Marketers Wait in Vain for Feds to Act on Regulation

CPG and Pharma Firms Seek Regulatory Guidance

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Marketers are prone to complain about too much regulation, but sometimes too little is just as painful.

Regulatory silence on the definition of "natural" and precise rules for pharmaceutical brands to operate in social media have left marketers facing an onslaught of civil litigation in the former case, and the risk of regulatory penalties for violating rules that don't clearly exist in the latter.

FTC and FDA have refused to define
FTC and FDA have refused to define "natural," leaving marketers open to suits.

Despite years of pleas for guidance, the Food and Drug Administration and Federal Trade Commission are likely to keep letting marketers figure things out for themselves.

Plaintiffs and trial lawyers have been happy to step into the regulatory void regarding "natural" claims. They've filed at least 14 lawsuits alleging deceptive use of the word in recent years against packaged-goods marketers ranging from Unilever's Ben & Jerry to PepsiCo's SoBe, Sun Chips and Tostitos and, most recently, Johnson & Johnson's Aveeno.

"The lack of clarity from regulators has contributed to a free-for-all, where marketers treat "natural' differently, with some being pretty aggressive and others being much more conservative," said Terri Seligman, attorney with Frankfurt Kurnit in New York.

Not even the courts are providing much guidance, in part because some cases have been settled out of court. Unilever last year agreed to pay $7.5 million into restitution funds for customers of Ben & Jerry and Breyers and to stop using the phrase "all natural" on products that contain alkalized cocoa. Other cases have been dismissed on grounds that didn't touch on the definition of "natural," and most are still pending.

But all the litigation does appear to be having one effect. Last year, only 16.1% of new food, beverage, household and personal-care products carried some form of "natural" claim, according to Datamonitor, down from 24.3% a year earlier and 28.5% in 2009.

The FDA solicited comments about a proposed rule defining "natural" in 1991 but decided against it, citing resource limitations and other priorities. The FDA also rejected petitions from the Sugar Association and Sara Lee to define the word in 2007. When a federal court in New Jersey in 2010 again asked the FDA for guidance, the agency said it would take two to three years for proper public participation in the process and said it had more-pressing concerns.

The FTC hasn't been much help either. Many marketers asked for a definition of "natural" before that agency issued its updated Green Guides last year. But the FDA declined.

Pharmaceutical marketers have had a little more luck getting guidance from the FDA regarding use of digital and social media in marketing. The FDA last year issued formal guidance on how marketers should respond to public and private electronic inquiries about unapproved off-label uses of drugs.

Left unanswered are questions about how to talk about prescription drugs or medical devices broadly in social media or even digital display, said Stuart Friedel, an attorney with Davis & Gilbert in New York.

The FDA's general guidance has been for social media and other digital advertising to be treated the same as other advertising -- with full disclosure. Try tucking a drug-disclosure statement into a tweet.

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