This article addresses some of the fundamental issues impacting the development of dietary supplement warning labels based, in part, upon potential product liability exposure resulting from a “failure to warn” of applicable risks. As explained herein, determining whether to include a warning on dietary supplement labeling is a complex undertaking and requires careful assessment of multiple factors. This article addresses some of the factors companies should consider in making this determination, and provides guidance and suggested strategies for companies to mitigate product liability exposure. Furthermore, this article also reflects and revises an article previously published in HerbalGram #56 on this subject by the primary author of this article.¹

Proliferation of Product Liability Litigation (and Related Class Action Litigation) Directed against Dietary Supplements

The growth of the dietary supplement industry, and risks presented by a small subset of dietary supplements, has led to a proliferation of product liability-related litigation directed against companies marketing dietary supplements.

The success experienced by the supplement industry in the United States in recent years, which is projected to continue, raises the likelihood of increased product liability claims and lawsuits, which are often closely associated with expanding markets. Indeed, in 2012, dietary supplement companies generated approximately $32 billion in revenue; that figure is projected to nearly double to $60 billion by 2021.² Industry analysts estimate that one third of all Americans use herbal remedies such as echinacea (Echinacea spp., Asteraceae), ginseng (Panax spp., Araliaceae), or St. John’s wort (Hypericum perforatum, Clusiaceae), and that 123.5 million Americans use some kind of supplement (whether categorized as herbs, vitamins, minerals, enzymes, or amino acids).³ In step with the rise in consumer demand, dietary supplement companies increasingly are confronted with myriad legal issues, including product liability exposure (and potential exposure in class-action lawsuits).

Despite the strong safety profile of the dietary supplement category, some scientists, health professionals, and regulators claim that a small subset of dietary supplements may be capable of injuring consumers. For example, scientists have posited that certain dietary supplements, which constitute a small percentage of the industry’s total sales, can damage the liver — typically as a result of misuse.⁴ According to one report, products promoted as alleged dietary supplements may account for 20% of liver injuries diagnosed in hospitals, up from 7% a decade ago.⁴ Regardless of whether these reports are accurate*, they reflect a growing interest in this issue by concerned health professionals, public health officials, industry critics, and plaintiffs’ lawyers.

Not surprisingly, therefore, over the past ten years, sizable class-action lawsuits have been brought against dietary supplement companies with significant product liability dimensions. In the case of ephedra (Ephedra sinica, Ephedraceae), for example, the United States Food and Drug Administration (FDA) began receiving adverse event reports (AERs) concerning dietary supplements containing ephedrine alkaloids in the 1990s; these AERs included alleged health problems ranging from insomnia and arrhythmia to heart attack, stroke, and, in a few cases, death.⁵ In April 2004, more than 300 ephedra product liability cases were consolidated in the US District Court for the Southern District of New York.^6,7 As of 2007, plaintiffs had recovered at least $100 million in settlement payments.⁸ The litigation wound down by 2008.⁹

More recently, in April 2012, the FDA sent warning letters to 10 manufacturers and distributors of dietary supplements containing a synthetic chemical compound commonly known as DMAA (1,3-dimethylamylamine HCl),¹⁰ asserting that the supplements were “adulterated” based upon the presence of a “new dietary ingredient” that was not subject to a 75-day notification to the FDA as required by Section 8 of the Dietary Supplement Health and Education Act of 1994 (DSHEA).¹¹ Furthermore, the warning letters stated that “[e]ven if the required notification had been submitted,” the products would still be adulterated because “there is inadequate information to provide reasonable assurance that [the new dietary ingredient] does not present a significant or unreasonable risk of illness or injury.”¹¹ The FDA issued a press release,¹⁰ and plaintiffs began filing product liability-related class action complaints within a few days.¹² Claims include negligence, strict liability, breach of warranty, and false advertising.^13,14 This litigation is still ongoing.

As demonstrated by the DMAA example, in addition to product liability lawsuits, dietary supplement companies are increasingly being targeted in class-action lawsuits filed under state consumer protection laws, alleging the dissemination of false or deceptive claims. Unlike product liability cases, these types of class-action lawsuits may be successful even if consumers are not physically harmed. Although beyond the scope of this article, dietary supplement manufacturing and marketing companies should consider potential exposure to consumer protection class-action lawsuits as a potential factor in the product liability exposure assessment described herein.

