Marketing nutrition & health-related benefits of food & beverage products: enforcement, litigation & liability issues

Over the past decade, the liability risks associated with food and beverage product marketing have increased significantly, particularly with respect to nutrition and health-related product benefit claims. FDA and FTC enforcement priorities appear to have contributed to the increasing liability trends that are associated with these nutrition and health-related claims. This article examines key enforcement and litigation developments involving conventional food and beverage product marketing claims during the first 18 months of President Obama's administration: Part I considers FDA enforcement priorities and recent warning letters; Part II considers FTC enforcement priorities, warning letters, and consent orders; and Part III considers the relationship between FDA and FTC enforcement priorities and recent false advertising cases brought by private parties challenging nutrition and health-related marketing claims for food and beverage products. The article makes recommendations concerning ways in which food and beverage companies can help minimize liability risks associated with health-related marketing claims. In addition, the article suggests that federal policy reforms may be required to counter the perverse chilling effects current food liability trends appear to be having on health-related marketing claims for food and beverage products, and proposes a number of specific reforms that would help encourage the responsible use of well-substantiated marketing claims that can help foster healthy dietary practices. In view of the obesity prevention and other diet-related public health priorities of the Obama administration, the article suggests that this is an opportune time to address the apparent chilling effects increasing food liability risks are having on nutrition and health-related marketing claims for healthy food and beverage products, and potential adverse consequences for public health.

An economic assessment of patent settlements in the pharmaceutical industry

This article demonstrates that in recent years, patent settlements between branded and generic manufacturers involving "reverse payments" from branded manufacturers to generic manufacturers have received close antitrust scrutiny, driven by concerns that such settlements harm consumers by delaying the entry of lower-priced generic drugs. The authors note that such settlements will be a focus of the Obama Administration's antitrust enforcement policy, yet there is a growing consensus among the courts that such settlements are anticompetitive only under narrow sets of circumstances. In this article, the authors present an analytical framework for evaluating the competitive effects of patent settlements, including those involving reverse payments, and demonstrate that these settlements can benefit consumers. Thus, the authors conclude that while continued scrutiny of such settlements is important, broad brush treatments are inappropriate and only a more individualized evaluation can correctly determine the competitive effects of a particular settlement agreement.

Unsettling drug patent settlements: a framework for presumptive illegality

A tidal wave of high drug prices has recently crashed across the U.S. economy. One of the primary culprits has been the increase in agreements by which brand-name drug manufacturers and generic firms have settled patent litigation. The framework for such agreements has been the Hatch-Waxman Act, which Congress enacted in 1984. One of the Act's goals was to provide incentives for generics to challenge brand-name patents. But brand firms have recently paid generics millions of dollars to drop their lawsuits and refrain from entering the market. These reverse-payment settlements threaten significant harm. Courts nonetheless have recently blessed them, explaining that the agreements reduce costs, increase innovation, and are reasonable based on the presumption of validity accorded to patents. Although scholars and the Federal Trade Commission have voiced strong arguments against courts' leniency, these have fallen on judicial deaf ears. In this Article, I apply the framework that the Supreme Court articulated in Verizon Communications v. Law Offices of Curtis V. Trinko, LLP, which underscored the importance in antitrust analysis of a regulatory regime addressing the challenged activity. In particular, the Hatch-Waxman Act provides Congress's views on innovation and competition in the drug industry, freeing courts from the thorny task of reconciling the patent and antitrust laws. Unfortunately, mechanisms that Congress employed to encourage patent challenges--such as an exclusivity period for the first generic to challenge validity--have been twisted into barriers preventing competition. Antitrust can play a central role in resuscitating the drafters' intentions and promoting competition. Given the Act's clear purpose to promote patent challenges, as well as the parties' aligned incentives and the severe anticompetitive potential of reverse payments, courts should treat such settlements as presumptively illegal. If the parties can demonstrate that the payments represent a reasonable assessment of litigation success, then they can rebut this presumption. If not, courts should conclude that the agreements violate the antitrust laws.

Dietary supplement labeling and advertising claims: are clinical studies on the full product required?

Whether labeling and advertising claims for multi-ingredient dietary supplements may be based on the testing of individual, key ingredients--rather than the actual product--has caused a good deal of confusion. This confusion stems from the dearth of case law and the open-endedness of Federal Trade Commission (FTC) and Food and Drug Administration (FDA) guidance on this issue. Nevertheless, the relevant regulatory guidance, case law and self-regulatory case law--when assessed together--indicate that the law allows and even protects "key ingredient claims" (i.e., claims based on efficacy testing of key ingredients in the absence of full product testing). This article provides an overview of the relevant substantiation requirements for dietary supplement claims and then reviews FTC's and FDA's guidance on key ingredient claims; relevant case law; use of key ingredient claims in the advertising of other consumer products; and the National Advertising Division of the Better Business Bureau, Inc.'s (NAD's) approach to evaluating key ingredient claims for dietary supplements. This article concludes that key ingredient claims--provided they are presented in a truthful and non-deceptive manner--are permissible, and should be upheld in litigation and cases subject to industry self-regulation. This article further concludes that the NAD's approach to key ingredient claims provides practical guidance for crafting and substantiating dietary supplement key ingredient claims.