“Bogus Claims by Homeopathic Drug Makers Will Now Face Wrath of FTC.”
“A Rare Win for Science.”
You can always count on the media to sensationalize. What are these headlines about? How do they affect brands that offer homeopathic remedies? What, if anything, should these brands do? What caught the media’s attention was that in November of 2016, the FTC stepped up its requirements in relation to substantiation for homeopathic remedies.
A Little Background
The homeopathic industry has been under increased scrutiny following a number of class action lawsuits in the past few years against major players such as Boiron, Hylands, Nature’s Way, Boericke & Tafel and NatraBio.
And, in the last two years, two pivotal events occurred:
First, in 2015, the FDA held hearings and a public workshop on the homeopathic category. There the FTC made public comments expressing concerns that the existing FDA regulatory framework conflicted with the FTC’s advertising substantiation doctrine in ways that may have harmed consumers and created confusion in advertising. In research that the FTC conducted, they concluded that “many consumers may incorrectly believe these products are pre-approved by the FDA and tested on humans for efficacy. To add to this confusion, homeopathic products are placed side-by-side in retail stores throughout the United States next to products that are actually pre-approved by the FDA and tested on humans for efficacy. Finally, homeopathic product labels are confusing and do not conform with conventional product labeling. A consumer’s choice to use homeopathic medicine based on the above factors could cause harm. The FTC staff believes that the FDA should take these factors into consideration in its review of the regulatory framework for homeopathic products.”
Second, in the absence of revised FDA guidance or regulations, the FTC has stepped up its own requirements in the enforcement policy statement it just released in November 2016. Makers of over-the-counter (OTC) homeopathic drugs and products that claim to cure or treat ailments will now have to (in the absence of substantiation by competent and reliable scientific evidence) clearly disclose in their advertisements and labeling that: 1) there is no scientific evidence that the product works, and 2) the product’s claims are based only on theories of homeopathy from the 1700s that are not accepted by most modern medical experts. Reaction of the media to this enforcement policy statement was swift, with headlines proclaiming things like, “Bogus Claims by Homeopathic Drug Makers Will Now Face Wrath of FTC” and “A Rare Win for Science.”
Are the New FTC Requirements a Scarlet Letter for Homeopathic Brands?
The FTC statements are pretty harsh at their face value. Unless your brand has conducted clinical studies that provide scientific evidence of the product’s efficacy, you need to place, in essence, a scarlet letter on your package and marketing that paints your product as snake oil. And we’re not talking about a small disclaimer that dietary supplements are required to make under DSHEA — the FTC says that this disclosure should stand out, be in close proximity to the efficacy message, and perhaps even be incorporated into the efficacy message itself. They also suggest that there may be an inherent contradiction in telling consumers that a product is for “cold and flu” while at the same time saying that there is no scientific evidence for the product’s efficacy against cold and flu.
This is a pretty big can of worms to sort through, and no doubt you are working with your regulatory council to determine any action to be taken.
I spoke to my colleague, attorney Ashish Talati, partner at Amin Talati Upadhye, a respected FDA regulatory council to many companies in the space. He says, “If homeopathic companies disagree with the FTC, they will take their chances on it and not take any action. Many will reluctantly take action by having some form of disclaimer with the FTC-recommended language within something similar to the DSHEA disclaimer box, and be able to say they have met the requirements of FTC. However, some won’t find the FTC recommendations egregious at all — one of our clients updated their labeling the next day, and they were okay with it because they believe that their customer base doesn’t really care.”
The Homeopathic Customer Base
The homeopathic participant ranges in awareness: from high involvement and total belief in the efficacy of homeopathy, to not being aware that what they purchased is actually homeopathic.
