Shuts Down

Stephen Barrett, M.D.
February 14, 2001, which went online in 1996 and redesigned its Web site in 1998, anounced early in 2001 that the company was going out of business and would no longer take product orders. The site had offered “30,000 vitamins, herbs, and supplements. And expert advice. On everything from breast tenderness to gout. In complete and total privacy.” It further claimed be “a leading provider of health information on the Internet, with personalized information delivery and contributions from a panel of medical experts.” Its “medical advisory board” was composed of three medical doctors, one naturopath, one exercise physiologist, and two biochemists. The site featured:

  • An “Encyclopedia of Natural Health” that recommends products for more than a hundred conditions. The encyclopedia’s homeopathic section contains lists of homeopathic remedies claimed to be effective against 148 health concerns. The “Natural Diets and Therapies” section contains misinformation about dozens of topics and tells where to get more.
  • Wellness Advisor Network, which practitioners could join and get a “mini web site” containing their picture, office address, treatment philosophy, and supplement recommendations. Advisors were entitled to receive 20% of the sales generated through their mini site or to have the amount donated to one of eight charitable organizations. On January 20, 2001, 118 practitioners and clinics were listed.
  • Moderated message boards where “members” could share experiences and seek advice from one another.
  • Full-text posting of 20 health-related titles from Rodale Press, with whom maintained a strategic partnetship. Several of these books — most notably New Choices in Natural Healing — are filled with misleading advice about treatment. One of’s directors was Placido A. Corpora, a longtime Rodale employee who had headed its book division. Rodale Press itself owned 974,044 shares, which was 6.4% of the common stock as of April 17, 2000 [1]. also had strategic partmnerships with the American Association of Naturopathic Practitioners (AANP) and Landmark Healthcare, which offered “complementary and alternative medicine alternative medicine” programs through managed care and other programs. Landmark agreed to promote to its subscribers as a source for discount vitamins, minerals, supplements and other natural products. The companies also agreed to jointly market their services to other health plans and employer groups [2]. Under the agreement, AANP members would receive a 24% commission on the sales generated through their mini site and AANP would receive a 1% commission on all such sales [3]

The company’s 1999 $17 million advertising campaign included television, radio, and print ads [4]. American Pharmaceutical Association (APA) leaders complained that the ads depicted pharmacists as unapproachable and unprofessional and falsely stated that expert advice would be available for medically sensitive ailments. One radio ad, for example, suggested that it is undignified to “blab about bodily functions” to drugstore clerks.” [5] Another said, “Who wants to talk about constipation with a part-time sales clerk who doesn’t know homeopathic from psychopathic.” [6] Another promised “information about hundreds of health conditions and advice from medical experts . . . who can tell you about natural remedies for everything from arthritis to, well, flatulence.” [7] APA officials reported that no licensed health care professionals were available at the customer call-in center to answer questions about such topics [8].

APA executive vice president John A. Gans, PharmD., asked the company to discontinue the ads, but they did not. Gans also asked the FTC, the Federation of State Medical Boards, and the National Association of Boards of Pharmacy to review the ads for adherence to federal and state laws [8]. I asked the FTC to do something about the outrageous claims the site uses to promote its products.

On April 25, 2000, at an Internet health symposium,’s chief executive officer expressed great optimism and said that sales through his Web site were growing rapidly. That statement was true, but the company’s income was far less than its expenses. As noted in’s quarterly report to the Securities and Exchange Commission for the period ending March 31, 2000:

We believe that we will continue to incur operating losses for the foreseeable future and that the rate at which we will incur such losses will increase significantly from current levels. As of March 31, 2000, we had an accumulated deficit of approximately $82.8 million, and we have not achieved profitability. We incurred net losses of approximately $4.0 and $16.5 million for the first quarters of 1999 and 2000, respectively [9].

In November, the company announced that it would cease operations and expected to liquidate its remaining assets for about $15.8 million [10].

  1. Definitive proxy statement (DEF 14A) filed May 12, 2000.
  2. announces strategic alliances with two healthcare organizations. Agreements with Landmark Healthcare and the AANP offer marketing of products & information to millions of patients. Press release, Jan 5, 2000.
  3. Questions and answers re: the AANP & Wellness Advisor Network. AANP web site, accessed Feb 5, 2001.
  4. breaks 1st branding campaign. Advertising Age, Aug 30, 1999, p. 26.
  5. “Dignity.” Radio ad downloaded Sept 4, 1999.
  6. “Sorry.” Radio ad downloaded Sept 4, 1999.
  7. “Nose ring.” Radio downloaded Sept 4, 1999.
  8. English T. ads cast negative light on Internet pharmacies.
  9., Inc. Quarterly (10-Q) report period ended March 31, 2000.
  10. Robins A. — one of a few to close with cash. Denver Web site, Dec 22, 2000.

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This article was revised on February 14, 2001.