FTC Announces Settlement, Results of Operation Cure.All 2002

WASHINGTON--The Federal Trade Commission (FTC) announced July 24 that San Ysidro, Calif.-based BioPulse International Inc., its subsidiaries and its directors have agreed to settle FTC charges for "deceptive acts or practices, and false advertisements." BioPulse International, BioPulse Inc. and its directors, Jonathan Neville and Loran Swenson, were contacted by FTC regarding Insulin-Induced Hypoglycemic Sleep Therapy (IHT) and Acoustic Lightwave Therapy (ALW), both of which were touted as alternative remedies for treating cancer and other diseases such as arthritis, diabetes and pneumonia, and had been advertised since "at least March 2001" for these purposes.

The complaint and proposed consent decrees were filed in U.S. District Court, Northern District of California, in San Francisco on July 23. According to FTC, while BioPulse offered its treatments in a clinic in Tijuana, Mexico, it "did not have adequate substantiation for the safety and efficacy claims . made for these treatments."

Under two separate proposed settlements, which will require the court's approval, the defendants are permanently barred from misrepresenting the safety of IHT or any similar treatment and from making any unsubstantiated safety or efficacy claims for IHT, ALW or any dietary supplement, food, drug, device or any health-related service. The settlements also contain a suspended judgment of $4.3 million, due in full if the defendants are found to have misrepresented their financial situation, as well as standard record keeping and reporting requirements for FTC to monitor the defendants' compliance.

In related news, FTC announced it sent more than 200 domestic and more than 80 foreign advisory letters for "questionable claims" made on health-related Web sites regarding products or services. These letters were sent as a result of the latest Operation Cure.All 2002 (www.ftc.gov/cureall), which was conducted in part "to foster international cooperation in tackling consumer problems dealing with cross-border transactions," according to FTC. The third Operation Cure.All Internet surf was led by the Australian Competition and Consumer Commission and participated in by 19 members of the International Marketing Supervision Network (IMSN), an international network of consumer protection law enforcement agencies.

"I think in general [FTC's evaluation] can have a beneficial effect on the industry because it requires or forces manufacturers to either document their claims or reign in some of their more unsubstantiated or wild claims," said Mark Blumenthal, executive director of the American Botanical Council. "This industry has a reputation--warranted sometimes and unwarranted at other times--of making wild or unsubstantiated claims for various products for their health benefits. I think it's especially appropriate for FTC to evaluate Web sites ... because there is virtually no editorial control on Web site content."

The U.S.-sponsored site search focused on Web sites specifically marketing products and therapies for arthritis, cancer and HIV/AIDS, while other IMSN surfing partners also searched for sites promoting questionable products for weight loss and sexual performance enhancers. The international surf reportedly identified more than 1,400 questionable sites.

The advisory letters alerted site operators that they must have scientific support for the claims they make, and reportedly, FTC and the Food and Drug Administration (FDA) will revisit these sites to determine whether they are in compliance with FTC and FDA regulations. Appropriate regulatory and law enforcement actions will be initiated as warranted, according to FTC.

"Surveys have shown that many patients, especially those with chronic and life-threatening conditions like cancer, seek complementary and alternative medical (CAM) practices--to replace conventional treatments or to reduce their side effects, and to extend life or enhance its quality," said Stephen E. Straus, M.D., director of the National Center for Complementary and Alternative Medicine at the National Institutes of Health (NIH). "While we await the outcome of rigorous, NIH-funded studies of these CAM practices, it would be prudent to appreciate that they are not all safe and they do not all work. Patients and doctors should discuss the range of treatment options and develop a plan as to which CAM practices to pursue, and which to put aside altogether."

Blumenthal added, "The very existence of unsubstantiated claims and the perception that people in this industry make unsubstantiated claims speaks poorly for the credibility of this industry among consumers, health care professionals, journalists, government officials, etc."