FDA Mandates Very Few Dietary Supplement Warnings, but Frequently Issues Safety-Related Statements Applicable to the Dietary Supplement Industry

Although FDA regulation of dietary supplements pursuant to DSHEA is beyond the scope of this article (it has been adequately elaborated elsewhere), it is worth noting that the FDA mandates very few dietary supplement warnings.¹⁵ Although, for example, the FDA may require warnings for certain dietary supplements that contain iron, protein, or psyllium,¹⁶ the vast majority of dietary supplements are not subject to mandatory FDA warnings.^†

Rather, pursuant to the Federal Food, Drug, and Cosmetic Act (FFDCA), dietary supplement companies are obligated — consistent with requirements applicable to other FDA-regulated entities — to reveal material facts relevant to the consequences of using a dietary supplement.¹⁷ In addition, according to DSHEA, the FDA must determine if a dietary supplement is “adulterated” based upon whether the dietary supplement presents a significant or unreasonable risk of illness or injury under “conditions of use recommended or suggested in labeling.”¹⁸ Accordingly, the FDA permits companies to add voluntary dietary supplement warnings, and the addition of such warnings may mitigate FDA regulatory liability in addition to potential product liability exposure.

Despite the relative absence of mandatory dietary supplement warnings, the FDA occasionally disseminates safety-related information that may impact the voluntary determination to add warnings to dietary supplement labeling. For example, according to an article recently published in HerbalGram, FDA has issued an extensive number of alerts and letters to healthcare professionals regarding the safety of specific dietary ingredients in recent years.¹⁵ In addition, FDA’s Dietary Supplement Compliance Program Guidance Manual identifies a number of botanical ingredients subject to higher-priority FDA inspectional review based upon potential safety concerns.¹⁹ The FDA also recently issued an import alert for the botanical ingredient kratom (Mitragyna speciosa, Rubiaceae) based upon alleged safety concerns²⁰ and instituted a seizure action against 25,000 pounds of the herb held by a California company.²¹

Product Liability Overview – Elements of a Failure to Warn Claim

Product liability actions in the United States are generally based upon three potential common-law causes of action: (1) negligence, (2) strict liability, and (3) breach of warranty (express or implied). Each cause of action generally can address various types of product defects, such as manufacturing defects (defects in the production process for a specific batch of products), design defects (defects in intended product formulation), and marketing defects (including a failure to warn claim).

While claims against dietary supplement companies span the spectrum of potential product liability claims, it is the failure to warn claim that most frequently results in product liability exposure for dietary supplement companies. Thus, while there have been cases against dietary supplement companies involving manufacturing defects, those are normally “one-off” events that involve adulteration or contamination²²; examples include pesticides found in tablets containing Asian ginseng (Panax ginseng, Araliaceae) or prescription drugs found in certain supplements (which generally are described as illegal pharmaceutical drugs masquerading as “dietary supplements”).³

Claims related to the marketing of dietary supplement products, and specifically failure to warn claims, are the most common and also have received the most attention in the industry.³ They also present an opportunity for risk mitigation by addressing potential warning issues in a proactive way, as discussed in the section titled “Assessment of Potential Voluntary Warnings,” to follow.

The common elements of a product liability action based upon a failure to warn claim generally include a determination of the following: (1) whether the supplement company knew or should have known of the risk of harm, and (2) whether the company through labeling could have prevented or reduced the risk. When both of these elements are met, the company may be held to have a “duty to warn” consisting of two responsibilities: to provide adequate instructions for safe use and to provide a warning regarding potential dangers.

Courts generally have held that companies have a duty to warn of a particular risk if it is known or knowable at the time of manufacture and distribution. However, some courts have held that manufacturers should warn of risks discovered after the product is initially sold (i.e., that there is a continuing duty to warn). In a 2012 Ninth Circuit decision, Rosa v. Taser International, Inc., the court noted that “a manufacturer may be liable … for failure to warn of a risk that was subsequently discovered.”²³ Although complaints filed by plaintiffs often assert that a duty to test or conduct post-market research exists,²⁴ the applicability and scope of this duty for dietary supplement companies remains largely untested given the limited case law.

Manufacturers generally cannot, however, be held liable for failing to warn of unknowable or unforeseeable risks associated with the product. Additionally, companies typically are not expected to warn against risks that a reasonable, informed person would have been aware of at the time of the sale.²⁵

Importantly, courts generally have recognized that warnings must be selective in order to be effective. Indeed, dietary supplement label space is extremely limited, and too many warnings (i.e., “overwarning”) may detract attention from the most important warnings. Courts therefore have been reluctant to require warnings about relatively minor risks, risks that are not scientifically established, or risks that are extremely rare.²⁶

In light of the applicable legal standards, the two critical issues for dietary supplement companies are (1) whether a potential risk is known, knowable, or foreseeable, and (2) whether a reasonable, informed person would be aware of potential risks, such as herb-drug interactions, in the absence of label warnings.

Failure to Warn Cases – Difficulty in Establishing Causality

As a general rule, under the Daubert doctrine,²⁷ trial courts can admit expert testimony for scientific questions such as causality only if the expert employs reliable methodologies based upon valid scientific data. While guiding precedent in many US courts of appeals on the admissibility of expert testimony remains sparse and inconsistent,²⁸ the ephedra litigation is instructive for the dietary supplement industry; in McClain v. Metabolife International, Inc., the Eleventh Circuit took a restrictive approach regarding the admissibility of the plaintiffs’ expert evidence.

