the healthcare products they sell.
2. Is the retailer engaging in dishonest or misleading online marketing?
According to the updated Health Products Compliance Guidance, marketing claims include any claims that can be “inferred” from the whole advertising campaign. The campaign may include online marketing, pictures, weekly circulars, and more. The FTC can review the “net impression” of the campaign from the four corners of the advertisements. An ad may be misleading if even a small minority of consumers “take away a message that the business cannot substantiate.”
One possible “best practice” strategy is to test every claim with a representative panel to see how the claims are being interpreted.
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3. Does the FTC oversight of labels include private labels?
Some retailers sell their own products. One retailer, Trader Joe’s, was sued in 2020 in a lawsuit that claimed the retailer’s product, 12 Grain Mini Snack Crackers, was marketed as a 12-grain blend when the majority of the product was made with white flour. The combination of marketing a product in addition to selling the product creates additional legal exposure. In addition to retailers; marketing companies, corporate officers, and ad agencies may all be liable for deceptive guidelines.
4. The FTC’s new guidelines prioritize the accuracy of health claims and the effectiveness of the products sold
According to the 2022 Health Products Compliance Guidance:
“Claims about the health benefits of a product must be substantiated by ‘competent and reliable scientific evidence,’ which the FTC generally defines as ‘high-quality, randomized, controlled human clinical trials.’”
The population studied in any clinical trials should reflect the consumers most likely to use the product. Trials that focus on white men in urban areas, may not be relevant to females or people who live in rural or suburban areas.
Skilled healthcare lawyers can review what certifications and additional proof can help retailers evaluate the scientific merit and effectiveness of their products.
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The 2022 FTC Health Products Compliance Guidance – FTC oversight over the advertising of health care products
The new FTC guidance document updates and replaced the FTC’s Dietary Supplements: An Advertising Guide for Industry, issued in 1998.
The FTC has broad authority to prevent marketing acts or practices that are “unfair” or “deceptive.” This authority applies to dietary supplements and other health-related products – so consumers can make knowledgeable decisions about the products consumers buy and use. The two key principles are:
- Advertising must be truthful and not misleading; and
- Before disseminating an ad, advertisers must have adequate substantiation for all objective product claims conveyed, expressly or by implication, to consumers acting reasonably.
An ad is deceptive if the ad “contains a material misrepresentation or omission that is likely to mislead consumers acting reasonably under the circumstances.” Generally, claims about health benefits and safety of drugs, foods, dietary supplements and other health-related products “require substantiation in the form of competent and reliable scientific evidence.”
Advertising includes TV, print, radio, the Internet, and any other method used to create consumer interest and demand for healthcare products. These additional methods include packaging and label text and images, promotional brochures and booklets, digital content, social media, press releases, interviews with the press, trade shows, seminars, conferences, and indirect advertising “through healthcare practitioners or other intermediaries.”
Anyone who participates in deceptive marketing is potentially liable for FTC violations. This includes the parties who make the ads, conduct the promotions, or have authority over the ads and promotions. The responsible parties (as discussed above) may include expert endorsers, retailers, distributors ad agencies, catalog companies, and others.
FTC remedies can include an order to stop the deceptive claims, the requirement that future claims be truthful, and corrective advertising mandates. The FTC could ask the appropriate court to enjoin certain marketing practices, seek financial remedies, and possibly seek consumer refunds or civil penalties.
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How the FTC and FDA worth together to regulate the marketing of healthcare products
Both the FTC and FDA have oversight over healthcare product marketing. The two agencies coordinate their oversight through a Memorandum of Understanding called the “FDA-FTC Liaison Agreement.”
- The FDA has primary responsibility for claims that appear in labeling, including the package, product inserts, and other promotional materials available at the point of sale.
- The FTC has primary responsibility for claims in all forms of advertising.
- FTC advertising law applies to all products and claims – there’s no clear distinction between different categories of health-related products of claims like there is with FDA law.
