Advertising and Food and Drug Law Report: Consent Orders Provoke Debate Over FTC and FDA Substantiation Standards

Advertising and Food and Drug Law Report: Consent Orders Provoke Debate Over FTC and FDA Substantiation Standards

The advertising community is paying considerable attention to four recent Federal Trade Commission consent orders relating to health claims. For some of those claims, the orders impose a novel requirement under which the U.S. Food and Drug Administration would have to approve the claim for use in labeling or marketing of the product in question before the FTC would accept the claim for advertising the product. For other health claims, the orders would require preexisting "competent and reliable" scientific substantiation in varying forms depending on the nature of the claim. One of those mandated forms would require that the claims be substantiated by the results of at least two independently-done clinical studies on humans.

The Federal Trade Commission often settles its deceptive advertising charges against an advertiser by entering into such consent orders. In these, the accused agrees to abide by the requirements of a court-enforceable order, but does not admit to wrong-doing. The orders usually represent more than the resolution of a one-on-one encounter between the regulator and a marketer. They can be indicative of such things as FTC policies, priorities, policies, and enforcement strategies.

The apparent vivification of the FTC in President Obama's administration, the similarity of requirements across the four differing consent orders, and the murkiness of Commission explanations of them have provoked worrisome thoughts in the advertising community, where near-paranoia about the FTC has historic roots.

Has the FTC quietly adopted a tougher substantiation policy for advertising? Does the Commission intend to use its considerable powers in the settlement process to ban certain advertising claims sub silentio – through agreements that require advertisers to seek what likely never would be sought or granted and to undertake scientific testing the costs of which may not be justifiable under all applicable circumstances? Has the relationship between the FTC and FDA changed? These and other questions are among the murmurings.

Whether FDA's substantiation requirements are consistent with those of the FTC is another issue that has been sucked into this dark hole by the orders' requirements for prior FDA approval of certain advertising claims for products over which the two agencies share regulatory jurisdiction.


This report addresses those and related issues. We do so primarily by focusing on the FTC and FDA policies and requirements for substantiation of health and other effectiveness claims, using the four recent consent orders as a springboard. First, we describe those orders generally.

Second, we consider how the orders use FTC's powers under the Federal Trade Commission Act to ban advertising of a claim that has not received prior approval for non-advertising uses by the FDA under the Federal Food, Drug, and Cosmetic Act (FDCA). That is, under the orders, FDA first would have to approve the claim for use in labeling of the product in question or allow that product on the market to provide the beneficial effects that the consent order prohibits from being advertised.

Third, we discuss the orders' requirements for different types of scientific substantiation for advertising and how those requirements fit into historic and recent case law. Fourth, we canvas the more flexible approaches that the FDA has been taking with regard to scientific substantiation of effectiveness claims under the FDCA.

Throughout this report, we try to make the case for full FTC disclosures of how it determined the levels of substantiation required in consent orders – the factors that were considered and balanced, including consumer expectations and costs.[1] We also assert the need for an up-to-date, public working agreement between the FTC and FDA – one that explains the current priorities of each within their overlapping jurisdictions.


The four consent orders of interest were made public by the FTC in the latter half of 2010. Broadly speaking, all of them involve health claims, which can be defined as express or implied characterizations of the relationship of a product or service to a disease or health-related condition (e.g., "Dr. John's Miracle Juice Contains Antioxidants That Prevent Cancer").[2]

Three of the orders have been "consented to" by the advertisers that made the claims: The Dannon Company, Inc. (Dannon); Iovate Health Sciences USA, Inc., and related entities (Iovate), and Nestlé Healthcare Nutrition, Inc., a subsidiary of Nestlé S.A. (Nestlé). The fourth order was proposed by the FTC in an ongoing administrative proceeding against POM Wonderful LLC and others (POM).

The four orders contain actually or substantively identical provisions of interest, many of which are technical and lengthy. Therefore, relevant parts of the latest (Dannon) order will be described in relevant part fully and equivalent provisions in the prior orders will be referenced to the Dannon Order.

The Dannon Order

The Dannon administrative order fences-in the following covered products: yogurts, dairy drinks, and any food or drink containing any of the beneficial bacteria known as probiotics.[3] The FTC charged that various Dannon claims were deceptive due to a lack of adequate substantiation and that separate claims about clinical studies proving the claimed health benefits were false.

In the consent order, Dannon agreed to refrain from representing that any of its covered products "reduces the likelihood of getting a cold or the flu, unless the representation is specifically permitted in labeling for such product by regulations promulgated by the Food and Drug Administration pursuant to the Nutrition Labeling and Education Act of 1990" (NLEA), which amended the FDCA.[4] We'll call that the "Prior FDA Approval Requirement" for ease of reference.

The FTC's "competent and reliable scientific evidence" general requirement for substantiation is to be fulfilled differently for different claims covered by the order. (The same is true for the other three orders.) For Dannon claims that a covered product relieves temporary irregularity or helps with slow intestinal transit time, the order mandates that such scientific evidence must satisfy what we'll call the "Two Clinical Studies Requirement":

[A]t least two adequate and well-controlled human clinical studies of the covered product, or of an essentially equivalent product conducted by different researchers, independently of each other, that conform to acceptable designs and protocols and whose results, when considered in light of the entire body of relevant and reliable scientific evidence, are sufficient to substantiate that the representation is true.[5]

Two definitions in the Dannon Order amplify the Two Clinical Studies Requirement. The first defines an "adequate and well-controlled human clinical study" as –

a human clinical study conducted by persons qualified by training and experience to conduct such study. Such study shall be randomized, and, unless it can be demonstrated that blinding or placebo control cannot be effectively or ethically implemented given the nature of the intervention, shall be double-blind and placebo-controlled.[6]

The second amplification is a definition of "essentially equivalent product." This single-sentence definition is so chokingly dense and long that we'll relegate it to a footnote here.[7] For our purposes, it is enough to know that a product that is "essentially equivalent" to a product covered by the order is one to be consumed in the same way, form, and dosage; that contains identical active ingredients; and for which reliable evidence shows that any formulation differences are unlikely to lessen the effectiveness of its ingredients compared to the covered product.

