FTC Warning Letters: The Unfortunate Reality of an Entrepreneurial Healthcare Profession

NODE SMITH, ND

Many naturopathic doctors, in their yearning to support our communities and promote wellness during the COVID-19 pandemic, have discovered that their marketing language often conflicts with Federal Trade Commission mandates.

The Federal Trade Commission (FTC) and the US Food & Drug Administration (FDA) have been extremely clear that “companies allegedly selling unapproved products that may violate federal law by making deceptive or scientifically unsupported claims about their ability to treat coronavirus (COVID-19)” will not be tolerated.¹This has caused many natural health companies and practitioners to receive warning letters regarding online marketing claims. Since March 9, 2020, the FTC/FDA has issued over 180 warning letters.¹^,2^,3

Presumption of Guilt

Many of these warning letters refer to language wittingly or unwittingly used by companies and practitioners that may not be directly claiming to have “cures or treatments” for COVID-19 or to directly “prevent” the disease, but which still connects certain treatments to COVID-19 for monetary benefit. Due to the FDA’s firm claims that there is currently absolutely no known treatment, prevention, or cure for COVID-19, any marketing that insinuates or implies otherwise is suspect to scrutiny and at risk for authoritative action.

Many of the warning letters issued have been to companies that have indeed made bold marketing claims, directly claiming curative or preventative benefits of their products. However, a handful of practitioners and clinics have received letters that were issued based on language that focuses on enhancing immunity and/or research studies currently being conducted in other countries. Because of this, naturopathic organizations are urging members to be aware of the risk that comes with marketing, to adhere to association recommendations, and to not find “loop-holes” in language. Anything that implies treatment or curative benefit runs a risk of getting flagged – this is simply the current state of our situation.

I recently discussed this issue with Paul Anderson, NMD, a naturopathic doctor and scientist who has worked with numerous clinics regarding their interactions with regulatory authorities including the FTC. He said that a lot of people in these situations have a “presumption of innocence, as typically found in the criminal court system, where you’re innocent until proven guilty, but with regulatory agencies, it works the opposite way. Even if you are right, you are wrong until you can prove you are innocent. And you have to go through the effort to do so. Logistically, you are wrong until your day in court – which may be physically in a hearing or via written response.”

Dr Anderson points out that these “warning letters” are federal charges, where the FTC alleges that you have broken standing rules. The process usually involves a period of time during which the recipient of the letter would supply research and documentation to substantiate the validity of their claims. Following this, the FTC would conduct a hearing, after which a ruling would be handed down. Under the current pressures of the COVID-19 situation, the FTC is working alongside the FDA, and this process is not being adhered to in quite the same way; repercussions are being realized before hearings are finished. Dr Anderson voices concern that he “has never seen the type of financial involvement – with departments of commerce – occur before a hearing is complete.”

The financial involvement he is referring to regards a particular case in which the state Department of Justice opened up their own investigation and the clinic’s merchant account was closed, making them unable to financially conduct business. This is not happening to everyone who receives a warning letter, but business owners and clinicians should be aware of some of the “worst case scenarios” that have occurred.

Official Statements from FTC/FDA

The intention of the FTC is to “protect consumers and competition by preventing anticompetitive, deceptive, and unfair business practices through law enforcement, advocacy, and education without unduly burdening legitimate business activity.” And, in the case of the COVID-19 pandemic, they are working with the FDA to ensure that businesses are not capitalizing on a current atmosphere of fear and anxiety to sell products.

A side note that Dr Anderson thought important to bring up is that the FTC’s authority crosses professional and industry boundaries. They are not constrained to operate within the retail sphere, and can therefore target not just retail companies, but also service industry professionals and healthcare workers. The marriage between the FDA and FTC, in the case of COVID-19 surveillance, places more emphasis on the “medically approved” nature of consumables.

