The Changing Landscape for Marketing Health and Nutrition Benefits, Part 2
Anne V. Maher, Partner, Kleinfeld, Kaplan &Becker
Pom Wonderful’s fight with the FTC about pomegranate juice health claims—30% decrease in arterial plaque, 40% effective as Viagra, etc. Complaint said the substantiation was inadequate: prostate cancer study wasn’t properly blinded/otherwise conducted; the evidence didn’t support the claim. Proposed consent order has similar requirements to Nestle and Iovate. FTC also settled with Pom’s (now former) VP of regulatory affairs; he will cooperate in litigation against Pom. Pom sued the FTC in federal court before the administrative complaint issued, arguing that the Nestle & Iovate consent orders wrongfully promulgated new rules that violated the First Amendment.
Jonathan W. Emord, Principal, Emord & Associates, P.C.
Problems with FTC methods on statutory and constitutional grounds. If we were to start all over, what should we do to ensure compliance with the First Amendment and the FTCA?
First, recognize that speech at issue is protected commercial speech. Second, reality of marketplace: we base decisions on inconclusive information all the time. We exercise our sovereignty to make bets all the time. Conclusive/near conclusive proof is not required to segregate false from true speech. There are shades of deceptiveness; qualification is often the best means to alert people to the potential that something won’t work.
Truthful representations of inconclusive science are permissible and protected under the First Amendment if they can be rendered truthful by disclaimer. In almost every case, we have inconclusive science. Relative levels of credibility are key. Science evolves. If the government acts against inconclusive speech, it censors/creates a chilling effect.
Speech the government condemns or thinks is inadequately supported is nonetheless protected if backed by credible evidence. The FDA’s standards for credibility are subject to scrutiny for consistency with First Amendment. If in the end, there is censorship of inconclusive science backed by credible information, the courts have in 6 decisions found the FDA to violate the First Amendment.
Consent order: the deceptive thing within the FTC is a shell game: the consent order is not a final order, but the industry should be guided by it. Mixed messages; creates confusion in marketplace and has a chilling effect. Never have a safe harbor; always a chilling effect even if you have a clinical trial your scientists tell you is well designed. There will always be opportunity to challenge the integrity.
Politics plays a role in this.
Disease claim: FTC has adopted a prior restraint. Without first evaluating the truthfulness of the science, they’ll accept FDA’s prior restraint: prospective speech must satisfy FDA requirements. Inviting application Pearson, which applies in prior restraint context. These consent orders are more than guidance; they are used in negotiating with industry.
Truth depends on qualification. Rather than have all or nothing paradigm, or one in which FTC issues CID forcing people to pay to defend their speech, allowing government bird’s eye view into their finances, merely based on a hunch and never having to prove actual deceptions or sound science, that shifts the burden of proof in an unconstitutional way. The burden of proof is on the government, but it has been shifted to the accused party by requiring contemporaneous documentary evidence proving to near certainty that what it said was true. Without substantiation, you’re presumptively a deceptive advertiser. And you’re required to substantiate without clear evidence of what’s required.
Fundamentally, we should be allowed to place our bets. If I know probiotics affect immunity, but not the cold or flu—is it a reasonable scientific conclusion that it may affect the cold or flu? Even if inconclusive, you should have a right to convey that to the public in a qualified manner that the evidence is suggestive but not conclusive. It’s not for the government to make the penultimate decision.
Constitutional crisis! We have difficulty maintaining judicial victories without first going through the regulatory process. Pom going to court has difficulty with standing, ripeness, justiciability. But a petition for rulemaking to the FTC will lead to a decision in defense of the existing regime. Suing on First Amendment grounds creates an interesting, narrow question.
Legislative action: Ron Paul had Emord draft a great bill, the Freedom of Health Speech Act, depriving FTC of power to act against party unless it possesses scientific evidence that the representation is false, before it begins highly intrusive inquiry; could only exact damages if it showed actual deception with market studies.
