Joseph Price & Peter Goss, Partners & Bridget Kearns07.01.03
Obesity has reached epidemic proportions in the U.S. The Journal of the American Medical Association (JAMA) reports that two of every three American adults are overweight or obese, and a recent study in the New England Journal of Medicine strongly suggests a link between being overweight and developing cancer. Yet another article in the journal Pediatrics theorizes a link between obesity and birth defects. However, despite medical professionals' dire warnings regarding serious health risks associated with extra pounds, many Americans seem unable to put down the fork and pick up a gym membership. They are also remarkably eager to blame someone else for their weight loss frustrations, as seen in the recent obesity lawsuits brought against McDonald's. As Americans' waistlines grow, so too does their desire for a quick and painless approach to weight loss-and among the many possible approaches, nothing could be easier than simply popping a pill.
Among the almost limitless variety of prescription and over-the-counter (OTC) weight loss products, dietary supplements are perhaps the most appealing since they are simple to obtain and promise so much. This has caused an explosion in the demand for weight loss supplements in recent years, providing enormous opportunity for enterprising manufacturers. But accessing this burgeoning market entails some significant regulatory and legal risk. One need look no further than the personal injury litigation surrounding ephedra-based products to recognize that the downside of this volatile sector can be just as low as the upside is high. Based on the ephedra experience, it is safe to say that the plaintiff's bar now also sees weight loss supplements as a "growth opportunity." Further, the Federal Trade Commission's (FTC) sweep of Internet promotions for weight loss supplements-Operation Cure.All-has generated increased exposure on the regulatory side as well.
Supplement and weight loss manufacturers face possible liability from multiple directions, any one of which has the potential to wipe out the bottom line. Whether it's a private citizen suing for personal injury, the FTC bringing an action for false advertising, the Food and Drug Administration (FDA) considering a ban or Congress threatening to increase regulatory oversight of the supplement industry, legal minefields abound. Now that the "gloves have come off" between the supplement industry and the regulators and personal injury attorneys, manufacturers of weight loss supplements must take precautions. Although no one can guarantee smooth sailing through these troubled waters, an overview of the legal landscape, along with a good dose of common sense, can go a long way to reducing the risks.
As the recent high profile litigation related to ephedra shows, it's not just prescription drug manufacturers that are getting hit for big damages in personal injury litigation these days. Supplement manufacturers now find themselves facing many of the same arguments-and indeed the same plaintiffs' attorneys-that the pharmaceutical manufacturers faced in the fen-phen diet drug litigation. One can only assume that makers of weight loss supplements will encounter similar liability exposure if a jury decides their products have some relationship to a plaintiff's injury or death. Proving a drug or supplement was the main cause of a particular injury is certainly difficult, but if even one plaintiff can successfully establish such a connection, the results can be disastrous as many other plaintiffs are sure to follow. Whether a supplement manufacturer must contend with a class action in one court or multiple individual lawsuits in separate courts across the country, the numbers alone-leaving aside the merits-can prove overwhelming to many defendants. The cost of successfully defending this sort of mass litigation can be prohibitive, and manufacturers simply may not be able to afford a campaign to win all of their cases.
Although many supplement manufacturers no doubt believed the fen-phen litigation had little relevance to their non-prescription products, recent trends suggest that much can be learned from those cases. Despite the fact that fenfluramine had enjoyed FDA approval for many years-a claim that no supplement product can ever make-the manufacturer was hammered by the plaintiffs' bar after the Mayo clinic published a small series of case reports hypothesizing that fenfluramine can damage users' heart valves, especially when used in combination with phentermine. The manufacturer found itself defending a multitude of lawsuits, each claiming that it had failed to adequately warn plaintiffs and their doctors of the allegedly dangerous propensities of this medication. Although many cases were dismissed for lack of scientific merit, the company nevertheless spent billions of dollars defending the litigation and extinguishing the liability that fenfluramine ignited.
Just as the fen-phen litigation wave seems to finally be reaching the shore, it appears the ephedra wave is only beginning to crest. Following in the wake of such major diet-related litigation may prove especially treacherous for manufacturers of ephedra-based products because many of the same plaintiffs' firms that were successful in the fen-phen litigation are making the "lateral move" over to weight loss supplements. These firms are now more familiar with handling class actions and intend to apply their enhanced experience to suits against supplement manufacturers whose products contain ephedra.
