Are GNC, Vitamin Shoppe at Risk for a Health Scandal?

The New York Times reported yesterday that the Food and Drug Administration may be ignoring an amphetamine-like substance found in many popular weight-loss and workout supplements. In December, these products were pulled by Canadian health authorities, who labeled them "a serious health risk," according to the report. Thus far, authorities at the FDA have done nothing to regulate the products.

However, there is a growing uprising from outside groups and even a group of 14 state attorneys general who, just last week, asked Congress to embolden the FDA with more authority to regulate supplements.

For GNC Holdings Inc GNC, the controversy has sparked the company to agree to "extensive new testing and quality control procedures for its store-brand herbal products." However, should pressure continue to build, it's unlikely that this will be enough.

At Vitamin Shoppe Inc VSI, the New York Times found at least three supplements containing this chemical in stock, with one of them being the specific product banned by Canadian regulators.

After the recent Lumber Liquidators Holdings Inc LL health-related sell off, it is easy for the question to arise as to whether GNC and Vitamin Shoppe are doing enough. At present, investors may be uncertain. Since the New York Times piece, neither Vitamin Shoppe nor GNC have moved markedly.