American Society of Cataract and Refractive Surgeons

J U N - 0 6 - 9 5 	-14:1 7 F R O M : J + B 	DC 	I D :
, . 	.C" 	"-% 	7.
UNITED STATES OF AMERICA
FEDERAL TRADE CBMMISSfBN
~ A S N I N ~ T O N ,	D.C. 20580
Jenald A , 	Jacobs, E s q .
Jenner h 	B l o c k
2 1 Bupont 	Circles N.W,
Wa~hingtsn,D,C, 	2 0 0 3 6
Dear Mr. 	Jacobs:
This letter ~espondsto your request 	fox a staff a d v i s o q
opinion concerning proposed 	advertising widelines 	of 	t h e
merican 	Society of 	Cataract and Refractive Surgeons. 	A s 	is
discussed below, the guidelines appear generally consistent w i t h
eke approach the Cambssion and 	its staff 	have t a k e n w i t h 	respect
to p r i v a t e 	professional asssefatisns2seiguiasion 	of advertising
by 	t h e i r mehers. 	Ae 	such, 	t h e psopssed guidelines may provide
valuable 	afssistarrce to Society rrreaere and others who w i s h 	to
engage 	in truthful, 	nowdeceptive advertising o f 	h e a l t h 	case
a e n i c e s , 	and 	thereby advance e o n s u e r welfare-
According 	to t h e 	i n f o m a t i a n you 	have provided, 	t h e h e r i c a n
Society of 	Cataract 	m d 	Refractive Surgeons 	is a v o l u n r a q
association of approximately 	5,000 	ophthalmologists who
specialize in the extraction of cataracts, 	b p l a n t a t i o n sf
intrascular l e n s e s , 	eerneaf 	refractive-"surgeq, and 	other 	surgergr
r e l a t i n g to t h e 	a n t e r i o r 	sewenl of tk4 eye, 	As 	1 underatand 	L t ,
roughly half of 	t h e 	Society" 	members advertise, and many have
requested 	g u i d a n c e 	fram t h e Society to h e l p 	them avoid 	f a l s e 	and
deceptive alarements 	in t h e l r advertising* 	The Sseiety proposes
to issue guidelines that s e t 	f o r t h its viewa on criteria 	f o r
evaluazing advertising Q L 	cataract and refractive surge-
ssniees. 	You have represented, and the preamble 	ss 	t h e
widefines 	atates, 	that these principles 	are intended to be
a d v i s o q , 	Adherence 	to Eke pfdeliaes 	i e not 	a requirement BOP
m e b e r s h i p , 	and Society does not 	plan to undertake any
enforcement.
Action by 	professisnaZ aasocfatians to p r e v e n t 	f a l s e or
deceptive srdverti:,!sing, even LIhr~ugherrtaresable rules, La, 	as a.
general matter, 	emtirely consistent with 	Lhe aneitruab lawe
because 	such a c t i o n promotes 	r a t h e r 	than h i n d e r s 	competition,
The 	free 	faow sf t r u t h f u l 	information f a c l l f t a t e s the e f f i c i e n t
operation sf a competitive economy, 	while 	false or deceptive
i n f o m a t i o n d i s t o r t s 	the workings of the market. 	Indeed, 	the
Cornmiasion" 	sawtltrust 	enforcement actions challenging agreements
among competitors to suppress broad 	categories of 	truthful,
nondecegllve 	I n f a m a t i o n have esnsistezrtly 	recognized that
@ 	p r i v a t e 	professional associations 	have 	"a v a l u a b l e and unique

4	
JiJN-@Ei;95 	- 1 4 = 18 FROM: J + B 	DC 	I D : 	P A G E
a	
I ' 	r-9 	,--.-
,-49 	<
rehe to play 	w i t h 	respect 	to deceptive advertising and ~ppressive
E t h i c a l 	r u l e s 	directed 	toward false or deceptive advertising
w i l l 	promote competition and consmer welfare provided 	that they
are reasonably tailored to that end, 	T h u s , 	the essential issue
in assessing the Society" 	prropoeed guidelines is whether 	they
are likely to inhibit s i m i f i c a n t l y t h e dissemination sf
t r u t h f u l , 	nondeesptive 	b n f ~ m a t l s n .