Although the first cases alleging ephedra-related deaths or injuries were brought in the late 1990s, the recent death of Orioles pitcher Steve Bechler has heightened public scrutiny of the ingredient. Immediately following the Broward County medical examiner's conclusion that ephedra was a significant contributing factor in Bechler's fatal heatstroke, a flood of editorials condemned it. This public outcry is likely to engender more private lawsuits alleging harm-both for ephedra-based and "ephedra-free" weight loss supplements. Today ephedra is the target, but tomorrow it may be guarana, yohimbe, or any of the other ingredients typically found in "ephedra-free" formulations.
While ephedra has garnered the most public attention and seems to be a major focus of the plaintiff's bar, the makers of OTC diet aids that formerly contained phenylpropanolamine (PPA) have also been targets for private lawsuits. FDA banned PPA, which was found in both non-prescription cold medications and diet pills for decades, after a Yale study suggested it caused 200-500 strokes a year. The alleged link between PPA and strokes has encouraged stroke victims who used PPA-containing weight loss products to sue the manufacturers.
The availability of supplements without a doctor's prescription is both a blessing and a curse for the supplement industry. The lack of federal regulation for nutraceutical supplements has provided a much broader and more accessible market, but it has its drawbacks, not the least of which is the sole accountability of the manufacturer. If a drug is available only through a doctor's prescription, a drug manufacturer may legitimately disclaim some level of responsibility for the plaintiff's harm on the grounds that the doctor-sometimes described in legalese as the "learned intermediary"-was in a better position to communicate individually-tailored risk information to patients. If, on the other hand, the manufacturer knows its products will be sold directly, with no guidance from a medical professional, the manufacturer will be expected to shoulder more responsibility for warning consumers directly about potential adverse reactions.
Private citizens have always been able to sue manufacturers for the physical or mental harm they sustained from using a product. Recently, however, statutes in California, Texas, Illinois and Alabama have also enabled citizens to act as "private attorneys-general," in order to recover big damages under the guise of combating "unfair" or "fraudulent business practices." These statutes generally allow any consumer to bring suit against a company for unfair competition or deceptive practices, including false or misleading advertising. What make these "consumer fraud" statutes especially dangerous are their minimal requirements for showing actual, individualized harm. For example, in some states, such as California, you don't even have to buy the product in order to bring an "unfair business practices" lawsuit against the manufacturer.
This reduced standard of proof significantly increases the number of prospective plaintiffs who may sue a manufacturer, which can add up to considerable liability under the remedies provided for in most private attorney general/consumer fraud statutes. Most of them allow courts to order both monetary damages and injunctive relief, and some also allow attorney's fees, restitution, damages for mental anguish and triple damages where the jury finds that the misconduct was intentional. These statutes empower thousands of "consumers" with little or no connection to the product to file lawsuits whose collective impact could be ruinous for even the largest supplement manufacturers.
These statutes are particularly dangerous to companies when they are used as the basis for a class action lawsuit as they recently were in California.Cytodyne Technologies was found liable under California's consumer protection statutes 17200 and 17500 for false, deceptive and misleading advertising in relation to their ephedra-based product Xenadrine product. After a seven-week trial, a San Diego judge found that the company must return $12.5 million in profits to the plaintiffs as compensation for deceiving them regarding the effectiveness of Xenadrine.
Even in states that have not passed privately enforceable consumer protection laws, supplement manufacturers are constantly monitored by the FTC regarding the truth of their product claims and advertising materials. Supplement manufacturers must have studies and documentation to back up any statements they make regarding a product's safety or efficacy. Even if a product is not directly harmful, manufacturers cannot exaggerate or promise weight loss results their products cannot deliver.
