Diabetes Pill Marketers Settle FTC Complaint

On December 4, the Federal Trade Commission (FTC) announced the settlement of a complaint against Nobetes Corporation, which marketed and sold a pill that supposedly treats diabetes. The FTC complaint had alleged that the company made false or unsubstantiated health claims, engaged in illegal billing practices, and used deceptive endorsements in the marketing and sale of Nobetes. The FTC posted a detailed analysis of the Nobetes case on its Business Blog.

The order settling the FTC’s complaint “prohibits the company and its officers from engaging in future deceptive practices, including making unsubstantiated health claims, misleading consumers about the terms of ‘free trial’ offers, billing consumers without their consent, and other practices related to the use of ‘expert’ endorsements and consumer testimonials.” The company must also pay a fine of $182,000.

According to the FTC’s complaint, the company made false or unsubstantiated claims that Nobetes treats diabetes, keeps blood sugar within normal levels, and reduces or eliminates the need for medications such as insulin. The defendants continued to make diabetes benefit claims even after the U.S. Food and Drug Administration and the FTC warned them in 2016 that they needed reliable scientific evidence, including human clinical studies, to support health claims for Nobetes.

Some Nobetes ads featured consumer endorsers. The FTC Endorsement Guides state that an advertiser “must possess and rely upon adequate substantiation” to support claims made through endorsements “in the same manner the advertiser would be required to do if it had made the representation directly.”