[Federal Register Volume 59, Number 28 (Thursday, February 10, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-3088]


[[Page Unknown]]

[Federal Register: February 10, 1994]


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FEDERAL TRADE COMMISSION
[File No. 912 3147]

 

Vein Clinics of America, Inc. et al.; Proposed Consent Agreement 
With Analysis To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: In settlement of alleged violations of federal law prohibiting 
unfair acts and practices and unfair methods of competition, this 
consent agreement, accepted subject to final Commission approval, would 
prohibit, among other things, an Illinois-based corporation and its 
officer from misrepresenting the rate of likely recurrence for any 
venous disease following treatment, or misrepresenting the newness, 
past availability, safety, risks or potential side-effects of any 
cosmetic or plastic surgery procedure. In addition, the consent 
agreement would require respondents to have scientific evidence to 
substantiate any representations it makes about any cosmetic or plastic 
surgery procedure it markets or sells in the future.

DATES: Comments must be received on or before April 11, 1994.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary, 
room 159, 6th Street and Pennsylvania Avenue NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT:
Richard Kelly or Sondra Mills, FTC/H-200, Washington, DC (202) 326-3304 
or 326-2673.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Sec. 2.34 of the 
Commission's Rules of Practice (16 CFR 2.34), notice is hereby given 
that the following consent agreement containing a consent order to 
cease and desist, having been filed with and accepted, subject to final 
approval, by the Commission, has been placed on the public record for a 
period of sixty (60) days. Public comment is invited. Such comments or 
views will be considered by the Commission and will be available for 
inspection and copying at its principal office in accordance with 
Sec. 4.9(b)(6)(ii) of the Commission's Rules of Practice (16 CFR 
4.9(b)(6)(ii)).

Agreement Containing Consent Order To Cease and Desist

    In the matter of Vein Clinics of America, Inc., a corporation, 
and D. Brian McDonagh, M.D., individually and as an officer of said 
corporation.

    The Federal Trade Commission having initiated an investigation of 
certain acts and practices of Vein Clinics of America, Inc., a 
corporation, and D. Brian McDonagh, M.D., individually and as an 
officer of said corporation, and it now appearing that Vein Clinics of 
America, Inc. and D. Brian McDonagh, M.D., hereinafter sometimes 
referred to as a proposed respondents, are willing to enter into an 
agreement containing an order to cease and desist from the use of the 
acts and practices being investigated,
    It is hereby agreed by and between Vein Clinics of America, Inc., 
by its duly authorized officer, and D. Brian McDonagh, M.D., 
individually and as an officer of said corporation, and their attorney, 
and counsel for the Federal Trade Commission that:
    1. Proposed respondent Vein Clinics of America, Inc. is a 
corporation organized, existing and doing business under and by virtue 
of the laws of the State of Delaware, with its office and principal 
place of business located at 1101 Perimeter Drive, Suite 615, in the 
City of Schaumburg, State of Illinois.
    Proposed respondent D. Brian McDonagh, M.D. is the Chairman of the 
Board and National Medical Director of Vein Clinics of America, Inc. He 
formulates, directs and controls the policies, acts and practices of 
said corporation. His address is 1535 Lake Cook Road, in the City of 
Northbrook, State of Illinois.
    2. Proposed respondents admit all the jurisdictional facts set 
forth in the draft of complaint here attached.
    3. Proposed respondents waive:

    (a) Any further procedural steps;
    (b) The requirement that the Commission's decision contain a 
statement of findings of fact and conclusions of law;
    (c) All rights to seek judicial review or otherwise to challenge 
or contest the validity of the order entered pursuant to this 
agreement; and
    (d) All rights under the Equal Access to Justice Act.

