Avoiding Product Liability Traps in the New Dietary Supplement Regime

A year ago, manufacturers and marketers of dietary supplements benefited when the U.S. Food and Drug Administration (FDA) implemented a new regulation allowing such companies to make unproven health claims on their labels. Under the new relaxed FDA requirements regulating the marketing and promotion of dietary supplements, manufacturers have more leeway to tout the healthfulness of products by making “qualified health claims” on dietary supplement labels, even if there is no “significant scientific agreement” over the validity of these claims. Under the former policy, supplement manufacturers that had scientific support for their claims, but lacked conclusive evidence, were prohibited from marketing their potential health benefits, thus losing out on important marketing opportunities. The new, more flexible dietary supplement regime enables companies to market their products more aggressively and increase sales.

However, while such claims are permitted by FDA guidelines, FDA rules do not serve as a safe harbor to protect manufacturing companies from liability for making overreaching claims. In the midst of an environment in which lawsuits against dietary supplement manufacturers are flourishing, manufacturers must take precautions to avoid exposure. Thus, before publicizing new health claims or benefits of particular products, makers and sellers should become well acquainted with the controlling regulations and incorporate such considerations into their marketing schemes.

Suits Against Dietary Supplement Manufacturers and Sellers

In July 2003, the widow of Orioles pitcher Steve Bechler filed a $600 million wrongful death lawsuit against the manufacturer of Xenadrine, an ephedra-based dietary supplement that Bechler took just hours before he collapsed and died.

Bechler's status as a Major League Baseball Player has attracted major headlines and called attention to consumer safety issues with respect to herbal supplements, and the case underscores the increasing litigation against the dietary supplement industry. It is one of the multitude of products liability lawsuits brought against various manufacturers of dietary supplements, including those supplements containing ephedra, a naturally occurring substance derived from botanicals that has been promoted for weight loss and enhanced athletic performance. In the lawsuit, Bechler's family claims that the manufacturer overstated ephedra's health benefits by claiming that the product would allow you to “lose weight fast” and was “clinically proven,” when in fact it was unreasonably dangerous. Complaint '28, Bechler v. Cytodyne Technologies Inc., et al, No. 03-61369, (S.D. Fla. filed July 16, 2003). (Cytodyne Technologies Inc. has since become Nutraquest Inc., and has filed for Chapter 11 bankruptcy.)

Dietary supplements are used by millions of Americans annually and generate sales revenues in the billions. In 2002, dietary supplements generated the most sales of any category of over-the-counter drugs, and constituted the only category to generate sales in the billions. The number of products considered dietary supplements has greatly increased in the past 10 years, and sales continue to upsurge. Michael Johnsen, Despite Controversy Over Credibility, Dietary Supplement Sales Surge, Drug Store News, Aug. 18, 2003, sec. 10, vol. 25, p. 17. Plaintiffs' lawyers have been able to seize the moment, filing numerous high-figure lawsuits alleging that manufacturers of supplements have overstated the healthfulness of the products and failed to test their safety or warn consumers about potential health consequences. As such, manufacturers and sellers of these products should be advised that with the additional marketing capabilities and expanding customer base comes rising liability risks.

New Regulations Affecting the Dietary Supplement Industry

Supplements are regulated under the Dietary Supplement Health and Education Act (DSHEA), passed in 1994. This legislation was designed to decrease the regulatory obstacles limiting consumer access to safe products and accurate information. Sales have increased because supplements are now regulated as food, and therefore, manufactures are not required to test the products to prove safety or effectiveness before selling them. Congress defined a dietary supplement as a product (other than tobacco) that: 1) is intended to supplement the diet; 2) contains one or more dietary ingredients (ie, vitamins, minerals, or herbs) or their constituents; 3) is intended to be taken by mouth as a pill, capsule, tablet, or liquid; and 4) is labeled on the front panel as a dietary supplement. DSHEA, '3, 21 U.S.C. 321. DSHEA generally allows manufacturers to claim that their products affect the “structure or function” of the body, so long as they do not claim that the products treat or cure a specific disease. DSHEA, '6, 21 U.S.C. 343(r)(6).

