Marketing Promoting Products’ Health Benefits Needs Annual Checkup

For marketers of health foods and food-derived products, supplements, nutraceutical products, and weight loss products, these are dangerous times. Many of these marketers tout their products’ health benefits in advertising. In the past two years, however, we have seen and increase in challenges to such advertising from the Federal Trade Commission (FTC), state Attorneys-General, class action lawsuits, and watchdog group and industry lawsuits.

The FTC, again and again, has asserted publicly that it actively investigates marketers who make health-related advertising claims. It has been activist in its quest to require food marketers to obtain FDA approval before making certain kinds of health claims. In addition, the FTC has tried to make the definition of competent and reliable scientific evidence more stringent. It has sought scientific substantiation that matches the pharmaceutical industry’s requirements, namely at least two double-blinded, adequately controlled tests.

Last September, the FTC reached a $25 million settlement with Reebok. The past year also saw FTC cases investigating Activia for its claims relating to irregularity and Oreck Vacuum for its flu-prevention claims. Last month, the FTC and 44 state Attorneys-General announced a $40 million penalty (the second largest ever) against Skechers for unfounded claims regarding the health and fitness benefits of its toner shoes. In announcing the settlement, the FTC referred to unproven claims that the toner shoes strengthen muscles, improve circulation, and promote weight loss. It also cited manipulated scientific evidence. The agency then told all marketers to “shape up their substantiation or tone down their claims.”

In addition, an FTC administrative judge ruled last month that POM Wonderful lacked competent and reliable scientific evidence for a number of its advertising claims that pomegranate juice and supplements can treat or prevent heart disease, prostate cancer and erectile dysfunction. Interestingly, the judge in POM ruled against the FTC’s contention that marketers support their advertising’s health claims for food or food-derived products with double-blind, controlled clinical trials. It also called the FTC’s attempt to impose an FDA preapproval process for health claims “overreaching.” This case will likely go to appeal, and any brand operating in this space should be watching it closely.

We have also seen an upswing of class action activity. In recent months, All Market, Inc. agreed to pay $10 million to settle a class action that it misrepresented the health benefits and nutritional benefits of its coconut water. Similarly, the maker of Nutella will pay almost $7 million to settle charges that it made false advertising claims regarding Nutella’s nutritional attributes.

Finally, the National Advertising Division of the Council of Better Business Bureaus (NAD) is also hearing an increasing amount of cases generated by industry concerning health related claims. In March, it referred to the FTC its investigation of Serranol, a dietary supplement claiming to be a pro-immunity, anti-inflammatory, pro-circulation, anti-aging product.

STEPS TO TAKE
Given the current climate, marketers in this category should engage marketing legal counsel to conduct an audit of their advertising claims and marketing practices to determine risk. Such an audit should be conducted at least annually to
• Review the advertising claims being made and question whether they imply their products can treat or cure medical problems.
• Examine the underlying scientific studies for such claims to ensure they adequately substantiate the claims with reliable and competent scientific evidence.
• Determine whether the marketer has a sufficient number of studies and whether it needs double blind, controlled studies to stave off risk.
• Review endorsements and testimonials to ensure they have appropriate disclaimers to comply with the FTC Endorsement and Testimonial Guides.