Source: LOHAS Weekly Newsletter
Published: Monday, October 01, 2001

Amendments to DSHEA and increased scrutiny are likely as industry faces numerous challenges to its credibility

WASHINGTON—They say that perception is reality, and that’s certainly the case where the dietary supplements industry is concerned.

Mired in a sales slump that may or may not end any time soon, the perception of the media, certain politicians, consumer watchdog groups and more than a few consumers themselves is that the industry is unregulated, that it sells unsafe products and that FDA doesn’t have the power to remove these products from the market or prosecute the bad players.

The reality is that these perceptions could make scrap of the industry’s holy grail: the Dietary Supplement Health and Education Act (DSHEA) of 1994. In fact, the question among industry insiders is not if, but when, DSHEA will be amended, or worse, repealed by a Congress that, after the tragedy of Sept. 11, will be even more interested in protecting consumers from an industry that many say didn’t deserve the legislation in the first place.

Questions Raised

The litany of offenses is long and getting longer: unsubstantiated label claims; poor product quality; a lack of information on how to use the products; inability to meet ingredient listings; conflicting and confusing research; up to 80 deaths possibly traced to ephedra use; the sale of steroid precursors, such as androstenedione, to children; and most recently, unscrupulous companies bilking the elderly with fraud-ridden anti-aging products.

Already, a number of states require all supplements companies under their jurisdiction to be registered with state authorities, California invoked its Proposition 65 to take action against makers of andro, and two congressional hearings this year have raised questions about the industry, including last month’s Senate Special Committee on Aging’s hearing (see related story, pg. 8). Several committee members questioned whether regulatory controls were adequate to protect the public from marketers making unsubstantiated claims and selling ineffective products. Even the dreaded “snake oil salesmen” and “scam artists” lines were trotted out to describe industry companies.

The National Football League has banned the use of both andro and ephedra.

It’s gotten to the point where the industry’s Capitol Hill champions have privately told industry lobbyists and trade groups that they would not be able to stop any floor riders that could get introduced amending DSHEA. In the wake of the terrorist attacks on the World Trade Center and the Pentagon, that’s not likely to happen—this year. But next year and beyond is anybody’s guess.

“I began saying in 1996 that if we did not

get our act together, the DSHEA nullifying amendments could be the Food and Drug Act of 2006, in celebration of the 100-year anniversary of the Pure Food and Drug Act of 1906. I think now that it will happen sooner,” says Loren Israelsen, one of DSHEA’s architects and executive director of the Utah Natural Product Alliance.

The not-so-subtle message: the industry does not have the support from a wary Congress that it enjoyed back in the halcyon days of 1994, and in an Internet-savvy world where elected officials regularly receive thousands of pieces of mail on all kinds of issues, a replay of the consumer support that helped DSHEA become law isn’t likely to impress anyone in Washington. As the commercial says, “The rules have changed.”

“What we have is an environment where DSHEA is very vulnerable,” notes Washington attorney Tony Young, a partner in Piper Marbury Rudnick & Wolfe, who also serves as legal counsel for the American Herbal Products Association (AHPA). “The landscape is that if you assume that DSHEA passed [Congress] quickly, the same could bring it down.

“You have to look at this as a whole group of things that speak to concern that our detractors have about the industry. When you put all of this together, you see a pattern of problems. So why should it be a surprise when people perceive there to be a problem?”

Israelsen says that the historical antagonists in Congress to DSHEA never went away and that memories are long in Washington. “The antagonists also knew that if an unusual piece of legislation is passed that gives an industry a remarkable amount of freedom, Congress will not hesitate to change a law if safety concerns have changed and if the members think public sentiment has changed,” he says.

In fact, a legislative aide to Sen. Ted Kennedy, D-Mass., who chairs the committee on Health, Education, Labor and Pensions, was even quoted as saying his office would be “happy to work with” the members of the Committee on Aging “to amend DSHEA.”

“There are a few powerful members of Congress that do care—that’s politics,” Israelsen says. “They could easily say that a change of law or an amendment to the law is in order.” If there are perceived problems with DSHEA, those members could come back with a “We told you so—look what they’ve done,” he says. “It makes it easy for them to take the high moral ground on this issue.”

What Went Wrong

There is a widely held school of thought that the dietary supplements industry is getting exactly what it deserves—that a maverick bunch of independent entrepreneurs could never regulate themselves, nor could they work together proactively to protect and fortify the very legislation that gave them the freedoms that they so vigorously tried to defend back in the early 1990s. A string of failed public relations campaigns and a handful of questionable products give a measure of credence to this theory.

Then there is the agency entrusted with regulating the supplements industry, FDA. Perennially underfunded for its mission of overseeing nearly 25 percent of all consumer goods in the U.S., FDA simply does not have the resources to implement key provisions of the 7-year-old law, including the establishment of good manufacturing practices, which is reportedly still mired in administrative details at the Office of Management and Budget, and a workable adverse-event reporting system. Additionally, say those interviewed for this story, the regulation of dietary supplements is low on the agency’s priority list, resulting in few actions against known offenders, which further erodes public confidence in the category.

