Advertising and Marketing Claims

FTC penalties can kill a healthcare business.  That is why FTC and state law advertising compliance is a must from the start of any healthcare operation.

The Scope and Sweep of FTC’s Enforcement Powers

Our advertising and marketing compliance attorneys are highly skilled in Federal Trade Commission (FTC) and state law advertising issues.  Advertising and marketing claims can plague a healthcare company with both liability and regulatory enforcement.

The federal Trade Commission Act (FTCA) requires that all claims be truthful and non-misleading.  With this one requirement, the FTCA sweeps everything into FTC’s jurisdiction, everything a company says publicly (including online) in its marketing materials about its services or products.

FTC can require that a company disgorge its unlawful profits; penalties can be in the millions.

One of the core requirements behind FTC’s enforcement authority is that all claims be substantiated.  As FTC explains in the FTC Policy Statement Regarding Advertising Substantiation, the underlying requirement is that advertisers have a reasonable basis for advertising claims before they are disseminated.  Failure to have a reasonable basis for the claims is an unfair and deceptive act or practice in violation of the FTCA.

This requirement severely limits the claims that can be made, independent of FDA concerns.

For claims involving healthcare services or products, those claims must be substantiated by competent and reliable evidence.

FTC explains that its investigative and law enforcement authority includes a civil penalty and an injunction against business practices.  Recent FTC enforcement actions and settlements have included:

  • Aura Labs, for an Instant Blood Pressure app
  • Withdrawal Ease and Recovery Ease, for “home opiate detox” products ($6.6 million judgment)
  • Mars Petcare, for dog food claims about extended dog lifespan
  • NextGen Nutritionals, for claims that HCG could create weight loss of up to 80 pounds in 40 days
  • CellMark Biopharma, for claiming that “CellAssure” could treat side effects of cancer treatment
  • Health Research Laboratories, for claims about treating Alzheimer’s and dementia
  • Prevagen, for claims about treating memory loss
  • Avrom Lasarow, for marketing a “mole detective” family of healthcare apps.
  • Various companies, for making claims about preventing Zika.

FTC explains:

Marketers need competent and reliable scientific evidence to support all health, safety, or efficacy claims their ads convey to consumers expressly or by implication. And they need it in hand before the ad is disseminated. For most disease-related representations – especially claims as serious as Zika prevention or risk reduction – that means well-controlled human clinical testing.

The above are among the many actions FTC has brought regarding health claims.  As FTC notes, any claims should be identified, and reviewed, before going to market.  This is where FTC legal counsel can be invaluable.  Once a healthcare company comes within the FTC’s enforcement cross-hairs, FTC is likely to extract considerable enforcement authority and the legal costs will probably escalate geometrically in responding.

What FTC Looks For, In Evaluating Health Claims

In reviewing and evaluating health claims, 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.  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.

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.

According to FTC, well-controlled clinical studies are the most reliable form of evidence, and that “replication of research results in an independently-conducted study adds to the weight of the evidence.”

Among other things, advertisements must ensure that necessary qualifying information is presented clearly and prominently (for example, disclosing if subjects in a trial engaged in regular exercise and followed a restricted-calorie diet as part of the study regimen, and clarifying that users should follow the same to expect similar results).

FTC does not guarantee that following its guidance will not result in enforcement action; rather, it encourages industry to avoid puffery and over-stating results of studies that are not supported by the data, methods, and results.

Again, because of the breadth of FTC’s review and the draconian nature of FTC enforcement action and penalties, it is well worth having a healthcare lawyer who understands FTC law review all advertising and marketing claims before making those claims public.  That means legal counsel should conduct a thorough review of the website, social media sites, and other online as well as physical marketing materials before these materials are disseminated.

FTC Also Initiates Enforcement for Deceptive Endorsements & Testimonials

In addition to the above guidelines, FTC also addresses claims based on consumer experiences or expert endorsements.

FTC does not allow such claims if they are deceptive or could not be substantiated if made directly.

So for example, FTC notes that “vague” disclaimers such as “results may vary” do not cure a deceptive claim.

Similarly, overstating the qualifications of an expert can be considered deceptive and misleading.  For example, referring to someone as a “leading clinician in joint health” is deceptive if the expert has not conducted sufficient trials to support this endorsement.  In addition, the expert’s connection to the company affects the “weight and credibility” of the endorsement.  Even if the expert is adequately qualified, his or her position with the company must be clearly disclosed.

FTC also cautions against misleading consumer endorsements: FTC states that an advertisement employing endorsements by one or more consumers about the performance of an advertised product or service will be interpreted as representing that the product or service is effective for the purpose depicted in the advertisement.

According to FTC, the advertiser must possess and rely upon adequate substantiation, including, when appropriate, competent and reliable scientific evidence, to support such claims made through endorsements in the same manner the advertiser would be required to do if it had made the representation directly, i.e., without using endorsements. Consumer endorsements themselves are not competent and reliable scientific evidence.

FTC guidance gives detailed examples of consumer endorsements that could be considered misleading.  Because so many healthcare companies rely heavily on consumer testimonials and expert endorsements, it is important to have legal counsel review these for potential FTC exposure.

Healthcare Products Especially under FTC Scrutiny

Be sure to seek experienced FTC and advertising and marketing legal counsel, whether you are marketing:

  • Cosmetics
  • Dietary Supplements
  • Medical Devices
  • Mobile Medical Apps
  • Telemedicine
  • And in general, any healthcare service or product.

FTC coordinates enforcement with other federal agencies, including FDA and the state Attorney General (AG), particularly where the product or the claims represent a high risk to the consumer.

For example, in its post about the FTC enforcement action against Aura Labs (App developer under pressure for deceptive health claims), FTC notes:

The lifeblood of health claims is substantiation.  The consequence of inaccurate measurements of blood pressure or other key health stats can be – quite literally – as serious as a heart attack. That’s why companies must have solid science to support all health claims, express and implied.

FTC is correct.  Health claims often are the lifeblood of the success for a healthcare startup, particularly; and the lifeblood of those claims, is substantiation.

When your business operates online, consult with experienced FTC and state advertising and marketing compliance counsel. We help structure your business at the outset, provide regulatory compliance advice to ensure that you are meeting relevant legal standards, and advise on implementing corrective action for your business to achieve greater compliance.


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