On July 10, 2003, the FDA implemented a review process that utilized interim procedures and an interim ranking system for scientific data beginning Sept. 1, 2003, to evaluate the scientific evidence supporting qualified health claims. During this period, the FDA planned to “prioritize health claims for review based on the potential significance of the product's health impact on a serious or life threatening illness and the strength of evidence in support of the claim.” 68 Fed. Reg. 133. As a follow-up to such measures, the FDA continues to seek public commentary regarding regulation of “qualified health claims.”

The FDA will apply a rating system in determining what kind of claims can be made by manufacturers and sellers. The evaluations of health claims will be graded on a scale from “A” to “D,” with “A” representing unqualified scientifically proven health claims, currently the only health claims allowed on labels. A grade of “B” would be given to claims for which the supporting science is good, but not conclusive. Claims that are supported by limited science would receive a “C,” while claims with very little science, a “D.” These claims would be required to include qualifying language such as “evidence is limited and not conclusive,” and “very limited and preliminary scientific research.” 68 Fed. Reg. 133; U.S. Food and Drug Administration, FDA to Encourage Science-based Labeling and Competition for Healthier Dietary Choices, at http://www.fda.gov/. (Access the article by typing “Science-based labeling” into the search engine.) In sum, the new ranking system allows dietary supplement makers to make broader health claims than previously permitted.

The new relaxed rules governing health claims for dietary supplements will be beneficial to both the industry and to the millions of consumers using the products. Manufacturers have greater leeway to market the potential health benefits of their products, which undoubtedly will result in increased sales. The less hampered marketing will provide consumers with better and clearer information about the products available, and promote greater competition among supplement manufacturers on health-related grounds. Additionally, now that manufacturers have broader abilities to describe the benefits of a product, they will no longer be reduced to using cryptic pictures on product labels in attempts to convey messages about potential health advantages.

Broadened Dietary Supplement Claims May Invite More Lawsuits

The new and exciting marketing possibilities available under the new regime are accompanied by increased risks of liability. These risks include lawsuits arising from claims of misrepresentation, failure to warn, over-promotion, dangers associated with impurities, and failure to test the products before they are placed on the market. Some critics believe that the new FDA standard allows manufacturers to make health claims based on hopes, not facts, and that it encourages supplement manufacturers to make unfounded and outlandish claims. Statement of Sen. Orrin Hatch of Utah, Dietary Aids: FDA Oversight Criticized at Senate Hearing, American Health Line, Oct. 29, 2003; statement of Rep. Henry A. Waxman of California, Marc Kaufman, Wash. Post, July 11, 2003, at A01.

The plaintiffs' bar will seek every opportunity to bring claims against industry members who they contend are abusing the new guidelines by making unwarranted claims. As examples, the Missouri Attorney General has instituted a suit against the marketers of Hydroxycut, an ephedra-containing product, alleging the manufacturer engaged in false advertising and misrepresentation (Nixon v. MuscleTech Research and Development, Inc., No. 034-889 (Cir. Ct. MO, filed Mar. 27, 2003); San Diego based Metabolife International has been bombarded by more than 100 personal injury suits, one of which recently resulted in a $4.1 million jury verdict that has since been appealed (Sheryl Gay Stolberg, N.Y. Times, Dec. 31, 2003 at A1); and Nutraquest, Inc. (formerly Cytodyne) filed for Chapter 11 bankruptcy, citing increasing litigation costs and judgments against it. Mealey's Litig. Rep.: Ephedra & PPA, Nov. 2003, vol. 3, issue 7. Additionally, the precise definition of “qualified health claim” is still up for debate. This invites dispute and provides a wide margin of leeway for the plaintiffs' bar to maintain that health claims are exaggerated or unfounded.