As a catch-all for other claims "about the health benefits, performance, or efficacy of any covered product," the Dannon order imposes what we'll call the "Nonspecific Competent and Reliable Evidence Requirement"; that is the advertiser must have in hand –

[C]ompetent and reliable scientific evidence that is sufficient in quality and quantity based on standards generally accepted in the relevant scientific fields, when considered in light of the entire body of relevant and reliable scientific evidence, to substantiate the representation is true.[8]

For the purposes of that requirement, competent and reliable evidence is defined as "tests, analyses, research, or studies that have been conducted and evaluated in an objective manner by qualified persons and are generally accepted in the profession to yield accurate results."[9]

The Nestlé Order

The fenced-in products covered by the Nestlé administrative consent order are Nestlé's BOOST Kid Essentials, and drink product containing probiotics, and any nutritionally complete drink, with certain exceptions not relevant here.[10] Claims about any of those products reducing or preventing upper respiratory tract infection (URTI), including cold or flu viruses, are subject to a Prior FDA Approval Requirement identical to the one in the Dannon Order.[11]

For claims that a covered product reduced the duration of acute diarrhea in children up to age 13 or reduced absences from daycare or school due to illness, the Nestlé Order imposes a "Two Clinical Studies Requirement" for substantiation.[12] That requirement and its applicable definitions are identical to those in the Dannon Order.

The catch-all for other claims "about the health benefits, performance, or efficacy of any covered product" in the Nestlé order imposes a Nonspecific Competent and Reliable Evidence Requirement identical to the one in the Dannon Order.[13]

The Iovate Order

The third agreement, a stipulated final court judgment and order, also involved allegedly false or deceptive claims about preventing or reducing the incidence of colds and the flu, as well as weight loss claims.[14] In that order, Iovate agreed to refrain from making the cold and flu claims for any of its dietary supplements, foods, and drugs, unless the product had been approved previously by FDA for such claimed use.

However, the FDA authorization in this case would be in the form of an approved new drug application or an over-the-counter (OTC) drug "monograph," the antiquated term still used by that agency for detailed regulatory requirements that control aspects of the marketing of such drugs and their labeled uses.[15]

For claims that a covered product caused weight loss or rapid weight loss, the Iovate Order imposes a "Two Clinical Studies Requirement" for substantiation.[16] That requirement and its applicable definitions are substantively identical to those in the Dannon Order.

The catch-all for other claims "about the health benefits, performance, or efficacy of any covered product" in the Iovate order imposes a Nonspecific Competent and Reliable Evidence Requirement identical to the one in the Dannon Order.[17]

The POM Order

Finally, the consent order proposed for POM covers any food, drug, or dietary supplement, especially including any that contained pomegranate or its components.[18] The FTC combined in that POM Order all of the above Prior FDA Approval Requirements and applied them to allegedly false claims of treating, preventing, or reducing the risk of heart disease, prostate cancer, and erectile dysfunction.[19]

That is, the proposed order would require POM to refrain from making such claims for a covered product unless the product was approved by the FDA for the claimed uses under a final or tentative final OTC drug monograph, new drug application, or the claim specifically was permitted for labeling by regulations promulgated pursuant to the NLEA.[20]

The POM Order does not seek to impose a Two Clinical Studies Requirement. However, as a catch-all for other claims "about the health benefits, performance, or efficacy of any Covered Product," it also imposes a Nonspecific Competent and Reliable Evidence Requirement. [21] That requirement is identical to the one in the Dannon Order.


Research has revealed no principled statement by the FTC as to why prior third-party government approval of commercial speech was necessary or advisable to fence-in the advertisers subject to the four orders being reviewed here. The Commission's press releases announcing the three agreed-to orders acknowledged that FDA approval of claims is not needed for compliance with the Federal Trade Commission Act. These releases also state that requiring prior FDA approval will provide the consenting advertisers with "guidance" that will facilitate their compliance with the requirement and make FTC's enforcement of it easier.

How requiring such prior FDA labeling approvals would facilitate compliance and lighten the enforcement load is not made clear. It would be unfortunate if the broadened (fenced-in) prohibitions in the orders included commercial speech that potentially could be substantiated adequately in some way, but the advertisers never would seriously consider making the claims due to the difficulty or impossibility of satisfying the FDA prior-approval precondition.

Further inadequate explanations of the Commission's thinking appear in FTC's analyses to aid public comment on the Dannon and Nestlé orders. Unlike the press releases, these analyses do not state that imposition of a Prior FDA Approval Requirement provides the advertiser "guidance." However, they do restate without explanation that prior FDA approval of labeling claims will facilitate compliance and make enforcement easier.

These FTC analyses also state, without clear explanation, that the prior approval requirement in the orders "is reasonably related to the violations alleged" (Dannon Order) or "is reasonably related to the enforcement of this order" (Nestlé Order).[22] These self-protective legal conclusions appear within virtually identical and equally enigmatic statements, such as the following in the Dannon Order Analyses, which is substantively identical to the one in the Nestlé Order Analysis:[23]

As noted in the Commission's Enforcement Policy Statement on Food Advertising, "[t]he Commission regards the ‘significant scientific agreement' standard, as set forth in NLEA and FDA's regulations, to be the principal guide to what experts in the field of diet-disease relationships would consider reasonable substantiation for an unqualified health claim. Thus, although the Enforcement Policy Statement does not say that the only way a food advertiser can adequately substantiate a disease-risk reduction claim is through FDA authorization, the consent order provision requiring FDA pre-approval before respondent makes a reduced cold or flu likelihood claim for its covered products in the future will facilitate compliance with and enforcement of the order and is reasonably related to the violations alleged.

