Regulatory Reflections

Looking back at the regulatory issues that shaped the supplement industry in 2008.

By
Joanna Cosgrove
Online Editor

Generally speaking, 2008 was a relatively quiet but good year for dietary supplement regulations in the U.S. market. The year was chiefly characterized by the implementation of Adverse Event Reporting (AER) legislation and the promulgation of the Good Manufacturing Practices (GMPs), two events that will most certainly play a starring role in how the industry conducts business in the future.

Although it went into effect in December 2007, the AER law came into full bloom in 2008. “Looking at the data from January through July, there were about 600 adverse events reports submitted to the FDA; about half of those were submitted by the industry,” remarked Michael McGuffin, president, American Herbal Products Association (AHPA), Silver Spring, MD. “Companies seem to have figured out how to take on this new burden and so far there hasn’t been any dramatic problems.”

Mr. McGuffin said that in the first six months of 2008, the single most often reported product was Total Body Formula. “Between March 12-25 there were 24 adverse events associated with this product and they were fairly drastic: hair falling out, fingernails cracking, nausea and soreness. It turned out the product had been badly manufactured with about 10 or 20 times as much selenium as it was supposed to have had,” he said. “On March 26, the FDA issued a public notice advising people to stop taking the product so the system is doing what it’s supposed to do.”

Edward Wyszumiala, general manager, NSF International, Ann Arbor, MI, said the more than 600 adverse events reported is, at first, a very alarming number. But, he said, “When you compare that number to pharmaceuticals, it is very small,” he said. “This is an issue that will warrant continual monitoring going forward and industry should always be in a position to address AER reports, especially considering media’s perception of the industry, as well as the perception of a Congress that could again be setting its focus on new supplement regulations in the coming years.”

Loren Israelsen, executive director, United Natural Products Alliance (UNPA), Salt Lake City, UT, said it’s too early to have a clear picture of how AERs will be interpreted and reported by FDA. “So far, FDA has made general statements about the number of AERs filed, but it hasn’t provided sufficient details to help industry understand what is going on,” he said. “My belief—which I think is shared by many—is that the vast majority of the AERs reported to FDA were insignificant or attributable to causes other than an underlying safety problem with the supplement itself.”

Andrew Shao, PhD, vice president, Scientific and Regulatory affairs, Council for Responsible Nutrition (CRN), discussed one issue with the AERs that appeared to be benign on the surface, but could actually be a negative precedent-setting occurrence. “Earlier this year, FDA published a draft guidance recommending that labels include the full street address and prefatory language directing the consumer to contact the company in the event of an adverse reaction,” he said. “Yes, there are tremendous costs associated with relabeling products, and yes, no manufacturer wants to proactively warn consumers that they might experience an adverse event with their product.”

These are costly, but minor issues in comparison, he said. “The bigger issue is how FDA accomplished this (which is still in draft form and still sits on the Agency’s website). New label requirements (which is what these amount to) are major changes requiring notice and comment rulemaking. FDA completely avoided this by using a guidance. Ironically, the same basic requirements were issued around the same time for Rx drugs in the form of a 'proposed rule' (which has since become final). This should have been the approach for supplements and OTCs, but FDA has violated procedure. It remains to be seen whether the draft guidance will stand as final guidance.”

GMPs Moving Forward

Another key regulatory issue that defined 2008 was the implementation of GMP regulations. To begin the implementation process, FDA started training field inspectors this past summer and audits soon followed.

“As more training and field inspector qualifications continue, 2009 is sure to see an even higher volume of inspections to the supplement GMP regulation. If any company thinks that the FDA is not taking this regulation seriously and is not going to audit facilities due to lack of resources or time, they should think again,” said Mr. Wyszumiala of NSF. “This also applies to all facilities that import products into the U.S. for distribution. FDA plans to continue building its resources internationally as a way of building higher consumer confidence in imported products, including supplements to which they have regulatory authority.”

“GMPs for dietary supplements went into effect in June, however only for companies with more than 500 employees—amounting to perhaps five to eight companies,” said AHPA’s Mr. McGuffin. “But everybody is preparing for that because it goes into effect for companies with 20 or more employees as of next June.

Mr. Wyszumiala noted that FDA’s increased mandate for securing safety issues and the bulking up of staff will mean more inspections in 2009, when many of the larger contract manufacturers will have to demonstrate GMP compliance if audited by FDA. “Many of these manufacturers will be unable to satisfactorily pass an FDA inspection and demonstrate GMP compliance,” he said. “The lack of compliance could become a serious blight to the overall supplement industry, especially if it leads to negative press associated with poor manufacturing of supplements.”

For that reason, CRN’s Dr. Shao argued that the impact of GMPs was not fully felt in 2008. “FDA conducted only a handful of the inspections of larger firms that they intended. The real test will come when it has to inspect the mid-size and smaller firms that are less well prepared,” he said. “The single biggest issue in my opinion will be supply chain management and traceability. The lack of sufficient (or even any at all) ingredient supplier and distributor qualification will be the single greatest violation cited by FDA. Manufacturers, no matter what size do not have the ability to audit all their suppliers; however larger companies do have robust systems based on risk, preferred status, etc. The mid-size and smaller manufacturers are in the most difficult position as far as supplier qualification and being able to trace the supply chain.”

Regulatory Remnants

Beyond AER and GMP requirements, Dr. Shao asserted that food safety legislation—which is not necessarily directed at dietary supplements—has and will continue to have a substantial impact on dietary supplements. “Most of that discussion has occurred on the Hill, with various parties ‘jockeying’ for position and Congressional staffers doing their best to understand how the current system works and devise the appropriate legislation to address the areas of deficiency,” he said.

