It’s Nothing at Which to Sneeze: Is the National Advertising Division Changing Claim Substantiation Standards?

A recent decision by the National Advertising Division (NAD) of the Council of Better Business Bureaus, in response to a competitor’s complaint, represents a departure from the standard head-to-head tests typically required for substantiating superiority claims. Specifically, NAD, an advertising watchdog, accepted a drug company’s claim that its product “is the most effective OTC [over-the-counter] medicine for the treatment of nasal allergy symptoms,” even though no head-to-head tests were conducted to support the claim. Instead, NAD said there was “strong scientific consensus with regard to product efficacy” to back up the superiority claim.

NAD noted that the substantiation to support the superiority claim included several studies and meta-analyses that the product at issue and other intranasal steroids were better than all other classes of allergy relievers in the United States. While some of the studies were not specific to the product, NAD found the drug to be comparably effective to the other intranasal steroids evaluated. NAD considered studies submitted to the Food and Drug Administration (FDA) to support Rx-to-OTC switch to constitute “strong scientific consensus.”

AGG Observations

  • The NAD decision is not legally binding. It is not necessarily a prediction that the FDA and Federal Trade Commission (FTC) will supply a similar analysis. Nevertheless, the NAD decision is important because drug companies typically accept NAD decisions to support the self-regulation process.
  • The NAD standard here is not necessarily one that the FDA or the FTC would accept. Therefore, while the superiority claim was not rejected by NAD, it is not clear if this claim will pass government scrutiny (although there is no evidence the claim is presently under regulatory review).
  • The NAD decision was fact-specific. The watchdog group reviewed what the drug company had submitted to the FDA and that which was provided to NAD. While the “strong scientific consensus” standard is different than the traditional head-to-head standard, the facts dictate what comprises “strong scientific consensus.”
  • Whether NAD’s “new” standard will become the standard is not clear. However, it demonstrates NAD’s willingness to consider new methods of substantiation for comparative claims.
  • Given the Supreme Court’s recent decision in POM Wonderful LLC v. Coca-Cola, competitors may believe that they have greater leeway in bringing Lanham Act-based false advertising and unfair competition claims when such “most effective” superiority claims are not, in fact, based on head-to-head testing. The Supreme Court has drawn a sharp distinction between the FDA’s role in policing product packaging and labeling for health reasons and the Lanham Act’s role of addressing competition-based concerns arising out of such packaging and labeling.

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