False Claims for Supplements Costs Marketers $38 Million in Deal with FTC
The marketers of several supplements that claimed their drugs did any number of things, from relieving arthritis pain to improving brain function, have now found themselves barred from making any claims about the health benefits of their products, absent scientific evidence of such, and on the hook for a $38 million penalty in a settlement deal with the Federal Trade Commission (FTC).
The supplements, Neurocet, Regenify, and Resetigen-D, were marketed by a suite of related companies—Mile High Madison Group, Inc., Nordic Clinical, Inc., Encore Plus Solutions, Inc., Le Groupe Mile High Madison, Inc., and Clinique Nordique, Inc. In numerous marketing campaigns directed primarily at senior citizens, the companies’ ads featured bold headlines about pain relieving and inflammation reducing effects (Neurocet), as well as improved memory and brain function, decreased body fat, the elimination of tinnitus and even the elimination of psoriasis, eczema, cold sores and warts (Regenify and Resetigen-D). All of these claims were buttressed by representations citing false and nonexistent clinical or scientific studies, along with false testimonials from doctors and “researchers at Harvard, Yale, Oxford, and Johns Hopkins.”
In response to the misleading claims, the FTC filed a complaint in the United States District Court for the Southern District of Florida alleging violations of the FTC Act (1) prohibiting unfair or deceptive acts or practices in or affecting commerce and (2) the dissemination of false advertisements in or affecting commerce for the purpose of inducing, or which is likely to induce, the purchase of food, drugs, devices, services, or cosmetics.
The companies and their principals settled with the FTC for $38 million—funds which will be administered by the FTC or its designee and used to redress the wrong done to purchasers of the supplements.
“These defendants promised miracle cures to people who needed real medical help,” said Andrew Smith, Director of the Bureau of Consumer Protection. “Companies need scientific evidence to back up health claims for their products; the Commission will continue to take action against marketers who can’t support their claims.”
In addition to the monetary settlement, the companies are now barred from making claims about the products absent scientific evidence and the approval of the FDA. In addition, they must also preserve records of any scientific studies, send consumers notice of the settlement within 30 days, and cooperate with compliance monitoring.
The FisherBroyles Pharmacy and Health Care Law team is pleased to keep those in the industry updated on topics of interest. Questions related to the subject matter of this alert may be directed to any of the following attorneys:
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