That is certainly correct when it says that the 1994 Enforcement Policy Statement "does not say that the only way a food advertiser can adequately substantiate a disease-risk reduction claim is through FDA authorization." The reason, apparently, is because requiring FDA pre-approval as a condition to FTC approval for advertising was unthinkable when the FTC issued that Policy Statement.

The Enforcement Policy Statement does stress the similarities of FTC and FDA regulatory views toward health claims, but it does so in the context of each agency solely handling the matters within its jurisdiction. Thus, it states that, "The Commission's standard for substantiation of health claims in food advertising shares many elements with FDA's approach to such claims in labeling."[24] It also indicates that the FTC will give the FDA's actions and inactions relating to health claims considerable weight in Commission proceedings, and it contains this prescient warning that implies FTC, not FDA, action: "Food marketers should not expect to circumvent FDA's petition process for health claims simply by limiting the assertion of unapproved or unreviewed claims to advertising."[25]

Significantly, the Prior FDA Approval Requirements in the four consent orders are stand-alone provisions that are the sole means of eventually being allowed to make such claims. Each order requires, for the same covered products, different compliance requirements for different claims. Depending on the intended claim for a covered product, the advertiser must obtain prior FDA approval for the labeling or marketing of that product or may go ahead and make a different covered claim in advertising for the same product without notifying the government, provided that the advertiser has in hand adequate substantiation of the type required by the order for that claim.

For example, the Dannon order covers various "food" products within the meaning of that term as identically defined under the FTC Act and FDCA.[26] Under the order, if Dannon wanted to advertise in a television commercial that one of those foods reduced the likelihood of a cold, that claim would have to be first approved for labeling by FDA as a health claim under the NLEA.[27] Under the same order, if Dannon wanted to advertise on TV that one serving of the same product relieved temporary irregularity, it would be permitted to do so without prior governmental review, provided it had the described substantiation.


Variations in the Orders

The FTC press releases relating to the Dannon, Nestlé, and Iovate Orders and the Commission's analyses to aid public comment on the Dannon and Nestlé Orders shed no light on what criteria were used to determine whether a Two Clinical Studies Requirement or Nonspecific Competent and Reliable Evidence Requirement should be used for claims. And, as shown above, the light that the analyses shed on when a Prior FDA Approval Requirement should be used is dim and flickering. Thus, how the advertising community is to extrapolate from these orders the criteria it should apply to similar claims also is not clear.

To be sure, FTC staff members have given presentations to trade and other groups on the meaning and Commission intent with regard to its choosing different substantiation requirements for different claims in the orders. But these presentations have not dispelled confusion with regard to the extent of substantiation that the Commission considers necessary for health claims and similar representations. Moreover, the staff's explanations invariably are delivered only after they emphasize that they do not speak for the Commission.

FTC's Substantiation Policy Statement

The four recent orders address an advertiser's legal need to have on hand a "reasonable basis" in the form of competent and reliable substantiation for an intended claim. Presumably, each of the orders was subjected to Commission evaluation under the eponymous Pfizer factors, as transmuted into a cost-benefit analysis by the FTC Policy Statement Regarding Advertising Substantiation.[28] But we do not know whether and how such an analysis was done by the Commission.

In its Policy Statement on Advertising Substantiation, the Commission assumes, absent contrary evidence, that consumers expect a reasonable basis for an objective claim in advertising that does not identify the basis. It then states that –

The Commission's determination of what constitutes a reasonable basis depends, as it does in an unfairness analysis, on a number of factors relevant to the benefits and costs of substantiating a particular claim. These factors include: the type of claim, the product, the consequences of a false claim, the benefits of a truthful claim, the costs of developing substantiation for the claim, and the amount of substantiation experts in the field believe is reasonable. Extrinsic evidence, such as expert testimony or consumer surveys, is useful to determine what level of substantiation consumers expect to support a particular product claim and the adequacy of evidence an advertiser possesses.[29]

Disclosure by the FTC of whether and how that cost-benefit analysis has been applied to the circumstances of each consent order that requires a level of substantiation would provide the type of guidance advertisers need to understand how this Commission interprets its responsibilities, including how it determines what substantiation consumers expect for a given claim.

Representative Case Law

It is long-settled law that, under the FTC Act, an advertisement generally is considered deceptive if its advertiser lacked a preexisting reasonable basis as substantiation for the objective claims made therein.[30] What is not settled – and probably cannot be settled as a general principle – is what constitutes a reasonable basis for specific claims about specific products, often to specific audiences.

The courts repeatedly have looked at the difficulties associated with determining what a reasonable basis is in various circumstances. Perhaps the landmark decision is by the D.C. Circuit, the most influential federal court of appeals when it comes to interpreting regulatory actions of the type considered here. In Thompson Medical, that Circuit addressed not only what constituted a reasonable basis generally, but whether the FTC was allowed to require the advertiser to possess the results of two clinical studies as substantiation for claims that its OTC drug Aspercreme was effective as a topical analgesic.[31]

Importantly, Thompson Medical was an appeal from a Commission order entered after that body accepted the findings and conclusions of an administrative law judge – in large part, a detailed record of the facts and how the FTC applied the law to them. The D.C. Circuit ruled that the FTC had the discretionary authority to impose such a Two Clinical Studies Requirement or other remedies if the agency thought them appropriate. Based in large part on findings in the administrative record, the court held that the FTC properly determined that the two-test remedy was appropriate by doing a multi-factorial Pfizer analysis that was reflected in the record.[32] (The Pfizer factors to be analyzed are quoted above in the FTC Policy Statement Regarding Advertising Substantiation. That Policy Statement was appended to the FTC administrative decision before the court.)

