Appellate court rules in favor of Hi-Tech in FTC suit

NORCROSS, Ga. - Hi-Tech Pharmaceuticals was successful in their appeal against the FTC to overturn a $40 million verdict handed down last year for not having double-blind placebo tests to substantiate advertising, the company announced Thursday. A federal appeals court threw out a judge's ruling that required Hi-Tech and its CEO, Jared Wheat, to pay $40 million for making claims such as fat burner and general structure/function claims allowed by the FDA, Hi-Tech reported. 

 

The $40 million FTC verdict - one of the largest obtained by the FTC against a supplement manufacturer - until the appeals court ruling had caused concern amongst the industry that the FTC was trying to force this double-blind, placebo clinical trial standard on the entire supplement industry. 

 

The 11th circuit ruled that the federal judge didn't let Hi-Tech present the evidence they had to support their weight loss claims, including "several expert declaration that the representations were substantiated by 'competent and reliable scientific evidence.'" The federal judge had ruled that Hi-Tech did not have double-blind, placebo trials to substantiate its advertising claims like "metabolic aid or thermogenic" and suggested that only a pharmaceutical phase 1 clinical trial would do. These trials are estimated at more than $200 million for a weight loss product.