NY Attorney General Expands Diet Supplement Probe

Dietary supplements are under severe inspection from the US regulators, as two more states and Puerto Rico have joined New York in an investigation of the $33 billion industry. It all started when testing found that some products didn't appear to have key ingredients advertised.

In a statement on Tuesday, New York Attorney General Eric Schneiderman said that Attorneys general in Connecticut and Indiana and the Puerto Rico Consumer Affairs Department will scrutinize the industry practices to see whether claims of authenticity and purity are valid or not.

After the news of the expanded probe, on Tuesday, the price of Pittsburgh-based GNC Holdings Inc.'s stock fell around 7%. The analysts from Jefferies LLC said that around 8% of the nutritional retailer's sales are formed by herbal supplements.

The state said that previously, a researcher hired from New York had found evidence that store-brand products from GNC, Wal-Mart Stores Inc., Walgreens and Target Corp. supposedly consisting supplements such as echinacea and ginkgo biloba didn't have the signature ingredients or contained substances on the label.

Looking into the matter, GNC has doubts about the findings and has called the testing 'incomplete and unreliable'.

On Tuesday, Ellen Davis, GNC spokeswoman with Sard Verbinnen & Co., said that GNC has gone through with the inquiries about products from Mr. Schneiderman and has taken an additional step of commissioning independent, third-party tests for the verification of the quality of its products.

Davis, in a statement, mentioned that the additional tests and the company's own procedures have confirmed clearly that the products are safe, pure, properly labeled and are in full compliance with all regulatory requirements.

The US Food and Drug Administration want to make sure that the supplement sellers verify that their products are safe and are properly labeled. These supplements don't go through the same strict evaluation process as drugs.