American Journal of Law & Medicine

Stopping Deceptive Health Claims: The Need for a Private Right of Action under Federal Law

This Article offers a thorough analysis of an important public health issue, namely how to confront the growing problem of deceptive claims regarding foods and dietary supplements, including increasingly prevalent but unverifiable claims. The authors call for the creation of a limited private right of action under the Federal Trade Commission (FTC) Act for deceptive health-related claims for these products. The proposal responds to the growing market for these products and the inadequacy of current laws and enforcement actions to prevent such claims. In crafting the limited private right of action, the authors attempt to enhance consumer protection without undermining federal agency primacy in enforcement. The Article ends with an appendix setting forth proposed language for a statutory amendment to the FTC Act incorporating the authors'proposal. ([dagger][dagger])

I.   INTRODUCTION
II.  THE PROBLEM OF DECEPTIVE CLAIMS IN THE MARKETING OF
     NUTRITIONAL PRODUCTS
III. REGULATION OF HEALTH CLAIMS AND RECENT EFFORTS TO
     COMBAT DECEPTIVE CLAIMS
     A. FDA
     B. THE FTC
     C. RECENT ENFORCEMENT EFFORTS BY FDA AND THE FTC AGAINST
        NUTRITIONAL PRODUCT MANUFACTURERS FOR DECEPTIVE CLAIMS
     D. STATE CONSUMER PROTECTION LAWS
IV.  LIMITATIONS OF LAW AND ENFORCEMENT CAPACITY
     A. FDA
     B. THE FTC
     C. STATE CONSUMER PROTECTION LAWS
V.   A LIMITED FEDERAL PRIVATE RIGHT OF ACTION AS A SUPPLEMENT
     TO GOVERNMENT ENFORCEMENT
     A. THE NEED FOR A NEW LAW
     B. A PROPOSED NEW PRIVATE RIGHT OF ACTION
VI.  CONCLUSION
APPENDIX A

I. INTRODUCTION

Consumers are currently facing a torrent of new health-related claims as they shop for foods and dietary supplements (hereinafter referred to as "nutritional products") in grocery stores, pharmacies, health food stores, and on the Internet. (1) Some of these products make claims that they support immunity, improve memory, (2) and even cure cancer. (3) Such claims appear to be a response to increasing popularity among consumers of nutritional products that improve or maintain health and wellness. (4) Surveys have shown that United States consumers base decisions to purchase these foods and dietary supplements almost exclusively on "product labeling claims" (5) that describe health benefits. (6)

Claims about health benefits are more persuasive to consumers when they appear to be authoritative. The problem with seemingly authoritative claims, however, is that most of them are neither based on rigorous clinical studies nor vetted by any government agency. (7) Some lack any evidence of effectiveness; (8) others go beyond what is permitted by law. (9) Although this is not a new problem, (10) it is compounded by the vigorous marketing of new product lines, such as probiotics, claiming a wide variety of health benefits. (11) The growing market for these new products, (12) coupled with the lack of reliable studies of their efficacy," creates additional challenges for consumers and regulators. (14)

Preventing deceptive claims (15) about the health-related benefits of nutritional products is an important goal of both federal and state consumer protection policies. (16) Promoting nutritional products through deceptive claims can cause a variety of harms. (17) The most obvious is the financial exploitation of consumers through deceptively induced sales. (18) Even more troubling is the potential for harm caused by giving consumers false hope that nutritional products are the best solution to their health problems. (19) In the case of some nutritional products, Internet advertisements claim that the products can improve symptoms related to serious illnesses, including chronic diseases and chronic pain. (20) Such claims might lead consumers to forgo medically recommended therapies. (21) Consumers who are taking prescription drugs face the additional risk that some of these nutritional products, in particular dietary supplements, may result in harmful interactions. (22)

Both the Food and Drug Administration ("FDA") and the Federal Trade Commission ("FTC") regulate claims made by food and dietary supplement manufacturers. (23) FDA regulates labeling, while the FTC regulates advertising. (24) Under the Food, Drug and Cosmetic ("FD&C") Act, labels on these products must not be false or misleading. (25) Under the FTC Act, claims in advertising made about foods and dietary supplements may not be "unfair" or "deceptive." (26)

