FTC Homeopathic Medicine & Advertising Workshop

September 21, 2015

Segment 2

Transcript

GREGORY FORTSCH: Good afternoon. We're going to move into the final panel of the 

workshop today. And I want to introduce myself, who is moderating this panel. 

And you've met me already, and that's all I'm going to say about myself. 

So the more important part of the panel is who's on it, and the graciousness that they've all 

agreed to come today and speak on the panel. And I'll first introduce directly to my left, Michelle 

Rusk, who's a colleague in the Division of Advertising Practices; and then Christina Guerola 

Sarchio, from Orrick, Herrington, & Sutcliffe; and continuing on to my left, David Spangler, 

from the Consumer Healthcare Products Association; Antonio Vozzolo from Faruqi & Faruqi, 

hope I pronounced that right; And then going all the way down to my far right, Kat Dunnigan, 

from the National Advertising Division-- and you heard a bit about that the NAD, as it's known, 

in an earlier panel; Elaine Lippmann from the FDA; Al Lorman, from the law office of Alvin J. 

Lorman; and Paul Rubin from Ropes & Gray. 

So we are going to follow the same structure that we followed in the other two panels, where 

we're going to ask each of the panelists-- and as you can see, we have a larger group than the 

other two panels, so we're going to strictly enforce the five minute or less rule, but I think 

everyone is very well versed on that one. We're going to ask everybody to give a five minute or 

less opening remarks, and then we'll do a number of questions. If we have time we'll take 

questions from the audience, but I'm going to start with my colleague, Michelle Rusk. 

MICHELLE RUSK: Thanks, Greg. OK, so today-- now that everybody's awake-- I'm going to 

touch quickly on the FTC's shared jurisdiction with FDA. How we coordinate, but also how our 

legal frameworks differ in some important respects. And then I'm going to explain what, exactly, 

the FTC law requires in the way of scientific support for claims, not just for homeopathic 

products, but for any health-related product. 

We do share jurisdiction with FDA over homeopathic, allopathic, OTC drugs, food, 

supplements, and certain other health products. And that means we need to coordinate our 

enforcement efforts, so we have in place a memorandum of understanding that spells out that 

FDA has primary responsibility over claims made in labeling, and the FTC takes the lead on 

claims in advertising and other marketing. And we do make every effort to be consistent in our 

actions. But there are some important differences in our legal frameworks. 

The FTC is primarily a law enforcement agency, not a regulatory agency. And by that, I mean 

we don't engage in pre-market approval. The law requires an advertiser to substantiate 

advertising claims before they're made, but they don't have to submit ads to us in advance, and 

we don't pre-approve their claims, nor do we dictate how claims are worded or what specific 

disclosures are required. 
Also, the FTC law makes no distinction between product categories. It doesn't matter, under our 

approach, whether you position your product as a food, a supplement, a drug-- you will be held 

to the same substantiation standard for the claims that you make. And there's no exemption under 

FTC law or policy for products in the homeopathic pharmacopoeia. 

Finally, the FTC doesn't make bright line distinctions between disease claims, health claims, 

structure function claims, or other treatment claims. So for every claim, we're asking the same 

questions-- what message does the ad communicate to consumers? Is a truthful and accurate? Is 

it backed by science? 

Our authority for the approach comes from two very simple sections of the FTC Act-- not a lot of 

regulations you need to be familiar with. Section 5, which applies to both advertising and 

labeling, prohibits unfair or deceptive acts or practices in commerce. So Section 5 would prohibit 

deceptive marketing of homeopathic products, or any other product or service marketed to 

consumers. 

Section 12 applies to products that are also regulated by the FDA, like foods, drugs, 

supplements, devices, and it prohibits dissemination of false ads for these products. But under 

both of these sections, a marketer has to have a reasonable basis for any objective claim that they 

make about their product. And the FTC has made it clear in case law, in warning letters, in 

policy statements, and guidelines, that when you're talking about the benefits of a health related 

product, the reasonable basis standard means that you have to have competent and reliable 

scientific evidence. 

So in my last minute, I want to make a few points about what exactly the FTC means when we 

say, competent and reliable scientific evidence. I have two minutes, apparently. Most 

importantly, we expect to see rigorous science. As Rich mentioned, there is some flexibility in 

the number and type of studies, the size, the duration-- but as a general rule, for treatment claims, 

we expect randomized, double blind, placebo controlled, human clinical studies. Not in vitro 

studies, not animal studies, not anecdotal evidence-- no matter how compelling it is. 

Second, we expect the studies to be internally valid. That means well designed, reliably 

conducted, using procedures accepted in the field of research. It also means that results are not 

just statistically significant, but also strong enough to be clinically meaningful. 

Third, the evidence has to match the product and the specific claim. Is it the same active 

ingredient in the same form and dose? Are there other ingredients in the product that could alter 

the effect? Does the degree and nature of the effect match the claim? So for instance, a study that 

shows a product might shorten the duration of a cold for a day or two, is not support for a claim 

of cold prevention. 

And my final point, the FTC will look at a marketer's studies in the context of the larger body of 

evidence, not just in isolation. We ask, how does it fit? And is it consistent with the scientific 

literature as a whole? If the larger body of evidence suggests a product may not be effective, then 

that's going to be a very high hurdle for an advertiser to overcome. 
So that's our analysis-- whether you're advertising a homeopathic drug, an allopathic supplement, 

or something else, do you have one or more quality studies? Does the evidence match the 

product and the claim? And how does it fit into the science as a whole? 

GREGORY FORTSCH: Thank you, Michelle. I'm now going to turn to Elaine Lippmann to 

speak about the FDA. 

ELAINE LIPPMANN: Good afternoon. I'm Elaine Lippmann, I'm in the Office of Regulatory 

Policy at the FDA. FDA is pleased to be participating in the FTC's workshop to examine 

advertising of over-the-counter homeopathic products. The two agencies share an interest in drug 

products marketed as homeopathic. While the statutes and regulations we enforce differ, both 

agencies share the goal of implementing policies that are in the best interest of the public. We, 

therefore, welcome the opportunity to add our perspective to the FTC's exploration of the issues 

under its purview, as well as to hear from the FTC and others. 

Products that meet the definition of "drug" under the Food, Drug, and Cosmetic Act are subject 

to regulation by the FDA, regardless of whether they are labeled as homeopathic. Since 1988, 

prescription and nonprescription drug products labeled as homeopathic have been manufactured 

and distributed without FDA approval under our stated enforcement policies. FDA is now 

evaluating its current enforcement policies from scientific risk and process perspectives. 

In April of this year, FDA began soliciting opinions about whether and how to adjust the current 

enforcement policies to reflect changes in the homeopathic product marketplace over the last 

approximately 25 years. FDA is, therefore, engaged in its own reexamination of its regulatory 

approach to homeopathic drug products, at the same time that the FTC is examining issues 

related to the advertising of these products. 

Compliance policy guides explain FDA's policies on regulatory issues related to our laws or 

regulations. They also provide guidance to FDA's compliance staff and field investigators, on the 

agency standards and procedures to be applied when determining industry compliance. In 1988, 

FDA issued its compliance policy guide, or CPG, entitled, Conditions under Which 

Homeopathic Drugs May Be Marketed. 