The FDA has been active in the area and is working closely with the Federal Trade Commission (FTC) to take action against manufacturers' unsubstantiated claims about dietary supplements. Despite broadened FDA guidelines, manufacturers must still take great care to comply with existing FTC regulations obligating manufacturers to ensure that claims are presented truthfully and to check the adequacy of the support behind those claims. Federal Trade Commission, Business Guide for Dietary Supplement Industry Released by FTC Staff, Nov. 18, 1998, at www.ftc.gov/opa/1998/11/dietary.htm. The FTC has recently sued product manufacturers for making unsubstantiated claims. In one instance, the FTC sued “Slim America” and ultimately obtained an $8.3 million judgment. FTC v. SlimAmerica, Inc., No. 97-6072-Civ (S.D. Fla. 1999). The FTC recently settled with two dietary supplement manufacturers, requiring them to pay $340,000 in consumer redress and to stop making deceptive claims in advertisements for ephedra-based products. FTC v. USA Pharmacal Sales, Inc., et al., No. 8:03cv01366 (M.D. Fla.); FTC v. Health Laboratories of North America, Inc., et al., No. 1:03-cv-01457-TPJ (D.C.). In cases involving the marketing of St. John's Wort, an herbal supplement used to treat depression, the FTC challenged advertisements claiming that consumers could safely use the product to treat an assortment of diseases, including AIDS, TB, and Hepatitis B. The FTC also alleged that the ads falsely claimed, “ingestion of the product had no known contraindications.” Panda Herbal Int'l, Inc. C-4018; ForMore, Inc., C-4021 (Aug 3, 2001).

Manufacturers defending supplement claims need to understand that many typical defenses used by pharmaceutical companies against negligence claims do not apply to dietary supplements. For instance, in many jurisdictions the “learned intermediary” defense protects manufacturers from liability when a trained professional, for example, a physician, prescribes the drug. Additionally, regulatory compliance defenses generally available to pharmaceutical manufacturers will be similarly ineffective.

Moreover, unlike the heavily federally regulated pharmaceutical industry, makers and sellers of dietary supplements cannot readily use the constitutional doctrine of pre-emption as a defense to product liability suits. Under the pre-emption doctrine, when it appears that the federal government intended to “occupy” an entire field of law, states and localities are precluded from regulating the area. Thus, whereas pharmaceutical manufacturers are shielded from independent state tort claims because heavy federal government regulations over pharmaceutical products have effectively “occupied” the field, the less stringent federal regulation of dietary supplements has left supplement manufacturers subject to vast liability at the state level.

Warn Warn Warn! ' Protecting Against Product Liability Suits

Amongst the strongest arguments in the complaint filed by Bechler's widow is her allegation that “nowhere on the product's label does it warn” of the many known and potential health repercussions associated with the product. Complaint '49, Bechler v. Cytodine Technologies Inc., et al, No. 03-61369, (S.D. Fla. filed July 16, 2003). To avoid lawsuits, a primary focus of supplement manufacturers should be to warn consumers of the known risks associated with the product. Such warnings should not only include disclosures about known side effects or health risks of the product itself, but should also disclose any known harmful effects from drug interactions. For instance, studies have shown that interaction between St. John's Wort and certain drugs used to control HIV infection, anticancer or chemotherapeutic drugs, or drugs that help prevent the body from rejecting transplanted organs results in decreased effectiveness of these drugs. St. John's Wort and The Treatment of Depression, NCCAM Publication No. D005, Aug. 2002. Given the litigious atmosphere surrounding supplements, it behooves supplement manufacturers to warn of such interactions. In addition, people taking supplements do not think to disclose this fact to their doctors and should also be warned to check with their doctors if taking other prescription medications.

In order to take advantage of the new leeway to make health claims, companies need to ensure that they include an appropriate warning of known risks and do not make overbroad, deceptive, or easily misinterpreted claims. In addition, they should evaluate litigation risks in their business development plans. Before rushing to take advantage of the new initiative by making new health claims, supplement makers should make sure to review the controlling regulations and seek assistance in developing labels and a marketing campaign that accurately and adequately implement the new initiative standards.

