Supplement Fraud

Apparently, GNC, Target, Walgreens, and Walmart have been selling supplements without the labeled or advertised ingredients.

See article here: http://well.blogs.nytimes.com/2015/02/03/new-york-attorney-general-targets-supplements-at-major-retailers/?smid=fb-share

Wow. That's a breach of trust right there. Ripping off people who want to be healthy and those that are probably older than the general population.

So is this a market failure? Both yes and no.

Yes, because, obviously, the reputation mechanism failed for now. Firms were supposed to be honest because failure to do so would decrease their profits through the market mechanism. Also, there may be a internal control issue, where the management did not monitor the lower managers well. In addition, it is a failure of oversight by the regulators. Hence, there seems to have been a market failure.

However, despite this incidence, we cannot say that the markets failed. I have not read the details but it does not appear to have been widely systematic or conducted over a long time. And regulators came to correct the issue. So I believe that it is a market hiccup rather than a market failure. A market failure may be rigged bids in a developing nations where nobody wants to participate due to absolute corruption.

So now what? I believe that the regulators will fine the perpetrators and the firms will probably settle for some amount and those supplements will be taken off the shelves.

What should we do? Several things.

1. Don't buy supplements. They don't really work anyway.

2. Buy fresh fruits and vegetable. Yes, good food actually works better.

3. Complain to GNC, Target, Walgreens, and Walmart. Tell them how upset you are and that you will not shop there until trust is restored. One complaint is unlikely to make a difference but it is a start and always voice your concerns for a better and just world.

4. Dispose any of the supplements that are suspected of being mislabeled or falsely advertised in a trash can instead of flushing down the toilet. Flushing down the toilet will cause water pollution (http://www.epa.gov/aging/docs/disposal-meds-flyer.pdf).