Within the last six months, the FTC has sued two diet supplement manufacturers for false and unsubstantiated claims in the marketing and advertising of their products. In late December 2002, a federal judge entered a preliminary injunction against Mark Nutritionals, manufacturer of a weight loss product called Body Solutions Evening Weight Loss Formula. The injunction prohibits the company from doing any of the following:
• making false or misleading representations about their product;
• using the term "weight loss" in the name of Evening Formula unless the company can show through competent and reliable scientific evidence that the product causes clinically significant weight loss and
• making any claim about the safety, health benefits, performance or efficacy of any other supplement or health related product manufactured by the company unless the company has reliable and competent scientific evidence substantiating the claim.
The injunction also freezes the assets of Mark Nutritionals' two officers to preserve them for potential refunds to customers-a sanction that will no doubt give some readers pause.
The FTC brought a similar claim in January 2003 against Slim Down Solutions for making false and unsubstantiated claims in the marketing of its "Slim Down Solution" weight loss product. The FTC challenged the validity of the company's claim that its product absorbs up to 20 grams of dietary fat and causes weight loss without dieting or exercise. Slim Down Solutions ran infomercials making such claims on cable television stations and also advertised through the Internet. Although the case has not yet been finally decided, the FTC is seeking permanent injunctive relief against the company and redress for consumers who bought the product.
Although the risk of litigation, whether private or public, is a considerable threat to nutraceutical manufacturers, it may seem like a welcome risk when compared to the proposed alternative of FDA regulation. As Congress receives more public pressure to examine the safety and efficacy of dietary supplements, the opportunity to sell weight loss supplements may be disappearing before the industry's eyes. There are currently no formal proposals that the FDA undertake regulation of the entire supplement industry, but in response to the mounting safety concerns, the agency recently proposed the first ever Good Manufacturing Practices (GMPs) for supplement manufacturers. These standards are designed to regulate the production of supplements to ensure that, at a minimum, the ingredients and dosages on the product's label match what's actually inside the bottle. The proposed regulations are currently open for public comment and final regulations are expected in the near future.
Additionally, certain products, such as androstenedione, ephedra and usnic acid have been targeted for closer examination and may be reclassified as controlled substances under the Federal Controlled Substances Act. Congress has recently proposed legislation that would reclassify steroid metabolites, such as androstenedione, as Schedule III controlled substances. House Resolution 207 was primarily intended to prevent young athletes from using androstenedione and other testosterone precursors to build muscle mass, but its effects extend far beyond this stated goal. The bill covers any product "which either is a metabolite of a scheduled anabolic steroid or is transformed in the body directly into a scheduled anabolic steroid or the metabolite of a scheduled anabolic steroid." If the bill becomes law, all manufacturers and distributors of such steroid precursors and metabolites will be required to register annually with the Drug Enforcement Agency (DEA) and such products will only be available with a doctor's prescription. Failure to comply with the DEA's regulations would subject manufacturers and distributors to felony prosecution for illegally trafficking a Federally controlled substance. Because the bill has been promoted as a way to keep steroid-like products away from children, it appears likely to pass with little opposition.
Thus far, the Federal government has not indicated it will ban or reclassify ephedra-containing products, but such a proposal may be just around the corner. A recent study showed that ephedra was responsible for 64% of all adverse reactions to herbs in the U.S., despite the fact that it accounts for less than one percent of all supplement sales. Secretary of Health and Human Services (HHS) Tommy Thompson recently stated that he is considering limiting ephedra's use or banning it outright. FDA has also announced that it is currently developing a warning label for products containing ephedra. The National Football League (NFL), the National Collegiate Athletic Association (NCAA) and the International Olympic Committee (IOC) have already banned ephedra-containing products and Major League Baseball (MLB) may not be far behind given Mr. Bechler's untimely and tragic death.
So how can responsible supplement manufacturers protect themselves from the multitude of legal risks presented by both private citizens and the government? The most important step may be first to understand the territory and map the potential pitfalls. A company should know its product and gather evidence of its safety. Companies should also evaluate risk tolerance and balance it against the litigation trends. Also, keep in mind that non-prescription supplements made with natural ingredients may encounter the very same lawsuits as prescription pharmaceuticals. Companies should review their products' research, testing and labeling and take care that the claims made can be supported with proof. Lastly, get legal advice sooner rather than later and plan for the worst case because if it has happened to others, it could certainly happen to you. NW
About the authors:
Joseph Price and Peter Goss are partners, and Bridget Kearns is an associate, with the drug and medical device litigation practice at the Minneapolis, MN, law firm of Faegre & Benson. Mr. Price is also chair of the subcommittee on Nutritional and Dietary Supplements of the Defense Research Institute. The authors can be reached at info@faegre.com.
