A California-based physician and the companies that he controls have settled charges by the Federal Trade Commission that “amniotic stem cell therapy” can treat serious diseases, such as Parkinson’s disease, autism, macular degeneration, cerebral palsy, multiple sclerosis and heart attacks.
As set forth in the complaint, the defendants earned millions of dollars offering stem cell therapy between 2014 and 2017. Injections ranged from $9,500 to $15,000, with “booster” treatments that cost between $5,000 and $8,000.
The complaint alleges that the individual defendant acted as the main spokesman and marketer of both companies, touting – without evidence – that stem cell therapy could treat a wide range of serious diseases. Defendants allegedly claimed, online, that the therapy could restore the vision of blind patients, citing the case of a “101 year old Lady once blind for 7 years” who, thanks to stem cell therapy, could see again. The website’s homepage also claimed that the therapy could “reverse autism symptoms.”
The settlement prohibits the defendants from making these and other health claims unless they are truthful and supported by competent and reliable scientific evidence. Specifically, it prohibits defendants from misrepresenting that any product or service: cures, mitigates, or treats any disease or health condition, including Parkinson’s disease, autism, multiple sclerosis, cerebral palsy, traumatic brain injury, heart disease, macular degeneration, chronic kidney disease, osteoarthritis, and stroke; or is comparable, or better than, conventional medical treatments in treating any health condition, unless such claims are true and can be supported by competent and reliable scientific evidence.
The settlement also imposes a $3.31 million judgment that will be partially suspended after they pay $525,000 to the Commission, which may be used to provide refunds to consumers harmed by the defendants’ allegedly deceptive conduct. The order also requires the defendants to notify all current and former patients of the settlement.
The Proposed Stipulated Order can be seen, here.
“Clinics must have solid evidence to back up their claims before advertising that stem cell therapy can treat serious medical issues, particularly those affecting children and older adults,” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection.
If you are interested in the implementation of preventative claim substantiation compliance protocols, or if you are the subject of a regulatory investigation or enforcement action, you can contact the author directly at rnewman@hinchnewman.com.
Richard B. Newman is an FTC defense lawyer at Hinch Newman LLP focusing on advertising and digital media matters.
These materials are provided for informational purposes only and are not to be considered legal advice, nor do they create a lawyer-client relationship. No person should act or rely on any information in this article without seeking the advice of an attorney. Information on previous case results does not guarantee a similar future result. Hinch Newman LLP | 40 Wall St., 35thFloor, New York, NY 10005.
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