Three Little Pigs of Deceptive Advertising

Sep 01, 2010

Even the best marketing campaign can cause a headache if it precipitates false advertising allegations. Allegations of false advertising are generally addressed by either the FDA (for prescription drugs) or the FTC (for OTC drugs, medical devices, dietary supplements, and medical foods). But FTC enforcement can be severe, so it is of utmost importance to insulate against potential liability.

The Federal Trade Commission Act requires that advertising fulfill three requirements: First, advertising must be truthful and non-deceptive; while "puffery" is allowed, misleading statements are not. Second, advertising cannot be unfair. Third, therapeutic claims must be supported by "competent and reliable scientific evidence"—that is, clinical testing, laboratory studies, and other scientific evidence, which has been "evaluated by people qualified to review it."

Violations can be expensive, both financially and in reputation. For example, in June, Teva admitted to including false or misleading statements in the physician-prescribing information for its Gianvi oral contraceptive. To remedy this, Teva agreed to not ship any inventory until it could remove the false claim from package inserts and other materials. Adding embarrassment to this financial injury, however, Teva also agreed to directly notify every known wholesaler, distributor, and chain retailer that received Gianvi of the labeling change, and agreed to send e-mail or fax messages with corrected prescribing information to US pharmacies nationwide, once a week, every week, for three months.

In another false advertising case (involving Acella Pharmaceuticals' generic version of Merck KgA's prescription-strength l-methylfolate), the Louisiana Attorney General is demanding the manufacturer refund its entire gross sales of the product.

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