FIVE THINGS THE FTC WON’T LIKE ABOUT PRIVATE STEM CELL CLINIC ADVERTISING AND WHAT IT CAN DO ABOUT IT
December 17, 2018 Richard Jaffe
There have been some recent musings about what the FTC (Federal Trade Commission) might think about how the private stem cell clinics are advertising their treatments.
Here are the five things the FTC is going to have a problem with any stem cell clinic employing the advertising/disclaimers commonly used by these web sites:
1. Lack of adequate substantiation for the claims and implied claims
Under FTC law, claims made by businesses (including medical businesses, to the extent the FTC choses to assert jurisdiction over them) require adequate substantiation. In the medical field that means that the claims have to be supported by well-controlled clinical trials. (Of course, FDA approval would do the job as well.) My guess is that at least initially and without a fight, the FDA wouldn’t think any of the autologous MSC/SVF claims made by the stem cell clinics have adequate substantiation, and hence the FTC would view all such claims and implied claims of efficacy as false advertising.
2. Use of testimonials
Most of these clinics use testimonials from successfully treated patients. The FTC doesn’t particularly like testimonials, and it thinks that disclaimers following testimonials that “results may differ” or that the “testimonial doesn’t imply success in your or any other case” are not usually adequate to negate the implied efficacy claim.
3. Lack of clear and conspicuous disclaimers
Most of the disclaimers in these web sites are at the end of the page, require scrolling down, and are in small print. From the FTC’s point of view, that’s a violation of its clear and conspicuous disclaimer policy.
(Here it is: https://www.ftc.gov/system/files/documents/plain-language/bus41-dot-com-disclosures-information-about-online-advertising.pdf
4. Disclaimers which are contradicted by the claims
The author points out that the there is an inconsistency between the claims made and the disclaimers. If the FTC agrees, that would also be a problem, especially as the claims are prominent and the disclaimers/caveats are not.
5. Based on all of the above individual problems, the FTC might well conclude that the overall net effect of these web sites constitutes false advertising, perhaps even if there was no clear and conspicuous disclaimer problem. The FTC is big on looking at the overall effect of a web site as viewed from the average person, and if it concludes that the overall effect is to make one or more therapeutic claims which is (are) not substantiated, then that’s a problem for the FTC which becomes a problem for the claim-making clinic.
So, what can the FTC do about it?
We’ve seen one example already, where it forced a settlement from a stem cell clinic.
What happens if an offending clinic doesn’t settle?
The FTC has two options. It can bring a federal injunction lawsuit in the district in which the stem cell clinic operates. Second, and the preferred approach seems to be to bring an administrative action in Washington, D.C. before an FTC employed administrative judge. All these FTC judges do is apply FTC law to businesses which other agency employees have determined has violated FTC law. Let’s just say that for a litigator (and a client) it’s not the best possible forum. Practically what that means is that if you’re in an FTC administrative proceeding and what you’ve done is in violation of an FTC guideline, you’re going be found in violation of FTC law, enjoined and probably fined.
So, what does all this mean for the private stem cell community?
The bad news for the clinics is that FTC cases are much easier cases to pursue than FDA cases, since they don’t require a week or two site visit by multiple federal investigators. It can all be done by FTC investigators at their desks. The good news for the clinics is that the FTC, like the FDA has limited resources, and heretofore, medical clinics have not been a FTC high priority, and I sort of doubt that will change in a big way, because they have overlapping jurisdictional authority with some other government agencies which have more direct and obvious oversight, like the FDA, medical boards and the consumer fraud divisions of the state attorney generals offices.
I’m curious why all these agencies haven’t sat down together and figure-out and implement a comprehensive approach and prioritizing to the private stem cell clinic issue. That’s what I’d do. Or maybe it’s coming. We’ll see.
