Stay ADvised: What's New This Week, January 10
In This Issue:
- It's a One-Two-(Three) Punch for PLx Pharma at NAD After Compliance Inquiry & FTC Referral
- NAD Freezes Cord Blood Banking Claims Equating Storage With Treatment Access
- Bouncing Off NAD Decision, Lawsuit Alleges SlimFast "Clinically Proven" Claims False
- Farewell for Now, Young Living Essential Oil Deceptive Marketing Suit
- Blame It on (Representations About) the Juice: Welch's To Pay $1.5 Mil to Settle False Ad Suit
- Class Action Accuses New Balance of Repeated Deceptive Made in USA Claims
It's a One-Two-(Three) Punch for PLx Pharma at NAD After Compliance Inquiry & FTC Referral
Divide and conquer has been Bayer Healthcare's motto, resulting in a rough year or so for drugmaker PLx Pharma at the National Advertising Division (NAD), what with a NAD decision asking the company to modify or change a number of claims about its Vazalore aspirin in 2020, followed by a SWIFT action in November 2021—an expedited process for review of advertising cases that do not require complex claim substantiation—which was recently affirmed by a NARB panel, and a simultaneous NAD compliance matter decided in November 2021 and announced last month.
Despite PLx's argument that dividing challenges in this way has made a full response by it impossible, NAD and NARB disagreed—on all counts. It all began in December 2020, before Vazalore was even on the market, when competitor Bayer Healthcare hit PLx with a NAD challenge over claims concerning the Vazalore product, which comes in multiple strengths.
Although it recognized the drug utilizes a unique delivery mechanism, NAD recommended that PLx discontinue promoting that Vazalore has better absorption power than traditional aspirin, that it is "The Miracles of Aspirin Fully Realized," and that it provides "better gastrointestinal safety." PLx had agreed to make these changes.
Since then, Bayer had reservations about PLx Pharma's compliance with NAD's recommendations and brought a compliance action. And, as we covered just a few weeks ago on Stay ADvised, at about the same time, Bayer brought a related SWIFT challenge regarding the breadth of a claim in a Vazalore ad and whether the disclaimer properly limited the touted benefits to the higher-strength product.
NAD found that the ad did not contain a clear and conspicuous enough disclosure about the scope of its "better gastrointestinal safety" claim. PLx appealed and, just recently, NARB agreed with NAD in a decision that touched on the claims made generally as well as the sufficiency of the disclaimer reviewed in the SWIFT process.
Taking the challenges in order (sort of), on compliance, Bayer questioned whether PLx did in fact discontinue its claim "The Miracles of Aspirin Fully Realized," which NAD recommended the company discontinue because it conveyed an unsupported message that Vazalore provides therapeutic benefits beyond its competitors. On compliance, NAD found that a television commercial calling the drug "Aspirin Made Amazing" was essentially making the same type of unsupported claim. "Both phrases reasonably convey the unsupported message that Vazalore provides superior cardiovascular benefits or gastrointestinal safety," said NAD.
NAD also found problematic claims made by PLx on its dedicated website for healthcare professionals (HCP). In the underlying decision, NAD had recommended that PLx discontinue the claim that "Vazalore has up to 5x greater absorption than enteric coated aspirin" because it conveyed a message that the difference in absorption was due to "superior clinical efficacy," and failed to mention the limitations of the study. NAD found that the disclosures of these limitations on the HCP site were insufficient to comply with the prior recommendations, and recommended PLx modify its website so that the claim clearly and conspicuously references the "limited population of the clinical study."
Finally, NAD determined that the company's "Features and Benefits" page also conveyed a comparative safety message which NAD had held was inappropriate. It asked PLx to modify this claim to note the study limitation—that Vazalore causes fewer ulcers during the first week of treatment, rather than also at other times.
