[Senate Report 115-285]
[From the U.S. Government Publishing Office]
Calendar No. 490
115th Congress} { Report
SENATE
2d Session } { 115-285
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OPIOID ADDICTION RECOVERY FRAUD PREVENTION ACT OF 2018
__________
R E P O R T
of the
COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
on
S. 2842
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
June 27, 2018.--Ordered to be printed
__________
U.S. GOVERNMENT PUBLISHING OFFICE
WASHINGTON : 2018
SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
one hundred fifteenth congress
second session
JOHN THUNE, South Dakota, Chairman
ROGER F. WICKER, Mississippi BILL NELSON, Florida
ROY BLUNT, Missouri MARIA CANTWELL, Washington
TED CRUZ, Texas AMY KLOBUCHAR, Minnesota
DEB FISCHER, Nebraska RICHARD BLUMENTHAL, Connecticut
JERRY MORAN, Kansas BRIAN SCHATZ, Hawaii
DAN SULLIVAN, Alaska EDWARD J. MARKEY, Massachusetts
DEAN HELLER, Nevada TOM UDALL, New Mexico
JAMES M. INHOFE, Oklahoma GARY C. PETERS, Michigan
MIKE LEE, Utah TAMMY BALDWIN, Wisconsin
RON JOHNSON, Wisconsin TAMMY DUCKWORTH, Illinois
SHELLEY MOORE CAPITO, West Virginia MARGARETWOODHASSAN,NewHampshire
CORY GARDNER, Colorado CATHERINE CORTEZ MASTO, Nevada
TODD C. YOUNG, Indiana JON TESTER, Montana
Nick Rossi, Staff Director
Adrian Arnakis, Deputy Staff Director
Jason Van Beek, General Counsel
Kim Lipsky, Democratic Staff Director
Christopher Day, Democratic Deputy Staff Director
Calendar No. 490
115th Congress Report
SENATE
2d Session 115-285
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OPIOID ADDICTION RECOVERY FRAUD PREVENTION ACT OF 2018
_______
June 27, 2018.--Ordered to be printed
_______
Mr. Thune, from the Committee on Commerce, Science, and Transportation,
submitted the following
R E P O R T
[To accompany S. 2842]
[Including cost estimate of the Congressional Budget Office]
The Committee on Commerce, Science, and Transportation, to
which was referred the bill (S. 2842) to prohibit the marketing
of bogus opioid treatment programs or products, having
considered the same, reports favorably thereon with an
amendment (in the nature of a substitute) and recommends that
the bill (as amended) do pass.
Purpose of the Bill
The purpose of S. 2842, the Opioid Addiction Recovery Fraud
Prevention Act of 2018, is to explicitly prohibit the deceptive
marketing of opioid treatment programs and products. Section 5
of the Federal Trade Commission Act (FTC Act; 15 U.S.C. 41 et
seq.) already prohibits such deceptive practices. The bill also
would provide additional tools to the Federal Trade Commission
(FTC) and States to enforce against these practices.
Specifically, the bill would empower the FTC to seek the
remedies currently available under the FTC Act for violations
of a trade regulation rule, and empower States to seek
appropriate relief in Federal court. By providing the FTC and
States with these tools, the bill will facilitate enforcement
and thereby better protect consumers from the deceptive
marketing of opioid treatment programs and products.
Background and Needs
The term ``opioid'' includes prescription opioid
painkillers like hydrocodone and morphine and illegal drugs
like heroin. In July 2017, the Centers for Disease Control and
Prevention (CDC) reported that the amount of opioids prescribed
in 2015 was enough for every American to be medicated around
the clock for 3 weeks.\1\ According to a CDC report, there were
63,632 drug overdose deaths in the United States in 2016, and
42,249 deaths related to opioids overdoses.\2\ The CDC's 2017
Annual Surveillance Report of Drug-Related Risks and Outcomes
highlights that opioid overdose death rates are largely a
result of prescription or illicit opioids, including heroin and
illicit fentanyl, a synthetic opioid.\3\
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\1\CDC, Vital Signs (Jul. 2017). (https://www.cdc.gov/vitalsigns/
opioids/index.html)
\2\Puja Seth et al., Overdose Deaths Involving Opioids, Cocaine,
and Psychostimulants--United States, 2015-2016, 67 MMWR 349-358 (Mar.
30, 2018). (https://www.cdc.gov/mmwr/volumes/67/wr/
mm6712a1.htm?s_cid=mm6712a1_w)
\3\CDC, Annual Surveillance Report of Drug-Related Risks and
Outcomes (2017), (https://www.cdc.gov/drugoverdose/pdf/pubs/2017-cdc-
drug-surveillance-report.pdf)
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Heroin overdoses are closely linked to the opioid crisis.