While FDA and the FTC have made some efforts to challenge companies making deceptive health claims,27 the lack of resources for enforcement, the difficulty of policing advertising on the Internet, and the lure of profit by food and dietary supplement manufacturers make it virtually impossible for FDA and the FTC to keep pace with the marketing strategies for these products. (28) Moreover, FDA's regulatory power over these manufacturers has actually declined over the last few decades due to limitations placed on the agency by Congress and the courts. (29) In addition, it is unlikely that these enforcement mechanisms adequately deter "quick hit" marketers who are not concerned about long-term business or reputation. (30)

In order to bolster the enforcement tools available to combat the problem of deceptive health claims for nutritional products, we propose a limited private right of action under the Federal Trade Commission Act. As background to this proposal, in Part II of this article we expand on the problem of deceptive health-related claims for foods and dietary supplements amidst the growing demand for these products. In Part III, we describe the current legal standards under the FD&C Act, the FTC Act, and state consumer protection laws governing deceptive claims made by nutritional product manufacturers. Part III also examines current enforcement efforts aimed at ensuring compliance with the laws. In Part IV, we describe the limits of existing law and enforcement capabilities of the relevant federal agencies as well as the limits and shortcomings of state laws and their use by consumers. Part V describes the benefits, risks, and contours of the proposed limited private right of action, with an emphasis on creating an approach that will augment existing enforcement tools and lead to more effective consumer protection without undermining important federal agency control and enforcement goals. Finally, Appendix A offers suggested language for a statutory amendment to the FTC Act establishing the proposed private right of action.

II. THE PROBLEM OF DECEPTIVE CLAIMS IN THE MARKETING OF NUTRITIONAL PRODUCTS

Several prominent news stories have reported a growing prevalence of deceptive health claims for nutritional products sold at grocery and drug stores. (31) For example, a 2011 New York Times article quotes consumer advocates and nutritionists as stating that "shoppers are being bamboozled by slick marketing" of these products and that these products are not about health but about marketing. (32) Similarly, a 2010 Scientific American article warned consumers that many supermarket health claims are not supported by science and that the government does not endorse them. (33) These articles and others provide numerous examples of companies that lack substantiation for their claims, and at times even ignore evidence that shows their product clearly does not do what they claim it does. (34) The claims are being made for two types of products: foods with alleged health benefits (also called functional foods (35)) and dietary supplements; such as vitamins, minerals, and herbs; intended to add nutritional value to the diet. Both consumer groups and government agencies have weighed in on the extent of the problem.

The Center for Science in the Public Interest ("CSPI"), a consumer advocacy organization with a mission to carry out "innovative research and advocacy programs in health and nutrition, and to provide consumers with current, useful information about their health and well-being," (36) has made food labeling and deceptive health claims a priority in its advocacy program. In 2013, the organization initiated its "Stop the Lying Labels" campaign. (37) In an email to members of a CSPI listserv, Michael Jacobson, the organization's executive director, stated that in his forty-plus years of dealing with the food industry, he has "never encountered such bold deception and disregard for the law" as he sees now in the area of food labeling. (38) He cites as examples claims by General Mills "that some of its corn-syrup-drenched products are 'natural'" and claims by Coca-Cola about its "Vitamin water (which [he states] would be better called Sugar water)." (39)

Similarly, government reports and statements have been critical of claims being made by dietary supplement manufacturers--in particular, structure/function claims. (40) The criticism is that these claims go outside the bounds of the regulatory limits on them and bleed into the disease claim (i.e., drug) category, (41) thus requiring premarket approval by FDA, and that manufacturers have not done the studies necessary to substantiate their claims. In 2010, the Government Accountability Office ("GAO") issued a report in which it described numerous examples of deceptive or questionable marketing practices by dietary supplement manufacturers and retailers. (42) Of the questionable practices they found, the most egregious were "suspect marketing claims that a dietary supplement prevented or cured extremely serious diseases, such as cancer and cardiovascular diseases" or that it reduced the symptoms of Alzheimer's disease. (43)