David Seckman, executive director and CEO of the National Nutritional Foods Association (NNFA), has been quoted as saying that FDA and FTC “have a tendency to sit back and not be as aggressive as they could be,” when it comes to ensuring the accuracy of dietary supplements claims.

At a March 2001 House hearing on the status of national and international dietary supplements regulation, industry champion and House Government Reform Committee Chair Rep. Dan Burton, R-Ind., said that FDA has “a bias against the marketing of supplements under anything other than the drug framework” and that FDA is not implementing DSHEA. (Also see “Are Agencies Shirking Supplements Responsibility?” by Michael McGuffin, president of AHPA, Natural Business, August 2001.)

Add to that a sales slowdown going back to midsummer 1998, which has resulted in at least 16 months of negative IRI data for the mass channel and reduced funding for the trade associations trying to further the industry’s interest in Washington and in the minds of the media and consumers, and you have an industry in disarray, lacking the resources or willpower to defend itself.

Yet the perceptions persist that FDA doesn’t have the tools to oversee the industry. Comments by the agency’s John Taylor at the Sept. 10 Senate hearings represent a radical shift from the public statements of the agency under the direction of Commissioner Jane Henney, who has since left FDA. Henney had said it had all of the tools that it needed to prosecute nefarious supplements sellers. Taylor, on the other hand, told the panel of senators that the “burden of proof” component of DSHEA, which was placed squarely on the shoulders of the agency, was an impediment to its ability to regulate the industry.

Long-time industry critic Rep. Henry Waxman, D-Calif., trotted out a long-standing mantra of detractors when he told the House hearing in March that the supplements industry is unregulated because FDA doesn’t have enough resources to conduct proper oversight.

But something even greater has been lost in all of the media stories, government hearings and precipitous sales declines: the trust of the consumer, at least the ones who were initially wowed by all of the positive press of the post-DSHEA days.

“The new consumer is asking, ‘Am I playing Russian roulette here?’ The novice user had a high trust level that the products were effective and safe, but now they just don’t know,” Israelsen says. “It’s a new consumer that is easily influenced by other opinions from those whom they know and trust, whether it’s USA Today, Consumer Reports, doctors on the television networks or a personal physician. Mature, wiser industries have learned that maintaining the consumer’s confidence is absolutely priority No. 1. We have to justify ourselves more than we think.

“We simply don’t have the luxury of being casual about our relationship with consumers and the trust that is essential to our continued success,” he adds.

Karl Riedel, CEO of Garden Grove, CA-based Nature’s Life and a long-time member of NNFA’s COMPLI quality assurance committee, insists that the two biggest problems the industry faces are ignorance and apathy. “Most industry members don’t even know what DSHEA is,” he says. “You could go into 20 stores and they wouldn’t know either, and they’re the front line of the industry. I think the apathy comes from a feeling that the law is there and ‘we don’t have to worry any more.’”

Additionally, Riedel notes, there is no viable consumer organization in place to influence Congress. After difficulties with procuring industry funding, the Boulder, Colo.-based Citizens For Health (CFH)—which was crucial to the successful consumer letter-writing campaign that greatly influenced the passage of DSHEA—is essentially “dead in the water,” he says, adding that the primary retailer organization, NNFA, is under financial stress because of the industry downturn.

The plight of CFH is typical of other nonprofits serving the industry.

“When business has a downturn, the first things to go are voluntary nonprofit contributions and sponsorships, which are the lifeblood of the associations,” Riedel says. “Memberships have been a struggle. Additionally, businesses cut their ad budgets, so the message is not getting out to consumers as much as it was.”

At least three of the trade associations contacted for this story mentioned that membership and therefore their budgets were down, while two others said their roster of companies has held steady. The NNFA’s Seckman told Natural Business that the association’s retailer membership was up, due in large part to a membership program subsidized by suppliers. He says that there’s no correlation between a smaller association trade show last year and declining membership. “Because they didn’t exhibit doesn’t mean that they haven’t renewed their membership,” he says.

The lack of support for trade associations, which further hampers efforts to combat negative impressions, is very predictable, Israelsen notes. “There is a human tendency to squander the resources in good times and then not have them in bad times. We’ve not been through this severity of a downward cycle before. In the past, declines in business were temporary and were short lived.”

More to Come

With the floodgate of media attention wide open, especially in stories surrounding the use of questionable, performance-enhancing substances by professional and amateur athletes, the industry can expect even more scrutiny in the future. Analysts say that two areas in particular will face increased scrutiny: sports supplements, especially those containing creatine, and a perceived lack of substantiation for the claims the industry is allowed to make under the structure-function provisions of DSHEA.

“The biggest issue is the use [of sports supplements] by those 18 and under,” Young says. “The companies are pushing it to them and through their coaches. And we have not yet seen a proactive affirmative response from the sports supplements group.”

“If we’re seen as speed merchants or as selling drugs to kids, we’ll lose the trust of the general public,” Israelsen says. “I do believe we have to defend some of the basic tenets of DSHEA, including the public’s right to have access to the products. But there may be products that have to go.”

Next month: A call to action to save DSHEA and what the industry can do to protect itself by looking at another industry that has successfully regulated itself.

Kelly Beebe contributed to this article.