The company famous for its prominent billboards advertising treatments for premature ejaculation and erectile dysfunction targeted male vulnerability to sell highly priced but ineffective treatments. Photo: Danielle Smith
The company famous for its prominent billboards advertising treatments for premature ejaculation and erectile dysfunction, Advanced Medical Institute, has been ordered to pay compensation to 14 patients after its treatments were found by a court not to be effective.
Federal Court Judge Anthony North in Melbourne ruled on Wednesday there was “no proper scientific evidence” AMIs medications were effective to treat premature ejaculation and erectile dysfunction.
The companys sells nasal sprays and oral strips to treat premature ejaculation and erectile dysfunction and was famous for its “Want Longer Lasting Sex?” advertising billboards.
The Australian Competition and Consumer Commission took AMI, its founder, Jack Vaisman to court in December 2010 arguing it engaged in unconscionable conduct and that the terms of its refund for ineffective treatments were “unfair and void”.
Justice North also ordered AMI to compensate 14 patients who were treated in 2011 and whose cases were examined by the court.
Mr Vaisman was found responsible for the company’s unconscionable conduct and was banned from the business for seven years.
“A clear picture emerged that the business of AMI was concerned to make money from vulnerable men with premature ejaculation and erectile dysfunction,” Justice North said.
“It targeted their vulnerability to sell highly priced treatments which had no proper scientific basis.
“AMI required doctors to compromise their professional standards to advance the commercial interest of AMI.”
The ACCC discontinued proceedings against two AMI doctors James Vandeleur and Brian Lonergan after reaching a settlement with the men in July 2011 and June 2012 respectively.
The companies holding AMI were placed in administration and later liquidation after the ACCC took legal action, but the business of AMI was sold to NRM Corporation in June 2011, also run by Dr Vaisman and continues to operate.
The AMI business reported revenue of more than $59.3 million in 2008, $71.5 million in 2009, and almost $40 million in 2010.
Threats of penis-shrinking and impotence
AMI’s high pressure selling strategy “targeted the anxiety and distress of men seeking treatment” and included salespeople telling men “their penis would shrink and they would suffer psychological impotence if they did not agree to the treatment”, Justice North said.
The Court had a “unique insight” into the way AMI operated because of around three million phone call recordings the ACCC seized from the company under a search warrant.
Patients were charged between $2500 and $4500 for AMIs programs and were treated usually over the phone, speaking first to a salesperson, then to a doctor before being referred back to the salesperson.
Men were told the treatment was for 12 to 18 months but Justice North said the longer periods of treatment “cost more and hence suited the commercial interest of AMI”.
Penile injections required before refunds
Justice North said salespeople reassured patients they could get their money back if the treatment did not work, but did not disclose the men had to try all treatment options – including self-injection in the base of the penis in order to qualify for a refund.
Salespeople were paid on commission but were trained to conceal the fact from patients, he said.
Justice North said AMI’s doctors did not diagnose patients through conventional consultations, which was particularly important in cases of erectile dysfunction because it was often associated with cardiovascular disease, diabetes, or other underlying conditions.
The AMIs doctors elevated the commercial interests of AMI above the medical interests of the patients and failed to meet the standards of proper practice established by the medical profession, he said.
“Doctors who worked for AMI were, in practice, required to prescribe the AMI medications even though there was no proper scientific basis that they were effective,” Justice North said.
“Doctors failed to tell patients, adequately or at all, of the side effects of the medications. This encouraged them to agree to treatment.”
Medical disciplinary bodies to be notified
The ruling would be forwarded to the medical disciplinary bodies, he said.
Justice North ordered AMI to ensure consultations with doctors were conducted face to face or by video link, rather than merely over the phone.
Patient contracts must extend to no more than two month limit and be provided to patients before they sign up, with a five day cooling off period and 14-day cancellation period.
AMI was also ordered to tell patients that its doctors do not provide general medical advice but only consider whether to prescribe its medications.
The company was also found to have engaged in misleading or deceptive conduct for its advertisements featuring television personality Ian Turpie and themed “TV’s Star amazing CONFESSION!” to erectile dysfunction and premature ejaculation, in August 2006.