New publication expands and replaces 1998’s dietary supplement guidance to cover all health-related products
On Dec. 20, 2022, the Federal Trade Commission’s (FTC) Bureau of Consumer Protection released the first revision to its business guidance of health products in 25 years. The newly released Health Products Compliance Guidance is a significant update to the Commission staff’s 1998 guide, Dietary Supplements: An Advertising Guide For Industry.
As evidenced by the change in its title, one of the major changes to the guidance is that all health-related claims will now be covered—not just the marketing of dietary supplements. The agency has incorporated decisions from many of the law enforcement actions that were brought since the previous guidance was released in 1998.
Furthermore, the new publication includes other FTC guidance updates that have been made over the past few decades, such guidelines on testimonials and endorsements as well as the policy statement on the marketing of homeopathic drugs.
The Commission stated in its FTC.gov business blog that another purpose of the revised guidance is to correct the “urban myths” that have been propagated by industry representatives who have misquoted or misinterpreted the previous publication.
The new guidance, as with all such FTC publications, is intended as business guidance only and is meant to assist company executives and marketers with the interpretation of the FTC Act and case law—derived policy statements.
The staff blog goes on to highlight four areas in particular where the guidance has been expanded.
- The breadth of products discussed: Unlike the 1998 publication on dietary supplements, the revised guidance includes examples of food products, over-the-counter drugs and medical devices.
- The “clear and conspicuous” standard and qualified claims: The new guidance provides great detail about the requirement for marketers to provide a “clear and conspicuous” disclosure when additional, qualifying information in an advertisement is needed to keep the ad from being deceptive.
- The “competent and reliable scientific evidence” standard: Claim substantiation is covered in significant detail in the revised guidance with emphasis on the FTC’s “rigorous substantiation standard of competent and reliable scientific evidence.”
- Testing methodology: The revised guidance expands on the key elements of quality research that were touched on in the previous guidance.
Regulatory Framework in a Nutshell
The first section of the Health Products Compliance Guidance highlights the FTC’s authority over health product advertising as well as its coordination with the Food and Drug Administration (FDA). To comply with Sections 5 and 12 of the FTC Act, product advertising—including health-related products—must be truthful, not misleading and also provide substantiation for product claims made expressly or even by implication.
The guidance specifies the various types of advertising that it includes in its compliance requirements as “statements or depictions on packaging and labeling; in promotional materials such as brochures or booklets; on the internet and in other digital content; in social media and influencer marketing; in press releases, press interviews, or other media appearances; at trade shows, conferences, and seminars; and indirectly through healthcare practitioners or other intermediaries.”
The new publication also emphasizes that liability for deceptive claims will extend beyond the product marketers to distributors, retailers, and expert endorsers, among others.
Coordination with the FDA
The new guidance next reminds readers that the FTC and FDA work in a coordinated manner and share enforcement duties related to the marketing of health-related products.
In a Memorandum of Understanding—often called the “FDA-FTC Liaison Agreement”—the two agencies detail their division of responsibilities: The FDA has primary jurisdiction regarding product labeling claims, and the FTC has primary jurisdiction for claims in all forms of advertising.
The guidance advises marketers that the Agreement between the two agencies does not limit the FTC’s ability to take action against deceptive claims found on product labeling.
FTC and FDA Law – Key Differences
As it relates to the marketing of health-related products, the approach and legal framework of the FTC and FDA include three important differences that are highlighted in the revised guidance.
- FTC advertising law applies to all products and claims. While the FDA distinguishes between various categories of product claims such as structure/function claims, health claims and drug claims, the FTC does not. The Commission uses the same protocol to regulate advertising for all health-related products, including food, supplements and drugs.
- The FTC does not pre-approve health claims. Unlink the FDA, the FTC does not require prior approval for health claims made in the marketing of foods, supplements and health products. However, the FTC wants companies to be aware that it “gives great deference to a determination by the FDA of whether there is adequate support for a particular health claim in labeling.”
Furthermore, health claims that do not meet the FDA’s “significant scientific agreement” standard may be considered deceptive by the FTC unless the label clearly explains the uncertain aspects with qualifying language that is noticeable and understood by consumers.
- The FTC does not require notification for “structure/ function” claims. The way that a nutrient or dietary ingredient affects the normal structure or function of the body is the basis of a structure/function claim. The FDA’s Dietary Supplement Health and Education Act of 1994 (DSHEA) established special regulatory requirements for these types of claims, among types of dietary supplement labeling claims.
While supplement marketers must notify the FDA of structure/function claims that appear in product labeling, this requirement is not mirrored by the FTC. However, the revised guidance emphasizes that both agencies require that marketers have prior substantiation that its claims are “truthful and not misleading.”
Applying FTC Law to Health-Products Marketing
The second section of the Health Products Compliance Guidance outlines the FTC’s two-step process of determining whether product marketing complies with FTC law: identifying and then substantiating claims.
When identifying product claims, the Commission looks at both express and implied claims. Because FTC law centers on the consumer’s understanding of claims and not the marketer’s intent, the “net impression” of a claim is the fundamental aspect considered when judging its legality.
Furthermore, the revised guidance reminds marketers that the Commission monitors claims from the standpoint of the intended audience. For example, if a product claims to treat a particular illness or condition, the Commission takes into account the susceptibility of someone with that illness to be swayed by the claim.
“An ad also can be deceptive because of what it fails to say,” states the guidance. An ad will violate Section 15 of the FTC Act if it fails to disclose information material to the claim. Examples include limitations on promoted health benefits or safety risks associated with the product.
The revised guidance also emphasizes the importance for qualifying information about a claim to be “easily noticeable” and easily understood by “ordinary customers.” In other words, the disclosure should stand out and should not be contradicted or inconsistent with any other part of the ad.
Under FTC law, marketers must have a “reasonable basis” for their product claims. Furthermore, health claims are subject to especially rigorous substantiation standards. The Commission’s revised guidance lists the factors that go into determining the appropriate amount and type of substantiation that is required, including the type of product, the type of claim, the benefits of a truthful claim, the feasibility of substantiating a claim, the consequences of a false claim, and the opinion of experts in the field regarding what is to be reasonably expected in a claim.
The guidance specifies several standards that it considers to be integral to meeting its substantiation standard of “competent and reliable scientific evidence.” At the forefront of this standard is the practice of randomized, controlled human clinical trials (RCTs).
The Commission considers RCTs to be the most reliable form of evidence and gives further credence to replicated studies conducted by independent researchers. However, the Commission notes that it values “quality over quantity” when it comes to scientific studies.
New Year, New Investigations
Commencing a year that saw the FTC dust off its full arsenal of regulatory weapons, including the Penalty Offense Authority as well as a reinvigorated push for rulemaking, the replacement of the 1998 guidance on supplements to cover all health-related products should not be overlooked by companies, including direct sellers, that wish to stay off the Commission’s target list.
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