A bit fishy: nutraceuticals, marketing and procedural justice

Pills made from “wild krill” (apparently so much better for you than domestic krill)? Antioxidants from exotic plants, chlorophyll or the “Sicilian Blood Orange”? Promises of extra vitality, vim and vigour…

The dietary supplements, nutraceuticals or vitamins industry makes a lot of money. hit thatswitch/Flickr

Pills made from “wild krill” (apparently so much better for you than domestic krill)? Antioxidants from exotic plants, chlorophyll or the “Sicilian Blood Orange”? Promises of extra vitality, vim and vigour? Endorsements by celebrities?

What is variously dubbed the dietary supplements, nutraceuticals or vitamins industry is about marketing rather than just chemicals. It’s about the marketing of substances that may or may not be needed by consumers. It’s also about money – enough money for clever lawyers to find holes in Australia’s weak regulation of complementary medicine.

Questions about the effectiveness of the Australian regime were illustrated in a Federal Court decision last month. Swisse Vitamins Pty Ltd v The Complaints Resolution Panel [2012] FCA 536 followed a request by the Panel for Swisse, a high-profile vendor of “better living” products featuring undomesticated krill and other exotica, to withdraw particular advertisements and not repeat representations regarding those products.

The Panel is an industry-government body that derives its authority from the Therapeutic Goods Act. The associated Therapeutic Goods Advertising Code restricts advertising that is “likely to arouse unwarranted and unrealistic expectations of product effectiveness” and “mislead, or be likely to mislead”. In assessing what is unwarranted or misleading, the Panel considers the “probable impact upon the reasonable person to whom the advertisement is directed”.

The Panel is promoted as:

part of a system of advertising arrangements for therapeutic goods designed to ensure public health and safety while allowing a dynamic and fair environment for the manufacturing of products. These arrangements control promotional messages and general information about products to the public and are in place to ensure that all communications are truthful, valid and not misleading, such as by arousing unwarranted expectations or downplaying possible risks.

In essence, the Panel deals with complaints about problematical advertising that would otherwise be addressed by the Australian Competition Consumer Commission (ACCC), the national consumer protection agency that has dealt with misleading claims such as the celebrity-endorsed Power Balance wrist bands that “may be no more beneficial than a rubber band”.

The Panel received a complaint from a medical expert and consumer advocate about advertising by Swisse of products such as Ultiboost Hair Skin Nails, Liver Detox, Wild Krill Oil and Co-enzyme Q10. The co-regulatory scheme for diet supplements means that regulators rely on public-spirited advocates and consider specific complaints rather than systematically monitoring the market or initiating investigations.

The Panel concluded that the advertising was indeed problematic. It accordingly requested Swisse to withdraw the advertisements and not repeat certain claims – that the benefits of particular products (enhanced “immune defence”, better memory, better sleep, glossy hair, prevention of ailments or illnesses) were “clinically proven” and “independently tested”.

Swisse defended its “You’ll feel better on Swisse” slogan as a “generic marketing statement” that “merely amounts to branding or ‘marketing speak’ that consumers are not likely to take seriously”, what lawyers characterise as puffery. It also defended specific claims. Swisse expressed its unhappiness by going to the Federal Court, relying on the Administrative Decisions (Judicial Review) Act in arguing that it had been denied natural justice or procedural fairness by the Panel.

In essence, Swisse argued that the Panel’s “requests” to modify the advertisements were in fact decisions made without allowing Swisse to defend specific claims. The Panel responded that it had sufficiently alerted Swisse that the advertisements were contentious. And it had drawn attention to relevant provisions of the Code. Swisse had been invited to provide any material supporting the company’s claims.

The Court concluded the Panel had to do more. It commented that:

It is a fundamental requirement of procedural fairness that a person whose interests may be prejudiced by an administrative decision is entitled to “have his mind directed to the critical issue or factor on which the administrative decision is likely to turn so that he may have an opportunity of dealing with it.

The Panel had gone beyond the specific complaints and had failed to consistently direct Swisse’s attention to the specifics. Its request to restrict the Swisse slogan had been too broad.

The Court’s decision doesn’t mean that Swisse’s claims about its products have been found to be valid. In essence, the Court has instead handed the problem back to the Panel for review. That review may well find that Swisse’s claims breach the Code.

What does the case tell us about regulation rather than specific products?

If we expect bodies such as the TGA’s Complaints Resolution Panel to deal with rich determined corporations, we need to adequately resource those regulators in order to avoid procedural difficulties. Inadequate resourcing means that problematical marketing will continue to be rewarded and public interest advocates will be increasingly discouraged. Unsurprisingly, the Court commented that the Panel was unfortunately forced to defend its own decisions.

The case highlights the need to revisit the Code in terms of examining the adequacy of regulating products that are perceived by the public as having therapeutic properties. It also tells us that amid enthusiasm for digital literacy, we need to build a therapeutic literacy into the K12 curriculum, so that everyone’s clearer about the benefits – or otherwise – of krill and chlorophyll.