FTC mass-mails claim penalty notice to health product companies
April 18, 2023
On April 13, the United States Federal Trade Commission (FTC) announced that it had sent an identical notice to approximately 670 companies involved in the marketing of OTC drugs, homeopathic products, dietary supplements, and functional foods, informing them of the penalties for violation of the prohibition on deceptive or unfair practices under Section 5 of the Federal Trade Commission Act.
FTC also requested that companies read the recently updated Health Products Compliance Guidance, the issuance of which was previously announced by AHPA. Along with its April 13 announcement of the mass mailing, FTC also released a list of recipients of the notice, specifying “[t]he fact that a company is on this list is NOT an indication that it has done anything wrong” [emphasis in original].
FTC has previously released similar mass notices, including, for example, to companies active in education, direct sales, or online marketing. FTC uses such notices, in part, to attempt to establish that marketers have actual knowledge of the unfairness or deceptiveness of making unsubstantiated health claims. The agency does this to facilitate its assessment of civil penalties for any future violations.
“There is nothing in this notice that responsible marketers of dietary supplements are not already aware of,” said Robert Marriott, AHPA Director of Regulatory Affairs. “Companies making health-related claims know that they must have competent and reliable scientific evidence to support those claims, although industry may differ at times with FTC on its interpretation of that legal standard.”
“It is important to note that – as expressly indicated on the recipient list – a marketer's receipt of this notice does not necessarily reflect that FTC has a factual basis to assert a violation of Section 5,” added Michael McGuffin, AHPA President.