I would categorize myself in the high involvement end of the spectrum. From a personal standpoint, my family has had Dana Ullman’s seminal homeopathic guidebooks on our bookshelf since our children were babies. My entire family has used homeopathy for decades — from stalwarts like Boiron, to more esoteric anthroposophic remedies from WALA (influenced by Rudolph Steiner, the founder of Biodynamic farming and Waldorf education), to our chiropractor/clinical nutritionist’s own line of homeopathic seed and mineral remedies that operate on multiple genetic, physical, emotional and spiritual levels.
From a business perspective, Pure Branding developed the breakthrough “Tough to Pronounce, Even Tougher on Your Flu” campaign for Boiron’s flagship Oscillococcinum brand.
The other end of the spectrum of homeopathic involvement are those who see a drug claim on the packaging and look at those as reasons for purchase. They have little to no understanding of what homeopathy is or how it works.
There are three major channels through which homeopathic remedies can be bought that I’m going to focus on today: FDM, the natural channel, and the professional channel. Because this new FTC enforcement policy impacts each differently, I am going to suggest brand communication approaches for each.
1. FDM Homeopathic Brands
If you’re one of the brands that has penetrated into Food, Drug and Mass, count yourself lucky that for decades you’ve been able to mimic OTC drug claims and positioning for your products in channels that are more skeptical of natural products. Being able to make a disease claim has been a powerful tool for consumer communication, and something that dietary supplement companies have been envious of you for. You’ve done a good job getting your products on shelf with their conventional OTC counterparts because they look and sound like those counterparts. You’ve harnessed the conventional consumer’s desire for easy-to-understand efficacy with a safe and natural slant — a more “natural” version of OTC.
But my argument here is that what you’ve actually built are icon products — not brands. A brand is something that stands for something beyond its usage and connects more deeply with its participants, and most of you have built your brands around usage.
Given the potential new language requirements that may diminish your consumer’s trust in homeopathy (especially those on the far end of the spectrum who don’t really know what homeopathy is), will their purchase intent remain the same for a product now called “Cold & Flu: No Scientific Evidence?” Now is the time to start building your brand meaning: What do you stand for? Who are you and what are you creating in the world? Why are you doing it?
You need to do this not only for the consumer, but also for your FDM retailers, because they will need reassurance that your products are not going to cause confusion or alienation among their customer base.
2. Natural Channel Homeopathic Brands
The view is different from your window. Homeopathic brands that are distributed mainly in natural chains and independents and are now forced to contend with this new denigrating language have a great opportunity to align around the philosophy that perhaps the FDA and government do not know what is best for them.
Natural channel consumers are more skeptical of government bodies interfering in their healthcare journies. You have an opportunity to build a much fuller backstory of the history of homeopathy into your brand and how you are bringing this storied medicine from the 19th century into 21st century relevance. Natural channel consumers are already predisposed to be on your side, to believe in what you believe, and want to have a two-way relationship with you. Be transparent with them about the new FTC policy statements and what they mean for you. Explain to them the prohibitive cost of clinical research and how you rely on clinical experience rather than research. Be open and willing to take risks. Your consumers will respect you for it.
3. Practitioner Channel Homeopathic Brands
This FTC requirement should have little to no effect for homeopathic brands that sell only through complementary and alternative practitioners and integrative physicians. As I mentioned in my earlier blog post about direct-to-practitioner companies, patients don’t evaluate practitioner brands. You only need worry about your real customer: the practitioner or physician, and they know all about homeopathy. They’ve studied it and they certainly don’t worry about the new FTC requirement. When it comes to homeopathy, they’ve weathered far more rough and skeptical waters. So continue to support their efforts, and if anything, be even more confident in the value of your brand.
Think homeopathically. Treat this challenge through the lens of “like cures like” — the medicine must have the capability of producing symptoms similar to the ailment’s in order to be cured in a healthy person.
The FTC is challenging you for substantiation and clarity. To produce symptoms of substantiation and clarity, your medicine needs to be as transparent as possible. That is how you’ll have a healthy brand expression, despite what may feel like this new regulatory affliction to your business.