Wednesday, March 24, 2010

Walgreens Not Immune From False Advertising Claims

No one is immune from paying a price for deceptive advertising. Someone always pays: either the consumer who is fooled, or the company that made the product, or even the seller, if they get caught.

The FTC announced this week that it had settled a complaint against Walgreens:
National pharmacy chain Walgreens has agreed to pay nearly $6 million to settle FTC charges that the company deceptively advertised “Wal-Born” – a line of dietary supplements similar to the Airborne cold-and-flu treatment – using the same kind of baseless claims that the supplements could prevent colds, fight germs, and boost the immune system.


The best part: $1.2 million of the settlement went to consumers who purchased these supplements. A federal court also approved a $565,000 settlement of similar charges against two executives of the company that manufactured the supplements. The case against the company, Improvita Health Products, Inc., remains pending. See the entire FTC press release here.

Comparatively speaking, Walgreen's is paying a pretty high price for its shenanigans in claiming this supplement could prevent the common cold. The FTC last year settled similar charges against two other big pharmacy chains, CVS and Rite Aid, who sold the same or similar products under their store brands, as well as the 2008 case against Airborne, the product which prompted these copycat generics. It remains to be seen if the company that actually made the product will face similar penalties. I'll keep you posted on this case.

-B

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