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Wednesday, December 7, 2016

GNC Enters Into Agreement with Department of Justice to Improve its Practices and Keep Potentially Illegal Dietary Supplements Out of the Marketplace

The world’s largest dietary supplement retailer, GNC Holdings Inc. (GNC), has 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 Department of Justice announced today.  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 revealed 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 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 of injuries associated with a dietary supplement bought at GNC.

 

“Unlawful dietary supplements are an important enforcement priority for the department,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “Today’s resolution is a significant step forward in reforming an industry rife with alarming practices. Companies like GNC need to do more to ensure that they are not selling products containing questionable and untested ingredients.  The American public deserves better, and the Department of Justice appreciates GNC’s efforts in resolving its issues and moving forward in the best interests of American consumers.”

“I am pleased with this agreement and hold steadfast that those engaged in the sale of dietary supplements to the public must adhere to higher standards to ensure consumers are protected from lax business practices that could endanger them,” said U.S. Attorney John R. Parker of the Northern District of Texas.

“Protecting the public from unsafe ingredients in dietary supplements is one of FDA’s most important responsibilities,” said Director George M. Karavetsos of FDA Office of Criminal Investigations. “We will continue to work with industry to ensure that supplements distributed in the U.S. marketplace do not contain harmful ingredients.”

The matter was handled by Consumer Protection Branch Trial Attorneys David Sullivan and Patrick Runkle, and Northern District of Texas Assistant U.S. Attorney Errin Martin.  FDA Office of Chief Counsel Attorneys Nathan Sabel and Michael Shane supported the matter, which was investigated by the FDA Office of Criminal Investigations, Dallas Domicile.

Today’s action is part of the government’s efforts, in collaboration with the Uniformed Services University of the Health Sciences’ Consortium for Health and Military Performance (CHAMP), to provide educational resources for service members and the general public to protect them from risky dietary supplements. Through its Operation Supplement Safety (OPSS), and in partnership with the U.S. Anti-Doping Agency (USADA) and Supplement 411, OPSS provides important information to service members and consumers about dietary supplements.  In 2015, OPSS launched a High-Risk Supplement List mobile application (accessible on iOS and Android). For more information, consult the OPSS website. To access the educational resources USADA provides for athletes and general consumers to help realize, recognize and reduce the risks associated with using supplement products, visit USADA’s website at http://www.supplement411.org.

For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at http://www.justice.gov/civil/consumer-protection-branch.   For more information about the U.S. Attorney’s Office for the Northern District of Texas, visit its website at https://www.justice.gov/usao-ndtx.

 

 

 

16-1433
Topic: 
Consumer Protection
Updated March 17, 2017