In January 2013, the Federal Trade Commission (FTC) issued its much-anticipated ruling against POM Wonderful (POM), unanimously upholding Administrative Law Judge Michael Chappell’s May 2012 decision that POM lacked adequate substantiation for advertising claims that its products could treat, prevent or reduce the risk of heart disease, prostate cancer and erectile dysfunction. Finding that POM’s deceptive advertising was “serious and deliberate,” the FTC issued a 20-year injunction that bars POM from making disease-related claims for any products, unless supported by “two randomized, well-controlled, human clinical trials.”

Supplement companies can take some solace from the fact that the Commission did not give the FTC prosecutors all of the relief they sought.  It did not require POM to obtain FDA pre-approval before making any health claims for its products in the future.  It also did not require that all claims for supplements or food products be supported by randomized clinical studies (RCTs).  Instead, it limited the RCT requirement to disease claims – claims that a food or supplement will treat, prevent or reduce the risk of disease.  Nevertheless, the latest POM decision makes it abundantly clear that the FTC is closely scrutinizing claims that a food or supplement can have a positive health benefit, and companies are well-advised to proceed cautiously when promoting the health benefits of dietary supplements or foods. 

I. Background – The Regulation Of Substantiation For Health-Related Claims

The Food and Drug Administration (FDA) and the FTC share regulatory responsibility for dietary supplements.  The FTC is responsible for dietary supplement advertising and the FDA is responsible for its labeling.  The FDA derives its authority from the Dietary Supplement Health and Education Act of 1994 (DSHEA) while the FTC’s authority is pursuant to the Federal Trade Commission Act (the FTC Act).  Claims that concern health, safety and product efficacy must be supported by “competent and reliable scientific evidence.”  “Competent and reliable scientific evidence” is defined as:

[T]ests, analyses, research, studies, or other evidence based upon the expertise of professionals in the relevant area, that has been conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted to yield accurate and reliable results.^[1]

Significantly, no set number of studies or researchers or even type of study (e.g., the “gold” standard of a double-blind, placebo-controlled study) was traditionally required. 

That started to change, however, in the fall of 2009, when the FTC began advising the food and supplement industry that it would be “tightening up” the definition of “competent and reliable scientific evidence” to, in the FTC’s words: (1) make it easier to enforce; (2) better harmonize it with laws and regulations administered by sister agencies (e.g., FDA) and (3) address situations where a single piece of research, although conducted according to established protocols, achieved results inconsistent with the weight of scientific evidence in the relevant field.^[2]  True to its word, in July 2010, the FTC unveiled its new, more stringent definition of competent and reliable scientific evidence in consent orders that it reached with Nestlé HealthCare Nutrition, Inc. and Iovate Health Sciences.^[3]  To the dismay of the supplement industry, the FTC was now requiring that all health claims be backed by at least two adequate and well-controlled human clinical studies conducted on the same or substantially equivalent products. In addition, the FTC also required that certain disease or illness claims be pre-approved by the FDA.   

II. POM Wonderful Enters The Fray

In September 2010, in response to the Nestlé and Iovate consent orders, POM filed a declaratory judgment action challenging the FTC’s emerging preference for randomized controlled trials (RCTs) and FDA approval of disease prevention or treatment claims.  POM contended that the FTC had exceeded its statutory authority both with respect to its interpretation of the “competent and reliable scientific evidence standard” and by requiring FDA pre-approval of certain health-related claims.  The FTC responded by filing an administrative complaint against POM and its parent company, alleging that claims made by POM were not adequately substantiated.

The ALJ’s Opinion

On May 17, 2012, Judge Chappell ruled in favor of the FTC, finding that POM had not adequately substantiated claims that its products could treat heart disease, prostate cancer and erectile dysfunction.  However, Judge Chappell rejected the FTC’s position that health claims must be supported by RCTs finding that it was not authorized by the FTC Act.  Judge Chappell further found that claims that a product treats, prevents or reduces a disease had to be supported by adequate clinical data, but double-blind, randomized, placebo-controlled trials were not necessarily required.  Finally, the ALJ reasoned that POM’s more generalized claims that its products supported prostate health and promoted heart health did not constitute disease claims. 

