Staying One Step Ahead of Regulations
As recently as July 24, 2009 a Senate committee noted that dietary supplement products appear to be marketed via program-length infomercials, Internet advertising, word-of-mouth or viral marketing and consumer blogs-and that the use of "endorsements" or "testimonials" are viewed as more believable to the typical consumer. Thus, these are now up for re-examination from a regulatory perspective.
David Vladeck, FTC director in the Bureau of Consumer Protection, has stated that "false or exaggerated weight loss claims" is an area of high importance for the agency. "The commission considers its work in the dietary supplement and weight loss area to be high-priority," he said.
Keep in mind that FTC obtains part of its yearly budget from the monies it collects via fines (while the FDA's budget is set by Congress). Thus, there is added incentive for FTC to examine and re-examine marketing in the supplement space.
So how can the industry stay one step ahead of regulations?
For starters, if products are backed by multiple finished-good studies demonstrating efficacy, then subsequent marketing could be based on real applied science and not the typical "borrowed" or exaggerated science that has become so typical of products in the industry.
Another issue to be aware of is that substantiation now pertains to ANY endorser of a product. In FTC's view, expert endorsers are just as liable for their statements as the sponsoring company. Yes, the person giving the expert endorsement, even with the typical disclaimer, must have the proof, as the FTC sees it, to support his or her statement.
A case in point: earlier this year the courts ruled with FTC when it held a medical expert, who endorsed a weight loss supplement, personally liable for not having the evidence to support his own claim. He had to pay for his own deceptive endorsement, while the supplement company was also ordered to pay millions.
Added Incentive to Substantiate
Typical disclaimers are placed at the bottom of a print, television or even Internet advertisement and fall under FTC regulations. They usually tell a prospective buyer, for example, that the cereal inside may not look the same as the picture on the box or that actual weight may be different than listed weight.
Mr. Vladeck of FTC recently shared his take on disclaimers and typicality, stating: "The Guides are not working as intended to prevent consumer deception." As a result, FTC is proposing to remove the "safe harbor" statement for disclaimers-especially for disclaimers regarding "typical" results. The good news? Removing the safe harbor statement will raise the bar for substantiation.
Mr. Vladeck also says "if the advertiser cannot substantiate [a] claim, a fine print or fleeting superscript disclosure of atypicality is unlikely to cure the deception." Consequently, this makes the advertiser responsible for ensuring that consumers are not misled by the ad in its entirety.
Need another reason to work with outside scientists and researchers to ensure compliance with the FTC Guides? Consider this: regulatory authorities hold the whole product development chain responsible for product substantiation, including safety and other claims. Types of companies in this "custody chain" include everyone from raw material suppliers to finished product companies, retailers, endorsers and so on. Thus, in a way, all are responsible for ensuring that a given product complies with the laws.
Putting it all Together
Recent statements and actions by regulatory agencies make it apparent that greater controls in the marketplace are coming, and the only way to head them off is to build comprehensive substantiation for marketed products.
Truth in advertising remains very relevant and important in today's market. So having a scientific dossier, whether for a branded ingredient or finished product, can only enhance a relationship with regulatory authorities, while also building consumer confidence and repeat customers for the marketing side of the business.
In the end, the extra motivator for compliance may just be that liability for product claims lies with more than just the company selling the product, and that the fines can put you out of business or in personal bankruptcy.
Now is the time to reach out to a contract research organization (CRO), a local university or teaching hospital to begin a relationship. Whether the goal is to build or re-build the science, an opportunity exists here to lead the industry in many categories. And the return on investment is beyond promising.