Many of the widelines 	rewire no discussion because 	on
t h e i r 	face they appear 	simply to advise against advertising 	that
would 	be 	false, 	In p a r t i c u l a r , 	this appears 	to be 	the case w i t h
guidelines nmbered T h e e through E i g k , 	Ten, and T h i r t e e n . 	For
example8 Guideline Four pzovides that+-advertisers should not
suggest that t h e i r c l i n i c a l 	practice 6s conducted primarily 	f o r
charitable 	sr research 	purposes unPesd t h a t 	is t h e 	case,
Other widelines 	Warrant some discussion i n order 	to assess
t h e i r 	r e l a t i o n s h i p to Federal Trade Comissiow p o l i c i e s
concerning particular foms of 	deceptive advertising, and to note
potential 	issues that could arise in the application of t h e
guidelines 	ea 	individual caeea,
Guideline One states:
Advertising t h a t claime or suggests superiority or
u n i p e n e ~ ai n an sphthalmolaqisr% 	t r a i n i n g , 	prsficiency, 	or
expexiencs om %esuLts is e&jec% 	es substantiation by 	the
aphthabmolsgist,
This guideline" 	requirement 	f o r 	substantiation s f 	certain kinds
sf advertising claims 	appears generally consistent w i t h 	FTC
r e g u l a t i o n 	of advertising, 	The @ s m i s e i s ngenerally requires 	a
raasonable basis 	f o r advert%elng claims Because eansunters 	expect
t h a t 	advertisers have a reasonable basis 	f o r elaims t h e y make,
and would eherefsre be deceived if s u c h eupport were backing,
The amount 	and type o f 	substantiation rewired depends an what
kind of support the ad 	leads conamers 	to expect, 	Claims 	that do
not 	imply 	substantiation, s u c h 88 subjective claims 	("friendliest
ssmice"), do not r e p i r e sueh support, 	The touchstone 	in
asseseing 	substantiation p e s t i o n s 	i s 	what consmers would
reasonably 	expect, 	-	See PTC Policy Statement Regarding
AdvextLsing 	Substantiation, 	104 FrT*Ce-8%9 ( 5 9 8 4 ) - 	Although 	the
Society'@ proposed quideline Qaes not l h r n l t 	t h e 	substantiation
requirement to claims 	f o r which 	c o n e w e r s would 	e x p e c t 	support, 	I
recognize t h a t 	the provisions 	are intended to r e p r e s e n t 	only
general 	g u i d i n g principles 	f o r advertisers, 	As s u e h , 	Guideline
One p r e s e n t s 	no serious concern. 	I would note, however, 	that
s h o u l d the Society at 	some f u t u r e t i m e decide to enfarce the

JUN-06-95 	14 1 1 8 FROM: J a B 	B C	
- + 	rb-0	
I *
. 4 	.
guidelines as mandatoq 	rules sf 	conduct, 	it ehould bear 	in mind
the need to consider t h e way that a particular advertisement is
likely 	to be underst~odby sonsmere 	and the e x t a n t af
aubstantiatian, if any, 	t h a t 	i s 	implied,
Guideline melvs appears 	to represent application o f
substantiation principles to cfaima outside the area of 	the
ophrha%molsgiet% 	pprofeeeional 	skill@, 	Tkie provieion 	recamends
tkat if advertising cites 	"esnelusisns reported 	in s c i e n t i f i c
literature," the literature s h o u l d be a published 	wstk 	that has
been eubjected 	to peer revfew, 	Since conswers are l i k e l y 	6s
expect 	that 	scientific articles meet professional standards 	far
scholarly research, s u c h a provision 	appears intended to prevent
coneurnex 	deception, 	I would note that u n d e r 	FTC 	substantiation
analysis, publication in a peer-reviewed 	journal is neither a
necesecsq sr sufficient criterion for d e t e m i n i n g w h e t h e r or not.
