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Tag: False Advertising

  • MAHA lawsuit could upend FTC health claims regulation

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    Don’t get Nathan Jones started on xylitol, the active ingredient in his chewing gum, nasal spray and other products. He’ll talk your ear off about its wondrous powers against tooth decay, as well as its potential to fight covid, heart disease, Alzheimer’s — you name it.

    For now, Jones, the founder of Xlear, can’t make those claims in his company’s advertising. But if the lawsuit his company brought against the Federal Trade Commission succeeds, he’ll likely be able to say anything he wants.

    As the Trump administration loosens enforcement by the Federal Trade Commission, Department of Justice, and FDA of unproven health claims, Jones and his allies in the “medical freedom” movement are pushing to permanently roll back the health regulatory state.

    For decades, the FTC has required companies to back any medical claims about their products with substantial evidence, while taking actions against hundreds of “bogus health cures,” said Jessica Rich, the FTC’s director of consumer protection from 2013 to 2017.

    If successful, the lawsuit by Jones’ company “would be a complete game changer,” said Mary Engle, associate director of the FTC’s advertising practices division from 2001 to 2020.

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    The FTC — and FDA — don’t have sufficient staffing to rigorously police health claims, but Health and Human Services Secretary Robert F. Kennedy Jr.’s allies in the alternative medicine world have suggested that the agencies already go too far.

    “The pharmaceutical industry has a stranglehold and monopoly in America,” Jones told KFF Health News. “The consumer should have a choice in what they’re doing and how they’re being proactive and reactive in their health care.”

    Jones and other members of the Alliance for Natural Health USA, which includes alternative medicine practitioners, vaccine skeptics and proponents of “natural” remedies, were elated when Kennedy became Health and Human Services secretary in February. One called it a “once-in-a-lifetime opportunity.”

    Kennedy had warned shortly before Trump’s reelection that the FDA would face a reckoning for its “aggressive suppression” of vitamins, peptides, nutraceuticals and other products from a supplement industry that has sought more freedom to make claims about its products.

    Losing regulatory bite?

    For decades, the FDA has had the power to recall dangerous products and check health claims, although it has nowhere near the workforce it would need to police the vast $70 billion supplement industry.

    The FTC has traditionally had more teeth, successfully suing companies that make unsubstantiated claims. For example, the agency won a judgment last year against a company that advertised a supplement as “clinically shown” to improve memory.

    The FTC under Trump has not announced any new enforcement actions against supplement makers (it did send consumers the proceeds of previous fraud settlements), and the administration has reversed several covid-related FTC actions. In March, the FTC dropped a lawsuit filed in 2021 against Jones and Xlear over the marketing of its “drug-free” sinus rinse as a covid preventive and treatment. The Department of Justice also closed a case brought on behalf of the FTC and the FDA against a company that claimed its Earth Tea could cure covid.

    In June, Jones, who says he spent $3 million fighting the FTC suit before it was dropped, sued back. The company asked a judge to forbid the FTC from requiring that health product marketers back their claims with convincing evidence, such as clinical trials — a position the FTC has maintained since 1984.

    Xlear hopes the suit will be considered under last year’s Supreme Court ruling known as Loper Bright, said Xlear attorney Rob Housman. That ruling gave courts more power to second-guess federal agencies’ interpretation of the laws that govern their activities.

    The Alliance for Natural Health joined Xlear in a separate petition in May demanding that the FTC drop its requirement for companies to provide substantial evidence backing health claims, and to withdraw 2022 guidelines that generally require companies to run a randomized clinical trial to prove their claims.

    The petition was filed by Jonathan Emord, a lawyer who has successfully fought FDA and FTC regulation of supplements and unsuccessfully ran for governor of Virginia as a Republican in the 2024 primary.

    Emord’s petition seeks to flip the burden of proof. Instead of requiring the makers of supplements and cosmetic creams, pills, sprays and herbals to prove their products do what they claim to do, the government would have to prove that they don’t.

    “If an advertiser throws caution to the wind and makes a health-related product claim without resort to any supporting evidence, the FTC is powerless” to stop it, Emord wrote in the petition. “Rather, the claim will be tested in the idea and information market free of government constraint.”

    Emord and the Alliance for Natural Health did not respond to repeated requests for comment.