Thompson Medical also noted that the facts surrounding a particular FTC order may account for differences in how federal courts interpreted the need for specificity in FTC scientific substantiation requirements. The court noted that, in 1982, the Third Circuit struck down on vagueness grounds part of an FTC order containing an unspecific "competent and reliable scientific evidence" requirement; and, in 1985, the Second Circuit went the other way in upholding a similar order against a vagueness challenge.[33]

Late last year, in FTC v. Lane Labs-USA, et al., the Third Circuit revisited a Nonspecific Competent and Reliable Evidence Requirement imposed by the FTC.[34] Significantly, that substantiation requirement was in two consent orders relating to health benefit claims made for respondents' food, dietary supplement, or drug products. The orders required only that the claims be substantiated by "competent and reliable scientific evidence" and defined such evidence as –

[T]ests, analyses, research, studies, or other evidence based on the expertise of professionals in the relevant area, that have been conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted in the profession to yield accurate and reliable results.[35]

In that case, the FTC had moved the New Jersey District Court to hold the respondents in contempt for violating the orders in a multitude of ways. Significantly, there were no clinical trials done using the advertisers' products to prove the claims at issue; most of the evidence submitted by the FTC and the defending advertisers consisted of expert opinions on scientific principles and on tests involving other products or substances.

After a battle of expert and percipient witnesses over whether the nonspecific substantiation standard had been met, the Lane Labs trial court stunningly denied FTC's motion with respect to every one of its many alleged violations.[36] On appeal, the Third Circuit in Lane Labs affirmed some findings, reversed others, and remanded some for further inquiry and explanation.

One of the more interesting (the FTC might say disappointing) facets is how the trial and appellate courts handled the following health claim for one of the Lane Labs advertisers' dietary supplements: "AdvaCal Has Been Shown in Clinical Tests to Increase Bone Density in the Hip."[37] Since it was undisputed that no such research existed, one might expect that the FTC had a lay-down hand as to this claim. However, there were results of two generic calcium clinical trials. Thompson's expert extrapolated those results to opine that AdvaCal likely would have the claimed effect on bones because the product got calcium into the bloodstream and calcium generally has that effect. Both the district and appeals courts accepted this as competent and reliable scientific substantiation of the challenged "establishment claim."[38]

Also interesting is how the courts handled this image-inducing claim for another of the advertisers' dietary supplements: "Fertil Male Can Cause Sperm Count to ‘Skyrocket' in as Little as One Month."[39] The advertisers' expert testified "that there was competent and reliable scientific evidence suggesting that Fertil Male improves male fertility parameters such as sperm count," but he also testified that the "entire impact would require a longer time" than one month.[40]

In challenging the claim in court, the FTC focused on the allegedly unproved "one-month" representation. However, the district court found that the expert's testimony was competent and reliable substantiation for the entire claim, and so did the Third Circuit. In doing so, the appeals court criticized the Commission for not providing a better record at the trial level: "The FTC declined to delve further into this inquiry when it had the opportunity, but now asks that we set aside the District Court's factual findings on the basis of testimony that is ambiguous at best."[41]

Very recently, the D.C. Circuit returned to the fray. Citing Thompson Medical in a case involving substantiation of dietary supplement claims, that appeals court upheld as reasonable a generalized Commission requirement for "competent and reliable scientific evidence," which was adopted by the FTC after application of a Pfizer analysis.[42]


Before turning to the types of substantiation accepted by the FDA for effectiveness claims and other relevant matters within its overlapping jurisdiction, it is worth noting that the FTC and FDA are long overdue in updating their 1971 memorandum of understanding.

Under that memorandum, absent an express agreement to the contrary, the FTC is to "exercise sole jurisdiction over all matters regulating the truth or falsity of advertising of foods" and the FDA is to "exercise sole jurisdiction over all matters regulating the labeling of foods."[43] (Emphasis added.) If there have been no express agreements to the contrary between the FTC and FDA, how do we explain the recent consent orders? If there have been such agreements, why have they not been disclosed?


FDA's standards for the scientific evidence needed to support effectiveness claims for drugs and dietary supplements are more flexible, and have been more flexible for a longer time, than may be apparent today.

The overriding principle has always been to focus on the quality of the data involved, not the number of studies. FDA has been flexible about the number of studies needed to support a product's effectiveness, and in many cases has allowed manufacturers to base effectiveness claims for their specific products on published studies involving different formulations with the same (or sometimes, only a similar) active ingredient (i.e., there is no testing on the manufacturer's particular end product). This flexibility can be seen in FDA's guidance and actions concerning prescription drugs, over-the-counter (OTC) drugs, and dietary supplements.


As originally enacted, the FDCA only required that drugs be shown to be "safe"; there was no requirement that such products be shown to be "effective."[44] The Drug Amendments of 1962[45] added the requirement that there be "substantial evidence" (including "adequate and well-controlled investigations, including clinical investigations") showing that the drug will have its claimed effect under its intended conditions of use.[46] The term "adequate and well-controlled investigations" has generally been interpreted to mean at least two such studies.[47] However, the need for multiple clinical studies has never been a hard-and-fast rule.

