|Footnotes for this article are available at the end of this page.
In March, Khloe Kardashian unwittingly joined her sister, Kim Kardashian, as the subject of a Food and Drug Administration (FDA) Warning Letter relating to the reality star’s influencer-marketing activities. Kim’s troubles pre-date her younger sister, stemming from a 2015 social media campaign on behalf of a drug manufacturer. Khloe’s more recent reprimand emanates from a guest appearance on The View, where she lauded Biohaven Pharmaceuticals’ product, Nurtec ODT. Although Kardashian is properly identified in the piece as an official spokesperson of Biohaven, the star refers to the drug as a “game-changer,” insisting that “it works in 15 minutes,” and states that “other medications would give me rebound headaches, and this one doesn’t.” From the FDA’s perspective, Kardashian’s claims are false or misleading on both efficacy and risks, and she makes misleading comparative claims that are neither substantiated nor demonstrated. Presumably, this is not the marketing campaign that Biohaven Pharmaceuticals envisioned when they hired Ms. Kardashian.
New Media Marketing
The Kardashian episodes mentioned above are examples of a popular trend within the brand marketing industry that favors the use of celebrity endorsements and influencer marketing. Any casual user of digital and social media can attest to the popularity of influencers among advertisers. Solicitations promoting goods and services now pepper the newsfeeds of Facebook, Instagram, and Twitter, paid advertisements to introduce most YouTube videos, and promotional ads even sneak their way into closed and, seemingly, private platforms such as Pinterest. As our attention continues to migrate away from traditional media, such as print, radio, and television to digital and self-curated channels, advertisers are certain to follow the traffic. Through celebrity testimonials, user reviews, and product placements, pharmaceutical and other life science brands are able to directly and oftentimes seamlessly engage a broad and sophisticated audience without much effort or expenditure.
Regulatory Attention and Enforcement Actions
This proliferation of influencer and endorsement advertising by life science brands, coupled with the likelihood for consumer confusion, has piqued the interest of regulators at the Federal Trade Commission (FTC) and the FDA. In 2009, the FTC sounded the initial alarm in conjunction with the release of the revised “Guides Concerning the Use of Endorsements and Testimonials.”1 The publication was designed to provide guidance to brand advertisers concerning the use of consumer, expert, and celebrity endorsements in both traditional and new media forms of advertising. In recent years, the FTC has continued to ramp up its enforcement against persons and companies that fail to comply with the legal mandates governing the use of endorsements disseminated via new media, with recent actions against Teami,2 Urthbox, Inc.,3 and Nobetes Corporation,4 underscoring the agency’s focus. During the same time period, the FDA issued guidance to advertisers to ensure that the information disseminated by drug and medical device manufacturers online is accurate and complete and that any material connections between an influencer and a manufacturer are disclosed to the consumer. As such, before wading into these waters, it is imperative that brand advertisers be aware of the universe of activities that may trigger the FTC’s and FDA’s attention, which include:
- A physician posting a “selfie-photograph” depicting her use of a regulated medical device;
- Publication of a holistic blogger’s review of a dietary supplement product;
- A celebrity’s testimonial praise of a prescription drug on a television talk show; or
- A layperson consumer’s social media post endorsing an over-the-counter drug.
Disclosure, Disclosure, Disclosure
According to the FDA and FTC, if a celebrity, or any other person, is paid or, otherwise, enticed to promote (e.g., discuss, review, wear, depict, share, or compliment) a product or service, then the relationship must be disclosed in the advertisement. Non-monetary enticements such as the provision of free products or services may also require disclosure depending on the circumstances. The basic test articulated by the FTC is: “if a consumer knew an endorser was compensated or incentivized in any way, would that materially affect the weight or credibility of the endorsement?”5 The underlying policy goal of disclosure is to ensure that the endorsement is honest and accurate and simultaneously prevent consumer deception or confusion. As such, disclaimers must effectively communicate the relationship between an advertiser and the spokesperson, which must include the existence of any quid pro quo between the parties. As a matter of course, any failure to communicate that relationship will be deemed misleading and subject the parties to liability under the FTC Act, in addition to applicable state consumer protection laws.
Of course, depending on the medium utilized, logistical limitations inherent in platforms, such as Twitter, Instagram, and Snapchat, may make such requirements, at best, undesirable, and at worst, impossible. Further, weighing down a television interview or Facebook story with legal disclaimers and risk factors potentially dilutes the impact of an endorsement. Nonetheless, the failure to include mandated disclosures, regardless of the rationale, is an open invitation to regulators. In the case of Khloe Kardashian, the FDA laments:
…the video is misleading because it fails to present information relating to the contraindications, warnings, precautions, and adverse reactions for Nurtec ODT with a prominence and readability reasonably comparable with the presentation of information relating to the benefits of Nurtec ODT. Specifically, the video contains claims and/or representations about the benefits of Nurtec ODT in the audio portion, while the risk information is presented in a text-only format and small font. Moreover, the risk information only appears briefly for four seconds at the end of the video, after the close of the Spokesperson’s presentation, where it is unlikely to draw the viewer’s attention.
In other words, the consumer is denied the ability to make an informed decision due to the omission of pertinent information. Logistical limitations and aesthetic undesirability aside, the agencies’ insistence upon adequate disclosure is a well-known priority, and brands should avoid any media channels and activities that preclude or limit such disclosure.
While the burden to disclose is primarily placed upon the brand advertiser, both the advertiser and endorser/spokesperson (along with any third-party intermediaries) may be liable for the failure to comply with the legal rules. With such risks in mind, all parties should be careful to consider and monitor how their goods and services are being promoted and the methods employed to do so. It’s clear that Khloe Kardashian supports her new migraine medication, but was she paid to say so? And if Ms. Kardashian makes any comparative claims or statements related to the product’s efficacy or safety, what additional substantiation or disclaimers must accompany such assertions? Most importantly, how would a consumer view the advertisement given the information provided or omitted? These are the essential matters of concern from the perspective of the agencies.
As we continue to encounter new and self-curated media with increasing frequency, whether through traditional channels or the mini-computers that we carry in our pockets, the lines separating sponsored advertising from news and editorial content will continue to blur. Understanding the administrative agencies’ priorities and policy objectives in this area, it is imperative that those brands must be conscious of the regulatory landscape when developing and implementing an influencer-focused marketing strategy. A well-crafted and successful influencer campaign is capable of making a brand a household name, while a careless promotion is likely to make the same brand an anecdotal cautionary tale in a legal article. In this instance, it’s not advisable to keep up with the Kardashians.
Matthew V. Wilson, Esq., Partner at Arnall Golden Gregory LLP, Leader of the Entertainment and Sports team. Matt can be reached at email@example.com.
 16 C.F.R. Part 255.
 See Teami, LLC (March 20, 2020).
 See UrthBox, Inc., In the Matter of (December 9, 2019).
 See Nobetes Corp. (August 21, 2019).
 FTC “Guides Concerning the Use of Endorsements and Testimonials in Advertising,” 16 C.F.R. Part 255.5.