    The FTC would not comment on the lawsuit, the petition, or the issue of substantiation in general, spokesperson Juliana Gruenwald Henderson said.

    Shorthanded and mostly hands-off

    Meanwhile, with Kennedy’s administration chockablock with proponents of nontraditional health products, “there’s been a downtick of enforcement,” Housman said.

    Since Trump took office, the FTC has lost at least a quarter of the staff in its Division of Advertising Practices, which took the original action against Xlear, said Serena Viswanathan, who retired as FTC associate director in June. The Department of Justice has reorganized its consumer protection unit, which backed the FTC in many actions, and moved some of its lawyers to immigration and other areas.

    In one of the only actions it has taken against deceptive health practices under Trump, the FTC hosted a July 9 workshop titled “The Dangers of ‘Gender-Affirming Care’ for Minors.”

    In FTC Chairman Andrew Ferguson’s opening statement at that event, he excoriated the Biden administration for allowing hormonal and surgical treatments for youth experiencing gender dysphoria.

    But Ferguson justified the FTC’s new attack on these treatments by referring to the agency’s traditional practice of pursuing companies for making false and deceptive claims. Noting the agency’s past actions against “shyster snake oil salesmen” promoting fake cures, Ferguson highlighted the Biden-era FTC’s position that “health claims need to be backed up by reliable scientific evidence” and an “incredibly high standard of scientific ‘substantiation.’”

    Under that logic, Ferguson “has to defend against the Xlear lawsuit,” Rich said.

    “If anyone can just hawk health products without any basis, and customers spend money on bogus cures instead of seeking proper care, it’s really a serious issue,” she said.

    ‘Nanny state’ or not?

    Ferguson’s remarks reflect one of many contradictions in the administration’s approach to health policy. While favoring deregulation and greater personal liberty to consume unregulated supplements, Kennedy has also pushed for stricter FDA oversight of food and drugs, while advocating for behavioral change that GOP officials derided as “nanny state” tactics when Democrats like former first lady Michelle Obama promoted doing so.

    Kennedy, for example, has said he wants more randomized control trials for vaccines and drugs — a requirement rejected by medical freedom advocates like Jones.

    “I like clinical data; I think it’s great,” Housman said. “It’s not the be-all and end-all.”

    Kennedy has also announced plans to change a policy that allows food companies to add ingredients without a full safety review. But many supplement makers use the policy to get their products on the market without FDA review, and some are unhappy about the potential clampdown.

    Banking on xylitol

    The FDA approved xylitol as a food additive in 1963 and regulates it as a cosmetic ingredient. Jones, who said his company has about 110 employees and sells to 70,000 retailers, founded Xlear 25 years ago.

    Jones expresses skepticism of vaccines, believes the drug industry has a monopolistic stranglehold on health care, and is a “true believer” in xylitol, Housman said.

    In an interview with KFF Health News, Jones said that the slightly sweet, minty-flavored substance reduces gum inflammation by blocking the adhesion of tooth-rotting Streptococcus mutans bacteria to cells in the mouth.

    In Finland, where water is not fluoridated, dentists have long recommended xylitol-imbued chewing gum for children. In addition to fighting cavities and lowering periodontal disease, Jones said, xylitol could fight chronic illnesses like obesity, Alzheimer’s and heart disease, which “all have a correlation with oral hygiene.”

    But “the government bans us from going out and talking about what xylitol does,” he said. “We cannot say xylitol can help prevent tooth decay, because xylitol is not a drug, and that’s a drug claim.”

    As for its use against covid, three ear, nose and throat specialists interviewed by KFF Health News said that xylitol is good for moisturizing nasal cavities, perhaps a bit better than simple saline solution. While there’s no evidence it prevents or cures covid, xylitol, like saline nose washes, may reduce symptoms when used toward the start of any viral upper respiratory infection, said Christine Franzese, a professor of otolaryngology at the University of Missouri Medical Center and the chair of the American Academy of Otolaryngology-Head and Neck Surgery’s allergy, asthma, and immunology committee.

    Xylitol is poisonous to dogs, but deemed safe to humans when used at recommended doses in sprays, candies, chewing gum, and other products, according to the American Academy of Pediatric Dentistry, which also states that evidence is mixed on whether xylitol fights cavities effectively.

