FTC Ruling in POM Wonderful Case May Have Significant Ramifications for Food Industry

On January 10, 2013, the Federal Trade Commission (FTC) issued an Opinion and Final Order where it held, in a 5-0 vote, that the marketers of POM Wonderful 100% Pomegranate Juice and POMx supplements violated Sections 5a and 12 of the FTC Act by making false and misleading claims. The Commission rejected the company’s arguments that the FTC’s actions would violate POM’s First Amendment rights or its Fifth Amendment right to due process. In particular, the FTC ruled that POM deceptively advertised its products and did not have adequate support for claims that the products could treat, prevent, or reduce the risk of heart disease, prostate cancer, and erectile dysfunction, and that they were clinically proven to work.

The Commission Opinion found that the POM marketers made deceptive claims in 36 advertisements and promotional materials, going beyond the earlier decision of an administrative law judge who had found false or deceptive claims in only 19 of the challenged items. The challenged ads appeared in national publications such as Parade, Fitness, The New York Times, and Prevention magazines; on Internet sites such as pomegranatetruth.com, pomwonderful.com, and pompills.com; on bus stops and billboards; in newsletters to customers; and on tags attached to the product.

The most significant effect of the FTC’s Opinion and Final Order is the holding that bars the POM marketers from making any claim that a food, drug, or dietary supplement is “effective in the diagnosis, cure, mitigation, treatment, or prevention of any disease,” including heart disease, prostate cancer, and erectile dysfunction, unless the claim is supported by two randomized, well-controlled, human clinical trials. The FTC ruling means that health claims in food or dietary supplement advertisements must be based on competent and reliable scientific evidence that , when considered in light of the entire body of relevant and reliable scientific evidence, is sufficient to substantiate that the representation is true. For purposes of meeting this standard, the FTC held that “competent and reliable scientific evidence shall consist of at least two randomized and controlled human clinical trials (RCTs)” involving the product. The Commission further rejected POM’s arguments that its advertising simply referenced study results in a qualified manner with words such as “preliminary,” “promising,” encouraging,’ or “hopeful.” Therefore, general disclaimers of this type will likely not be considered a “safe harbor” for representations that fail to meet the “relevant and reliable scientific evidence” standard.
This portion of the Commission’s Opinion rejected Administrative Law Judge Michael Chappell’s previous holding that double-blind, placebo controlled studies were not necessary when “the safety of the product is known; the product creates no material risk of harm; and the product is not being promoted as an alternative to following medical device. The Commission disagreed, holding that “[t]he expert evidence was clear that [randomized and controlled studies] are necessary for adequate substantiation of [POM’s] representations.”

In a minor win for POM, the FTC did not agree with a request by the FTC staff that POM be required to obtain approval from the Food and Drug Administration (FDA) prior to making any health claims about its products.

POM has stated it plans to continue its battle with the FTC. POM may file a petition for review of the Commission Opinion and Final Order with the U.S. Circuit Court of Appeals within 60 days after service of the Final Order.

The FTC’s Opinion and Final Order may have broad ramifications for the food industry, and the appeal process will be closely followed. The Commission’s holding that the required level of substantiation—two randomized and controlled clinical trials— if upheld, could set a new and expensive precedent for the evaluation of deceptive practices and false advertising for food and dietary supplements. The concern is that food and supplement companies, who make health claims about their products may be held to similar standards as pharmaceuticals. To allay such concerns the FTC has indicated that the standards for food health claims announced in the POM case are not intended to be nearly as stringent as the FDA’s standards for new drug approvals. But, at a minimum, the FTC has announced a very specific and exacting standard that, if upheld on appeal, will impose major limitations and expensive and time-consuming requirements for food and dietary supplement manufacturers that desire to communicate scientific developments and research results about their products to consumer.

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