Rebecca L. Tushnet, Professor, Georgetown University Law Center
False or misleading commercial speech may be banned, unlike false or misleading political speech. From the procedural side: this standard will always require elaboration in particular cases; the FTC can and must always come in and say, given these claims, you need X evidence. Transparency here is desirable. Puzzled by statement that it’s not clear what’s required: new consent orders seem to represent a substantial improvement; you may not like the standard, but it’s certainly more predictable.
Prior restraint: just want to make clear, the foundation of the FDA’s jurisdiction is based on what you say about the product: if you don’t claim to treat a disease with your paint, it’s not a drug or device.
We all like science! But there are two kinds of science at issue here: the health claims and the behavioral/psychological/marketing science of information communication.
What does misleading mean? Two possibilities: how do consumers react? Or, how would someone who was paying sedulous attention to every aspect of the advertising and did their own homework react? I think only the first one is coherent; the case law on this is incredibly underdeveloped, with the Supreme Court just declaring something to be inherently misleading or merely potentially misleading, with none of the recourse to consumer evidence that we now expect from consumer litigation. I don’t honestly know what inherently misleading could mean other than asking whether it could be fixed, and I don’t know what it would mean to fix the claim other than to change it so that it doesn’t mislead a reasonable consumer.
So while it is definitely true that we make decisions with probabilistic information all the time, the matter doesn’t end there. If a statement induces a consumer to believe that the probability of its truth is much higher than it really is, the consumer is misled, and her ability to satisfy her preferences, including her preferences for risk, is impaired.
Advertisers know they face tough choices with the amount of information it’s possible to communicate: you can’t tell your customers everything you’d ideally want them to know; they just won’t absorb it. This is even more true with second order information such as level of confidence. So in practice we have to look at whether the kinds of disclaimers proposed are diminishing consumer mistakes at all.
Slides: Pearson-approved disclosures:
• 0.8 mg folic acid in a dietary supplement is more effective in reducing the risk of neural tube defects than a lower amount in foods in common form. FDA does not endorse this claim. Public health authorities recommend that women consume 0.4 mg folic [acid] daily from fortified foods or dietary supplements or both to reduce the risk of neural tube defects.
• As part of a well-balanced diet that is low in saturated fat and cholesterol, Folic Acid, Vitamin B6 and Vitamin B-12 may reduce the risk of vascular disease. FDA evaluated the above claim and found that, while it is known that diets low in saturated fat and cholesterol reduce the risk of heart disease and other vascular diseases, the evidence in support of the above claim is inconclusive.
Grade level required to read them, according to Microsoft Word: 11.8/17.1.
How well do these work? Terribly. Karen Russo France & Paula Fitzgerald Bone, Policy Makers’ Paradigms and Evidence from Consumer Interpretations of Dietary Supplement Labels: Disclosures about minimal scientific evidence and lack of FDA approval had no effects.
• DSHEA disclaimer produced no difference in consumer beliefs regarding the effectiveness of the supplement in preventing, treating or curing a disease
• Scientific certainty disclaimer produced no difference in consumer beliefs regarding the scientific certainty about the relationship between a particular disease and a particular supplement
• Disclaimer also produced no difference in consumer beliefs regarding the effectiveness of a dietary supplement in preventing treating or curing a particular disease
• Perhaps shockingly, “This statement has not been evaluated by the Food and Drug Administration” did not even change consumer beliefs regarding whether the FDA evaluated the statements made on the package label
As marketers, the federal judges who approved the Pearson disclosures should be fired.
FTC also has studies showing that longer disclaimers increase consumers’ confidence in the basic benefit claim. Consumers are unruly! They don’t behave as we wish they would. So what do you do? Take the consumers as you find them; judge advertising by its actual effects. If disclaimers don’t change the perception of the basic claim, then the basic claim remains misleading and the FTC has the authority to require advertisers to stop making it.
