The Success of Supplements May Be Their Undoing
by Scott Tips, Editor of Health Freedom
News
Board Member and Legal Counsel for NHF
Many years ago I was representing a
client selling a homeopathic product that, because of its huge success, had
encountered the unwanted attention of the Food and Drug Administration. In a
meeting with one of the FDA agents in charge of its investigation of that
product, I was told in a moment of candor that “We are only interested in
taking action against your client’s product, or any other homeopathic product
for that matter, because it has been successful.” “That’s ridiculous,” I
remember thinking at the time, “they are
attacking my client’s product and putting us to all this expense and trouble
simply because a lot of consumers want to buy it and it’s therefore a threat to
existing orthodox drug products.”
Years later, after that meeting,
the Dietary Supplement Health and Education Act of 1994 (DSHEA) was passed. The
FDA lost many (but not all) of its arbitrary powers of life and death over
dietary supplements, and the whole-foods marketplace exploded with
the unleashed creativity of the marketplace. At the time, there were about
4,000 supplements on the market, including vitamins, minerals, amino acids, and
herbs. Ten years later, according to a recent Institute of Medicine report, it
was estimated that about 29,000 supplement products are now on the market with
another 1,000 new products being introduced annually. In fact, the same report
notes that every year American consumers spend $18 billion on dietary
supplements. And these purchases are not narrowly based either - more than half
of all adult American consumers either buy or take supplements in one form or
another. Clearly, even though it has not always been smooth sailing, this
market has enjoyed enormous success.
But as with my long-ago client’s
homeopathic product, success attracts attention. And that attention may not
always be desirable. In this case, the success of supplements has drawn legal,
legislative, and regulatory attention. That unwanted attention sometimes seeks
to feed off of that success through money-hungry product-liability and
consumer-action lawsuits (such as the many lawsuits brought under California’s
Proposition 65, where manufacturers, distributors, and health-food stores have
been hit with claims for huge damages over herbal and dietary-supplement
products that allegedly contain toxic levels of lead and other harmful
substances) or it may seek to stifle and limit the success of natural products
by imposing regulatory burdens upon this unexpectedly strong source of
competition.
Regulations Are Not “Cost Free”
Most people presume, without
thinking, that regulations are “cost free,” that by simply passing a law or
regulation mandating health or wealth one can improve the world without cost.
But that is far from the truth. In fact, regulations typically impose a huge
burden and cost upon society. As author Doug Bandow
pointed out in his 1993 article “Wanted: A Real Deregulatory Revolution”
(www.fff.org/freedom/0193c.asp), “There are few
aspects of the workplace . . . exempt from governmental meddling.
Federal controls, supplemented by state and local rules, raise business costs,
which destroy jobs and hike consumer prices. All told, figures Thomas Hopkins,
an economics professor at the Rochester Institute of Technology, regulation is
costing $400 billion a year, or about $4,000 per household. That comes to a
13 percent reduction in the average household's standard of living of $32,000
annually. The largest single source of regulatory costs is what Professor
Hopkins terms ‘process regulation,’ particularly due to various paperwork and
reporting requirements.”
Also contrary to what most people
think, regulations are generally not opposed by large, well-established
businesses, which tend to see regulatory burdens as important in keeping out
new competition. Such large businesses actually support regulations that will
reduce competition in the marketplace and ensure their own survival. Sheldon
Richman, writing in his piece “Free Markets Are Not Conservative” (Nov. 2001),
noted that “[o]lder and bigger firms can more easily
contend with such [regulatory] burdens than newer, smaller ones can. IBM and
AT&T have bigger legal and accounting departments than some nascent garage
operation. Many ideas for new businesses never get off the ground because of
the regulatory and tax barriers.”
In short, Richman says,
“[businessmen know their fate is in the consumers’ hands. They know there is no
safe harbor in the free market — which is why so many companies try to get
government to adopt anti-market — that is, anti-consumer — regulations and
taxes. It’s the only way to prevent consumers from switching to a competitor
they like better.”
A Clouded Sky
So, ten years into DSHEA, we in the
nutrition industry have great success, a much larger marketplace with many more
supplement choices than ever before in the history of humanity, and a blue sky
overhead that seemingly stretches forever. Yet that sky has clouds. Not only do
lawsuits threaten the supplements market; but, more importantly, others –
particularly pharmaceutical companies - are correctly seeing the success of the
supplements market as a threat to their financial bottom line. It is not
exactly a state secret that consumers have been losing faith in pharmaceuticals
and turning en masse to alternative health products.
