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Executive Summary

FTC OTC ADVERTISING AND LABELING CONSUMER PERCEPTION STUDY, backed by FDA funding, will evaluate consumer understanding of common OTC terminology. The Federal Trade Commission and FDA are scheduled to meet on March 26 with the Non-prescription Drug Manufacturers Association to discuss industry reactions to a draft study protocol that has been circulating since early March. The study is meant to collect information on how consumers understand current OTC labeling and advertising terminology and the format in which such information is presented. The specific ad categories on which the study will focus will be discussed at the meeting. The proposed study design calls for consumer panels to review mock OTC ads incorporating commonly used advertising and labeling information. The panelists will then be asked to fill out questionnaires evaluating their understanding of the information. Market Facts, an independent Washington, D.C. research company, has been awarded a $159,000 contract to conduct the study, with most of the funds coming from FDA. Once a final protocol is established, the study proposal still must be approved by the Office of Management and Budget. FDA does not expect any data from the study before the end of the year. FDA Division of Advertising, Marketing and Communications consumer safety officer David Banks first hinted that such a study might be conducted at a presentation in April of last year, referring to FTC's use of "copy testing" in advertising investigations to determine how consumers perceive certain ad claims ("The Pink Sheet" April 29, 1991, p. 3). The current project results from division director Lou Morris' six-month detail at FTC last year, where he worked two days a week to gain an understanding of that agency's methods for evaluating consumer perceptions of advertising. Industry concerns about the intent and methodology of the study were aired at a Jan. 15 meeting between FDA, FTC and NDMA. At that time, only a letter of understanding between FTC and FDA describing the study in general terms had been developed. NDMA has since received and is reviewing the draft protocol. In reaction to the letter of intent, NDMA said it was concerned that the study will be a search for evidence against individual OTC ads. FDA said that the use of mock ads shows that the study is intended only to develop a better understanding of what types of ads potentially could be misleading or confusing to consumers. Such a database of deceptive or poorly understood terminology, however, could be used as supporting evidence in future FTC hearings or investigations. NDMA also was concerned that the study will evaluate both labeling and advertising, citing a difference in scope and intent between labeling and ads. The trade group added that it had problems with some aspects of the study's methodology.

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