    At higher doses, xylitol can cause diarrhea and other gastrointestinal problems, and a study funded by the National Institutes of Health and published last year found that regular use of xylitol as a sweetener could exacerbate heart disease. The quantities of xylitol consumed daily by participants in that study were far higher than what’s in a few sticks of chewing gum, however.

    Whether his lawsuit succeeds or not, Jones can probably expect a rosy business future.

    On May 21, he and pediatric dentist Mark Cannon of Northwestern University were called to testify in the Utah Legislature in support of a pilot project to provide Xlear’s gum to students and prisoners in the state as a replacement for fluoridated water, which the state banned in March.

    Florida ordered fluoride removed from the state’s water starting July 1, and other states are considering bans. Kennedy wants to end fluoridation nationwide, despite widespread skepticism of his belief that it poisons the brain at common dosing levels.

    The bans are a boon to Xlear, Jones said. The company would provide gum for the Utah pilot at cost, he said, but if governments promote it and people learn more, “that’s where we see us being able to grow.”

    This article first appeared on KFF Health News, a national newsroom that produces in-depth journalism about health issues.

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  • False Dosage Labels on 96% of Tested Amazon Hemp Products, Many With No Hemp or CBD

    False Dosage Labels on 96% of Tested Amazon Hemp Products, Many With No Hemp or CBD

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    In the midst of blossoming cannabis and CBD reform throughout the West, hemp-derived cannabinoid products are increasingly taking center stage as legislators continue to raise red flags surrounding the lack of regulation and intoxicating potential of these products.

    Just in the past several months, a number of states have moved to introduce new policies to limit or ban the sale of psychoactive hemp-derived cannabinoid products, like delta-8 THC. Similarly, many are calling out some of the issues surrounding the regulatory gaps surrounding hemp-derived products in the market.

    Among them is CBD Oracle, a consumer research company aiming to improve safety and transparency surrounding cannabis products. 

    Most recently, it turned its attention to CBD gummies and other hemp products available for purchase on Amazon.com. While the company notes that Amazon will “tell you confidently” that they do not allow CBD gummies on the platform, CBD Oracle’s new independent analysis on such products begs to differ.

    A Look at Amazon’s Approach to Hemp and CBD Products

    While Amazon doesn’t technically allow CBD products, CBD Oracle suggests that sellers on the site largely get around this obstacle by avoiding the term “CBD” and instead using “hemp” on packaging and in product descriptions. 

    Neurogan CEO Jan Brandup said that Amazon’s “hemp products” are not related to actual hemp and rather use the term as a sales tactic.

    “It’s alarming how easily consumers are deceived into trusting these products, just because they are sold on a reputable platform like Amazon,” Brandup said. “The best case is they may drain your wallet.”

    Sunday Scaries CEO Mike Sill agreed, adding that many of the products on Amazon automatically lack credibility and ultimately quality due to the nature of the platform’s regulations.

    “When you search for ‘CBD gummies’ on the platform, no reputable brands populate in your search results,” Sill said. “The reason for this is that credible brands like Sunday Scaries, Charlotte’s Web and cbdMD are not allowed to sell on Amazon without being banned.”

    Rather, Sill said these companies engage in “brand burning,” meaning that once they are banned from Amazon, they essentially rebrand with a new name and packaging only to reupload the same products to the site and continue sales.

    “Their business model doesn’t include a focus on building a reputable brand and providing the highest quality and safest products to consumers; they are just looking for a quick sale and will do whatever is necessary to stay ‘live’ on Amazon,” Sill said.

    So what exactly do Amazon “hemp” products contain?

    Investigating the Contents of Amazon’s ‘Hemp’ Products

    In an effort to analyze the specific contents of CBD products on Amazon, the company purchased 56 of the most popular hemp products on the site and tested them through InfiniteCAL Labs. Most of the products (80%) were gummies, with eight tinctures, two topical creams and one pack of mints. A majority (89%) also made specific numerical claims regarding dosage.

    Around 30% (17 of 56) of the products tested contained CBD, averaging 547 mg per package. However, there was a large variance in CBD quantity between products, with a minimum of 28 mg of CBD and a maximum of 1,582 mg. While CBD Oracle notes that this at least shows Amazon isn’t being totally dishonest about some of these products containing hemp and hemp compounds, it still violates Amazon’s policies and may not be legally compliant.

