[Federal Register Volume 79, Number 10 (Wednesday, January 15, 2014)]
[Notices]
[Pages 2668-2674]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-00560]
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FEDERAL TRADE COMMISSION
[File No. 122 3115]
L'Occitane, Inc.; Analysis of Proposed Consent Order To Aid
Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed consent agreement.
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[[Page 2669]]
SUMMARY: The consent agreement in this matter settles alleged
violations of federal law prohibiting unfair or deceptive acts or
practices or unfair methods of competition. The attached Analysis of
Proposed Consent Order to Aid Public Comment describes both the
allegations in the draft complaint and the terms of the consent order--
embodied in the consent agreement--that would settle these allegations.
DATES: Comments must be received on or before February 6, 2014.
ADDRESSES: Interested parties may file a comment at https://ftcpublic.commentworks.com/ftc/loccitaneconsent online or on paper, by
following the instructions in the Request for Comment part of the
SUPPLEMENTARY INFORMATION section below. Write ``L'Occitane, Inc.--
Consent Agreement; File No. 122 3115'' on your comment and file your
comment online at https://ftcpublic.commentworks.com/ftc/fidelitynationalconsent https://ftcpublic.commentworks.com/ftc/loccitaneconsent by following the instructions on the web-based form.
If you prefer to file your comment on paper, mail or deliver your
comment to the following address: Federal Trade Commission, Office of
the Secretary, Room H-113 (Annex D), 600 Pennsylvania Avenue NW.,
Washington, DC 20580.
FOR FURTHER INFORMATION CONTACT: Matthew D. Gold, Federal Trade
Commission Western Region, (415-848-5100), 901 Market Street, Suite 570
San Francisco, CA 94103.
SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34,
notice is hereby given that the above-captioned consent agreement
containing consent order to cease and desist, having been filed with
and accepted, subject to final approval, by the Commission, has been
placed on the public record for a period of thirty (30) days. The
following Analysis to Aid Public Comment describes the terms of the
consent agreement, and the allegations in the complaint. An electronic
copy of the full text of the consent agreement package can be obtained
from the FTC Home Page (for January 7, 2014), on the World Wide Web, at
http://www.ftc.gov/os/actions.shtm. A paper copy can be obtained from
the FTC Public Reference Room, Room 130-H, 600 Pennsylvania Avenue NW.,
Washington, DC 20580, either in person or by calling (202) 326-2222.
You can file a comment online or on paper. For the Commission to
consider your comment, we must receive it on or before February 6,
2014. Write ``L'Occitane, Inc.--Consent Agreement; File No. 122 3115''
on your comment. Your comment--including your name and your state--will
be placed on the public record of this proceeding, including, to the
extent practicable, on the public Commission Web site, at http://www.ftc.gov/os/publiccomments.shtm. As a matter of discretion, the
Commission tries to remove individuals' home contact information from
comments before placing them on the Commission Web site.
Because your comment will be made public, you are solely
responsible for making sure that your comment does not include any
sensitive personal information, like anyone's Social Security number,
date of birth, driver's license number or other state identification
number or foreign country equivalent, passport number, financial
account number, or credit or debit card number. You are also solely
responsible for making sure that your comment does not include any
sensitive health information, like medical records or other
individually identifiable health information. In addition, do not
include any ``[t]rade secret or any commercial or financial information
which . . . is privileged or confidential,'' as discussed in Section
6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR
4.10(a)(2). In particular, do not include competitively sensitive
information such as costs, sales statistics, inventories, formulas,
patterns, devices, manufacturing processes, or customer names.
If you want the Commission to give your comment confidential
treatment, you must file it in paper form, with a request for
confidential treatment, and you have to follow the procedure explained
in FTC Rule 4.9(c), 16 CFR 4.9(c).\1\ Your comment will be kept
confidential only if the FTC General Counsel, in his or her sole
discretion, grants your request in accordance with the law and the
public interest.
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\1\ In particular, the written request for confidential
treatment that accompanies the comment must include the factual and
legal basis for the request, and must identify the specific portions
of the comment to be withheld from the public record. See FTC Rule
4.9(c), 16 CFR 4.9(c).
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Postal mail addressed to the Commission is subject to delay due to
heightened security screening. As a result, we encourage you to submit
your comments online. To make sure that the Commission considers your
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/loccitaneconsent by following the instructions on the web-based
form. If this Notice appears at http://www.regulations.gov/#!home, you
also may file a comment through that Web site.
