As Roll Global continues to regroup following a highly publicized battle that pit its POM Wonderful LLC against the FTC, those observing the case have questioned how the ruling stands to shape the functional food and beverage industry at large.
According to Thomas Cohn, an attorney with New York-based LeClairRyan, and 17-year FTC veteran, the judge’s ruling not only highlights the risks of aggressively marketing functional foods, it “might also lead to a showdown over whether the FTC can force marketers to get ‘gold-standard’ scientific evidence before they run such ads.
“Over the past couple of years, the newly aggressive FTC has tried to redefine ‘competent and reliable scientific evidence’ for certain serious health claims to mean something quite specific—namely, randomized, double-blind clinical studies involving human subjects,” said Mr. Cohn. “While this is part and parcel of FDA's strict pre-approval process for certain drugs, it represents quite a departure in the arena of supplements and functional foods. The POM Wonderful case is significant because the judge found there was no precedent for the FTC's imposition of these more-stringent substantiation standards.”
Although the FTC administrative law judge decided POM Wonderful had made false and unsubstantiated advertising claims, Mr. Cohn pointed out that the judge also noted that the existing substantiation requirement for disease-fighting claims does not require carefully controlled clinical trials along the lines of FDA drug pre-approval. “Rather, the ruling was that POM’s evidence must meet standards generally accepted in the relevant scientific field, and that this evidence must be weighed in light of the entire body of “relevant and reliable’ scientific evidence,” he said. “That might sound demanding, but it is a far cry from clinical trials.”
In a press release, POM focused on page 248 of the ruling, which stated: “The greater weight of the persuasive expert testimony in this case leads to the conclusion that where the product is absolutely safe, like POM Products, and where the claim or advertisement does not suggest that the product be used as a substitute for conventional medical care or treatment, then it is appropriate to favor disclosure.”
The company said that statement contained four important implications: that Roll Global will not have to get preapproval from the FDA before making health claims about our food products; that Roll Global will not have to conduct the kind of double-blind, randomized, placebo-controlled studies that are required of the pharmaceutical industry; that the Administrative Law Judge affirmed the scientific validity behind the general health benefits of pomegranates; and that the ruling completely exonerated POM regarding any claims of misrepresenting the health benefits of POM Wonderful 100% pomegranate juice and POM food products in broadcast or print interviews.
It’s worth noting, said Mr. Cohn, that the past two years have seen the FTC reach nearly 20 settlements in which it has persuaded marketers of supplements and functional foods to conform to this higher standard—particularly when it comes to weight-loss and disease-fighting claims. In various business education publications, the agency has also warned marketers of the need to comply with stringent, FDA-derived protocols. “Significantly, the judge said this was without any precedent, and that new standards could only be established through adjudication or rulemaking,” he said. “The judge simply included in his order the usual definition of competent and reliable scientific evidence from most past FTC orders. The FTC, in other words, had overstepped its authority by trying to impose another agency’s requirements.”
The next step in the judiciary process will be for the full commission to review the administrative law judge’s decision, which it can do on its own or at any party’s request. If the full commission’s decision is contested, the matter would go to a federal appeals court.
“If this ruling is adopted by the full Federal Trade Commission, Roll Global …would be under a 20-year order that requires scientific research to back up health benefit claims, but that order would not require FDA preapproval or language that would be interpreted as the standard of double-blind, randomized, placebo-controlled studies as requested by the FTC in their complaint,” Roll Global said. “In effect, the nature of the order requires Roll Global to continue to do what it has always done—be transparent in delivering health information to consumers, backing up that information with peer-reviewed, scientific research.”
All told, the POM case creates a host of broader questions, Mr. Cohn said. “Will the respondents fight the rulings against them? Will FTC staff push for an FDA pre-approval requirement, which it has inserted into many recent settlements but has never successfully litigated?” he asked. “If FTC loses this point on appeal to federal court, that might even nullify this requirement in those past settlements.”
An FTC victory, on the other hand, could force marketers of functional foods to dial back their disease-fighting claims in the absence of data from clinical trials, he said. “Such studies are so astronomically expensive that only the biggest companies can afford them,” he commented. “This is significant in an industry full of small startups.”
In the meantime, those who market the likes of coconut oil and goji berries should take care to avoid making unsubstantiated claims, Mr. Cohn advised. “A just-the-facts approach is critical. If you are marketing cherry soda and your product actually contains real cherries, it might be OK to put ‘Contains antioxidants’ on the label,” he said. "But if you add another gram of vitamin K to your cereal, you should think twice about trumpeting that it ‘fights cancer’ or ‘boosts immunity.’”
Marketers should also avoid messaging that might cause FTC experts to believe certain health benefits were being implied, if not explicitly claimed. “The exact wording of the ad is not the whole story,” Mr. Cohn advised. “When it comes to implied claims, judges usually defer to the FTC's expert witnesses. Subtle suggestions, in other words, also carry risk.”
Eric Lindstrom, legal counsel at Keller and Heckman, LLP, who assists companies on FDA, FTC, and USDA regulatory matters for foods, dietary supplements and cosmetics, concurred with Mr. Cohn, and offered the most common sense takeaway advice for companies from the POM case: make sure all material product claims have a reasonable basis before they are made and that the substantiation for the claims is in the possession of the company before the claims are made. “In the case of health-related claims for foods and dietary supplements, that reasonable basis must be competent and reliable scientific evidence,” he said. “If they don't have substantiation, which by itself is actionable by FTC, and the claims are false or deceptive, FTC, FDA or competing companies may take issue with the claim and, at minimum, cause a significant amount of bad PR.”