In the first of many press releases by the FTC, Chairman Joe Simons affirms this intention¹:

There already is a high level of anxiety over the potential spread of coronavirus. What we don’t need in this situation are companies preying on consumers by promoting products with fraudulent prevention and treatment claims. These warning letters are just the first step. We’re prepared to take enforcement actions against companies that continue to market this type of scam.

In this same press release, the FDA aligns itself with this aim, and makes it clear that increased surveillance will be utilized to monitor online sources that sell products that proclaim to cure, treat, or prevent COVID-19.¹ As FDA Commissioner Stephen M. Hahn, MD, states,¹

The FDA considers the sale and promotion of fraudulent COVID-19 products to be a threat to the public health. We have an aggressive surveillance program that routinely monitors online sources for health fraud products, especially during a significant public health issue such as this one. The FDA’s laws are designed to protect the public health by ensuring, among other things, that drugs are safe and effective for their intended uses.

These are legitimate concerns, and perusing the warning letters – which are all public record and available online – there are many obvious instances where companies are either wittingly or unwittingly leveraging consumer fear in order to sell a product; most of these companies do not appear to be affiliated with naturopathic doctors. However, naturopathic doctors are not immune to the constant scrutiny from regulatory authorities.

Varying Interpretations of FTC Mandates

When warning letters were first issued in April, the prevailing thought seemed to be that the only potential danger was in making direct claims regarding treatment, prevention, and cure of COVID-19. This led to a general focus on “boosting immunity” and the plethora of treatments and protocols, supplements, and strategies that influence the immune system.

However, we’ve seen that concentrating on the immune system, and being careful not to make direct claims about cure, prevention, or treatment of COVID-19, doesn’t remove a company or practitioner from the crosshairs of the FTC and FDA. Making any claim that can be insinuated that a product or treatment is being used, or should be used, in the treatment of COVID-19, or recommending that certain products be utilized to “boost immunity,” or “enhance the immune system,” in the context of COVID-19, has been grounds for the issuing of a warning letter. The underlying rationale here is the implication that is being made to the public.

Dr Anderson explains that these regulatory authorities use algorithmic bot-programs and web crawlers to find websites based on keywords and phrases. Currently, “COVID-19” and “viral immunity” have been added to the already monitored list of holistic and naturopathic phrases under scrutiny.

Concentration on Marketing, NOT Information

The concentration of this surveillance by the FDA and FTC appears to be on the marketing of specific products and treatments. If the public sees products or services being advocated by a doctor on a webpage or in an advertisement that connects those products in any way with COVID-19, the message is fairly clear, and this is a revenue-generating method for the doctor or company. The FTC is primarily concerned with claims that in any way connect the public’s fear and anxiety over COVID-19 with a product or service.

This is where the lack of concrete evidence (FDA approval) for any natural products is really hindering naturopathic doctors in marketing. However, this is the current situation; if you’re selling something and it’s connected with COVID-19, you’re at risk.

The vast majority of the warning letters that have been issued have to do with selling a specific product or service. Practitioners are generally not getting letters for providing information that is not directly linked to a payment option or other money-generating funnel.

Referencing of Scientific Studies

Many naturopathic doctors have begun to utilize research on certain treatments to help support their marketing. This has become more common as more research has been conducted in other countries, such as China and Italy. This makes complete sense, and research should be used to support treatment claims. However, it does not necessarily make a clinic immune to FTC warnings.

Dr Anderson very succinctly put it this way during our conversation: “Research is never a bad thing to cite in your posts, but it’s not going to stop them from placing a charge against you.”

He went on to describe the common situation where a charge will be filed against a doctor or clinic, whose body of research is presented on their webpage or communication, and they’ll have to turn around and submit all that research (the same research) to them. The research is then assessed in a hearing.

Negative Media Attention & Other Repercussions

When a warning letter is issued, it is made public record. So, there is a small amount of negative media attention that is possible. The recipient has 2 days to comply with the recommendations and to contact the Commission to verify that action has been taken or to begin building their case that their claim is a valid one.