The "adequate and well-controlled investigations" standard applies most directly to drugs that must be approved through the New Drug Application (NDA) process.[48] In 1995, FDA published a notice in the Federal Register noting that additional flexibility is appropriate when establishing effectiveness:

While a second [effectiveness] study may well be needed to replicate results demonstrated in a first study, in some instances, it is possible to replicate results within one large, well-designed, multi-center study. FDA emphasizes that this approach can be successful only when results are strong. The agency has, in the past, approved new human drug products on the basis of a single, multi-center study.[49]

This flexibility is now written into the law. The Food and Drug Administration Modernization Act of 1997 (FDAMA) specifically amended Section 505(d) of the FDCA to provide that:

If [FDA] determines, based on relevant science, that data from one adequate and well-controlled clinical investigation and confirmatory evidence (obtained prior to or after such investigation) are sufficient to establish effectiveness, [FDA] may consider such data and evidence to constitute substantial evidence for purposes of [§ 505(d)].[50]

Following this amendment by FDAMA, FDA issued a guidance document to elaborate on different circumstances under which this flexibility may be exercised:

FDA has been flexible within the limits imposed by the congressional scheme, broadly interpreting the statutory requirements to the extent possible where the data on a particular drug were convincing. In some cases, FDA has relied on pertinent information from other adequate and well-controlled studies of a drug, such as studies of other doses and regimens, of other dosage forms, in other stages of disease, in other populations, and of different endpoints, to support a single adequate and well-controlled study demonstrating effectiveness of a new use.[51]

This flexibility has not been limited to approving just "new uses" of existing drug products. Indeed, initial approvals of certain drug products have been based on the published literature studying the effects of the active ingredient in varying formulations.[52]

On other, more recent, occasions (especially involving bioterrorism-related drug products), FDA has not required a drug applicant to submit any safety or effectiveness data on its specific product. Instead, the agency has reviewed the available published scientific literature and concluded that the active ingredient has been shown to be safe and effective. In such cases, NDA applicants have been instructed to provide information about the chemistry, manufacturing, and controls (CMC) for the finished drug product and to cite the Federal Register notice in lieu of providing safety and effectiveness data. For example:

We [FDA] have determined that 500-mg Prussian blue capsules can be safe and effective for the treatment of patients with known or suspected internal contamination with radioactive thallium, nonradioactive thallium, or radioactive cesium. We encourage the submission of NDAs for Prussian blue drug products. The requirement under 21 U.S.C. 355(b)(1) for full reports of investigations to support these NDAs may be met by citing the published literature we relied on in preparing this notice. . . . It is unnecessary to submit copies and reprints of the reports from the listed published literature.[53]

FDA reached a similar conclusion with respect to pentetate calcium trisodium and pentetate zinc trisodium for the treatment of internal contamination with plutonium, americium, or curium, finding that existing published literature showed that the drugs were safe and effective for their intended use.[54]

Finally, FDA has also developed a procedure for approving drug products for "ameliorating or preventing serious or life-threatening conditions caused by exposure to lethal or permanently disabling toxic biological, chemical, radiological, or nuclear substances" when "[d]efinitive human efficacy studies cannot be conducted because it would be unethical to deliberately expose healthy human volunteers to a lethal or permanently disabling toxic biological, chemical, radiological, or nuclear substance; and field trials to study the product's effectiveness after an accidental or hostile exposure have not been feasible."[55]

This procedure is known as the "animal efficacy rule." Under these conditions, "FDA may grant marketing approval for a new drug product for which safety has been established and for which the requirements of [21 C.F.R. §] 314.600 are met based on adequate and well-controlled animal studies when the results of those animal studies establish that the drug product is reasonably likely to produce clinical benefit in humans."[56] In short, drugs of this type can be approved without any studies on humans to support effectiveness.[57]

The bottom line is that FDA has long believed that it is not bound by a requirement for a specific number of clinical studies and that it has the flexibility to rely on valid scientific data that may be available in a number of forms. This approach makes sense from a scientific standpoint and is a fundamental principle supporting FDA's current system for regulating most OTC drugs.


Following the Drug Amendments of 1962, FDA contracted with the National Academy of Science-National Research Council (NAS-NRC) to review the effectiveness of currently-marketed drug products. This effort, known as the Drug Efficacy Study Evaluation (DESI), initially focused on prescription drugs. However, NAS-NRC also reviewed 420 OTC drugs which were broadly representative of the whole range of the OTC market at that time.

The NAS- NRC panels' conclusions, which were based on supporting data submitted by manufacturers, were that only approximately 25 percent of the drugs reviewed had an indication that was classifiable as effective.[58] Given that the number of individual OTC drugs on the market ranged from 100,000 to 500,000, FDA concluded that it could "either initiate a separate court action with respect to each violative OTC drug or deal with all OTC drugs through rulemaking by therapeutic classes on an industry-wide basis."[59] The Agency opted for the class-based approach and set forth several arguments justifying that decision.

In the final regulations, FDA addressed comments asserting that the agency "does not have the authority to regulate drugs by therapeutic class, because the authority to do so has not been given by Congress."[60] FDA noted that "[b]ased on present resources it would not be possible to adopt a drug-by-drug approach even if it were a better method. The Commissioner has also concluded that a drug-by-drug approach is not the best method of proceeding, since it would be so cumbersome, time consuming, and confusing."[61]

In the end, the FDA found that "[n]othing in the [FDCA] prohibits the use of the therapeutic category approach to defining those OTC drugs that are generally recognized as safe and effective [GRASE] and not misbranded."[62] While this is a departure from FDA's ordinary practice of considering a drug's status on a formulation-specific basis, the U.S. Supreme Court has commented favorably upon the OTC process established.[63] Its use has been accepted in the ensuing decades as a matter of FDA's enforcement discretion, if not practical necessity.

To help determine which OTC drugs on the market were GRASE and which should be considered "new drugs" under the 1962 amendments, FDA assembled expert Advisory Panels beginning in the early 1970s to review the active ingredients in these products and to develop "monographs" (essentially, regulations) that would set out the conditions under which these drugs would be considered GRASE and not misbranded.

