PHARMANEX MAKING SHIFT TO DIRECT SALES.

Byline: Ben Sullivan Daily News Staff Writer

Nutritional supplements maker Pharmanex Inc. said Wednesday it has begun pulling all of its products from store shelves as it shifts to a new direct-sales model.

The move follows Pharmanex's purchase this summer by Provo, Utah-based Nu Skin Enterprises, a multilevel marketer, which will begin selling the Simi Valley firm's herbal and dietary supplements through independent sales contractors. The transition should be complete by Jan. 15, a company spokesman said.

The move is ``calculated to take advantage of the growth in direct sales in the United States,'' Pharmanex President Bill McGlashan said in a written statement. McGlashan said direct selling ``represents a more attractive way to differentiate the benefits . . . of Pharmanex products.''

Nu Skin Chief Executive Steven Lund described the shift as ``the logical next step'' in the integration of Pharmanex into the Nu Skin organization. The company said Pharmanex products such as green tea capsules and the cholesterol-lowering yeast product Cholestin will be available for sale by Nu Skin's approximately 500,000 sales representatives internationally, though the reps are not required to carry the products.

Both Nu Skin and Pharmanex have come under government scrutiny in the last year. The U.S. Food and Drug Administration is trying to prevent the firm from selling Cholestin, insisting that its contents constitute a drug and require government approval. A federal judge is currently considering the complaint.

And in February, the Pennsylvania Attorney General's Office accused Nu Skin of operating a pyramid scheme related to the sale of electricity services. Nu Skin later settled those charges with the state while denying the charges.