Consumer Advertising Law Blog

Third Circuit Sends FTC and Lane Labs Back For Another Round

Many of us have been awaiting the outcome of the FTC's appeal to the Third Circuit in the Lane Labs case.  As we noted in a previous blog, the FTC had brought a compliance action against Lane Labs alleging that the company lacked adequate substantiation for several of its dietary supplement claims.  The District Court found that the FTC had failed to meet its burden, holding that while there was a disagreement among the scientific studies and experts, Lane Labs had acted reasonably under the circumstances.

Well the Third Circuit has spoken and it looks like we will all have to wait a bit longer for a complete resolution as the case was remanded back to the District Court for a more detailed, claim specific review rather than what the Third Circuit perceived to be a generalized review of the efficacy of the challenged products.

However, the Third Circuit did provide some useful insight along the way.  First, the Third Circuit affirmed the District Court's finding that the claim that AdvaCal would increase bone density in the hip was substantiated.  The Third Circuit did so notwithstanding the absence of any studies specific to AdvaCal because it agreed with Lane's expert that generic calcium trials showing an effect from calcium on bone density in the hip could be extrapolated to AdvaCal because "once the calcium is in your bloodstream, it doesn't make any difference what it was associated with before."  As we have noted in prior blogs, the FTC has adopted new language regarding "reliable and competent scientific evidence" that makes it increasingly difficult to make such "extrapolations" and it will be interesting to see what impact, if any, the Third Circuit's decision has on the FTC's efforts in this regard. 

On the other hand, the Third Circuit found a number of specific claims for AdvaCal to be unsubstantiated, including claims that it was comparable or superior to prescription medicine and that it was unique in its ability to increase bone density

With respect to the male fertility product, the Third Circuit upheld the District Court's finding that a claim of improvement in sperm count in one month was substantiated because the FTC at trial failed to question Lane Lab's expert witness further in regard to what it characterized as his ambiguous testimony. 

In analyzing the District Court's opinion that Lane Labs had not violated that portion of the Order that prohibited misrepresentations regarding tests and research, the Third Circuit held that the conclusion that AdvaCal was generally efficacious did not preclude a finding that the Company had misrepresented clinical studies.  The Third Circuit remanded the issue back to the District Court, noting though that it was "difficult to comprehend" how this provision of the Order had not been violated. 

Lastly, the Third Circuit formally adopted the defense of "substantial compliance."  The Court held that to assert the defense a party must show that it "has taken all reasonable steps to comply with the valid court order" and has "violated the order in a manner that is merely 'technical' or 'inadvertent.'"  In addressing whether Lane Labs had acted "reasonably" the Third Circuit held that the District Court had properly taken into account the FTC's "prolonged delay" (approximately 6 years) in initiating contempt proceedings.  The Court found, however, that the District Court had not made sufficient findings as to whether the alleged violations were "technical" or "inadvertent" and remanded this issue.

In summary, the FTC may have won the victory but lost the war. The Third Circuit's opinion clearly establishes that Lane Labs violated portions of its order, but the Court's opinion on the extrapolation of clinical research to other products and the impact of the long delay in the FTC's compliance process may have the more lasting impact. 

- Randy Shaheen

Green Tea Antioxidant Claims Trigger FDA Warning Letters as Agency Focuses More on FOPs

Last October, we wrote about FDA’s intention to adopt a more aggressive approach to regulating “Front-of-Package” (FOP) food labels. On March 3, 2010, FDA wrote an open letter to the food industry outlining its focus on developing “practical, science-based” criteria for FOP labeling as well as its plans to review FOP labels to determine compliance with existing regulations. At the time, the Agency issued 17 Warning Letters asserting that FOP statements for various products were misleading because they were unauthorized or unsubstantiated health or nutrient claims or were supplemented by or linked to claims or health information on company websites or in other materials that created an mistaken impression about the product or its potential health benefits.

A Warning Letter issued on August 30, 2010 to Dr Pepper Snapple Group and directed at FOP statements regarding antioxidants suggests that FDA is continuing its aggressive approach to regulating FOP statements as well as statements on company websites to which consumers are referred by the product labels (For example, see a warning about dietary supplements focused on a company website here).

The principal display panel of Dr Pepper Snapple Group’s “Sparkling Green Tea Ginger Ale” label contained the claim, “ENHANCED WITH 200 mg OF ANTIOXIDANTS FROM GREEN TEA & VITAMIN C” with the double asterisk referring to the statement, “**Each 8oz serving contains 200mg of antioxidants from Green Tea Flavonoids and Vitamin C.” The warning letter suggests that this claim is misleading for the following reasons:

• The use of the term “enhanced” suggests that the Ginger Ale is fortified with antioxidants - i.e., that it contains at least 10 percent more of the Reference Daily Intake or Daily Reference Value for antioxidants. However, “the FDA does not consider it appropriate to fortify snack foods such as carbonated beverages.”
• The Nutrition Facts on the back label of the bottle indicate that Vitamin C only accounts for 60mg of the 200mg of antioxidants identified. This implies that the remaining 140mg of antioxidants come from “green tea” or “green tea flavonoids;” however, “green tea” is not a recognized source of antioxidants by the FDA.

These “Green Tea” letters are yet another example of FDA’s renewed focus on food labeling as a part of its broader food safety agenda. They illustrate that FDA’s regulatory approach to food labeling focuses not only on the individual label statements, but what those statements imply about the product’s nutrient content when examined in conjunction with the Nutrition Facts on the back panel and the package as a whole. Moreover, as FDA increases its focus on regulating product-related internet and social media content, online content that supplements or explains FOP or package label statements will receive greater scrutiny. For companies, this trend underscores the importance of coordinating the development and review of FOP and other labeling with any supplemental online marketing.

Consistent with FDA’s practice, Dr Pepper Snapple Group had 15 days to respond to FDA with its plan to correct current violations and prevent future violations. Failure to correct the violations may result in regulatory actions without further notice, such as seizure or injunction.

