Health Claims Check: The Case of POM Wonderful

The FTC this January struck down an appeal from pomegranate marketer POM Wonderful in a case that found POM guilty of making unsupported, deceptive health claims. POM had appealed FTC chief administrative law judge (ALJ) D. Michael Chappell’s ruling back in May 2012 that POM made deceptive claims for its juice and dietary supplement products. The FTC Commission’s opinion, In the matter of POM Wonderful LLC¹, details its January decision.

In contrast to previous FTC settlements involving health-benefit claims for food products, the 53-page January opinion provides detailed insight into the Commission’s position on health-benefit claims for conventional food and beverage companies contemplating novel health-centered marketing strategies. There is a lot the dietary supplement industry can take away from this case.

The ALJ’s Ruling

This case goes back to ALJ Chappell’s May 2012 decision in an administrative complaint filed by the FTC. In the FTC complaint, the FTC charged POM Wonderful with making false and unsubstantiated claims for its pomegranate juice and POMx supplements. The agency said POM had claimed its products will prevent or treat heart disease, prostate cancer, and erectile dysfunction.

In his decision, the ALJ determined that 19 of the 43 challenged advertisements and promotional materials of concern to the FTC staff contained implied claims that POM Products will treat, prevent, or reduce the risk of heart disease, prostate cancer, or erectile dysfunction. The ALJ ruled that these claims were false or misleading and material to consumers’ purchasing decisions.

However, importantly, ALJ Chappell decided that POM Wonderful should not be required to obtain FDA preapproval prior to making similar claims in future advertising-something the FTC had requested.

The ALJ also determined that in the case of a “safe food” that is not advertised as a substitute for medical treatment, competent and reliable scientific evidence should include clinical studies. Crucially, however, he said that those clinical studies do not necessarily need to be double-blind, randomized, placebo-controlled clinical trials (RCTs).

The ALJ’s ruling that RCTs may not be required to substantiate POM’s claims was considered a blow to the FTC staff. The agency had argued that POM’s claims should be substantiated by two RCTs. Both parties, POM and the FTC, appealed the ALJ’s decision, and this is what led to the FTC Commission’s review of the case de novo and its decision this January.

FTC Commission Opinion

The FTC Commission’s January opinion² largely upheld and expanded the scope of the ALJ’s May 2012 decision, ruling that 36 of POM’s 43 ads made efficacy claims and were false and misleading.

However, and very importantly, the Commission rejected of the ALJ’s position regarding the requisite substantiation for POM’s claims. The Commission instead agreed with the FTC staff that POM isrequired to present two RCTs to substantiate claims regarding heart disease, prostate cancer, and erectile dysfunction. The Commission also ruled that claims that a product can treat, prevent, or reduce the risk of these ailments are “serious disease claims.”³

Notable Takeaways

While most of the remaining Commission rulings were unsurprising,⁴ some of the Commission’s discussion of POM’s actions sheds more light on how FTC scrutinizes health-benefit claims. Insights include how the Commission determines the net impression of an ad and when the Commission deems it appropriate to pursue individual liability for company officers. Below are just a few of the key points:

• The Commission may determine the net impression of ads without relying on extrinsic data. In the POM case, both POM and the FTC provided “extrinsic evidence”-expert testimony and related materials discussing consumers’ impressions of advertising-regarding the types of implied messages POM’s advertising conveyed. After noting that it considered the expert testimony and other evidence regarding consumers’ interpretations of the ads, the Commission clarified that “only a facial analysis [wa]s necessary to determine whether Respondents had indeed made the claims alleged by Complaint Counsel.”⁵ A “facial analysis” of an advertisement is a review of the advertisement itself without any additional testimony or evidence regarding consumers’ perception of the advertisement. The Commission’s statement that it could determine the messages conveyed by POM ads by reviewing the ads alone is notable because it means the Commission can rule that advertisements make stronger claims than may be suggested by experts or a company’s internal data. For example, in the POM action, the Commission found 17 more ads to be deceptive than ALJ Chappell initially ruled to be deceptive.