Based on a review of all the available data submitted on particular active ingredients, the Advisory Panels initially classified active ingredients into one of three categories: Category I (GRASE for its intended use), Category II (not GRASE for its intended use), or Category III (insufficient data to permit classification). Unless sufficient data are submitted on an active ingredient to permit its classification in Category I prior to the issuance of a final monograph, the active ingredient is not GRASE for the indications covered by the monograph. Therefore, finished products formulated with it must be the subject of an approved NDA.

Although FDA originally proposed to have its expert Advisory Panels review inactive ingredients in OTC drug products,[64] the agency subsequently agreed that the OTC review was intended to cover only the safety and effectiveness of active ingredients and eliminated the proposal to review data on "inactive" ingredients.[65]

Monographs are developed by FDA for particular categories of drug products (e.g., cough/cold products, internal analgesics, sunscreens, and anticaries products). They not only list those active ingredients that are GRASE, but also establish specific labeling requirements for indications, directions for use, and warnings to ensure that the products are used properly. A drug product marketed in compliance with an OTC monograph does not require FDA review before marketing.[66]

In the end, the entire OTC monograph system is based on the premise that the data supporting the effectiveness of an active ingredient generally are sufficient to support the marketing of finished formulations containing that active ingredient that have not themselves been the subject of safety or effectiveness testing.[67] Indeed, no safety or effectiveness testing is required on finished OTC monograph drug products.

In fact, the only direction given to manufacturers on the issue of finished formulations is a long-standing general requirement for all OTC drugs that the "product contains only suitable inactive ingredients which are safe in the amounts administered and do not interfere with the effectiveness of the preparation or with suitable tests or assays to determine if the product meets its professed standards of identity, strength, quality, and purity."[68] As a result, it is up to the OTC drug manufacturer to determine what inactive ingredients are "safe" and "suitable" for a particular OTC drug product formulation.[69]

Most OTC drugs on the market today are based on data that were developed years ago on active ingredients studied in different formulations. Despite the absence of any scientific data on the current products, they are required to bear the claims set forth in the applicable monograph. These claims are presumed to be truthful and accurate, based on data developed on potentially widely varying drug products. Any suggestion that every OTC drug formulation must be the subject of its own effectiveness testing would impose a huge burden on an industry. Three decades' of experience shows that such a burden is not warranted.


Here, we need a primer on "structure/function" claims and dietary supplements. Drugs and dietary supplements are both allowed to make such claims with respect to the human body. Under the FDCA, a "drug" is defined, in part, as an article "(other than food) intended to affect the structure or any function of the body of man or other animals."[70] The FDCA's definition of "dietary supplement" states that "[e]xcept for purposes of section 201(g), a dietary supplement shall be deemed to be a food within the meaning of [the FDC] Act."[71]

This would ordinarily disqualify dietary supplements from making "structure/function" claims. However, there is a separate statutory provision that authorizes a claim for a dietary supplement if, among other conditions, the statement "describes the role of a nutrient or dietary ingredient intended to affect the structure or function in humans [or] characterizes the documented mechanism by which a nutrient or dietary ingredient acts to maintain such structure or function."[72] FDA has promulgated a final regulation allowing these types of claims for dietary supplements.[73]

As for dietary supplements, unlike other product categories, FDA has provided recent, specific guidance on the scientific evidence needed to support effectiveness claims for those product. In 2009, FDA announced the availability of a final Guidance for Industry on the scientific data necessary to substantiate "structure/function claims" (among certain others) made for dietary supplements.[74]

The agency stated that it intends to apply a standard that is consistent with the one used by FTC. FDA states that its approach "provides manufacturers flexibility in the precise amount and type of evidence that constitutes adequate substantiation." However, this purported flexibility is likely to be the source of continuing uncertainty over whether adequate substantiation actually exists for a particular claim. FDA acknowledges that there is "no general rule for how many studies, or what combination of types of evidence, is sufficient to support such a claim."[75]

In determining whether the substantiation standard has been met with competent and reliable scientific evidence, FDA recommends that firms consider the following issues: (1) the meaning of the claim(s) being made; (2) the relationship of the evidence to the claim; (3) the quality of the evidence; and (4) the totality of the evidence. The Guidance outlines these factors through a number of examples, most of which illustrate when the proposed substantiation is not adequate.

Since manufacturers of dietary supplements do not have to provide FDA with substantiation of their claims unless the claims are challenged, it is difficult to know the extent to which companies are relying upon the flexibility provided in the claims Guidance. However, the discussion in the Guidance makes clear that FDA's approach to claims substantiation for dietary supplements is not restricted to a specific number of studies and does not require that each unique formulation be the subject of its own testing.


The recent FTC press release announcing the Dannon Order states this: "As part of its ongoing efforts to make sure that marketers do not overstate the health benefits of their products, the FTC charged that Dannon's ads were deceptive because it did not have substantiation for its claims."[76] Thus, regulating such claims apparently is a priority at the FTC, and a worthy one at that. But the FTC's pursuit of such a priority without doing a good job of explaining to confused marketers what it expects them to have as substantiation is not worthy of the Commission. It could do much better.

It would be in the public interest for the Commission to publish its Pfizer factor analysis when a consent order is announced or proposed. It also would be in the public interest for the FTC and FDA to clarify how they are sharing, and will share, their joint jurisdiction. Indeed, it may be time to take a look at all of the guides and policy statements affecting advertising substantiation for foods, drugs, and cosmetics and attempt to unify them according to contemporary needs.

[1] Of course consent orders are by definition "agreements," a term that implies negotiation, but that does not mean equality of bargaining power. We doubt whether the FTC would agree to an inadequate level of substantiation for health or other effectiveness claims. If anything, the concern would be that the FTC might use its usually dominant "negotiating" position to require, in terms of quantity or quality, more evidence of the truth of a claim than is needed.

[2] See FDA's definition at 21 C.F.R. § 101.14(a)(1). That definition is accepted by the FTC as authoritative. FTC Enforcement Policy Statement on Food Advertising (1994) (Enforcement Policy Statement), available at http//, at note 64.