Among the almost limitless variety of prescription and over-the-counter (OTC) weight loss products, dietary supplements are perhaps the most appealing since they are simple to obtain and promise so much. This has caused an explosion in the demand for weight loss supplements in recent years, providing enormous opportunity for enterprising manufacturers. But accessing this burgeoning market entails some significant regulatory and legal risk. One need look no further than the personal injury litigation surrounding ephedra-based products to recognize that the downside of this volatile sector can be just as low as the upside is high. Based on the ephedra experience, it is safe to say that the plaintiff's bar now also sees weight loss supplements as a "growth opportunity." Further, the Federal Trade Commission's (FTC) sweep of Internet promotions for weight loss supplements-Operation Cure.All-has generated increased exposure on the regulatory side as well.
Supplement and weight loss manufacturers face possible liability from multiple directions, any one of which has the potential to wipe out the bottom line. Whether it's a private citizen suing for personal injury, the FTC bringing an action for false advertising, the Food and Drug Administration (FDA) considering a ban or Congress threatening to increase regulatory oversight of the supplement industry, legal minefields abound. Now that the "gloves have come off" between the supplement industry and the regulators and personal injury attorneys, manufacturers of weight loss supplements must take precautions. Although no one can guarantee smooth sailing through these troubled waters, an overview of the legal landscape, along with a good dose of common sense, can go a long way to reducing the risks.
Private Lawsuits
As the recent high profile litigation related to ephedra shows, it's not just prescription drug manufacturers that are getting hit for big damages in personal injury litigation these days. Supplement manufacturers now find themselves facing many of the same arguments-and indeed the same plaintiffs' attorneys-that the pharmaceutical manufacturers faced in the fen-phen diet drug litigation. One can only assume that makers of weight loss supplements will encounter similar liability exposure if a jury decides their products have some relationship to a plaintiff's injury or death. Proving a drug or supplement was the main cause of a particular injury is certainly difficult, but if even one plaintiff can successfully establish such a connection, the results can be disastrous as many other plaintiffs are sure to follow. Whether a supplement manufacturer must contend with a class action in one court or multiple individual lawsuits in separate courts across the country, the numbers alone-leaving aside the merits-can prove overwhelming to many defendants. The cost of successfully defending this sort of mass litigation can be prohibitive, and manufacturers simply may not be able to afford a campaign to win all of their cases.
Although many supplement manufacturers no doubt believed the fen-phen litigation had little relevance to their non-prescription products, recent trends suggest that much can be learned from those cases. Despite the fact that fenfluramine had enjoyed FDA approval for many years-a claim that no supplement product can ever make-the manufacturer was hammered by the plaintiffs' bar after the Mayo clinic published a small series of case reports hypothesizing that fenfluramine can damage users' heart valves, especially when used in combination with phentermine. The manufacturer found itself defending a multitude of lawsuits, each claiming that it had failed to adequately warn plaintiffs and their doctors of the allegedly dangerous propensities of this medication. Although many cases were dismissed for lack of scientific merit, the company nevertheless spent billions of dollars defending the litigation and extinguishing the liability that fenfluramine ignited.
Just as the fen-phen litigation wave seems to finally be reaching the shore, it appears the ephedra wave is only beginning to crest. Following in the wake of such major diet-related litigation may prove especially treacherous for manufacturers of ephedra-based products because many of the same plaintiffs' firms that were successful in the fen-phen litigation are making the "lateral move" over to weight loss supplements. These firms are now more familiar with handling class actions and intend to apply their enhanced experience to suits against supplement manufacturers whose products contain ephedra.
