United States: Guest Post — Do It If It Makes You Feel Good: FTC's Report On Homeopathic Medicine Advertising

Last Updated: November 25 2016
Article by Eric Alexander

What follows is a guest post by John Feldman, a partner in Reed Smith's Entertainment and Media Industry Group. John closely follows all things Federal Trade Commission and approached us when he saw the FTC weighing in a group of products that falls under the first word of our title. We have weighed in before on FDA's regulation of homeopathic drugs, but FDA is not the only regulator in town.

As always, our guest posters are entitled to all of the credit, and any blame, for their efforts.

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"Eye of newt, and toe of frog. For a charm of powerful trouble, Like a hell-broth boil and bubble." Hey, if it works for you, more power to ya.

That's the FTC's attitude toward homeopathic drugs. Following up on a homeopathic drug workshop in conducted in 2015, the staff at the FTC is apparently convinced that generally there is no medical basis for most claims on homeopathic drug labels and marketing materials. The FTC recognizes that thousands if not millions of people use and find value in homeopathic drugs. And it may be that many if not most of the users of such products know that the science underpinning the products is shaky at best and possibly non-existent, but the FTC believes that many people purchasing homeopathic drugs do not even understand what homeopathy is.

Enter: The FTC Enforcement Policy Statement on Marketing Claims for OTC Homeopathic Drugs.

What's the Impact of an FTC Enforcement Policy?

An enforcement policy is an indication of FTC intent to enforce Section 5 of the FTC Act against deceptive advertising. It is a clear message to the industry that enforcement is imminent. Last January, the FTC published its Enforcement Policy on Deceptively Embedded Advertising, and an order right on point was announced within the next 60 days against Lord & Taylor. Notwithstanding the results of the recent election, expect enforcement activity soon.

How Does the FTC Enforcement Policy Jibe with FDA Law?

The FDA issued a Compliance Policy Guide in 1988 on homeopathic drugs. Under the guide, only homeopathic products intended solely for self-limiting disease conditions amenable to self-diagnosis of symptoms and treatment could be marketed OTC. The guide required that homeopathic drugs be labeled as homeopathic and that their labeling display at least one major OTC indication for use. The FTC has rarely challenged misleading claims for homeopathic drugs even though the FTC Act does not exempt them from scrutiny. The basic FTC enforcement policies for objective claims will apply to homeopathic drugs.

What is the FTC Enforcement Policy on Homeopathic Drugs?

  1. OTC homeopathic drugs will be treated the same as other products that make health-related claims, which means that unqualified disease claims made for homeopathic drugs must be substantiated by competent and reliable scientific evidence.
  2. A marketer of an OTC homeopathic drug may include an indication for use that is not supported by scientific evidence if the marketer effectively communicates the limited basis for the claim.

    1. That essentially means that OTC homeopathic drug marketing claims in advertising and labeling that are not supported by scientific evidence must effectively communicate that (1) there is no scientific evidence that the product works; and (2) the product's claims are based only on theories of homeopathy that are not accepted by most modern medical experts.
    2. It is NOT sufficient to just say that there is no scientific evidence for the health-related claims associated with the product. The FTC believes that it is necessary to ALSO say that homeopathic drugs are based on theories that are not accepted by modern medicine.
    3. A possible sample disclosure might be: "Product claims for this product are not based on scientific evidence and are based on homeopathic theories that are not accepted by most medical experts."
  3. By "effectively communicates," the FTC means that:

    1. The disclosure must stand out and be in close proximity to the efficacy message. The FTC suggests that in some cases the disclosure should be incorporated into the efficacy message.
    2. There cannot be any positive statements or consumer endorsements that contradict the qualification.

Other Observations Related to FTC Enforcement Practice

In September, the FTC held a workshop on the effectiveness of disclosures. Although there have been no further express statements from the FTC about that workshop, the Homeopathic Drug Enforcement Policy exhorts marketers "to develop extrinsic evidence, such as consumer surveys, to determine the net impressions communicated by their marketing materials." The Policy goes on to say that "The Commission will carefully scrutinize the net impression of OTC homeopathic advertising or other marketing employing disclosures to ensure that it adequately conveys the extremely limited nature of the heath claims being asserted. If, despite a marketer's disclosures, an ad conveys more substantiation than the marketer has, the marketer will be in violation of the FTC Act." Thus, the overriding tautology of the disclosures workshop has now been embedded into this new enforcement policy: disclosure is effective unless it is not effective.

If you sell homeopathic drugs or work with such marketers, review your labels and marketing materials now. And, if you're in the business of newts and frog appendages, beware: "Something wicked this way comes."

This article is presented for informational purposes only and is not intended to constitute legal advice.

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