[3] In the Matter of The Dannon Company, Inc., FTC File No. 082 3158. The proposed order and complaint are available by electronic link within the Commission's news release of December 15, 2010 (Dannon News Release), available at

[4] Section I, proposed Agreement Containing Consent Order.

[5] Id. at Sections II, III. The two Sections are identical except that there is an exception for the apparently true claim that eating three servings a day of the advertiser's Activia yogurt will provide the benefit.

[6] Id. at Definition 3.

[7] "'Essentially equivalent product' means a product that contains the identical ingredients, except for inactive ingredients (e.g., inactive binders, flavors, preservatives, colors, fillers, excipients), in the same form and dosage, and with the same route of administration (e.g., orally, sublingually), as the covered product; provided that the covered product may contain additional ingredients or other differences in formulation to affect taste, texture, or nutritional value (so long as the other differences do not change the form of the product or involve the ingredients from which the functional benefit is derives), if reliable scientific evidence generally accepted by experts in the field demonstrates that the amount of additional ingredients, combination of additional ingredients, and any other differences in formulation are unlikely to impeded or inhibit the effectiveness of the ingredients in the essentially equivalent product." Id. at Definition 5.

[8] Id. at Section I.

[9] Id. at Section IV.

[10] Definition 4, Agreement Containing Consent Order, In the Matter of Nestlé Healthcare Nutrition, Inc., FTC File No. 092 3087. The proposed order and complaint are available by electronic link within the Commission's news release of July 14, 2010 (Nestlé News Release), found at

[11] Section I, Agreement Containing Consent Order.

[12] Id. at Section II.

[13] Id. at Section III.

[14] FTC v. Iovate Health Sciences USA, Inc., et al (W.D.N.Y.; July 29, 2010).

[15] Id., Stipulated Final Judgment and Order for Permanent Injunction and Other Equitable Relief (Stipulated Order) at Section I.

[16] Id. at Section II.

[17] Id. at Section III.

[18] Definitions 4 and 7, proposed Agreement Containing Consent Order, Complaint, In the Matter of POM Wonderful LLC, et al., available by electronic link at

[19] Id. at Section I.

[20] Id.

[21] Id. at Section III.

[22] The Dannon Company, Inc.; Analysis of Proposed Consent Order to Aid Public Comment, 75 Fed. Reg. 80051 (December 21, 2010) (Dannon Order Analysis) at 80053; Nestlé HealthCare Nutrition, Inc.; Analysis of Proposed Consent Order to Aid Public Comment, 75 Fed. Reg. 42752 (July 22, 2010) (Nestlé Order Analysis) at 842753.

[23] Dannon Order Analysis at 80052-80053; Nestlé Order Analysis at 842753. (Citation to the Enforcement Policy Statement omitted.)

[24] Enforcement Policy Statement at IV.A.

[25] Id. at n. 80.

[26] Paragraph 3 of the proposed Dannon Complaint defines the products as "foods" under Sections 12 of the FTC Act, 15 U.S.C. § 53. That definition is identical to Section 201(f) of the FDCA, 21 U.S.C. § 321(f).

[27] Dannon Order Section I.

[28] Appended to Thompson Med. Co., 104 F.T.C. 648 (1984), aff'd 791 F. 2d 189 (D.C. Cir. 1986) (Substantiation Policy Statement); see also In re Pfizer 81 F.T.C. 23, 91 (1972).

[29] Substantiation Policy Statement at 4.

[30] In re Pfizer, 81 F.T.C. 23 (1972); Porter & Dietsch, Inc. v. FTC, 605 F.2d 294, 302 (7th Cir. 1979);

[31] Thompson Medical Co. v. FTC, 791 F.2d 189, 193-194 (D.C. Cir. 1986) (Mikva, J.).

[32] Id. at 195.

[33] Id. at195-196 (citing American Home Products Corp. v. FTC, 695 F.2d 681, 710 (3rd Cir. 1982) and Bristol-Myers Co. v. FTC, 738 F.2d 554, 560-561 (2d Cir. 1984)).

[34] No. 09-3909 (3d Cir. Nov. 17, 2010).

[35] Filed op. at 6.

[36] That shocking experience may have contributed to the FTC's use of more specific Two Clinical Studies Requirements in recent orders, even though that would be a tactical reason that was not part of a Pfizer analysis.

[37] Filed op. at 22-24 (full Third Circuit discussion).

[38] An "establishment claim," sometimes called a "tests prove claim," contains within in it a representation that the claim's promise (e.g., "Relieves Congestion") has been established as true by scientific or technical proof (e.g., "Tests Prove Dr. John's Miracle Juice Relieves Congestion").

[39] Id. at 31-34 (full Third Circuit discussion).

[40] Id. at 31-32. What evidence suggested increase sperm count was not specified in the opinion.

[41] Id. at 34.

[42] Daniel Chapter One, et al. v. FTC, No. 10-1064 (D.C. Cir. Dec. 10, 2010) (unpublished).

[43] Working Agreement Between FTC and Food and Drug Administration, 4 Trade Reg. Rep. (CCH) ¶ 9850 at ¶ 9850.03.

[44] Pub. L. No. 75-717, 52 Stat. 1040 (1938).

[45] Pub. L. No. 87-781, 76 Stat. 780 (1962).

[46] FDCA § 505(d) (as amended in 1962).

[47] 44 Fed. Reg. 51512, 518 (August 31, 1979) (FDA final decision in administrative hearing denying supplemental approval to the drug product Benylin); Warner-Lambert Co. V. Heckler, 787 F. 2d 147 (3d Cir. 1986)).

[48] Although the majority of drugs with approved NDAs are prescription products, the NDA process would also apply to any OTC drugs that were not eligible for the "monograph" process described in Section II.

