The California Food, Drug, and Medical Device Task Force announced a settlement this week with Goop, the lifestyle brand founded by Gwyneth Paltrow, which we’ve written about here and here. The complaint alleges that Goop made false and misleading representations regarding the effects or attributes of three products—the Jade Egg, Rose Quartz Egg, and Inner Judge Flower Essence Blend. According to the complaint, Goop advertised that the Jade and Rose Quartz Eggs—egg-shaped stones designed to be inserted vaginally and left in for various lengths of time—as well as the Inner Judge Flower Essence Blend could balance hormones, prevent uterine prolapse, increase bladder control and prevent depression. The complaint also alleges that none of Goop’s claims regarding these products were supported by competent or reliable scientific evidence.

The stipulated judgment prohibits Goop from (1) making any claims regarding the efficacy or effects of any of its products without possessing competent and reliable scientific evidence that substantiates the claims; and (2) manufacturing or selling any misbranded, unapproved, or falsely advertised medical devices. In addition, Goop agreed to pay $145,000 in civil penalties and will provide refunds to consumers who purchased the products during 2017.

Goop responded, in part, as follows: “Goop provides a forum for practitioners to present their views and experiences with various products like the Jade Egg. The law, though, sometimes views statements like this as advertising claims, which are subject to various legal requirements.”

Yep. True story. Here are a few other lessons:

  • When made on a site promoting sale of a product, statements by practitioners or other testimonialists about the benefits of that product are advertising (not sometimes, always) and can never be used to support claims that are not otherwise supported by competent and reliable scientific evidence.
  • Competent and reliable scientific evidence is a flexible standard. For health claims, though, it frequently requires well-designed clinical tests. Simply put, the standard isn’t whether there is any evidence; it is whether there is credible evidence that experts in the field would agree is reliable.
  • Fanciful claims that do not rise to the level of disease prevention aren’t necessarily puffery either. Advertisers need to clearly understand when they are making objectively provable claims and have an obligation to substantiate them before dissemination.
  • Products that feature claims of disease treatment or reduction may be classified as medical devices or drugs and may be subject to FDA clearance or approval prior to marketing.

Goop claims to have modified its claims to comply with the settlement. Notably, the Jade Egg remains available. We’ll let you decide what to do with that.

The FTC recently announced a settlement with Breathometer, Inc., a company that marketed a smartphone accessory that it claimed could detect blood alcohol levels.  Users could simply plug the accessory into the headphone jack, open the Breathometer app, blow, and receive a reading of their blood alcohol content within five seconds.  Breathometer marketed the products as “FDA registered devices,” featuring “law enforcement”-grade technology, to help you “make informed, dependable decisions” about whether to drive after drinking.

The FTC alleged that Breathometer did not have adequate substantiation for its performance claims. Specifically, the products were tested to determine accuracy at .02% blood alcohol content, not .08%, which is the legal limit under state laws.  In addition, testing revealed that the accuracy of the Breeze version of the product degraded over time and the company did not have a means of recalibrating it remotely.  Breathometer stopped selling the Breeze product but allegedly did not adequately inform consumers of the issue.

This case is yet another illustration of the FTC taking the lead on mobile health products that are or could potentially be regulated by the FDA. As readers of our Food and Drug Law Access blog may know, FDA has taken a risk-based approach to regulation of such products and, with the exception of products that could cause patient harm or death upon malfunction, is exercising regulatory discretion. Yet, many companies, particularly those who are new to the health market, presume that FDA is the primary, if not the only, regulator likely to have an interest in their product and claims.

Not so. The FTC has repeatedly voiced concerns about the proliferation of mobile health apps and whether claims were being properly substantiated, particularly where disease diagnosis, treatment, or mitigation claims are featured.  Along with the Breathometer matter, the Lumosity, Melanoma Detective and Aura Labs cases collectively demonstrate that when it comes to many consumer-directed mobile health products, the regulator most likely to take interest is the FTC.

The Federal Trade Commission announced this week that it has reached settlements with two marketers for “deceptively claiming their mobile apps could detect melanoma, even in its early stages.” MelApp and Mole Detective claim to have the ability to accurately screen for a mole’s analyzed melanoma risk despite the absence of clinical testing. The FTC alleged this was a deceptive tactic as the marketers lacked sufficient evidence to prove these claims.

The settlements prohibit each company “from claiming that a device, such as an app, can detect or diagnose melanoma, unless the representation is truthful, not misleading, and supported by competent and reliable scientific evidence in the form of human clinical testing of the device.” The agency will pursue litigation against two additional marketers who did not agree to settle.

