March 1, 2023

Podcast - How to Comply with FTC's Guidance for Healthcare Companies

Clearly Conspicuous Podcast Series

In the fourth episode of his "Clearly Conspicuous" podcast series, "How to Comply with FTC's Guidance for Healthcare Companies," consumer protection attorney Anthony DiResta takes a look at the Federal Trade Commission's (FTC) new compliance guidance for healthcare companies concerning advertising and marketing. Mr. DiResta starts by summarizing the new publication and provides key takeaways from the guidance. He also points out that these key takeaways can be used by anyone who does any kind of external marketing.

Listen to more episodes of Clearly Conspicuous here.


This is Tony DiResta, and I want to welcome you to our fourth podcast of "Clearly Conspicuous." As I've stated, our goal in these podcasts is to make you succeed in this current environment that's very aggressive, make you aware of what's going on and to just give you some practical tips for success. It's a privilege to be with you today.

FTC's New Compliance Guidance

Today I want to talk about a substantive issue. The topic is the FTC's new compliance guidance for healthcare companies concerning advertising and marketing. Although the guidance focuses on the healthcare industry, please listen carefully, because these gems and the guidance apply to all industries way beyond healthcare. Now, the compliance guidance is intended to apply across the board to all health-related claims, statements, representations, communications and is intended to supplement older guidance such as the FTC's Dietary Supplements: An Advertising Guide for Industry. The new publication draws upon key compliance points conveyed by FTC actions brought over the past 20 years, which includes more than 200 FTC law enforcement actions that challenge false, misleading or deceptive health claims. In addition, the publication reflects updates from other FTC guidance documents — for example, guidelines on endorsements and testimonials — and the enforcement policy statements on homeopathic drugs.

Key Takeaways from the Guidance

So some of the key takeaways from this guidance includes the breadth of the products discussed, underscoring the broad applicability of the publication. There are examples in the guidance relating to foods, over-the-counter drugs, devices and other health-related products. Very broad obviously. The "clear and conspicuous" standard and qualified claims is also discussed. There is an instruction on the FTC's clear and conspicuous standard, including the challenges companies face in adequately communicating qualified claims to consumers. Obviously, on the platforms that we have today on our phones and in other kinds of devices, being clear and conspicuous is obviously a challenge, but the FTC is sensitive to that. I want to say in the FTC parlance, a qualified claim is one that's made with certain limitations or caveats. Now, importantly, there is a competent and reliable scientific evidence standard, and the section in the guidance that provides a discussion of that standard has been expanded to emphasize the general rule that the FTC expects companies to support health-related claims with high-quality, randomized, controlled human clinical trials or RCTs. Now let's talk a second about testing methodology. Drawing upon the POM Wonderful decision, the revised guidance takes a deep dive into the key elements of quality research. There are discussions concerning the use of control groups, randomization, double blinding and the requirements that results must be both statistically significant between the treatment and the control group, and clinically meaningful to consumers. One noteworthy point concerns caution against "p-hacking," or the practice of selectively relying on an analysis of a small subset of data after failing to find a treatment effect in the study population at large. You can see the breadth and the scope of this guidance is pretty important here. The guidance also includes discussions about the use of consumer testimonials, expert endorsements, disclaimers, traditional use claims, FDA approval claims and third party literature is also discussed.

Key Takeaways for All Industries

So what are the key takeaways? I want to apply the key takeaways to all industries, financial services as well as healthcare, hospitality, tech and anybody that does any kind of promotional communications. After all, all companies do marketing to survive. Key takeaways. All advertising claims must have a reasonable basis, and the evidence, which is reasonable basis, must exist before the claims are made public. You just can't throw something out there and hope you'll find evidence after the fact. Again, the evidence has to exist before the claims are made. Next, you can't hide key terms in small font or in the footnotes or in unreadable text. That's what clear and conspicuous is all about. Finally, junk science is not acceptable. The FTC and other regulators have experts to determine whether your substantiation is appropriate. There's a couple of war stories I can talk about here, but let me kind of just merge them together into one episode. There are two major FTC investigations I've been involved in over the past five years that went on for years. We had expert witnesses, the FTC had expert witnesses and it became a battle of experts, just like you would find in litigation. The FTC was taking the position that basically our methodology was wrong or our experts didn't have the appropriate credentials, etc. It truly became, as I said, a battle of experts. Luckily, we were able to really convince the FTC that this was not junk science. Indeed, some of the claims we were making were bold and very aggressive, but the FTC made the determination that they had bigger fish to fry. They closed the investigation, and I'll say it was because of the integrity of our expert witnesses, the testimony and the reports that they provided that won the day. It was the showing that we did not have junk science and that they had a possibility of seriously losing in a court, whether administrative or federal.

Closing Remarks

So, again, I want to emphasize these three takeaways. Again, all advertising has to have a reasonable basis. The evidence has to exist before the claims are made. You can't hide the key terms in small font. The terms and conditions have to be made clearly and conspicuously, and the substantiation can't constitute junk science. So, ladies and gentlemen, stay tuned for further programs as we identify and address other key issues and developments in consumer protection and provide strategies for success. I wish you continued success and a meaningful day. Thank you.

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