Although the first cases alleging ephedra-related deaths or injuries were brought in the late 1990s, the recent death of Orioles pitcher Steve Bechler has heightened public scrutiny of the ingredient. Immediately following the Broward County medical examiner's conclusion that ephedra was a significant contributing factor in Bechler's fatal heatstroke, a flood of editorials condemned it. This public outcry is likely to engender more private lawsuits alleging harm-both for ephedra-based and "ephedra-free" weight loss supplements. Today ephedra is the target, but tomorrow it may be guarana, yohimbe, or any of the other ingredients typically found in "ephedra-free" formulations.
While ephedra has garnered the most public attention and seems to be a major focus of the plaintiff's bar, the makers of OTC diet aids that formerly contained phenylpropanolamine (PPA) have also been targets for private lawsuits. FDA banned PPA, which was found in both non-prescription cold medications and diet pills for decades, after a Yale study suggested it caused 200-500 strokes a year. The alleged link between PPA and strokes has encouraged stroke victims who used PPA-containing weight loss products to sue the manufacturers.
The availability of supplements without a doctor's prescription is both a blessing and a curse for the supplement industry. The lack of federal regulation for nutraceutical supplements has provided a much broader and more accessible market, but it has its drawbacks, not the least of which is the sole accountability of the manufacturer. If a drug is available only through a doctor's prescription, a drug manufacturer may legitimately disclaim some level of responsibility for the plaintiff's harm on the grounds that the doctor-sometimes described in legalese as the "learned intermediary"-was in a better position to communicate individually-tailored risk information to patients. If, on the other hand, the manufacturer knows its products will be sold directly, with no guidance from a medical professional, the manufacturer will be expected to shoulder more responsibility for warning consumers directly about potential adverse reactions.
Private Enforcement of Public Law
Private citizens have always been able to sue manufacturers for the physical or mental harm they sustained from using a product. Recently, however, statutes in California, Texas, Illinois and Alabama have also enabled citizens to act as "private attorneys-general," in order to recover big damages under the guise of combating "unfair" or "fraudulent business practices." These statutes generally allow any consumer to bring suit against a company for unfair competition or deceptive practices, including false or misleading advertising. What make these "consumer fraud" statutes especially dangerous are their minimal requirements for showing actual, individualized harm. For example, in some states, such as California, you don't even have to buy the product in order to bring an "unfair business practices" lawsuit against the manufacturer.
This reduced standard of proof significantly increases the number of prospective plaintiffs who may sue a manufacturer, which can add up to considerable liability under the remedies provided for in most private attorney general/consumer fraud statutes. Most of them allow courts to order both monetary damages and injunctive relief, and some also allow attorney's fees, restitution, damages for mental anguish and triple damages where the jury finds that the misconduct was intentional. These statutes empower thousands of "consumers" with little or no connection to the product to file lawsuits whose collective impact could be ruinous for even the largest supplement manufacturers.
These statutes are particularly dangerous to companies when they are used as the basis for a class action lawsuit as they recently were in California.Cytodyne Technologies was found liable under California's consumer protection statutes 17200 and 17500 for false, deceptive and misleading advertising in relation to their ephedra-based product Xenadrine product. After a seven-week trial, a San Diego judge found that the company must return $12.5 million in profits to the plaintiffs as compensation for deceiving them regarding the effectiveness of Xenadrine.
Government Prosecution
Even in states that have not passed privately enforceable consumer protection laws, supplement manufacturers are constantly monitored by the FTC regarding the truth of their product claims and advertising materials. Supplement manufacturers must have studies and documentation to back up any statements they make regarding a product's safety or efficacy. Even if a product is not directly harmful, manufacturers cannot exaggerate or promise weight loss results their products cannot deliver.
Within the last six months, the FTC has sued two diet supplement manufacturers for false and unsubstantiated claims in the marketing and advertising of their products. In late December 2002, a federal judge entered a preliminary injunction against Mark Nutritionals, manufacturer of a weight loss product called Body Solutions Evening Weight Loss Formula. The injunction prohibits the company from doing any of the following:
• making false or misleading representations about their product;
• using the term "weight loss" in the name of Evening Formula unless the company can show through competent and reliable scientific evidence that the product causes clinically significant weight loss and
• making any claim about the safety, health benefits, performance or efficacy of any other supplement or health related product manufactured by the company unless the company has reliable and competent scientific evidence substantiating the claim.
