The Federal Trade Commission yesterday ordered Lane Labs-USA Inc. and Cartilage Consultants Inc. to stop promoting shark cartilage products as cancer treatments and fined Lane Labs $1 million for false advertising.

The two companies agreed to settle the FTC complaint after contending for months that the case was "groundless," urging congressional leaders to oppose it and warning that the federal government was seeking "to prohibit you from purchasing safe, beneficial dietary supplements."

Under the agreement, Lane Labs, of Allendale, N.J., and Cartilage Consultants, of Short Hills, N.J., agreed to stop marketing BeneFin, a shark cartilage product, and SkinAnswer, a topical skin cream, as cancer treatments. Lane Labs sells 270 caplets of BeneFin for $86.95.

The agreement also fined Lane Labs and its president, Andrew Lane, $1 million. The case alleged that Lane Labs and Cartilage Consultants acted together to market the two products falsely, claiming they were "clinically proven" to cure cancer. Cartilage Consultants' president, I. William Lane, is Andrew Lane's father.

In many of its false claims cases, the FTC simply reaches agreement for a company to stop an offending ad campaign. But Darren Bowie, an assistant FTC director for advertising practices, noted that the agency has the power to seek restitution directly.

"We do think monetary relief is called for in this case, given the consumer injury and the seriousness of the offense," Bowie said. He noted that touting products as cancer remedies takes advantage of the fears of a particularly vulnerable group of people.

Shark cartilage, taken from Pacific Ocean sharks, is used as a dietary supplement to relieve arthritis and psoriasis, and the National Cancer Institute is conducting clinical trials to test its effectiveness as a cancer treatment.

Lane Labs is providing cartilage for the study, and under terms of the agreement, the company will pay $550,000 as a fine to the FTC and contribute the remaining $450,000 to the NCI trial.

Despite the settlement, Bowie said the Food and Drug Administration will still pursue a lawsuit filed Dec. 10, 1999, seeking to ban BeneFin, SkinAnswer and other company products as unapproved drugs. The authoritative Natural Medicines Comprehensive Database describes shark cartilage's cancer-curing properties as "likely ineffective."

Lane Labs did not return telephone calls seeking a reaction to yesterday's settlement, but after the Dec. 10 FDA filing, Andrew Lane accused the federal government of having "targeted" the company.

"If the FDA beats Lane Labs or pressures us into an unreasonable settlement, soon it may be 'open season' by the FDA on the supplement industry, especially on important, cutting-edge supplements," Lane said in a letter posted on the Lane Labs Web site.

Lane also promised to relay supporters' concerns to congressional leaders, and in a March 29 letter, House Government Reform and Oversight Committee Chairman Dan Burton (R-Ind.), a longtime advocate of dietary supplements, told the FDA that 300 consumers had written him on Lane Labs' behalf in "a keen example of how Americans feel about medical freedom."