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    ‘Burn It, Don’t Return It’: The Duty to Destroy Adulterated Material

    Experts discuss how companies can guard against adulteration and build in procedures for when issues arise.

    ‘Burn It, Don’t Return It’: The Duty to Destroy Adulterated Material
    By Mike Montemarano, Associate Editor11.18.22
    The ABC-AHP-NCNPR Botanical Adulterants Prevention Program (BAPP) recently published a guidance document to communicate best practices for destroying adulterated raw material that cannot can’t be remediated.

    According to BAPP, the standard operating procedure (SOP) is "a voluntary set of guidelines, for use by suppliers, manufacturers, and distributors of herbal raw materials and other articles in implementing best practices to protect against intentional and accidental adulteration and ensure that irreparably defective raw materials and products are destroyed or appropriately disposed of and thereby removed from the supply chain."

    At SupplySide West 2022 in Las Vegas, contributing BAPP members discussed how the industry should interpret and apply these best practices in their own supplier relationships.

    Filling the Guidance Gap

    Adulteration of herb, botanical, and other material is a critical issue, and there hasn’t been much guidance prior to this playbook on how to best handle situations when they arise.

    “What happens when companies find that an ingredient is adulterated to the point that it needs to be rejected?” said Mark Blumenthal, founder and executive director of the American Botanical Council (ABC). “More importantly, what happens when adulterated material is returned back to a supplier? Do they always destroy or remediate it? Some things can’t be lawfully remediated, and those are what we consider to be ‘irreparably defective articles.’”

    BAPP wasn’t satisfied with current guidelines, Blumenthal said, and set out to create a template by which industry could best self-regulate with contractual agreements.

    “The industry has a moral responsibility to remove irreparably defective articles from the supply chain and this is a project to empower the industry to do some much-needed self-regulation. We know adulteration is there, but we don’t know the extent of it […] cGMPs [current Good Manufacturing Practices] are silent on this problem,” Blumenthal said. 

    The Basics

    According to Michael Levin, founder of Health Business Strategies, who led the development of the SOPs, the best practices are mainly concerned with materials that are misbranded, contaminated, or intentionally adulterated. “This is meant to cover the final step in the process of consumer protection,” Levin said.

    To avoid all doubt, suppliers and customers should enter into a contract with clear definitions for “irreparably defective articles” (IDAs) and specifications on what material is fit for intended use.

    The contract should allow the recipient to destroy IDAs on site, and require them to provide the other party with an audit trail to prove its destruction, Levin said. In the event that a supplier disagrees that their product fails to meet the specifications agreed to in the contract, the SOP also spells out a recommended dispute resolution process, which could include a third party and three-way confidentiality agreement, Levin said. 

    Being Truly Prepared

    According to Stefan Gafner, chief science officer of ABC, it’s prudent for companies to use these standards to prepare for today’s environment. “We recently collaborated with the University of Mississippi to analyze 31 dietary supplements containing elderberry, and found that most of them were adulterated. Intentional adulteration becomes a cat and mouse game in which people who adulterate their products for economic reasons know which analytical methods are being used, and know how to change their tactics in order to avoid detection.”

    Compared to the early days of the herbs and botanicals industry, when materials were handled as bales of intact plants, powdered extracts are prone to much more sophisticated adulterants. “Goods are moving all over the world, with many hands exchanging them, and it’s hard to identify true transparency,” said Loren Israelsen, president of the United Natural Products Alliance (UNPA).

    “Adulteration is the oldest game in the book, and it’s a weakness that needs correction, and this mechanism is set up to protect someone who has to reject a product in good faith,” Israelsen continued. “This is a very carefully crafted legal document that has been vetted to assure it’s successful, negotiable, and can offer protections to both sides. It’s not about trying to be punitive, it’s about having a tool to resolve these situations without having to punish, embarrass, or litigate—there’s room for resolution, which is the hardest part to get right.”

    David Trosin, managing director for NSF International’s Health Sciences certification program, added: “Many of us have a bad habit of thinking linearly, but from an auditing perspective, it’s chaotic. There’s too many points of opportunity for adulteration and unintentional contamination when a typical ingredient or product involves tons of farms, extractors, foreign distributors, domestic distributors, manufacturers, and retailers. I think we can all guarantee that if we don’t’ destroy adulterated materials they’ll be used by someone else; they’ll find a place to sell defective ingredients.”

    Power to the Gatekeepers

    Finished product manufacturers are the final gatekeepers preventing adulterated ingredients from entering the marketplace. Without rules in place, they take the financial loss for destroying IDAs.

    Should the SOP template become an industry standard, advocates hope that contracts will entail requirements for the most validated testing methods.

    “Often, manufacturers don’t know the subtleties of certificates of analysis (CoA) and a CoA might say that an elderberry extract, for instance, passed whatever test was applied to it, but that was due to sophistication, which is different than adulteration, which is when a material is so deeply extracted that what’s left is usually just thrown away, and then they’ll add just enough juice in order to pass quality tests,” said Roy Upton, executive director and editor of the American Herbal Pharmacopoeia (AHP).

    Elan Sudberg, CEO of Alkemist Labs, concurred. “One lab might fail a material, but a seller could easily shop around until it finds a lab in which that material passes a test. That’s mainly an economic and ethical problem because some labs use incorrect testing technologies. An extract labeled ashwagandha root that has the leaf of the plant in it isn’t getting anyone sick, and likely won’t be an issue that goes to trial, but it’s not a good material and there’s no way to remove the leaves from a powder. Even if an ingredient requires proprietary methods, there’s no reason you can’t do this without protecting the key pieces of intellectual property.”

    In Practice

    The practices outlined in the SOP must become widespread in order to have an impact on the rate of adulterated products reaching the marketplace, according to experts.

    “This is the only way we’ve had the ability to remove a product from the market,” said Christine Burdick-Bell, vice president and general counsel at Pharmavite, which began instating the policies ahead of their publication. “We seek out vendors who accept it without question. When an ingredient supplier objects to it, we tell them that this is going to be a market standard and reputable brands will be adopting it […] suppliers shouldn’t be able to just find a new buyer. It needs to be a broad enough effort to ensure there are no doorways for irreparably defective articles to go through.”

    “People tell us that we’re too tough, and we remind them that they don’t have to do business with us,” said Jim Emme, CEO of NOW. “This is a painful process, especially if you don’t have a document in place by which to do the right thing for the right reasons. It’s good to accommodate, but not to compromise on values and standards.”

    “The days of handshake deals should be long gone,” said Justin Prochnow, attorney at Greenberg Traurig, LLP. “Companies shouldn’t be paying suppliers upfront just to run into adulteration issues by operating on emails and purchase orders.”

    If nothing else, having an attorney’s fee provision in a contract may help resolve adulteration disputes. Under U.S. law, you can’t seek attorney’s fees if a dispute is less than $75,000, meaning it will cost more to go to court than what can be recovered.

    “If the supplier is required to cover attorney’s fees, they’ll suddenly be much more willing to come to an arrangement, and this BAPP program is an easy way to do it,” Prochnow said.
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