This CPG states that the FDA does not intend to take enforcement action against drug products 

labeled as homeopathic and marketed without pre-market review and approval, provided that 

certain conditions are met regarding ingredients, labeling, prescription status, and current good 

manufacturing practice. The homeopathic drug industry has continued on an upward growth 

trajectory since FDA issued the CPG in 1988, especially with respect to OTC drug products 

labeled as homeopathic. 

The CPG noted that at the time of original publication in 1988, the homeopathic drug market was 

a multimillion dollar industry in the United States. In 2007, the National Health Interview Survey 

conducted by the Centers for Disease Control and Prevention estimated that adults spent about 

$2.9 billion on the purchase of homeopathic medicine. Drug products labeled as homeopathic are 

marketed and sold in a variety of dosage levels and forms, direct to consumers, through 
magazines, the internet, and in both big box retail establishments-- like Target and Walmart--

and traditional retail pharmacies like CVS and Walgreens. 

To date, manufacturers have listed with the FDA over 7,000 OTC drug products marketed as 

unapproved homeopathics. In light of the growth of the industry, and the passage of 

approximately 25 years since the CPG's issuance, FDA is evaluating its regulatory framework 

for these products. This past April, FDA held a public hearing to obtain information and 

comments from stakeholders about the current use of homeopathic drug products, as well as the 

agency's regulatory framework for these products. 

FDA is seeking broad public input on the current enforcement policies related to drug products 

labeled as homeopathic in an effort to better promote and protect the public health. 

On August 21st, the FTC submitted a comment to our docket. In it, FTC recommends that FDA 

reconsider its current regulatory approach to OTC products labeled as homeopathic. FTC states 

its concern that our policies conflict with the commission's advertising substantiation policy in 

ways that may harm consumers and create confusion for advertisers. FDA will consider FTC's 

comment, along with other comments submitted to our docket, as we determine whether and how 

to adjust our regulatory approach to products labeled as homeopathic, with the goal of protecting 

and promoting the public health. 

GREGORY FORTSCH: Thank you, Elaine. I'm now going to turn it over to Al Lorman. 

AL LORMAN: Thank you. Good afternoon. I appreciate this opportunity to speak to you today 

on behalf of my client, the American Association of Homeopathic Pharmacists. The issues that 

the FTC staff have asked this group to address are both important and complex. In the five 

minutes that each of us have been allotted, I'm going to focus on the use of disclaimers in 

labeling and advertising. 

First, however, I'd like to make one brief point though about a key legal assertions by the FTC 

staff. I believe that a Compliance Policy Guide reflects FDA's recognition that Congress may 

well have adopted a different standard of effectiveness for homeopathic drugs. Whether that 

same standard also applies under the Federal Trade Commission Act is a legal issue which has 

never been decided by either the commission, nor court. Even were the FDA to revoke or revised 

the Compliance Policy Guide, as suggested by the FTC staff in its comments to FDA, that does 

not actually change the legal status of homeopathic drugs under the Food and Drug Act. 

The FDA would still have to take some sort of legal action to establish that these drugs are not 

legal. In fact, since the drug amendments of 1962 were passed, the amendments which added the 

effectiveness requirements of the statute, FDA has been in the process of reviewing both 

prescription and over-the-counter drugs to determine their compliance with the effectiveness 

standard. There are still hundreds of OTC and RX allopathic drugs for which FDA has not made 

a final determination as to safety and effectiveness. 
As a legal matter, homeopathic drugs are in no different position. And if we have to take our 

place in the line of FDA's review of drugs under the 62 amendments, I suspect they may reach it 

in the next century. 

However, my main point today is that the AAHP believes that there is actually an appropriate 

path forward that not only gives consumers additional purchase information, but also satisfies the 

FTC's claimed legal standard. We would much rather cooperate than litigate. The AAHP adopted 

a voluntary advertising and labeling disclaimer program in 2012. That disclaimer was based on 

the one adopted by Congress in the DSHEA for diet supplements, which made structure function 

claims. Between the AAHP guideline, and court-approved settlements in some of the false 

advertising cases that have been brought against homeopathic manufacturers, we believe that a 

majority of the homeopathic products sold today bear some sort of disclaimer on labels and in 

advertising. 

The AAHP has conducted a study about consumer understanding of FDA's role in the approval 

of a number of product categories. This study showed that 24% of the consumers tested believe 

that FDA approved homeopathic drug claims. This 24% is within the range found by the FTC in 

its study of a couple of years ago. 

While 24% is not an inconsequential number of consumers to be confused, it is important to put 

that number in context. The AAHP study shows that fewer consumers believe that FDA 

approves homeopathic product labels than believe that FDA approves cosmetic, pet food, and 

grocery product labels. In fact, fewer consumers that we surveyed believed that FDA approved 

homeopathic product claims than any other product category tested. 

The study also suggested that most consumers can differentiate between allopathic OTC drugs, 

and homeopathic OTC drugs. The study showed that 76% of consumers understood that FDA 

reviewed the claims for allopathic OTC products. But, as noted, only 24% thought the same 

about homeopathic products. This was a study that did not show consumers labels-- this was 

based solely on the use of the terminology. 

In a separate study, the AAHP also studied consumer perception of product labels with one of 

three different disclaimers. This study, to the extent possible, was modeled on the study that the 

FTC commissioned several years ago. 

We tested three different disclaimers. One, these statements have not been reviewed by the Food 

and Drug Administration. Two, the uses of our products are based on traditional homeopathic 

practice-- they have not been reviewed by the Food and Drug Administration. And three, the 

uses of our products are based on traditional homeopathic practice, and then a parentheses, see 

www.homeopathic.org, close parentheses. They have not been reviewed by the Food and Drug 

Administration. 

I should add that that is not a real website, or if it is, it's not one controlled by us. We use that as 

a signal to consumers that more information was available. And there was some indication from 

the person who helped design the survey that signals can help consumers understand that perhaps 

this is out of the ordinary. 
The key finding of this survey is that when a homeopathic drug bears one of the three label 

disclaimers that we tested, only between 1% and 8% of consumers believed that homeopathic 

drug claims are approved by FDA. That is a dramatic decline from the 24% who believed that 

FDA approved these claims when not presented with a label showing a disclaimer. 

In addition, only 14% of the consumers we surveyed believe that homeopathic drugs had the 

same level of scientific support as allopathic drugs. The report and the analysis of these studies 

are still in draft form, unfortunately. We will be submitting them as part of our written comments 

to the FTC. And actually, we will also submit them to the FDA. 

The data, however, we believe clearly speak for themselves. We believe that when you have a 

chance to review the data in detail, you will agree that the use of appropriate disclaimers on 

homeopathic products helps consumers make informed purchasing decisions, while complying 

with the applicable legal standards. And we look forward to working with the FTC staff on this 

issue. Thank you. 

GREGORY FORTSCH: Thank you, Al. And I should elaborate a little bit, as you mentioned, 

about the comments-- just to reiterate again, people are probably tired of hearing this. But by 

November 20th, we will accept comments at the FTC, and will welcome the comment that Al 

has referenced here. And I know the FDA is also extended their comment period. I don't know 

the exact date--

ELAINE LIPPMANN: It's open until November 9. 

GREGORY FORTSCH: OK, so we're in November. Everybody remember November if you 

want to file something. So I'm next going to introduce Paul for his opening remarks. 

