FTC imposes $6.5 million penalty on supplement outliers for making false claims
WASHINGTON — The final three of nine defendants sued for deceptively marketing dietary supplements will settle charges that the Federal Trade Commission and the State of Maine had filed in February 2017. The agencies charged the defendants with using deceptively formatted radio infomercials and print ads with fictitious endorsers to pitch products they claimed would improve memory and reduce back and joint pain.
The proposed orders announced Wednesday bar Synergixx, an ad agency, and its principals Charlie Fusco and Ronald Jahner from engaging in a wide range of marketing practices that have caused financial injury to consumers.
The FTC and State of Maine charged all nine defendants with making false and misleading claims about the supplements CogniPrin and FlexiPrin. The claims include that CogniPrin reverses mental decline by 12 years; improves memory by 44%; and improves memory in as little as three weeks and is clinically proven to improve memory. For FlexiPrin Synergixx advertised it reduces joint and back pain, inflammation and stiffness in as little as two hours; rebuilds damaged joints and cartilage; and has been clinically proven to reduce the need for medication in 80% of users and to reduce morning joint stiffness in all users.
According to the complaint, Synergixx and Fusco promoted CogniPrin and FlexiPrin through 30-minute radio ads that were deceptively formatted to sound like educational talk shows. The complaint also alleges that Synergixx and Fusco created inbound call scripts that deceptively claimed that consumers could try the supplements “risk-free” with an unconditional 90-day money-back guarantee, without disclosing requirements for obtaining refunds and making product returns.
The complaint also alleges that the defendants failed to disclose that consumers would have to enroll in an auto-ship continuity plan to qualify for the “risk-free” trial offer, and would have 14 days or less to try the products. It also charges Synergixx and Fusco with failing to make important disclosures when they “up-sold” consumers negative option buying clubs and discount medical programs with ongoing fees, charging many consumers for poorly disclosed auto-ship continuity plans they did not want.
In addition, Jahner, whom defendants presented as an objective medical expert, was charged with providing endorsements without examining the products or exercising his represented expertise. The defendants also allegedly failed to disclose that he was paid a percentage of FlexiPrin and CogniPrin sales revenues.
The two orders announced today settle the charges against Synergixx, Fusco and Jahner, and bar them from making the false or unsubstantiated health claims challenged in the complaint, require them to have competent and reliable scientific evidence when making health-related claims and require them to clearly disclose their material connections between product sellers and product endorsers.
The defendants are also barred from misrepresenting the existence or outcome of tests and studies when they promote health products. Additionally, defendants Synergixx and Fusco are barred from employing deceptive marketing practices relating to cancellations, negative-option payment plans, upsold merchandise and deceptive pricing practices.
The order against Synergixx and Fusco also requires that when they sell products through continuity programs, they must obtain customers’ express informed consent prior to enrolling consumers into such plans, including free-trial offers that convert to continuity programs at the end of the trial period. Finally, the order against Synergixx and Fusco imposes a $6.5 million monetary judgment that is suspended based on their inability to pay.
President Trump signs OTC Hearing Aid Act into law
WASHINGTON — Hearing aids addressing mild to moderate hearing loss are soon headed to a retail pharmacy near you. President Donald Trump last week signed into law the "FDA Reauthorization Act of 2017," which included the bipartisan Over-the-Counter Hearing Aid Act.
"The House and Senate passed this measure recently as part of the FDA Reauthorization Act with overwhelming bipartisan support," stated Rep. Marsha Blackburn, R-Tenn. "And on Friday, the President signed this landmark bill into law. For so many, this measure will finally make hearing correction affordable and within reach – with the latest technology, competitive prices and a short trip to your local pharmacy or shopping center," she suggested. "This bill addresses a problem that does not discriminate. At older ages, hearing loss becomes almost universal, affecting more than 60% of those in their 70s and nearly 80% of those over 80."
“I’ve heard from Iowans and others around the country in support of this provision,” added Sen. Chuck Grassley, R-Iowa, a co-sponsor of the legislation in the Senate. “Consumers are interested in new hearing aid products to improve their quality of life at an affordable price. The more products available, the more consumers will be able to find something they can afford that works for them.”
"Thanks to President Trump signing the FDA Reauthorization bill into law … consumers with mild-to-moderate hearing loss will no longer be at the mercy of companies selling expensive and cost-prohibitive hearing aids that cost thousands of dollars," commented Gary Shapiro, president and CEO, Consumer Tehcnology Association. "Instead, 40 million Americans living with hearing loss in the future can buy over-the-counter hearing aids at roughly one-tenth of what traditional hearing aids costs."
Now the real work begins, Shapiro suggested, as stakeholders including CTA work with FDA on quality-assurance measures that will enable the consumer to distinguish high-quality hearing enhancement devices for mild-to-moderate hearing loss from cheap, ineffective personal amplifiers.
According to CTA research, 1.5 million devices designed to amplify ambient sounds are expected to be sold in the U.S. this year.
Caret Pharma grows footprint with Fiber Choice acquisition
BOCA RATON, Fla. — Caret Pharma today announced it has entered into an agreement with Moberg Pharma to acquire the assets of Fiber Choice, a line of dietary supplements containing 100% natural, prebiotic fiber.
Fiber Choice will be marketed by IM HealthScience, a subsidiary of Caret Pharma’s parent company, Caret Group. It will join a growing digestive health product portfolio that already includes IBgard (for irritable bowel syndrome) and FDgard (for functional dyspepsia).
“We are pleased to welcome Fiber Choice to our family of companies. In a time of consumer empowerment and rising healthcare costs, people are taking a more active role in managing their own health-and-wellness. We believe Fiber Choice offers these consumers and their healthcare providers an important option,” said Fred Hassan, founder and chairman of Caret Group.