If you file your comment on paper, write ``L'Occitane, Inc.--
Consent Agreement; File No. 122 3115'' on your comment and on the
envelope, and mail or deliver it to the following address: Federal
Trade Commission, Office of the Secretary, Room H-113 (Annex D), 600
Pennsylvania Avenue NW., Washington, DC 20580. If possible, submit your
paper comment to the Commission by courier or overnight service.
Visit the Commission Web site at http://www.ftc.gov to read this
Notice and the news release describing it. The FTC Act and other laws
that the Commission administers permit the collection of public
comments to consider and use in this proceeding as appropriate. The
Commission will consider all timely and responsive public comments that
it receives on or before February 6, 2014. You can find more
information, including routine uses permitted by the Privacy Act, in
the Commission's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.
Analysis of Proposed Consent Order To Aid Public Comment
The Federal Trade Commission (``FTC'' or ``Commission'') has
accepted, subject to final approval, an Agreement Containing Consent
Order from L'Occitane, Inc. (``respondent''). The proposed consent
order has been placed on the public record for thirty (30) days for
receipt of comments by interested persons. Comments received during
this period will become part of the public record. After thirty (30)
days, the Commission will again review the agreement and the comments
received, and will decide whether it should withdraw from the agreement
and take appropriate action or make final the agreement's proposed
order.
This matter involves the advertising, marketing, and sale of
``Almond Beautiful Shape'' and ``Almond Shaping Delight''
(collectively, ``the almond products'') by respondent. Respondent has
marketed the almond products to consumers through its retail stores and
Web site, and through third-party retail outlets.
The almond products are skin creams that contain almond extracts
and other ingredients. According to the FTC complaint, respondent
promoted the almond products as able to slim and reshape the body.
Specifically, the FTC complaint alleges that respondent
represented, in various advertisements, that topical use of Almond
Beautiful Shape trims 1.3
[[Page 2670]]
inches from the user's thighs in just four weeks; topical use of Almond
Beautiful Shape significantly slims the user's thighs and buttocks;
topical use of Almond Beautiful Shape significantly reduces cellulite;
and topical use of Almond Shaping Delight significantly slims the body
in just four weeks. The complaint alleges that these claims are
unsubstantiated and thus violate the FTC Act. The complaint also
alleges that respondent represented, in various advertisements, that
scientific tests prove that topical use of Almond Beautiful Shape trims
1.3 inches from the user's thighs in just four weeks; scientific tests
prove that topical use of Almond Beautiful Shape significantly reduces
cellulite; and scientific tests prove that Almond Shaping Delight
significantly slims the body in just four weeks. The complaint alleges
that these claims are false and thus violate the FTC Act.
The proposed consent order contains provisions designed to prevent
respondent from engaging in similar acts or practices in the future.
Specifically, Part I prohibits respondent from claiming that the almond
products or any other topically applied product causes substantial
weight or fat loss or a substantial reduction in body size. Part I of
the order is designed to fence in respondent by ensuring that extreme,
scientifically unfeasible claims will not be made in the future.
Part II addresses the slimming claims at issue in this matter. It
covers any representation, other than representations covered under
Part I, that a drug or cosmetic causes weight or fat loss or a
reduction in body size. Part II prohibits respondent from making such
representations unless the representation is non-misleading, and, at
the time of making such representation, respondent possesses and relies
upon competent and reliable scientific evidence that substantiates that
the representation is true. For purposes of Part II, the proposed order
defines ``competent and reliable scientific evidence'' as at least two
randomized, double-blind, placebo-controlled human clinical studies
that are conducted by independent, qualified researchers and that
conform to acceptable designs and protocols, and whose results, when
considered in light of the entire body of relevant and reliable
scientific evidence, are sufficient to substantiate that the
representation is true.
Part III of the proposed order prohibits respondent from making any
representation, other than representations covered under Parts I or II,
that use of a drug or cosmetic reduces or eliminates cellulite or
affects body fat or weight, unless the representation is non-
misleading, and, at the time of making such representation, respondent
possesses and relies upon competent and reliable scientific evidence
that is sufficient in quality and quantity based on standards generally
accepted in the relevant scientific fields, when considered in light of
the entire body of relevant and reliable scientific evidence, to
substantiate that the representation is true. For purposes of Part III,
the proposed order defines ``competent and reliable scientific
evidence'' as tests, analyses, research, or studies that have been
conducted and evaluated in an objective manner by qualified persons,
and that are generally accepted in the profession to yield accurate and
reliable results.