PAUL RUBIN: Great, thank you, Greg. I first would like to thank the FTC for hosting this public 

workshop, and providing the opportunity for a wide range of stakeholders, including government 

regulators, medical professionals, industry representatives, and consumer advocates to share their 

views on this important topic. 

In 1938, Congress enacted the Federal Food Drug Cosmetic Act, or FFDCA, which contains a 

number of specific provisions applicable to the commercial distribution of homeopathic drugs in 

the United States. For example, the definition of a drug expressly includes articles recognized in 

the official homeopathic pharmacopoeia of the United States, or HPUS. Importantly, it's my 

understanding that the fundamental principles of homeopathy, including homeopathic claim 

support, have been generally consistent since the passage of the FFDCA. In other words, when 

the FFDCA was enacted, Congress knew how homeopathy claims are supported, recognized that 

homeopathic drugs are distinguishable from allopathic drugs, and clearly intended for consumers 

to have access to homeopathic drugs in the United States. 

FDA's regulation of homeopathic drugs since 1938 has been consistent with this approach. FDA 

has long recognized the distinction between homeopathic and allopathic drugs, and has not 

applied new drug application or NDA requirements, or the OTC drug review to OTC 

homeopathic drugs. In 1988, FDA made this policy explicit when it issued a Compliance Policy 
Guide, or CPG, still in effect today, explaining that OTC homeopathic drugs may be legally 

marketed in the absence of NDA approval, or inclusion on the OTC drug review, as long as a 

number of conditions are satisfied. 

One of those conditions that OTC homeopathic drug labeling must bear at least one major OTC 

indication for use, stated in terms likely be understood by lay persons. This requirement is 

consistent with the FFDCA requirement that all OTC drugs must bear labeling containing 

adequate directions for use. In its recent comments to the Food and Drug Administration, FTC 

staff acknowledged the potential conflicts caused by FDA regulatory requirements applicable to 

homeopathic drugs. In an effort to address this conflict, the FTC proposed three options for the 

FDA. 

I respectfully submit that, in my opinion, all three options are sub-optimal, and would pose legal 

and policy challenges for FDA as they would either be, in my opinion, contrary to congressional 

intent, or violate the FFDCA. Rather than those proposed approaches, I respectfully suggest that 

there is an alternative approach that should be capable of achieving the FDA's and FTC's goals, 

while avoiding vexing legal problems and which would seem to benefit all stakeholders. 

That would be the use of disclaimers and qualified language. Effective disclaimers should be 

capable of addressing the FTC's concerns, and would be consistent with the FTC's guidance 

regarding claims for traditional use. Such an approach would have another crucial benefit, as 

well-- it would avoid offending First Amendment principles that strongly disfavor the 

suppression of commercial speech. This is now the clear trend in First Amendment jurisprudence 

involving claims for FDA regulated products. 

Such issues arose, for example, in the Pearson v. Shalala decision, where the DC Circuit 

concluded that health claims lacking significant scientific agreement may be lawfully 

disseminated, consistent with First Amendment precedent, provided appropriate disclaimers are 

disseminated in order to avoid consumer confusion or deception. Similarly, in the recent FTC 

POM Wonderful decision, the DC Circuit acknowledged that an advertiser may lawfully 

disseminate a health related claim lacking robust substantiation, falling short of a randomized 

control trial, if the claim includes an effective disclaimer disclosing the limitations of the 

supporting research. 

The use of disclaimers in this context would also be consistent with the recent First Amendment 

decision in the Amarin case, where the Southern District of New York held that commercial 

speech disseminated by a prescription drug company may not be just restricted by the 

government, if claims were accompanied by appropriate disclaimers reflecting limitations on 

claim support. Thus the existing case law, and the clear trend in such cases, strongly suggest that

disclaimers would be more likely than other options to pass muster under the First Amendment. 

Of course, according to FTC precedent, disclaimers will need to be presented in a clear and 

conspicuous manner, easily legible to consumers. In some, both the statutory requirements and 

constitutional considerations strongly suggest that use of carefully crafted disclaimers in 

qualifying language would be the optimal solution for addressing concerns about promotional 

claims for homeopathic drugs. Such an approach would be consistent with congressional intent, 
FDA regulations, and FTC precedent, and would have the important benefit of adhering to the 

First Amendment's dictate that suppression of commercial speech should be a last resort. 

By utilizing carefully crafted disclaimers and qualifying language, the First Amendment right of 

companies to inform consumers, in advertising and promotion, regarding claims lawfully 

included on product labeling would not be infringed. Thank you. 

GREGORY FORTSCH: Thank you, Paul. I next want to ask Christina to speak. 

CHRISTINA SARCHIO: Thank you, Greg. Class action lawsuits can serve an important 

function in protecting consumers. And agencies, with great demand on their resources, 

sometimes rest a little easier knowing that consumers can enforce their rights through other 

vehicles. 

Unfortunately, that has not been the case here. Where lawsuits filed against the homeopathic 

industry have done nothing more than decrease competition in the marketplace, while providing 

little value to consumers. Good afternoon, my name is Christina Sarchio. 

I have been practicing law for 20 years, and in the past five years, I have seen a huge spike in the 

number of class action lawsuits filed against homeopathic companies, and the number of lawyers

that are attacking homeopathic companies and profiting from these lawsuits. In fact, in the five 

years past alone, 75 lawsuits have been filed against homeopathic companies in federal and state 

courts throughout the country. 

I have represented manufacturers and retailers in a dozen of these cases, and have seen firsthand 

the impact that litigation has had on companies and consumers. The financial impact on 

companies as a result of this litigation has been significant, and in some cases, devastating-- with 

litigation defense budgets quickly reaching seven figures, even before the parties have reached 

trial. Now the three cases that have gone to trial have been wins for homeopathy. In each of these 

three cases, which included two bench trials and one jury trial, plaintiffs failed to prove in court 

that the homeopathic claims were false and misleading. 

Most cases, however, never get to trial, with many of them either being dismissed or settled on a 

private basis. A handful of those cases have resulted in settlements, where homeopathic 

companies have volunteered to add disclaimers that plaintiff's lawyers have accepted and that 

judges have approved as adequate to address concerns of false advertising. 

So what has been the impact of this litigation on consumers? First, these cases have served to 

limit competition in the marketplace. Some homeopathic companies have stopped selling in the 

US altogether, while others have stopped selling their lower priced and lower selling products, 

because the cost of litigation is greater than their sales. 

In addition, retailers worried about suits, or the negative publicity of these suits, have reduced the 

number of homeopathic drugs they carry on their store shelves. Thus, the choices that consumers 

have are being limited-- and not because the court has ordered them off the shelf, or because 

there was any finding of wrongdoing. 
Second, because the majority of these cases are either dismissed or they settle on an individual 

basis, consumers mostly receive nothing at all from the lawsuits that are brought on their behalf. 

The individuals that bring these suits often have a familial or close connection to the lawyers that 

also bring these suits, and these folks quickly abandon their efforts to stop the, quote, offending 

conduct, for the want of $5,000 they can get in a private settlement, and the handsome fees their 

attorneys can get. 

Third, and the rare instance, a case survives dismissal or is certified by a judge, the settlement 

that follows typically yields very little value to consumers. A settlement usually provide 

reimbursement through a fund, but very few consumers actually get any money from it. In one 

lawsuit I was involved in, where the sales totaled $350,000 over a four-year period, the company 

spent over $1 million in litigation before deciding to settle. Less than 10% of the class members 

submitted requests for reimbursement, so at the end, consumers received about $33,000 from this 

settlement, while their lawyers received $750,000 in fees.

