FTC Issues Enforcement Policy Statement on Marketing Claims for Over-the-Counter Homeopathic Drugs
On November 15, 2016, the Federal Trade Commission (FTC) released a new “Enforcement Policy Statement on Marketing Claims for Over-the-Counter (OTC) Homeopathic Drugs” memorializing its position that, (1) when reviewing substantiation for claims for homeopathic products, the FTC will apply the same legal standard that it applies to other OTC drugs and (2) in cases where the substantiation in support of the efficacy for a homeopathic product is less than what would be required for an OTC drug product, the FTC will require any advertising for the homeopathic product to include prominent disclosure of the limited evidence supporting the efficacy of the homeopathic product.
According to the FTC’s press release, the agency issued the Policy Statement in response to the “burgeoning mainstream marketing of OTC homeopathic products alongside other OTC drugs.” The FTC’s Policy Statement was informed by last year’s FTC workshop entitled “Homeopathic Medicine & Advertising,” and accompanied by a staff report that summarizes the results of the agency inquiry into the marketing and sale of homeopathic products.
As part of its efforts to understand the homeopathic marketplace and obtain information about consumers’ knowledge and understanding of homeopathic products, the FTC commissioned consumer focus group research. According to the FTC, this research, which began in 2010 and is described in the staff report, “suggests that a significant percentage of consumers do not understand the nature of homeopathic products, how they are regulated, or how much evidence there is to support their claims.” The FTC has also stated that this finding was the impetus behind its new enforcement policy, which FTC says will make clear “that marketers of OTC homeopathic drugs must either have adequate substantiation for their efficacy claims or effectively communicate the lack of scientific evidence backing them.”
Moving forward, FTC’s new enforcement policy is a signal that the agency will monitor the marketing of OTC homeopathic drugs more closely. Pursuant to the FTC Act, companies are required to have a reasonable basis for making product claims and the FTC has taken the position that in the case of health-benefit claims a reasonable basis requires competent and reliable scientific evidence. The FTC’s Policy Statement, however, notes its position that (1) for the vast majority of OTC homeopathic drugs, “the case for efficacy is based solely on traditional homeopathic theories and there are no valid studies using current scientific methods showing the product’s efficacy” and (2) as such, the marketing claims for these products are likely misleading, in violation of the FTC Act.
Notably, after sharing its position that most homeopathic products are being marketed in violation of the FTC Act, the FTC offers guidance to homeopathic product manufacturers on how they may, nevertheless, continue marketing their products for indications for which they do not have competent and reliable scientific evidence supporting the products’ efficacy. The Policy Statement indicates that the promotion of an OTC homeopathic product may not be considered deceptive under the FTC Act if the advertising effectively communicates to consumers that: (1) there is no scientific evidence that the product works and (2) the product’s claims are based only on theories of homeopathy from the 1700s that are not accepted by most modern medical experts. More specifically, FTC concludes with the following guidance:
- Any disclosure should stand out and be in close proximity to the efficacy message; to be effective, it may actually need to be incorporated into the efficacy message.
- Marketers should not undercut such qualifications with additional positive statements or consumer endorsements reinforcing a product’s efficacy.
- In light of the inherent contradiction in asserting that a product is effective and also disclosing that there is no scientific evidence for such an assertion, it is possible that depending on how they are presented many of these disclosures will be insufficient to prevent consumer deception. Marketers are advised to develop extrinsic evidence, such as consumer surveys, to determine the net impressions communicated by their marketing materials.
- The Commission will carefully scrutinize the net impression of OTC homeopathic advertising or other marketing employing disclosures to ensure that it adequately conveys the extremely limited nature of the health claim being asserted. If, despite a marketer’s disclosures, an ad conveys more substantiation than the marketer has, the marketer will be in violation of the FTC Act.
The FTC’s Policy Statement is the most recent development in the balancing act that has occurred in FDA and the FTC’s joint regulation of homeopathic products. While, all products that meet the definition of a drug under the Food, Drug, and Cosmetic Act are subject to regulation by the FDA, due to an explicit reference to homeopathy in the 1938 statute, FDA has generally permitted homeopathic products to remain on the market if their composition and claims are consistent with the tenets of homeopathy. Specifically, under FDA’s Compliance Policy Guide (CPG) addressing its approach to homeopathic products, FDA does not take enforcement action against drug products labeled as homeopathic and marketed without pre-market review and approval, provided that certain conditions are met regarding ingredients, labeling, prescription status, and good manufacturing practices). FDA has on a number of occasions sent warning letters to manufactures of homeopathic products who are not in compliance with the CPG’s conditions. Examples include letters sent to Nutri-Dyn Midwest, Inc. (January 15, 2016), HomeopathyStore.com (July 6, 2015), A Nelson & Co., Ltd. (July 26, 2012), Pacific Naturals (April 28, 2011), and Homeopathy For Health (June 8, 2010).
The FTC has also taken enforcement action challenging misleading claims for homeopathic products, but, as noted in the FTC’s Policy Statement, such challenges were rare (e.g., FTC complaints filed against HCG Diet Direct, LLC (January 7, 2014) and Iovate Health Scis. USA, Inc. (July 14, 2010)). The FTC’s issuance of this Policy Statement, however, is a clear indication that the FTC will be more active in monitoring and challenging the truthfulness and accuracy of health-benefit claims made for homeopathic products going forward.
For more information regarding the FTC’s scrutiny of homeopathic products, please see our prior post.
© Arnold & Porter Kaye Scholer LLP 2016 All Rights Reserved. This blog post 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.