Part IV of the proposed order addresses the allegedly false claims
that scientific tests prove that topical use of Almond Beautiful Shape
trims 1.3 inches from the user's thighs in just four weeks; scientific
tests prove that topical use of Almond Beautiful Shape significantly
reduces cellulite; and scientific tests prove that Almond Shaping
Delight significantly slims the body in just four weeks. Part IV
prohibits respondent, when advertising any product, from
misrepresenting the existence, contents, validity, results,
conclusions, or interpretations of any test, study, or research, or
misrepresenting that the benefits of the product are scientifically
proven.
Part V of the proposed order states that the order does not
prohibit respondent from making representations for any drug that are
permitted in labeling for that drug under any tentative or final
standard promulgated by the Food and Drug Administration (``FDA''), or
under any new drug application approved by the FDA. This part of the
proposed order also states that the order does not prohibit respondent
from making representations for any product that are specifically
permitted in labeling for that product by regulations issued by the FDA
under the Nutrition Labeling and Education Act of 1990.
Part VII of the proposed order requires respondent to pay four
hundred and fifty thousand dollars ($450,000) to the Commission to be
used for equitable relief, including restitution, and any attendant
expenses for the administration of such equitable relief. To facilitate
the payment of redress, Part VI of the proposed order requires
L'Occitane to provide to the Commission a searchable electronic file
containing the name and contact information of all consumers who
purchased the almond products from March 19, 2012 through the date of
entry of the order.
Parts VIII, IX, X, and XI of the proposed order require respondent
to keep copies of relevant advertisements and materials substantiating
claims made in the advertisements; to provide copies of the order to
its personnel; to notify the Commission of changes in corporate
structure that might affect compliance obligations under the order; and
to file compliance reports with the Commission. Part XII provides that
the order will terminate after twenty (20) years, with certain
exceptions.
The purpose of this analysis is to facilitate public comment on the
proposed order, and it is not intended to constitute an official
interpretation of the agreement and proposed order or to modify their
terms in any way.
By direction of the Commission.
Donald S. Clark,
Secretary.
Statement of Chairwoman Edith Ramirez and Commissioner Julie Brill
We write to explain our support for the remedy imposed against
respondents GeneLink, Inc. and foru International Corporation, which we
believe to be amply supported by the relevant facts. In this, as in all
of the Commission's advertising actions alleging deceptive health
claims, the Commission has called for, as proposed relief, a level of
substantiation that is grounded in concrete scientific evidence and
reasonably tailored to ensure that the conduct giving rise to the
violation ceases and does not recur, among other important remedial
goals. In our view, the remedy adopted here accomplishes just that,
without imposing undue costs on marketers or consumers more generally.
Respondents market and sell genetically customized nutritional
supplements and topical skin products. As described in the complaint,
this enforcement action stems from claims made by respondents in
promotional materials and through testimonials that their products
compensate for consumers' ``genetic disadvantages'' and cure or treat
serious conditions such as diabetes, heart disease, and arthritis. In a
newsletter, for example, respondents represented their products had
cured ``a serious diabetic and cardiac patient,'' and an affiliate's
Web site stated that the products produced ``improvements in everything
from blood pressure to eczema to hormonal issues to arthritis.'' \1\
The Commission alleges that
[[Page 2671]]
respondents lacked adequate substantiation for these claims and that
they falsely represented that the products' benefits were
scientifically proven.
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\1\ Compl. Exs. G and H.
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Disease treatment claims such as these require a rigorous level of
substantiation. Based on evidence from genetics and nutritional
genomics experts, the Commission has reason to believe that well-
controlled human clinical trials (referred to here as ``randomized
controlled trials'' or ``RCTs'') are needed to substantiate
respondents' claims and that the studies relied on by respondents to
back up their claims fall far short of this evidence. Because
respondents lacked even one valid RCT for their products, it was
unnecessary for the Commission to decide, for purposes of assessing
liability, the precise number of RCTs needed to substantiate their
claims.
In fashioning an appropriate remedy, however, we are requiring that
respondents have at least two RCTs before making disease prevention,
treatment, and diagnosis claims. We have the discretion to issue orders
containing ``fencing-in'' provisions--``provisions . . . that are
broader than the conduct that is declared unlawful.'' Telebrands Corp.