[49] 60 Fed. Reg. 39180, 39181 (August 1, 1995) (col. 1). An example of such a product is Pulmozyne (dornase alfa) (BLA No. 103532) (for cystic fibrosis) (approved December 30, 1993).

[50] Pub. L. 105-115, Section 115(a) (amending FDCA § 505(d)).

[51] FDA "Guidance for Industry - Providing Clinical Evidence of Effectiveness for Human Drug and Biological Products" (May 1998) (page 3) (available at:

[52] Examples include: (1) Secretin-Kabi (secretin), NDA No. 18-290, approved May 29, 1981; and (2) Sclerosol Intrapleural Aerosol (Sterile Talc Powder) NDA No. 20-587, approved December 24, 1997.

[53] 68 Fed. Reg. 5645, 5647 (February 4, 2003) ("Guidance for Industry on Prussian Blue for Treatment of Internal Contamination With Thallium or Radioactive Cesium; Availability"). Relying on this guidance document, Heyl (c/o Heyltex Corp) received approval of its NDA 21-626 on October 2, 2003. A second company (Degussa AG) received tentative approval for its Prussian blue formulation.

[54] 68 Fed. Reg. 53984, 53986 (September 15, 2003) ("Guidance for Industry on Pentetate Calcium Trisodium and Pentetate Zinc Trisodium for Treatment of Internal Contamination with Plutonium, Americium, or Curium; Availability") ("We have determined that Ca-DTPA and Zn-DTPA can be safe and effective for treatment of patients with known or suspected internal contamination with plutonium, americium, or curium to increase the rates of elimination. . . . The requirement under 21 U.S.C. 355(b)(1) for full reports of investigations to support these NDAs may be met by citing this notice and the published literature we relied on in preparing this notice."). Relying on this Federal Register notice, Hameln Pharmaceuticals GmbH received approval of its NDA Nos. 21-749 and 21-751 on August 11, 2004.

[55] 21 C.F.R. § 314.600.

[56] 21 C.F.R. § 314.610(a).

[57] Using this process has resulted in at least new drug approvals: (1) Pyridostigmine bromide (NDA No. 20-414) (U.S. Army) (approved February 5, 2003) (pretreatment against Soman nerve gas exposure); and (2) Cyanokit (hydroxocobalamin) (NDA No. 22-0410 (approved December 15, 2006) (Merck Sante SAS) (treatment of cyanide poisoning).

[58] See FDA's general discussion in the preamble to the proposed rules establishing the OTC drug review. 37 Fed. Reg. 85, 85 (January 5, 1972).

[59] 37 Fed. Reg. at 86 (col. 1).

[60] 37 Fed. Reg. 9464, 9465 (May 11, 1972) (FDA response to comment 10) ("These comments also argue that the category reviews are not legally proper, since it is a subversion of the NDA procedures (21 U.S.C. 355), which call for a drug-by-drug review.").

[61] 37 Fed. Reg. at 9465 (FDA response to comment 9).

[62] 37 Fed. Reg. at 9465 (FDA response to comment 10).

[63] Weinberger v. Bentex Pharmaceuticals, Inc., 412 U.S. 645, 650-51, 93 S.Ct. 2488, 2492 (S.Ct. 1973).

[64] See FDA's general discussion in the preamble to the proposed rules establishing the OTC drug review. 37 Fed. Reg. 85, 88 (January 5, 1972) (proposed 21 C.F.R. § 130.301(a)(5)(iii)).

[65] 37 Fed. Reg. 9464, 9467 (May 11, 1972) (FDA response to comment 42) ("Comments stated that [FDA's] request for the complete quantitative composition of the drug was not necessary because the review covered only the safety and efficacy of active ingredients. The Commissioner agrees with this comment and the regulations have been changed to require submission only of a quantitative statement of the active ingredients [see revised 21 C.F.R. § 130.301(a)(5)]."); "The OTC drug review is an active, not an inactive, ingredient review . . .." TFM for OTC Oral Health Care Drug Products, 56 Fed. Reg. 48302, 48305 (September 24, 1991) (FDA response to Comment 3).

[66] "Manufacturers desiring to market an OTC drug covered by an OTC drug monograph need not seek FDA clearance before marketing." 67 Fed. Reg. 3060, 3060 (January 23, 2002) (preamble to final regulation on use of foreign marketing experience to support OTC monograph status in the U.S.).

[67] Certain monographs include performance testing requirements to ensure that the finished formulation does not adversely affect the performance of the active ingredient(s). See e.g., antacid final monograph (21 C.F.R. § 331.10(a); anticaries final monograph (21 C.F.R. § 355.70); antigingivitis/antiplaque proposed monograph (proposed 21 C.F.R. § 356.92 (68 Fed. Reg. 32232, 32286 (May 29, 2003))); and sunscreen products (21 C.F.R. §§ 352.70 - .77). However, none of this testing establishes the effectiveness of the active ingredients themselves.

[68] 21 C.F.R. § 330.1(e).

[69] "Thus, manufacturers have . . . the responsibility to assure that such inactive ingredients meet the criteria set forth in [21 C.F.R.] § 330.1(e)." 53 Fed. Reg. 6100, 6101 (February 29, 1988) (FDA response to comment 2) (preamble to Final Monograph on OTC Stimulant Drug Products).

[70] FDCA § 201(g)(1)(A).

[71] FDCA § 201(ff).

[72] FDCA § 403(r)(6)(A).

[73] 21 C.F.R. § 101.93(f).

[74] 74 Fed. Reg. 304 (January 5, 2009). The Claims Guidance ("Substantiation for Dietary Supplement Claims Made Under Section 403(r)(6) of the [FDCA]") is available at:

[75] Claims Guidance, Section II.E.

[76] The December 15, 2010, release is available at