Bayer Beats U.S. Bid for 9-Figure Penalty Over Supplements

  • FTC sought hundreds of millions of dollars in damages
  • U.S. sued in 2014 over claims about Phillips Colon Health

Bayer AG’s U.S. unit defeated the Federal Trade Commission’s bid for hundreds of millions of dollars in a lawsuit accusing the company of making misleading statements about a dietary supplement to promote digestive health.

U.S. District Judge Jose Linares in Newark, New Jersey, rejected FTC claims that Bayer was in contempt of court because of a 2007 consent decree over the marketing of another dietary supplement. That accord covered all future products, including Phillips Colon Health that was the target of the suit filed last year, the FTC argued.

The FTC said Bayer made unsubstantiated advertising claims when it touted Phillips Colon Health as a product that “defends against” occasional constipation, diarrhea, and gas and bloating, while implying it prevents, treats and cures those conditions. The FTC said Bayer lacked “competent and reliable scientific evidence” to back the claims.

In a trial this year before Linares, Bayer defended the product’s effectiveness and said the FTC sought to hold supplements to the more rigorous standard required for drug testing, which usually means randomized, placebo-controlled, double-blind clinical trials. Bayer argued that supplements aren’t marketed like drugs, and claims about them only need to be “truthful and not misleading,” according to a July 30 court filing.

In a one-page order on Friday, Linares backed the company. He said he was sealing the opinion explaining his decision until Oct. 8.

“We are very pleased,” Jonathan Cohn, a Sidley Austin LLP partner who represented Bayer, said in a statement. “The government never should have brought this misguided contempt action. Bayer faithfully followed the law, including the FTC’s own guidance. The government was simply trying to impose a novel and unlawful standard, and the court properly rejected this overreach.”

Cohn said the ruling has implications throughout the dietary supplement industry.

“Requiring a drug-level randomized controlled clinical trial for a dietary supplement is not and has never been the standard for dietary supplement claims,” Chris Loder, a Bayer spokesman, said in an e-mail. “We are gratified that the court agreed with this view.”

The case is USA v. Bayer Corp., 07-cv-00001, U.S. District Court, District of New Jersey (Newark). 

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