Rick Jaffe, Esq. http://rickjaffeesq.com/2018/12/17/five-things-the-ftc-wont-like-about-private-stem-cell-clinic-advertising-and-what-it-can-do-about-it/
December 17, 2018 Richard Jaffe
There have been some recent musings about what the FTC (Federal Trade Commission) might think about how the private stem cell clinics are advertising their treatments.
Here are the five things the FTC is going to have a problem with any stem cell clinic employing the advertising/disclaimers commonly used by these web sites:
1. Lack of adequate substantiation for the claims and implied claims
Under FTC law, claims made by businesses (including medical businesses, to the extent the FTC choses to assert jurisdiction over them) require adequate substantiation. In the medical field that means that the claims have to be supported by well-controlled clinical trials. (Of course, FDA approval would do the job as well.) My guess is that at least initially and without a fight, the FDA wouldn’t think any of the autologous MSC/SVF claims made by the stem cell clinics have adequate substantiation, and hence the FTC would view all such claims and implied claims of efficacy as false advertising.
2. Use of testimonials
Most of these clinics use testimonials from successfully treated patients. The FTC doesn’t particularly like testimonials, and it thinks that disclaimers following testimonials that “results may differ” or that the “testimonial doesn’t imply success in your or any other case” are not usually adequate to negate the implied efficacy claim.
3. Lack of clear and conspicuous disclaimers
Most of the disclaimers in these web sites are at the end of the page, require scrolling down, and are in small print. From the FTC’s point of view, that’s a violation of its clear and conspicuous disclaimer policy.
(Here it is: https://www.ftc.gov/system/files/documents/plain-language/bus41-dot-com-disclosures-information-about-online-advertising.pdf
4. Disclaimers which are contradicted by the claims
The author points out that the there is an inconsistency between the claims made and the disclaimers. If the FTC agrees, that would also be a problem, especially as the claims are prominent and the disclaimers/caveats are not.
5. Based on all of the above individual problems, the FTC might well conclude that the overall net effect of these web sites constitutes false advertising, perhaps even if there was no clear and conspicuous disclaimer problem. The FTC is big on looking at the overall effect of a web site as viewed from the average person, and if it concludes that the overall effect is to make one or more therapeutic claims which is (are) not substantiated, then that’s a problem for the FTC which becomes a problem for the claim-making clinic.
So, what can the FTC do about it?
We’ve seen one example already, where it forced a settlement from a stem cell clinic.
What happens if an offending clinic doesn’t settle?
The FTC has two options. It can bring a federal injunction lawsuit in the district in which the stem cell clinic operates. Second, and the preferred approach seems to be to bring an administrative action in Washington, D.C. before an FTC employed administrative judge. All these FTC judges do is apply FTC law to businesses which other agency employees have determined has violated FTC law. Let’s just say that for a litigator (and a client) it’s not the best possible forum. Practically what that means is that if you’re in an FTC administrative proceeding and what you’ve done is in violation of an FTC guideline, you’re going be found in violation of FTC law, enjoined and probably fined.
So, what does all this mean for the private stem cell community?
The bad news for the clinics is that FTC cases are much easier cases to pursue than FDA cases, since they don’t require a week or two site visit by multiple federal investigators. It can all be done by FTC investigators at their desks. The good news for the clinics is that the FTC, like the FDA has limited resources, and heretofore, medical clinics have not been a FTC high priority, and I sort of doubt that will change in a big way, because they have overlapping jurisdictional authority with some other government agencies which have more direct and obvious oversight, like the FDA, medical boards and the consumer fraud divisions of the state attorney generals offices.
I’m curious why all these agencies haven’t sat down together and figure-out and implement a comprehensive approach and prioritizing to the private stem cell clinic issue. That’s what I’d do. Or maybe it’s coming. We’ll see.
Rick Jaffe, Esq. http://rickjaffeesq.com/2018/12/17/five-things-the-ftc-wont-like-about-private-stem-cell-clinic-advertising-and-what-it-can-do-about-it/