GNC Reaches Settlement In Supplement Case

(RTTNews) - Dietary supplement retailer GNC Holdings Inc. (GNC) has agreed to pay $2.25 million to the U.S. government over the alleged sale of potentially unlawful dietary supplements, the U.S. Department of Justice said Wednesday. The company's agreement with the Justice Department also enables it to avoid federal prosecution.

The Justice Department said that GNC has agreed to reform its practices related to potentially illegal supplements and also take steps to improve the quality as well as purity of its dietary supplements.

The non-prosecution agreement resolves GNC's liability for selling certain dietary supplements produced by a company currently under indictment.

Principal Deputy Assistant Attorney General Benjamin Mizer, said, "Unlawful dietary supplements are an important enforcement priority for the department. Today's resolution is a significant step forward in reforming an industry rife with alarming practices."

The non-prosecution agreement stems from allegations that GNC allowed a misbranded supplement - OxyElite Pro Advanced Formula, a product of Dallas-based USP Labs - to be sold in its stores nationwide in 2013.

GNC sold the product based on representations from USP Labs that ingredients contained in the product complied with the law. However, GNC did not undertake additional testing or verify that the ingredients in the product were as represented.

USP Labs was indicted in November 2015 in a U.S. federal court in Dallas and is awaiting trial, the DOJ noted. The indictment alleges that company engaged in a conspiracy to import ingredients from China using false certificates of analysis and false labeling.

USP Labs told some of its retailers and wholesalers that it used natural plant extracts in some of its products, when it actually contained synthetic stimulants made in a Chinese chemical factory.

Under the deal with the DOJ, GNC has agreed to take immediate action to suspend the sale of products if the Food and Drug Administration issues a public warning about them.

GNC will create two lists of acceptable and unacceptable ingredients that can be used in supplements, and conduct more due diligence on its vendors. The company is also required to develop an industry-wide quality seal program.

Finally, GNC will update its adverse event reporting policy to ensure that its employees understand the procedures to be implemented if a customer complains of injuries associated with a dietary supplement bought at GNC.