In response to the COVID-19 pandemic, numerous manufacturers and distributors of products ranging from CBD, to herbal products and supplements, to ingestible silver, began to market their products as those that could potentially diagnose, mitigate, prevent, treat, and/or cure COVID-19. Given the sweeping and unproven nature of these marketing claims, early in the pandemic, the Food and Drug Administration (“FDA”) and the Federal Trade Commission (“FTC”) issued Warning Letters to manufacturers and distributors of these products. Such Warning Letters delineate the potentially misleading health claims made by the letters’ recipients, and request that the entities cease and desist from making unproven and/or unreliable claims regarding use of these products in connection with COVID-19. Many of the Warning Letters pertaining to products marketed as drugs caution that the entities are distributing unapproved and misbranded drugs in violation of Sections 505(a) and 502 of the Federal Food, Drug, and Cosmetics Act, respectively. Similarly, the Warning Letters note violations of the FTC Act’s prohibition on making claims that products can prevent, cure, or treat human disease without reliable scientific evidence. The issuance of these Warning Letters has continued throughout the pandemic and, at various times, dozens of letters have been issued per week.
In addition to the issuance of Warning Letters regarding potential sales of unapproved or misbranded drugs, and misleading and/or deceptive claims regarding these products, formal actions are now being instituted. For example, in November 2020, the FTC commenced an action for injunctive relief and compensatory damages against website distributors of COVID-19 disinfectant and cleaning products. In Federal Trade Commission v. One or More Unknown Parties, the FTC commenced an action in the U.S. District Court for the Northern District of Ohio against 25 websites that allegedly preyed “on consumers’ COVID-19 pandemic fears to deceive them into purchasing Clorox and Lysol products that the defendants never delivered.” One day after the FTC’s filing of the action, the federal court issued a temporary restraining order enjoining the websites from continued operation, freezing the operators’ assets, and further declaring that the websites were in fact counterfeit websites designed to impersonate the Clorox and Lysol websites. In addition, though this case appears to involve intentional fraud, the court noted that one basis for issuance of the preliminary injunction was that the website operator defendants misrepresented their abilities to deliver the disinfectant products within the claimed timeframe. Broadly applied, this reasoning could have potential implications for legitimate retailers who do intend to distribute cleaning products within a stated timeframe, but who are otherwise hampered from doing so based on manufacturing backlogs in many of these products.
In light of the above, it is clear that agencies throughout the United States remain focused on regulating the marketing and sales of products potentially related to the COVID-19 pandemic. Accordingly, product manufacturers, distributors, and retailers should expect increased scrutiny of their marketing claims, materials, and websites. Further, entities in the chain of distribution are well advised to refrain from making claims that their products diagnose, prevent, mitigate, treat, or cure COVID-19. Finally, retailers of pandemic-related products should ensure that they deliver their products within the advertised time period, or make good faith efforts to advise their customers of any delays.
This alert does not purport to be a substitute for advice of counsel on specific matters.
Harris Beach has offices throughout New York State, including Albany, Buffalo, Ithaca, Long Island, New York City, Rochester, Saratoga Springs, Syracuse and White Plains, as well as New Haven, Connecticut and Newark, New Jersey.