PLx declined to make the additional modifications recommended by NAD, and in accordance with its procedures, NAD has referred the company to the Federal Trade Commission (FTC). Shortly thereafter, NARB affirmed NAD's decision that the disclaimer used in advertising was insufficient to limit related but approved claims to the 325 mg dosage of the product (which also comes in an 81 mg form). There, although PLx disagreed with NARB, it agreed to comply.
These related, but different, cases illustrate how challengers can effectively use the various NAD tracks in ways that may cause heartburn for advertisers. The compliance decision is also a reminder that even revised claims, in context, may suffer the same fate as the original claim.
NAD Freezes Cord Blood Banking Claims Equating Storage With Treatment Access
Medical advances carry with them the need to explain them to the public. It seems those explanations, and comparisons to other available options, are sometimes as difficult as the research which allows the medical developments in the first place.
Proving once again that it is willing to dive deeply into new products and complex science, NAD recommended that a blood cord storage bank discontinue or modify certain advertising claims conveying the unsupported message that its customers have access to unique cord blood infusion treatments.
For the uninitiated, cord blood banking involves storing blood from the veins in a newborn baby's umbilical cord and placenta for future medical use. Competitor ViaCord challenged claims made by Cryo-Cell about the unique benefits of its cord storage services.
Both ViaCord and Cryo-Cell offer services relating to the preservation, storage, and transportation of cord blood stored on behalf of families for potential future use. As NAD noted, cord blood is "rich in hematopoietic stem cells, which have been approved by the FDA to treat certain blood disorders and are the subject of ongoing clinical trials for use in treating autism and other neurologic disorders."
ViaCord claimed that advertising for Cryo-Cell falsely implied that their customers would have exclusive or superior access to Duke University's unique cord blood infusions for the treatment of neurological disorders, specifically autism. Among other claims, ViaCord challenged Cryo-Cell's claim: "What Sets Us Apart – Key Partnerships – Patients will have access to investigational therapies for certain conditions through our partnership with Duke University."
NAD agreed with the challenger that Cryo-Cell's claims communicated the unsubstantiated message that the company's storage patients have exclusive access to the infusion treatments, when such treatments would be available to all eligible patients. NAD found that Cryo-Cell's claims conflated storage with treatment.
Duke University holds a patent on methods of treating autism with cord blood regarding which it had granted Cryo-Cell an exclusive license, but only to practice those treatment methods. The cord blood used for such treatments comes from many storage facilities, including both ViaCord and Cryo-Cell. NAD therefore recommended that the company discontinue the claims or modify them to cease conveying an unsupported superiority message.
Cryo-Cell "may make this modification by clearly and conspicuously disclosing that using Cryo-Cell's storage services will not impact eligibility for the treatments, or by modifying its website to separate its claims related to exclusive benefits for Cryo-Cell customers and access to the treatments available to all eligible patients," noted NAD.
In reaching its decision, NAD took special notice of the audience of expectant parents under "time pressure" to make important health decisions, a reminder that the industry watchdog will look even more closely at claims targeted to a "vulnerable" audience.
Bouncing Off NAD Decision, Lawsuit Alleges SlimFast "Clinically Proven" Claims False
The road from NAD to court is supposed to be a bumpy one: NAD cases are not to be used as precedent in court, but they continue to provide fodder for the class-action bar and SlimFast is feeling the burn. With the recent NAD cases as its guidepost, plaintiffs filed suit regarding SlimFast's allegedly false and deceptive claims that its weight-loss products are "clinically proven" to help consumers lose weight.
The lawsuit, filed in New York federal court, alleges that parent company KSF Acquisition Corp. "has made false, misleading, and deceptive representations to consumers about the efficacy of its meal replacement products; specifically, that its products are 'clinically proven' to cause and maintain weight loss." The company does so in order to capitalize on consumer demand for weight-loss products, alleges the plaintiff.
Plaintiff's theory of the case is predicated almost entirely on a NAD decision published in September 2021 which found SlimFast's longstanding "clinically proven" weight-loss claims unsupported because KSF made the claim based on dated studies and did not provide clinical testing evidence that its current products lived up to the promise of the claim.
