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FTC Blurs Supplement/Drug Claim Substantiation in Bayer Litigation

<p>Three times now, federal courts have rejected FTC&#8217;s attempt to change the legal standards for dietary supplements through litigation.</p>

FTC still has not learned its lesson. Three times now, federal courts have rejected the agency’s attempt to change the legal standards for dietary supplements through litigation.1 But the agency continues to ignore federal law, choosing instead to treat dietary supplements like prescription drugs, and threatening industry with lawsuits if it does not acquiesce.

FTC’s most recent defeat on this issue came last year in United States v. Bayer. Seeking hundreds of millions of dollars, the agency brought a civil contempt action against Bayer, alleging the company had marketed a probiotic dietary supplement, Phillips’ Colon Health, in violation of a 2007 consent decree. The government’s theory was that Bayer needed double-blind, randomized, placebo-controlled clinical trials—the kind required for prescription drugs—to support its dietary supplement claims.

After a bench trial, Judge Jose Linares of the United States District Court for the District of New Jersey rejected this argument and denied the government’s contempt motion in its entirety. The court held that the government’s demand for drug-level clinical trials was inconsistent with the Dietary Supplement Health and Education Act (DSHEA).2 The court relied heavily on FTC’s own Dietary Supplement Guidance to Industry, which made clear that drug-level clinical trials were not required.3 As the court explained, Bayer could rely on other types of scientific evidence, including other types of human trials, animal trials and in vitro tests. Finally, the court held that Bayer’s employee and expert testimony demonstrated that Bayer had competent and reliable scientific evidence for its product. The government chose not to appeal.

This was the government’s third judicial defeat on the issue, but FTC is apparently looking for a fourth strike. Recently, the agency has made two bewildering responses to the Bayer decision. First, an FTC attorney reportedly stated: “I don’t think [the Bayer decision] was about whether you need clinical trials."4 The court could not have been more clear, holding that “competent and reliable scientific evidence does not require drug-level clinical trials."5 The FTC lawyer then repeated the view that was rejected by Bayer; namely, that the agency continues to expect evidence from randomized controlled trials to support all “health-related" claims, even for dietary supplements.6

Likewise, in litigation, FTC argued the Bayer court got it wrong.7 But enough is enough. It is irresponsible for an agency to lose three times, not even appeal the third decision, and continue to harangue industry with an erroneous standard that is contradicted by the agency’s own guidance. Congress spoke when it enacted DSHEA, and FTC should stop ignoring its plain text and the court decisions that addressed the issue.

Because of the agency’s lawless recalcitrance, industry should closely monitor FTC’s further comments regarding the Bayer case and be ready to litigate the next time the agency disregards federal law. Maybe the agency will learn that it is not above the law.

Looking for guidance on claims substantiation? Join us for the Developing and Substantiating Product Claims workshop on Wednesday, Oct. 6, at SupplySide West 2016.

Jonathan F. Cohn and Benjamin M. Mundel were members of the Sidley Austin LLP (Sidley) trial team that represented Bayer Corp. in the above litigation. Cohn, a partner with Sidley, is a member of the firm’s complex commercial litigation practice and Supreme Court and Appellate practice. Mundel is an associate in Sidley’s complex commercial litigation practice and Supreme Court and Appellate practice.

For a list of references, email references@naturalproductsinsider.com.

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