He also noted that the industry has slowly begun to adopt the use of the Standardized Information on Dietary Ingredients (SIDI) protocol. “All four trade associations have been pushing for its use, and we are seeing more ingredient suppliers putting their ingredient information in the SIDI format. Further, more manufacturers are accepting or requiring ingredient information in the SIDI format,” he said. “This is an important tool to assist with ingredient supplier qualification, which in turn is a key component of GMP compliance.”

In addition, he said, the success of the National Advertising Review Program, a joint effort by the Council for Responsible Nutrition and the National Advertising Division (NAD) of the Council of Better Business Bureaus, continued in 2008. “Since initiated, the program has more than quadrupled the number of dietary supplement advertisements that NAD has reviewed,” he said. “The decisions rendered by NAD have run the full range, from no or minor changes needed in the advertising, to major changes, to referrals to FTC.”

Another important regulatory accomplishment, according to NSF’s Mr. Wyszumiala, was seen in the publication of FDA’s draft guidance for industry for voluntary third party certification programs for food and feed as part of the Food Protection Plan (FPP) that came from the interagency working group on import safety established by Presidential Executive Order 13439. “This outlines the potential for FDA to use accredited third party audits as a reliable tool. In the supplement area this would focus on GMP compliance,” he said. “If the draft guidance were adopted, FDA could utilize accredited third party audits, which could become the vehicle for industry to demonstrate its commitment to self regulation, and shift FDA’s focus to the companies who are not compliant.”

New Administration Ripple Effect

On the heels of one of the most historic presidential elections on record, the experts interviewed for this article were split on the trickledown effect the incoming administration will have on the dietary supplement and functional food industry.

Dr. Shao of CRN says the writing is on the wall. “We are already receiving hints that the new administration will be more imposing on industry and will watch more closely what FDA does. We already know that food safety is among the handful of priorities for Obama,” he said. “For some companies, if AERs and GMPs were not enough of a wake-up call, the new administration will be.”

UNPA’s Mr. Israelsen agreed. “The impact of the elections on our industry cannot be overstated,” he said. “The clean sweep of the Democrats will usher in a major change in the role of FDA as a stronger regulator.”

Mr. Wyszumiala of NSF also concurred, however he said that given the larger platform issues, it’s clear that supplements aren’t a top priority. “Issues such as financial stabilization, healthcare, the war on terror and import safety are considered front burner issues, and sweeping changes to supplements at the current time are not,” he said.

At present, all eyes are squarely focused on the tussle for the Energy and Commerce Committee (ECC) Chair in the House. “That’s where it’s all going to happen,” exclaimed AHPA’s Mr. McGuffin. “Both Reps. John Dingle (D-MI) (the outgoing chair) and Henry Waxman (D-CA) (the incoming chair) are longtime critics of this industry, and one can argue that Henry Waxman is even more of an activist, so we now have a more active person in that role.”

Mr. Israelsen said how Chairman Waxman allocates his time and interest pertaining to FDA issues—specifically DSHEA—will be a primary indicator. “We should expect that DSHEA will come under intense scrutiny at some point in 2009,” he predicted.

On a positive note, Mr. McGuffin pointed to the Health Subcommittee under the ECC, which is chaired by Rep. Frank Pallone (D-NJ). “Pallone is somebody who understands the value of dietary supplements and the value of acknowledging consumer choice and continuing to allow dietary supplements to be readily marketed,” he said.

But Mr. Israelsen additionally noted that another key factor will be senior staff at the HHS level advising Secretary Daschle (Sen. D-SD). “A number of these key positions are now held by former Waxman staffers,” he said, adding that the remaining wild card is Senator Durbin (D-IL), a close confidant and adviser to President-elect Obama. “It is well known that Senator Durbin favors amendments to DSHEA,” he said. How this will manifest remains to be seen.

Regarding the new administration, it’s too early to gauge what the overall position will be toward the supplement industry. The first indication to look for will be the announcement and nomination of the new FDA commissioner. “Depending on who is nominated, industry should be able to gather a better sense of the direction FDA will take toward supplement issues going forward and the overall advice FDA will lend to the new administration,” said Mr. Wyszumiala.

On the whole, Mr. McGuffin remained confident that the fresh direction of the new administration will bode well for the supplement industry. “During one of his speeches, I heard President-elect Obama say that we don’t have a healthcare system; we have a disease care system. It didn’t sound like he was bragging; it sounded like he was describing a problem that needed fixing. What’s interesting is I’ve heard this before from Sen. Tom Harkin (D-IA), one of our best friends in the U.S. Senate,” he said. “The formal health platform posted by Obama and Biden said the same thing and talked numerous times about prevention and personal responsibility—our industry’s taglines.

“We in the herbal industry have been talking about maintaining health (prevention), personal choice and personal responsibility as our creeds and here they are in the body of the document that serves as the beginning point of the Obama administration’s approach to healthcare,” Mr. McGuffin continued. “Healthcare is one of the top four or five projects. I don’t think the government means healthcare insurance reform, although it’s the most talked about aspect. I think they’re talking about going back to look at how well the healthcare system is working and I see that as presenting opportunities for the whole range of complementary and alternative medicine, alternative therapies and dietary supplements and herbs. I think there may be some opportunities here, as long as we’re smart, attentive, specific and tactical in terms of what we would propose.”