In 2015, more than 33,000 people died from an opioid overdose,
with heroin deaths increasing over 20 percent from 2014 to
2015.\4\ A 2015 report by the CDC and the Food and Drug
Administration (FDA) found the strongest risk factor for a
heroin use disorder is a prescription opioid use disorder.\5\
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\4\Rose A. Rudd et al., Increases in Drug and Opioid-Involved
Overdose Deaths--United States, 2010-2015, 65 MMWR, 1445-1452 (Dec. 30,
2016). (https://www.cdc.gov/mmwr/volumes/65/wr/
mm655051e1.htm?s_cid=mm655051e1_w#T1_down)
\5\Press Release, CDC, New research reveals the trends and risk
factors behind America's growing heroin epidemic (Jul. 7, 2015).
(https://www.cdc.gov/media/releases/2015/p0707-
heroin-epidemic.html)
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To prevent overdose and death, the CDC recommends treatment
for people struggling with opioid use disorder. To treat those
with opioid use disorder, the CDC specifically recommends
expanded access to evidence-based treatments, including
medication-assisted therapy, a comprehensive approach to
treatment that combines the use of medication (methadone,
buprenorphine, or naltrexone) with counseling and behavioral
therapies.\6\
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\6\CDC, Treat Opioid Use Disorder (https://www.cdc.gov/
drugoverdose/prevention/
treatment.html) (accessed May 17, 2018).
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In response to growing demand for treatment services, the
Substance Abuse and Mental Health Services Administration
maintains a behavior health treatment services locator which
lists substance abuse and addiction treatment facilities that
meet certain eligibility criteria.\7\
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\7\Substance Abuse & Mental Health Services Admin., Behavioral
Health Treatment Services Locator (https://findtreatment.samhsa.gov)
(accessed May 17, 2018).
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Given this demand, opioid treatment centers have become big
business. The President's Council of Economic Advisors
estimated that prescription opioid misuse increased healthcare
and substance abuse treatment costs by $29.4 billion in
2015.\8\ In one Florida county alone, substance abuse treatment
was estimated to be a $1 billion business and a major economic
engine, ranking only below tourism, agriculture, and
construction.\9\
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\8\Council of Econ. Advisors, The Underestimated Cost of the Opioid
Crisis (Nov. 2017). (https://www.whitehouse.gov/sites/whitehouse.gov/
files/images/
The%20Underestimated%20Cost%20of%20the%20Opioid%20Crisis.pdf)
\9\Pat Beall, County's $1 billion gold rush: Addiction treatment
draws FBI, Palm Beach Post (Aug. 14, 2015). (https://
www.mypalmbeachpost.com/news/county-billion-gold-rush-addiction-
treatment-draws-fbi/JT3MyQwWckFyEZaSfQnoTN) (hereinafter Beall).
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While legitimate treatment centers exist, media reports
have uncovered various scam treatment centers operating in the
United States and detailed the prevalence of questionable
industry practices. One report explained how ``[c]rooked''
treatment centers partner with ``body brokers'' and sober homes
to generate patient leads through various tactics, including
``offer[ing] those trying to get clean free rent and grocery
store gift cards, cigarettes and manicures in exchange for
going to a specific treatment center, which pays kickbacks for
every client.''\10\ The report further explained how these
treatment centers, in turn, often provide ``questionable
counseling, costly and potentially unnecessary drug screens,
and exotic laboratory tests. Some treatment centers not only
overlook drug use--they encourage it. To Florida's worst
operators, relapse doesn't mean failure. It means profit.''\11\
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\10\Lisa Seville et al., Florida's Billion-Dollar Drug Treatment
Industry Is Plagued by Overdoses, Fraud, NBC News (Jun. 25, 2017).
(https://www.nbcnews.com/feature/megyn-kelly/florida-s-billion-dollar-
drug-treatment-industry-plagued-overdoses-fraud-n773376)
\11\Id.
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Unscrupulous drug treatment centers have been the target of
criminal law enforcement across the country. In July 2017, for
example, State and Federal law enforcement conducted a sweep of
arrests in South Florida targeting the owners of drug treatment
centers.\12\
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\12\Anna R. Schecter & Lisa Seville, Florida Drug Treatment Center
Operators Busted in Crackdown, NBC News (Jul. 19, 2017). (https://
www.nbcnews.com/health/health-care/florida-drug-treatment-center-
operators-busted-crackdown-n784326)
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Opioid recovery scams are perpetrated not only by treatment
centers, but also by companies promoting recovery treatment
products with deceptive advertising claims. For example, in
2015, the FTC filed a lawsuit in Federal court to enjoin a
dietary supplement marketer from making misleading claims that
its product can help treat and even cure people who are
addicted to opiates. In that case, the FTC alleged that a
Florida-based company deceptively claimed that its dietary
supplement Elimidrol contained a ``proprietary blend'' of herbs
and other compounds to alleviate opiate withdrawal symptoms and
increase a user's likelihood of overcoming opiate
addiction.\13\ Under the court order settling the FTC's
charges, the company is barred from making such unsubstantiated
health and efficacy claims and agreed to pay $235,000 for
consumer refunds.\14\
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\13\FTC v. Sunrise Nutraceuticals, LLC, No. 9:15-CV-81567 (S.D.