A year ago, manufacturers and marketers of dietary supplements benefited when the U.S. Food and Drug Administration (FDA) implemented a new regulation allowing such companies to make unproven health claims on their labels. Under the new relaxed FDA requirements regulating the marketing and promotion of dietary supplements, manufacturers have more leeway to tout the healthfulness of products by making “qualified health claims” on dietary supplement labels, even if there is no “significant scientific agreement” over the validity of these claims. Under the former policy, supplement manufacturers that had scientific support for their claims, but lacked conclusive evidence, were prohibited from marketing their potential health benefits, thus losing out on important marketing opportunities. The new, more flexible dietary supplement regime enables companies to market their products more aggressively and increase sales.

However, while such claims are permitted by FDA guidelines, FDA rules do not serve as a safe harbor to protect manufacturing companies from liability for making overreaching claims. In the midst of an environment in which lawsuits against dietary supplement manufacturers are flourishing, manufacturers must take precautions to avoid exposure. Thus, before publicizing new health claims or benefits of particular products, makers and sellers should become well acquainted with the controlling regulations and incorporate such considerations into their marketing schemes.

Suits Against Dietary Supplement Manufacturers and Sellers

In July 2003, the widow of Orioles pitcher Steve Bechler filed a $600 million wrongful death lawsuit against the manufacturer of Xenadrine, an ephedra-based dietary supplement that Bechler took just hours before he collapsed and died.

Bechler's status as a Major League Baseball Player has attracted major headlines and called attention to consumer safety issues with respect to herbal supplements, and the case underscores the increasing litigation against the dietary supplement industry. It is one of the multitude of products liability lawsuits brought against various manufacturers of dietary supplements, including those supplements containing ephedra, a naturally occurring substance derived from botanicals that has been promoted for weight loss and enhanced athletic performance. In the lawsuit, Bechler's family claims that the manufacturer overstated ephedra's health benefits by claiming that the product would allow you to “lose weight fast” and was “clinically proven,” when in fact it was unreasonably dangerous. Complaint '28, Bechler v. Cytodyne Technologies Inc., et al, No. 03-61369, (S.D. Fla. filed July 16, 2003). (Cytodyne Technologies Inc. has since become Nutraquest Inc., and has filed for Chapter 11 bankruptcy.)

Dietary supplements are used by millions of Americans annually and generate sales revenues in the billions. In 2002, dietary supplements generated the most sales of any category of over-the-counter drugs, and constituted the only category to generate sales in the billions. The number of products considered dietary supplements has greatly increased in the past 10 years, and sales continue to upsurge. Michael Johnsen, Despite Controversy Over Credibility, Dietary Supplement Sales Surge, Drug Store News, Aug. 18, 2003, sec. 10, vol. 25, p. 17. Plaintiffs' lawyers have been able to seize the moment, filing numerous high-figure lawsuits alleging that manufacturers of supplements have overstated the healthfulness of the products and failed to test their safety or warn consumers about potential health consequences. As such, manufacturers and sellers of these products should be advised that with the additional marketing capabilities and expanding customer base comes rising liability risks.

New Regulations Affecting the Dietary Supplement Industry

Supplements are regulated under the Dietary Supplement Health and Education Act (DSHEA), passed in 1994. This legislation was designed to decrease the regulatory obstacles limiting consumer access to safe products and accurate information. Sales have increased because supplements are now regulated as food, and therefore, manufactures are not required to test the products to prove safety or effectiveness before selling them. Congress defined a dietary supplement as a product (other than tobacco) that: 1) is intended to supplement the diet; 2) contains one or more dietary ingredients (ie, vitamins, minerals, or herbs) or their constituents; 3) is intended to be taken by mouth as a pill, capsule, tablet, or liquid; and 4) is labeled on the front panel as a dietary supplement. DSHEA, '3, 21 U.S.C. 321. DSHEA generally allows manufacturers to claim that their products affect the “structure or function” of the body, so long as they do not claim that the products treat or cure a specific disease. DSHEA, '6, 21 U.S.C. 343(r)(6).

