FDA Slaps Herbalife Ltd. (HLF)’s Hand For YouTube Video Comments

FDA Slaps Herbalife Ltd. (HLF)’s Hand For YouTube Video Comments

Herbalife Ltd. has taken a lot of heat from activist investor Bill Ackman for its distributors allegedly making misleading statements regarding claims the company’s products help with various medical problems. Now the nutritional supplements company has attracted the attention of the U.S Food and Drug Administration regarding comments one of its executives made in a video posted on YouTube.

FDA sends letter to Herbalife

The FDA posted a letter it sent to Herbalife Chairman and CEO Michael O. Johnson on its website. The agency said the advertisement includes statements that “mischaracterize FDA’s role with regard to dietary supplements.” The FDA pointed to a specific statement made by Vasilios H. Frankos, Ph.D., a former FDA official hired by Herbalife to handle compliance.

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Frankos stated in the video, “When I was director of dietary supplements at the FDA, I oversaw nutritional supplements, making sure they were safe and effective for use.”

The video in question is listed on YouTube as being private, which means not just anyone can access it at this time.

FDA doesn’t approve dietary supplements

The FDA said in its letter to Herbalife, that the Dietary Supplement Health and Education Act of 1994 states that manufacturers of dietary supplements are not required to receive approval from the FDA before they market them. Further, the agency states that it isn’t authorized to review dietary supplements and does not review them for effectiveness before companies market them, “absent review related to health claims and qualified health claims, which is not relevant here,” the letter states.

The agency also said it isn’t authorized and doesn’t review dietary supplements for safety either, except for those that have a new ingredient that hasn’t been in the food supply “as an article of food used for food in a form in which the food has not been chemically altered.”

The FDA also can’t approve or disapprove marketing for safety. Additionally, the agency is only able to halt marketing efforts by proving to a court that there isn’t enough information to reasonably assure that an ingredient is safe.

FDA: Herbalife’s video is misleading

“The safety and effectiveness standard referred to in the Herbalife video is the FDA standard for drug review and does not reflect what FDA does with regard to dietary supplements,” the agency wrote.

The FDA also expressed concerns that the statements made in the video are misleading to viewers about whether the agency has ruled that Herbalife’s products are effective and safe. Regulators have not made a determination on either issue. Officials requested that Herbalife remove the video from YouTube and stop airing it elsewhere.

Shares of Herbalife Ltd. edged upward less than 1% during regular trading hours today in spite of the public FDA letter to Herbalife.

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