    4. This agreement shall not become part of the public record of the 
proceeding unless and until accepted by the Commission. If this 
agreement is accepted by the Commission it, together with the draft of 
complaint contemplated thereby, will be placed on the public record for 
a period of sixty (60) days and information in respect thereto publicly 
released. The Commission thereafter may either withdraw its acceptance 
of this agreement and so notify the proposed respondents, in which 
event it will take such action as it may consider appropriate or issue 
and serve its complaint (in such form as the circumstances may require) 
and decision, in disposition of the proceeding.
    5. This agreement is for settlement purposes only and does not 
constitute an admission by the proposed respondents of facts, other 
than jurisdictional facts, or of violations of law as alleged in the 
draft Complaint here attached.
    6. This agreement contemplates that, if it is accepted by the 
Commission, and if such acceptance is not subsequently withdrawn by the 
Commission pursuant to the provisions of Sec. 2.34 of the Commission's 
Rules, the Commission may, without further notice to proposed 
respondents, (10) issue its complaint corresponding in form and 
substance with the draft of complaint here attached and its decision 
containing the following order to cease and desist in disposition of 
the proceeding and (2) make information public in respect thereto. When 
so entered, the order to cease and desist shall have the same force and 
effect and may be altered, modified or set aside in the same manner and 
within the same time provided by statute for other orders. The order 
shall become final upon service. Delivery by the U.S. Postal Service of 
the complaint and decision containing the agreed-to order to proposed 
respondents' address as stated in this agreement shall constitute 
service. Proposed respondents waive any right they may have to any 
other manner of service. The complaint may be used in construing the 
terms of the order, and no agreement, understanding, representation, or 
interpretation not contained in the order or the agreement may be used 
to vary or contradict the terms of the order.
    7. Proposed respondents have read the proposed complaint and order 
contemplated hereby. They understand that once the order has been 
issued, they will be required to file one or more compliance reports 
showing that they have fully compiled with the order. Proposed 
respondents further understand that they may be liable for civil 
penalties in the amount provided by law for each violation of the order 
after it becomes final.

Order

Definitions

    For purposes of this Order, the following definitions shall apply:
    1. ``Sclerotherapy'' means the treatment of venous disease by 
injecting a solution into a vein with a needle.
    2. ``Compression sclerotherapy'' means the treatment of venous 
disease by injecting a solution, including but not limited to 
Sotradecol (sodium tetradecyl sulfate), into a vein with a needle, 
followed by compression of the injected area with bandages or wraps and 
post-procedure ambulation by the patient.
    3. ``Any substantially similar service'' means compression 
sclerotherapy in which a solution of Sotradecol (sodium tetradecyl 
sulfate) is injected into a vein.
    4. ``Venous disease treatment procedure'' includes, but is not 
limited to, sclerotherapy, compression sclerotherapy, laser treatments, 
electrocautery, and surgery.
    5. ``Competent and reliable scientific evidence'' means tests, 
analyses, research, studies or other evidence based on the expertise of 
professionals in the relevant area, that have been conducted and 
evaluated in an objective manner by persons qualified to do so, using 
procedures generally accepted in the profession to yield accurate and 
reliable results.

I

    It is Ordered That respondents Vein Clinics of America, Inc., a 
corporation, its successors and assigns, and its officers, and D. Brian 
McDonagh, M.D., individually and as an officer and medical director of 
said corporation, and respondents' agents, representatives and 
employees, directly or through any corporation, subsidiary, division or 
other device, in connection with the advertising, promotion, offering 
for sale or sale of any venous disease treatment procedure or any other 
cosmetic or plastic surgery procedure in or affecting commerce, as 
``commerce'' is defined in the Federal Trade Commission Act, do 
forthwith cease and desist from, in any manner, directly or by 
implication:
    A. Representing that the rate at which varicose veins recur 
following surgery is approximately 65% to 85% in five years, or 
otherwise misrepresenting the rate at which venous disease is likely to 
recur or return following treatment by any venous disease treatment 
procedure;
    B. Representing that prior to the opening of Vein Clinics of 
America, surgery was the only available treatment for large varicose 
veins;
    C. Representing that the sclerotherapy practiced at respondents' 
clinics as of the date respondents sing this Order sometimes referred 
to as the ``MicroCure Process,'' or any substantially similar service, 
is a newly discovered and/or previously unavailable method of treating 
varicose and spider veins;
    D. Misrepresenting that the sclerotherapy practiced at respondents' 
clinics as of the date respondents sign this Order, sometimes referred 
to as the ``MicroCure Process,'' or any substantially similar service, 
is exclusively available at respondents' clinics;
    E. Misrepresenting the newness of, or the past or present 
availability of, any cosmetic or plastic surgery procedure, including 
any venous disease treatment procedure;
    F. Representing that the sclerotheraphy practiced at respondents' 
clinics as of the date respondents sign this Order, sometimes referred 
to as the ``MicroCure Process,'' or any substantially similar service:

