Markets Wired

Just in time for back-to-school and cold season, national retailer CVS Pharmacy, Inc. will stop making misleading claims that its “AirShield” dietary supplements can prevent colds, fight germs, and boost immune systems. CVS also will pay nearly $2.8 million to settle Federal Trade Commission charges. This case is similar to cases that the FTC has announced in the last year – against Airborne Health, Inc., Improvita Health Products, Inc., and Rite Aid Corporation – which involved dietary supplements that purportedly treat colds and the flu.

“Students returning to college campuses and parents sending their kids off to school want to take precautions to fight the germs that can cause coughs, colds, and the flu,” said David Vladeck, Director of the Bureau of Consumer Protection of the Federal Trade Commission. “As the CDC has advised, there are good practices to follow. But consumers should not be misled by false claims about the germ-fighting properties of dietary supplements. With orders against Airborne, Rite Aid, and the one proposed against CVS, manufacturers and retailers are on notice that they have to tell the truth about what dietary supplements can and cannot do.”

CVS marketed AirShield products by touting their similarity to widely advertised “Airborne,” which last year settled FTC charges for making the same kind of misleading claims. Like Airborne Health, Inc., the FTC charges CVS with making false and deceptive advertising claims that using its product would reduce the risk of colds and protect against catching colds in crowded places, such as schools, airplanes, offices, health clubs, theaters, or restaurants. The FTC alleges that the company had no evidence that the products could boost the immune system or prevent colds. A settlement with Rite Aid Corporation regarding similar claims for its “Germ Defense” products was announced on July 13, 2009, and a Rite Aid consumer refund program will begin on October 1.

Under the terms of the CVS settlement, the company will provide $2.78 million for
refunds to consumers who purchased AirShield products. Purchasers will be identified through
the CVS ExtraCare card program and sales on cvs.com. The order also will bar CVS from making claims that any CVS-brand food, drug, or dietary supplement can reduce the risk of or prevent colds, protect against cold viruses in crowded places, fight germs, or boost the immune system unless the claims are true and backed by scientific evidence.

The FTC urged college students, concerned parents, and all Americans to consult the
Centers for Disease Control for information about seasonal flu (http://www.cdc.gov/flu/) and the “novel H1N1” flu, otherwise known as swine flu (http://www.cdc.gov/h1n1flu/sick.htm).

The Commission vote to approve the complaint and proposed settlement against CVS was 4-0. These documents will be filed in the U.S. District Court for the District of Rhode Island on September 9, 2009. The order becomes effective when entered by the court.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant has actually violated the law. The stipulated final order is for settlement purposes only and does not constitute an admission by the defendants of a law violation. A stipulated final order requires approval by the court and has the force of law when signed by the judge.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,700 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.

(FTC File No. 0723237)
(CVS NR.wpd)