As Stephen Hahn explains,¹

In the letters, the FTC states that one or more of the efficacy claims made by the marketers are unsubstantiated and therefore violate the FTC Act. The letters advise the recipients to immediately cease making all claims that their products can treat or cure coronavirus. … Finally, they instruct the recipients to notify the FTC within 48 hours of the specific actions they have taken to address the agency’s concerns.

The FTC also states that “the Commission may seek a federal court injunction and an order requiring money to be refunded to consumers.”¹

These letters have the potential to trigger a cascade of downstream repercussions. According to the American Association of Naturopathic Physicians (AANP), this may include the following⁴:

In at least 1 state, the FTC letter triggered a state Department of Justice Investigative Demand for violation of the Unlawful Trade Practices Act. This is a serious charge that requires (often expensive) legal assistance.
Local Departments of Justice may involve your ND licensing board
Banks are advised to shut down merchant service accounts of anyone who has received an FTC letter. This not only disrupts business operations, but can also make it very difficult to clear it from your record.

If you are found in violation and sanctioned by any agency, your ND regulatory authority may get involved, potentially impacting your license

Professional Support

The AANP, CNDA, OANP, and other naturopathic professional organizations are all working diligently to communicate with members, legislators, and attorneys to figure out where naturopathic doctors stand in this “environment where heightened fear is leading to unprecedented and aggressive regulatory actions.⁴

In a recent “Message to the Community,”⁴ the AANP writes, “one attorney AANP consulted said she has never seen this many warning letters coming from so many regulatory agencies in this volume over her entire career. It’s not just the FTC; it’s also the FDA, FBI, OSHA, state consumer protection bureaus and departments of labor, to name just a few.” The AANP confirms that it is actively working to support naturopathic doctors in 2 primary areas:

Help You Manage Your Risk – AANP has and will share guidance you can deploy to immediately mitigate your risk and prevent you from getting any warning letters. This may seem uncomfortable or overly restrictive, but the goal is not censorship, it’s protection from harm.

Push Back and Defend Your Rights – AANP is working to defend the right to practice, to educate patients and the public, to call out double standards, and to reaffirm that natural approaches to health are equally if not more valid now than ever before. Our medicine holds unique value in the national response and AANP will continue to advocate on behalf of every ND.

The AANP has been in communication with local and national health authorities and regulatory bodies to gain clarity on this issue. They are also in contact with the FTC regarding the double standards that seem to be allowing MDs to utilize experimental drug protocols with impunity, while NDs are being targeted for doing the exact same thing but with different agents. The AANP has issued “Template Language Guidelines for Providers During COVID-19 Pandemic”⁵ in order to help the naturopathic profession navigate this issue. The highlights of these guidelines are listed below, and the entire document can be found at: https://tinyurl.com/ydynh2pf.

DOs⁵

Reaffirm, support, and share official public health guidelines and recommendations for social distancing, personal hygiene, and self-quarantine as needed. This is imperative.
Frame your language from the perspective that naturopathic medicine has many tools to support patients. Use the following communication strategies:

Emphasize general health promotion
Provide patient-centered care that supports immune resiliency

Discuss supportive care for symptom management of viral infections
Discuss the importance of self-care
Offer suggestions for managing anxiety and other mental health concerns exacerbated by current events
Address recovery from illness

Support your patients’ care needs by continuing care of chronic diseases, pain, and anxiety/depression/insomnia that still need care and attention during this time, or may even be exacerbated by current conditions.

Adapt your care delivery to align with public health mandates and maintain clear lines of communication with patients on how you are available to support them – whether you have modified in-person clinic hours or through telemedicine/telehealth.
Check the AANP’s COVID-19 Resource and Guidelines, which provide excellent clinical guidelines for naturopathic doctors, written by naturopathic doctors.