v. FTC, 457 F.3d 354, 357 n.5 (4th Cir. 2006) (citation and internal
quotation marks omitted). Here, we believe that the two-RCT mandate is
appropriate and reasonably crafted to prevent the recurrence of
respondents' alleged unlawful conduct. This requirement conforms to
well-recognized scientific principles favoring replication of study
results to establish a causal relationship between exposure to a
substance and a health outcome. See, e.g., Thompson Med. Co., 104
F.T.C. 648, 720-21, 825 (1984) (requiring two RCTs to support claims of
arthritis pain relief and thereby affirming determination that
``[r]eplication is necessary because there is a potential for
systematic bias and random error in any clinical trial''), aff'd, 791
F.2d 189 (D.C. Cir. 1986).\2\ It also provides clear rules for
respondents, facilitating the setting of future research and marketing
agendas, and preserves law enforcement resources by minimizing future
argument over the quantity and quality of substantiation needed for the
most serious health claims about respondents' products. Moreover, the
deceptive claims alleged in the complaint are the type of significant
violations of law for which fencing-in relief is more than justified as
an additional safeguard against potential recidivism. See, e.g., id. at
834 (ruling that deceptive health claims about topical analgesic for
arthritis pain warranted fencing-in, and noting that the seriousness of
the violations was ``affected by the fact that consumers could not
readily judge the truth or falsity of the claims'').
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\2\ See also Geoffrey Marczyk et al., Essentials of Research
Design and Methodology 15-16 (2005) (``The importance of replication
in research cannot be overstated. Replication serves several
integral purposes, including establishing the reliability (i.e.,
consistency) of the research study's findings and determining . . .
whether the results of the original study are generalizable to other
groups of research participants.'').
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While not taking issue with respondents' liability as alleged in
the Commission's complaint, Commissioner Ohlhausen objects to the
Commission's decision to require, as a remedial matter, that
respondents have at least two RCTs before representing that their
genetic products can cure, treat, diagnose, or prevent a disease. In
addition to arguing that the two-RCT requirement is ``unduly high,''
Commissioner Ohlhausen expresses concern that these and other recent
Commission orders may lead advertisers in general to believe that they
too must invariably have two RCTs to substantiate health and disease
claims for a variety of products, leading them to forgo otherwise
adequately substantiated claims and depriving consumers of potentially
useful information.\3\ We respectfully disagree.
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\3\ Statement of Commissioner Maureen K. Ohlhausen, Dissenting
in Part and Concurring in Part [hereinafter Ohlhausen Statement] at
1. In her Statement, Commissioner Ohlhausen also references various
weight-loss related enforcement actions announced today by the
Commission, including FTC v. Sensa Products, LLC. Her objections,
however, center on the remedy imposed in this matter.
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There is nothing in our action today that amounts to the imposition
of a ``de facto two-RCT standard on health- and disease-related
claims.'' \4\ In this and other recent enforcement actions, the
Commission has consistently adhered to its longstanding view that the
proper level of substantiation for establishing liability is a case-
specific factual determination as to what constitutes competent and
reliable scientific evidence for the advertising claims at issue.\5\
The same fact-specific approach has guided the Commission's remedial
standards. Recent Commission consent orders concerning different types
of health claims have variously required two RCTs,\6\ one RCT,\7\ or
more generally defined ``competent and reliable scientific evidence.''
\8\ Against this backdrop, we are not persuaded that by requiring two
RCTs as a remedial matter here, the Commission will create a
misperception among advertisers about the substantiation standards that
govern liability for deceptive advertising.\9\ However, to the extent
other marketers look to our orders for signals as to the type of
backing required for disease treatment claims, we prefer that they
understand that serious claims like those made by respondents must have
hard science behind them.
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\4\ Ohlhausen Statement at 3.
\5\ See, e.g., Bristol Meyers Co., 102 F.T.C. 21, 332-38 (1983),
aff'd, 738 F.2d 554 (2d Cir. 1984); FTC, Dietary Supplements: An
Advertising Guide for Industry 10 (Apr. 2001) [hereinafter Dietary
Supplements Advertising Guide] (``When no specific claim about the
level of support is made, the evidence needed depends on the nature
of the claim. A guiding principle for determining the amount and
type of evidence that will be sufficient is what experts in the
relevant area of study would generally consider to be adequate.'').
\6\ See, e.g., FTC v. Skechers U.S.A., Inc., No. 1:12-cv-01214-
JG (N.D. Ohio July 12, 2012) (prohibiting, as a remedial matter,
weight loss claims without two RCTs); FTC v. Labra, No. 11 C 2485
(N.D. Ill. Jan. 11, 2012) (same); FTC v. Iovate Health Scis. USA,
Inc., No. 10-cv-587 (W.D.N.Y. July 29, 2010) (same); Nestl[eacute]
Healthcare Nutrition, Inc., 151 F.T.C. 1 (2011) (requiring two RCTs
for claims that any probiotic drink or certain nutritionally
complete drinks reduce the duration of acute diarrhea in children or
absences from daycare or school due to illness).
