Monday, January 9, 2017

Dietary Supplements Are Subject to FDA Investigation. GNC Entered Into Agreement with Department of Justice to Keep Potentially Illegal Dietary Supplements Out of the Marketplace.

Nutritional supplements are often recommended or sold by practitioners such as chiropractors, naturopathic doctors and other providers. Determining what ingredients are in the products is difficult and a recent settlement shows that retailers will be held responsible for selling products with misbranded supplements or that promise to treat or cure a disease. 

All providers who sell supplements should ensure that the products do not include unlawful dietary supplements to the extent possible. How can a retailer determine if supplements are from natural plants or are synthetic? 

On December 7, 2016, the world’s largest dietary supplement retailer, GNC Holdings Inc. (GNC), entered into a wide-ranging agreement with the Department of Justice to reform its practices related to potentially unlawful dietary ingredients and dietary supplements, and has further promised to embark on a series of voluntary initiatives designed to improve the quality and purity of dietary supplements.

The non-prosecution agreement resolves GNC’s liability for selling certain dietary supplements produced by a firm currently under indictment.  As part of the agreement, GNC has agreed to pay $2.25 million to the U.S. government and cooperate in dietary supplement investigations conducted by the government.

A lengthy investigation conducted by the U.S. Food and Drug Administration (FDA), the U.S. Attorney’s Office for the Northern District of Texas, and the Consumer Protection Branch of the Department of Justice’s Civil Division resulted in allegations that GNC’s practices related to ensuring the legality of products on its shelves were lacking. 

According to an agreed-upon statement of facts that accompanies the non-prosecution agreement, GNC admitted it engaged in acts and omissions that allowed a misbranded supplement— OxyElite Pro Advanced Formula, a product of Dallas-based USPlabs LLC (USP Labs)—to be sold at GNC locations nationwide in 2013.  The statement of facts notes that GNC sold the product based on representations from USP Labs that ingredients contained in the product complied with the law.  It further notes that GNC did not undertake additional testing or require additional certifications to confirm such representations or to verify that the ingredients in the product were as represented. 

USP Labs was indicted in November 2015 and is awaiting trial.  The indictment alleges, among other things, that USP Labs engaged in a conspiracy to import ingredients from China using false certificates of analysis and false labeling, and then lied about the source and nature of those ingredients after it put them in its products.  According to the indictment, USP Labs told some of its retailers and wholesalers that it used natural plant extracts in some of its products, when in fact it was using synthetic stimulants manufactured in a Chinese chemical factory.

Today’s resolution requires GNC to commit to certain changes designed to prevent unlawful dietary supplements from reaching its shelves: 

First, GNC has agreed that, upon learning that the FDA has issued a public written notice indicating that a purported dietary supplement or an ingredient contained in a purported dietary supplement is not legal and/or not safe, GNC will take immediate action to suspend the sale of such a product or products. 

Second, GNC will establish two lists—a “restricted list” containing ingredients that are not to be used in dietary supplements and a “positive list” containing ingredients that are approved for sale.  Although GNC has agreed that the lists it creates will not have the force of law, GNC will use these lists to guide the company in determining what products it will approve for sale.  Products containing novel ingredients that do not appear on either list will, GNC agreed, require further internal action and approval before being offered for sale.

Third, GNC will substantially revise its internal approach to dealing with the vendors whose products GNC sells, including requiring more explicit guarantees from its vendors that their products do not contain ingredients on the “restricted list” and that their products comply with federal law.

Fourth, GNC will voluntarily work to develop an industry-wide quality seal program.  When this quality seal is implemented, GNC has agreed to stop paying its retail salespeople bonus commissions, or “promotional money,” to direct customers to products in its stores not carrying the seal. 

Finally, GNC will update its adverse event reporting policy to ensure that its employees understand the proper procedures to employ if a customer complains about a product.

Compliance by retailers or sellers of supplements to ensure that they do not sell or distribute prohibited dietarty supplements since they are in the stream of commerce.

Posted by Tracy Green, Esq.
Green and Associates, Attorneys at Law
Phone: 213-233-2260


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