Tag: Health Care

In February 2020, the FTC filed a complaint in federal district court against ZyCal Bioceuticals, a company that manufactured and sold the ingredient Cyplexinol to trade customers for use in making pain relief products for joint ailments, such as arthritis. Zycal also marketed a line of Cyplexinol-based pain relief products to chiropractors and directly to consumers under the brand name Ostinol. The same complaint includes allegations against another company, Excellent Marketing Results, Inc. (EMR), which was one of ZyCal's trade customers. EMR marketed a Cyplexinol-based formulation called StimTein via infomercials and online, and claimed it was clinically proven to stimulate cells to grow bone tissue and cartilage. EMR and its president agreed to a settlement that resolves charges against them in the FTC’s complaint, and prohibits them from making such health-related product claims unless they are supported by competent and reliable scientific evidence. In September 2020, the FTC announced it was returning more than $110,000 to consumers who bought EMR’s StimTein.   In February 2023, the FTC announced a proposed order barring the ZyCal defendants from the deceptive conduct alleged in the complaint.

San Juan IPA, Inc., an independent physician association in Farmington, New Mexico, has agreed to pay a $263,000 civil penalty to the FTC to settle allegations that it violated a 2005 order. The 2005 case alleged that San Juan IPA orchestrated agreements among competing member physicians to coordinate joint pricing, collectively negotiated contracts with payors on behalf of members, and refused to deal with payors except on collectively determined price terms.

To remedy these allegations, the 2005 order prohibited San Juan from, among other things, entering into, maintaining, enforcing, or facilitating any agreement or understanding among any physicians (1) to negotiate on behalf of any physician with any payor, (2) to deal, refuse to deal, or threaten to refuse to deal with any payor, (3) regarding any term upon which any physician deals with a payor, including price terms, and (4) not to deal individually with any payor or not to deal with a payor except through the IPA. The order also prohibited San Juan from attempting to engage in, or encouraging any person to engage in, any prohibited action.

San Juan IPA, Inc., a physicians’ independent practice association operating in northwestern New Mexico, agreed to settle Commission charges that it orchestrated and carried out agreements among its member doctors to set the price that they would accept from health plans, to bargain collectively to obtain the group’s desired price terms, and to refuse to deal with health plans except on collectively determined price terms. According to the complaint, the effect of this conduct was higher prices for medical services for the area’s consumers. The consent order prohibits the association from collectively negotiating with health plans on behalf of its physicians and from setting their terms of dealing with such purchasers. This consent involves 120 physicians who make up about 80 percent of the doctors practicing independently in the area of Farmington, New Mexico.

In January 2022, New York City-based Vision Path, Inc., the online seller of direct-to-consumer Hubble lenses, agreed pay penalties and redress totaling $3.5 million to settle FTC charges that it violated the Contact Lens Rule in several ways, including by failing to obtain prescriptions and to properly verify prescription information, and by substituting Hubble lenses for those actually prescribed to consumers. The FTC also alleged the company violated the FTC Act when it failed to disclose that many reviews of Hubble lenses were not by unbiased consumers but were written by reviewers who were compensated for their reviews, and, in at least one instance, by one of its own executives.