The FTC has also asserted that the food and dietary supplement industries are making health-related claims that are often "false or unproven." In particular, the agency cites a "trend in food advertising toward making unproven claims that eating certain foods can improve health and even reduce the risk of serious illnesses such as prostate cancer and heart disease." (45)

While there is little hard evidence of the extent of the problem, a walk through a supermarket or pharmacy reveals the pervasiveness of health claims on product labels. Moreover, the growing demand for these products suggests that the problem will increase over the next several years. Markets for both dietary supplements and functional foods are booming. A 2012 Department of Health and Human Services ("DHHS") Office of Inspector General ("OIG") report on structure/function claims about dietary supplements states that in this country, "dietary supplements are a $20 billion-per-year industry and are used by 80 percent of adults for a wide range of purposes." (46) The worldwide market for these products is also flourishing. According to a 2013 article in Forbes, "[o]ne of the fastest growing industries in the world is the nutritional supplement group.... Producing about $32 billion in revenue for just nutritional supplements alone in 2012, it is projected to double that by topping $60 billion in 2021." (47) The FTC suggests on its website that consumers have turned to supplements as a result of a "downturn in the economy" and as a way to "avoid expensive doctor visits and prescription medications." (48)

The market for functional foods and beverages is growing at an even greater rate than dietary supplements, with the global market for these products reaching over $ 170 billion in 2013. (49) According to one source, "this booming category now accounts for 5% of the overall food market and is driving growth for the food industry as a whole." (50) The same source also attributes this sales growth to consumers looking to these products as a health solution. In particular, consumers are looking to functional foods as a way to manage "chronic conditions, such as diabetes, [cardio-vascular disease] or obesity." (51) Claimed benefits of these foods include boosting energy levels, improving or maintaining gut, bone and heart health, managing weight, and sharpening mental faculties. (52) One of the fastest growing segments of both the dietary supplement and functional food markets is probiotics, in large part due to manufacturers' claims about the role of probiotics in wellness and health improvement. (51)

The functional food market consists of a number of large multinational companies who are the "key functional food players," (54) but "smaller participants are successfully creating and defending niches in the market." (55) Large segments of the market include soft drinks (primarily enhanced water and energy drinks) and dairy products, especially yogurts. (56) Both consumer demand and the potential for premium pricing by manufacturers and retailers (57) are attracting suppliers to this market.

Some observers differentiate between major manufacturers of nutritional products with significant investments in brand reputations and smaller manufacturers, some of which operate on the fringe of legality. Steve Mister, president of the Council for Responsible Nutrition, a trade association representing dietary supplement and functional food manufacturers, describes the supplement business as a "tale of two industries. There's a mainstream, responsible industry. Then there is this sort of shadow industry, the smaller guys playing around the fringes. The problem is how we distinguish between the two." (58) He characterizes some members of the industry as "rogue players [who] are poisoning the reputation of the industry" for everyone. (59)

III. REGULATION OF HEALTH CLAIMS AND RECENT EFFORTS TO COMBAT DECEPTIVE CLAIMS

Federal statutes regulating deceptive health claims include the Federal Food, Drug, and Cosmetic Act, (60) the Dietary Supplement Health and Education Act ("DSHEA"), (61) the Nutrition Labeling and Education Act ("NLEA"),62 and the Federal Trade Commission Act. (63) Each statute, augmented by agency regulations and guidance documents, has a separate framework for establishing when claims violate the law. In addition to these federal laws, state consumer protection laws provide standards for making claims about consumer products and function as another enforcement avenue for consumers harmed by deceptive advertising.