\7\ See, e.g., FTC v. Skechers U.S.A., Inc., No. 1:12-cv-01214-
JG (N.D. Ohio July 12, 2012) (prohibiting muscle strengthening
claims for any footwear product without one RCT); FTC v. Reebok
Int'l Ltd., No. 1:11-cv-02046-DCN (N.D. Ohio Sept. 29, 2011) (same).
\8\ See, e.g., NBTY, Inc., 151 F.T.C. 201 (2011) (requiring
marketer of vitamins to possess ``competent and reliable scientific
evidence'' for any claim about the health benefits, performance, or
efficacy of any product).
\9\ Moreover, as Commissioner Ohlhausen notes, Ohlhausen
Statement at 2 n.7, there may be some instances in which the medical
community would not require RCTs to demonstrate that a substance
treats, prevents, or reduces the risk of a disease. See, e.g.,
Dietary Supplements Advertising Guide, supra note 5, at 11
(explaining that an appropriately qualified claim based on
epidemiological evidence would be permitted where ``[a] clinical
intervention trial would be very difficult and costly to conduct,''
``experts in the field generally consider epidemiological evidence
to be adequate'' and there is no ``stronger body of contrary
evidence''). But, contrary to Commissioner Ohlhausen's contention,
the link between folic acid and neural tube birth defects was
substantiated using a combination of RCTs and observational
epidemiological evidence, as indicated by the articles she cites.
See, e.g., Walter C. Willett, Folic Acid and Neural Tube Defect:
Can't We Come to Closure?, 82 Am. J. Pub. Health 666, 667 (1992).
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We also disagree that the proposed remedy will deny consumers
access to useful information about new areas of science. The value of
information naturally depends on its accuracy.\10\ As
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the DC Circuit has emphasized, ``misleading advertising does not serve,
and, in fact, disserves, th[e] interest'' of ``consumers and society .
. . in the free flow of commercial information.'' FTC v. Brown &
Williamson Tobacco Corp., 778 F.2d 35, 43 (D.C. Cir. 1985) (citation
and internal quotation marks omitted). If respondents wish to rely on
emerging science, they can qualify their claims accordingly. Properly
qualified claims are lawful and permissible under our proposed orders.
See Proposed Consent Orders, Part III.
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\10\ In some instances, ``emerging'' scientific evidence has
been subsequently contradicted by further research, leading to
consumer confusion and potential physical and financial harm. See,
e.g., Eric A. Klein et al., Vitamin E and the Risk of Prostate
Cancer, The Selenium and Vitamin E Cancer Prevention Trial (SELECT),
306 J. Am. Med. Ass'n 1549, 1551 (2011) (reporting that a 2008
randomized, placebo-controlled prospective clinical trial of over
35,000 men contradicted ``considerable preclinical and
epidemiological evidence that selenium and vitamin E may reduce
prostate cancer risk,'' and that follow-up observational data from
2011 showed a statistically significant increase in prostate cancer
in the vitamin E group over placebo).
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The fact that the ingredients in respondents' products are safe
also does not alter our conclusion. Consumers who rely on respondents'
claims may forgo important diet and lifestyle changes that are known to
reduce the risk of diabetes, heart disease, or arthritis. Or they may
forgo treatments that, unlike respondents' products, have been
demonstrated to be effective. In addition, respondents charge a
premium, over $100 per month, for their customized products. Consumers,
therefore, may be deceived both to their medical and economic detriment
when a safe product provides an ineffective treatment. See FTC v. QT,
Inc., 512 F.3d 858, 863 (7th Cir. 2008) (safe but deceptively
advertised treatment ``will lead some consumers to avoid treatments
that cost less and do more; the lies will lead others to pay too much
for [treatment] or otherwise interfere with the matching of remedies to
medical conditions''); Pfizer Inc., 81 F.T.C. 23, 62 (1972) (``A
consumer should not be compelled to enter into an economic gamble to
determine whether a product will or will not perform as
represented.''). Unsubstantiated disease claims also harm honest
competitors that expend considerable resources on studies or analyses
of the existing science and conform their advertising claims
accordingly. Allowing companies to rely on ``emerging'' evidence to
support disease claims merely because the products in question are safe
would risk a ``race to the bottom''--the proliferation of progressively
more egregious disease claims, which would harm both legitimate
competitors and consumers in the process.
Finally, Commissioner Ohlhausen argues that requiring the RCTs to
be conducted by different researchers working independently of each
other imposes undue burdens in the absence of evidence that a defendant
has fabricated or interfered with a study or its results.\11\ This
requirement is an important safeguard that lessens the likelihood that
researcher bias will affect the outcome of a study and helps ensure
that the results are replicable.\12\
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\11\ Ohlhausen Statement at 2-3.