gscfentifie material is of 	8ueh qualitp as 	to c o n s t i t u t e 	the type
02 	evidence 	necessaq 	to establish a =asonable 	b a s i s 	f o r 	an
advertising c l a h , 	An unpublished study m i g h t 	in f a c t 	meet
prafasaisnal standards 	f o r 	e c i s n t i f i c reaearck, 	and 	t h e 	FTC dsee
net require that advertisers rely onby on published works P s r
substantiation sf advertising r l a i m a , 	h 	flat ban 	on a11 claims
based 	on unpublished data could deny eonsunrers important t r u t h f u l
I n f a m a t i o n and 	raise 	significant a n t i t r u s t 	concerns, 	Guideline
I"iLselve, however, 	is an a d v L a a q atatenrent whose staced purpose 	is
t h e 	prevention sf deception, 	and T do w e t 	understand 	it to
c o n s t i t u t e 	sueh a ban,
Guideline W s addresses advertising of professional 	titles,
degree@, and mentlaerehips, 	It pravides that where 	s u e h matters
are represented Lo be 	"prodssaional medical 	c r e d e n t i a l s 	that
relate 	La expertise," then they 	should in fact 	refleet tkat the
individual has 	been evaluated and found to m e e t 	"objective and
reasonable 	criteria 	far medical education, 	training, experience
or examination." 	On its face, 	the ~ i d e l i n eappears aimed 	at
deception, providing in essence that advertisers should not c l a i m
t k a t 	t b t l e a , 	mernlPerships, 	or atber credentials signidy
prsfessionab 	recognition of ewertise unless tkat 	is the case-
Advertising of bogus credentials issued by 	a 	"dipPoma m i l l " 	would
represent deceptive advertising that would conflict w i t h 	this
provision, 	The 	intended 	scope a f 	Guideline Wo, 	however, 	is not
e n t i r e l y ebeax, 	because 	it I s unclear when 	an advertiser would 	be
deemed to have 	"representeda8t h a t 	his or her we&ership 	in a
professional organization is a credential that relates to
expertise, 	F s s exismple, 	if one simply announces 	one's mmernbership
in a professional organization such as one" 	ssLate 	or local
medical 	society, 	t h a t 	does not 	appear, 	without 	more, to be a
representation tha% such membership 	"relate[s] %o expertise," and
i t is my 	understanding that t h e Society doe3 n o t 	view 	auck
announcements 	as falling w i t h i n 	the pumiew 	of t h i s 	guideline.
A n y 	application sf this guideline s h o u l d of course 	f o c u s on how
cansuers 	are afkely to understand particular 	advertisements-

P A G E 	6
d U N - 0 G b z & 5 	-14 : f 9 F R O M : J+B 	DC 	I D :	
C--C
. 	*
Guideline Nine addmeeses u s e of testimonials by pasients,
and pravides 	c h a r 	they 	s h o u l d o n l y be used where t h e 	t e s t i m o n i a i
refleets 	~epreeentative mesulta 	in the ~ p h t h a L m ~ l o g i s t	s	@
plractice, 	It alas sratea 	tkat only actual patiente, rather than
actors 	o r 	models, should Be used, 	Z would n o t e 	that the
e o m i s s i a n ' s 	"Guides Concerning Use of 	Endorsements a n d
~ e r s ~ i m s n i a l a	i n Advertfeinng," 	l6 1 6 - F . R , 	S 255, 	are, Enore 	flexible,
and permit 	s u c k 	tsstimoniala 	provided 	t h a t 	t h e advertiser
d i s c l o s e a 	t h e 	limited 	applicability 	sf the endorser"' 	experience
and 	the f a c t 	that persons 	in t h e advertieement are 	n ~ ta c t u a l
caneuers, 	T h i a 	aspect of the Society" 	proposed guidelines,
however, 	would raise aneilruss concerns 	only 	if it substantially
inhibited 	t h e dissemination o f 	t m t k d u l , 	nsndeceptive
Informaeion- 	Such a n effect appear8 	unlikely to r e s u l t 	d r s m 	t h e
S o c i e t y " 	sadvissq statement,
G u i d e l i n e s 	Eleven, 	F i f t e e n , 	Eighteen, Nineteen, 	and W s n t y
all recornend t h e 	i n c l u s i o n of 	certain disclosures 	in
advertising. 	DiscOosure s e q i r e m e n t ~c a n be h n e f i c i a l 	when they
a r e 	reasonably related to &Re pmeventian 	of 	deception. 	They
should be applied w i t h some caution, however, 	f o r such
requirements can 	s e n e 	to discourage adverriaing by making 	i t
more costly and diluting t h e advertiser" 	message. 	Some of t h e
proviabone, if construed 	LQ impose across-the-board d i s c l o s u r e
requfsements, could r a i s e concerns, 	but we do n o t 	understand
these advisory guidelines 	to do so. 	In applying t h e s e 	guidelines
to 	i n d i v i d u a l 	advertisemente, t h e c r i t i c a l 	inquiry 	should be
whether 	vithaut 	the diseloaure the advertisement would 	deceive
cBnB1ULIIIeZB.