Amanda Beamon, Corporate Counsel, Law Department, H.J. Heinz Company
Heinz identified a need for tighter review procedures in mid 2010, driven by new FTC activity. Purpose: timely, efficient and accurate review of marketing materials while protecting Heinz corporate assets and reputation. Scope: consumer ads and materials going to customers (by which I understood her to mean retailers). Social media is included.
Old process had a lot of steps back and forth between ad agency, regulatory affairs, legal, PR. New process: agency proposes, internal marketing review, then review committee including legal, then back internally to the agency and done. Clear documentation and support for all claims; all relevant parties review material at one time avoiding rework and conflicting feedback; saves money with agency changes too.
Historically, Heinz ketchup tied itself to benefits of lycopene, an antioxidant in tomatoes. In 1998, Heinz had been making qualified health claims: eating ketchup may lower the risk of prostate chancer and certain chronic ailments, including heart disease and other cancers, and directing consumers to lycopene.org for more information. Heinz, among others, had commissioned research on the topic. In 1999, received letter from the FTC. We discontinued the advertising in question; when discussing lycopenes, focused on tomatoes rather than ketchup and made clearer disclosures; also disclosed sponsorship of lycopene.org.
On product packaging, Heinz said “Lycopene is another great reason to love Heinz Ketchup! … visit lycopene.org …” Appealed to FDA in 2005 to make qualified health claims on packaging, e.g., “Although the evidence is not conclusive, tomato lycopene may reduce the risk of prostate cancer.” (Applied for about 20, all pretty similar.) FDA ruled that they could say this, if they qualified it with a side warning that there was little scientific evidence supporting the claim. Here, Heinz was relying on the scientific studies, rather than on any consumer takeaway of that claim.
In recent years, Heinz changed marketing strategy to move away from this type of claim, but would look at the consent orders to figure out how to do so if they decided to go back to health claims.
Example: Smart Ones storyboard, suggesting that Smart Ones got the depicted person “back to fightin’ weight”—implied weight loss claim. Added word “help” to suggest that Smart Ones could only help and made sure the visual depiction wasn’t one of extensive weight loss.
Heinz wouldn’t have sued as Pom did—historically had conservative approach to health claims. Also, practical implications of suing FTC or government agency—PR perspective; relationship with the agency going forward, given that Heinz has been involved in major mergers; wouldn’t want to be a target for future advertising initiatives. Cost of the lawsuit is also significant. Has sympathy for Pom if they genuinely thought they had the basis for these claims; business strategy is basically gutted if they lose.
Q for Emord: say more about politics.
Emord has written extensively on politics, and refers those interested to emord.com. Folic acid claims had a political context: recommendation to women that they consume 400 mcg/daily before becoming pregnant to decrease risks of neural tube deficits; 800 mcg could decrease risks more. This was all subject to debate, and FDA censored that information in the marketplace, because drug approval is big business and costs $600 million. A rarefied group of parties play. Political influences overrule scientific judgments of staff. All decisions made by the science staff are ultimately passed on by political appointees, who know where the bread is buttered. Vioxx was not a coincidence—despite recommendations against approval, FDA commissioner put it on the market.
Emord: Tushnet is internally inconsistent. Major premise: we must rely on government to perform the role of setting a high standard of review to determine whether or not speech should be allowed in the marketplace. Minor premise: disclaimers were ineffective. But what that means is that people came to their own conclusions apart from the official orthodoxy—that’s why they didn’t care about the qualification. Freedom hinges on sovereignty. Government can’t compel us to accept its orthodoxy on science.
RT: My public school would disagree re: government orthodoxy on science. Note that we are still talking about post-marketing enforcement, so “allowing” speech is a characterization with a conclusion embedded. Anyway, if you accept Emord’s interpretation of the evidence, then you have to say that people came to their own conclusions apart from the information the marketer imparted to them too. This seems implausible. Also, the FDA result contradicts this interpretation: they came to their own conclusions about whether the FDA had evaluated the claim? Rather, they read the main, first-order health claim and then applied their priors. You can’t fulfill your preferences if you’re making decsions on wrong information.