Specifically, in McClain, the plaintiffs claimed that they sustained significant injuries (strokes and one heart attack) because they ingested ephedra in a Metabolife^® product and alleged that Metabolife sold the product without adequate warnings.²⁹ Although a jury had found Metabolife liable for $15 million in damages,^30‡ the Eleventh Circuit reversed the verdict in full based on the trial court’s error in admitting the plaintiffs’ expert testimony.²⁹

Under the McClain precedent, courts would be required to conduct a rigorous analysis of expert testimony in support of both general and individual causation.^§ According to the McClain ruling, reliable expert testimony should include testimony on the dose-response relationship³¹ (i.e., the relationship between the dose of a product and the body’s reaction to it) and account for background risk.³² Furthermore, expert testimony that relies solely on unsubstantiated comparisons of the supplement with similar substances,³³ adverse event reports,^34ǁ or actions by the FDA^35¶ may not be deemed sufficiently reliable.

While McClain may appear to pose a significant barrier to plaintiffs in dietary supplement cases, a few important caveats should be noted. First, in McClain, the expert testimony was markedly deficient. The plaintiffs’ key expert based his testimony primarily on traits associated with a broad category of substances that imitate the effects of ephedra, but offered no data on ephedra’s dose-response relationship, no epidemiological or animal studies, and no direct biological evidence of ephedra’s harmful effects.³⁶ Accordingly, even after McClain, the minimal threshold of evidence required for admissibility remains unclear. Secondly, although other Eleventh Circuit cases have applied the McClain standard,²⁸ other jurisdictions do not apply a uniform approach. Thus, this area of the law remains unsettled and should be monitored carefully.

Assessment of Potential Voluntary Warnings

As explained above, if and when a voluntary dietary supplement warning is issued depends on the specific product in question and the specific risk of harm. That said, dietary supplement companies may seek to mitigate exposure to failure to warn claims by monitoring developments that may give rise to a duty to warn.

More than 10 years ago, the Office of the Inspector General of the Department of Health and Human Services issued a report criticizing the dietary supplement industry for, among other things, not including a sufficient number of dietary supplement warnings on product labels.³⁷ Although it is reasonable to assume that the dietary supplement industry has become more proactive in recent years in adding voluntary dietary supplement warnings, we nonetheless provide below a number of recommendations to help dietary supplement companies establish procedures for monitoring safety issues and assessing the need for additional voluntary warnings. However, we caution that due to the complexity of these issues, manufacturers and marketers of dietary supplements should consult with legal counsel to address potential issues associated with product liability exposure, including the potential addition of voluntary warnings.

Monitor FDA Statements, Scientific Developments, and Literature that May Be Relevant to the Product

According to failure to warn product liability case law, the critical issue in determining liability is whether a company knew or should have known about the potential for harm. Thus, at a fundamental level, the law charges supplement manufacturers, like the manufacturers of all products introduced into the stream of commerce, with knowledge of what they reasonably should know about a product. By way of example, once the FDA issues a safety-related communication regarding a specific dietary ingredient or product, manufacturers may be deemed to be “on notice,” and the potential harm may be considered “known” or “knowable,” thus giving rise to a duty to warn.

While the obligation to be aware of developments may be self-evident, the vast amount of information available through electronic media presents a challenging environment for companies seeking to keep abreast of developments relevant to their products. Although general familiarity with the industry may result in anecdotal information coming to the attention of management, it is typically prudent for companies to periodically check relevant databases and other sources to keep up to date on safety-related developments. Obvious sources of information include the FDA website as well as industry publications, trade association updates and policies (if the company is a member of the association), peer-reviewed scientific journals, newsletters, etc. With respect to the sale of herbs and other botanical-based dietary supplements, companies should review the relevant sections of the American Herbal Product Association’s Botanical Safety Handbook, 2nd edition (CRC Press, 2013), since this expanded edition has been compiled by herbal experts and has been extensively peer reviewed, constituting an authoritative and reliable source on the relative safety of more than 550 herbs sold in commerce in the United States.³⁸ Further, companies also periodically could review sources of information concerning claims and lawsuits, scientific publications, news reports, and other web-based sources of data.

Monitoring of these various sources can be conducted in-house or through outside counsel or other outside contract services, but companies may want to develop a process that reasonably ensures that they are aware of relevant information.

Review Warnings Used for Other Products

Because very few dietary supplement warnings are mandated by the FDA, a court’s determination of whether a label warning should have been issued may often depend, at least in part, on what is reasonable in the industry (i.e., “industry custom”). Management should therefore assess whether other companies distributing similar products have disseminated warnings. Accordingly, as a corollary to the monitoring procedure discussed above, it may be prudent — in certain situations — for companies to periodically review warnings issued by other companies for similar products.

