It’s no secret federal regulators—and likely class action attorneys—are closely monitoring marketing claims presumably designed to exploit consumers’ growing anxiety over the coronavirus.
In recent months, representatives from two prominent government agencies—FDA and FTC—have already sent several letters to marketers over coronavirus (COVID-19)-related claims that may be misleading and render their products unapproved new drugs.
What are the consequences of receiving a warning letter, what claims should marketers avoid, and what can companies say during this pandemic and beyond about their hemp and dietary supplement products while minimizing their risks?
Some experts answered those questions during an April 23 webinar, “Ethical Product Marketing in the Coronavirus Era: Town Hall,” hosted by Asa Waldstein, a certified clinical herbalist who chairs the cannabis committee for the American Herbal Products Association (AHPA). Attendees on the call hailed from the hemp/CBD and supplement sectors.
[You can access the webinar here via YouTube: https://m.youtube.com/watch?v=PmlHwb0Bnec].
Not only is a warning letter a matter of public record, failure to address the concerns identified by FDA could lead to a seizure of products and request for an injunction, said Erica Stump, an attorney in Fort Lauderdale, Florida, who has been practicing law for 20 years and handles many projects for food and supplement companies.
Based on her experience, the greatest problem arising from a warning letter is the prospect of private litigation.
“The plaintiff’s class action lawyers get a hold of that [letter], and they use that to base it as a class action lawsuit,” said Stump of the law firm Erica W. Stump, P.A. “It’s very difficult to defend that if the FDA’s come out and said you did something wrong.”
For example, the lawyer referenced a wave of class action lawsuits filed in late 2019 against the CBD industry after FDA sent warning letters to several firms. She predicted similar litigation in the wake of the coronavirus-related letters.
And with mergers and acquisitions occurring in the hemp industry, Waldstein cautioned, “Getting a warning letter will scare your investors away.”
Linda Nielander is vice president of sales and marketing with Quicksilver Scientific, a manufacturer of dietary supplements in Lafayette, Colorado.
Commenting on warning letters related to COVID-19, she said she found it “surprising” that companies are unaware of or have forgotten the rules.
“You would never say your product cures the common cold or even mitigates those situations,” Nielander said. Yet, she added, the warning letters are largely related to claims that products do “something to prevent or to cure a disease.”
FDA, experts cautioned, examines various marketing materials, including websites, social media like Facebook and Instagram, and—when people eventually convene again in person—trade show booths.
Stump discussed one warning letter that she said referenced a COVID-19 hashtag on Twitter, which linked to a website where the product was sold. “It wasn’t exactly sitting in the same place, but the FDA put all the pieces of the puzzle together and said, ‘You can’t do this,’” she said.
Likewise, a company could get into trouble by using buzzwords like coronavirus or COVID-19, even if it was making otherwise-compliant statements like “immune support,” Waldstein suggested. As an initial measure, he recommended companies remove such buzzwords from their websites.
But what can companies say about their immune products, for example, amid a global pandemic? Experts cited examples of so-called structure/function claims authorized under the Dietary Supplement Health and Education Act of 1994 (DSHEA).
Referring to one advertisement by Quicksilver Scientific, Nielander said, “We’re not using terminology that says ‘it’s going to boost your immune system’ or ‘it’s going to improve your immune system.’ We basically talk about supporting your immune system.”
Nielander and Stump also emphasized marketing statements must be truthful and substantiated with competent and reliable scientific evidence. “You can’t say something [like] ‘absorbs faster’ or ‘absorbs more’ if you don’t then have the data to back it up,” Nielander explained.
Waldstein asked the women what words could be used to market CBD products. Stump made such suggestions as “helps reduce occasional stress and tension” and “maintain a healthy body and mind.” She recommended companies don’t mention such medical conditions as “anxiety” or “depression.”
Nielander said Quicksilver has a useful placard in the office distinguishing claims that shouldn’t be made like “depression” from acceptable statements like “supports a healthy mood.”
“You can’t reference obesity, but you can talk about weight,” she added. “You can’t say ‘insomnia’ but you can say, ‘helps supports a calm mind.’”
In considering what marketing claims to make, part of the analysis involves an assessment of risk.
“I like to say I wouldn’t have a job if I came into the CMO and CEO’s office all the time and said, ‘You can’t do this, period,’” Waldstein said. “They would tell me to get lost. I come in and I say, ‘Here’s what you shouldn’t do. Here’s the reason why. Here’s its risk level on a scale of 1 to 10, and here’s some ways you can communicate” in a way that lowers the risk.
He added: “I think we’re all pretty aware that nothing is without risk, in particular in the CBD industry.”
Commenting on egregious claims being made, Nielander acknowledged she too faced a learning curve when she first entered the industry.
“When I first started, I had no idea that you couldn’t message supplements like you could pharmaceutical drugs,” she said.
While some companies may be in the CBD industry to make a quick buck, Nielander expressed the view that “legitimate” firms seeking to “help people are going to very quickly learn” the rules regarding permissible claims.