National Advertising Division Finds Certain Perrigo Infant Formula Cost Savings Claims Supported; Recommends Others be Modified or Discontinued

New York, NY – Nov 30, 2022 – The National Advertising Division (NAD) of BBB National Programs determined that Perrigo Company plc provided a reasonable basis for certain cost savings claims for its store brand hypoallergenic infant formula but recommended that other challenged claims be modified or discontinued.

Mead Johnson & Company (MJ), manufacturer of the competing Enfamil Nutramigen formula, challenged claims relating to Perrigo’s generic extensively hydrolyzed casein formula, one that is designed for infants with a cow’s milk allergy and is sold by various retailers under their respective store brands. The Perrigo claims appeared in consumer and pediatrician-directed websites, as well as in pediatrician-directed print advertising, and range from unqualified assertions of Perrigo’s store brand formula being more affordable to specific cost savings calculated according to Perrigo’s price-per-pound calculations.

At issue before NAD was whether Perrigo’s price comparison claims between its generic store brand hypoallergenic infant formula and Nutramigen are truthful and non-misleading.

Percentage Savings Claims

Based on IRI Market Advantage annual retail sales data and Perrigo’s price calculations on each container’s price per ounce, NAD found the following claims supported:

• “Store Brand Hypoallergenic Infant Formula costs less, allowing families to save at least 22% … compared to leading name brands”; and
• “The chart with the claim “provides the best value for hypoallergenic infant formula … at least 22% of  savings.”

NAD also determined that the advertiser’s evidence, a double-blind, randomized crossover clinical study, provided a reasonable basis to support the claim that Perrigo’s store brand formula is nutritionally comparable to leading name brand hypoallergenic formulas.

Monthly Savings Claims

NAD determined that the IRI retail sales data and Perrigo’s calculations provide a reasonable basis to support:

• The advertiser’s daily, weekly, monthly, and annual savings claims comparing Perrigo to Nutramigen;
• The bar graph titled “At Least $75 in Savings Per Month” depicting Similac Alimentum as costing $250 per month, Enfamil Nutramigen as costing $252 per month, and Perrigo Store Brand Hypoallergenic Formula as costing $173 per month; and
• The claim that “families who switch from expensive name brand formula to Store Brand infant formula can save approximately $62 monthly” as it relates to hypoallergenic However, NAD found that the second part of that claim “which can help cover more than half the cost of diapers” was not supported and recommended that portion of the claim be discontinued with respect to hypoallergenic formulas.

NAD concluded that disclaimers referencing 2021 sales data that qualify the $75 monthly savings claims should be modified to ensure they are clear and conspicuous and placed in close proximity to the claims they qualify.

Affordability Claims

Based on IRI retail sales data and Perrigo’s price calculations, NAD found the following claims supported:

• The general “more affordable” claim;
• “Parents deserve a more affordable hypoallergenic option and now they have one”;
• “Finally, you can now recommend a more affordable option for your families”; and
• “The cost comparison in the claim “parents deserve a safe effective and lower-cost hypoallergenic infant formula that meets the same high-quality standards as expensive name brands. And as their pediatric provider, you can now recommend a more affordable option with confidence.”

However, NAD determined that “the same high-quality standards as expensive name brands” conveys a broader message of equivalence that is not supported by the advertiser’s clinical study. Therefore, NAD recommended that this portion of the claim be modified to clearly state that Perrigo meets standards for AAP hypoallergenicity.

NAD also found that an unsupported message of broad equivalence between generic hypoallergenic formulas and brand name hypoallergenic formulas is reasonably conveyed by the claim “you can’t put a price on health and nutrition, but there’s no reason to pay a premium just for the name on the label.” Therefore, NAD recommended that the claim be discontinued or modified to avoid conveying such a message.

Implied Claim

NAD found that the implied claim caregivers will spend less money on hypoallergenic formula over the course of their infant’s cow’s milk allergy if they use Perrigo’s store brand formula instead of Nutramigen is supported. NAD noted that cow’s milk allergy infants need to consume hypoallergenic infant formula as a replacement for regular formula or breast milk, and the pricing evidence demonstrates that Perrigo hypoallergenic formula costs less than Nutramigen.

Finally, NAD considered whether MJ’s evidence shows that Nutramigen offers materially different benefits than Perrigo products such that Perrigo’s price comparisons between the infant formulas are inherently misleading. When evaluating health claims especially in the context of infant nutrition NAD requires competent and reliable scientific evidence including when that evidence is used to rebut the advertiser’s evidence that establishes a reasonable basis to support its advertising claim. After considering all the data in the record, NAD determined that MJ has not provided stronger, more persuasive evidence reaching a different result than the evidence provided by Perrigo.

In its advertiser statement, Perrigo stated that it “will comply with NAD’s recommendations.” The advertiser further stated that while it “disagrees” with NAD’s recommendations regarding its advertising, “Perrigo respects the self-regulatory process, and appreciates the NAD’s decision and careful analysis.”

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About BBB National Programs: BBB National Programs is where businesses turn to enhance consumer trust and consumers are heard. The non-profit organization creates a fairer playing field for businesses and a better experience for consumers through the development and delivery of effective third-party accountability and dispute resolution programs. Embracing its role as an independent organization since the restructuring of the Council of Better Business Bureaus in June 2019, BBB National Programs today oversees more than a dozen leading national industry self-regulation programs, and continues to evolve its work and grow its impact by providing business guidance and fostering best practices in arenas such as advertising, child-directed marketing, and privacy. To learn more, visit bbbprograms.org.

About the National Advertising Division: The National Advertising Division (NAD) of BBB National Programs provides independent self-regulation and dispute resolution services, guiding the truthfulness of advertising across the U.S. NAD reviews national advertising in all media and its decisions set consistent standards for advertising truth and accuracy,    delivering meaningful protection to consumers and leveling the playing field for business.