The Federal Trade Commission plans to add staff focused on enforcement against fraudulent dietary supplement claims in fiscal 2011.

In its budget request submitted to Congress Feb. 1, the agency also says it plans to bolster oversight of biopharma mergers with additional staff to "specialize" in the "increasingly complex" actions in this sector.

FTC seeks a total budget allotment of $314 million, an increase of about 7.6 percent from the current year's appropriation, under its budget plan. That level would support 1,207 full-time equivalent staff members, an addition of 40 from fiscal 2010.

The additions would include two FTEs working in "the health fraud area to address weaknesses in the regulatory framework for dietary supplements claiming to prevent and treat diseases and improve health," according to the agency's budget justification summary.

FTC in 2009 increased scrutiny of advertising claims for supplements, conventional foods and OTC drugs. The commission established working groups with FDA and the Department of Justice Office of Consumer Litigation, and adopted a final revised guidance with significant changes on allowing the use of testimonials and endorsements in ads.

Also in the consumer protection area, FTC took action against deceptive marketing of purported H1N1 influenza remedies. This enforcement, taken in conjunction with FDA, represented an unusual step for the agency (¹ Also see "FTC Stakes New Territory, Joins FDA In Warning On H1N1 Claims" - Pink Sheet, 19 October, 2009.).

Health Fraud Has "High Priority"

FTC proposes a total of 23 additional FTEs to work in the area of consumer protection. The two FTEs for investigating health fraud are included in the 13 slots for "high priority matters," the justification says.

The Obama administration already indicated plans for closer scrutiny of the drug and nutritional supplement industries with its top-level commission appointments.

In April, Public Citizen veteran David Vladeck was chosen to head FTC's Bureau of Consumer Protection. Vladeck had moved to Georgetown University's Law Center after nearly three decades with the consumer advocacy group (² Also see "FTC Consumer Chief Vladeck’s Reputation Precedes Him" - Pink Sheet, 20 April, 2009.).

In November, the president nominated as a commissioner Julie Brill, a former state legislator with an active agenda in pharmaceutical marketing and pricing (³ Also see "Pharma Industry Watchdog Brill Nominated For FTC Commissioner" - Pink Sheet, 23 November, 2009.).

The budget request asks for 17 FTEs to "maintain competition," including nine to "meet the increased workload generated by the growing complexity of merger transactions and an active merger enforcement agenda." Those nine also will focus on anticompetitive mergers and practices in the pharmaceutical, health care, energy and technology arenas, as well as protecting consumers from anticompetitive price increases.

Four of the nine specifically are slated for pharmaceutical and technology sector oversight. Another four will oversee the energy industry.

While FTC often has moved to block pharma mergers as anticompetitive unless the combining companies divest overlapping products, many stakeholders have looked for the administration to increase antitrust enforcement. The commission has not proven a hurdle for some of the most high-profile biopharma mergers of 2009 - though it required Pfizer to divest half of Wyeth's animal health business to complete its acquisition of the company (⁴ 'The Tan Sheet' Oct. 19, 2009, In Brief).

FTC has challenged some deals, to notable effect. The agency points out in the justification document that it ensured possible future competition would not be restrained by Inverness Medical Innovations' purchase of at-home pregnancy test assets from ACON Laboratories.

Inverness agreed in December 2008 to sell its assets in ACON's water-soluble dye technology and remove any competitive prohibitions the firm placed on ACON's partnership with Church & Dwight in the area of digital pregnancy tests (⁵ Also see "Inverness Forced To Release Pregnancy Test Technology" - Pink Sheet, 5 January, 2009.).

- Denise Peterson ( ⁶ d.peterson@elsevier.com ) and Malcolm Spicer ( ⁷ m.spicer@elsevier.com )

FTC Staffing Up To Boost Consumer Health Fraud Enforcement

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