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, “[b]usinessmen 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 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 bottomline. 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.
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.
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 Dickinson’s view, the
industry would be better served if it returned its focus to
the core nutrients – basic vitamin and mineral supplements.”
Unfortunately, these are the kind of views that will accept
restrictions on innovative health products (and coincidentally
reduce competition with pharmaceuticals).
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 you and your success. You, 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.