- Vernessa Pollard and Daniel Stuart

Government Tries to Round-Up Truth about Botanicals Claims

In the 1970s Euell Gibbons seemed like a radical when a commercial for Post Grape Nuts featured him telling all of us that you could eat cat tails.

 

Even just a few years ago most of us would have thought that acai was something you shouted during a taekwondo match or that mangosteen was the name of a former Soviet Republic. Today, though, almost everyone wants to add botanicals to their food products, sometimes with claims and sometimes without. With big business comes big scrutiny, and the federal government has stepped up its oversight of botanicals both in terms of their efficacy and safety. NIH through its offices of Dietary Supplements and the National Center for Complementary and Alternative Medicine, has recently awarded over $37 million in grants for the study of botanicals such as plant oils, garlic, elderberry, St. John’s wort, soy and licorice. (No word yet on whether the grants require growing the botanicals, which would put a new twist on “shovel ready” stimulus projects.) This is on top of over $250 million that has been awarded in recent years. According to the Wall Street Journal (subscription may be required), these studies have suggested that chamomile really does make you calm and milk thistle may have an effect on the hepatitis c virus. but that gingko won’t help your memory and that St. John’s wort doesn’t help treat symptoms of ADHD in children. All of this follows on the heels of the FTC’s recent effort to require tighter substantiation standards for at least some dietary supplement claims. In light of these developments, anyone adding botanicals to their product, particularly those making claims, may want to stay abreast of the results of these government funded studies.

- Randy Shaheen

When Do I Need to Print Calorie Information on My Restaurant Menu? Yesterday, Says FDA.

On August, 24, 2010, the U.S. Food and Drug Administration published draft and final guidance documents for restaurants and States on how to interpret and implement the new restaurant menu labeling law. The new law, found in section 4205 of the Patient Protection and Affordable Care Act of 2010, requires all chain restaurants and “similar retail food establishments” with 20 or more locations to provide calorie information for “standard menu items” on menus, and to make other nutritional information available in writing on the premises.

FDA’s final guidance states that the law’s preemption provisions went into effect upon enactment with respect to non-identical state and local provisions, but the concurrently issued draft guidance takes the position that certain major provisions of the law also became effective -- and triggered industry labeling obligations -- when President Obama signed it on March 23, 2010, and provides other tips for compliance.

Although FDA’s position in the draft guidance is arguably contrary to the law, and the Agency has stated that it does not intend to enforce the law at this time, absent a change in position or legal challenge, affected chain restaurants and similar retail food establishments will need to consider implementation prior to the issuance of final regulations. Companies operating 20 or more vending machines are also covered.

States that were hoping to continue enforcing their own menu labeling requirements need to stop, unless those requirements are identical to the federal law.

Now that the draft guidance is out, chain restaurants and similar retail food establishments who thought section 4205 was missing important details have more to chew on, and should consider submitting comments on issues such as:

• Is This A Restaurant or “Similar Retail Food Establishment?” FDA tried to include everyone it could, including “coffee shops, delicatessens, food take out and/or delivery establishments (e.g., pizza take out and delivery establishments), convenience stores, movie theaters, cafeterias, bakeries/retail confectionery stores, food service vendors (e.g., lunch wagons, ice cream shops, mall cookie counters, and sidewalk carts), and transportation carriers (e.g., airlines and trains).” The law also covers “grocery stores [that] have cafes, food courts, or otherwise sell food that is for immediate consumption directly to consumers.” FDA is still mulling over how to regulate grocery stores selling dual-purpose foods (i.e., “that could be consumed immediately or could be purchased as traditional grocery items for future consumption, such as in-store bakeries, salad bars, pizza bars, or delicatessens”).

• There are calories in alcohol? Who knew! Yes, there are calories in alcohol. And according to FDA they have to be printed on the menu or menu board. Margaritaville, take note.

• But she said to hold the mayo? Does she need a new menu? No. Custom orders are not covered. But FDA will be coming up with regulations by springtime to cover what it calls “variable items” like pizzas with toppings chosen from a list.

• Do I need to print calorie information on every menu? It seems that way based on FDA’s interpretation. Although the law says it must be printed on the “primary writing” a customer uses to select an item, FDA has interpreted this to include menu boards, take-out menus, and internet menus. That suggests that, at least in FDA-speak, “primary” means “every.”

• Can I put the calories in the fine print under the coleslaw? FDA wants to see it in big print, right next to the menu item, just like you would list the name of the item and price, and at least as large as whichever is bigger.

• Can I at least omit the trans fat? FDA’s draft would require trans fat to be listed with the additional nutritional information (fat, cholesterol, sodium, carbs, sugars, fiber and protein) that must be provided in writing upon request.

For more information about this development, click here.

- Trent Norris and Zack Allen

FTC Complaint Includes at Least 3 Life Lessons That Should Make Any Advertiser’s “Best Life” List

Some of us are certain that the cure to all aging, memory loss and weight gain woes can be found in the Brazilian Amazon. According to the Federal Trade Commission, if so, it hasn’t been identified just yet. The FTC recently filed a complaint with the Northern District of Illinois, which granted a temporary restraining order against Central Coast Nutraceuticals and other related parties for false advertising and other deceptive practices related to its AcaiPure and Colopure products.

There are at least 3 life lessons from the complaint:

1) Free Cannot Come with Strings Attached: The FTC asserted the “free” and “risk free” trials were anything but. According to the FTC’s complaint, Central Coast failed to disclose adequately that consumers would automatically be charged for other products unless they opted out and would be enrolled in an automatic monthly membership for the products they ordered. The FTC has long been focused on negative option programs and what constitutes clear and conspicuous notice of material terms, including holding workshops and publishing a lengthy Staff Report last year. Any recurring charges must be expressly authorized and if future charges will vary, advance notice must be provide to customers. The FTC thanked Visa and the Better Business Bureau of Central, Northern & Western Arizona for their assistance in rooting out these practices. And Visa had this to say: "We have tightened enforcement of our rules against banks whose merchants generate excessive levels of cardholder disputes because of deceptive marketing. We also make it a priority to partner with law enforcement and agencies like the Federal Trade Commission and support their investigations such as this case."

