Federal agencies hit 117 supplement makers

Federal agencies hit 117 supplement makers

USP Labs was the poster child of the day's announcement, but the greater supplement industry may feel some pain.

Five federal agencies led by the U.S. Department of Justice brought criminal and civil actions against more than 100 makers and marketers of supplements for making illegal products masqueraded as supplements and making deceptive claims about supplement ingredients. They also issued a warning against all supplement companies for not adhering to Good Manufacturing Practices and for selling pure powdered caffeine.

While the poster child of the day’s announcement was six individuals at USP Labs for using untested synthetic materials and calling it natural (DMAA) in its Jack3d workout supplement, the greater supplement industry may feel some pain.

The allegations against USP Labs should serve as a wake-up call to the dietary supplement industry, said Benjamin Mizer, principal deputy U.S. assistant attorney general. These efforts won’t put an end to this widespread problem, but they will go some distance to bringing change to the industry.

In a possible metaphor for the short- and long-term health of the industry, GNC'€™s stock price was down a whopping 25 percent in afternoon trading, €”only to recover once it was revealed the supplements retailer was not part of the sweep, to finish the day down 3.8 percent in heavy trading. A similar story played out in market trading for Vitamin Shoppe and Herbalife €”both companies were down sharply and then recovered to a 5 percent loss for Vitamin Shoppe and 2.3 percent decline for Herbalife.

The day'€™s dramatic announcement by officials at the Department of Justice, the Food and Drug Administration, the Federal Trade Commission, the Department of Defense and the U.S. Anti-Doping Agency has been exactly what the industry has been asking for. The 117 targets of federal action included executives, consultants and companies involved in largely internet-only marketing. Companies included USP Labs, Vibrant Life, Optimum Health, Sunrise Nutraceuticals, Bethel Nutritional Consulting and others. The concern is bad actors such as these are bringing down the rest of the industry, giving rise to questions about product quality and consumer trust among even reputable supplement brands. The headline from The Daily Beast, under the kicker, "Shady," was "The $40 billion snake-oil industry."

In May, when Loretta Lynch was confirmed as U.S. attorney general, Sens. Orrin Hatch (R-Utah) and Martin Heinrich (D-New Mexico) wrote a letter to Lynch requesting action against companies engaging in blatant criminal activity by manufacturing and marketing products that masquerade as €˜dietary supplements€™ but contain anabolic steroids, active pharmaceutical ingredients (APIs) or analogues of APIs.

That the new attorney general took action provided satisfaction among supplement industry players who have long said that the feds have all the authority they need without the need of new laws to police the industry, and that it's far from being "unregulated."

The clear message for industry, Congress, the media and consumers is that there is broad authority held by various agencies to regulate dietary supplements," said Loren Israelsen, president of the United Natural Products Alliance. Today's press conference was a good demonstration of regulators taking action. We say, €˜Carry on.

Short-term pain, long-term gain?

Supplements industry trade group Council for Responsible Nutrition was the only industry association to follow up on the senators€™ letter to urge the Justice Department to move on this.

€œThis will make the supplements space a safer space for consumers and help level the playing field for responsible companies doing things right, CRN president and CEO Steve Mister told newhope.com. When people see other companies being indicted with criminal charges, it totally changes the calculus of doing this. It does have a deterrent effect.€

Mister, however, said he is concerned about the consumer media not making a distinction between reputable companies and the outliers.

I do worry about it, said Mister, €œbut in the grand scheme of things, the industry is better off prosecuting companies even though we'€™ll have to spend a lot of time talking about a tale of two industries€—€”one responsible, the other fraudulent and opportunistic.

The industry's hope is that it can look back at the mid-teens as the years when the industry was called to task for its problems of adulterated ingredients and fraudulent products containing pharmaceutical analogs, most especially in the categories of sports performance, sexual enhancement and weight loss.

In February, the New York state attorney general announced a sting operation into ingredient adulteration, targeting the largest retailers in the country—Walmart, Target, Walgreens and GNC. The national meeting of state attorneys general two weeks ago discussed targeting herbal supplements as an enforcement priority. Television specials on supplement quality are airing on public television channels.

Questions are arising over the long-term health and viability of the $40 billion supplements category.

The question is, will the industry rise to the occasion? Maybe the industry can clean up its act clearly with the help of government agencies, because the self-police model, 20 years after the signing of the Dietary Supplements Health and Education Act, has proven to be ineffective. Perhaps once consumers, the media and government are satisfied that supplement companies are indeed all producing quality products, with no question whether a product contains things other than what's on the ingredient deck, the supplements industry can grow. Why shouldn't supplements be available for food stamps recipients? Don't supplements offer an elegant solution to personalized medicine? Nutrition science continues to accumulate. There'€™s reason to believe we will look at supplements becoming a $60 billion industry. If the price of that is fewer supplement makers and marketers but a more trustworthy industry with greater profits, would there be many complaints?

With vulnerability comes opportunity. But before the industry can healthfully innovate and provide real consumer benefits, it needs to get its foundation on more solid ground. Fraudulent practitioners playing in opportunistic categories have been put on notice.

Today'€™s joint agency effort is to protect consumers from potentially unsafe dietary supplements,€ said Howard Sklamberg, FDA'€™s global regulatory operations and policy chief. We will prioritize consumer health or vulnerable populations.

That means the breadth of categories FDA is looking at will expand from the three aforementioned ones to age-related conditions, from cognitive health to making hair turn from gray back to black or grow back, to opportunistic ones such as companies capitalizing on the latest flu outbreak or, in the case of Sunrise Nutraceuticals that was served a permanent injunction today, those that target heroin or other opiate addicts.

"We are not here to criticize the entire supplements marketplace,€" said the Department of Justice'€™s Mizer. "Not every supplement contains an undisclosed ingredient. Not every label lies about what'€™s in the bottle. Not every claim about dietary supplements is unsupported. It is challenging to sort through real scientific substantiation compared to unsubstantiated hype."

To that end, the group also announced educational tools available for consumers. The U.S. Anti-Doping Agency launched a website, supplement411.org. The military says more than 70 percent of active-duty service members take some type of supplement, and 20 percent take performance-enhancing, bodybuilding or weight-loss supplements, which are the categories of chief concern among government agencies. The military has a website, Operation Supplement Safety, to provide education on how to choose supplements wisely.

What do you think? Is the short-term pain going to ultimately lead to long-term gain for the supplements industry? Comment  below.

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