CVS Settles AirShield Probe for $2.8 Million

CVS Caremark Corp. has agreed to pay close to $2.8 million to settle charges by the Federal Trade Commission that it made unsubstantiated claims that its AirShield health supplements could stave off colds and fight germs.

The money will be used to refund customers who bought AirShield between July 2005 and November 2008.  The FTC will administer the refund program based on purchase information provided by CVS.

The FTC had charged the drugstore chain with deceptive advertising.  In July, Rite Aid Corp. reached a similar settlement with the Commission, agreeing to pay $500,000 to settle charges that it made misleading claims about the efficacy of its Germ Defense products.

Both products were created to compete with Airborne, a popular health supplement that claimed to help prevent colds.  In August 2008, Airborne Inc. agreed to stop running misleading ads and change its packaging to settle an FTC probe.  Airborne also agreed to kick in as much as $6.5 million to a $23.5 million fund created by a class action lawsuit against Airborne in California.

The packaging for CVS's AirShield, the store brand equivalent to Airborne, was changed in 2008, CVS said in a statement.  "CVS has also agreed to pay $2.78 million to the FTC to cover the costs of a refund program for customers who purchased CVS AirShield from July 2005 through November 2008," the company said.

Why it matters:  In announcing the settlement with CVS, the FTC is warning all marketers to be careful in their claims about the efficacy of health supplements.  "With orders against Airborne, Rite Aid, and now CVS, manufacturers and retailers are on notice that they have to tell the truth about what dietary supplements can and cannot do," said David Vladeck, director of the FTC's Bureau of Consumer Protection.