    THC is also banned from Amazon sales, though six (11%) of the tested products contained the cannabinoid with the three containing the most comprised primarily of delta-8 THC. While all of the products were under the THC threshold set by the 2018 Farm Bill, the three delta-8 products “had very high quantities of THC” with 641, 2,507 and 3,028 mg per pack. The product with the highest amount of THC had 76 mg per gummy.

    The majority of tested products (35 of 56 products, or 62.5%) contained no cannabinoids at all with more than a third (24 of 56 products, or 43%) containing no hemp.

    InfiniteCAL Lab Manager Dr. Erik Paulson explains that hemp is typically infused into consumable products through hemp seeds, which contain no cannabinoids, or through extractable material pulled out of leaves, stems or buds — generally to create cannabinoid-infused products.

    “Simply put, if you buy ‘hemp’ from Amazon it is likely that you will actually be buying an expensive jar of gummy bears. Gelatin and sugar, priced at a premium,” CBD Oracle notes in the report.

    The report also confirmed that a whopping 96% of tested products did not advertise an accurate dosage.

    “If we assume the dosage listing refers to cannabinoids (and not just the total mass of hempseed oil), just two products were confirmed by lab testing to have a dosage within 10% of that listed on their labels,” the report states. “They contained an average of just 25% of the advertised dosage. In most cases, this was less than advertised, but one product primarily containing delta-8 THC had twice the promised dosage.”

    In addition, 52% of the products appeared to make an unapproved medical claim, and almost 95% of products did not provide Certificates of Analysis (COA), typically considered an essential for reputable companies selling hemp products.

    A Growing Issue and Potential Solutions

    While the report focused on Amazon products, CBD Oracle notes the prevalence of this trend, as other companies like eBay, Walmart and Alibaba carry similar products — sometimes the exact same options.

    Authors note the potential ramifications of selling these products, beyond safety and health concerns, in that it could undermine the broader hemp and cannabis industries and the reform progress so many are actively pushing for.

    “Amazon has demonstrated that they don’t understand the difference between hemp seed oil and hemp extract that contains cannabinoids,” said Forge Hemp’s Kelly Lombard. “As long as sellers are vague about a product’s contents, Amazon doesn’t seem to care. This is problematic because U.S. consumers need more information about hemp and CBD, not less. Amazon’s convenience and return policy may entice more consumers to try hemp products, but if their experience is negative, that hurts the industry.”

    CBD Oracle also lists some potential solutions to remedy these issues, though they largely fall on Amazon to either adhere to more strict verification and COA guidelines, if not completely remove any products making false claims. They note that customers tend to have limited impact and that individual efforts to combat or report these products may ultimately result in frustration and wasted time. 

    Authors also cite that the current model, a blanket ban on CBD encouraging companies to be dishonest and actively work around it, may not be the answer.

    “Even establishing a bare minimum requirement for hemp sellers — showing an up-to-date lab report — would be enough to send the snake oil sellers running for the hills,” the report concludes. “Will you be able to pretend that CBD isn’t available on your platform? No. But customers who are buying CBD on your platform — who already exist, like it or not — would be much, much more likely to get safe products that offer what they say on the label.”

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    Keegan Williams

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  • The Impact of Fake News and False Narratives on Company Culture

    The Impact of Fake News and False Narratives on Company Culture

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    Opinions expressed by Entrepreneur contributors are their own.

    It’s not all that shocking that with the rise of social media and big data, CEOs can hide many activities that would otherwise cause consumers to stop purchasing their products or services. What is shocking is just how many CEOs have been lying or deceiving the public and shareholders about the health of their companies.

    An HBR study showed that over one-third of executives believe CEOs should be held legally responsible for being dishonest or misleading regarding topics like sustainability and ethical business practices, but this still doesn’t stop them from doing it.

    The collapses are based on throwing out age-old wisdom to fleece millions with new-age Ponzi schemes.

    Related: The Future of Work: 4 Ways Companies Can Evolve to Usher in the Future of the Workplace

    What is a false narrative?

    A false narrative is when CEOs and executives of a company create and propagate a story to their stakeholders and the public that misrepresents the actual situation of the business. This can be done in different ways, including making false claims about the company’s profitability and success, hyping up faulty prospects of future growth, and more.