2) Use Extra Caution with Health Claims: Central Coast claimed AcaiPure “Was Not Created For Those People Who Only Want to Lose A Few Measly Pounds” and that it would quickly reshape your body. The producer also claimed that its Colopure could eliminate “excess weight and toxic buildup,” thereby helping to prevent colon cancer. The FTC has longstanding guides detailing its views on what substantiation is required for dietary supplement makers and for weight loss products. As we have recently blogged, the FTC has been tightening its requirements for substantiation of health-related claims. Investigating health claims has long been a top enforcement priority for the FTC and we believe will continue to be so.

3) Endorsers Need to Endorse the Product and Do Not (Repeat DO NOT) Mess with Oprah: The FTC has also revised its Testimonial and Endorsement Guides. We have blogged before about what is new and what is old. One thing that is timeless is the requirement to actually have an endorsement from one you claim endorses your product. The FTC asserts Central Coast claimed implied phony endorsements from Oprah Winfrey and Rachael Ray, including posting a picture of Oprah on its website and claiming Rachael called Acai her “number one superfood”. Both (here and here) provided the FTC with declarations used in the TRO proceedings.

- Amy Mudge and Michael Thorpe

Preemption, Puffery Arguments Fail to Derail Case Against VitaminWater

A federal court in New York recently denied an effort to dismiss a consumer class action based on allegedly deceptive nutrient content and health claims made in relation to the highly popular VitaminWater beverage.(We have previously blogged about this case here).

The consumer advocacy group Center for Science in the Public Interest (CSPI), along with a plaintiff’s firm, claims that VitaminWater’s labeling and marketing mislead consumers by (1) drawing consumer attention away from a significant amount of sugar in the product; (2) portraying VitaminWater as a healthy snack food that provides nutritional benefits, when the nutrients in question are only available in the product through fortification; and (3) suggesting VitaminWater contains nothing but vitamins and water.

Defendants moved to dismiss the claims arguing the claims were preempted by the Federal Food, Drug, and Cosmetic Act (FDCA).

Plaintiffs countered, arguing a lack of preclusion of their state law claims because the claims are based on misleading statements that violate FDA regulations. The Complaint alleges violations in the form of (1) making health claims or implied nutrient-content claims despite the high amount of sugar in the product (up to 33 grams of sugar per 20 oz. bottle); (2) making health claims about the product despite the fact that VitaminWater has been fortified with vitamins in violation of FDA’s fortification policy; and (3) prominently featuring the name of some, but not all of the ingredients on the product and in its name.

The court pointed out that while the FDA has recognized some “disqualifying nutrient levels” (i.e., levels of a particular nutrient such as fat, saturated fat, cholesterol, or sodium that preclude promoting health claims in conjunction with such a product), sugar was not placed on that list and hence, “any claim under state law solely premised on the notion that vitaminwater’s high sugar content made its health or implied nutritent content claims misleading is preempted.

Defendants’ victory, however, was small and short-lived, as the Court’s opinion went on to find that the arguments that health claims were made in violation of the FDA’s fortification policy or "Jelly Bean Rule" and that the product name misleadingly references only two of vitaminwater’s ingredients, but omits the presence of a key, unnamed ingredient (sugar), were not preempted.

Further, the Court determined that most plaintiffs met the minimum pleading standards under each states’ laws in question. The Court was unpersuaded by Defendants’ position that placing the sugar content on the drink’s label made consumer confusion relating to the health of VitaminWater unreasonable: “a nutritional panel, though relevant, does not as a matter of law extinguish the possibility that reasonable consumers could be mislead. . . .” The Court was equally unpersuaded by Defendant’s position that slogans such as “vitamins + water = all you need” and sayings like “healthy as a horse” constituted puffery such that “no consumer could reasonably be misled into thinking VitaminWater was a healthy beverage. . . .” (It has also earned VitaminWater a bit of mocking in the popular press which can sometimes be a problem with a puffery defense.)

The outcome of the case remains to be seen. However, the Court’s decision clearly raises a warning flag in terms of relying solely upon the nutrition label to “qualify” any claims that might otherwise be made. However, CSPI’s Litigation director, Steve Gardner, appears to be optimistic and perhaps emboldened to take on new challenges. He said “. . . vitaminwater is no more than non-carbonated soda, providing unnecessary added sugar and contributing to weight gain, obesity, diabetes, and other diseases. We look forward to representing all Americans whom Coke has deceived.”

- Randy Shaheen and Jessica Halbert

Competent and Reliable Scientific Evidence Just Isn't What It Used to Be

The FTC has been promising for awhile to tighten the definition of its "competent and reliable scientific evidence" standard.  Last week, the agency made good on that promise in consent orders reached with a Nestle subsidiary and Iovate Health Sciences.

The orders provide that for certain claims "competent and reliable scientific evidence" is defined as

"at least two adequate and well-controlled human clinical studies of the product, or of an essentially equivalent product, conducted by different researchers, independently of each other, that conform to acceptable designs and protocols and whose results, when considered in light of the entire body of relevant and reliable scientific evidence, are sufficient to substantiate that the representation is true."

"Essentially equivalent" is in turn defined as

"a product that contains the identical ingredients, except for inactive ingredients, (e.g., binders, colors, fillers, excipients), in the same form and dosage, and with the same route of administration (e.g., orally, sub lingually), as the covered product; provided that the Covered Product may contain additional ingredients if reliable scientific evidence generally accepted by experts in the field demonstrates that the amount and combination of additional ingredients is unlikely to impede or inhibit the effectiveness of the ingredients in the Essentially Equivalent Product." 

(There are other new provisions not discussed here, including a requirement that certain claims require FDA approval.)

These new definitions apply in the case of Nestle's Health Care Nutrition division to claims that any drink containing probiotics or any nutritionally complete drink, with certain exceptions, reduce the duration of diarrhea in children under the age of thirteen or reduce absences from daycare or school due to illness.  In the case of Iovate, the new definitions apply more broadly to claims that any dietary supplement, food or drug causes weight loss, including rapid weight loss.

