GNC Pays $2.25M Over Misbranded Supplements

DALLAS (CN) – Dietary supplement retailer GNC agreed Wednesday to pay $2.25 million and reform its practices to avoid prosecution over the sale of misbranded OxyElite Pro Advanced Formula, federal prosecutors said.

Made by Dallas-based USPlabs, OxyElite Pro has been accused of containing synthetic stimulants made in a laboratory instead of natural plant extracts as advertised. The supplement maker and its top bosses were slapped with an 11-count criminal indictment in November 2015.

GNC has steadfastly denied that it knowingly sold supplements that violate federal law. Federal prosecutors said GNC did not request additional testing or require additional certifications to verify the ingredients in the supplements were as represented.

The U.S. Department of Justice says it entered into the nonprosecutorial agreement with GNC based on its “acceptance of responsibility for its conduct,” its cooperation in their criminal investigation and GNC’s commitment to voluntary compliance measures, according an agency letter to GNC’s attorneys on Monday.

Prosecutors say GNC has voluntarily made organizational changes regarding the sale of dietary supplements under the terms of the agreement. It will also establish two lists – a “restricted list” for ingredients that are not to be used in dietary supplements and a “positive list” for ingredients are approved for sale. While lacking force of law, the list will guide GNC to determine what products it will approve for sale.

The company will also voluntarily work to develop an industry-wide “quality seal” program and will stop paying its sales staff bonus commissions to direct customers to non-seal products.

“GNC does not endorse, ratify or condone illegal conduct related to the manufacture, distribution or sale of dietary supplements,” the 12-page letter says. “GNC states that it has accordingly entered into this agreement for the benefit of consumers, state and federal regulators, and the broader dietary supplement industry (including raw material supplies, manufacturers and retailers).”

GNC said Wednesday it is “pleased” to have reached the agreement relating to products that it says has been off its store shelves for years.

“Ultimately, the DOJ found sufficient evidence that USP Labs provided false assurances and information and fake documentation to third parties, including GNC,” the company said in a statement. “The DOJ and [U.S. Food and Drug Administration] also concluded that GNC was unaware of any information that the products manufactured by USP Labs violated the [Federal Food, Drug, and Cosmetic Act], while recognizing GNC’s representation that it did not knowingly sell products that violated the FDCA.”