Department of Justice Now Uses Bankers as Henchmen to Strike Off Online Dietary Supplement Marketers
July 7, 2016
According
to one source, online sales of dietary supplements now represents 15.5%
of overall sales and is a fast growing channel. [McKinsey Marketing] But that may not be for long. Consider these recent events privately reported to me.
A
dietary supplement company that had been doing business for over a
decade online was in the middle of a December 2015 year-end sale when it
ran out of the product. With the consent of consumers who wanted
year-end pricing, orders were taken but not processed and a promise to
ship in mid-January 2016 was offered.
Three
weeks went by before the company could resume shipping. When they did,
the huge jump in sales volume to make up for back orders caught the eye
of a bank merchant account auditor. The merchant account service that
processes all the online orders for this business called the company in
question and wanted to know why the company was suddenly selling so much
product.
The bank,
one of the biggest in the world, thought something fraudulent was going
on and gave the vitamin company 10 days to find another merchant account
before they would pull the plug. The dietary supplement company
appealed but the bank merchant account service said they had reviewed
the company’s website and found unsubstantiated advertising claims but
refused to identify them. Their decision was final. The company had
been in good standing for over a decade and had never received a
correction letter from the FDA or FTC.
In another
case, a dietary supplement company was under re-organization due to a
divorce in a family-owned business. The company had been in business
since 1985. The supplement company applied for a new bank merchant
account and its application was denied. The reason: another website
associated with the site under review made unsubstantiated advertising
claims, they said.
Current Prices on popular forms of Silver Bullion
That
amounted to wording about a product that had “anti-aging” properties.
“Anti-aging” is wording that now out of bounds for supplement
companies.
So, will
FDA and the Department of Justice crack down on MIT’s Elysium Health
with its newly unveiled niacin-like anti-aging pill? An article in
MIT’s Technology Review says Elysium “hopes to elude the U.S. Food &
Drug Administration” by marketing its product (trade name Basis) as a
dietary supplement rather than a drug. MIT researchers say the claim
their pill has anti-aging effects “is nearly impossible to prove”
because life-long studies would be required to provide conclusive
evidence. [MIT Technology Review 2015]
Department of Justice enters war against dietary supplements
What
is happening here is part of the Department of Justice’s clamp down on
dietary supplement companies that do business online. Cloaked as a
consumer protection plan, in reality, the online supplement industry is
being dismantled one vendor at a time. New online supplement companies
are scrambling to find merchant account services that will accept their
business.
The
impetus for the crackdown on supplement companies stems from action
taken against USP Labs of Dallas, Texas, that marketed a stimulant
called DMAA (dimethyllamylamine), said to be a bit more powerful than
ephedra, a banned stimulant in weight loss formulas, but less toxic than
amphetamine. Reports of liver failure and even a few deaths were
reported.
After
the FDA sent warning letters to USP Labs in 2012 and 2013 about its
DMAA-containing supplements, USP Labs ultimately agreed to destroy $8
million of DMAA dietary supplements.
DMAA was
synthetically made and marketed in 1944 by Eli Lilly as a nasal
decongestant. DMAA was said to be an extract from geranium oil, which
qualified it as a dietary ingredient. But this was found to be a
falsehood (or was it?). The deception, said the Department of Justice,
was that DMAA was synthetic when it was portrayed as a natural product.
Reports
of liver toxicity from one physician in Hawaii started the DMAA
investigation by health authorities. There was so much DMAA being sold
at the time it would be implausible to think only one physician would
report cases of hepatitis from one brand among over 200 sports
supplements that featured it as an ingredient.
While
there have been other sporadic reports of deaths and liver toxicity
associated with Oxy Elite Pro by USP Labs and Jack3d by SK Labs, the
companies sanctioned by the Department of Justice, most of the time DMAA
products were used with other stimulants like caffeine and there is no
telling whether users who died or experienced side effects (fast heart
rate, nausea, and vomiting) had overdosed or not.
Users
of performance-heightening dietary supplements in their quest to
perform better and better may think more is better. It would be unfair
to blame overdosed drugs or dietary supplements for side effects that
induced by intentional overdosing. But this appears to be the case.
Attorneys
began advertising for users of Oxy Elite and Jack3d to register with
them for financial claims that could be awarded in future class action
lawsuits.
This
resembles what happened with ephedra, the herbal weight-loss supplement
that was overdosed by crash dieters. Deaths and liver toxicity was
reported in 2003-2004. Ephedra was banned in dietary supplements.
Consumers of ephedra products lined up to get in the collection line for
the class action awards. But for the most part, the customers
experiencing side effects were overdosing or using ephedra with other
stimulants.
