Many people of all ages are incorporating joint health products into their diet. Younger people are using them more as a precautionary measure, while older generations are more active than ever, hoping to support their joints as best they can. The demand for these products is real, and the global bone and joint health supplements market is projected to surpass US$9 billion this year in 2017. As a steadily growing market, and its sensitive target population of the elderly class, bone and joint health supplements continue to remain on the radar of regulators and members of the plaintiff’s bar. To remain a sustainable product in this ever-growing category of products, it is imperative that U.S. Food and Drug Administration (FDA) and Federal Trade Commission (FTC) guidelines are adhered to, but also it is just as important to consider the current litigious climate and recent class action matters in this space.
In 2013, a class action complaint was filed against NBTY Inc., Rexall Sundown and Target Corp. concerning certain joint health products that were marketed as dietary supplements. These products were marketed, among other things, to help rebuild cartilage or support renewal of cartilage, help maintain the structural integrity of joints, maintain healthy connective tissue, lubricate joints and maintain joint comfort, or support mobility and flexibility. To avoid risk, expense and delay of trial, the companies entered a nationwide class settlement, while also standing by the efficacy of its glucosamine joint health products. In asserting its position, the plaintiffs cited to 2006 GAIT Study that concluded, “The analysis of the primary outcome measure did not show that either [glucosamine or chondroitin], alone or in combination, was efficacious. . ." (Ann Rheum Dis. 2010 Aug;69(8):1459-64). (As part of the settlement, the companies agreed to remove any claims relating to the fixing, mending, reconditioning, rehabilitating, increasing, developing, building, repairing, rebuilding, renewing, regrowing, adding, regenerating, revitalizing, or rejuvenating cartilage. The injunctive relief did not extend to any other structure/function claims such as claims that the products support, protect, or promote joint comfort, mobility or health.
This case is significant. First, it serves as ample evidence that even ingredients, such as glucosamine and chondroitin, that are well-studied and historically known to provide benefit, are open to being challenged. It is a product of the litigious culture the supplement, food, and beverage industry now lives within. Second, it reinforces the long-standing principle that marketing claims must be narrowly tailored to the science that serves as its support. If a study measures levels of joint comfort only, then claims beyond joint comfort, such as to rebuild or renew, cannot be gleaned from that study.
Finally, this matter evidences the nature of class action settlements and the intricacies involved in such type of litigation. An initial settlement had been proposed in the matter whereby members of the class who submitted a claim would be eligible to receive $3.00 for proof of purchase of up to four bottles, or $5.00 for proof of purchase of up to 10 bottles. Certain class members objected to the settlement, arguing that the settlement agreement was not fair, adequate and reasonable given that the setup would result in the class receiving less than $1 million dollars while counsel for the class would receive $4.5 million dollars. However, Judge Richard Posner of the Seventh Circuit Court of Appeals ruled in favor of objectors to the settlement, while also calling out the Plaintiff’s bar: “Class counsel could have done much better by the class had they been willing to accept lower fees," further noting that “but realism requires recognition that probably all that class counsel really care about is their fees – for $865,284 spread over 12 million class members is only 7 cents apiece." This case brought to light the disparity between plaintiffs’ attorneys’ fees awards and actual benefit to class members. A second settlement agreement presented to the Court, giving consumers up to $104 per household and class counsel up to $1.5 million in fees, was recently approved in August 2016.
As you can see, defending a class action, even with good facts on your side, is an expensive undertaking. The question becomes then is how to avoid becoming a defendant in a class action. The answer is simple and yet not so simple: do not give them a reason to sue you. Thus, compliance is key and undergoing a labeling and substantiation review as early in the process of marketing a product is one way to mitigate this risk. When bringing an innovative product to market, companies often forego labeling and substantiation reviews, expecting that this can be done at a later point in time when revenue starts to generate. However, a pre-emptive compliance review is without a doubt less costly to companies than dealing with a demand letter or potential class action lawsuit. In fact, a minor FDA labeling violation such as an improperly formatted Supplement Facts or an improper net weight statement may be the reason a plaintiff’s attorney chooses to dig further into a product and its advertising claims. Thus, the goal is to spot a potential regulatory or advertising issue with a product before a member of the plaintiffs’ bar does.
With that said, just the nature alone of being in the supplement, food, or beverage industry presents class action and litigation risks. Now, more than ever, is the time to review advertising, assess areas of risk exposure, and develop strategies to mitigate such risk or plan for receipt of that impending demand letter from the plaintiff’s bar.
Abhishek Gurnani is a partner at Amin Talati Upadhye. Gurnani represents a wide variety of health and wellness-focused companies addressing issues such as quality control (QC), recalls, government investigations and class action lawsuits, as well as dealing with matters before FDA, FTC, U.S. Customs and USDA.
With a background in both biology and chemistry, Amit Sharma advises on laws and related legal strategies for companies in the food, beverage, supplement, drug and cosmetic industries. Sharma, as associate at Amin Talati Upadhye, primarily helps clients with compliance and disputes before FDA, FTC, USDA, NAD and U.S. Customs. Amit also reviews product labels and packaging for compliance and advises on claim substantiation for websites and other advertising such as social media, print, radio television and internet.