\12\ Commissioner Ohlhausen also objects to the Part I
requirement that testing be conducted on the product about which the
advertising claim is made or an ``essentially equivalent product,''
arguing that the order should authorize ``claims regarding
individual ingredients in combined products as long as claims for
each ingredient are properly substantiated and there are no known
interactions.'' Ohlhausen Statement at 3. In fact, the orders permit
that very thing. If there is reliable evidence that the additional
ingredients will not interact with the tested product in a way that
impacts efficacy, the orders do not require testing of the combined
product. See Proposed Consent Orders at 3 (defining ``Essentially
Equivalent Product'' to permit additional ingredients, beyond those
in the tested product, if ``reliable scientific evidence generally
accepted by experts in the field demonstrates that the amount and
combination of additional ingredients [in the respondent's product]
is unlikely to impede or inhibit the effectiveness of the
ingredients in the [tested product]'').
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In short, we believe the relief obtained by the Commission in this
settlement is warranted and strikes the right balance between the need
for accuracy in health-related advertising claims and the burden placed
on respondents.
Statement of Commissioner Maureen K. Ohlhausen Dissenting In Part and
Concurring In Part
I strongly support the Commission's enforcement efforts against
false and misleading advertisements and therefore have voted in favor
of the consent agreements with Sensa Products, LLC; HCG Diet Direct,
LLC; L'Occitane, Inc.; and LeanSpa, LLC, despite having some concerns
about the scope of the relief in several of these weight-loss related
matters. I voted against the consent agreements in the matter of
GeneLink, Inc. and foru International Corporation, however, because
they impose an unduly high standard of at least two randomized
controlled trials (or RCTs) to substantiate any disease-related claims,
not just weight-loss claims. Adopting a one-size-fits-all approach to
substantiation by imposing such rigorous and possibly costly
requirements for such a broad category of health- and disease-related
claims \1\ may, in many instances, prevent useful information from
reaching consumers in the marketplace and ultimately make consumers
worse off.\2\
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\1\ This provision may apply quite broadly in practice given the
Commission majority's conclusion in our POM Wonderful decision that
many of the claims involving the continued healthy functioning of
the body also conveyed implied disease-related claims. See POM
Wonderful, LLC, No. 9344, 2013 WL 268926 (F.T.C. Jan. 16, 2013).
\2\ To be clear, however, I am not advocating in favor of
permitting ``unsubstantiated disease claims,'' as suggested in the
statement of Chairwoman Ramirez and Commissioner Brill. Rather, I am
suggesting that consumers would on balance be better off if we
clarified that our requirements permit a variety of health- or
disease-related claims about safe products, such as foods or
vitamins, to be substantiated by competent and reliable scientific
evidence that might not comprise two RCTs.
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The Commission has traditionally applied the Pfizer \3\ factors to
determine the appropriate level of substantiation required for a
specific advertising claim. These factors examine the nature of the
claim and the type of product it covers, the consequences of a false
claim, the benefits of a truthful claim, the cost of developing the
required substantiation for the claim, and the amount of substantiation
experts in the field believe is reasonable for such a claim.\4\ One of
the goals of the Pfizer analysis is to balance the value of greater
certainty of information about a product's claimed attributes with the
risks of both the product itself and the suppression of potentially
useful information about it. Under such an analysis, the burden for
substantiation for health- or disease-related claims about a safe
product, such as a food, for example, should be lower than the burdens
imposed on drugs and biologics because consumers face lower risks when
consuming the safe product.\5\
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\3\ Pfizer, Inc., 81 F.T.C. 23 (1972).
\4\ Id. at 91-93; see also FTC Policy Statement Regarding
Advertising Substantiation, 104 F.T.C. 839 (1984) (appended to
Thompson Med. Co., 104 F.T.C. 648, 839 (1984)).
\5\ The FDA designates most food ingredients as GRAS (generally
recognized as safe). 21 CFR 170.30. Vitamins and minerals are
treated as foods by the FDA and are also GRAS. See FDA Guidance for
Industry: Frequently Asked Questions about GRAS (Dec. 2004),
available at http://www.fda.gov/Food/GuidanceRegulation/GuidanceDocumentsRegulatoryInformation/IngredientsAdditivesGRASPackaging/ucm061846.htm#Q1. As a result,
food ingredients, vitamins, and minerals can be combined and sold to
the public without direct evidence on the particular combination
realized in the new product. Many products are made up of several
common generic ingredients, for which there is little financial
incentive to test individually or to retest in each particular
combination.