    (1) Does not present the risk of burning, marking, or scarring 
the skin; or
    (2) Presents no possibility of significant risks to health;

    G. Misrepresenting the safety, risks, or potential side-effects of 
any cosmetic or plastic surgery procedure, including any venous disease 
treatment procedure.

II

    It is further ordered That respondents Vein Clinics of America, 
Inc., a corporation, its successors and assigns, and its officers, and 
D. Brian McDonagh, M.D., individually and as an officer and medical 
director of said corporation, and respondents' agents, representatives 
and employees, directly or through any corporation, subsidiary, 
division or other device, in connection with the advertising, 
promotion, offering for sale or sale of any venous disease treatment 
procedure or any other cosmetic or plastic surgery procedure, in or 
affecting commerce, as ``commerce'' is defined in the Federal Trade 
Commission Act, do forthwith cease and desist from making any 
representation, in any manner, directly or by implication, regarding:

    A. The success rate or the rate at which a condition is likely 
to recur or return following treatment by any cosmetic or plastic 
surgery procedure, including any venous disease treatment procedure; 
or
    B. The rate or nature of risks to health or of adverse cosmetic 
side-effects presented by any cosmetic or plastic surgery procedure, 
including any venous disease treatment procedure;

unless, at the time of making such representation, respondents possess 
and rely upon competent and reliable scientific evidence that 
substantiates the representation.

III

    It is further ordered That for five (5) years after the last date 
of dissemination of any representative covered by this Order, 
respondents, or the successors and assigns, shall maintain and upon 
request make available to the Federal Trade Commission for inspection 
and copying:
    A. All materials that were relied upon in disseminating such 
representation; and
    B. All tests, reports, studies, surveys, demonstrations or other 
evidence in their possession or control that contradict, qualify, or 
call into question such representation, or the basis relied upon for 
such representation, including complaints from consumers.

IV

    It is further ordered That respondents shall distribute a copy of 
this Order to each of their operating divisions, to each of their 
managerial employees, and to each of their officers, agents, 
representatives, or employees engaged in the preparation or placement 
of advertising or other material covered by this Order and shall secure 
from such person a signed statement acknowledging receipt of this 
Order.

V

    It is further ordered That respondents shall notify the Commission 
at least thirty (30) days prior to any proposed change in the 
corporation such a dissolution, assignment, or sale resulting in the 
emergence of a successor corporation, the creation or dissolution of 
subsidiaries or any other change in the corporation which may affect 
compliance obligations arising out of this order'.

VI

    It is further ordered That, for a period of ten (10) years from the 
date of entry of this Order, the individual respondent named herein 
shall promptly notify the Commission of the discontinuance of his 
present business or employment, with each such notice to include the 
respondent's new business address and a statement of the nature of the 
business or employment in which the respondent is newly engaged as well 
as a description of respondent's duties and responsibilities in 
connection with the business or employment.