Seeing this epic change, the
pharmaceutical companies have almost certainly made their own projections as to
this new market’s potential – if it continues unchecked. The last thing these
companies would like to see is a growing whole-foods market destroying their
profits. And they did not become billion-dollar companies because they were run
by dumb people. They have known for some time that they either must put a lid
on the competition using laws and regulations or else buy out the competition. Or both.
Prediction: Regulations Will Be Used More Aggressively To
Limit The Market
In a stunning coincidence then, the
FDA has been tightening up its regulatory control over the supplements market
over the last few years. And to do that, the FDA has been using the very law –
DSHEA – that has been derided in a carefully orchestrated press campaign as the
odious law that has left us all unprotected from the evils of unregulated
supplements.
Speaking before the American
Society for Pharmacology and Experimental Therapeutics and the American Society
for Nutritional Sciences last April, FDA Acting Commissioner Dr. Lester M.
Crawford said, "Unlike most foods, some dietary supplements are pharmacologically
active. And we have seen over the last 10 years a huge growth in the dietary
supplements industry, including the introduction of products that seem far
removed from the vitamins and minerals of the pre-DSHEA days. We have become
increasingly aware of the potential health problems some of these products
pose."
FDA’s press release on this speech
then brags about its recent enforcement actions: “In the last 6 months, FDA has
inspected 180 domestic dietary supplement manufacturers; sent 119 warning
letters to dietary supplement distributors; refused entry to 1,171 foreign
shipments of dietary supplements; and seized or supervised voluntary destruction of almost $18 million
worth of mislabeled or adulterated products.” “We will continue to aggressively
enforce DSHEA against unsafe or mislabeled products,” Crawford is also quoted
as saying.
As for the future, the FDA admits
that it is “developing approaches to systematically review the evidence about
the safety of individual dietary supplements.” FDA will evaluate the available
pharmacology, published literature (including animal, in vitro,
epidemiological, and clinical trial data) evidence-based reviews, and adverse
event information - the approach that
formed the scientific foundation for FDA's recent rulemaking on ephedra – and take action against other supplements that it
finds offensive. So, expect more ephedra-type bans
from the FDA based upon its bad science.
The FDA also intends to take more
intensive action against supplement claims. As you know, supplement labels can
make claims about the effect of a supplement on the body’s structure or
function, but the claims must be truthful and not misleading. The FDA wants to
clamp down on these and other claims and will be issuing a compliance policy
guide at some time in the future detailing what data the FDA would find
acceptable to substantiate such claims. Expect these substantiation
requirements to be stringent.
This tightening by the FDA of its
regulatory control over dietary supplements is in direct response to the
industry’s huge success and the threat that success poses. Coupled with the
drug-like Good Manufacturing Practices (GMPs) that
FDA seeks to shove down the throats of manufacturers, the near-hysterical media
campaign to demonize and denigrate supplements, and the onslaught of
legislation meant to address the supplement-safety “problem,” the FDA’s
tightening of the screws on the industry should not be taken lightly. All of
these actions are more carefully coordinated than they are meant to seem.
Drug Company Schemes: If You Can’t Beat Them, Buy Them
Out.
At the same time, pharmaceutical
companies have been increasingly buying into the whole-foods industry. They
have snapped up supplement companies and, with the change, a new mentality has
entered into our market. In some ways it is a more professional and corporate
oriented view, but it also is oftentimes less innovative and creative. These
are companies that seem to be more accepting of regulations and limitations
upon the creative, competitive forces of our industry.
And this is reflected in the
industry associations that have them as member companies. These associations
perform useful, even critical, functions for the industry and their member
companies, but are now much less vigorous about defending our rights to buy and
sell dietary supplements. In an interview appearing in a recent issue of The
New Yorker, even industry representative Annette Dickinson, president of the
Council for Responsible Nutrition (CRN), has been reported as wanting a more
limited supplements market than currently exists. According to the interviewer,
“In
A Warning to the Nutrition/Natural Health Industry: Your
Success Is The Threat.
Thanks to that offhanded comment
made long ago by an FDA agent, I understood then the driving force behind much
of FDA’s regulatory actions against supplements. Any successful, competitive
product would be knocked down; and that strategy worked well until DSHEA was
enacted. DSHEA eliminated much of the arbitrariness formerly enjoyed by the
FDA, which has been chaffing at the bit ever since. But the explosive success
of our industry is now too much of a threat to ignore.
They are afraid of the nutrition
industry and its success. You small guys, seemingly little and insignificant
you, are the threat. After all, you, and millions more like you, might just
keep on choosing to buy and sell natural, healthful products over their
medicines. Instead of waiting to be sick and then possibly cured, you choose
health now. That is more than they can stand – expect them to try to stop
you.