On January 26, 2015, the Federal Trade Commission filed a complaint in federal court against Texas-based Genesis Today, Inc., a marketer of dietary supplements; its branding subsidiary, Pure Health LLC; and its founder and CEO, Dr. Lindsay Duncan.

During the Fall of 2014, the defendants and the FTC agreed upon the terms of a settlement that forms the basis of the government’s prayer for relief. The resolution of this case may shed light on the direction of FTC enforcement activities. See FTC Press Release: Marketer Who Promoted a Green Coffee Bean Weight-Loss Supplement Agrees to Settle FTC Charges (Jan. 26, 2015).

The complaint cites the “Oz Effect”

Genesis made a product whose principal ingredient was Green Coffee Bean Extract (GCBE) and positioned it as a weight loss supplement. Genesis also offered a product containing black raspberry extract and sold it as a “cancer-fighting supplement.”

In its complaint, the FTC alleges that the defendants’ marketing plan involved retaining a public relations firm to book Genesis founder, Dr. Duncan, on a variety of day-time television shows such as “The View” and the “Dr. Oz Show.” Once on the show, Dr. Duncan would be able to message “tens of millions of female shoppers.” See Complaint, Federal Trade Comm. v. Genesis Today, Inc., et al., Case No. 1:15-cv-62 (W.D. Tex.).

According to the FTC, the defendants were attempting to capitalize on the so-called “Oz effect,” articulated as the “phenomenon where discussion of a product ingredient on the “Dr. Oz Show” causes a large increase in demand for products containing the ingredient. Id. at 6. On each show, Dr. Oz would announce the “breaking news” that “a miracle pill” had been developed and then Dr. Duncan—described as a leading nutrition expert—would discuss the operative ingredient without mentioning a product or disclosing the fact that he represented a company that made products with those ingredients. Id. at 4.

Once the show was taped, the defendants would establish a website for the relevant product and then purchase numerous Google AdWords aimed at directing inquiry traffic to their website. In addition, they would set up microsites which contained related keywords and meta-tags all linked to defendants’ real site, ensuring the highest ranked response to any search inquiry. Prior to airing, they would then inform the Dr. Oz producers of how consumers could get the product.

The establishment claim

According to the FTC, the defendants also sought out traditional retailers promising them “the Oz Effect on steroids.” Id. at 11. At venues like Walmart and Sam’s Club, point of sale displays allegedly touted a “‘published clinical study’ in which subjects lost an average of 17 pounds and 16% total body fat.” Id. at 14.

According to the FTC, the study was structurally flawed and facially unreliable. As an example, the FTC cites the fact that in the study almost 11 pounds of the 17 pound weight loss occurred when the participant was taking neither GCBE or the placebo.

FTC enforcement

Under the terms of the settlement, the defendants have agreed to pay US$9 million but do not admit to any of the FTC’s allegations. In addition to the payment, the defendants are enjoined from making any weight loss or cancer-fighting claims or, indeed, any health benefit or efficacy claims that are not supported by competent and reliable scientific evidence. See FTC v Genesis, Stipulated Judgment (Jan. 27, 2015).

As has been common in FTC consent decrees involving dietary supplements since at least 2010, the FTC specified that for a weight loss claims, this evidence must consist of:

at least two adequate and well-controlled human clinical studies …  conducted by different researchers, independently of each other, that conform to acceptable designs and protocols and whose results, when considered in light of the entire body of relevant and reliable scientific evidence, are sufficient to substantiate that the representation is true. Id. at 7.

The FTC’s recent move toward imposing more rigorous substantiation requirements on food and supplement advertising has been often been criticized as an unwarranted attempt by the FTC to hold food and supplement suppliers to the same standards applicable to pharmaceutical suppliers. Indeed on Friday, the US Court of Appeals for the DC Circuit found that in the case of advertising claims made by pomegranate juice maker POM Wonderful, the FTC went too far in requiring two human clinical trial studies to support any health claims in advertising. The court held that the FTC had failed to adequately justify “an across the board two-‘randomized and controlled human clinical trial’ requirement for all disease claims by petitioners.”

What about Dr. Oz?

The FTC did not name Dr. Oz as a party in this matter. He would presumably have broader First Amendment protections as an individual speaker than would Genesis as a commercial speaker. Still, in June 2014, a US Senate committee called Dr. Oz to testify concerning five different “miracle pills” he had touted for weight loss.

In addition to GCBE, the ingredients in these products included Raspberry Ketone, African Mango, Saffron Extract, and Garcinia Cambogia extract. When Senator McCaskill challenged Dr. Oz, he acknowledged his use of “flowery language” as a tool to motivate his audience to lose weight, and added “I recognize that, oftentimes, they don’t have the scientific muster to present as fact.” View Senate Hearing videoclip with Dr. Oz.

Sources: Federal Trade Commission v. Genesis Today, Inc., et al., Case No. 1:15-cv-62 (W.D. Tex.); B. Gholipour, “Dr. Oz’s ‘Miracle’ Diet Pills: 6 Controversial Supplements”, posted on LiveScience (June 18, 2014); J. Christensen, J. Wilson, “Congressional hearing investigates Dr. Oz ‘miracle’ weight loss claims,” posted on CNN (June 19, 2014)