GNC Supply Chain Reform Pays Dividends In DoJ Settlement From DMAA Investigation

DoJ announces a "non-prosecution agreement" that requires GNC to pay $2.25m and to cooperate in dietary supplement market investigations conducted by FDA and other federal agencies, including the current litigation against USPlabs.

[GNC Holdings Inc.] enters a settlement with federal prosecutors to put behind it a banned ingredient that the rest of the dietary supplement industry, with the exception of a firm GNC has agreed to testify against, was quicker to leave behind.

The Department of Justice on Dec. 7 announced a "non-prosecution agreement" that requires GNC to cooperate in the prosecution of [USPlabs LLC]. The US. Attorney’s Office for the Northern District of Texas is prosecuting USPlabs and executives from the firm on criminal charges stemming from engaging in a conspiracy to import ingredients from China using false certificates of analysis and false labeling and lying about the source and nature of the ingredients after using them in its products.

The agreement requires GNC to pay $2.25m to the federal government, though DoJ does not identify the payment as a fine, but resolves the firm's liability for selling USPlabs' OxyElite Pro Advanced Formula, Jack3d and Versa-1 supplements formulated with the stimulant DMAA, or 1,3 dimethylamylamine.

"We are pleased to have put this matter behind us," Pittsburgh-based GNC said in a same-day statement.

Still, the settlement keeps in front of GNC the possibility that some violations could be charged against the firm through its cooperation in the USPlabs investigation. (Dallas-based USPlabs is not connected in any way with the US Pharmacopeia standards-setting organization.)

The settlement document the US Attorney's Office submitted to GNC counsel states that "any testimony given by or on behalf of GNC before a grand jury, any court or tribunal, whether before or after this agreement, and any leads derived from such statements, will be admissible in evidence in any and all proceedings brought by the Government pursuant to this agreement against GNC."

'Acts And Omissions'

DoJ's Civil Division the Consumer Protection Branch explained in a release that the "statement of facts" GNC agreed to indicate that the firm "engaged in acts and omissions that allowed a misbranded supplement" to be sold its stores in 2013.

The settlement document states that the agreement is contingent on the firm's "acceptance of responsibility for its conduct" and its cooperation in the investigation of USPlabs, "including its providing the Government with information about the conduct of individuals within and outside of GNC."

The document also explains that "enhanced compliance measures" GNC agreed to in the settlement are accounted for in the firm's work in 2015 and 2016 on ingredient supplier guidelines to improve its compliance with federal and state regulations. GNC, which also added the American Herbal Product Association's good agricultural practices, has made the guidelines available to firms across the supplement industry.

The agreement states that GNC said the initiative will harmonize audit standards; require annual inspections of supplement manufacturing facilities by qualified, independent third party organizations that would certify whether the facility meets FDA good manufacturing practices regulations and strengthen quality and integrity in the botanical raw materials supply by developing and establishing industry good agricultural and collection practices and GMPs from farm to facility, including traceability standards and testing requirements for producers, brokers and distributors.

Additionally, DoJ said through its initiative the firm is leading the adoption of an industry-sponsored product database with unique product numbers issued for registered supplement products, similar to the registry the Council for Responsible Nutrition separately is developing for information about vitamins, supplements, minerals and other nutritionals available in the US. (Also see "'Online Wellness Library' Accepting Product Labels To Test Scalability" - HBW Insight, 1 Nov, 2016.)

According to the settlement document, the firm agreed to requirements that generally track manufacturers' responsibilities under FDA's 2007 supplement GMP final rule. However, the settlement puts firm on higher alert to detect and prevent violations, including:

• " take immediate actions to suspend the sale" of any product containing an ingredient that FDA identifies in written notice as "not legal under federal law and/or is not safe."
• "maintain and continuously update a list of ingredients that will be prohibited from inclusion in any products that are sold by GNC."
• "develop and maintain a list of dietary ingredients that GNC believes comply with the applicable provisions of the" Food, Drug & Cosmetic Act.

The agreement, which also requires GNC to commit an additional $500,000 to the industry guidelines initiative, extends for 60 months but allows the firm to request early termination after 36 months.

In an unrelated investigation, GNC in March 2015 agreed with the New York state attorney general to impose manufacturing and supply chain requirements beyond FDA’s supplement GMP final rule. The New York agency alleged GNC several mass merchandisers sold adulterated and misbranded herbal supplements at stores in the state. (Also see "GNC-New York Agreement Spurs States’ Call To Tighten Supplement Industry Scrutiny" - Pink Sheet, 31 Mar, 2015.)

FDA Enforcement Resisted

GNC and USPlabs resisted FDA enforcement actions and continued to assert DMAA was safe after the agency beginning in 2012 asked supplement manufacturers and marketers to remove from the market products containing the ingredient. DMAA was suspected of being linked to adverse events, including deaths, and the Department of Defense had banned sales in military stores of products containing the ingredient.

Following a DOD investigation released in August 2013 that found no proof of a causal link between DMAA and the deaths of four US military members, GNC said FDA's enforcement had been unjustified was not supported by science. (Also see "Military Report Slams DMAA While GNC Claims Victory" - Pink Sheet, 7 Aug, 2013.)

However, by that time the firm had already pulled DMAA from its store shelves and destroyed remaining inventory in the face of mounting regulatory pressure, including FDA seizing and detaining the products. USPlabs also gave up its defense of DMAA at that time, destroying $8m in products. (Also see "In Brief" - Pink Sheet, 22 Jul, 2013.)

Following the DoD report, FDA held to its position that DMAA is not derived from the geranium plant as some in the supplement industry argued, and is neither a dietary ingredient nor generally recognized as safe for use in foods. The DoD report noted that even if commercially viable amounts of DMAA could be extracted from geranium, manufacturers admitted to using synthetic ingredients in their products.

USPlabs problems didn't end with keeping DMAA out of its products, however. In November 2013 the firm recalled OxyElite Pro Versa-1 capsules and powder products after FDA threatened the firm with a mandatory recall order because the products contained aegeline. Although aegeline lacks a history of use or other evidence of safety, USPlabs had started using it instead of DMAA in some products. (Also see "In Brief: CDC calls for safer cough/cold delivery, USPlabs toes the line, Neptune disputes fine, and more" - Pink Sheet, 18 Nov, 2013.)

The aegeline-containing product recall came after FDA reported in October 2013 that USPlabs' OxyElite Pro supplements were suspected of being linked to cases of acute non-viral hepatitis in Hawaii. The agency said 11 of the 29 people hospitalized with acute hepatitis potentially linked to the product, two received liver transplants and one died. (Also see "DMAA Product OxyElite Pro Named Potential Link In Acute Hepatitis Cases" - Pink Sheet, 9 Oct, 2013.)

DoJ disclosed the USPlabs indictment in November 2015 when it announced a 12-month, multi-agency enforcement sweep against noncompliant supplement firms. While the agency linked the sweep primarily to firms making false claims for their products, it noted the charges against USPlabs were the most substantial result. (Also see "Federal Sweep Nets 40 Criminal, Civil Cases For Spiked Supplements, Disease Claims" - Pink Sheet, 23 Nov, 2015.)

In January 2016, a federal judge cited the DoD report in dismissing all claims against USPlabs and GNC by the family of a US military member who died during a training exercise while using Jack3d because the evidence they presented was unreliable.