We think the key points from these new definitions is that the FTC has now predetermined that certain claims must be substantiated by:

1. two human clinical studies;
2. that should be evaluated in light of the entire body of scientific evidence; and
3. are conducted on a product with identical active ingredients to the advertised product and in the same form, dosage and route of administration, unless there is sufficient reason to believe that the differences are unlikely to affect the efficacy of the advertised product.

Of course, the FTC has in the past required two clinical trials to substantiate certain claims so the requirement itself is not new.  What is new is determining that up front in a consent order.  Essentially, the FTC has taken the guesswork out of its definition of "clear and competent scientific evidence" and presumably minimized the risk of embarrassing court losses like Lane Labs.

However, for advertisers, the FTC's new definition has potentially significant ramifications.  Several questions, though, remain unanswered.  First, how broadly does the FTC intend to apply its new 2 clinical trial requirement?  Our guess is that the Commission may try to insert the language (or the FDA approval requirement if the claim is a disease claim) in many orders covering health related claims.  Second,the requirement that any supporting tests be conducted on an essentially equivalent product could have a significant impact on advertisers, depending upon how broadly or narrowly the FTC interprets the exception for differences that are unlikely to make a difference.  Advertisers that comes out with a low fat version of a product or makes some other relatively minor product change may now struggle with whether the relevant health claims for the modified product have to be resubstantiated.  Other companies that found it prohibitively expensive to conduct their own research for their product, but instead relied upon clinical studies of the principal ingredient may similarly face some difficult decisions. 

Our two cents worth is that determining in advance the necessary quantity and quality of substantiation for claims ahead of time is an exercise in trying to balance risk: setting too strict a standard that discourages innovation and consumer communications versus allowing advertisements prone to misleading claims because the substantiation bar is set too low (or that courts will interpret general substantiation requirements in a way to harm consumers). Perhaps the benefits outweigh the harm when the product and claims at issue are ones that are unlikely to be truthful in any circumstance (e.g. "lose weight while you watch TV").  In that situation, there is little risk of inadvertently suppressing innovation or consumer communication and significant risk that misleading claims might otherwise be made.  However, when the product and claims are ones that could in some circumstances be substantiated the risk/benefit analysis seems reversed.  In this scenario, product innovation and communication of truthful information to consumers might be overly discouraged while the heightened standard does little to further prevent the communication of misleading information.  In either event, if you know anyone pondering a career path, going into clinical research might not be such a bad idea. 

- Randy Shaheen and Diem-Mi Lu  

The Heartburn (Litigation) Is Gone...For Now

AstraZeneca, maker of the blockbuster acid reflux drug Nexium, may have finally ended its five-year class action litigation battle with the Pennsylvania Employee Benefit Trust Fund, other third party payors, and individual plaintiffs. On May 6, 2010, in Pennsylvania Employee Benefit Trust Fund v. Zeneca, Inc., the US District Court of Delaware granted AstraZeneca's motion to dismiss plaintiffs' amended complaint for failure to state claims of consumer fraud, unjust enrichment, and negligent misrepresentation. The court's opinion, written by Judge Eduardo Robreno, is enlightening in its canvassing of several state consumer protection statutes and, in the process, detailing some nuanced distinctions in consumer protection law, such as the difference between a causation and reliance requirement and between a product purchased for "personal, family or household purposes" and for commercial purposes. It also underscores the high threshold for pleading causation and reliance in consumer fraud actions.

The litigation has centered around whether AstraZeneca, after the patent for its highly successful "purple pill" Prilosec expired, merely "repackaged" Prilosec as Nexium, with marginal chemical modifications. The union third party payors and individual plaintiffs claim that the advertising campaign for Nexium was misleading and resulted in billions of dollars of needless drug expenditures, since consumers and third party payors were induced to buy Nexium, even though a less-costly, equally-effective generic option was available. The plaintiffs first filed the class action in 2005. It eventually landed in the US Supreme Court in 2009, only to be remanded all the way back again to Delaware, where the federal district court finally addressed plaintiffs' substantive claims of consumer fraud, unjust enrichment, and negligent misrepresentation (the prior appeals focused on preemption issues).

The court first decided that the law of each plaintiff's home state (Pennsylvania, New York, Michigan) applied. As a result the court wrestled with significant differences between the consumer protections laws of Delaware (no reliance requirement), Pennsylvania (reliance requirement), New York (no reliance, but causation requirement), and Michigan (no reliance, but must involve product purchased for "personal, family, or household purposes").

In relating the reliance and causation requirements of Pennsylvania and New York law, respectively, the court said plaintiff's reliance on a defendant's misrepresentations is not "wholly irrelevant" to the analysis of causation. The plaintiff does not have to prove justifiable reliance or that the defendant's misrepresentation was the lone motivation behind a product purchase, but the plaintiff "must allege some awareness of a defendant's misrepresentation prior to purchasing the product in order to establish the element of causation." Since neither the Pennsylvania nor New York plaintiffs alleged to even be aware of the physician-directed marketing or direct-to-consumer advertising of Nexium, their consumer fraud claims were dismissed. Without any awareness of defendants' representations, Plaintiffs' own opinions as to the quality of a product add nothing to the causation and reliance analysis.

Michigan consumer protection law, on the other hand, lacking a reliance requirement, only regulates "the conduct of a business providing goods, property, or service primarily for personal, family, or household purposes..." The "ultimate purpose for which the product is purchased is determinative," not the "characterization of the purchaser." The question then for the court was whether the Michigan plaintiff - a third party payor - was a "'mere conduit or intermediary' for its participants' use of Nexium or whether it purchased Nexium principally to engage in its own commercial enterprise." Since the plaintiff's complaint offered no explanation for how it purchased Nexium (directly or via a partial reimbursement to its members), the court dismissed it.