On July 10, 2003, the FDA implemented a review process that utilized interim procedures and an interim ranking system for scientific data beginning Sept. 1, 2003, to evaluate the scientific evidence supporting qualified health claims. During this period, the FDA planned to “prioritize health claims for review based on the potential significance of the product's health impact on a serious or life threatening illness and the strength of evidence in support of the claim.” 68 Fed. Reg. 133. As a follow-up to such measures, the FDA continues to seek public commentary regarding regulation of “qualified health claims.”

The FDA will apply a rating system in determining what kind of claims can be made by manufacturers and sellers. The evaluations of health claims will be graded on a scale from “A” to “D,” with “A” representing unqualified scientifically proven health claims, currently the only health claims allowed on labels. A grade of “B” would be given to claims for which the supporting science is good, but not conclusive. Claims that are supported by limited science would receive a “C,” while claims with very little science, a “D.” These claims would be required to include qualifying language such as “evidence is limited and not conclusive,” and “very limited and preliminary scientific research.” 68 Fed. Reg. 133; U.S. Food and Drug Administration, FDA to Encourage Science-based Labeling and Competition for Healthier Dietary Choices, at http://www.fda.gov/. (Access the article by typing “Science-based labeling” into the search engine.) In sum, the new ranking system allows dietary supplement makers to make broader health claims than previously permitted.

The new relaxed rules governing health claims for dietary supplements will be beneficial to both the industry and to the millions of consumers using the products. Manufacturers have greater leeway to market the potential health benefits of their products, which undoubtedly will result in increased sales. The less hampered marketing will provide consumers with better and clearer information about the products available, and promote greater competition among supplement manufacturers on health-related grounds. Additionally, now that manufacturers have broader abilities to describe the benefits of a product, they will no longer be reduced to using cryptic pictures on product labels in attempts to convey messages about potential health advantages.

Broadened Dietary Supplement Claims May Invite More Lawsuits

The new and exciting marketing possibilities available under the new regime are accompanied by increased risks of liability. These risks include lawsuits arising from claims of misrepresentation, failure to warn, over-promotion, dangers associated with impurities, and failure to test the products before they are placed on the market. Some critics believe that the new FDA standard allows manufacturers to make health claims based on hopes, not facts, and that it encourages supplement manufacturers to make unfounded and outlandish claims. Statement of Sen. Orrin Hatch of Utah, Dietary Aids: FDA Oversight Criticized at Senate Hearing, American Health Line, Oct. 29, 2003; statement of Rep. Henry A. Waxman of California, Marc Kaufman, Wash. Post, July 11, 2003, at A01.

The plaintiffs' bar will seek every opportunity to bring claims against industry members who they contend are abusing the new guidelines by making unwarranted claims. As examples, the Missouri Attorney General has instituted a suit against the marketers of Hydroxycut, an ephedra-containing product, alleging the manufacturer engaged in false advertising and misrepresentation (Nixon v. MuscleTech Research and Development, Inc., No. 034-889 (Cir. Ct. MO, filed Mar. 27, 2003); San Diego based Metabolife International has been bombarded by more than 100 personal injury suits, one of which recently resulted in a $4.1 million jury verdict that has since been appealed (Sheryl Gay Stolberg, N.Y. Times, Dec. 31, 2003 at A1); and Nutraquest, Inc. (formerly Cytodyne) filed for Chapter 11 bankruptcy, citing increasing litigation costs and judgments against it. Mealey's Litig. Rep.: Ephedra & PPA, Nov. 2003, vol. 3, issue 7. Additionally, the precise definition of “qualified health claim” is still up for debate. This invites dispute and provides a wide margin of leeway for the plaintiffs' bar to maintain that health claims are exaggerated or unfounded.

