NAD Case Reopened, But Fungi-Nail Marketer Fails Again With ‘#1 Pharmacist Recommended’ Claim

New Jersey-based Arcadia Consumer Healthcare, Inc., succeeded in reopening a 2018 National Advertising Division case involving its ‘#1 Pharmacist Recommended’ claim for the Fungi-Nail line, but failed again to convince the NAD that survey findings justify the claim.

Arcadia Consumer Healthcare, Inc. met the high bar for reopening a National Advertising Division review but did not convince the watchdog that new survey findings adequately support a “#1 Pharmacist Recommended” claim for Fungi-Nail athlete’s foot products.

Bridgewater Township, NJ-based Arcadia was advised to discontinue the claim in 2018 after the NAD determined its survey results at the time insufficient. 

The company successfully petitioned the NAD to reopen the review, taking advantage of a procedure the advertising self-regulation group introduced in 2018. Director Laura Brett noted that re-reviews would be limited to “extraordinary circumstances.” (Also see "National Advertising Division’s Updated Procedures Allow Reopening Of Old Cases" - HBW Insight, 1 Oct, 2018.)

For its second attempt, Arcadia submitted findings from a survey that asked pharmacists, “When recommending a brand or product that treats fungus on the skin around the toenail, what brands or products do you recommend (select all that apply)?”

Respondents could choose from four products in addition to Fungi-Nail: FungiCure; ProClearz; Tinecide; and Myocide.

Of the pharmacists surveyed, 73% recommended Fungi-Nail, which contains tolnaftate 1%, the highest concentration permitted under the US Food and Drug Administration's FDA's OTC monograph for topical antimicrobial drug products, subpart C (topical antifungal drug products).

Advantice Health LLC, which markets Fungal Nail Renewal under the Kerasal brand, challenged the claims. It argued out that Arcadia’s survey failed to include the biggest competitors in the OTC antifungal marketplace when asking respondents to identify brands they recommend.

The NAD agrees in its decision published on 26 August, citing Lamisil, Lotrimin and Tinactin as the “undisputed brand leaders.”

The BBB National Programs Inc. investigative division said it was not persuaded by Arcadia’s argument that it did not include leading brands because they are “general” antifungals while its product is a “specialty” formula applied with a specific applicator to treat fungus around the toenail.

“While the advertiser may seek to differentiate its product from ‘general’ antifungal products, all antifungals contain the same ingredients (as specified by the monograph) and they all treat athlete’s foot, no matter where the fungal infection appears on the foot,” the NAD says.

Arcadia is advised not to make the pharmacist-recommended claim, which has already been used again on its website and product packaging. In an advertiser’s statement, Arcadia agreed to comply.

Some of Fungi-Nail's labeling claims and images have changed in compliance with previous NAD recommendations.

In its 2017 review of Fungi-Nail advertising – undertaken when Arcadia operated as Kramer Laboratories, Inc. – the NAD recommended discontinuation of the company’s “#1 Pharmacist Recommended” claim, which was based on a survey that asked pharmacists, “What would you recommend to your patients for nail antifungals?”

The NAD took issue with the product’s designation as a “nail antifungal” when the product is an anti-fungal for skin. Numerous ad claims, including the brand’s name, were deemed misleading on the same basis. (Also see "Athlete's Foot Firm Kicks Back On NAD Finding That Brand Is A Fungal Claim" - HBW Insight, 15 Jan, 2018.)

The OTC monograph for topical antimicrobial drug products allows athlete's foot treatment claims when specified conditions are met, but requires product labeling to include the disclosure, "This product is not effective on the scalp or nails.”

When Arcadia refused to comply with NAD’s recommendation to discontinue statements about treating nail fungus versus athlete’s foot, the NAD referred the company to the Federal Trade Commission.

The FTC responded in February 2018, declining to take further action after meeting with company representatives who highlighted changes made to Fungi-Nail advertising in line with NAD recommendations, short of a new trade name.

The NAD’s Brett, now also vice president of BBB National Programs, discussed the procedure for reopening cases during the group’s annual conference in New York in September 2018.

According to an NAD procedures document, a closed NAD or National Advertising Review Board review “may be reopened if the NAD director, in his/her sold discretion, determines that extraordinary circumstances warrant the reopening.”

In making that determination, the NAD director is expected to take into consideration factors including “if the reopening is requested based on new evidence,” “whether there is a satisfactory showing that the new evidence was not reasonably available to the party at the time the NAD record was closed,” and “whether the request has sufficient merit to warrant the expenditure of NAD resources.”