These settlements are noteworthy because they signal that the FTC’s interest in health benefit claims is not limited to consumable products such as foods, which may be news to newcomers in the health technology area.  It is also a departure from the Food and Drug Administration’s enforcement discretion position relative to low-risk health apps geared toward consumers.  The lesson for industry is that even if FDA does not require a pre-market clearance showing of safety and efficacy in order to market apps such as these, the FTC still holds marketers to the “competent and reliable scientific evidence” claim substantiation standard.

The use of mobile apps for health purposes has created new questions for users, developers, and regulators regarding the balance between convenience, expanded health care, and public safety. The line between apps that are useful tools for accessing health information and those that are considered medical devices can be unclear but is very important for developers and marketers of these products.

On April 24, 2013, associate Kristi L. Wolff will present a Thompson Interactive webinar, “There’s an App for That: Regulating Mobile Medical Devices” regarding these issues. Ms. Wolff will discuss the regulatory status surrounding health-related and medical device mobile applications, or MMAs. The presentation will cover topics including FTC’s enforcement and recent statements regarding health-related mobile applications, design considerations key to application development, such as privacy, and FDA’s position regarding MMAs as explained in the draft guidance, the recent Congressional hearings on the issue. Participants will also have the chance to ask questions during the live Q&A portion of the webinar.

To register, please click here.

The Alabama Supreme Court recently held in Wyeth, Inc. v. Weeks, – So.3d –, No. 1101397, 2013 WL 135753 (Ala. Jan. 11, 2013) that a drug company may be held liable for fraud or misrepresentation (by affirmative misrepresentation or omission), based on statements it made in connection with the manufacture and distribution of a brand-name drug, by a plaintiff claiming physical injuries from the ingestion of a generic drug manufactured and distributed by a different company.

Continue Reading Alabama Supreme Court Holds Brand-Name Drug Manufacturer Liable for Ad Representations Made by Generic Drug Manufacturer

On January 16, 2013, the Federal Trade Commission (“Commission”) issued an Opinion In the matter of POM Wonderful LLC upholding in part and overruling in part Chief Administrative Law Judge D. Michael Chappell’s May 2012 initial decision regarding advertising claims for POM Wonderful (“POM”) products. In pertinent part the Commission opinion, issued by Commissioner Maureen Ohlhausen, ruled the following:

  • Thirty-nine of POM’s 43 ads made efficacy claims and were false and misleading;
  • Two well-designed, well-conducted, double-blind, randomized controlled clinical trials (RCTs) are required to substantiate claims that a food can treat, prevent or reduce the risk of “serious diseases;”
  • The proposed order does not violate POM’s 1st or 5th amendment rights;
  • The past COO and President of POM Wonderful who, at the time of his employment, was responsible for the operations of the marketing team, “both participated directly in and had the authority to control the acts or practices at issue,” and thus should be held individually liable and subjected to a Final Order along with Steward and Lynda Resnick; and
  • FDA-preapproval is not warranted as part of the remedy in the POM action.

The Commission also agreed with the ALJ’s conclusion that the Respondent’s actions were serious and deliberate. Two concurring statements were included: a statement by Commissioner Ohlhausen (rejecting the two RCT standard and concluding that extrinsic evidence should have been used to determine whether some of POM’s ads made implied disease claims) and a statement by Commissioner J. Thomas Rosch (agreeing with the majority opinion but noting that “having served as a Commissioner for seven years and having been a trial lawyer for nearly 40 years before… [he is] somewhat skeptical of relying so heavily on the opinions of experts who are paid by both Complaint Counsel and Respondents”).

The Commission ruling provides helpful insight into the Commission’s position regarding health-benefit claims and the level of substantiation required to make claims that a food or beverage product treats, mitigates or prevents a “serious disease.” The decision also reflects the Commission’s intent to pursue individual liability for company officers believed to play an integral role in the development of health-benefit related marketing campaigns.

More information regarding the ruling and related proceedings can be found here.

On July 16, 2012, the United States District Court for the District of New Jersey granted summary judgment in favor of Nestlé Healthcare Nutrition, Inc. in Scheuerman, et al. v. Nestlé Healthcare Nutrition, Inc., No. 2:10-cv-03684 (D.N.J.), a putative nationwide class action challenging Nestlé’s advertising and marketing campaign for its BOOST® Kid Essentials Drink (“BKE”) product. BKE is a nutritionally complete drink supplement for children, which formerly was sold in a carton attaching a separately-packaged straw containing the probiotic, Lactobacillus reuteri.

