Who Regulates Your Product Labels?

Does the U.S. Food and Drug Administration (FDA) regulate homeopathic product labels? Or does the U.S. Federal Trade Commission (FTC)? Is it both? While most members of the homeopathic industry have long understood that the FDA is responsible for over-the-counter (OTC) drug labels and labeling and the FTC is responsible for OTC drug advertising, the November 2016 release of the FTC’s guidance on homeopathic drug marketing claims has muddied the water. The historic division of labor between the FDA and the FTC is, in fact, largely a result of inter-agency agreements rather than black letter law.

While the FTC guidance never uses the word “label,” the trade press has quoted an FTC attorney as explaining that the FTC views its guidance on “marketing claims” for homeopathic drugs as covering labels as well as advertising. (That guidance, you’ll recall, claims that there is no modern science to support claims for homeopathic drugs and that only a very strongly worded label and advertising disclaimer could prevent consumer deception.)

Section 5(a) of the Federal Trade Commission Act (FTC Act) provides that “unfair or deceptive acts or practices in or affecting commerce…are…declared unlawful” (15 U.S.C. § 45(a)(1)). “Unfair” practices are defined as those that “cause[] or [are] likely to cause substantial injury to consumers which is not reasonably avoidable by consumers themselves and not outweighed by countervailing benefits to consumers or to competition” (15 U.S.C. § 45(n)). Section 12 of the FTC Act prohibits the false advertisement of “food, drugs, devices, services, or cosmetics” (15 U.S.C. § 52).

Because FDA has broad jurisdiction over drug labels, it was perhaps inevitable that confusion between the two agencies would arise. The solution was to adopt a Memorandum of Understanding (MOU) over how the two agencies would exercise jurisdiction. The first version was adopted in 1954. The current version, adopted in 1971, provides that, “in the absence of express agreement between the two agencies to the contrary,” the FDA will exercise primary jurisdiction over “all matters relating to the labeling of . . . drugs” while the FTC has primary jurisdiction over “all matters relating to the truth or falsity of advertising of . . . [OTC] drugs . . . .”[1]

While the MOU would seem to clearly require the FTC to obtain “express agreement” to impose any requirement on OTC homeopathic product labels, the MOU does not provide any procedure to let the public know whether or not that approval was obtained. So, for the moment, we don’t know if the FDA has approved the FTC’s actions. Also, it is not clear if there is a remedy (short of litigation) if the FTC did not obtain FDA permission.

[1] The Memorandum of Understanding also covers other products regulated by FDA.