Medifast Agrees to Settle Advertising Dispute with FTC

Oct 01, 2012   

On September 10, 2012, the Federal Trade Commission (“FTC“) announced that Jason Pharmaceuticals, Inc. (“Jason”), a subsidiary of Medifast, Inc. and the makers of Medifast weight loss meal replacement products, agreed to pay $3.7 million to settle charges for allegedly violating a 1992 Consent Decree regarding weight loss claims. This enforcement action is part of the FTCs ongoing effort to make sure that companies comply with FTC consent decrees, and the Commissions crackdown on what it deems to be deceptive and misleading health claims.

According to its Complaint, the FTC alleges that since at least November 2009, Jason violated the FTCs 1992 Consent Decree by making unsubstantiated weight loss claims in advertisements in violation of Sections 5(a) and 12 of the FTC Act, 15 U.S.C. §§ 45(a) and 52. The Complaint also alleges that consumer testimonials in Jasons advertisements conveyed unsubstantiated claims that Medifast products resulted in weight loss of 2 to 5 pounds per week.

The 1992 Consent Decree specifies that Jason must possess “competent and reliable scientific evidence” in order to substantiate heath claims. “Competent and reliable scientific evidence” is defined as “tests, analyses, research, studies, surveys or other evidence conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted in the relevant profession or science to yield accurate and reliable results.”  However, the newly entered 2012 Consent Decree redefines “competent and reliable scientific evidence” as “one [a]dequate and well-controlled human clinical study” of a “low calorie meal replacement program . . . designed to lower the users total caloric intake” that follows “acceptable designs and protocols” or a protocol “satisfying all of the criteria.”  The criteria require 16-week clinical studies for weight loss claims, and 52-week clinical studies to support any claims related to weight maintenance.

As we have previously reported (here, here, and here), over the past several years the FTC has attempted to employ and enforce a heightened level of substantiation for health related claims through consent decrees. In litigation with companies such as Garden of Life, The Dannon Company, Nestle HealthCare, Iovate Health Sciences and POM Wonderful, the FTC has sought to enforce the definition of “competent and reliable scientific evidence” to require “two adequate and well-controlled human clinical studies for all absolute or comparative claims” and FDA approval for all “disease treatment and cure claims.”

Conversely, the new requirements for substantiation contained in the Jason consent decree mandate one, not two, adequate and well-controlled human clinical studies. This change may be due to the recent trend of courts disagreeing with the FTCs attempts to redefine and enforce a heightened level of substantiation requiring two adequate and well-controlled human clinical studies for health related claims.  As we previously reported, the Garden of Life decision is one example. In FTC v. Garden of Life, the FTC sought to modify a previous consent decree by changing the definition of “competent and reliable scientific evidence” to require “two adequate and well-controlled human clinical studies for all absolute or comparative claims” and FDA approval for disease claims. In rejecting the FTCs position, the Court stated that competent and reliable evidence does not mean “uncontroverted proof.”

For more information on FTC regulations and substantiation requirements, or on how to ensure that your business maintains regulatory compliance at both the state and federal levels, please contact us at contact@fidjlaw.com.