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FTC takes on deceptive stem cell therapy claims for blindness cure and autism treatment

By David Horowitz, Susan Lee & Lowell Zeta
November 7, 2018
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On October 18, the Federal Trade Commission (FTC) announced it settled charges against California-based Regenerative Medical Group, Telehealth Medical Group, and the founder of both companies, Dr. Bryn Jarald Henderson, based on deceptive stem cell therapy claims.  In its complaint, the FTC alleged Henderson and the companies made unsupported claims, including that “amniotic stem cell therapy” can treat serious diseases, including Parkinson’s disease, autism, macular degeneration, cerebral palsy, multiple sclerosis, and heart attacks.  Henderson and the companies even claimed that the treatment could “reverse autism symptoms” and cure blindness.  The FTC asserted that the claims are not supported by scientific evidence in violation of the FTC Act, which prohibits false advertising and deceptive practices.  The settlement:

  1. Imposes a partially suspended $3.31 million judgment, which represents what patients paid for the treatments,
  2. Prohibits Henderson and the companies from making these and other health claims in the future unless the claims are true and supported by competent and reliable scientific evidence, and
  3. Requires the defendants to notify current and former patients about the settlement within 30 days.

In addition, under the terms of the proposed order, Henderson and the companies are required to submit compliance reports to the FTC of any changes in ownership interest or business activity for the next 10 years.

FTC blasts “dramatic” marketing claims

In a “Business Blog” post, the FTC describes Henderson’s marketing claims as “dramatic,” citing a promotional letter from Dr. Henderson that reads, “Lives are being saved, the blind see, the crippled walk and the patients with heart, lung, kidney and nerve diseases can alter the course of their suffering with a simple therapy [that] lasts for years and impacts their lives NOW!”  In addition, one of the company’s YouTube videos featured an 11-year-old girl with cerebral palsy who purportedly spoke “her first words” after receiving treatment from the defendants; yet, the FTC points out “there are no human clinical studies showing that amniotic stem cell therapy treats any diseases in humans and certainly not the long list of conditions the defendants claimed to cure.”

In order to avoid running afoul of health representation laws, the FTC advises clinics:

  • Don’t draft your ad copy until you have methodologically sound testing in hand that demonstrates statistically and clinically significant results: products that promise to treat or cure diseases need the support of human clinical testing.
  • Exercise caution when using in-the-headlines medical terms, such as “stem cell treatment,” which covers a broad range of therapies.

Historic first for FTC enforcement against stem cell clinics

This is the first time the FTC has cracked down on stem cell clinics, and the action against Regenerative Medical Group and Telehealth Medical Group follows a trend of regulatory actions by federal agencies, including FDA, challenging false and misleading claims related to unproven treatments for autism, arthritis, macular degeneration, and other serious conditions.

FTC’s attention to deceptive stem cell therapy claims is particularly noteworthy because, under a longstanding agreement, FTC defers to FDA for the regulation of prescription drug advertising and promotion, raising the question of how the two agencies will collaborate on human cell and tissue products in the future.  We have also been monitoring how FDA is following through on its commitment to increasing focus on oversight and enforcement in the regenerative medicine space, including injunction and seizure actions and a Warning Letter against other stem cell clinics, recently summarized here.  We will continue to report on stem cell enforcement issues as the FTC and FDA continue to implement their stepped up enforcement against stem cell therapy claims lacking scientific evidence.

Photo of David Horowitz David Horowitz

Partner, Washington, D.C.

David Horowitz brings 25 years of combined experience at the U.S. Department of Health and Human Services (HHS) and the FDA to help clients anticipate and navigate regulatory challenges, and participating in the policy-making process.

As Deputy General Counsel at…

Partner, Washington, D.C.

David Horowitz brings 25 years of combined experience at the U.S. Department of Health and Human Services (HHS) and the FDA to help clients anticipate and navigate regulatory challenges, and participating in the policy-making process.

As Deputy General Counsel at HHS (2010-2017), David oversaw and coordinated legal services in support of FDA, the Centers for Disease Control and Prevention (CDC), the National Institutes of Health (NIH), and international and emergency preparedness programs. His work focused on FDA regulatory policy and litigation. During his tenure at FDA – which included five years as head of the Office of Compliance for drugs, and three years as Assistant Commissioner for Compliance Policy – David played a leadership role in major initiatives, including the modernization of FDA’s approach to pharmaceutical manufacturing quality and the agency’s efforts to develop and implement a more scientific, risk-based approach to inspection and enforcement.

Over the course of his career at HHS and FDA, David developed substantial knowledge pertaining to FDA law and policy, with particular emphasis on pharmaceuticals, compliance, and the application of administrative law. He also developed a deep understanding of the institutions, organizational structures, procedures, and cultures through which regulatory policy and compliance decisions are considered, developed, and implemented across all branches of government, including Congress and the courts, as well as various components of FDA, HHS, Office of Management and Budget, Department of Justice, and the White House.

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Susan Lee

Susan Lee’s practice focuses on the U.S. Food and Drug Administration’s regulation of pharmaceuticals and biological products. Susan counsels clients on a broad range of FDA legal and regulatory matters, with particular areas of expertise and interest in advertising and promotion issues; the…

Susan Lee’s practice focuses on the U.S. Food and Drug Administration’s regulation of pharmaceuticals and biological products. Susan counsels clients on a broad range of FDA legal and regulatory matters, with particular areas of expertise and interest in advertising and promotion issues; the design and conduct of clinical trials; approval standards for new products; and the FDA-related considerations that arise in the context of acquisitions, collaborations, licensing arrangements, and other types of transactions in the pharmaceutical and biotechnology sector.

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  • Posted in:
    Administrative
  • Blog:
    Focus on Regulation
  • Organization:
    Hogan Lovells
  • Article: View Original Source

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