DOJ and FDA Are Closely Monitoring the Marketing of COVID-19-Related ProductsMay 11, 2020 – Alerts
By taking swift legal action against a Utah man and two companies he controls for allegedly selling a fake cure for COVID-19, federal authorities signaled that they are on heightened alert for scams seeking to take unfair advantage of pandemic panic.
My Doctor Suggests LLC and GP Silver LLC are Utah corporations controlled by Gordon Pedersen. Since 2014, the companies have allegedly promoted products containing silver as a treatment for various diseases, including arthritis, diabetes, influenza and pneumonia. The products were marketed for consumers to ingest or apply topically.
In early 2020, the U.S. Department of Justice alleges in a civil complaint, Pedersen and his companies turned their focus to treatment for COVID-19. The complaint accuses the company of carrying out a mail and wire fraud scheme by fraudulently promoting products for the prevention and treatment of COVID-19 through YouTube videos, podcasts and websites. The ads allegedly made false claims that its products can destroy COVID-19, and remove it from the body.
Pedersen often uses the title “Dr.” even though he is not licensed as a medical provider in the State of Utah and does not hold a Doctor of Medicine (M.D.) degree, the DOJ alleges. Nonetheless, the complaint states that the My Doctor Suggests website contained an image of Pedersen in a white coat with a stethoscope around his shoulders, “creating the appearance of a treating physician.”
The DOJ contends that My Doctors Suggests is inducing consumers to spend money based on fraudulent claims and the concealment of material facts, while creating a false sense of security that may cause consumers to avoid conventional medical treatment for COVID-19.
“There is no recognized cure for COVID-19,” the DOJ complaint states, “and no drug product has been proven safe and effective for the prevention, treatment or cure of COVID-19.”
In its complaint, the DOJ sought an injunction to stop My Doctors Suggests from promoting the alleged treatment for COVID-19. The action was filed on April 27, 2020, and a preliminary injunction was granted the following day that ordered My Doctors Suggests to cease all promotions and froze its assets.
Use Caution When Marketing Any Products Related to COVID-19
In a press release, the DOJ promised to move quickly to protect consumers from those who “recklessly exploit” the public health crisis by offering phony cures for the treatment or prevention of COVID-19. The DOJ confirmed that it is working closely with the Food and Drug Administration and will act swiftly to shut down schemes to promote and sell unlawful products during the pandemic.
The DOJ previously shut down an alleged fake coronavirus cure website that offered a COVID-19 vaccine kit. The DOJ has made clear, if companies are advertising that supplements can help with COVID-19, and such products are not approved as treatments for COVID-19, the DOJ is ready to swiftly prosecute.
These rapid actions by the DOJ should serve as a cautionary tale for any company contemplating the sale of products or the use of promotional materials that connect products to COVID-19. Any company that has disseminated marketing or promotional materials that relate its products to COVID-19, or that has already been contacted by the government about such statements or materials, should seek legal counsel immediately.
Fox Rothschild attorneys are experienced in advising businesses in regulatory and criminal investigations. If you have any questions about this alert, please contact Marissa Koblitz Kingman at 973.548.3316 or [email protected], or any member of Fox Rothschild's national White-Collar Criminal Defense & Regulatory Compliance practice group.