Taking it a step further than NAD did, plaintiff avers that because SlimFast's claims are not "clinically proven" to cause or maintain weight loss, they are an "affirmative falsehood based on the absence of any testing." The complaint predicates its argument on the allegation that reasonable consumers understand the "clinically proven" claim to communicate that each SlimFast product is clinically proven to cause and maintain weight loss.
According to plaintiff (and NAD's decision), none of the current products are clinically tested for their weight-loss prowess. Neither does SlimFast's qualification of the claim ("when used as part of a SlimFast plan") suffice to mitigate the allegedly misleading messages, argues plaintiff. A determination also found by the NAD.
The complaint alleges violations of New York consumer protection statutes based on KSF's alleged deceptive acts or practices and materially misleading statements.
KSF is appealing NAD's determination to the National Advertising Review Board (NARB). Still, the case is a reminder that despite NAD procedures specifically noting that its decisions are not to serve as a basis for class actions (or other litigation), the potential remains that NAD cases nonetheless provide the plaintiffs' bar with an effective roadmap.
Farewell for Now, Young Living Essential Oil Deceptive Marketing Suit
Another class-action lawsuit surrounding claims that first surfaced at NAD has now met its end. This lawsuit alleged that multi-level marketing company Young Living falsely advertised its essential oils, and it's now been dismissed after the court found that the claims were "mere puffery."
According to the complaint, Young Living's representations that its oils are "therapeutic-grade" and have multiple health benefits are false, misleading, and unsubstantiated. To make their case, plaintiffs' complaint cited a 2014 Food and Drug Administration (FDA) letter warning Young Living about its promotion of essential oil products for the treatment of various diseases. It also cited the NAD decision finding the "therapeutic-grade" claim and other claims that the essential oil products help reduce anxiety and improve alertness to be unsupported.
In essence, the court found Young Living's claim that its essential oils are "100% Pure, Therapeutic-Grade" is non-actionable puffery. That's because it doesn't appear to have a "concrete meaning" and doesn't communicate any specific about the product that would "signal" to a consumer that the product works in an "objectively measurable way."
Other marketing terms like "promote feelings of relaxation" or "help to maintain energy levels," "can ease…tension" or "may help relieve tension" were also puffery, held the court. They were vague, non-specific, and subjective.
NAD had found Young Living's scientific evidence fundamentally flawed and determined that the reasonable consumer would take away the message that the oils provide a health benefit. But the court held the opposite view under New York law. Viewing the advertising as a whole, the court considered it puffery, as it contained "no factual representations whatsoever."
Certainly, Young Living intended to give consumers the impression that the product works, but its representations are vague and non-committal, held the court. In the end, the reasonable consumer could not rely on these vague claims about what the products may or may not help or promote, the court added.
The court also dismissed unjust enrichment and breach of warranty claims. It gave plaintiff the chance to file for leave to amend.
The courts and NAD continue to have quite different views of what constitutes puffery, with the latter taking a much narrower view. Just as SlimFast's case is a reminder that NAD cases can spark litigation, the outcome in Young Living is a reminder that they are not precedent, and the standards that govern the independent agency when deciding a false advertising matter are very different from those that a court considers.
Blame It on (Representations About) the Juice: Welch's To Pay $1.5 Mil to Settle False Ad Suit
Welch's Foods will pay $1.5 million to settle a class-action lawsuit alleging that it misled consumers about the heart health benefits of its grape juice products after a court granted preliminary approval to the proposal.
A March 2020 complaint took Welch's to task over marketing that promoted its products as the juice that "Helps Support a Healthy Heart," calling the representations false and misleading. Named plaintiff Curtis Hanson alleged for himself and a proposed class of consumers that Welch's claims about the heart health benefits of its 100% Grape Juice Concord Grape, 100% Juice Red Sangria and 100% Black Cherry Concord Grape Juice products are false and misleading because fruit juices like these actually increase the risk for heart disease, type 2 diabetes, and mortality.
