The participants are:

• Dr. Daniel Fabricant, CEO & Executive Director, Natural Products Association, Washington, DC, (202) 223-0101

• Marcia S. Moll, Marketing Director, Dietary Supplements & Herbal Medicines, U.S. Pharmacopeia, Rockville, MD, (301) 881-0666

• George Pontiakos, President & CEO, BI Nutraceuticals, Rancho Dominguez, CA, (310) 669-2100

• Elan M. Sudberg, CEO Alkemist Labs, Costa Mesa, CA, (714) 754-4372

• Ivan Wasserman, Partner, Advertising, Marketing and Media Division, Manatt, Phelps & Phillips, Washington, DC, (202) 585-6500

With dietary supplement scrutiny at an all-time high, will the industry unite in its efforts to ensure consumer confidence and provide safe, healthy products? Where are the best opportunities for lucrative products moving forward? Nutrition Industry Executive (NIE) asked industry leaders their views on the current state of the natural products industry and where they see it headed in 2016.

NIE: Topping the biggest challenges facing the natural products industry in 2015 were actions by New York and other state attorneys general (AG). What changes do you predict the industry will see in response?

Fabricant: Federal action will be more limited given the Presidential election, but there is always a chance for some legislative or regulatory activity. Instead, the industry will likely see more state action than they have ever seen before. Moll: Additional actions by state governments may be likely as evidenced by the recent action by the state attorney general from Oregon. Stakeholders, the industry and regulators may exhibit a renewed focus on the quality of dietary supplements.

Pontiakos: The industry has already seen a response due to the actions by the NYAG; several manufacturers are now requiring DNA tests on all ingredients. Since manufacturers are legally responsible for the safety of their products, their supplier requirements will become much stricter. This will result in smaller supplier bases as those without the infrastructure to support the new requirements are discovered. However, this will not be a quick transition but rather a gradual one, starting with the handful of manufacturers currently implementing stricter requirements.

Sudberg: New technology has entered the dietary supplement industry and is being forced upon us quickly. The labs will have to take that on, and it’s a fairly complicated business to bring a new technology to the point where it’s “fit for purpose.” Transparency has been a theme that won’t be going away either due to the increased scrutiny by regulators, media and now consumers as a result. As a whole, the industry’s quality will improve.

Wasserman: I think it is safe to say that the natural products industry, and dietary supplements in particular, will continue to be the focus of state AGs and other regulators in the coming year, perhaps based more on claims and manufacturing quality than on ingredient identity issues as alleged by New York.

NIE: Along with AGs, there are other issues that impact the industry—FDA Food Safety Modernization Act (FSMA), defining natural, Bayer vs. FTC (Federal Trade Commission), GMO (genetically modified organism) labeling, etc. What do you see affecting the industry most?

Moll: The primary issue confronting the industry today is the marketing of products purporting to be dietary supplements that are adulterated with illegal drugs. Many manufacturers that are committed to quality will need to proactively address and advocate for measures that can help identify and prevent the marketing of contaminated products such as the USP Verification Program.

Pontiakos: All of the above will have a positive impact on the industry, I believe, as of right now, FSMA will affect the industry the most since it is a tangible piece of regulation with its passing in September, unlike the others. Although defining natural, the Bayer vs. FTC ruling and GMO labeling are in the forefront of discussion, they do not require any actions, or at least for now.

Sudberg: FSMA will certainly affect many things moving forward. FSMA includes, among other things, the requirement that businesses manufacturing, packing, processing or holding human food, identify hazards that may impact food safety and implement controls to prevent them. In particular, dietary supplement ingredient suppliers will be impacted by this far more than they were by DSHEA-mandated GMPs. The Foreign Supplier Verification Program (FSVP) and the Certification of Third Party Auditors Program aspect in particular will become a big deal, given that more than half of dietary supplement ingredients are sourced from foreign countries.

Wasserman: Certainly FSMA and supplement GMPs will have the most significant impact that the public will not see or be aware of. Compliance does not make the news, only non-compliance does. The biggest thing that would impact the public would be if any states pass GMO labeling laws that are not pre-empted. While FDA’s attempt to define natural could ultimately have a huge impact on the industry, I do not see that happening next year.

NIE: Will there be industry unity to address safety and consumer concerns?

