Consumer Health Digest #14-14
Your Weekly Update of News and Reviews
April 20, 2014
Consumer Health Digest is a free weekly e-mail newsletter edited by Stephen Barrett, M.D., with help from William M. London, Ed.D., M.P.H. It summarizes scientific reports; legislative developments; enforcement actions; news reports; Web site evaluations; recommended and nonrecommended books; and other information relevant to consumer protection and consumer decision-making.
Herbalife hit by class-action suit. A class-action lawsuit has been filed by Abdul Awad, an Herbalife shareholder who claims to have bought the company's stock at inflated prices because of false or misleading statements made by the company. Awad is seeking to represent all investors who bought the stock between May 4, 2010 and April 11, 2014. His complaint states:
- The company's operations were based on a pyramid scheme whereby its distributors generate revenue by recruiting other distributors rather than selling its diet and nutritional products to the general public.
- Herbalife engaged in deceptive trade practices where it unduly pressured its members to purchase more products to resell as one of its "distributors."
- As a result of the above, the company's financial statements were materially false and misleading at all relevant times.
- In 2013, The New York Times reported that the Securities and Exchange Commission (SEC) opened an investigation into the company. Recently the Financial Times reported that the FBI has opened a criminal probe of Herbalife. [Registration is required to access the article.]
- U.S. Senator Edward J. Markey of Massachusetts has sent a letter to Herbalife's chief executive, Michael O. Johnson, asking (a) How much profit (net earnings after expenses) can the average distributor expect to make from retailing to non-distributors (i.e., people who are not directly involved in Herbalife themselves)?; and (b) What's the correct number of sales outside the network as a percentage of total sales for each of the last five years measured by product, quantity and dollars. Markey also urged both the FTC and SEC to examine whether Herbalife was a legitimate multilevel marketing company. Markey also reported that one family in Norton, MA had lost $130,000 from its investments in the company's products, and another woman said she was pressured to recruit family members and spend more money to buy more Herbalife products so she could qualify as a "supervisor" in the Herbalife system.
- News of the investigations triggered sharp declines in the price of Herbalife common stock, causing Awad and many other investors to suffer significant losses.
Toxic supplement product triggers call for greater regulation. Nearly 100 cases of hepatitis (liver inflammation) and liver failure have been linked to the use of OxyElite Pro, a dietary supplement intended for muscle-building or weight loss. In response, Pieter A. Cohen, M.D., has pointed out:
- Americans spend more than $32 billion a year on more than 85,000 different combinations of vitamins, minerals, botanicals, amino acids, probiotics, and other supplement ingredients. Unlike prescription medications, supplements do not require premarketing approval before they reach store shelves.
- Under the Dietary Supplement Health and Education Act of 1994, anything labeled as a dietary supplement is assumed to be safe until proven otherwise. The FDA is charged with the unenviable task of identifying and removing dangerous supplements only after they have caused harm.
- Although OxyElite Pro was recalled, nothing has been done to prevent another supplement from causing organ failure or death. Nor have any changes been made to improve the FDA's ability to detect dangerous supplements.
- More than 500 supplements have already been found to be adulterated with pharmaceuticals or pharmaceutical analogues, including new stimulants, novel anabolic steroids, unapproved antidepressants, banned weight-loss medications, and untested analogues of sildenafil (the active ingredient in Viagra).
- If consumers and physicians are to have confidence that all supplements are safe, the laws regulating supplements must be reformed so that every ingredient is required to undergo rigorous safety testing before marketing.
[Cohen P. Hazards of hindsight: Monitoring the safety of nutritional supplements. New England Journal of Medicine 370:1277-1280, 2014]
NSW nurse facing practice ban for administering "alternative" treatments. The New South Wales Civil and Administrative Tribunal has concluded that the registration of nurse-midwife Nola Fraser should be suspended or canceled. The ruling came in response to a complaint by the Health Care Complaints Commission, which alleged that Fraser was involved with an unregistered former medical practitioner (Chittoor Krishnan) in providing insulin potentiation therapy (IPT) and intravenous vitamin therapy to four patients, one of whom was her brother. On April 4, the Tribunal found Fraser guilty of professional misconduct because she had:
- Willfully ignored whether Krishnan was registered in NSW at the relevant time.
- Administered intravenous vitamin C therapy to a patient in a private home without the supervision or appropriate authority of a registered medical practitioner.
- Helped administer IPT to a patient at her own cosmetic and laser clinic when she knew the practitioner "supervising" the treatment was not registered.
- Administered IPT to this patient outside her scope of practice.
- Obtained medication for the purpose of administering vitamin therapy to two patients even though a medical practitioner had not written a prescription for the medication or assessed the patient for the purpose of receiving this therapy.
- Administered intravenous vitamin therapy to her brother without appropriate supervision.
- Collaborated with her brother to obtain a chemotherapy drug, the administration of which would not be supervised by a registered medical practitioner.
This page was posted on April 20, 2014.