The Dietary Supplements Industry Won the Bayer Case, but Still Needs to Watch the FTC, Leaders Warn

Nutritional Outlook, Nutritional Outlook Vol. 18 No. 9, Volume 18, Issue 9

“What’s going to come next? Well, what I think is going to come next is more specific orders,” said attorney John Villafranco of Kelley Drye & Warren LLP.

In a year of regulatory strife, it’s nice to celebrate positive news for a change. The dietary supplements industry is enjoying a moment of triumph following Bayer Corp.’s recent victory over the FTC in a court case over probiotic structure-function claims.

A New Jersey federal district court judge ruled in September that Bayer met its “competent and reliable scientific evidence” burden and affirmed that randomized controlled trials (RCTs) aren’t required for structure-function claims. The bottom line: supplements are not to be regulated as drugs, the judge said. More importantly, he ruled that the FTC cannot, by way of regulatory creep, introduce new substantiation standards for supplements that run counter to the laws governing supplements, to FTC’s own guidance governing supplements, and to language already instated in existing consent decrees. (Click here to read about the case and the opinion's key points.)

“This was a great moment for industry in dealing with what has been, as an agency, one of our more rigorous opponents,” said attorney Marc Ullman of Rivkin Radler LLP during a SupplySide West panel in October.

For Jonathan Cohn of Sidley Austin LLP, one of the attorneys who argued the case on behalf of Bayer, the takeaway is simple: Industry should fight more cases when the FTC is trying to sidestep the appropriate route for changing legal statute.

“Try more cases,” he urged, speaking at October’s Council for Responsible Nutrition (CRN) annual conference. “Bottom line, industry can win. We did it before, and we can do it again."

Others are happy, but cautious. "Don’t take this as the end of the issue,” Ullman said. FTC will almost certainly try to flex its muscles again in the future, and it also has 60 days to appeal the Bayer case.

“What’s going to come next? Well, what I think is going to come next is more specific orders,” said attorney John Villafranco of Kelley Drye & Warren LLP, also speaking at the CRN event. He pointed to prior statements made by David Vladeck, former director of FTC's Bureau of Consumer Protection, that FTC believes consent orders are more enforceable and stronger in court if they spell out specific types of tests.

New FTC consent orders will provide hints of what’s to come, industry leaders say. And industry should monitor those orders closely.

Speaking to CRN conference attendees, FTC’s Mary Engle, associate director for advertising practices, Bureau of Consumer Protection, likewise advised companies to examine FTC’s complaints. While consent decrees only bind the companies under order, “they may provide some guidance as to where we’re drawing the line between when you need clinical trials and what broader claims that you may not necessarily need clinical trials [for].”

“Sometimes competent and reliable scientific evidence is randomized controlled trials,” she added. And while the agency has “pretty much stopped putting in our order provisions [a requirement for] at least two RCTs, what you’ll see instead is simply the requirement that the court put in the [consent order for] POM Wonderful [in its FTC case over disease claims] that they have clinical testing, without specifying that number.”

Companies should not take the Bayer case as a cue to relax; just the opposite. They should be more vigilent of their claims substantiation, said Michael McGuffin, president of the American Herbal Products Association, at the SupplySide West panel. “What the court’s decision did not do is tell us that we don’t have to have substantiation. We still need to have substantiation for our claims.”

“FTC is not going to go away,” said panelist Dan Fabricant, PhD, CEO and executive director of the Natural Products Association. “[The Bayer case] is limited to one jurisdiction. Even if the judge’s language is somewhat of an endorsement of Bayer’s procedure, that’s not going to get you real far. They’re going to find another jurisdiction to keep bringing these sorts of cases. They’ve already shown that from the start.”

In terms of RCTs, said Villafranco, FTC’s “thinking is really starting to evolve, and it’s becoming crystallized.” Even if we do not see orders delineating two RCTs in most cases, he said, pay attention to the fact that the FTC does not seem to flinch at requiring two RCTs for highly scrutinized categories like weight-loss supplements.

“Not a lot of companies have the conviction that Bayer had here or the resources or time to really dig in” and take the FTC on in court, Villafranco added. For most companies, the path forward will be vigilance, careful stepping, and the sense not to become complacent when it comes to the FTC.

 

Also read:

The top key takeaways from the judge’s decision in Bayer versus the FTC

 

Jennifer Grebow
Editor-in-Chief
Nutritional Outlook magazine
jennifer.grebow@ubm.com