In another case I was involved in, we polled the consumers that submitted claim forms after 

settlement. 55 of those consumers went out and purchased either the same homeopathic product 

or a different homeopathic product, despite receiving money from the lawsuit that alleged that 

homeopathic products do not work as advertised. 

In conclusion, what I have seen is that the cost of litigation has been devastating to many 

companies-- typically small companies that are forced to defend their products. No plaintiff has 

been able to convince any judge or any jury at trial that these claims are false or misleading, and 

the consuming public has received little to no benefit from the class action cases brought on their 

behalf. Thank you. 

GREGORY FORTSCH: Thank you, Christina. David? 

DAVID SPANGLER: Good afternoon. I'm with the Consumer Healthcare Products Association, 

we represent manufacturers of OTC medicines-- both allopathic and homeopathic and dietary 

supplements. Thank you for having us here this afternoon. 

I'd like to make four points this afternoon. First, consumers want choice and control over their 

health. For instance, in a survey this year for CHPA by the market research firm, GS Strategy 

Group, they found that while three quarters of Americans agree they have sufficient choices in 

consumer health care products today, that same percentage would like to have even more options 

to treat their conditions. Four out of five respondents agreed that finding a product that works for 

them means they need multiple choices. 

Homeopathic products are one part of that spectrum of options of choices to help Americans 

address their everyday health care needs. That includes things like addressing cold symptoms, 

headaches, or heartburn. 

For another example, the National Health Information survey found that nearly three quarters of 

Americans have used complementary and alternative medicine, as CDC defines it. One small 

part of that, around 2.6%, is homeopathy. So repeating, it's a choice among many options. 
Second, yes, Section 5 of the FTC Act declaring unfair or deceptive acts or practices unlawful 

certainly applies the homeopathic product advertising, just as it would to other consumer health 

care product advertising-- or indeed, consumer advertising, in general. Third, well established 

and embedded within the prohibition against deceptive advertising is advertisers must have a 

reasonable basis for their claims-- or in other words, ads must be substantiated under the Pfizer 

factors, which take into account, as you know, the type of product, the type of claim, and the 

ease of developing substantiation for a claim. 

As I know this audience is well aware, the Pfizer factors approach to substantiation is a flexible 

standard that recognizes the amount of evidence required depends on what the advertiser has said 

about that evidence. In general, the commission has not attempted to use substantiation doctrine 

to prescribe specific tests as the basis for particular classes of ad claims. To suggest otherwise, as 

the August 2015 FTC staff comments to FDA on homeopathic product regulations seem to 

suggest, is overreaching. 

I say that because under the approach of the American Association of Homeopathic Pharmacists 

ad guidelines, homeopathic ads disclose the product is homeopathic, they can disclaim the 

product is not FDA reviewed, and they reference the support for their claims such as 

homeopathic literature. An ad following this approach is squarely within the Pfizer factors-- the 

type of claim ties to the strength of support. 

Fourth and finally, we would note that, going back decades-- and as Michelle Rusk noted--

there's been a clear delineation between FTC and FDA where, in the interest of clarity and 

efficiency, FDA has primary responsibility with respect to regulation of advertising of foods, 

drugs, devices, and cosmetics. And in the absence of an express agreement between the two 

agencies to the contrary, FDA exercises primary jurisdiction over all matters regulating the 

labeling of these products. 

We are reassured that today, we've heard from neither FTC nor FDA, a suggestion that there's 

some basis to change this longstanding, widely understood agreement. 

GREGORY FORTSCH: Thank you, David. Antonio? 

ANTONIO VOZZOLO: Good afternoon. I'd like to thank the FTC for holding this panel today. 

Appreciate the invitation to come speak today. 

I'd like to read off a couple of pretty interesting and noteworthy statements. "Many companies 

simply use regulation of homeopathic medicine as a cheap license to sell whatever they wish. 

Since the FDA in the United States, like many regulatory agencies, is underfunded, and since the 

public safety impact of enforcement of homeopathic regulation is seen as a low priority, there are 

no bodies in the streets, the FDA frequently does not enforce its own regulations, let alone those 

of the HoPUS-- HPCUS. 

The results are that the US has become the victim of numerous so-called homeopathic medicines, 

which received big ad dollars but no clinical testing. Manufacturers have an obligation to 

customers to provide products that work." 
Now this statement is not a statement from a class action attorney. The statement is not from a 

consumer advocate. This is from a prominent CEO of one of the major homeopathic 

manufactures in this country. And the statement was made in 2001. 

So the question you have to ask-- what has occurred between 2001 and 2015? And that's why I 

thank the FTC for holding this panel, because there's obviously an issue with the marketing of 

homeopathic products in this country. 

What I've heard today are anecdotal evidence about surveys, about how customer satisfaction is 

somehow tantamount to efficacy. Somehow customer satisfaction implies that products work. 

Product placement implies efficacy-- you need to walk into these grocery stores, these 

pharmacies, and look at the actual packaging. There are efficacy claims made right on a 

packaging. 

This is not simply packaging placed next to other OTC products. The deceptive and misleading 

advertising is actually on the packaging-- representations that these products are effective, that 

these products are fast acting, that these products work quickly. 

And I'd like to point back to that last statement-- there's an obligation to provide truthful and 

accurate statements. Manufactures have an obligation to provide products that work. And this is 

the benefit of class actions. I thank Mrs. Sarchio for providing a wonderful interpretation of class 

action benefits that have occurred to date. 

But the class action device is very powerful, particularly in this instance where there seems to 

have been a lack of action on behalf of numerous parties. And the value of class action litigation 

provides multiple benefits-- including deterrence effects; reimbursement and refunds to 

consumers; many of these settlements have provided monetary relief to class members-- they've 

received full reimbursement of the purchase price of their product; there have been funds made 

at anywhere between $1 dollars and $5 million for some of the smaller cases, which does not 

revert back to defending the homeopathic manufacture-- this is hard, real money for consumers 

to get back. 

Now the problem with the amount of claims has to do with the way the products are marketed. 

These products are sold in pharmacies. There is a claims made process where people have to 

submit claim forms. It's just a function of the system. Has nothing to do with the efficacy or 

value of class action litigation. 

The other benefits of class action litigation involve what I call injunctive relief-- or labeling 

changes. And we've gone through a litany of some of the labeling changes. FDA disclaimers has 

been mentioned as an important disclaimer. Although the regulatory body has claimed benefit of 

imposing the FDA disclaimer, that is a function of some of the lawsuits that have been filed early 

on. That was one of the proposals made by plaintiffs class action attorneys on how to address 

some of the misleading advertising. 

Some of the other injunctive aspects that have been proposed in class action settlements include 

dilution disclaimers-- explaining what these dilution formulas on a product packaging, what they 
mean, and how to provide that information to consumers so they could make a reasonable and 

informed decision. There also have been the CPG disclaimer, where they place a link to the FDA 

Compliance Policy Guidelines, Section 400 400. 

And also there have been proposed efficacy disclaimers, where defendants agreed not to use the 

words "clinically proven," "proven effective," or similar words unless at least two clinical trials 

have been performed by independent researchers, using random clinical trials to establish 

efficacy. I think that's all I have to say. I know we have limited duration. 