In Scheuerman, the plaintiffs alleged that Nestlé committed common law negligent misrepresentation and violated the New Jersey Consumer Fraud Act (“NJCFA”), California’s Unfair Competition Law (“UCL”), False Advertising Law (“FAL”), and Consumer Legal Remedies Act (“CLRA”), and Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (“UTPCPL”). They argued that Nestlé made express and implied claims that BKE provided a number of health benefits, including, among other things, immunity protection; a strengthened immune system; reduced absences from daycare or school due to illness; reduced duration of diarrhea; and protection against cold and flu viruses. They also claimed that Nestlé advertised that those challenged health benefits were “clinically shown.”

The court held that the plaintiffs could not prevail on their NJCFA, UCL, FAL, or CLRA claims on their theory of liability – that Nestlé lacked substantiation for the challenged advertising claims at the time the claims were made (sometimes referred to as the “prior substantiation doctrine”). Rather, the plaintiffs were required to come forward with evidence actually demonstrating that the challenged advertising claims were affirmatively false, not merely that the claims were not supported by competent and reliable scientific evidence.

Continue reading about the significance of this decision with respect to “clinically proven” or “clinically shown” advertising claims…

We reported on May 23 on Chief Administrative Law Judge Chappell’s initial decision in the FTC’s action against POM Wonderful. On June 4, all parties filed notices of appeal. The FTC staff’s notice states that it is appealing "(1) The failure to find that certain of the challenged advertisements made the claims alleged in the Complaint; (2) The level of substantiation required for the challenged advertising claims; and (3) Certain provisions of the Order entered by Judge Chappell." POM’s notice (and the me-too notice filed by individual respondent Tupper) state that they are appealing "(1) all portions relating to the finding of liability against Respondents in their entirety and (2) all portions relating to the imposition of a remedial order against any and all Respondents, in their entirety" as well as "certain procedural, evidentiary, and substantive rulings relating to the findings of fact and law and remedial relief."

The notices are terse, but if there is a surprise anywhere in them, it is the FTC not explicitly appealing Judge Chappell’s finding that the appearances of POM principals such as Lynda Resnick to promote POM on news and talk shows are not within the FTC’s reach as "advertising" by reason of not having been paid for. Conceivably, however, such a theory could be lodged within the first part of the staff’s statement, together with a challenge to Judge Chappell’s interpretation of some of the challenged POM advertisements as not communicating specific disease treatment, prevention, mitigation or cure claims. As expected, the FTC staff also appeals Judge Chappell’s rejection of the two-clinical-study requirement that the staff sought to impose on ads making such claims. POM and Mr Tupper simply appeal everything in the decision that didn’t go their way.

On May 17, Chief Administrative Law Judge Michael Chappell issued his Initial Decision in the FTC’s case against POM Wonderful, accusing POM of making unsubstantiated claims that its pomegranate juice and pomegranate extract supplement pills can prevent, treat, cure or mitigate heart disease, prostate cancer, erectile dysfunction, and other medical conditions. The decision found POM, its parent company Roll Global, and individual principals Stewart and Lynda Resnick and Matthew Tupper to have violated the FTC Act, and imposed a 20-year injunction against making such unsubstantiated claims in connection with any food, drug or dietary supplement product.

At the outset, the court determined the evidentiary standard to be applied to claims that a food product prevents, treats, mitigates or cures diseases. Here, in the portion of the decision that dominates POM’s own press release, POM succeeded in convincing Judge Chappell that the FTC does not require an advertiser to have either (1) prior FDA approval of the product for treating such diseases or (2) at least two solid, randomized clinical trials, as would normally be required for FDA approval of a new drug, before making such claims. The judge instead adopted the more flexible standard that the appropriate level of substantiation depends on the specific facts and on what experts in the field would consider adequate, relying on past Commission case law (e.g., In re Pfizer, Inc., 81 F.T.C. 23 (1972); FTC v. Direct Marketing Concepts, Inc., 624 F. 3d 1 (1st Cir. 2010); Removatron Int’l Corp. v. FTC, 884 F.2d 1489 (1st Cir. 1989)) and on the status of pomegranate juice as a non-hazardous food that is not marketed as a substitute for other medical treatment. In certain cases, he conceded, the FTC’s flexible standard might parallel that of the FDA. See, e.g., FTC v. Nat’l Urological Group, 645 F. Supp. 2d 1167 (N.D. Ga. 2008).

The real crux of the opinion, however, was that even under the flexible substantiation standard, POM could not

Continue Reading Administrative Judge in FTC versus POM Wonderful Lowers the Bar, but POM Still Can’t Clear It