Fla.) (complaint for permanent injunction and other equitable relief
filed Nov. 16, 2015), (https://www.ftc.gov/system/files/documents/
cases/151117sunrisenutraceuticalscmpt.pdf)
\14\FTC v. Sunrise Nutraceuticals, LLC, No. 9:15-CV-81567 (S.D.
Fla.) (stipulated final judgment and order for permanent injunction and
other equitable relief entered July 8, 2016). (https://www.ftc.gov/
system/files/documents/cases/160706sunrise-stip.pdf)
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Summary of Provisions
Although the bill does not in any way expand the FTC's
jurisdiction, it does reaffirm the FTC's jurisdiction over
marketing practices also subject to the FDA's jurisdiction,
such as the advertising of drugs. The Committee notes that the
Memorandum of Understanding Between The Federal Trade
Commission and The Food and Drug Administration (MOU) approved
and accepted by the two agencies in 1971, addresses how the two
agencies will proceed where their jurisdictions overlaps.\15\
The MOU provides that, with the exception of prescription
drugs, the FTC has primary responsibility with respect to the
regulation of the truth or falsity of all advertising (other
than labeling) of foods, drugs, devices, and cosmetics.\16\ In
contrast, the FDA has primary responsibility for preventing
misbranding of foods, drugs, devices, and cosmetics, and with
respect to the regulation of the truth or falsity of
prescription drug advertising.\17\ In addition, the MOU
provides that ``[t]he initiation of proceedings involving the
same parties by both agencies shall be restricted to those
highly unusual situations where it is clear that the public
interest requires two separate proceedings.'' The Committee
notes that the purpose of the MOU is to prevent unnecessary and
wasteful duplicative enforcement by the FTC and FDA.
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\15\Mem. of Understanding Between The Fed. Trade Comm'n and The
Food and Drug Admin., MOU 225-71-8003 (1971). (https://www.fda.gov/
AboutFDA/PartnershipsCollaborations/MemorandaofUnderstandingMOUs/
DomesticMOUs/ucm115791.htm)
\16\Id.
\17\Id.
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Section 2 would define the term ``opioid treatment
product'' to mean a product, including any supplement or
medication, for use or marketed for the use in the treatment,
cure, or prevention of an opioid use disorder. It would define
the term ``opioid treatment program'' to mean a program that
provides treatment for people diagnosed with, having, or
purporting to have an opioid use disorder. It would define the
term ``opioid use disorder'' to mean a cluster of cognitive,
behavioral, or physiological symptoms in which the individual
continues the use of opioids despite significant opioid-induced
problems, such as adverse health effects.
Section 3 would affirmatively establish that it is unlawful
to make any deceptive representation with respect to the cost,
price, efficacy, performance, benefit, risk, or safety of any
opioid treatment program or opioid treatment product. Any such
violation would be considered a violation of an FTC trade
regulation rule, allowing the FTC to seek civil penalties under
section 5 and the remedies set forth in section 19 of the FTC
Act, in addition to injunctive relief and other equitable
remedies. The maximum civil penalty amount the FTC may seek for
violations of trade regulation rules is $41,484 per violation,
as currently adjusted for inflation. This section would also
empower States to bring actions against entities for violations
of this section and to obtain appropriate relief.
Legislative History
S. 2842 was introduced on May 15, 2018, by Senator Capito
(for herself and Senator Cortez Masto) and was referred to the
Committee on Commerce, Science, and Transportation of the
Senate. Senators Brown, Sullivan, and Nelson are also
cosponsors of the bill. On May 22, 2018, the Committee met in
open Executive Session and, by voice vote, ordered S. 2842
reported favorably with an amendment (in the nature of a
substitute).
During the 115th Congress, the Committee has held hearings
to examine both the opioid crisis and consumer scams generally.
On March 21, 2017, the Subcommittee on Consumer Protection,
Product Safety, Insurance, and Data Security held a hearing
entitled ``Staying a Step Ahead: Fighting Back Against Scams
Used to Defraud Americans'' in which the subcommittee heard
testimony about FTC and State attorneys general efforts to
combat various consumer scams.
On May 17, 2017, Chairman Thune convened a full committee
hearing entitled ``Current Issues in American Sports:
Protecting the Health and Safety of American Athletes'' in
which the Committee heard testimony about the opioid crisis and
its impact on athletes and their families.