The injunction also freezes the assets of Mark Nutritionals' two officers to preserve them for potential refunds to customers-a sanction that will no doubt give some readers pause.
The FTC brought a similar claim in January 2003 against Slim Down Solutions for making false and unsubstantiated claims in the marketing of its "Slim Down Solution" weight loss product. The FTC challenged the validity of the company's claim that its product absorbs up to 20 grams of dietary fat and causes weight loss without dieting or exercise. Slim Down Solutions ran infomercials making such claims on cable television stations and also advertised through the Internet. Although the case has not yet been finally decided, the FTC is seeking permanent injunctive relief against the company and redress for consumers who bought the product.
Congressional Action
Although the risk of litigation, whether private or public, is a considerable threat to nutraceutical manufacturers, it may seem like a welcome risk when compared to the proposed alternative of FDA regulation. As Congress receives more public pressure to examine the safety and efficacy of dietary supplements, the opportunity to sell weight loss supplements may be disappearing before the industry's eyes. There are currently no formal proposals that the FDA undertake regulation of the entire supplement industry, but in response to the mounting safety concerns, the agency recently proposed the first ever Good Manufacturing Practices (GMPs) for supplement manufacturers. These standards are designed to regulate the production of supplements to ensure that, at a minimum, the ingredients and dosages on the product's label match what's actually inside the bottle. The proposed regulations are currently open for public comment and final regulations are expected in the near future.
Additionally, certain products, such as androstenedione, ephedra and usnic acid have been targeted for closer examination and may be reclassified as controlled substances under the Federal Controlled Substances Act. Congress has recently proposed legislation that would reclassify steroid metabolites, such as androstenedione, as Schedule III controlled substances. House Resolution 207 was primarily intended to prevent young athletes from using androstenedione and other testosterone precursors to build muscle mass, but its effects extend far beyond this stated goal. The bill covers any product "which either is a metabolite of a scheduled anabolic steroid or is transformed in the body directly into a scheduled anabolic steroid or the metabolite of a scheduled anabolic steroid." If the bill becomes law, all manufacturers and distributors of such steroid precursors and metabolites will be required to register annually with the Drug Enforcement Agency (DEA) and such products will only be available with a doctor's prescription. Failure to comply with the DEA's regulations would subject manufacturers and distributors to felony prosecution for illegally trafficking a Federally controlled substance. Because the bill has been promoted as a way to keep steroid-like products away from children, it appears likely to pass with little opposition.
Thus far, the Federal government has not indicated it will ban or reclassify ephedra-containing products, but such a proposal may be just around the corner. A recent study showed that ephedra was responsible for 64% of all adverse reactions to herbs in the U.S., despite the fact that it accounts for less than one percent of all supplement sales. Secretary of Health and Human Services (HHS) Tommy Thompson recently stated that he is considering limiting ephedra's use or banning it outright. FDA has also announced that it is currently developing a warning label for products containing ephedra. The National Football League (NFL), the National Collegiate Athletic Association (NCAA) and the International Olympic Committee (IOC) have already banned ephedra-containing products and Major League Baseball (MLB) may not be far behind given Mr. Bechler's untimely and tragic death.
Conclusion
So how can responsible supplement manufacturers protect themselves from the multitude of legal risks presented by both private citizens and the government? The most important step may be first to understand the territory and map the potential pitfalls. A company should know its product and gather evidence of its safety. Companies should also evaluate risk tolerance and balance it against the litigation trends. Also, keep in mind that non-prescription supplements made with natural ingredients may encounter the very same lawsuits as prescription pharmaceuticals. Companies should review their products' research, testing and labeling and take care that the claims made can be supported with proof. Lastly, get legal advice sooner rather than later and plan for the worst case because if it has happened to others, it could certainly happen to you. NW
About the authors:
Joseph Price and Peter Goss are partners, and Bridget Kearns is an associate, with the drug and medical device litigation practice at the Minneapolis, MN, law firm of Faegre & Benson. Mr. Price is also chair of the subcommittee on Nutritional and Dietary Supplements of the Defense Research Institute. The authors can be reached at info@faegre.com.
