GNC’s Department of Justice Deal Is a “Fair Deal,” One Expert Says

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The U.S. Department of Justice’s (DOJ) announcement last week that it had come to an agreement with dietary supplement retailer GNC to better police the products on its shelves is being regarded as good news by members of the supplements community. On December 7, the DOJ announced that GNC had voluntarily agreed to strengthen the scrutiny of products on its shelves by pledging to take some key actions.

GNC was in the hot seat with justice officials after it sold products by USPLabs, a supplement manufacturer indicted in a federal sweep last year for illegally selling misbranded products as dietary supplements. By allowing products like USPLabs’ OxyElite Pro Advanced Formula to be sold in GNC stores nationwide in 2013, “GNC’s practices related to ensuring the legality of products on its shelves were lacking,” the DOJ said in its December 7 announcement.

GNC has agreed to pay $2.25 million to the U.S. government as part of the deal, and the retailer also agreed to cooperate in any future investigations, according to the announcement. GNC also agreed to take voluntary measures, including:

• Ceasing the sale of a product if GNC learns that the FDA has issued a public notice indicating a supplement product or ingredient is not legal and/or not safe
• Maintaining a list of restricted ingredients and using this list to determine which products will/will not be allowed for sale
• Developing an “industry-wide quality seal program,” and “when this quality seal is implemented, GNC has agreed to stop paying its retail sales people bonus commissions, or ‘promotional money,’ to direct customers to products in its stores not carrying the seal”
• Ensuring employees understand how to handle any customer adverse-event reports associated with a supplement purchased at GNC
• Ending salespeople bonus incentives to sell a certain supplement product

“The non-prosecution agreement resolves GNC’s liability for selling certain dietary supplements produced by a firm currently under indictment,” the DOJ concluded.

Marc Ullman, of counsel at law firm Rivkin Radler, called the deal a “fair deal” for GNC. Moreover, he said, “I think GNC was lucky they weren’t prosecuted,” adding, “When you read between the lines, there was the possibility of a federal criminal prosecution, most likely under the FD&C Act for the sale of an adulterated, misbranded dietary supplement.”

One positive outcome of the GNC deal could be if it reminds other retailers within the supplements industry that they are gatekeepers helping to ensure potentially unsafe products don’t reach consumers.

“It certainly should send a message,” Ullman said. “Retailers have a responsibility. Again, this isn’t Staples selling pencils. Retailers are selling products that we’re telling people they should ingest and the products will perform/provide them with significant health benefits. Why GNC decided to keep these products on the shelf to the point they ended up with a DOJ potentially criminal investigation? It’s absolutely beyond me.”

“I think it’s every retailer’s responsibility to understand what they’re selling,” he added.

“Companies like GNC need to do more to ensure that they are not selling products containing questionable and untested ingredients,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division, in the DOJ announcement.

Read more:

GNC’s New Mandatory Supplier-GMP Initiative: As GNC Goes, So Goes Industry?

From the Editor: Industry Taking the Right Road

FDA Makes Public Adverse Event Reports for Foods, Supplements, and Cosmetics

Jennifer Grebow
Editor-in-Chief
Nutritional Outlook magazine
jennifer.grebow@ubm.com