    Unfortunately, this false narrative often results in people investing their hard-earned money into companies with inflated expectations, only to find out too late that the company executives have deliberately misled these expectations.

    In addition, a false narrative is often used to justify irresponsible spending and excessive bonuses for top executives. This practice has become too common recently, with many high-profile corporate scandals coming to light.

    It’s estimated that billions of dollars have been lost by investors who have fallen prey to the false narrative spun by CEOs, leading to a massive collapse in trust in companies.

    Ultimately, a false narrative from companies can be highly damaging and should be guarded against at all costs. Companies need to take responsibility for their actions and ensure they only share accurate information with their stakeholders and the public.

    When companies fail to do this, they risk damaging not just their reputation but also the trust of their customers, which can be challenging to regain.

    How does this false narrative cause a collapse in trust?

    The false narrative being spread by CEOs of companies and, at times, promoted by large media institutions is leading to a collapse in trust among their consumers, shareholders and the public. It’s no secret that the actions of a company’s top executive can have an enormous impact on how their organization is perceived.

    When a CEO makes bold statements not backed up by reality or presents a false story about the company’s performance or direction, it can lead to a crisis of trust between the company and its stakeholders.

    When a CEO pushes a false narrative, it can create serious doubts about the integrity of their promises or statements. This can be seen in recent examples from corporate America, such as Volkswagen’s CEO Martin Winterkorn, who resigned after admitting to having lied about the company’s emissions scandal.

    This is just one case of how the false narrative of a CEO can create mistrust in the company they represent.

    Related: Why Everyone and Everything on Social Media Is Fake

    What are some examples of a false narrative?

    In recent years, the world has seen several high-profile cases of false narratives being peddled by CEOs. One of the most well-known examples is Elizabeth Holmes and her now-defunct health technology startup, Theranos.

    She sold a story to the public about revolutionary new blood tests and technology that would revolutionize the healthcare industry. In reality, the company was based on inaccurate and false statements about its products and services.

    Related: What the Theranos Story Teaches Us About the Dark Side of Personal Branding

    Another example of a CEO peddling false narratives is Adam Neumann, CEO of WeWork, before his ouster in 2019. His narrative was that WeWork was an innovative tech startup and a revolutionary business model when it was built on a shaky foundation of inflated valuations and poor management decisions.

    Finally, there’s Samuel Bankman-Fried, the founder of FTX, a cryptocurrency derivatives trading platform. Despite the revolutionary nature of cryptocurrency and blockchain technology, Bankman-Fried painted a misleading picture of how FTX worked by claiming that its underlying technology was more secure and reliable than traditional financial services. In reality, this wasn’t the case.

    These cases highlight how important it is for investors and customers to vet any company and CEO before investing or signing up for services. By doing due diligence, you can avoid becoming victims of false narratives peddled by unscrupulous CEOs.

    What can be done to prevent the false narrative from continuing?

    First and foremost, it’s essential to ensure that CEOs remain accountable and transparent with their statements. They should also be encouraged to make decisions based on facts rather than speculation or hype.

    Additionally, CEOs should focus on building relationships with stakeholders through open and honest communication, as this will help create trust between the company and its stakeholders.

    Furthermore, companies should encourage a culture of questioning and critical thinking within the organization. Ensuring that employees are questioning the decisions being made and challenging the status quo will ensure that decisions are made based on sound judgment and that any potential false narratives will be uncovered quickly.

    Finally, companies should ensure that their employees are regularly trained in ethics, so they understand the importance of ethical behavior when making decisions. This can extend toward ensuring that any false narratives are quickly identified and addressed.

    By implementing these steps, companies can help build a more trustworthy relationship with their stakeholders and eliminate false narratives before they impact the organization.

    Related: The Importance Of Honesty And Integrity In Business

    Conclusion

    The false narrative by CEOs has been causing a collapse in trust in companies, resulting in a lack of confidence from both the public and shareholders.

    With the reputation of businesses taking a hit, CEOs need to realize that honesty and transparency are crucial to sustaining trust. Only by communicating openly and accurately can leaders hope to rebuild the trust necessary for any successful company.

    Taking responsibility for their words and actions will go a long way in reinstating trust in companies and the people who run them.

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    Jon Michail

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