GREGORY FORTSCH: OK, thank you, Antonio. And last, but not least, Kat Dunnigan from the 

NAD. 

KATHLEEN DUNNIGAN: Hi, and hi over there. I came from New York this morning, and at 

4:00 AM as I was headed out, I peeked into my kid's room and immediately my two-year-old 

said, "I'm awake! Yay!" Which is both adorable and unfortunate. 

But so I say to you, in a similar vein, at the end of this long panel, I'm the last one! Yay! And so 

just to get right to it-- if there's one thing I would want you to take away from anything I have to 

say today is that at NAD, the National Advertising Division, if you want to make health-related 

performance claims about your homeopathic product, then you must have competent and reliable 

scientific evidence to support those claims. And just so we're on the same page, I'm also 

including claims that appear on the label. 

And just a quick background about NAD, the National Advertising Division, we are one of 

several forums an advertiser can find themselves in, be it legal, regulatory, self-regulatory--

where an advertiser will be called upon to provide a basis for their claims. NAD is a selfregulatory forum where competitors challenge the truthfulness and accuracy of one another's 

advertising. 

We also have a monitoring program were reach out and ask advertisers to send a substantiation 

for their claims. We do this in industries where competitors tend not to challenge one another--

the cosmetics industry, dietary supplements, and homeopathy. Especially with regard to 

homeopathic products, the types of claims we see over and over again are health claims. 

And so just to call a few examples from prior cases-- prevents acne, clinically proven to reduce 

the duration of your cold, or, more seriously, to relieve symptoms of ADHD in children. These 

claims, and others like them, should be supported by competent and reliable scientific evidence. 

And just to say it again, the best being randomized, placebo controlled trials that are statistically 

significant to the 95% confidence level. There should also be evidence that the treatment effect is 

large enough to be meaningful to consumers, and that isn't always the same thing as statistical 

significance. 

While NAD makes determinations on a case by case basis, generally speaking, the product of a 

presence active ingredient or ingredients and documents produced by the HPUS or the in a 

materia medica are not sufficient-- they are insufficient, not good enough to provide a reasonable 

basis for health related performance claims. Also, generally speaking, homeopathic provings, in 
vitro studies, and animal studies are also not considered, on their own, to be competent, reliable 

scientific evidence. 

And to understand why this is, you have to go back to the very beginning of claim analysis. And 

the first question we ask ourselves is what are the messages reasonably conveyed by this 

advertising? The types of messages conveyed drive the level of evidence required. And so if 

you're going to implicitly or explicitly say that your product has a specific effect on human 

health-- and I think we need to take a moment to just acknowledge that these claims can be very 

powerful, and have the potential to touch upon real fears and vulnerabilities in people's lives--

well if you're going to make that type of claim, consumers are reasonable in assuming that you 

have tested the product out on humans. 

And at the present time-- and admittedly painting with a broad brush across different health 

fields-- scientists concur that the most reliable way to do this is to gather a sample population of 

people that look a lot like the people you're advertising to, and to have clinical endpoints that are 

clearly defined. Test your ingredient or product against a placebo, and then conduct a statistical 

analysis to make sure that what you're seeing is due to the intervention, and not just due to 

random chance. 

I don't mean to sound so grim. I'm certainly not saying that in the absence of this evidence there 

are no claims to be made. And as also has been said before me many times, traditionally, use 

types of claims are popular in this field, and are generally approvable as long as they're narrowly 

tailored to not imply that they've been clinically tested for efficacy. 

So in conclusion, the types of messages conveyed drive the level of evidence required. At NAD, 

it doesn't matter who you are. If you're an aspirin manufacturer, or dietary supplements, or 

homeopathy, what we look at are the messages conveyed, and the fit of the evidence to those 

messages. And so regardless of what product category you find yourself in, if you want to make 

health related performance claims, then the level of evidence is competent and reliable. 

Thank you. And thank you, FTC, for having this panel and for having me today. 

GREGORY FORTSCH: So thank you for all your opening remarks. And again, thank you for 

participating. We're going to now go into a number of different questions that are raised by the 

FTC, including issues that have come up earlier today. 

Now, as commissioner Ohlhausen said in her opening remarks-- and I would reiterate, and I 

think it's pretty clear at this point-- our workshop today is not about the practice of homeopathic 

medicine. It's about the advertising of products that are marked as homeopathic, or are 

homeopathic. And we also are here to talk about the FTC. 

But it's hard to talk about this issue without talking about the FDA, because as we pointed out a 

number of times today, and in our remarks, comments that we filed with FDA, we work very 

well and very collaboratively with the FDA, because we have common interests in protecting the 

American public. And so my first question I want to direct to Elaine Lippmann from the FDA. 
There's a few questions, but the first one is-- and I think you covered this a little bit in your 

opening remarks, but maybe a little more elaboration, if you can-- on why is the FDA 

reexamining its regulatory framework right now? 

ELAINE LIPPMANN: Yes, so as I stated in my opening remarks, our current policy has been in 

place for about 25 years-- during which time, the homeopathic industry has grown significantly. 

So we're gathering information about whether it's the right time to adjust the current enforcement 

policies to better reflects the variety, the volume, and complexity of the homeopathic products 

that are on the market today. 

In addition to the industry's significant growth, there have been some emerging safety, quality, 

and policy concerns that we've become aware of in recent years. For instance, there's a common 

misconception that homeopathic products are necessarily safe because they're natural. 

Unfortunately, FDA has become aware of some safety issues associated with some of these 

products, which demonstrates that the safety of these products depends upon a multitude of 

variables, just as it does with all drug products. Things like how much ingredient there is, 

manufacturing quality, that sort of thing. 

So for all these reasons, FDA is taking another look, gathering stakeholder input, and 

determining the best way to regulate these products. 

GREGORY FORTSCH: So Elaine, I think another question I had for you was-- which I think 

would be helpful to make a distinction, if you can, and I'm sure it's complicated, of course-- but 

what is FDA's regulatory enforcement approach to other non-homeopathic marketed, unapproved 

drugs. To provide a contrast between homeopathic and non-homeopathic. 

ELAINE LIPPMANN: Sure. First, let me step back and explain that any new drug requires 

approval by the FDA before it can be marketed in the US. And this is true whether it's 

prescription or over-the-counter. Now some new drugs are marketed without FDA approval, and 

recognizing that we are not able to take immediate legal action against all illegally marketed 

products, we have to prioritize, figure out how to best use our resources. So we've had to 

prioritize our enforcement efforts with regard to drug products that require FDA approval but are 

marketed without it. 

And these priorities are spelled out in our FDA guidance called, Marketed Unapproved Drugs 

Compliance Policy Guide, which was issued in September of 2011. And FDA has other 

compliance policies in place, as well-- for example, the homeopathic CPG. But I want to just 

make clear that any drug product that requires FDA approval, but is marketed without it, is 

subject to FDA enforcement. 

GREGORY FORTSCH: And this could be a challenging question, but I'll ask anyway-- because 

I don't know how I would answer it. But what options is FDA considering? 

ELAINE LIPPMANN: Yes, it is a challenging question, and I'll answer with kind of a nonanswer which is that we're still considering a range of options, and it's premature to discuss what 

we might do. We're still gathering feedback, we've gotten a lot of comments to our docket so far, 
and we recently reopened the docket-- so now it is open until November 9. And we encourage 

any interested person who has not already submitted comments to go ahead and do so. So we're 

getting a broad range of feedback, and will consider all of that information in determining the 

best way to regulate homeopathic products. 