VII

    It is further ordered That respondents shall, within sixty (60) 
days after service upon them of this Order and at such other times as 
the Commission may require, file with the Commission a report, in 
writing, setting forth in detail the manner and form in which they have 
complied with the requirements of this Order.

Analysis of Proposed Consent Order To Aid Public Comment

    The Federal Trade Commission has accepted an agreement to a 
proposed consent order from Vein Clinics of America, Inc., a Delaware 
corporation, and D. Brian McDonagh, M.D., its Chairman of the Board and 
National Medical Director (hereinafter collectively referred to as 
``VCA''). VCA markets a procedure commonly known as ``compression 
sclerotherapy'' for treating venous disease, including varicose veins, 
spider veins and ulcers. VCA's treatment method, which it sometimes 
refers to as the ``MicroCure Process'', consists of injecting solutions 
of Sotradecol (sodium tetradecyl sulfate) into the veins, followed by 
compression of the area with a bandage and post-procedure ambulation by 
the patient. Proposed respondents currently offer their sclerotherapy 
treatment services to the public at twelve clinics located in cities in 
California, Georgia, Illinois, Kansas, Maryland and Virginia.
    The proposed consent order has been placed on the public record for 
sixty (60) days for the reception of comments by interested persons. 
Comments received during this period will become part of the public 
record. After sixty (60) days, the Commission will again review the 
agreement and will decide whether it should withdraw from the agreement 
or make final the agreement's proposed order.
    The Commission's complaint charges that proposed respondents 
deceptively advertised: (1) The rate at which venous disease recurs 
following treatment by VCA's procedure and by other methods; (2) the 
newness and availability of the treatment method administered by VCA; 
and (3) the risks to health and of adverse cosmetic side-effects 
presented by VCA's treatment procedure and by other methods of treating 
venous disease.

Recurrence

    The complaint against VCA alleges that proposed respondents falsely 
represented that varicose veins recur at a rate of approximately 65 to 
85 percent in five years following surgical treatment when, in fact, 
the rate at which venous disease recurs five years after surgery is 
substantially lower than 65 percent.
    The complaint also alleges that VCA failed to posses a reasonable 
basis for claims it made regarding the rate at which venous disease 
recurs following treatment by VCA's method and by other treatment 
methods. In brochures VCA provided to prospective customers, proposed 
respondents represented that the rate at which venous disease recurs 
within five years following treatment by VCA is less than 3 percent. 
VCA also claimed that the rate at which venous disease recurs following 
treatment by hypertonic saline injections is ``high.'' VCA's brochures 
also represented that there is virtually no recurrence of venous 
disease among patients who have undergone treatment by VCA after having 
previously undergone surgery or other modes of treatment and that 
venous disease recurs at a lower rate following treatment by VCA than 
by any other treatment method. The Commission believes that these 
recurrence rate claims are deceptive because at the time proposed 
respondents made these claims, VCA did not posses adequate 
substantiation for those claims.
    The proposed consent order seeks to address the alleged recurrence 
rate misrepresentations cited in the complaint in several ways. First, 
the order (Part I.A) prohibits proposed respondents from representing 
that the rate at which varicose veins recur following surgery is 
approximately 65 to 85 percent in five years.
    Second, Part I.A further prohibits proposed respondents from 
otherwise misrepresenting the rate at which venous disease is likely to 
recur or return following treatment by any venous disease treatment 
procedure.
    Third, Part II.A of the order requires proposed respondents to 
posses a reasonable basis consisting of competent and reliable 
scientific evidence substantiating any claim regarding the success rate 
or the rate at which a condition is likely to recur or return following 
treatment by any cosmetic or plastic surgery procedure, including any 
venous disease treatment procedure.