The 2022 FTC Health Products Compliance Guidance – Factors that govern FTC oversight
The guidance compliance document reviews different factors that determine when and how the FTC investigates and reviews various advertising claims and what enforcement actions the agency may take. The guidance provides numerous examples that may be relevant to your product and your type of marketing claim.
We discuss a few of these factors and examples. For advice that applies to your business, please contact our experienced healthcare compliance attorneys.
Identifying claims and interpreting an ad’s meaning
The FTC begins its analysis of the truthfulness of advertising and marketing materials by examining all the express and implied claims being made to consumers. Marketers can’t suggest healthy, safety, or other product features indirectly that the advertisers couldn’t claim directly.
The intent of the marketers isn’t material. It’s the consumer’s reasonable understanding that counts. The marketing companies and other advertisers need to focus on the “net impression” of the ad including the product name, text, images, graphs, and charts. Marketers are responsible for each interpretation that is reasonably understood.
The FTC also considers the audience that will likely be reading the advertisement. “Terminally ill consumers might be particularly susceptible to exaggerated cure.” Consumer surveys can help show how consumers interpreted the ads.
A few examples in the FTC guidance document illustrate the issues involved in identifying and interpreting marketing ads:
- Example 1: A weight-loss marketing brochure shows physicians dressed in “white lab coats looking through microscopes, molecular structures, and a stack of medical journals.” The images imply scientific legitimacy, and that the product has been clinically evaluated.
- Example 2. An ad for a “children’s nutritional drink features an image of the straw from the drink box encircling a child to create a barrier as another child sneezes in her direction.” The image implies that drinking the product will protect children from catching the cold or the flu.
- Example 3. A vitamin supplement ad claims that 90% of heart doctors regularly take the product. This ad expressly states that 90% of cardiologists tried the supplement and implies that the product provides heart benefits. In addition to the express claim about the percentage of cardiologists who use the product, the ad likely conveys an implied claim that the product offers some benefit for the heart.
Some statements, depending on how the ad is worded or the context of the ad, about the product’s “effect on the normal ‘structure or function’ of the body may also convey to consumers an implied claim that the product is beneficial for the treatment of a disease.” Any ad that suggests any disease benefits “must be able to substantiate the implied disease claim even if the ad contains no express reference to a disease.”
Ads can be deceptive because of what the ad “fails” to say. The FTC Act, Section 15 provides:
“An ad is misleading if it fails to disclose information that is material in light of the claims in the ad or with respect to how consumers would customarily use the product. Thus, if the ad would be misleading without certain key qualifying information, that information must be disclosed.”
As an example, marketers should include any “significant limitations on an advertised health benefit.” When ads make express or implied statements about safety benefits, the ads should include statements about the safety risks. An example illustrates the point:
- Example 4. A multi-vitamin and mineral supplement ad claims the “product can eliminate a specific mineral deficiency that results in feelings of fatigue.” The FTC states that less than two percent of the general population suffers from the deficiency that the ad targets. The advertiser, according to the new FTC healthcare product compliance guidance, should make clear that only a small percentage of people who have this mineral deficiency are likely to be less tired after using the product.
The FTC guidance document provides additional examples of direct and implied marketing ads.
In part two of our discussion of the new FTC healthcare product compliance guidance document, we’ll discuss proper substantiation for claims and other advertising issues.
Drug manufacturers, marketers, retailers, and the physicians who recommend healthcare products need to be honest with consumers and with patients. The FTC, which regulates deceptive and misleading advertising in healthcare products, issued an updated compliance document for healthcare products in 2022. Businesses and medical practices should consult with experienced healthcare lawyers to understand their advertising obligations and when the FTC may consider their marketing efforts to violate the law.
Drug makers, distributors, retailers, and physicians should contact Cohen Healthcare Law Group, PC to understand how the FTC’s new healthcare product compliance document affects their marketing. Our experienced healthcare attorneys advise healthcare companies and medical practices about healthcare compliance laws and regulations.
Contact our healthcare law and FDA attorneys for legal advice relevant to your healthcare venture.