GREGORY FORTSCH: So I honestly did not set up that question so that I could answer it 

myself, but we're also-- I would say the same thing for the FTC. We're really considering and 

looking at comments, listening to every single thing that's been said today, before we decide the 

path forward for us, as well. And so to turn more to the FTC, I wanted to ask my colleague 

Michelle a few questions. 

FTC consumer research suggests-- and I'm talking about, in part, the research that we reference 

in our comments that we filed with FDA in August-- FTC consumer research seems to suggest 

that there are a significant number of consumers who think homeopathic products have been 

tested for efficacy. Now, Al has different research which I look forward to reviewing, and I 

know there are differing opinions on this, but based on our agency's research, are consumers 

misled when that is not the case? 

MICHELLE RUSK: I think the answer to that is yes, clear and simple. If a claim that a product 

is effective to treat a certain condition carries with it the implied claim, the underlying claim, that 

the advertiser in fact has done the research to know that it's effective for that condition. And if 

they haven't done the research, and they don't know that it's effective, the claim's misleading. 

And we heard a lot of talk in the opening remarks about disclaimers as the way to fix that. And I 

have two thoughts about that. 

One is saying the FDA has not approved the product doesn't really address that issue of 

correcting consumers' understanding that the claim is substantiated, that there's quality science 

behind it. It corrects a different misperception which is that the FDA regulatory approach is the 

same as for other products. But it doesn't correct the misperception about there being science to 

back up the efficacy. 

The other thing I would say about disclaimers is that our research-- not just for homeopathics,

but over the years looking at things like qualified health claims for food products and 

supplements-- has shown us pretty vividly that it's very difficult to craft a disclaimer that really 

communicates there is no science to back up this claim. So I think we have to be careful when 

we think about disclaimers as a remedy in making sure that they really effectively correct the 

misperception. 

GREGORY FORTSCH: I suspect there might be others on the panel who have a question or 

comment on that. If not, I'll move on to the next question. Do the two people to my right want to-

-

AL LORMAN: I'll accept your invitation. We have more data on that, and we have not had an 

opportunity to fully digest it. Unfortunately the study that we commissioned exists at this point--

we have the raw data, but the analysis of the data is in draft form. But we did actually inquire 

about the level of understanding of what kind of support there is behind these claims, because we 
recognize that the FTC is looking at this. The initial data shows that consumers do recognize that 

there's a difference between that-- and as I cited-- between the level of data supporting allopathic 

products regulated by FDA, and homeopathic products. 

I'm not prepared to say more about that at this point. And it may well be that additional surveys 

are necessary to further elucidate that point, and we're perfectly happy to do that. 

GREGORY FORTSCH: Since we're on the topic of disclaimers, I have a question from the 

audience. For those who think disclaimers are an answer to the problem, how do you balance 

FDA's requirement of indications of use-- for example, cold or flu-- with an actually effective 

disclaimer, and how do you disclaim what the product is sold for? 

PAUL RUBIN: Well, I can start with that. So I think the issue really, I think, the best source of 

this is the FTC's guidance, the advertising guidance for dietary supplements for traditional use--

which I think All alluded to a few minutes ago. And in essence, yes, there's an indication for use 

that FDA requires companies to use, and they would include that on your label. But you can have 

a disclaimer that can go in many different directions. 

You've seen some that talk about FDA approval. You could see some that address the 

substantiation, from the principles of traditional homeopathic principles. You can see references 

to educational websites, with significant information. 

One of the problems I think we see, when we think about disclaimers, is that it is exceedingly 

difficult to have a comprehensive disclaimer explaining the depth of homeopathic regulation and 

how that contrasts to the OTC drug review, or NDA OTC drug products, in a disclaimer on a 

product or advertising. It'll be way too confusing. So from my perspective, I think the key is to 

signal consumers that there is a fundamental difference. And as long as consumers are signaled, 

and then they're armed now-- that fortunately we live in an era where via the internet and other 

sources you can obtain a tremendous amount of information. 

So I think the signaling effect is really what's critical for disclaimers. And I think there are many 

ways of getting there. But I don't think there's inherent tension between having an indication for 

use, and having some disclaimer addressing it. And I think that's consistent with the FTC's 

principles established in the traditional use guidance. 

GREGORY FORTSCH: Since we teased that question out a little bit after I initially asked that, I 

wanted to see if Michelle had a response to the--

MICHELLE RUSK: I do. As somebody who was very involved in the writing of the dietary 

supplement guides--

PAUL RUBIN: I spoke to you about it years ago. 

MICHELLE RUSK: Yes. I have noticed that it's one of those documents that can be quoted to 

support whatever you want, unfortunately, sometimes. But you are right that we do address 

traditional use medicines in the guidelines. But I think I want to make it very clear what the 
guidelines say about traditional use, because it's a very limited situation where we would 

consider it appropriate to talk about how something has been traditionally used. 

And what our guidelines say is that any discussion of traditional use also needs to clearly convey 

that the efficacy of the product has not been confirmed by research, and that traditional use 

doesn't establish that the product will achieve the claimed results. And that's a standard of-- does 

the consumer get those messages? One that it hasn't been backed by research, and that the fact 

that's it traditionally used doesn't mean it will have the claimed results. 

I think that's a pretty high standard. We're not saying-- and we wouldn't say under the First 

Amendment-- that under no circumstances could you communicate that effectively. But as I said 

before, I think it's very challenging to say, "traditional use for colds." We don't have any science, 

and traditional use doesn't mean it works for colds. I think that's a message that just-- there's a 

disconnect there that makes it very difficult for consumers to reconcile. 

The other thing our guideline says is that traditional use claims, even with that kind of very clear 

and strong disclaimer about efficacy, shouldn't be made for serious diseases. That at that point, 

the analysis shifts. And when you're talking about cancer, for instance, you really can't make a 

claim and just disclaim away the lack of science. 

PAUL RUBIN: Can I jump in, Greg? 

GREGORY FORTSCH: Yes, but quickly. 

PAUL RUBIN: Sure, I'll be very quick. So I agree with that last point, that was a very good 

segue, Michelle. Just to remind everyone that we're talking about OTC homeopathic drugs, 

which, pursuant to FDA rules, must be marketed for the treatment of a self-limiting condition 

amenable to self-diagnosis. And in the traditional used guidelines, I'll quote, it says, "The FTC in 

the determining the level of substantiation necessary to substantiate a claim, the FDA will assess, 

among other things, the consequences of a false claim." 

And I think in this context, that should be factored in. We're talking about things they basically 

are self-limiting. They go away on their own, they're OTC conditions. It's not cancer. These are 

not significant diseases. So I would respectfully submit that that should be factored into the 

analysis, as well. 

GREGORY FORTSCH: So as we have moved a little bit into the issue of substantiation, I want 

to ask the question. The science panel this morning talked a lot about substantiation, and I want 

to direct this to Al, initially, with questions from others, or comments from others, if there are 

any. 