GuidebXne F o u r t e e n 	provides 	that advertising s h o u l d 	not
suggest that 	the-phyebcian r o u t i n e l y waives deductible or
eopaynrent 	obligationo under the Medicare program. 	Unlike s t h e r
proposed guidelines, this provision appears 	LO be aimed not
simply at deceptive advertising but rather at the u n d e r l y i n g
conduct, 	Federal law makes 	It a 	felony 	f o r 	anyone 	to knowingly
and willfully offer, pay, 	~ o l i c i t ,or receive 	any remuneration 	i n
order 	to induce buefness 	r e i a u n s e d under 	t h e Medicare or
Medicaid 	programs, 	The Department of Health and H m a w 	Services
has declared 	thac phyeicians 	tkat r o u t i n e l y 	waive Medicare Par% B
c s p a p e n t s and deduetiblea 	are in violation of 	that l a w , 	See	-*
54 Fed, Rege 3088, 	3092 	[ J a n u a q 2 3 , 	1989). 	T h u s , 	a n
ophrkalmologLat w h o 	truthfulby advertises that he routinely
waives Wedleare copaments and deductibfee 	is effectively
announcing a prackice 	s n i n t e n t i o n to violate federal law.
Advising 	againat 	auch advertlafng, even Lhsugk 	t h e 	advertising is
not deceptive, does n o t 	appear to present 	any r i s k 	to
competition. ,
Guideline S i x t e e n advises Ghat 	"[ajdvertising should not
promote 	equipment, 	devices, 	or d r u g s awaiting approval by 	the
4

7
* 	b
@
e 	P A G E
J L J % M - @ % - ~ ~ 14 :28 FROM: J + B 	BC I D : -	# -
Food 	and Drug A d i n i s z r a t i o n 	as safe and effective," 	The
p r o v i s i o n 	is entitled 	"Eq~1serimraneal/I3"svestigstional	P r o d u c t s ,
and, 	as 1 understand it, 	is intended 	to apply only 	to such
pnoducss 	and 	to recornend that m e m k r s 	comply with Food and Drug
~ & l w i s t r m s i o n regulations eowcsening m p r s a e n t s % i s n s regarding
s a f e t y 	and e f f i c a c y o f 	investigational produces. 	As 	such, 	it
does 	n o t 	appear to raise antierust concerns, 	Rsrecvet, 	to t h e
sxbewt 	t h a t 	the mle 	is aimed a6 medical 	~slmlecyand efficacy
c l a i m s 	that cannot 	be adequately 	substantiated, it addresses
& ~ d v e r t i s L n gekae may be deceptive under 	PTC standards,
Finally, Guideline Sevenreen stares 	that medical equipment,
dxugs, 	0% devieee 	shou%d n o t 	be 	adve~tisedas approved 	by the
road 	and Drug Administration. 	Such advertising i s prohibited 	by
federal 	e t a t u t e , 	21 U - S * C , 	S 3 3 9 ( L ) , 	Whether or not 	s u c h
advertising i s 	Snhesently deceptive, 	Z see no anrftruat problem
fn t h e 	Soefety counseling its mehers 	to avoid such a clear
v i o l a t i o n of 	Pan*
I n 	sum, the Swciety5s p r s p s e d 	guidelines appear 	on t h e
whole to be con85stent 	with Federal Tfade 	Csmissiow precedent
w i t h 	regard 	to private assscfatisns6 regulation o f 	advertising by
their members, 	As 1 rn sure you axe aware, this concPusisn
reflecce oney t h e opinian af the staff sf the Bureau 	sf
~ a r n p a g i t i a n , Under t h e C a m i s e i s n ' e Rules s f 	P r a c t i c e S 	B , 3{c),
t h e 	Comission 	is not bound 	by 	this advice and resemes 	t h e right
to rescind it at a later 	time and take such 	action as 	the p u b l i c
i n t e r e s t may require. 	This office retains the right to
reconaides the q e s L i o n s 	involved, and, 	w i t h 	n o t i c e 	ts 6As
requesting party, 	to rescind or revoke it8 s p i n i ~ nif
implementation sf the proposed conduct r e e u l t s 	in substantial
anticempetltFve ef%ecls, if t h e widelines 	are used 	f o r o t h e r
improper purpoaea, 	or if it othemise would be in the public
i n t e r e s t 	'to ds as,
V s q truly yours,
Assistant Director 	w 7