Though this case has been pending for five years, the majority of time has been consumed with issues outside the sufficiency of the pleadings. Therefore, Judge Robreno left the door open for the plaintiffs to refile, as he dismissed the complaint without prejudice. Through his opinion, he also provided them with a roadmap for amending their complaints to avoid dismissal. Stay tuned to see if AstraZeneca's heartburn (litigation) fully subsides after all. 

- Randy Shaheen and John Eason

FDA’s New Internet Research: Connecting “Unbranded” Websites to Drug Manufacturers and Faulting Manufacturers for the Content

FDA has again made clear its interest in ensuring that “less traditional” forms of marketing of FDA-regulated products do not mislead consumers or otherwise pose a potential risk to public health. Back in November 2009, FDA held a public hearing and opened a docket on promotion of medical products using the Internet and social media tools, such as Google searches, Twitter, Facebook, and Wikipedia. This hearing alerted companies to increased FDA scrutiny of, among other things, company-sponsored websites and third-party websites that may be receiving manufacturer grants or other funding.

On April 21, 2010, FDA’s Division of Drug marketing, Advertising, and Communications (DDMAC) issued a Warning Letter to Novartis Pharmaceuticals Corporation concerning two disease awareness sites sponsored by Novartis, www.gistalliance.com and www.cmlalliance.com -- even though these websites nowhere mentioned the Novartis cancer drug by name, Gleevec®. FDA nonetheless considered these websites to be “branded promotional materials for Gleevec” that promoted the drug for an unapproved use, failed to disclose risk information, and made unsubstantiated dosing claims that could “put patients at higher risk of experiencing serious adverse events.”

FDA did some detective work in linking the two disease awareness sites to Gleevec. Among other alleged connections, FDA found that the two websites were:

• “perceptually similar” to the Novartis Gleevec product site” in that both included a “distinct orange” color scheme and similar design layouts, for example;
• registered to Novartis;
• contained numerous specific references to a set of clinical guidelines that recommend Gleevec exclusively for first-line treatment of the two cancers discussed in the websites, chronic myeloid leukemia (CML) and gastrointestinal stromal tumors (GIST);
• discussed the use of a certain class of anti-cancer drugs for first-line treatment of CML and GIST, often in conjunction with the Novartis name -- yet Gleevec is the only product in this drug class indicated for these uses and the only one made by Novartis for these uses, details that are “well known in the oncology community”; and
• presented data and corresponding literature references with titles that included the established name of the drug (imatinib), and at least one of these literature references described the pivotal clinical study submitted to FDA in support of the Gleevec approval.

These and other factors made FDA consider the websites “Gleevec-specific promotions” and thus subject to FDA regulation. FDA identified in these promotional sites a number of alleged violations, including promotion of an unapproved use for Gleevec and omission or minimization of risks associated with the drug.

FDA did further detective work in tracing back to Novartis a third website, www.bloodleveltesting.com, which was prominently displayed on the two main “Gleevec-branded” websites above and which included allegedly unsubstantiated dosing claims for Gleevec. A pop-up disclaimer for this third website -- you are “moving to an external website independently operated and not managed by the Novartis Pharmaceuticals Corporation” -- did nothing to dispel FDA’s belief that Novartis was responsible for its content. Among other links to Novartis, FDA found that the website was registered to Novartis, included repeated references to Novartis and hyperlinks to the two “Gleevec-branded” websites above, and identified no other pharmaceutical manufacturers or drugs in Gleevec’s drug class except Novartis and imatinib (Gleevec’s established drug name), respectively. That Novartis offered a Blood Level Testing Program at no cost to healthcare providers further suggested a link between the company and the site www.bloodleveltesting.com. Finding Novartis “at least partly responsible for the content of this website,” FDA faulted Novartis for the website’s unsubstantiated dosing claims, which FDA found “deeply troubl[ing]” from a public health perspective.

This Warning Letter confirms what the November 2009 public hearing, and an earlier batch of Untitled Letters concerning “sponsored-links” (issued on March 26, 2009 and posted in April 2009 here), already indicated: websites, even apparently “unbranded” websites, are under increasing FDA scrutiny. Companies should be careful about how connected they are to disease awareness and other informational sites. Too many connections -- even despite pop-up disclaimers and the like -- may cause FDA to consider the websites promotional materials and fault the company for any information therein that may be misleading or otherwise in violation of the Federal Food, Drug, and Cosmetic Act.

- Margaret Renner and Daniel Kracov

FDA Proposes New Requirements For TV & Radio Prescription Drug Ads

The Food and Drug Administration (FDA) has proposed to amend its regulations concerning direct-to-consumer (DTC) advertisements of prescription drugs. Currently, the Federal Food, Drug, and Cosmetic Act (the Act) requires DTC advertisements of prescription drugs to contain a “true statement” of certain information including a brief summary of side effects, contraindications and effectiveness. This statement is referred to as the “major statement” and if omitted or insufficient could render the drug misbranded in violation of the Act. (See 21 C.F.R. 202.1 and 21 U.S.C. 352(n).) The new rule would implement a requirement for television or radio advertisements that the “major statement” be presented in a “clear, conspicuous, and neutral manner, regardless of the manner in which effectiveness information is presented in the advertisement.”

The requirement for a “clear, conspicuous, and neutral” major statement was created by the Food and Drug Administration Amendments Act of 2007, with a command that standards for the major statement being “clear, conspicuous, and neutral” be put in place within thirty (30) months. The proposal would implement this requirement. Under the proposed amendment, a major statement will be considered clear, conspicuous, and neutral, provided that:

1. the information is presented in language that is readily understandable by consumers;
2. audio information is understandable in terms of volume, articulation, and pacing used;
3. text information is placed appropriately and is presented against a contrasting background for sufficient duration and in a size and font that allows the information to be read easily; and
4. the advertisement does not include distracting representations that detract from communication of the major statement.

The proposal goes on to provide further details and explanations for the presented standards, such as specifically addressing the different levels of language that may be employed for advertisements directed at the medical community versus lay persons. For complete text of the proposal, see here.

Written or electric comments on the proposed rule are being accepted until June 28, 2010. For more information on the submission of comments, see here.

