Upcoming Issue Highlights

Taming the Beast?

Washington & The Natural Industry Washington & The Natural Industry

The natural products industry has different views on how to tackle the FDA and the challenges that confront us in 2017.

The Participants Are:

• Gretchen DuBeau, Esq., Executive and Legal Director, Alliance for Natural Health, Atlanta, GA

• Mike Greene, Vice President of Government Relations, Council for Responsible Nutrition (CRN), Washington, D.C.

• Mark A. LeDoux, Chairman and CEO, Natural Alternatives International, Carlsbad, CA

• Neil E. Levin, CCN, DANLA, NOW Foods Nutrition Education Manager, Bloomingdale, IL

• Scott C. Tips, J.D., President, National Health Federation, Monrovia, CA

We will have a new U.S. president in office as of January 20, 2017, and for both chambers of Congress on November 8, 2016. What is the most critical point the natural products industry needs to get across to a new president and to freshmen legislators? On July 29, President Obama signed U.S. Senate Bill 764, the “Biotech Labeling Solutions Act” (known by some as the Deny Americans the Right to Know, or the DARK act) into law. This past June, a controversial bill, Puerto Rico Senate Bill 1599 was defeated. The bill was an effort to codify an order (Administrative Order 346) issued by the PR Secretary of Health that would have imposed a variety of burdensome fees. A revised version of the NDI Draft Guidance (Guidance for Industry Dietary Supplements: New Dietary Ingredient Notifications and Related Issues) was issued this past August. What should be the industry’s next steps on the NDI guidance, assuming the comment period is extended? What are the key issues that are being communicated to U.S. legislators? What are the most effective ways to advocate for legislative and/or regulatory matters? What are the biggest challenges or blind spots that the natural products industry has, and how can these vulnerabilities be proactively addressed by industry? Should companies focus more on state issues where the immediate threats to supplements are potentially greatest (such as New York), or on federal issues?

NIE: We will have a new U.S. president in office as of January 20th, 2017, and for both chambers of Congress on November 8, 2016. What is the most critical point the natural products industry needs to get across to a new president and to freshmen legislators?

Levin: Our most important message to legislators and regulators is that our products are overwhelmingly safe and that our industry has had an extensive expansion of regulation over the past 20 years. Important newer laws and regulations governing the dietary supplement industry include the introduction of mandatory cGMPs (current good manufacturing practices) in 2007 (as authorized by DSHEA [Dietary Supplement Health and Education Act] in 1994), the Food Safety Modernization Act in 2010, the Dietary Supplement and Nonprescription Drug Consumer Protection Act in 2006 that requires adverse event reporting, and the Public Health Security and Bioterrorism Preparedness and Response Act in 2002. Other laws increasing government oversight of our industry include a couple of anabolic steroid control acts (in 2004 and 2014) plus the Food Allergen Labeling and Consumer Protection Act of 2004. The recent NDI Guidance issued by FDA represents a dramatic increase in potential government regulation of our industry, despite its apparent conflicts with congressional intent as stated in the law that authorized NDI regulation (DSHEA).

Greene: The most important points that the Council for Responsible Nutrition will be conveying to the new administration, whomever it will be, and the freshman legislators of the 115th Congress, is that dietary supplements are regulated, that significant health care cost savings can be realized through the smart prevention and use of key dietary supplement among high risk populations, and that our industry is a major economic engine, impacting each state and district, successfully employing more than 750,000 Americans. In addition, we’ll underscore that two thirds of all Americans take dietary supplements; many of them are constituents. Lastly, CRN will do what we do at the beginning of every Congress—we’ll provide information about how dietary supplements are regulated and why DSHEA was passed more than 20 years ago. And if these new legislators want more information, we’ll encourage them to join the Congressional Dietary Supplement Caucus, which holds quarterly briefings and has a robust bipartisan membership of Senators, Representatives and staff who want to know more about dietary supplements and natural products.

LeDoux: This is an interesting question, because it is not a political matter as much as a fiscal matter. It has become clear that the Affordable Health Care Act also known as ‘Obamacare’ is probably the most inaptly named piece of major legislation in recent memory. Recent charges by one candidate for president regarding the exorbitant cost of the Mylan Labs EpiPen (ingestible epinephrine) points out that the American system of health care and its costs are unjustifiable and unsustainable. Whoever is called upon to govern must look at our industry as a potential vehicle to helping reduce the overall staggering costs of remedial health care in our country. Natural products should provide a significant value to the country if they are widely utilized to help retard disease states that cost billions of taxpayer dollars a year to manage. America appears to be one of the most overfed but undernourished countries on the planet with soaring rates of obesity and type 2 diabetes. A look at the numbers is downright scary. Natural products offer reasonable and cost-effective solutions, and as demonstrated in multiple venues and research articles, can help reduce the onset of debilitating diseases and their resultant costs to society.