DON’Ts⁵

Make public statements in relation to COVID-19 that use the words:

Prevent / Prevention
Treat / Treatment
Cure
Provide Immunity to/from COVID-19/coronavirus

Note: At the time of this document’s publication, there are no known preventive measures, treatment protocols, or cures specifically for COVID-19. Although there may be some correlations with how similar viral infections have been treated and new information emerging from China and other countries, at this time, claims that you or naturopathic medicine can prevent, treat, or cure COVID-19 are considered false and misleading. Such claims could impede public health efforts, harm the profession by drawing negative attention, and could put your license in jeopardy.

Monetize the emergency. The financial impact on many industries may be substantial; however, please be mindful of how you word your email updates/marketing communications in light of this pandemic.

Appropriate: “The CDC has recommended that patients secure a three month supply of medications. Our practice has products in stock if you are running low and need refills.”
Inappropriate: “This product will boost your immunity to COVID-19 and is a must-have during this pandemic! Purchase now through our site.”

In Closing

The AANP wants it to be clear that they and many state associations and licensing boards, “are sharing language guidelines NOT in an attempt to censor naturopathic doctors, but rather to help you navigate through an environment where heightened fear is leading to unprecedented and aggressive regulatory actions. Naturopathic Medicine is essential in our national response to COVID-19 and the AANP encourages all NDs to utilize their full scope of practice in supporting their communities. Far from limiting our medicine, we will continue to defend your ability to treat your patients without restriction.”⁴

In addition to the guidelines from the AANP, state boards are encouraging the following:

Share, and re-share the AANP’s template guidelines for communicating with patients.⁵
Communicate with each other that the FTC is aggressively issuing warning letters and that the repercussions could potentially be severe (eg, merchant account closure).
Contact your state board and the AANP at [email protected] if you are contacted by any regulatory authority.

References:

Federal Trade Commission. FTC, FDA Send Warning Letters to Seven Companies about Unsupported Claims that Products Can Treat or Prevent Coronavirus. March 9, 2020. FTC Web site. https://www.ftc.gov/news-events/press-releases/2020/03/ftc-fda-send-warning-letters-seven-companies-about-unsupported. Accessed March 9, 2020.
Federal Trade Commission. FTC Sends 45 More Letters Warning Marketers to Stop Making Unsupported Claims That Their Products and Therapies Can Effectively Prevent or Treat COVID-19. May 7, 2020. FTC Web site. https://www.ftc.gov/news-events/press-releases/2020/05/ftc-sends-45-more-letters-warning-marketers-stop-making. Accessed May 7, 2020.
Federal Trade Commission. FTC Coronavirus Warning Letters to Companies. April 14, 2020. FTC Web site. https://www.ftc.gov/coronavirus/enforcement/warning-letters. Accessed June 1, 2020.
American Association of Naturopathic Physicians. Important Message to the Community about FTC and Other Regulatory Actions. May 21, 2020. AANP Web site. https://cdn.ymaws.com/naturopathic.org/resource/resmgr/documents/covid19/Message_to_community_about_F.pdf. Accessed June 1, 2020.
American Association of Naturopathic Physicians. Template Language Guidelines for Providers During COVID-19 Pandemic. March 20, 2020. AANP Web site. https://cdn.ymaws.com/naturopathic.org/resource/resmgr/documents/covid19/template_language_guidelines.pdf. Accessed May 29, 2020.

Node Smith, ND, is a 2017 graduate of NUNM, is licensed in Oregon, and is also working towards licensure in Saskatchewan, Canada, where he lives. Node is associate editor and continuing education director for NDNR. His mission is serving relationships that support the process of transformation, which ultimately leads to healthier people, businesses, and communities. His primary therapeutic tools include counseling, homeopathy, diet and the use of cold water combined with exercise. Node has worked intimately with many groups and organizations within the naturopathic profession, and helped found the non-profit, Association for Naturopathic Revitalization (ANR), which works to promote and facilitate experiential education in Vitalism.