Natural Products Insider

MAY-JUN 2018

INSIDER is the leading information source for marketers, manufacturers and formulators of dietary supplements, healthy foods and cosmeceuticals. Since 1997, INSIDER has been serving the needs of the global nutrition industry.

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40 INSIDER May/June 2018 FTC is undergoing changing leadership, leaving an uncertain impact on U.S. marketers of dietary supplements. Regulatory lawyers, however, said the environment at the commission has been more business-friendly under the Trump administration's fi rst year. President Donald Trump's nominee to lead the commission, Joseph Simons, is a well-known antitrust lawyer in Washington and former FTC offi cial during the George W. Bush administration. If confi rmed by the U.S. Senate, Simons will replace FTC Commissioner Terrell McSweeny, a Democrat and former Obama administration offi cial. McSweeny's term offi cially expired in 2017, but she remains at the commission, along with FTC Acting Chairman Maureen Ohlhausen, a Republican who was nominated by Trump to serve as a judge on the U.S. Court of Federal Claims. Several others nominated to serve on the commission are awaiting Senate confi rmation, including: Rohit Chopra, a senior fellow at the Consumer Federation of America (the White House said he concentrates on consumer protection issues facing young individuals and military families); Noah Phillips, chief counsel to Sen. John Cornyn, a Republican from Texas currently serving as majority whip; Christine Wilson, senior vice president of regulatory and international affairs at Delta Air Lines and, during the George W. Bush administration, chief of staff to FTC Chairman Timothy Muris; and Rebecca Slaughter, chief counsel to Sen. Chuck Schumer, a Democrat from New York (a Yale Law School-educated attorney and former associate to the law fi rm Sidley Austin LLP). It's diffi cult to fi gure out FTC's priorities under its incoming leadership, some regulatory lawyers said. Most of Trump's nominees don't have a background in consumer protection, pointed out Katie Bond, a partner in Washington with the law fi rm Amin Talati Upadhye LLP. Chopra is a consumer protection expert. However, he hasn't worked on matters at the Consumer Federation of America affecting the dietary supplement industry, Jack Gillis, a spokesman for the association of nonprofi t organizations, confi rmed last year in an email. While Bond anticipates a "more business-friendly" environment under the new commissioners, she suggested it's unclear whether they will focus on issues around advertising claims. Dietary supplement companies and other FTC-regulated businesses are perhaps more welcoming of Ohlhausen than her predecessor—Edith Ramirez, former FTC chairman during the Obama administration. As a proponent of "regulatory humility," Ohlhausen has recognized the limits of regulation and the importance of focusing on actual harm to consumers. On the other hand, while serving as an FTC commissioner when the agency was controlled by a Democratic majority, even if she contested the requirement for two randomized controlled trials (RCTs) to substantiate advertising claims, Ohlhausen "was perfectly OK with one clinical trial" in several cases, observed Bond, whose experience includes defending clients in FTC investigations. In some regards, regulatory lawyers have described the environment at the commission as "business as usual," with ongoing investigations and complaints brought by FTC staff. However, since Ohlhausen became acting director, Bond has noticed FTC zeroing in on aggressive claims, like those targeting cancer and other diseases. The lawyer also reported a focus on negative-option programs, in which sellers interpret a customer's failure to take action as consent to be charged for goods and services. FTC also appears to continue to target weight loss advertisements it has described as "gut check" claims, such as those promising signifi cant weight loss without diet or exercise, said Rend Al-Mondhiry, senior counsel to Amin Talati Upadhye. She also mentioned an FTC lawsuit fi led in Florida against a company and its owner tied to products marketed as effective treatments for cancer patients. One of the products was a supplement for patients suffering from cognitive dysfunction caused by cancer treatment. In January 2018, FTC announced CellMark BioPharma LLC and its CEO, Derek Vest, agreed to settle charges that they made false or unsupported claims concerning the health products. FTC is targeting areas "where the claims, if unsubstantiated, would pose a serious risk to consumers," commented Al- Mondhiry, an expert on dietary supplement regulations who previously worked as associate general counsel at the Council for Responsible Nutrition (CRN). FTC is focused on "cases of true deception and actual harm to consumers, and tying monetary relief to that actual harm as opposed to cases where the harm to consumers might be theoretical," added the regulatory lawyer, summarizing what she heard from Thomas Pahl, acting director of FTC's Bureau of Consumer Protection. FTC offi cials have long been wary of advertising claims targeting vulnerable Legal: FTC Enforcement With several nominated commissioners awaiting confirmation by the U.S. Senate, it's difficult to assess the impact of changing FTC leadership on the dietary supplement industry. Under the tenure of Acting FTC Chairman Maureen Ohlhausen, regulatory lawyers have noticed FTC zeroing in on aggressive claims, like those targeting cancer and other diseases, and focusing on cases where consumers have suffered actual harm. It remains to be seen whether the Trump administration's FTC will continue to favor randomized controlled trials (RCTs) to support dietary supplement claims under certain conditions. Regulatory Lawyers Assess FTC in Republican Administration by Josh Long INSIDER's Take

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