The Commission’s Decision

Both POM and the FTC appealed, and in January 2013, the Commission issued its decision, in which it agreed with Judge Chappell’s finding that POM’s claims were not adequately substantiated.  However, the Commission broke with Judge Chappell in holding that because POM had made “serious disease claims,” RCTs were required for substantiation.  The Commission drew a distinction between general health benefit claims and disease treatment, prevention or risk reduction claims.  It held that RCTs are required for the latter, but not the former. 

Important Takeaways

•  RCTs Required For Disease Claims

The Commission concluded that some of POM’s ads, expressly or by implication, claimed that clinical studies, research or trials proved that POM’s products prevent, treat or reduce the risk of heart disease, prostate cancer or erectile dysfunction.  In the Commission’s view, only human clinical trials are adequate to substantiate disease claims.  The Commission was not moved by the fact that such studies are prohibitively expensive for most food and supplement manufacturers and concluded that was not an adequate justification to hold foods and supplements to a lower substantiation standard. 

The Commission did not rule on how many RCTs would be required to support disease-treatment or prevention claims generally.  It did hold that in light of POM’s history of intentional deception and the serious health conditions referenced in its ads, POM would be required to have at least two randomized clinical trials before it can make future claims regarding disease treatment or prevention. 

•  FDA Pre-Approval Not Required

As already noted, FTC has recently been resolving false advertising cases against other food and supplement companies with consent decrees that require the companies to obtain FDA approval before making disease treatment or prevention claims. FTC staff sought to impose the same requirement against POM, but the Commission did not order this relief.  The Commission did not explain its decision not to require FDA pre-approval, but by declining to order it, the Commission avoided POM’s argument that the relief sought exceeded the FTC’s statutory authority.

•  The FTC Can Rely On Its Own Analysis Of The Challenged Advertisement

In determining what claims have been communicated by a challenged ad, the FTC may rely on its own analysis: “only a facial analysis is necessary to determine whether Respondents had indeed made the claims alleged by Complaint Counsel.” ^[4]  FTC does not need to conduct a professional survey of consumers’ perceptions of the ad, as long as the advertising claims, including implied claims, are “reasonably clear” from the face of the ad.  In the POM case, the Commission concluded that POM did convey efficacy claims about its products’ ability to treat or reduce the risk of certain diseases – even though POM’s ads did not expressly contain these claims, because the claims were conveyed indirectly through references to blood pressure, plaque, blood flow, heart disease, PSA-doubling time, prostate cancer, erectile functioning and other medical language and imagery that contributed to the overall “net impression” of POM’s advertising campaign. 

•  Qualifiers May Not Provide A Safe Harbor

Advertisers frequently use qualifiers such as “may, can or preliminary” in an effort to communicate to consumers the results of a study that appears to show a link between a food and a health benefit without overstating the strength or importance of the study.  In POM, the Commission ruled that POM’s use of qualifiers such as “may, can, preliminary, promising and encouraging” did not change the overall net impression that the “advertisements were claiming clinical proof” because the statements were coupled with medical symbols or noted the millions of dollars POM spent studying the benefits of its products. This suggests that the use of such qualifiers, without more, may not be enough to prevent the advertisement from being viewed as an implied efficacy or establishment claim. 

III. Conclusion – Proceed Cautiously

POM has filed an appeal of the Commission’s Order with the D.C. Circuit, and while the Commission was careful to limit the legal findings in its January 2013 ruling to the facts of the POM case, the FTC is plainly targeting claims touting foods or supplements as having health benefits. The POM decision is a reminder that companies will be held to a high standard when touting the health benefits of their products or ingredients.  Companies should scrutinize their advertising carefully and assess whether it communicates disease treatment or prevention claims and craft claims carefully to ensure that they accurately reflect the underlying science.  While the Commission did not expressly rule that two RCTs are always required to substantiate disease claims, a prudent advertiser will have two RCTs for any claims of disease prevention, risk reduction or treatment.  In addition, given the FTC’s recent enforcement posture, advertisers making any health related claims would be well advised to have at least one clinical study that supports the claim.  Proceeding in a cautious, conservative fashion will avoid the time and expense of responding to an FTC inquiry, or worse, enforcement proceeding.