Assuming the FTC required human clinical trials to substantiate treatment claims for over-thecounter homeopathic drugs, or determined that provings were not sufficient competent and 

reliable scientific evidence to substantiate such claims, what would be the effect on the OTC 

homeopathic drug industry? 
AL LORMAN: Well, first I would like to point out that requiring 2015 clinical trials for OTC 

homeopathic drugs would essentially be requiring a standard that was never required of 

allopathic OTC drugs during the OTC review-- when in fact, panels of experts largely relied on 

their own sophisticated medical expertise to decide which drugs would be recognized or 

generally recognized as safe and effective. It was never a two clinical trial requirement during 

the OTC drug review. And so you'd actually be requiring of us something that is not required of 

allopathic OTC drugs. 

Elaine mentioned that there are 7,000 homeopathic products registered with FDA. If each of 

them were to be the subject of two clinical trials, that's 14,000 clinical trials. This is where my 

math starts to break down. If each clinical trial costs roughly $1 million to conduct, I calculate 

that that's a commitment of $1.4 trillion for an industry whose annual sales, at retail, are slightly 

above $1 billion. 

Even if that money was available, I find it inconceivable that any regulatory agency would spend 

the time and energy to review 14,000 clinical trials. The practical effect of any kind of clinical 

trial requirement of that extensiveness is that-- assuming that you're just going to apply it to 

advertising, it means there's not going to be any advertising, basically. And that, therefore, 

consumers are going to be denied a way of knowing about the existence of these drugs, assuming 

they're still available under FDA's compliance policy guide. And so that the manufacturers then 

face a much more difficult task in presenting to consumers any information about these products. 

It seems to me that it's an unworkable requirement, given the number of homeopathic drugs. And 

I might add-- the price of homeopathic drugs. We're talking about products who, at retail, range 

from $3 to maybe $10. I mean, the clinical trial requirement that you're talking about today is 

essentially the clinical trial requirement required in new drug applications, where pharma is 

hoping to hit $1 billion a year sale. That's essentially what our entire industry does. 

GREGORY FORTSCH: I don't-- I know Michelle probably wants to comment on that, but I also 

wanted to ask Elaine if it's something that you can weigh in on. And particularly the OTC 

comments that Al mentioned initially. 

ELAINE LIPPMANN: Which? 

GREGORY FORTSCH: The extent to which so many OTC products are not subject to what 

we're asking homeopathic products to be subject to. 

ELAINE LIPPMANN: Well, like I said, any drug-- if you meet the definition of a new drug, you 

need to be established as safe and effective, whether it's through the OTC monograph or through 

an application, an NDA application. So as I said before, we have enforcement priorities that we 

articulate in any number of ways, but under the statute, all new drugs, in order to be marketed in 

the US, are required to be established safe and effective. 

Now, I'm not sure how any change in the FTC's requirement for substantiation-- I'm not sure 

how that would affect FDA's regulatory authority. I will say that the homeopathic CPG of the 

FDA is not intended to bind the FTC, or to impact its enforcement of its own statutory authority. 
It's merely an articulation of FDA's enforcement policies with regard to requirements of the 

FD&C Act. 

GREGORY FORTSCH: Michelle? 

MICHELLE RUSK: I'd like to respond to the statements Al made about what the effect would be 

on the industry, and what the cost of doing clinical studies are. First all, those 7,000 products-- I 

think we heard this morning, in terms of what's really in retail, it's more like 100 products, 

maybe 1,000 at most. More importantly, I think, nobody said today that you need to do $2 

million trials. 

And we regularly investigate companies in all kinds of product categories who are making 

similar claims to the homeopathic industry, claims about colds, claims about weight loss-- and 

the studies that are done are significantly less expensive than $1 million studies. And they are 

definitely financially feasible, given the profits the companies are making. 

PAUL RUBIN: May I respond? 

GREGORY FORTSCH: I actually want to-- we're limited in time, so I would love to have you 

respond, but we must keep moving. So one of the questions that I have for both Paul and David 

is about qualified claims. They can be difficult to communicate, and may not be commercially 

attractive. But what would a qualified claim for an over-the-counter homeopathic product look 

like? 

A qualified claim must communicate, unambiguously, that the evidence is non-conclusive, or 

that additional research is necessary. Something that we think might apply to a homeopathic 

product, or at least some of them. So I wanted to see if either of you had a response to that. I 

might start with David, and then go to Paul. 

DAVID SPANGLER: I think Paul already, earlier, talked about a lot of that when he was 

talking-- there are a lot of different ways to disclose and qualify. So I don't know that there's a 

magic bullet, and I don't know why, then, one would say that a qualified claim must 

unambiguously communicate that the evidence is inconclusive, or that additional research is 

necessary. It seems to me, your qualifier or your disclaimer is simply trying to make sure that 

you're getting across the context in which the claim is made-- be that a reference to a website, be 

that pointing out its traditional literature, or traditional use, or that it's based on homeopathic 

literature. But accurately characterizing what the claim is based on, as opposed to trying to 

communicate what it's not based on. 

PAUL RUBIN: And I think just to add to David's comments, which I agree with entirely, I think 

it's important to keep in mind the fact that FDA regulated products are very diverse. And if you 

want to delve into comprehensive disclaimers that address complex regulatory regimes are just 

not going to work. I mean, think about all the different products where that could be required--

you have class one devices, that are not reviewed or approved or cleared by FDA at all; class two 

medical devices that are cleared, but not approved, only deemed to be substantially equivalent to 

a lawfully marketed predicate-- do you have to make that disclosure and say, some of those cases 
there are no clinical studies, other cases there are? Do you really need to get into that level of 

detail? 

So I would, again, submit that I think the key is to signal to consumers. Even the OTC drug 

review we've been talking about, I mean, consumers don't appreciate that that's an ingredientbased review, not a product specific review. Those products, in general, have not been 

individually reviewed for safety and efficacy. They're deemed generally recognized as safe and 

effective, based on ingredients. 

So I think that based on all that, the key is to signal consumers that there is something unique and 

special about homeopathy, and that the claims are based on a very different standard. And I think 

there are many ways of accomplishing that. 

GREGORY FORTSCH: I'm going to beg the panel and the audience's indulgence-- I'd like to go 

on for a few more minutes. I have a few questions for Antonio and Christina and Kat, so if you 

wouldn't mind a few more minutes, I'm going to beg your indulgence for that. 

Kat, I had a question for you. Is the NAD requiring a level of substantiation that is not required 

by the Federal Trade Commission? 

KATHLEEN DUNNIGAN: The short answer is there doesn't seem to be any indication that 

NAD's approach to claim substantiation is at odds with the FTC's thinking on the matter. And 

then the slightly less short answer is that NAD has enjoyed, we're very privileged to enjoy, an 

open relationship with the FTC. And we know that if an advertiser chooses not to participate, or 

chooses not to comply with our recommendations, that when we send the referral to the Federal 

Trade Commission, that they will communicate with the advertiser and also then communicate 

the status of the referral, the results of that referral. 

And so there is a dialogue between these two institutions. And I think that if they were going in 

very separate directions, we would know. 

GREGORY FORTSCH: And so, I just had a couple questions for Antonio and Christina, who I 

hope will be friends after this panel today. 

[LAUGHTER] 

If they're not already friends. I have several questions, so I'll go back and forth on who I start 

with, or we'll let the discussion take its course. First, what has been the overall impact of class 

action litigation on the homeopathic industry? And I know, I think at least, Christina, you 

covered this, but I think you may have different answers to that question. So I'd like to hear both 

of you and your thoughts on that. 

