FDA and FTC Send Joint Warning Letters to Seven Companies for "Selling Fraudulent COVID-19 Products"

Wilson Sonsini Goodrich & Rosati

The number of cases of SARS-CoV-2 coronavirus infection, and COVID-19, the disease caused by the virus, continue to increase in the United States—both in number and in location (real-time map). At the same time, the number and severity of symptoms post-infection can vary by age and other risk factors (CDC Report). High level officials and politicians have been reported to be infected by, or in contact with, the virus. And there is no U.S. Food and Drug Administration (FDA) approved or licensed cure for COVID-19 (other than time, supportive measures as necessary, and a healthy immune system). "Although there are investigational COVID-19 vaccines and treatments under development, these investigational products are in the early stages of product development and have not yet been fully tested for safety or effectiveness."

Against this backdrop, the FDA, and the U.S. Federal Trade Commission (FTC), on March 9 issued a statement and joint warning letters to seven companies for "selling fraudulent COVID-19 products." FTC chairman Joe Simons noted "there is already a high level of anxiety over the potential spread of coronavirus." [...] "What we don't need in this situation are companies preying on consumers by promoting products with fraudulent prevention and treatment claims."

The seven companies sell products that include one or more of tinctures of colloidal silver, teas, and essential oils. For example, one of the companies, the Jim Bakker Show (warning letter), associated with televangelistsalesman, and convicted felon Jim Bakker, is alleged to sell "Silver Sol Liquid," in the United States "to mitigate, prevent, treat, diagnose, or cure COVID-19 in people."

The agencies' warning letter cites a series of claims made for Silver Sol Liquid, including:

"Silver Solution has been proven … to kill every pathogen it has ever been tested on … and it can kill any of these known viruses …"; and

"So the virus, like the coronavirus that we're talking about … affects the lung tissue so what you can do … put it straight … in a nebulizer which then creates a steam and you breathe it in and it will go directly into your lungs where that virus is and any other infection."

These claims, the agencies assert, misbrand Silver Sol Liquid because it is an unapproved new drug sold in violation of the Federal Food, Drug, and Cosmetic Act, or the FDCA. The FDA is concerned that companies like the Jim Bakker Show can cause harm in at least two ways. First, the companies may delay or prevent people from seeking medical attention for COVID-19.

Second, the FDA has previously issued a final rule that "all over-the-counter (OTC) drug products containing colloidal silver ingredients or silver salts for internal or external use are not generally recognized as safe and effective and are misbranded." Chronic ingestion or inhalation of colloidal silver salts, for example, can result in argyria—a condition where the skin permanently turns purple-grey (Tin Man Syndrome: article and picture here).

In addition to these concerns, the FTC is concerned that these companies are using fraudulent and not scientifically substantiated data (i.e., not substantiated by competent and reliable scientific evidence) to part scared consumers from their money.

The agencies have required that the companies "take immediate action to correct the violations" … "including reviewing websites, product labels, and other labeling and promotional materials" to ensure you are "not representing your products for a COVID-19 related use" for which they "have not been approved by FDA." The warning letter also requires, within 48 hours, that an email be sent to the FDA's COVID-19 Task Force describing the specific steps taken to correct the violations. Finally, the warning letter notes that failure to "immediately correct the violations cited in this letter may result in … seizure and injunction."

Conclusion

Warning letters typically have a 15-day period for response. In contrast, only 48 hours are being given to respond to these warning letters. Also, the FDA and the FTC are taking seriously the attempt to profit from fraudulent product claims during a time of heightened public concern, as additionally evidenced by:

  1. the FDA and the FTC jointly scrutinizing products for fraudulent COVID-19 claims;
  2. the FDA's COVID-19 Task Force is involved in the issuance and response to warning letters regarding companies' allegedly fraudulent COVID-19 treatment and prophylaxis products;
  3. the FDA and the FTC jointly issuing a statement; and
  4. the issuance of seven warning letters.

Consumer goods and dietary supplement companies should carefully scrutinize any claims that are, or could be interpreted as being, related to the treatment and prevention of COVID-19. Seeking the advice of counsel when responding to a COVID-19 related warning letter is also strongly recommended.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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