Newness and Availability

    The Commission's complaint further alleges that proposed 
respondents falsely represented that VCA's treatment procedure, 
sometimes referred to by VCA as the ``MicroCure Process,'' is a unique 
mode of treatment that is exclusively available from VCA and that 
differs materially from the procedures generally used by other 
physicians to treat varicose and spider veins. The complaint also 
alleges that proposed respondents falsely represented that VCA's 
procedure is a newly discovered, previously unavailable method of 
treating varicose and spider veins and that prior to the opening of 
VCA, surgery was the only available treatment for large varicose veins.
    In fact, according to the complaint, proposed respondents' 
treatment method is not unique, is not exclusively available from VCA 
and does not differ materially from the procedures used by physicians 
to treat varicose and spider veins. Rather, VCA's procedure, known 
within the medical community as compression sclerotherapy, can be, has 
been and is regularly performed by other physicians. VCA's procedure is 
neither a new nor previously unavailable method of treating varicose 
and spider veins. Moreover, prior to the advent of VCA, surgery was not 
the only method of treating large varicose veins.
    The proposed consent order prohibits the alleged 
misrepresentations. First, the consent order prohibits proposed 
respondents from representing that prior to VCA, surgery was the only 
available treatment for large varicose veins (Part I.B).
    Second, the proposed consent prohibits VCA from representing that 
its procedure is a newly discovered and/or previously unavailable 
method of treating varicose and spider veins (Part I.C).
    Third, the proposed consent further prohibits VCA from 
misrepresenting that its procedure is exclusively available at proposed 
respondents' clinics (Part I.D).
    Finally, the proposed order broadly prohibits VCA from making any 
misrepresentations regarding the newness of, or the past or present 
availability of, any cosmetic or plastic surgery procedure, including 
any venous disease treatment procedure (Part I.E).

Risks and Side-Effects

    The complaint also alleges that VCA's brochures and advertisements 
falsely represented that proposed respondents' sclerotherapy method 
does not present the risk of burning, marking or scarring the skin. The 
complaint further alleges that VCA falsely represented that the only 
significant risk to health and risk of allergic reaction presented by 
respondents' method is that of a mild allergic reaction in 1 in 1,000 
patients.
    In fact, according to the complaint, VCA's sclerotherapy can result 
in burning, marking and scarring the skin. Injections of Sotradecol may 
cause ulcers (open sores) to form if it extrudes onto the surface of 
the skin when injected, leaving scars, and may result in potentially 
permanent pigmentation. Sotradecol can also cause sever allergic 
reactions, including the possibility of anaphylactic shock.
    In addition, the complaint alleges that proposed respondents failed 
to possess a reasonable basis for claims that VCA's sclerotherapy 
presents (a) fewer significant risks to health than other non-surgical 
methods of treating venous disease, and (b) presents fewer risks of 
adverse cosmetic side-effects than other methods of treating venous 
disease. The Commission believes these claims are deceptive because at 
the time proposed respondents made these claims, they did not possess 
adequate substantiation for those claims.
    The proposed consent order addresses these alleged 
misrepresentations in several ways. First, the proposed consent 
prohibits VCA from representing that its sclerotherapy does not present 
the risk of burning, marking or scarring the skin (Part I.F.1) or 
presents no possibility of significant risks to health (Part I.F.2).
    Second, the proposed consent broadly prohibits VCA from 
misrepresenting the safety, risks, or potential side-effects of any 
cosmetic or plastic surgery procedure, including any venous disease 
treatment procedure (Part I.G).
    Third, the proposed consent order requires VCA to possess a 
reasonable basis consisting of competent and reliable scientific 
evidence substantiating any claims about the rate or nature of risks to 
health, or of adverse cosmetic side-effects, presented by any cosmetic 
or plastic surgery procedure, including any venous disease treatment 
procedure (Part II.B).
    The purpose of this analysis is to facilitate public comment on the 
proposed order, and it is not intended to constitute an official 
interpretation of the agreement and proposed order, or to modify in any 
way their terms.
Donald S. Clark,
Secretary.
[FR Doc. 94-3088 Filed 2-9-94; 8:45 am]
BILLING CODE 6750-01-M