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Recently, however, Commission orders, including the ones in the
matter of GeneLink and foru International, seem to have adopted two
RCTs as a standard requirement for health- and disease-related claims
for a wide array of products.\6\ RCTs can be difficult to
[[Page 2673]]
conduct and are often costly and time-consuming relative to other types
of testing, particularly for diseases that develop over a long period
of time or complex health conditions. Requiring RCTs may be appropriate
in some circumstances, such as where use of a product carries some
significant risk, or where the costs of conducting RCTs may be
relatively low, such as for conditions whose development or
amelioration can be observed over a short time period. Thus, I am
willing to support the order requirement of two RCTs for short-term
weight loss claims in the Sensa, HCG Diet Direct, L'Occitane, and
LeanSpa matters because such studies can be conducted in a relatively
short amount of time at a lower cost than for many other health claims.
My concern with GeneLink and foru International and the series of
similar orders is that they might be read to imply that two RCTs are
required to substantiate any health- or disease-related claims, even
for relatively-safe products. It seems likely that producers may forgo
making such claims about these kinds of products, even if they may
otherwise be adequately supported by evidence that does not comprise
two RCTs.\7\
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\6\ The orders in this matter include as a Covered Product any
food, drug, or cosmetic that is genetically customized or
personalized for a consumer or that is promoted to modulate the
effect of genes. Other cases requiring two RCTs are POM Wonderful
LLC, Docket No. 9344 (F.T.C. Jan. 10, 2013) (fruit juice); Dannon
Co., Inc., 151 F.T.C. 62 (2011) (yogurt); Nestl[eacute] Healthcare
Nutrition, Inc., 151 F.T.C. 1 (2011) (food); FTC v. Iovate Health
Sci. USA, Inc., No. 10-cv-587 (W.D.N.Y. July 29, 2010) (dietary
supplement).
\7\ Notably, the medical community does not always require RCTs
to demonstrate the beneficial effects of medical and other health-
related innovations. For example, the recommendation that women of
childbearing age take a folic acid supplement to reduce the risk of
neural tube birth defects was made without RCT evidence on the
relevant population. See Walter C. Willett, ``Folic Acid and Neural
Tube Defect: Can't We Come to Closure?'' American Journal of Public
Health, May 1992, Vol. 82, No. 5; Krista S. Crider, Lynn B. Bailey
and Robert J. Berry, ``Folic Acid Food Fortification--Its History,
Effect, Concerns, and Future Directions,'' Nutrients 2011, Vol. 3,
370-384.
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Although raising the requirement for both the number and the rigor
of studies required for substantiation for all health- or disease-
related claims may increase confidence in those claims, the
correspondingly increased burdens in time and money in conducting such
studies may suppress information that would, on balance, benefit
consumers. If we demand too high a level of substantiation in pursuit
of certainty, we risk losing the benefits to consumers of having access
to information about emerging areas of science and the corresponding
pressure on firms to compete on the health features of their products.
In my view, the Commission should apply the Pfizer balancing test in a
more finely calibrated manner than they have in the GeneLink and foru
International orders to avoid imposing ``unduly burdensome restrictions
that might chill information useful to consumers in making purchasing
decisions.'' \8\
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\8\ FTC Staff Comment Before the Food and Drug Administration In
the Matter of Assessing Consumer Perceptions of Health Claims,
Docket No. 2005N-0413 (2006), available at http://www.ftc.gov/be/V060005.pdf.
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In addition, based on the same concerns about imposing
unnecessarily burdensome and costly obligations, I do not support a
general requirement that all products be tested by different
researchers working independently without an indication that the
defendant fabricated or otherwise interfered with a study or its
results.\9\ Where defendants have fabricated results, as our complaint
against Sensa alleges, a requirement of independent testing may be
appropriate, but a simple failure to have adequate substantiation
should not automatically trigger such an obligation. In other cases,
where there is some concern about a sponsor or researcher biasing a
study, our orders may address this in a less burdensome way by
requiring the producer making the disease-related claims to provide the
underlying testing data to substantiate its claims, which we can
examine for reliability. Similarly, the requirement to test an
``essentially equivalent product,'' which appears to be more rigorous
than FDA requirements for food and supplement products, can
significantly and unnecessarily increase the costs of substantiation,
again potentially depriving consumers of useful information. Instead,
Commission orders should clearly allow claims regarding individual
ingredients in combined products as long as claims for each ingredient
are properly substantiated and there are no known relevant
interactions.\10\
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\9\ The FDA does not require independent testing for clinical
investigational studies of medical products, including human drug
and biological products or medical devices, and it permits sponsors
to use a variety of approaches to fulfill their responsibilities for
monitoring. See FDA Guidance for Industry Oversight of Clinical
Investigations--A Risk-Based Approach to Monitoring (Aug. 2013),
available at http://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/UCM269919.pdf.
