The FDA is aggressively reducing the size and scope of the dietary supplement industry, culling from its ranks many small, innovative producers to pave the way for an ultimate assumption of market control over basic vitamins and minerals by pharmaceutical companies. For decades the FDA employed direct, blunt tactics to force supplements off the market or make them available only by prescription, ranging from efforts to declare nutrients above certain dose levels unlawful to sell except as drugs to efforts to define dietary supplements as unapproved food additives (on the ridiculous theory that a gel cap is a food and the nutrients within in it are food additives). Those efforts failed miserably because they appeared to the public transparent attempts to take their supplements away. The current FDA approach to remove supplements from the market does not offend public sentiment because it proceeds under the guise of safety without ever having to prove a product actually unsafe. That approach is causing the supplement company carcasses to form heaps along the regulatory road.
Unwisely, major dietary supplement companies, through their trade association the National Nutritional Foods Association (NNFA) (since renamed Natural Products Association (NPA)), drafted a lengthy document calling for FDA to adopt rules mandating process controls over every aspect of dietary supplement manufacture, holding, and distribution, the so-called current Good Manufacturing Practice guidelines. Misunderstanding the relative strength of the dietary supplement lobby at the FDA and the amount of power conveyed to FDA through the proposal, many leading supplement makers thought the new regulations would force small firms out of the market, achieving an anti-competitive goal. They failed to appreciate that the primary regulate at the FDA, and the one that has the agency as its captive, is the drug industry. Consequently, FDA with pleasure adopted the cGMPs but proceeded to enforce them in ways that are enormously costly, adversely affecting all companies, big and small, in the industry, to the great benefit of those, like the pharmaceutical companies, that rely on economies of scope and scale in standardized mass manufacture of drug and supplement products that already satisfy these same kinds of regulations. When fully implemented, the GMPs are estimated by the FDA itself to result in a reduction of some 25% of the companies in the dietary supplement industry. An economic assessment my firm had commissioned of the impact yielded a higher estimate, some 30% of supplement companies.
In addition, under Commissioner Margaret Hamburg, FDA has selectively changed its enforcement priorities and policies to be far more aggressive, protecting the agency’s favored regulatee, the drug industry, from all but nominal actions while slamming supplement companies even for minor infractions of the rules. During the Bush Administration, the FDA required its district offices to obtain approval from the FDA Chief Counsel’s office before initiating an enforcement action against a company. Commissioner Hamburg eliminated that requirement, enabling district offices to proceed as desired against supplement companies. Indeed, she stepped up enforcement, investigating far more companies and issuing far more warning letters than her predecessors. She also approved agency reliance on draconian consent decrees (forcing those accused of wrong-doing to face criminal charges or agree to a multi-year system of FDA oversight that forces the accused to hire outside counsel beholden to the FDA to review all company labels and labeling and report to the FDA and permits random agency inspections at the company’s expense, among other costly strictures).
Adding to those changes, the Food Safety Modernization Act invites FDA to hire some 30,000 new investigators, forces all food companies to register with the FDA for the first time in American history, and compels companies to pay the cost of all reinspections of food facilities with the proceeds going to pay for additional inspections.
While all of those measures would appear enough to force out of existence a significant number of supplement companies, FDA just recently added yet another weapon to its arsenal against supplements: the New Dietary Ingredient guidance. Under the Dietary Supplement Health and Education Act, a New Dietary Ingredient is presumed adulterated and unlawful to sell unless (1) it is a dietary ingredient in food that has not been chemically altered or (2) it has been the subject of a petition to FDA and the agency registers no objection to its entry into the market. In its guidance, FDA has vastly expanded the definition of chemical alteration, so that far more ingredients must be the subject of advance FDA approval to be lawful to market.
As counsel to the Alliance for Natural Health—USA, my firm commissioned Dr. Joanna Shepherd Bailey, professor of law and economics at Emory University, an expert in assessing the impact of regulation, to determine the impact of the FDA’s New Dietary Ingredient guidance. She determined that if fully implemented by supplement companies, the guidance would cause approximately 50% of dietary supplements currently on the market to be unlawful to sell. The guidance would cause over 100,000 people in the industry to lose their jobs. Revenue losses would be in the billions.
When we examine the history of law, policy, and enforcement under President Obama’s FDA, we see aggressive regulatory enforcement that is having the effect of destroying businesses, sacrificing jobs, and denying consumers access to health enhancing nutrients. The beneficiaries of the FDA’s supplement wrecking ball are the large pharmaceutical companies who, like Cheshire cats, sit on the fence, eyeing the developments with smiles, waiting to pounce and fill the void once the supplement companies have been sufficiently culled by big pharma’s help mate.