Piling on
In a
continued effort to pillory dietary supplements, a figure of 20,000
annual emergency room visits by users of dietary supplements is now
being widely distributed in news reports. [New York Times
Oct 14, 2015] But to dig a bit deeper into the figure, more than a
quarter of these emergency room visits were by young people age 20-34
who were using them for weight loss or energy enhancement (and many
overdosing).
About a
third of these E.R. visits were by people age 65 and older that reported
problems like choking on the pills. An older person who chokes and
then aspirates (vomits) into their lungs and dies would be counted as a
dietary supplement related death. But there may be nothing wrong with
the product.
Failed inspections?
Another
mischaracterization is the way news organizations recently reported on
the number of dietary supplement manufacturers that failed FDA
inspections.
A report
said the FDA inspects ~500 firms annually out of an estimated 13,000
manufacturing facilities in the U.S. Sixty-three (63) of these 500
companies were re-inspected by the FDA with 32 of them having been the
subject of “official action.” Fourteen (14) of the 32 re-inspected
companies were cited by the FDA for failing to verify the identity of an
ingredient in their products. That figure eventually dropped to just 7
in 2015.
To
summarize, just 2.8% of inspected companies failed to properly identify
an ingredient in their product and that problem dropped to 1.4%. [Natural Products Insider June 20, 2016]
Federal agencies align to attack dietary supplements
There
simply isn’t sufficient evidence of an industry-wide problem that
requires a crackdown by so many law enforcement agencies such as the
U.S. Postal Service, the Department of Defense, the U.S. Anti-Doping
Agency, along with the Department of Justice, that cracked down on USP
Labs in unison. One government agent said:
“This serves as a wake-up call to the supplement industry. The unmistakable message is that the Department of Justice and its federal partners will be vigilant when it comes to the health and safety of the American public.” (SEM Forum Blog]
You mean crash dieters and members of the military participating in military drills that overdosed on dietary supplements?
The aftermath of DMAA
The
USP Labs fiasco resulted in the U.S. military banning all
DMAA-containing supplement from all military exchanges worldwide. [Archives Internal Medicine 2012]
The witch
hunt against dietary supplement manufacturers resulted in U.S. Attorney
General Loretta Lynch issuing a recorded message highlighting the
Department of Justice’s “work against fraudulent, deceptive or unsafe
dietary supplements.” [Department of Justice]
AG Lynch
says: “Unlike pharmaceutical drugs, the Food & Drug Administration
does not test dietary supplements prior to their introduction to the
market.” The fact is, the FDA doesn’t test any substance, drug or
supplement, before market approval. Drug companies conduct their own
trials and just send reports to the FDA. So the highest-ranking legal
officer in the country doesn’t understand what dietary supplement
manufacturers must do to keep their products on the market.
In another
overkill, a U.S. Senator announced legislation that would require
dietary supplements sold on military bases to first undergo independent 3rd
party verification of quality standards. However, the Senator withdrew
his proposed amendment when it was realized current law already does
that.
Then on
November 17, 2015, an article in Fortune Magazine said: “The Department
of Defense even considers dangerous supplements a threat to the
readiness of the U.S. military given how far-reaching items like protein
powders and weight-loss supplements have become.” [Fortune Nov 17, 2015] Really? More than half of the U.S. military takes dietary supplements.
There is
more evidence of a pincers movement against the dietary supplement
industry. Six former FDA commissioners met in Aspen, Colorado to
outline the shortcomings of the agency that morphed into an event staged
to demonize dietary supplements. [The AtlanticJune 26, 2016] The anti-supplement sentiment is prevalent in news reports while consumers have yet to abandon their use.
On November 4, 2015, two writers for Forbes.com
penned an article entitled: “Death by Dietary Supplement.” The article
cited that Lamar Odom, former NBA star, and TV reality show
participant, was found unresponsive at a Nevada brothel and became “very
close to becoming yet another statistic in the body count racked up by
‘herbal supplements’.” [Forbes.com Nov 4, 2015]
Industry backpedals
The
Council For Responsible Nutrition, an industry trade association, wants
to create some distance from bad players in their industry and is
creating a product registry to “take their industry back from the
lawbreakers, from the renegades, from the companies that spurn
regulation,” said a CRN spokesperson. CRN has announced a condition of
membership would be for manufacturers to submit supplement product
labels to the Office of Dietary Supplements Label Database. [Nutritional Outlook April 13, 2016]
Reeling
backward on defense, the supplement industry released a report on June
9, 2016, stating it contributes $122 billion to the U.S. economy. [Nutritional Outlook June 9, 2016]
States Attorney Generals
All
these events follow the unprecedented action by the New York State
Attorney General’s office into the contents and labeling of dietary
supplements sold at Walgreen’s, Walmart, GNC and Target stores. The NY
State attorney general used a new barcode method of testing that is not
considered a standard in the industry. Thirteen States Attorneys
General then joined New York. [Health Affairs BlogFeb 24, 2016]
But wait…
But wait, a
wrongful death lawsuit filed against USP Labs and General Nutrition
Corp. (GNC store chain) was dismissed by a judge because expert
witnesses on behalf of the plaintiff failed to base their opinion on any
study that reliably tested whether DMAA can cause side effects and
failed to use scientific methods.