\10\ Although the statement by Chairwoman Ramirez and
Commissioner Brill asserts that the orders in GeneLink and foru
International permit claims for individual ingredients in combined
products as long as the claims for each ingredient are properly
substantiated and there are no known interactions, the orders
actually require that ``reliable scientific evidence generally
accepted by experts in the field demonstrate that the amount and
combination of additional ingredients is unlikely to impede or
inhibit the effectiveness of the ingredients in the Essentially
Equivalent Product.'' Decision and Order at 2, In the Matter of
GeneLink, Inc. FTC File No. 112 3095 (emphasis added). My point is
that the FDA does not require direct evidence regarding combinations
of individual ingredients deemed GRAS but the order on its face
requires scientific evidence demonstrating the effect of such
combinations.
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It is my hope and recommendation that as we consider future cases
involving health- and disease-related claims, the Commission and its
staff engage in a further dialogue about our substantiation
requirements to discern how best to assess the potential costs and
benefits of allowing different types of evidence that might provide a
reasonable basis to substantiate such claims. Although I am willing to
support liability for failures to have adequate substantiation for
health- and disease-related claims under certain circumstances, I am
not willing to support a de facto two-RCT standard on health- and
disease-related claims for food or other relatively-safe products.
Statement of Commissioner Joshua D. Wright
Today the Commission announces five settlements involving the
deceptive marketing of a variety of nutritional and dietary
supplements, skincare products, and weight-loss remedies. While the
course of business conduct, type of product and particular advertising
claim at issue in each case differs, all share one common
characteristic--the Commission has alleged that, in the course of
advertising their products, each of these defendants has made false or
unsubstantiated claims about the treatment of certain medical or health
conditions.
Cases that challenge false or unsubstantiated claims--especially
those involving serious medical conditions--are an important component
of our agency's mission to protect consumers from economic injury.
Indeed, the aggregate consumer injury in these particular matters is
estimated to be $420 million and these settlement agreements will
return approximately $33 million to consumers. I fully support the
Commission's efforts to deter deceptive advertising and voted in favor
of authorizing these particular settlements.
In crafting remedial relief in these cases, the Commission
inevitably faces a tradeoff between deterring deceptive advertising and
preserving the benefits to competition and consumers from truthful
claims. Tailoring remedial relief--including the level of
substantiation required--to the specific claims at issue is in the best
interests of consumers.\1\ I write today to express some of my views on
this issue.
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\1\ The Commission's determination of whether an advertiser has
adequate substantiation in the first instance depends upon ``a
number of factors relevant to the benefits and costs of
substantiating a particular claim. These factors include: the type
of claim, the product, the consequences of a false claim, the
benefits of a truthful claim, the cost of developing substantiation
for the claim, and the amount of substantiation experts in the field
believe is reasonable.'' FTC Policy Statement Regarding Advertising
Substantiation, appended to Thompson Medical Co., 104 F.T.C. 648,
839 (1984), aff'd, 791 F.2d 189 (D.C. Cir. 1986), cert. denied, 479
U.S. 1086 (1987). Formulating the required level of substantiation
for injunctive relief should necessarily be grounded in the factors
set forth in this policy statement, although additional
considerations might also be relevant.
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[[Page 2674]]
Each of the consent agreements announced today includes injunctive
relief provisions requiring the settling parties to satisfy a standard
of ``competent and reliable scientific evidence'' before again making
the claims at issue. Each consent agreement further defines ``competent
and reliable scientific evidence'' as requiring, among other things,
two adequate and well-controlled human clinical studies (randomized
controlled trials or RCTs) of the product. I encourage the Commission
to explore more fully whether the articulation and scope of injunctive
relief in these and similar settlements strikes the right balance
between deterring deceptive advertising and preserving for consumers
the benefits of truthful claims. The optimal amount and type of
evidence to substantiate a future claim will vary from case to case.
Similarly, a fact-specific inquiry may justify specially crafted
injunctive relief in certain cases, such as bans, performance bonds or
document retention requirements for underlying study data. I look
forward to working with my fellow Commissioners to continue to examine
and evaluate our formulation of the competent and reliable scientific
evidence standard, as well as the ancillary injunctive provisions in
consent agreements, in order to best protect consumers from the costs
imposed upon them by deceptive advertising while encouraging
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competition and truthful advertising that benefits consumers.
[FR Doc. 2014-00560 Filed 1-14-14; 8:45 am]
BILLING CODE 6750-01-P