- Daniel Kracov and Jessica Halbert

Bitter Juice To Swallow - Court Strikes Claims In Pom False Advertising Suit Against Coca Cola

Pom Wonderful LLC (“Pom”), makes, markets, and sells POM WONDERFUL® an upscale pomegranate juice. Pom brought suit against Coca-Cola in 2008 stemming from its Minute Maid product -- Enhanced Pomegranate Blueberry Flavored 100% Juice Blend -- a mix of five juices. Pomegranate and blueberry, however, comprise less than .5% each of the overall blend of juices in this Minute Maid Product. In the lawsuit, Pom claimed false advertising under the Lanham Act, 15 U.S.C. §1125(a) as well as false advertising and unfair competition under California’s Business and Professions Code §§17200 and 17500.We have blogged about previous developments in this case, here and here.

To support its claims, Pom has provided consumer complaint evidence bemoaning the product as “nothing but fancy apple grape juice” and a waste of customers’ “time and money.” Pom also presented evidence from a Coca-Cola employee who stated that in her experience, the Juice has received “more complaints than any other Minute Maid Product.” Pom further produced a consumer survey which illustrated that more than a third of participants thought the juice contained only pomegranate and blueberry juices, with nearly all of those participants forming that belief from Minute Maid’s use of ‘pomegranate blueberry’ on the label.

Coke’s counterargument centered on its compliance with FDA labeling requirements, which permit companies to name a multiple-juice beverage with names that do not include all the juices contained in the drink, provided that the represented juice used for labeling the product is used as a flavor (e.g. raspberry-flavored apple and pear juice drink). “Blend” is also contemplated in the labeling requirements as a way to indicate non-represented juices are present (e.g., apple blend; apple juice in a blend of two other fruit juices). See 21 C.F.R § 102.33. Coke asserted that its compliance with the FDA labeling laws preempts any Lanham Act Claim.

Based on this defense, the Court sided with Coca-Cola and determined that Pom may not challenge the naming of the Minute Maid beverage or Minute Maid’s use of a fruit vignette (image of fruits contained in the juice blend product) on its label, both of which comply with FDA labeling requirements. The Court found both items to be clearly within the purview of the FDA and held that, “[a]s a private litigant, Pom cannot seek to have this Court indirectly attack FDA regulations as courts may not be used to second-guess the considered judgments of the FDA.”

Pom remains free to pursue its false advertising claim insofar as it alleges that Minute Maid’s advertising of the juice blend product deceived customers, but how much weight will be afforded to the survey demonstrating such confusion remains in question. Regardless of the survey, if Pom can produce evidence showing that Coca Cola willingly deceived its customers, the court suggested that the burden may then shift to Coca-Cola to prove otherwise.

- Randy Shaheen and Jessica Halbert

What's in Your Shampoo? Group Seeks to Expand USDA Authority to Regulate Organic Products

The Department of Agriculture regulates organic agricultural products through the Organic Foods Production Act of 1990 ("OFPA") and its National Organic Program ("NOP").  However, the regulatory status of personal care products has long been uncertain.  In 2008 USDA stated that such products could not falsely claim or imply that they meet USDA organic standards but that USDA did not otherwise have jurisdiction over the labeling of personal care products that are not made up of agricultural ingredients.  In 2009 the National Organic Standards Board recommended that the NOP regulations become mandatory for personal care products.  However, no action has been taken on that recommendation.  Finally, in a 2009 Lanham Act case a number of personal care product companies successfully argued that a claim that some of their products were falsely labeled as "organic" fell within the purview of USDA and must first be pursued there. 

That victory may turn out to be pyrrhic.  Recently the Organic Consumers Association ("OCA") and three organic personal care manufacturers filed a complaint with USDA against thirteen personal care product companies.  The complaint alleges that each of the thirteen companies processes agricultural products and manufactures personal care products that are labeled and sold as "organic."  However, the complaint alleges that the products consist primarily of non-organic agricultural material, including numerous petrochemicals, and that most products only contain water extracts of organic herbs and/or reconstituted aloe vera organic powder concentrate.  The complaint requests that USDA impose civil penalties for mislabeling and order the companies to cease and desist from labeling their products as "organic."

OCA's view is that USDA has the authority under the OFPA to impose civil penalties on any person knowingly labeling a product "organic" that is not in accordance with the Act.  If USDA adopts OCA's position, it could lead to a significant expansion of USDA's authority to regulate organic products.  In the meantime, OCA is also waging war on the public relations front.  Members of the group dressed as large shampoo bottles (we presume, nonorganic) stood outside the National Products Expo West mocking the allegedly offending products and handing out flyers detailing the lack of regulation on organic personal care products. These efforts may be bearing fruit.  Just today OCA announced that Whole Foods will tighten its requirements for organic claims on personal care products.    

- Randy Shaheen & Jessica Halbert

Targeting Grandfathered Drugs with Claims of Misrepresentation - Private Enforcement of the FDCA?

The Federal Food, Drug and Cosmetic Act (“FDCA”) imposes specific requirements governing the approval, labeling and promotion of prescription drugs. FDA has exclusive authority to enforce those requirements.

The FDCA grandfathers out of the approval requirements products that were on the market before the statute was enacted. This exception recently created a conundrum for the federal district court in New Jersey, which addressed whether a plaintiff can sue under the Lanham Act claiming that the mere marketing of a grandfathered product, as the FDCA allows, falsely implies FDA approval. In Mutual Pharmaceutical Co., Inc. v. Watson Pharmaceuticals, Inc., Watson was selling a gout medication, which, it argued, was grandfathered. Mutual, unlike Watson, sought FDA approval to manufacture and sell the drug for gout, as well as the exclusive right to market it for a different, rare disease. Upon receiving FDA approval, Mutual, along with two other companies, sued Watson. Mutual alleged that by disseminating advertisements and product information through various channels, Watson falsely implied its drug was FDA-approved.

