The Food and Drug Administration is maintaining its August 2017 commitment to step up enforcement against violative stem cell therapy and regenerative medicine companies. But FDA’s activity hasn’t stopped the Federal Trade Commission from flexing its own regulatory muscle against the same industry.
Regenerative Medical Group, Telehealth Medical Group, and their CEO entered into a proposed agreement earlier this month to settle a lawsuit with the FTC related to claimed health benefits of stem cell therapy. According to the complaint, the FTC found that the defendants had made false representations in various advertisements that were not substantiated by scientific literature or studies conducted by the companies. The advertisements included grand claims that the stem cells could reverse autism symptoms or help regain the sight of someone blind for seven years. With the companies charging up to up to $15,000 and $8,000 for initial and follow-up stem cell therapy treatments, respectively, the FTC asserted that the defendants “sold false hope at high prices.” The proposed settlement, in turn, appears to come at a high price for the CEO, Dr. Bryn Jarald Henderson, and his companies. If approved, the settlement would impose a partially suspended $3.31 million judgement, prohibit the defendants from making the objectionable and similar health claims in the future, and require notification of the settlement to current and former patients within 30 days.
The objections themselves should not be surprising, given the claims’ egregious and unsubstantiated nature. Rather, it is the FTC plaintiff emerging in the midst of continuous FDA action that may furrow readers’ brows. Before the FTC complaint, the FDA was already on roll, regularly issuing a stem cell Warning Letters. Practically simultaneous with FDA’s Fall 2017 public commitment to ramp up enforcement against offending stem cell companies, the agency issued bi-coastal Warning Letters to stem cell clinics in Florida and California. In January 2018, FDA issued a Warning Letter to a New Jersey stem cell clinic and moved for permanent injunctions in May 2018 to prohibit the aforementioned Florida and California clinics from performing additional stem cell procedures. With all the FDA activity, readers may have lost sight of other regulators, including FTC. That is, until now.
In its complaint, the FTC cited its authority under the FTC Act prohibiting both “unfair or deceptive acts or practices in or affecting commerce” and “the dissemination or any false advertisement in or affecting commerce for the purpose of inducing, or which is likely to induce the purchase of … drugs ….” Applying those standards, the FTC considered the defendants’ claims that their stem cell therapy could cure, treat, or mitigate specific diseases or health conditions, including Parkinson’s disease, autism, multiple sclerosis, cerebral palsy, traumatic brain injury, heart disease, macular degeneration, chronic kidney disease, osteoarthritis, and stroke to be either false or unsubstantiated. Earlier this Fall, the FTC exercised the same statutory provisions when bringing action against a Texas company for claiming its intravenously-injected therapy products could treat serious diseases such as cancer, multiple sclerosis, and congestive heart failure.
Through different agencies with the same general goal of protecting consumers, the FTC and FDA have so far been able to reprimand bad actors to protect not only the general public, but also the interests of compliant medical product companies.
In a marketing landscape fraught with enforcers, readers should remain keen to potential regulators. Beyond even FDA and FTC, the SEC remains ready to file action, as we have previously reported. A comprehensive strategy focused on regulators’ respective standards for health claims and substantiation can help minimize liability and maximize product success.