Fabricant: NPA will certainly work to look at legislative means if needed to enhance consumer confidence. More importantly, we’ll work with other industry groups—such as NPA’s program with UL—to give consumers more confidence.

Moll: It will take a concerted effort from all interested stakeholders including the FDA, Department of Justice, other regulatory agencies, industry, trade associations, retailers and consumers to help accomplish this task.

USP offers the Dietary Supplement Verification Program to help consumers chose supplements with the confidence that what’s on the label is in the bottle and it contains no harmful levels of contaminants.

Pontiakos: Yes, there has been [unity] for quite some time now with trade associations such as American Botanical Council (ABC) and American Herbal Products Association (AHPA). There has never been so much discussion about supplements as there is now from not only industry professionals but also consumers, encouraging, even more so, a concerted effort from those in the industry. As with any industry, unscrupulous companies that are not concerned with consumer safety exist. However, as time progresses so does our industry to a more quality-focused marketplace as market forces weed out those unscrupulous companies. Bottom line, management is responsible for the marquee and success of their company, great companies do not allow exposures in their supply chain.

Sudberg: No. Industry unity isn’t scheduled for another few years after another few more massive scandals, and FDA involvement, with an extra shot of class-action lawsuits, unfortunately.

Wasserman: “Unity” is a big word. It is a large and diverse industry so unity is always a worthwhile, but difficult goal. I do think you will see efforts by trade associations to take various measures to address safety and consumer concerns, and perhaps stave off additional regulation.

NIE: What trends and consumer demands should product manufacturers be prepared to meet in 2016?

Fabricant: Consumers are more interested in transparency now than ever. Companies will need to find more creative ways to promote their processes for quality [and], integrity of their supply chain for sourcing ingredients and on which they are basing their claims.

Moll: Transparency is a trend that will continue. Consumers are generally becoming more aware of what they ingest and as such are interested in how products are manufactured and the ingredients they contain.

Pontiakos: The market trend of clean label is still going strong, and some predict it may go beyond to clear label. Clear label goes a step further than short, recognizable ingredient lists; it is identifying the origin of the ingredients including if it is ethically and sustainably sourced. As the amount of consumers reading product labels increases, so does the demand for transparency; more and more consumers are now seeking out whole food supplements, organic supplements and other third-party certified supplements. Manufacturers, on their end, are starting to show transparency through their packaging and even the actual delivery format to those positioned closer to food such as beverages and gummies.

Sudberg: Consumer demands will soon include third-party assurance that what is on the label is in the package. Third-party seals of approval will gain interest and in my view UL has the best chance to make that worthwhile to the consumers. Wasserman: I don’t see an abatement in demand for products based on what they do not contain—gluten, animal products, artificial anything, soy, etc. Some categories, such as probiotics, seem to be hot and getting hotter.

NIE: How do you advise manufacturers as they look to explore new products and opportunities going forward?

Fabricant: First and foremost, “what is your community,” is the question we ask our members. When we see NPA members involved in our committees discussing this topic—like ComPLI—you get a good feel for what trends are going to stay and those that are not going to last as people are well versed in what’s going on scientifically. Now more than ever, the science is driving the industry—which is great news.

Moll: It is important that dietary supplements be made with the highest quality and best science. We are in a position to offer these resources to manufacturers as USP develops public standards for dietary supplements.

Pontiakos: Price point is a good indication as to the quality of the product as well as the supplier. If you are getting product significantly less than the market value, you need to ask yourself why. Vendor surveillance and testing comes at a price, but a price that is much lower than a product recall, class-action lawsuit, or the AG coming after you. The best way to get to know your supplier is to visit their facility—see their capabilities, equipment and personnel in person.

Sudberg:

1. Get a good lawyer.

2. Hire really smart people internally or find a great lab to do method development on the product itself and then again on the final product mixed with the other ingredients.

3. Put your marketing team in check by understanding the limitations allowed for the dietary supplement industry.

4. Join a trade association, if you haven’t already, so you are helping to fund the people whose efforts keep the industry viable.

Wasserman: As a regulatory attorney, I always advise companies to get me (or someone like me) involved as early in the process as possible. I have seen so much time wasted by companies on products that turn out to be non-starters from a regulatory perspective. Just asking a regulatory attorney for a simple signal, like a green, yellow or red light on a possible new product may not be that expensive and may save companies from considerable wasted investments in time and resources. NIE