An
online commenter said: “So far we have seen seven peer-reviewed
studies that were published outlining the safety of DMAA, showing it was
no worse than two cups of coffee on cardiac function. A study
performed by the Department of Defense showed an excessively low risk
for causing harm and even stating ‘evidence does not establish that DMAA
containing products are causally associated with adverse events’.” [Natural Products Insider Jan 29, 2016]
When
researchers took 50 young healthy men and gave them DMAA and/or caffeine
for 12 weeks there were no statistically significant changes in blood
pressure, blood count, respiratory rate or heart rate or rhythm. [Human Experimental Toxicology 2013]
In early
2015 FDA issued another “public notification” that USP Labs Oxy Elite
Pro product contained fluoxetine (Prozac) and should not be used by
consumers. But USP Labs countered that the product tested by FDA was
counterfeit and its lot numbers didn’t match any used by the company.
USP Labs said the Prozac-laced product was most likely marketed by a
Brazilian website. [Raps.org March 2, 2015;Buzzfeed.com Feb 28, 2015] Was USP Labs telling the truth?
Major supplement adversary rebutted
There’s
more. A letter published in a major medical journal rebuts many of the
warnings issued about DMAA by long-time dietary supplement antagonist
Pieter A Cohen of Harvard Medical School.
Even
though a synthetic version was used by USP Labs and marketed as
“natural,” investigators note that natural DMAA has in fact been
documented in the germanium plant. Many health authorities mistakenly
maintain DMAA is not a dietary ingredient and is solely synthetic.
Pieter
Cohen cited six DMAA studies but failed to note that blood pressure was
only elevated by 15% in one study and not in any of the others.
Furthermore, none of the side effects reported in individual published
case reports were noted in the remaining 5 studies.
This
strongly suggests that mortal or morbid side effects associated with
DMAA occur among rogue users who may intentionally overdose or combine
other molecules to maximize DMAA’s effect. When the dose is controlled,
such as in a study, few side effects materialize.
These
reviewers say the demand by Dr. Cohen to recall all DMAA products “is
not based on data analyses using sound principles of risk assessment.” [Journal Internal Medicine 2013]
For
the record, overuse of acetaminophen (Tylenol), an FDA-approved drug,
is the leading cause of liver failure in the U.S. and accounts for more
than 100,000 calls to poison control centers, 60,000 emergency room
visits and hundreds of deaths each year. The product is allowed to
remain on the market with printed warnings on the label. Acetaminophen
is also found in many over-the-counter prescription and non-prescription
medications (Nyquil). [Drug Watch] The antidote to acetaminophen poisoning is a dietary supplement (N-acetyl cysteine). [Journal Clinical Investigation]
Witch hunt
There surely is a witch hunt going on. Major health freedom groups haven’t weighed in on the issue yet.
Scott
Tips, president of the National Health Federation (NHF) whose
organization has taken a leadership role at international CODEX meeting
to oppose the watering down of vitamin supplements, says this is by far
the greatest threat to the dietary supplement industry since the passage
of the Dietary Supplement Education & Health Act of 1994.
His
organization says dietary supplements are safer than table salt, tap
water, and aspirin and asks if “death by dietary supplement” were true,
just where are the dead bodies, hiding underneath the floorboards of
dietary supplement shops?
NHF says existing safeguards already exist and legal liability serves enough to keep supplement makers compliant.
NHF
advocates a rule that all dietary supplement executives read Title 21
of the Food Drug Act that deals with dietary supplement Good
Manufacturing Practices and FTC advertising guidelines and sign an
affidavit they read those regulations, which would make them personally
liable for product liability claims. He says it is too easy for startup
companies to go into the supplement business without first
understanding the rules.
Tips
says there is no bigger issue than dietary supplements, not even the
right to bear arms. He cites the fact there were more letters received
in Congress about blocking the effort to classify dietary supplements as
drugs in 1994.
Maybe
Donald Trump would be a more favorable Presidential candidate as he
would be the only President who once owned a dietary supplement
company. The dietary supplement industry might need a regime change to
survive. ####
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