Consumer Health Digest #19-39

Your Weekly Update of News and Reviews
September 29, 2019

Consumer Health Digest is a free weekly e-mail newsletter edited by William M. London, Ed.D., M.P.H., with help from Stephen Barrett, M.D. It summarizes scientific reports; legislative developments; enforcement actions; news reports; Web site evaluations; recommended and nonrecommended books; and other information relevant to consumer protection and consumer decision-making. Its primary focus is on health, but occasionally it includes non-health scams and practical tips.

Herbalife settles charges of misleading investors. Herbalife Nutrition Ltd.—a direct selling company with operations in over 90 countries—has agreed to pay $20 million to settle charges by the Securities and Exchange Commission (SEC) that it made false and misleading statements about its China business model in numerous U.S. regulatory filings over a six-year period. [Herbalife to pay $20 million for misleading investors. SEC news release, Sept 27, 2019] According to the SEC's order, Herbalife misled investors that it would not conduct multilevel marketing operations in China where such marketing is banned, but the company actually employed a very similar compensation model for its direct sellers in China to the one it has employed in every other country. The order finds that Herbalife's public statements concerning service provider compensation deprived investors of the information they needed to fully evaluate the risk of investing in Herbalife stock.

In 1986, Herbalife and its founding president Mark Hughes, agreed to pay $850,000 to settle charges by the California Attorney General that the company made false medical claims and engaged in an illegal pyramid-style marketing scheme. In 2016, Herbalife International of America, Inc. (a subsidiary of Herbalife Nutrition Ltd.) and its affiliates agreed to a settlement with the Federal Trade Commission (FTC) that provided $200 million in redress for consumers FTC contended were harmed by its business practices, which led many distributors to purchase an oversupply of product and a majority to either lose money or make little or no money. With the 2016 settlement, Herbalife agreed to stop paying its distributors based on their own wholesale purchases and those of distributors who buy from them and instead pay distributors based upon verifiable retail sales. The new settlement with the SEC ought to spark increased scrutiny of Herbalife's restructuring to comply with the 2016 settlement.

Recipient of invasive "chronic Lyme disease" treatment developed severe infection. A 32-year-old woman with an indwelling central venous catheter (CVC) that had been placed for intermittent treatment with intravenous, broad-spectrum antibiotics to treat "chronic Lyme disease" developed a severe bacterial bloodstream infection that spread to her lungs a year later. [Shelton A and others. A case of Bacterium goodii infection related to an indwelling catheter placed for the treatment of chronic symptoms attributed to Lyme disease. Infectious Disease Report, 11:8108, 2019] The investigators noted that three other cases had been reported of serious bloodstream infections associated with catheters placed specifically for long-term antibiotic treatment of symptoms attributed to Lyme disease, with one case resulting in death. In 2010, a review panel of the Infectious Diseases Society of America unanimously reaffirmed the Society's 2006 guidelines which said:

State licensing boards have disciplined at least 30 physicians for nonstandard Lyme-related practices. [Barrett S. Lyme-related government actions. Quackwatch, Sept 30, 2019]

U.S. prescription drug prices scrutinized. The U.S. House Ways and Means Committee staff has reported how the prices of 79 drugs in the United States compared with those in the United Kingdom, Japan, Canada (Ontario), Australia, Portugal, France, the Netherlands, Germany, Denmark, Sweden, and Switzerland. [Ways and Means Committee Staff. A Painful Pill to Swallow: US vs. International Prescription Drug Prices. Sept 2019] The 787-page report notes that in 2017 and 2018:

Patient says chiropractic business won't let him out of contract for "stem cell" treatments. A disabled veteran with knee arthritis who signed up for 2½ months of treatment at a cost of $15,602 from Superior Health Centers has reported that Superior would not agree to let him terminate his contract. As reported in the third NBCLA I-Team investigation of the southern California business, the veteran had responded to an invitation from Superior for a free dinner promoting "stem cell treatments." He then visited Superior, was misled into believing he has neuropathy in addition to arthritis, and was bombarded with paperwork that signed him up for a treatment program. One document stated that Superior uses "human umbilical cord tissue," which actually contains no stem cells or anything that could play a role in regenerating damaged organs or tissues. The veteran had not received any "stem cell treatment" from Superior when he requested cancellation of his contract. [Johns C. Rohrer C. 'I've been duped': disabled veteran says he spent thousands at health center with no improvement. NBC Los Angeles, Sept 25, 2019] Other regretful patients were featured in the first and second I-Team investigations. Dr. Stephen Barrett has advised patients not to pay or contract in advance for chiropractic visits at a "discount" price.

"Fortune teller" sentenced and ordered to repay victim. Sherry Tina Unanawich, 28, of South Florida, who represented herself as "psychic/fortune teller," has been sentenced by a U.S. District Judge to 40 months in prison. According to the court docket the defendant was holding herself out as a psychic/fortune teller when she met a female victim in Houston, Texas in 2007. After gaining the victim's trust, Unanawich persuaded her that a curse had been placed on her and her family and claimed that she needed large sums of money to purchase crystals, candles and the like that were needed for meditation work to lift the curse. The relationship continued for years, during which the victim paid approximately $1.6 million. The scheme came to an end in 2014, when Unanawich admitted to the victim there had been no curse. [South Florida woman sentenced to prison and ordered to pay $1.6 million in restitution for "fortune telling" fraud scheme. U.S. Attorney's Office Southern District of Florida news release, Sept 9, 2019]

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This page was posted on September 30, 2019.