• Qualifiers may not be enough to limit the level of substantiation required for a health-benefit claim. Commonly, marketers will use qualifiers such as words like may, can,or preliminary to convey to consumers the results of a study believed to illustrate a relationship between a food and a health benefit, without overstating the strength of the study. The POM action, however, indicates that use of qualifiers, alone, may not insulate a company’s ads from being viewed as implied efficacy or “establishment” claims. In POM, the Commission ruled that POM’s use of qualifiers such as may, can, preliminary, promising, encouraging,and hopeful failed to limit the overall net impression that “such advertisements were claiming clinical proof” because the statements were coupled with medical symbols (i.e., a caduceus) or statements regarding the millions of dollars spent researching the benefits of POM products.⁶

• The Commission distinguishes “serious disease claims” from general nutrition and health-benefit claims. In POM, the Commission was careful to limit the two RCT standard imposed by the decision to claims regarding the efficacy of particular foods to treat, prevent, or reduce the risk of “serious diseases,” and declined to rule on the level of substantiation required for general health-benefit claims.⁷ This dicta indicates that the Commission may not require two RCTs to support all health-benefit claims, especially those that do not involve “serious diseases.”

• The Commission will pursue individual liability for company officers believed to play an integral role in the development of “deceptive” health benefit–related marketing campaigns. In its appeal, POM argued that its past COO and president should not be held individually liable for the marketing claims made by the company. However, the Commission upheld the ALJ’s ruling that the individual, who at the time of his employment was responsible for the operations of the marketing team, “both participated directly in and had the authority to control the acts or practices at issue,” and thus should be held individually liable and subjected to a Final Order. The owners of the company were held individually liable as well.

The Lesson? Market with Caution

Regulators are increasingly scrutinizing campaigns marketing the relationship between diet and disease. The POM Wonderful case is just one of many recent examples of regulatory action.

POM reinforces the importance of ensuring that all health-benefit claims are carefully constructed to reflect the underlying science. Companies interested in minimizing the risk profile for a product line should take a conservative approach to describing the science supporting health-benefit claims in advertisements.

For example, in the absence of clear evidence establishing a causal relationship between a substance and a disease, companies should avoid touting the amount of money spent on research and should avoid coupling such claims with medical symbols, such as a caduceus. In addition, when developing marketing campaigns, companies may also want to consider whether the claims would involve a “serious disease” and refrain from making claims related to serious diseases unless such claims are supported by RCTs.

Taken together, these steps can help a company sustain the scrutiny of the FTC and avoid both company and individual liability for potential deceptive claims.

References

1. Opinion of the Commission In the Matter of POM Wonderful LLC, Docket No. 9344, www.ftc.gov/opa/2013/01/pom.shtm.
2. Two concurring statements were included: a statement by Commissioner Ohlhausen (rejecting the two RCT standard and concluding that extrinsic evidence should have been used to determine whether some of POM’s ads made implied disease claims) and a statement by Commissioner J. Thomas Rosch (agreeing with the majority Opinion but noting that “having served as a Commissioner for seven years and having been a trial lawyer for nearly 40 years before… [he is] somewhat skeptical of relying so heavily on the opinions of experts who are paid by both Complaint Counsel and Respondents”).
3. Commissioner Rosch dissented from the Commission’s position that erectile dysfunction is a serious disease.
4. For example, the Commission rejected POM’s allegation that the proposed order violated POM’s 1st and 5th Amendment rights. The Commission also upheld the ALJ’s ruling that FDA preapproval was not an appropriate remedy in this case.
5. Id.at 14. Commissioner Ohlhausen (who also submitted a concurring opinion), believes that the qualifying language used in some of the exhibits required extrinsic evidence to find an implied claim, but the majority disagreed.
6. Id.at 14-15.
7. Id.at 37. Commissioner Rosch submitted a concurring statement ruling that ED should not be considered a “serious disease,” but agreed that two RCTs are required In the Matter of POM Wonderful LLC because POM made establishment claims regarding the products’ efficacy.