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Rexall to Settle FTC Charges on Weight-Loss Drug

March 12, 2003|From Times Wire Services

Drug maker Rexall Sundown Inc. agreed to give back to consumers as much as $12 million to settle charges that its weight-loss drug Cellasene did not work as advertised, the Federal Trade Commission said Tuesday.

The proposed settlement involving the cellulite treatment needs approval from federal court in Miami. The FTC said such a settlement would also resolve separate class-action lawsuits in California and Florida, provided both states sign off on the deal.

The FTC had charged Rexall, a subsidiary of Dutch food group Royal Numico, with fabricating clinical data and making false claims that Cellasene helped consumers lose weight.

In 1999, Rexall launched a nationwide marketing campaign for the drug, citing "impressive" clinical results in all its advertising and promotional materials, the FTC said in its lawsuit, filed in July 2000.

Florida-based Rexall voluntarily stopped selling Cellasene one month after the FTC sued.

Sales of the product, which cost consumers $200 for an eight-week supply, reached $40 million in the United States.

"Hundreds of thousands of consumers were misled by the claims for this product," said Howard Beales of the FTC's consumer protection bureau.

Rexall did not admit guilt as part of the settlement, but the company has agreed to refrain from making unsubstantiated claims about Cellasene or other weight-loss drugs in the future.

Spokeswoman Carol Walters said Rexall believes that it followed fair advertising practices.

"We settled the suit so we can move forward and focus on selling our other products," she said.

Consumers interested in a refund should call a settlement hotline at (202) 326-3793.

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