Watson moved to dismiss the complaint as a disguised effort to enforce the FDCA. Mutual’s claim, Watson contended, required the Court to determine an issue only FDA could decide -- whether Watson needed FDA approval to sell the drug. The Court disagreed. The question under the Lanham Act, the Court found, was not whether Watson needed FDA approval, but whether it falsely implied that it had FDA approval. The Court cited survey evidence in the complaint reflecting the inaccurate perception by consumers that FDA had approved the product. Interestingly, though, the survey dealt not with any advertising claims by Watson but rather with the belief by consumers that pharmacy computers would only display FDA-approved drugs. Watson argued that if marketing its product through traditional channels was sufficient to create the false implication of FDA approval, it could not market the product even though the FDCA allowed it to do so. Nevertheless, the court found that the facts as pled were sufficient to defeat the motion to dismiss.

This result --treating the mere marketing of an allegedly grandfathered drug as inherently misleading and subject to injunction-- is troubling. Arguably, such an injunction either would conflict with the FDCA where the Act did not require FDA approval for marketing, and would enforce the Act through a private right of action where approval was required.

Just how troubling the case is -- and how much latitude it affords for private claims -- is unclear. In an earlier case a California District Court declined to be drawn into what it viewed as enforcement of the FDCA. The plaintiffs in In re Epogen and Aranesp Off-Label Marketing & Sales Practices Litigation brought a RICO claim based on the defendants’ alleged off-label marketing of a kidney drug, in violation of the FDCA. The Court found that the “existence of federal enactments-i.e., the FDCA and accompanying regulations-making off-label promotion illegal, is central to many of Plaintiffs' claims . . . . Allowing Plaintiffs to proceed on a theory that Defendants violated RICO by engaging in off-label promotion, without specific allegations that Defendants made false or misleading statements, would, in effect, permit Plaintiffs to use RICO as a vehicle to enforce the FDCA.” In dismissing the complaint, the Court noted that the plaintiffs were free to bring claims based on wholly separable private causes of action stemming from the same activity.

To be sure, the artful tailoring of the complaint in Mutual Pharmaceutical, while sufficient to skirt a motion to dismiss, may not suffice to sustain the case beyond that stage. If plaintiffs do succeed, it will doubtless require substantial legal debate, not to mention further litigation, to determine where, between Mutual Pharmaceutical and Epogen, the balance tips from a separate, cognizable cause of action to an impermissible private effort to enforce the FDCA.

- Robert Weiner and Jessica Halbert

Tupperware™ Parties And Prescription Drug Marketing: FDA Puts The Lid On A Drug Promotional Campaign

Ever since the Tupperware Company revolutionized direct-to-consumer (“DTC”) marketing through its famous “Tupperware™ parties” of the 1950s, manufacturers have been trying mimic its success. Pharmaceutical manufacturers are among the latest to revive this “old school” technique, and FDA has taken notice.

On January 12, 2010, FDA’s Division of Drug Marketing, Advertising, and Communications (“DDMAC”) posted a December 30, 2009 letter to Bayer HealthCare Pharmaceuticals Inc. (“Bayer”) on its website objecting to a script for a live consumer-directed program for the drug Mirena® entitled “Mirena Simple Style Statements Program” (“Program”). Mirena (levonorgestrel-releasing intrauterine system) is a drug delivery system indicated for intrauterine contraception for up to five years. The drug carries various contraindications and warnings and the FDA-approved label (“PI”) requires that patients be “reexamined and evaluated 4 to 12 weeks after insertion, and once a year thereafter, or more frequently if clinically indicated”.

The Program was developed as a partnership between Bayer and Mom Central, a commercial social networking site “dedicated to providing busy moms with smart household and parenting solutions”. According to FDA’s letter and the allegedly violative Program script, the Bayer-sponsored Program is presented in a consumer’s home or another private setting (such as a private restaurant party). A Mom Central representative starts the presentation with a scripted introduction and then hands the presentation off to a nurse practitioner who follows a scripted Mirena product presentation. After a question and answer session, the nurse practitioner (who Bayer says is trained to keep her messaging consistent with the Mirena PI) hands off the presentation to a stylist who offers fashion tips. The overall effect is to present Mirena as an attractive option to busy moms who are looking for a “lifestyle solution”.

The Mirena FDA letter underscores the need for the pharmaceutical industry to balance clever “lifestyle marketing” with FDA’s standards for substantiation for quality of life claims and risk/benefit balancing. In particular, FDA takes objection to statements in the Program script which suggest that Mirena increases levels of intimacy, romance, and emotional satisfaction. In FDA’s view, these statements overstate Mirena’s efficacy because they have not been proven to be quality of life outcomes supported by substantial clinical experience, noting that 5% of clinical trial patients actually reported decreased libido as a side effect. Further, the nurse practitioner was scripted to state that busy moms who use Mirena, “look and feel great”. FDA points out that this statement, among others, minimizes the risks associated with use of Mirena, which include, irregular bleeding, ovarian cysts, back pain, weight increase, acne and other risks which are not only inconsistent with “feeling great” but are also important risks that need to be communicated to consumers. Finally FDA notes that the script states that Mirena has “no daily, weekly, or monthly routines to comply with” as part of its overall message that Mirena fits into a convenient lifestyle. In fact, FDA notes that the Mirena PI requires both patient and physician follow up.

While presenting a prescription pharmaceutical product as an attractive lifestyle option may be a clever way to advertise directly to consumers, FDA’s response to this consumer program script has made clear that drugs are not Tupperware.

- Daniel Kracov and Mahnu Davar

FDA Public Hearing on Promotion of FDA-Regulated Products Using the Internet/Social Media Tools

Companies that make or market FDA-regulated products are increasingly using Internet and social media tools such as Google searches, Twitter, Facebook and Wikipedia to promote their products and to provide other important information to consumers and health care professionals. While the Internet and social media provide significant benefits to consumers, industry, healthcare professionals and the public as a whole, these forms of media present new legal and regulatory challenges with respect to promotional labeling and advertising, third-party communications about a company’s products, and potential adverse events identified in blogs, chat rooms, and other forms of social media.

