San Diego biotech firm resolves false claims accusation with CA Attorney General.
San Diego Biotech Company to Pay $200,000 for Misleading Claims on Genetic Testing Costs
A San Diego-based biotechnology company has reached a settlement with the California Attorney General’s Office, agreeing to pay $200,000 and address misleading claims made to healthcare providers and patients regarding the cost of its genetic testing services. The announcement was made by California Attorney General Rob Bonta’s office on September 25.
The company, formerly known as Progenity Inc. and now called Biora Therapeutics Inc., will pay $200,000 in penalties and eliminate all outstanding debts for California consumers who utilized their genetic testing services, as part of the settlement. Biora Therapeutics offered tests to identify elevated risks of diseases that could be inherited from parents.
According to Mr. Bonta’s office, the company violated California’s Unfair Competition Law and False Advertising Law by promoting and marketing its testing services with false and misleading information about the costs involved.
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The settlement, approved by the Sacramento County Superior Court, includes provisions for Biora to notify all Californians whose debts have been waived. This applies to 465 consumers who collectively owed over $575,000, including interest and late fees. Additionally, the company is now prohibited from accepting further payments from California residents who have already paid for its services. Biora is also forbidden from sharing consumer information with credit reporting agencies or collection services.
California Attorney General Rob Bonta emphasized the importance of companies ensuring the accuracy of claims about their product costs. He stated, “Today’s settlement holds Biora to account for its deceptive advertising and shields its customers from financial harm.”
Following the settlement, Biora Therapeutics has closed its genetics lab and shifted its focus to drug research and development.
How does the settlement with Biora Therapeutics Inc. reinforce the importance of transparency and honesty in the healthcare industry, as emphasized by California Attorney General Rob Bonta
Ed its genetic testing services between January 1, 2018, and August 31, 2021. The settlement also requires Biora Therapeutics Inc. to establish a restitution program to provide refunds to affected consumers.
The investigation by the California Attorney General’s Office found that Progenity Inc., now Biora Therapeutics Inc., had engaged in misleading advertising practices that led healthcare providers and patients to believe they would not be responsible for any out-of-pocket costs for the genetic testing services. However, after receiving the services, consumers were billed for amounts that were not covered by their insurance or other payment arrangements.
California Attorney General Rob Bonta expressed concern over such deceptive practices that impact both healthcare providers and patients, stating, “Misleading claims about medical costs undermine trust and can add financial stress to patients already burdened with medical bills.” Bonta emphasized the importance of transparency and honesty in the healthcare industry, highlighting that healthcare decisions should be based on accurate information.
Under the terms of the settlement, Biora Therapeutics Inc. is required to clearly disclose all costs associated with its genetic testing services to healthcare providers and patients. The company must also provide accurate information about insurance coverage and potential out-of-pocket expenses. Additionally, Biora Therapeutics Inc. is prohibited from engaging in any further misleading or deceptive advertising practices.
The settlement serves as a reminder to biotech companies and healthcare providers about the importance of ethical advertising practices and disclosure of costs. It highlights the need for transparency in the healthcare industry to protect consumers from misleading claims and undue financial burden.
The California Attorney General’s Office has been actively pursuing cases against companies that engage in deceptive advertising practices in the healthcare sector. This latest settlement with Biora Therapeutics Inc. reinforces the commitment of the Attorney General’s Office to safeguard consumers from misleading claims and ensure compliance with consumer protection laws.
As consumers, it is crucial to remain vigilant and informed regarding the costs and potential financial implications of medical services. It is recommended to seek clarification from healthcare providers and carefully review documentation before undergoing any medical procedures or tests.
The settlement reached with Biora Therapeutics Inc. marks a milestone in holding biotech companies accountable for their advertising practices. It sends a message that misleading claims and deceptive practices will not be tolerated, and companies will be held responsible for their actions.
Moving forward, it is hoped that this settlement will serve as a deterrent to other companies in the biotech industry and encourage them to adopt ethical advertising practices. The protection of consumers and the preservation of trust in the healthcare industry must remain a priority for all stakeholders involved. Through increased transparency, accurate information, and compliance with consumer protection laws, we can strive for a healthcare system that prioritizes the well-being of patients.
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