Estimated Costs
In accordance with paragraph 11(a) of rule XXVI of the
Standing Rules of the Senate and section 403 of the
Congressional Budget Act of 1974, the Committee provides the
following cost estimate, prepared by the Congressional Budget
Office:
S. 2842--Opioid Addiction Recovery Fraud Prevention Act of 2018
S. 2842 would authorize the Federal Trade Commission (FTC)
to levy civil penalties on opioid treatment programs and
products that make false or deceptive claims regarding their
cost, price, efficacy, performance, benefit, risk, or safety.
Under current law, the FTC already has the authority to
prohibit such claims but does not have the authority to levy
civil penalties. The bill also would authorize state attorneys
general, or other state officials, to bring civil actions for
violations such deceptive claims.
Using information from the FTC, CBO estimates that
implementing S. 2842 would have no significant effect on the
agency's administrative costs because the bill would not expand
the scope of the FTC's enforcement authorities.
S. 2842 would allow the FTC to levy civil penalties (which
are recorded in the budget as revenues) to enforce the
prohibition; therefore, pay-as-you-go procedures apply.
However, CBO estimates that any increase in revenues would not
be significant because we expect that few entities would be
affected. Enacting S. 2842 would not affect direct spending.
CBO estimates that enacting S. 2842 would not increase net
direct spending or on-budget deficits in any of the four
consecutive 10-year periods beginning in 2029.
S. 2842 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act.
The CBO staff contact for this estimate is Stephen Rabent.
The estimate was reviewed by H. Samuel Papenfuss, Deputy
Assistant Director for Budget Analysis.
Regulatory Impact Statement
In accordance with paragraph 11(b) of rule XXVI of the
Standing Rules of the Senate, the Committee provides the
following evaluation of the regulatory impact of the
legislation, as reported:
number of persons covered
S. 2842, as reported, would not impose any new regulatory
requirements on businesses.
economic impact
Enactment of this legislation is not expected to have an
adverse impact on the Nation's economy.
privacy
S. 2842 does not raise any issues relating to privacy.
paperwork
S. 2842 would not impose any new paperwork requirements,
other than an obligation on States to notify the FTC in writing
before they file an action to enforce section 3(a) of this
legislation.
Congressionally Directed Spending
In compliance with paragraph 4(b) of rule XLIV of the
Standing Rules of the Senate, the Committee provides that no
provisions contained in the bill, as reported, meet the
definition of congressionally directed spending items under the
rule.
Section-by-Section Analysis
Section 1. Short title.
This section would provide that the bill may be cited as
the ``Opioid Addiction Recovery Fraud Prevention Act of 2018.''
Section 2. Definitions.
This section would define the term ``opioid treatment
product'' to mean a product, including any supplement or
medication, for use or marketed for the use in the treatment,
cure, or prevention of an opioid use disorder. It would define
the term ``opioid treatment program'' to mean a program that
provides treatment for people diagnosed with, having, or
purporting to have an opioid use disorder. It would define the
term ``opioid use disorder'' to mean a cluster of cognitive,
behavioral, or physiological symptoms in which the individual
continues the use of opioids despite significant opioid-induced
problems, such as adverse health effects.
Section 3. False or misleading representations with respect to opioid
treatment programs and products.
Section 3(a) would affirmatively establish that it is
unlawful to make any deceptive representation with respect to
the cost, price, efficacy, performance, benefit, risk, or
safety of any opioid treatment program or opioid treatment
product.
Section 3(b) would provide that any such violation would be
considered a violation of an FTC trade regulation rule,
allowing the FTC to seek civil penalties under section 5 and
the remedies set forth in section 19 of the FTC Act, in
addition to injunctive relief and other equitable remedies that
it can already obtain under the FTC Act. The maximum civil
penalty amount the FTC may seek for violations of a trade
regulation rule is $41,484 per violation, as currently adjusted
for inflation.\18\ The section 19 remedies for trade regulation
rule violations include ``rescission or reformation of
contracts, the refund of money or return of property, the
payment of damages, and public notification respecting the rule
violation . . . except that nothing in this subsection is
intended to authorize the imposition of any exemplary or
punitive damages.''\19\
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\18\See 15 U.S.C. Sec. 45(m)(1)(A) and 16 C.F.R. Sec. 1.98.
\19\See 15 U.S.C. Sec. 57b(b).
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Section 3(c) would empower States to bring actions in
Federal court against entities for violations of this section
and to obtain appropriate relief. It would also require a State
to notify the FTC in writing before filing a case if possible,
or if not feasible immediately upon filing the action. The FTC
would have the authority to intervene in the State action. Once
the FTC or the Attorney General on the FTC's behalf files an
action, States may not file during the pendency of the FTC
action their own actions against a party named in the FTC
action alleging the same violation. This section also addresses
venue and service of process issues.
Changes in Existing Law
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, the Committee states that the
bill as reported would make no change to existing law.
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