According to the complaint, Welch's promoted the heart health benefits throughout its marketing: on the label, in ads featuring food celebrities touting "super antioxidants" that "destroy free radicals," in detailed social media-friendly infographics, and in recipes. But Hanson alleged that scientific evidence showed otherwise—that drinking fruit juices at the levels typically consumed could lead to heart problems. In addition to the false and misleading affirmative heart health statements, Hanson argued that Welch's regularly and intentionally omitted information about the dangers of sugar consumption, and these omissions also constituted false advertising.
The lawsuit also alleged that Welch's violated Food and Drug Administration's (FDA) food labeling laws. The false and misleading statements caused the products to be misbranded, and the heart health claims "fail[ed] to reveal facts that are material in light of other representations made or suggested by the statement[s]," also in violation of federal law. Welch's further neglected to reveal facts that were "material with respect to consequences which may result from use" of the juice, namely the health problems that plaintiff alleged can derive from drinking the grape juices.
In addition to the monetary component, Welch's also agreed to stop making claims that its grape juices "help support a healthy heart" or "help promote a healthy heart" on the labels of the subject fruit juices. The settlement class will consist of all U.S. consumers who purchased any of the three products for household use between March 2016 and October 2021. Though Welch's has agreed to settle the matter, the company does not admit any liability.
No real news here—health-related claims for food products leave advertisers particularly vulnerable to class-action litigation.
Class Action Accuses New Balance of Repeated Deceptive Made in USA Claims
A class-action lawsuit alleges that New Balance is falsely advertising its sneakers as Made in the USA in violation of Federal Trade Commission (FTC) regulations—and a prior settlement.
Plaintiffs allege that shoemaker New Balance makes prominent and false representations "at nearly every opportunity possible—on the tongues of the shoes and on the shoe boxes" that certain sneaker models are Made in the USA. The shoes at issue are part of the company's "MADE" series, which emphasizes footwear the company says is made in the United States.
Plaintiffs allege that, contrary to the representations, at least 30 percent of the sneakers' components are made outside the United States, including the sneaker sole, which plaintiffs aver is "an important aspect of the shoes" that should be of an especially high quality. Plaintiffs allege New Balance's misrepresentations dodge FTC regulations, which require that products marketed as "made in the USA" be made "all or virtually all" in the United States.
Plaintiffs assert that what makes the sneaker company's false advertising more egregious is that New Balance settled a separate class-action lawsuit centering on deceptive Made in the USA claims for sneakers sold between 2012 and 2019. The company has also faced an FTC administrative action over similar charges.
Yet New Balance continues to intentionally misrepresent that its sneakers are "Footwear Made in the USA," say plaintiffs. They argue that the company does so "solely to attract consumers and drive sales" because it knows that the homegrown label matters to consumers, and that consumers are willing to pay a premium for products made in the United States.
To, ahem, balance the claims, and in what the complaint calls an apparent attempt "to circumvent these regulations," New Balance includes "a small print disclaimer … in portions of its website and on the underside of its packaging … stating that the "MADE" series' shoes 'contain a domestic value of 70% or greater.'"
Plaintiffs take issue with this disclaimer, noting that "[n]o reasonable consumer would expect that small print language on the underside of a packaging or hid in assorted places on a website contain language inconsistent with the representations that the Sneakers were 'Made in the USA.'"
The lawsuit alleges that New Balance violated multiple state consumer protection and false advertising laws and unjust enrichment, fraud, and breach of warranty causes of action. The six named plaintiffs seek to certify six classes of plaintiffs for their respective states.
Whatever else may come out of this lawsuit, plaintiffs' argument that a disclaimer cannot negate false representations may be a winner. The FTC requires that to carry the Made in the USA moniker, products be all or virtually all made in the United States.