ANTONIO VOZZOLO: Sure. I'm not sure it's actually had a significant impact on the marketing 

or activities of homeopathic companies. I am not aware of any companies that have gone out of 

business as a result of class action litigation. The class action lawsuits that have been brought so 

far have resulted in fairly small settlements. 
I think there's a misnomer, or a misunderstanding, about the types of, or the size of the 

manufacturers that sell these products in the US. They're very large manufacturers. They 

generate significant revenues, and you can tell that by the quality of the counsel that they hire. 

Every law suit I've seen has hired white shoe law firm to defend it. These are very expensive 

lawyers, they have significant funding. 

So I do not think it has had an impact whatsoever in the industry. 

GREGORY FORTSCH: Christina? 

CHRISTINA SARCHIO: So in 2014, the CEO of Heal announced in a press release, that's 

publicly available, that one of the major reasons that Heal was withdrawing from the North 

American market was quote, "the substantial cost of litigation." Want to make sure I got that 

right. At least two homeopathic companies have completely withdrawn from the US company, 

and I have seen homeopathic companies lay people off, not be able to invest in research and 

development-- and more importantly, not wanting to change or improve their advertising 

practices, or educational campaigns, for fear that if they change anything, then the plaintiff's 

lawyers will come in saying, ah-ha, you changed it because you admit you were doing something 

wrong. 

And so we're really at a standstill in improvements in the homeopathic industry, because 

litigation has chilled the desire of the companies to really reinvest in their product, and in 

educational campaigns. 

ANTONIO VOZZOLO: Greg, I'd just like to follow up on one point. You raise the fact that R & 

D for homeopathic companies-- and are you aware of homeopathic companies actually spending 

significant dollars on R & D for homeopathic products? Because I challenge you to say that 

statement. It is a complete fictitious answer. There is no such word as R & D in a homeopathic 

business. 

GREGORY FORTSCH: Well, I'm going to-- I now Al had a comment, and I did also have a 

couple more questions in the field before we close. Al? 

AL LORMAN: I just wanted to follow up on something Antonio said earlier about that the class 

actions lawsuits have contributed to the disclaimers that appear on labels and advertising. And in 

fact, the truth is just the opposite. The American Association of Homeopathic Pharmacists, long 

before the first of these cases was ever filed, was discussing ways to adopt a disclaimer program 

to provide additional information to consumers about the homeopathic nature of the products that 

we sell. And in fact, that effort basically stopped when the lawsuits were filed, precisely because 

we were concerned that were we to then adopt it, it would be cited against us in the lawsuits as 

proof that we knew we weren't adequately warning people before. 

So the reality is that an adequate disclaimer program would have been adopted many years ago, 

had there not been these class actions against the companies. 
ANTONIO VOZZOLO: Just one follow-up point, Greg-- it's just a well known concept in law 

that subsequent remedial measures are inadmissible in a court proceeding. So I take that with a 

grain of salt. 

GREGORY FORTSCH: Well, Christina and Antonio, in terms of settlements, some companies 

have agreed to include a disclaimer that the claims have not been approved by the FDA. How if, 

at all, does that disclaimer address the Federal Trade Commission's concern with adequate 

substantiation? And I'm going to ask Michelle to address that after you both provide answers. 

CHRISTINA SARCHIO: If I can jump in and start. So as you can see in litigation, we hotly 

debate each and every issue that comes up. And so when we get to the negotiation table, and talk 

about settlement and talk about disclaimers, the disclaimers that plaintiff's lawyers and defense 

lawyers have agreed to have been hotly contested. Where are we going to put the comma? Where 

are we going to put the period? Which letter is going to be capitalized? 

Each and every issue has been carefully vetted by the plaintiff's lawyers that are aggressively 

defending their client's interests. And we, on the homeopathic industry side, are carefully vetting 

to make sure that these disclaimers comply with all the federal rules and regulations that apply to 

the companies. And so once we finally agree to the language-- and not only do we agree to the 

language, but then we have to make sure that a judge approves it. 

And again, the judge doesn't just rubber stamp settlement agreements. I have been in many cases 

where at the final hearing, we are debating-- because there's an objector, or there's somebody 

that's coming in at the last minute trying to champion consumer rights, saying that, wait a 

minute, is this class action settlement fair and reasonable? And we have had to defend our 

position, and bring in experts, to support the disclaimers that, again, we have vigorously fought 

for and agreed to. 

And court after court has approved these disclaimers. In fact, I had a case that went all the way 

up to the Ninth Circuit Court of Appeals where a settlement was challenged, and one of the items 

that was challenged were whether the disclaimers were effective. And the Ninth Circuit Court of 

Appeals felt that the district court judge did his job in carefully evaluating the benefits to 

consumers, and the benefits of the settlement, and approved that settlement with the disclaiming 

language. 

ANTONIO VOZZOLO: I tend to agree with Ms. Sarchio, surprisingly, but I do think disclaimers 

are important. I think the whole goal behind consumer class actions and civil litigation is to 

provide the consumer with full information, accurate information, truthful information. And I 

think that is a critical step in at least providing that consumer with the necessary information. 

MICHELLE RUSK: OK, so I'll just reiterate one thing I said earlier about disclaimers, which I 

think-- to the extent we're talking about disclaimers, let's say, a homeopathic product has not 

been approved by FDA-- we still believe that that's not really getting at the issue that we're most 

concerned about, which is that consumers need to understand that the efficacy claim hasn't been 

established by accepted scientific procedure, meaning randomized, controlled trials. And this 

afternoon, or before the break, when we had this panel about the science, there seemed to be a lot 
of disagreement on a lot of different points. But when we narrowed it down to the specific issue 

of should there be randomized, controlled trials to support specific claims about specific 

products, I think there was very wide agreement that that was what was called for. 

So when there's not that level of evidence, that's really what the disclaimer needs to go to. And I 

want to go back to something that David mentioned about referring to a website as a way of 

letting consumers know what the evidence is-- under our policy, disclaimers have to be clear and 

prominent. They have to be put in a place where consumers are going to see them. They have to 

be worded in a way that consumers are going to understand. And you can't leave the important 

qualifying information in another place. It has to be close to the claim that you're qualifying. 

So any disclaimer that uses an approach of referring to a website, and putting the important 

qualifying information there, would not be acceptable under FTC law. 

GREGORY FORTSCH: So as much as I would like to go on longer-- and I do enjoy these sorts 

of things, since I'm a lawyer-- I think we do have to conclude. But the fortunately-- as I've 

mentioned, and I will mention once again-- we can accept your comments. We didn't get to take 

questions from the audience, that's even more important, of those who weren't able to get their 

comments or questions up here, to file them with us at ftc.gov on or before November 20. 

I want to thank so much the panelists on my panel today, and the panelist that served on the 

panels moderated by Mary Engle and Rich Cleland. I just have a couple of very quick 

housekeeping items, not nearly as long as the ones that I provided in the morning. 

First of all, on a non-substantive basis, security badges can be passed to the people at the desk on 

the way out. They do reuse them, so if you got one, please pass in one on the way out right 

outside the door. And I should also-- I can't fail to thank all of the people at the agency who work 

so hard to put on today's workshop, especially our dedicated division of Consumer and Business 

Education, my colleagues in my division, and managers, and our office of executive director, 

who organized the workshop so that everything was functioning. And most importantly, I just 

want to thank you so much for taking the time to come out today's workshop. And I will now 

adjourn the workshop. Thank you.