The FDA has been active in the area and is working closely with the Federal Trade Commission (FTC) to take action against manufacturers' unsubstantiated claims about dietary supplements. Despite broadened FDA guidelines, manufacturers must still take great care to comply with existing FTC regulations obligating manufacturers to ensure that claims are presented truthfully and to check the adequacy of the support behind those claims. Federal Trade Commission, Business Guide for Dietary Supplement Industry Released by FTC Staff, Nov. 18, 1998, at www.ftc.gov/opa/1998/11/dietary.htm. The FTC has recently sued product manufacturers for making unsubstantiated claims. In one instance, the FTC sued “Slim America” and ultimately obtained an $8.3 million judgment. FTC v. SlimAmerica, Inc., No. 97-6072-Civ (S.D. Fla. 1999). The FTC recently settled with two dietary supplement manufacturers, requiring them to pay $340,000 in consumer redress and to stop making deceptive claims in advertisements for ephedra-based products. FTC v. USA Pharmacal Sales, Inc., et al., No. 8:03cv01366 (M.D. Fla.); FTC v. Health Laboratories of North America, Inc., et al., No. 1:03-cv-01457-TPJ (D.C.). In cases involving the marketing of St. John's Wort, an herbal supplement used to treat depression, the FTC challenged advertisements claiming that consumers could safely use the product to treat an assortment of diseases, including AIDS, TB, and Hepatitis B. The FTC also alleged that the ads falsely claimed, “ingestion of the product had no known contraindications.” Panda Herbal Int'l, Inc. C-4018; ForMore, Inc., C-4021 (Aug 3, 2001).

Manufacturers defending supplement claims need to understand that many typical defenses used by pharmaceutical companies against negligence claims do not apply to dietary supplements. For instance, in many jurisdictions the “learned intermediary” defense protects manufacturers from liability when a trained professional, for example, a physician, prescribes the drug. Additionally, regulatory compliance defenses generally available to pharmaceutical manufacturers will be similarly ineffective.

Moreover, unlike the heavily federally regulated pharmaceutical industry, makers and sellers of dietary supplements cannot readily use the constitutional doctrine of pre-emption as a defense to product liability suits. Under the pre-emption doctrine, when it appears that the federal government intended to “occupy” an entire field of law, states and localities are precluded from regulating the area. Thus, whereas pharmaceutical manufacturers are shielded from independent state tort claims because heavy federal government regulations over pharmaceutical products have effectively “occupied” the field, the less stringent federal regulation of dietary supplements has left supplement manufacturers subject to vast liability at the state level.

Warn Warn Warn! ' Protecting Against Product Liability Suits

Amongst the strongest arguments in the complaint filed by Bechler's widow is her allegation that “nowhere on the product's label does it warn” of the many known and potential health repercussions associated with the product. Complaint '49, Bechler v. Cytodine Technologies Inc., et al, No. 03-61369, (S.D. Fla. filed July 16, 2003). To avoid lawsuits, a primary focus of supplement manufacturers should be to warn consumers of the known risks associated with the product. Such warnings should not only include disclosures about known side effects or health risks of the product itself, but should also disclose any known harmful effects from drug interactions. For instance, studies have shown that interaction between St. John's Wort and certain drugs used to control HIV infection, anticancer or chemotherapeutic drugs, or drugs that help prevent the body from rejecting transplanted organs results in decreased effectiveness of these drugs. St. John's Wort and The Treatment of Depression, NCCAM Publication No. D005, Aug. 2002. Given the litigious atmosphere surrounding supplements, it behooves supplement manufacturers to warn of such interactions. In addition, people taking supplements do not think to disclose this fact to their doctors and should also be warned to check with their doctors if taking other prescription medications.

In order to take advantage of the new leeway to make health claims, companies need to ensure that they include an appropriate warning of known risks and do not make overbroad, deceptive, or easily misinterpreted claims. In addition, they should evaluate litigation risks in their business development plans. Before rushing to take advantage of the new initiative by making new health claims, supplement makers should make sure to review the controlling regulations and seek assistance in developing labels and a marketing campaign that accurately and adequately implement the new initiative standards.