Pantron I Corporation and Hal Z. Lederman market a product known as the Helsinki Formula. This product supposedly arrests hair loss and stimulates hair regrowth in baldness sufferers. The formula consists of a conditioner and a shampoo, and it sells at a list price of $49.95 for a three-month supply. The ingredients that allegedly cause the advertised effects are polysorbate 60 and polysorbate 80. Pantron offers a full money-back guarantee for those who are not satisfied with the product.
The Federal Trade Commission (FTC) challenged both Pantron's claims that the formula arrested hair loss and promoted growth of new hair as unfair and deceptive trade practices. The FTC presented a variety of evidence that tended to show that the Helsinki Formula had no effectiveness other than its placebo effect (achieving results due solely to belief that the product will work).
The FTC introduced expert testimony of a dermatologist and two other experts who denied there was any scientific evidence that the Helsinki Formula would be in any way useful in treating hair loss. Finally, the FTC introduced evidence of two studies that had determined that polysorbate-based products were ineffective in stopping hair loss and promoting regrowth. In response, Pantron introduced evidence that users of the Helsinki Formula were satisfied that it was effective. It offered testimony of eighteen users who had experienced hair regrowth or a reduction in hair loss after using the formula.
It also introduced evidence of a ‘‘consumer satisfaction survey'' it had conducted. Pantron also introduced evidence that more than half of its orders come from repeat purchasers, that it had received very few written complaints, and that very few of Pantron's customers (less than 3 percent) had redeemed the moneyback guarantee. Pantron finally introduced several clinical studies of its own, none performed in the United States or under U.S. standards for scientific studies. The evidence from these studies did show effectiveness, but the studies were not random, blind-reviewed studies, and thus did not take into account the placebo effect. Discuss.