On November 12-13, 2009, FDA held a public hearing on the promotion of FDA-regulated medical products using the Internet and social media tools to hear from industry leaders, consumers, public interest groups, and media professionals. The hearing followed a panel-style format in which pre-selected speakers gave prepared remarks with accompanying slide presentations. FDA panel members asked questions of the speakers, but did not otherwise provide prepared remarks or invite participation from the audience.

Internet companies and regulated industry representatives discussed the need to differentiate Internet and social media from other forms of labeling or advertising because, unlike traditional promotional labeling and print or broadcast advertisements, Internet and social media users have a greater ability to control, alter and respond to the promotional messages and other product information they receive. Speakers such as Eli Lilly, sanofi-aventis, and Pharmaceutical Research and Manufacturers of America (PhRMA) agreed that manufacturers should be accountable for online content they control, but noted that manufacturers should not have a broad obligation to police or remove all forms of third-party content about their products.

Sloppy Record Keeping Leads to Loss of Significant Green from Coral Calcium

The FTC can claim another victory against infomercial pitchman Donald W. Barrett and his affiliates over the dietary supplements, "Coral Calcium" and “Supreme Greens” ― products that were found to be falsely marketed as treatments or cures for a host of serious diseases, including cancer, diabetes and heart disease. (FTC press release found here)

This saga began when the FTC initiated an action on June 2, 2004 against the defendants charging them with making false claims regarding the Coral Calcium and Supreme Greens products (complaint found here). A preliminary injunction issued on July 3, 2004 enjoining defendants from making false or misleading claims concerning any dietary supplement during the pendency of the action. Thereafter, and following discovery, the FTC filed a motion for summary judgment against the defendants arguing that they were liable for falsely claiming that the Coral Calcium and Supreme Greens products would treat, cure or prevent any number of health related problems.

In July 2008, District Judge George A. O’Toole, Jr. of the United States District Court for the District of Massachusetts granted the FTC’s motion for summary judgment, finding that the defendants were liable for deceptively touting the cure-all affects of the Coral Calcium and Supreme Greens products. (Summary judgment decision found here) Following this decision, discovery was conducted and a bench trial had to determine the appropriate terms of injunctive relief and the amount of monetary relief to be ordered.

Judge O’Toole has now spoke . . . and he has hit hard. (August 27 decision and order found here) Acknowledging the willful nature of defendants conduct, Judge O’Toole permanently enjoined the defendants from making any representation about the health benefits, performance, or efficacy, of any product (including the Coral Calcium and Supreme Greens products) unless the representation is true, non-misleading, and, at the time the representation is made, the defendants possess and rely upon competent and reliable scientific evidence that substantiates the representation. As for the assessment of disgorgement, Judge O’Toole determined that defendants’ record keeping with respect to profits of the products was not reliable. The Court was troubled that there were multiple different versions of Defendant’s financial statements with different amounts listed for sales and net income, stating “The degree of difference was not so great that a reasonable estimate could not be made on the basis of the differing figures, but the very fact of the variations, together with other evidence about the casual and deceptive way financial information was maintained and reported . . . undermines any confidence that even the ranges reported are close to accurate. The defendants were fiction writers in their infomercial and there is reason to be concerned they were fiction writers in their financial statements.” Thus, the Court accepted the sales numbers advanced by the FTC ― net revenue numbers rather than net profits during the time the ads at issue were run, totaling approximately $70 million. The disgorged sum will be used for consumer redress.

In a Battle of Experts, Only the Fair Survive

What makes up “competent and reliable scientific evidence?” That’s a question that has vexed many a practitioner and client. A federal district court judge in New Jersey recently weighed in on that topic (opinion here) and it wasn’t good news for the FTC. In FTC v. Lane Labs-USA, Inc., et al., the FTC asked that the U.S. District Court for New Jersey fine Lane Labs, a supplier of dietary supplements, $24 million as a result of the lab’s alleged violation of a nine year old consent order in which it agreed to only make representations about the effects of its dietary supplement products that could be supported by competent reliable scientific evidence. In its complaint the FTC alleged order violations relating to two Lane Labs’ products — AdvaCAL, a calcium supplement, and Fertil Male, a product derived from a Peruvian plant known as “Maca” that allegedly increases male fertility.

The Defendant relied upon several clinical studies and the testimony of a scientific expert for each of its products. The FTC’s experts criticisms of the study were familiar ones to those who practice in this area. They included the fact that the studies were underpowered, used rats instead of humans, that the products had inert ingredients not found in the products tested, and that the studies tested one proposition (increase in bone density) from which the claim (reduced risk of fractures) had to be inferred. Defendant’s experts rebutted each of these criticisms.

The Court found that the FTC had not met its burden of proof and that the Defendant had taken reasonable steps to comply with the Order:

• The court found that while all four experts were credible and knowledgeable, the Defendant’s experts were more reasonable. In particular, the court was critical of the overly exacting standard of one of the FTC’s experts in evaluating the reliability of clinical studies.
• Neither of the FTC’s experts found that Lane Labs’ supplements were not effective or constituted a health risk to the public, but instead that the studies relied upon by Lane Labs had “questionable aspects,” including using rats versus humans to study effects and having a smaller number of participants. As the court pointed out, however, Lane Labs’ experts were able to successfully explain why those aspects didn’t corrupt the overall value of studies, thereby swaying the court in their favor.
• The court agreed with Lane Labs’ experts’ more inclusive view of the kinds of research that substantiate claims, including research that is tangentially related, if not directly on point, to a claim.
• The court would not find a violation of the Order where there was simply a difference of opinion among credible experts
• Lane Labs “did what they were supposed to do” in seeking expert advice before relying upon scientific articles and peer reviewed studies attesting to the purported effects of AdvaCAL and Fertil Male. To ask the company to do more would be unreasonable, said the court.

If the Court’s decision is upheld in the face of a likely appeal, it may present a clearer and potentially less exacting path to substantiating dietary supplement and other claims. In particular, so long as a company relies upon legitimate studies that a credible expert says are good, a few flaws here and there or the contrary views of an FTC expert may not be enough to sink the product claims.