A. FDA

FDA is responsible for ensuring that foods and dietary supplements are properly labeled and, if they make claims about the products, that such claims are not false or misleading. (64) Food labeling is in large part governed by the NLEA, which requires most foods to include nutrition labeling and "requires food labels that bear nutrient content claims and certain health messages to comply with specific requirements." (65) In addition, under the FD&C Act, foods and dietary supplements may not be adulterated or misbranded. (66) A product is misbranded if its label is "false or misleading in any particular" (67) or if the product is not in compliance with labeling requirements. (68) As to claims, FDA statutes and regulations permit manufacturers of foods and dietary supplements to make three types of claims on their labels: health, nutrient content, and structure/function. (69) Foods and dietary supplements may not make disease claims, which are claims that describe the effect of a substance on the diagnosis, treatment, mitigation, cure, or prevention of disease. (70) Any product that makes a disease claim is considered a drug and must go through the extensive and costly drug approval process prior to marketing. (71)

Of the three types of claims permissible for dietary supplements and foods, only claims in the health category require premarket FDA approval. (72) Such claims include "health claims" (73) and "qualified health claims." (74) Prior to 1990, health claims on food products were prohibited. It was only after the passage of the NLEA75 that health claims were permitted. (76)

FDA defines health claims as claims made on the label of a food or dietary supplement that characterize the relationship between the labeled substance and the reduced risk of a disease or health-related condition. (77) FDA may approve health claims for foods and dietary supplements only if the claimed relationship between the nutritional product and reduction of risk of disease is based on "significant scientific agreement among experts." (78) FDA responds to a petition for approval and authorizes these types of health claims only after an extensive review of the scientific literature and the promulgation of a specific regulation permitting the claim. (79) An example of a health claim approved through this process is "adequate calcium throughout life, as part of a well-balanced diet, may reduce the risk of osteoporosis." (80)

Manufacturers of foods (but not dietary supplements) may also make health claims if the claim is based on an '"authoritative statement' from certain scientific bodies of the United States government (81) or the National Academy of Sciences." (82) A food manufacturer or distributor that intends to make such a claim must submit a notification to FDA, which then has 120 days to respond if it finds that the notification does not comply with the Food and Drug Administration Modernization Act. (83) This type of marketing does not require promulgation of a regulation; however, FDA may prohibit or modify such a claim by regulation. (84)

An additional type of health claim, the "qualified health claim" ("QHC"), was established by FDA in response to the D.C. Circuit court's decision that a dietary supplement manufacturer has a First Amendment right to make health claims based on less scientific evidence than the "significant scientific agreement" standard requires, as long as such claims do not mislead consumers. (85) QHCs can be made for both foods and dietary supplements, and they differ from other health claims "in that they must be accompanied by a disclaimer or otherwise qualified." (86) Manufacturers or distributors wishing to make a QHC must submit a petition to FDA summarizing the scientific data in support of the claim the petitioner wishes to make, including copies of computer literature searches, all research articles relied upon to support the petition, and information about any adverse consequences from the food or dietary supplement for any segment of the United States population. (87)

Food manufacturers may make a second type of claim, "nutrient content claims." (88) Subject to FDA's criteria, (89) a manufacturer may make claims, for example, that a product is good, excellent, enriched/fortified, or high potency with respect to vitamins, minerals, fiber, or protein; that a product is "lite" or "light" with regard to calories or sodium; or even that a product is "healthy." (90) Such claims can be used on labels without review by FDA, as long as they comply with all FDA definitions and rules. (91) All other nutrient content claims are prohibited. (92)

Food and dietary supplement manufacturers can also make structure/function claims, (93) which are claims that describe the role of a nutrient or dietary ingredient intended to affect the normal structure or functions of the human body. (94) While these claims do not require premarket approval, the manufacturer must ensure their accuracy and must have substantiation to support its claims. (95) For dietary supplements (but not foods) making structure/function claims, the manufacturer must notify FDA within thirty days of placing the product on the market. (96) The notification must include an attestation by the manufacturer that the "[manufacturer] has substantiation that the claim is truthful and not misleading." (97) In addition, dietary supplement manufacturers making structure/function claims must include a disclaimer that the claim has not been evaluated by FDA and that the product is "not intended to 'diagnose, treat, cure or prevent any disease.'" (98)

Of each of the three types of claims that nutritional product manufacturers may make, structure/function claims are especially problematic in terms of consumer deception. The fact that these claims do not require premarket approval creates the opportunity for claims that lack scientific support and even make outright false statements. (99) Structure/function claims are also used much more frequently than health claims apparently because they allow companies to bypass the approval process required for health claims. …

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