GNC Names CEO, Wind River Woes: Health And Wellness Industry News
This article was originally published in The Rose Sheet
Executive Summary
Martindale brings familiarity to GNC helm; and FDA warns Wind River Herbs after no response.
Martindale brings familiarity to GNC helm
Ken Martindale could find [GNC Holdings Inc.] quite familiar when he becomes CEO on Sept. 11 after nearly a decade in executive posts with drug store chain Rite Aid Corp., which features GNC "stores within a store" in many locations. GNC on Sept. 6 announced Martindale's appointment to succeed interim CEO Bob Moran, who was elected non-executive board chairman and will work on Martindale's transition and on the nutrition, health and wellness product manufacturer and retailer's ongoing pricing and loyalty program transformation. The Pittsburgh-based firm said Michael Hines will step down as chairman but remain on the board, with all changes effective Sept. 11.
Martindale joined Rite Aid as merchandising, marketing and logistics senior executive in 2008, soon after the chain began featuring GNC's "Live Well" sections with some of its stores. (Also see "GNC, Rite Aid expansion plans" - Pink Sheet, 13 Aug, 2007.) GNC noted Martindale "was instrumental" in Rite Aid changing its store format and expanding its loyalty program.
Ken Martindale takes GNC helm after leading a drug store chain that featured GNC "Live Well" sections in its stores.
He most recently served as CEO of Rite Aid Stores, starting in 2013, and added corporation president to his title in August 2015. Rite Aid in 2015 agreed to be acquired by Walgreens Boots Alliance Inc. for $17.2bn, but regulatory concerns about the marketplace impact plagued the deal, which would have made Walgreens and CVS the two dominant US drug store chains. Instead, in June the firms changed their agreement to Walgreens buying 2,186 Rite Aid stores for $5.2bn, leaving Rite Aid with 2,350 stores after the deal closes.
GNC named Moran interim CEO in July 2016 when it removed Mike Archbold from the post after two years for the same reason his predecessor lost the job, steadily declining customer numbers. Although total adjusted net income was down 48% to $27.8m in GNC's latest quarter, the firm reported strong results from its "One New GNC" loyalty and pricing program. (Also see "'New' GNC Tag Sticks With Turnaround Results Still In 'Early Days'" - HBW Insight, 28 Jul, 2017.)
GNC also incurred memorable regulatory challenges in addition to declining revenues during Archbold's tenure. After reaching a settlement in 2015 on charges by the New York Attorney General's office about adulterated herbal extract products sold in the state, Archbold had GNC develop and share guidelines for ingredient suppliers across the dietary supplement industry to help galvanize regulatory compliance, helping foster recommendations from a broad coalition of industry stakeholders on improving compliance with federal and state regulations. He also launched an initiative to dramatically increase GNC franchise stores and cutting the number of company stores. (Also see "GNC Makes Change At Helm As Revenue Decline Continues" - HBW Insight, 28 Jul, 2016.)
Wind River Herbs warned after no response
Wind River Herbs brand supplements make disease claims from “useful for intestinal parasites, especially giardia" to "for liver congestion and toxicity," and from "antiseptic and anti-fungal" to “antibiotic with a similar action as penicillin," FDA says in a recent warning letter. Marketer C.K. Solutions Inc. also covers the waterfront with supplement good manufacturing practices problems, says the Denver District of FDA's Office of Regulatory Affairs.
ORA staff in May inspected the Thayne, Wyo., firm's facility and reviewed claims for its herbals on a branded website and a second online sales site and subsequently informed C.K. Solutions of their findings, which also include misbranding problems, in a form 483. "To date, we have not received a written response from you," ORA said in the Aug. 10 letter that FDA posted online Sept. 5.
FDA officials and food and drug attorneys long have said that responding with comments on form 483 findings is crucial to convincing the agency that the problems listed are being corrected and to reducing the chances of receiving a warning letter. (Also see "Timely 483 Response Can Ease Agency Enforcement Action – FDA Official" - Pink Sheet, 7 Feb, 2011.)
The warning to C.K. Solutions says violative claims established as drugs these Wind River products: Black Cohosh, Echinacea Goldenseal Blend, Milk Thistle Blend, Mullein Blend, Pros Men Blend, Traveler’s Aid Blend, Women’s Balancing Blend, Baptisia, California Poppy, Elderflower, Elecampane, Ginkgo, Helonias, Horsetail, Lomatium, Pipsissewa, Reishi Mushroom Rhubarb, Usnea, Wild Yam, Yarrow, Black Cohosh Tincture, Osha Lungwort Blend Tincture, Cornsilk Pipsissewa Blend, Kava Kava Tincture and Clotsfoot Tincture.
GMP violations noted in the warning run the gamut of the most commonly noted problems at dietary supplement manufacturing and distribution facilities since FDA in 2010 began the inspections based on requirements in its 2007 supplement GMP final rule.
The letter notes GMP problems from not having written procedures for manufacturing quality control to failing establish specifications for each supplement it manufactures for the identity, purity, strength and composition of finished batches, and from not having written procedures for handling returned supplements to not having master manufacturing records – "you indicated that you did not have MMRs for any of the dietary supplements you manufacture," the letter states.
Misbranding problems common in the industry were noted – incorrect serving sizes, omission of a specific plant part as an ingredient's source and absence of a manufacturer's complete address – in addition to an error in ginseng product labeling. Wind River's Siberian ginseng product is misbranded because the labeled ginseng ingredient is not from a plant classified with the genus Panax, ORA officials say.
The letter states that FDA regulations limit the use of “ginseng” as a common product name for an herb or herbal ingredient derived from a plant classified within Panax. The labeled ingredient in Wind River's product may not be declared under a name that includes “ginseng” because it is not from the genus Panax.