Maker of Supposed Cold Remedies Fined $1.5 Million for False Claims

A dietary supplement distributor has agreed to pay $1.5 million in civil penalties and costs to settle a lawsuit filed by 10 California counties that accused it of engaging in false and misleading advertising, prosecutors said today.

The settlement with Iovate Health Sciences, a Canadian corporation based in Oakville, Ontario, and its American affiliate, Iovate Health Sciences USA, Inc., is the second largest dietary supplement settlement in California history, according to prosecutors.

The suit was brought by the district attorney's offices in Alameda, Napa, Marin, Monterey, Orange, Santa Clara, Santa Cruz, Shasta, Solano and Sonoma counties and the settlement was signed in Napa County Superior Court.

The suit alleged that the company engaged in false and misleading advertising in connection with the marketing and sale of some of its dietary supplement products and violated Proposition 65, which requires a warning label on products that expose consumers to more than one-half microgram of lead a day.

The settlement calls on the Iovate companies to pay $1.2 million in civil penalties that will provide support for the future enforcement of California consumer protection laws as well as $300,000 for investigative costs.

Alameda County Deputy District Attorney Scott Patton, one of the prosecutors involved in the case, said state action against the companies was necessary because the federal government doesn't regulate the dietary supplement market.

He said unlike prescription medication, dietary supplements do not need to be pre-approved by U.S. Food and Drug Administration before they can be sold to consumers and a dietary supplement can be sold without prior government approval or proof that it is either safe or effective for its intended use.

Patton said the suit alleged that the Iovate companies were making claims that their products could cure colds and diseases without any scientific proof to back up those claims.

For example, he said the companies said its Cold MD product could increase resistance to colds by 312 percent, reduce the duration of colds by 94 percent and prevent people from catching colds in crowded places such as airplanes and buses.

The products named in the settlement mainly were aimed at fighting colds and allergies and helping people lose weight, Patton said.

Prosecutors said their investigation also disclosed that Iovate was marketing and selling Cold MD in violation of California's Proposition 65, which requires that all products containing more than one-half of a microgram of lead be marked with warning labels.

They said laboratory tests revealed that certain lots of Cold MD product contained significantly more than one-half microgram of lead in a single dose of the product. The company stopped selling the product in 2008, according to prosecutors.

Iovate officials couldn't be reached for comment Wednesday.

Prosecutors said the Iovate companies did not admit fault or liability, but have agreed to abide by comprehensive court orders to prevent any future unfair or deceptive business practices.

Alameda County District Attorney Nancy O'Malley said her office participated in the case because it is "committed to protecting California consumers from deceptive advertising and potentially harmful products in the dietary supplement market place."

—Bay City News