FTC Puts Industry on Notice of its Expectations for Health-Related Advertising Claims

On April 13, the Federal Trade Commission (FTC) announced that it sent a notice to nearly 700 companies of the agency’s claim substantiation expectations for health-benefit and safety claims. The FTC’s notice letter is intended to alert companies engaged in the marketing or sale of health-related products that they could incur significant civil penalties (up to $50,120 per violation) if they fail adequately to substantiate their health and safety claims for such products. Companies who receive a notice regarding penalty offenses have not necessarily violated the law. Instead, the notice is intended to enable the FTC to pursue civil penalties for violations, even on the first offense, as a response to the Supreme Court’s ruling in AMG Capital Management, LLC v. Federal Trade Commission, 141 S.Ct. 1341 (2021).

The FTC’s April 2023 notice follows other recent hints of forthcoming FTC enforcement-related to health product advertising, and it reflects a powerful message to industry to get its house in order as the FTC prepares to increase enforcement related to the promotion of consumer health products both via product claims and use of endorsements through social media. In the notice, the FTC shares its determination that five key acts and practices are deceptive or unfair and are unlawful under Section 5(a)(1) of the Federal Trade Commission Act, including:

• making an objective product claim without having a reasonable basis, at the time the claim is made, consisting of competent and reliable evidence;
• making a claim relating to the health benefits or safety features of a product without possessing and relying upon competent and reliable scientific evidence that has been conducted and evaluated in an objective manner by qualified persons and that is generally accepted in the profession to yield accurate and reliable results, to substantiate that the claim is true;
• representing expressly or by implication that a product is effective in the cure, mitigation, or treatment of any serious disease, including heart disease, cancer, arthritis, and erectile dysfunction, without possessing and relying on at least one human clinical trial of the product that (1) is randomized, (2) is well controlled, (3) is double-blinded (unless the marketer can demonstrate that blinding cannot be effectively implemented given the nature of the intervention), (4) is conducted by persons qualified by training and experience to conduct such studies, (5) measures disease end points or validated surrogate markers, and (6) yields statistically significant results;
• misrepresenting the level or type of substantiation for a claim; or
• representing that a product claim has been scientifically or clinically proven unless, at the time the representation is disseminated, the advertiser possesses and relies on evidence sufficient to satisfy the relevant scientific community of the claim’s truth.

The notice also directs companies to the FTC’s prior Notice of Penalty Offenses Concerning Deceptive or Unfair Conduct around Endorsements and Testimonials and the FTC’s December 2022 Health Product Compliance Guidance. The FTC’s invocation of the Health Product Compliance Guidance is especially notable, given the guidance is considered by many to apply a heightened standard for health-benefit claim related support and disclosures than historically applied by FDA, FTC, or industry.

History has shown that penalty notices are followed by FTC enforcement.  For this reason, all companies engaged in the marketing and sale of consumer health products should take advantage of this opportunity to conduct a risk assessment of current marketing strategies, including both claim support and use of influencers, as well as consumer reviews and other engagement strategies on social media.

For any questions regarding this development or how to mitigate the risk in the current regulatory landscape, please feel free to reach out to the authors or any of their colleagues in Arnold & Porter’s Consumer Protection & Advertising and Life Sciences & Healthcare Regulatory practice groups.

© Arnold & Porter Kaye Scholer LLP 2023 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.