Causation Analysis and Harm Potential

Again, in the absence of regulatory guidance, management may want to consider — in appropriate situations — engaging an independent scientific expert to analyze and determine if there is a basis to believe the product causes the alleged harm. Such analyses may be useful in defending against product liability lawsuits and also in providing consumers with information concerning the safety of the product. If, on the other hand, the results of the analysis provide data that may support the existence of a risk of harm, management can make an informed decision regarding the addition of a voluntary product warning.

Development of Warning Verbiage

If a company decides to add a label warning, it must consider carefully the content of the warning. As a general matter, language should be as clear and concise as possible and should avoid technical jargon. Depending on the situation, it may be necessary to advise consumers of the likelihood and severity of the risk. Placement of the warning also can be crucial, as a warning can be deemed insufficient if not positioned appropriately on the label.

Based on the above criteria, it is often helpful to review FDA-required warnings (regardless of their applicability to food/dietary supplement companies, drug companies, or device companies) as templates for the development of appropriate warning verbiage and placement. The FDA has substantial expertise developing product warnings, and courts may be deferential to warning verbiage — and placement — that mimics the language mandated by the FDA in similar situations. Ultimately, though, the development of appropriate warning language requires an individualized assessment by appropriate experts.

Bring Along the Industry

In cases where management determines that a warning should be added to product labeling based upon an issue that may relate to other products as well (e.g., an ingredient-related warning potentially applicable to an entire class of products), it may be advisable to notify competitors, trade associations, and/or the FDA in order to ensure that potential risks are publicized appropriately. This also will help to ensure that the warning is used throughout the industry and is not viewed by consumers as being product-specific. For example, a dietary supplement company could work with a trade association to develop a model ingredient warning for wider dissemination throughout the industry. This would avoid the competitive disadvantage that may arise from being the “first adopter” of a warning.

Transactional Issues

Increasingly, dietary supplement companies have become attractive targets for acquisitions and other merger and acquisition-related activity. Both financial and strategic buyers need to be aware of the potential risk of product liability claims and lawsuits and should engage experienced counsel during the diligence process to assess the risk associated with the target’s operations both from a regulatory and litigation standpoint.

In this regard, it is important to understand historical claims data as well as the company’s quality assurance processes. It is often well worth the time and expense to exercise diligence on behalf of the company’s manufacturing processes and historical labeling/warning practices in order to identify potential risks.

Insurance Coverage

As the dietary supplement industry grows and matures, companies may see advantages in exploring different levels of insurance coverage for product liability claims. As in the pharmaceutical industry, traditional coverage may be difficult to obtain or be overly expensive. Accordingly, companies should consider exploring self-insured programs, captive arrangements, and other alternatives for mitigating risk and controlling costs.

Conclusion

The dietary supplement industry represents an important and growing component of the US economy, as consumer demand for dietary supplements continues to increase. As with any successful industry, market penetration and growth often comes with a price: greater exposure to product liability risk. Although the dietary supplement industry can claim a strong safety record to date, dietary supplement companies nonetheless should adopt a proactive approach to mitigating product liability risk by considering the addition of product warnings — where appropriate — based upon the recommendations outlined herein.

Paul D. Rubin, Esq., is a life sciences partner in the Washington, DC office of Ropes & Gray LLP, specializing in FDA/FTC regulatory law. Lee S. Gayer, Esq., is litigation counsel in the New York office of Ropes & Gray LLP, specializing in product liability law. Jessica M. Band, Esq., is an associate in the Washington, DC office of Ropes & Gray LLP.

*See “Perspectives about the Potential Hepatotoxicity of Various Herbs, Including Green Tea Extract” on page 52 of this issue.

^† Although beyond the scope of this article, certain states may require warnings for dietary supplements, as demonstrated by the number of states (including California and Texas) that required warnings for dietary supplements that contain ephedra.

^‡ The district court reduced this amount to $4.35 million on constitutional grounds.

^§ The plaintiff must meet the burden of proof by showing both general causation (that the substance could cause the harm in question) and specific causation (that the substance did in fact bring about the harm in question).

^ǁ Adverse incident reports alone cannot prove causation due to a lack of a control group. The court found that the expert’s reliance on an article in the New England Journal of Medicine that described 140 adverse incident reports did not render his testimony sufficiently reliable.

^¶ The court not only took issue with the FDA’s “flawed methodology” in “rel[ying] heavily on adverse incident reports without sufficient scientific controls,” but also observed that the FDA applies a reduced evidentiary standard in its risk-benefit calculation when determining whether to institute any informal or formal action against a dietary supplement manufacturer.

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