Tips: They need to know that ObamaCare has been a complete disaster and will continue to be a major drag on the economy and Americans’ health. It is nothing but corporatist protectionism package camouflaged as compensation. It is also a means of roping Americans into a disease-care system that is oriented toward drugs and failed medical procedures and in keeping Americans away from natural health care. It must go.

NIE: On July 29th, President Obama signed U.S. Senate Bill 764, the “Biotech Labeling Solutions Act” (known by some as the Deny Americans the Right to Know, or DARK, act) into law. By some interpretations, the new law has made voluntary labeling for GMO (genetically modified organism) foods the national standard and has stripped away consumers’ right to know by blocking all state efforts to require no-nonsense labeling of GMO foods. According to Food and Water Watch, the law would make the already inadequate approval process for genetically engineered (GE) foods even worse. Agree/disagree, why? By other interpretations, we finally have a single federal law regarding the labeling of GMOs rather than a patch-quilt of varying state laws. Agree/disagree, why?

Levin: NOW Foods has always opposed GMOs because our scientific assessment is that they pose unreasonable risks to the environment and health, while encouraging unsustainable farming practices. Our position is that GMOs should be banned until they have been thoroughly tested and proven to be safe, which is not the case today. A willful refusal to collect proper evidence is not the same as a record of proven safety, though that is what pro-GMO advocates want the public to believe. Mandatory labeling is necessary to allow people to know what their food sources are and to be able to vote their preferences with their wallets. It’s also required to track potential issues, such as unpredicted food allergies, which are completely ignored under current GMO approval processes.

We want a single federal standard to avoid having to satisfy conflicting requirements of individual states, or even internal trade barriers between states. In this, there is general agreement within our industry, and this is in concert with the thinking of our founders and the Commerce Clause of the U.S. Constitution. Of course we want mandatory labeling, but without the various ‘bounty hunter provisions’ that were included in some state proposals that would make well-meaning industry companies the targets of aggressive lawyers seeking lucrative settlements to drop nuisance suits. It’s a shame that the compromise made to pass a federal bill did not require as much labeling as we think is needed to protect the public and allow us to make informed choices.

However, there is a clause in the new law that allows the government to assess whether the mechanisms for avoiding direct labeling are effective for the public, and to propose changes if they’re not. This is an area that pro-labeling forces should focus on as the law is implemented. In any case, large food companies and restaurant chains will follow the preferences of their customers and the public. We can still get pledges to label or avoid GMO ingredients from these companies, regardless of the law’s relatively weak labeling requirements. Consumers have some power to demand labeling from the private sector.

Greene: I don’t believe either side of the GMO labeling debate was happy with the amount of time it took to reach compromise and achieve a finalized outcome, but I do believe it is the best that either side could have hoped for. Consumers who want to know what is in their products will be able to find out, and the manufacturers will have a uniform standard and clear information about how to label if a product contains a GMO or if it is free of GMOs. I’m very impressed with the new technology, like SmartLabel, that is being utilized to provide consumers detailed product information about the country of origin, nutrition, GMOs, and use of natural ingredients. This new technology is being used by many food manufacturers, but also by those who make natural products and dietary supplements, and I suspect that there will be more transparency from all food companies, including dietary supplements, as we move into the future. Even though the legislative debate is over, it is important to underscore that the consumer was heard, and they are getting what they wanted—more information about the products they consume. A state-by-state patchwork of labeling laws would have disrupted commerce and raised food costs for consumers. No one would have benefited.

DuBeau: This is a phony labeling bill. There aren’t even enforcement mechanisms for those who ignore the law. On this issue Congress completely sold out consumers and handed Big Food exactly what it wanted and what many were doing anyway: hiding the contents of their food in a scannable code that no one will use.

LeDoux: I strongly support the right of consumers to know what they are eating and where it comes from. Genetic modifications of cereal grains under one very noteworthy hypothesis identified by medical doctors is directly linked to the growth of type 2 diabetes and obesity in American citizens who consume the recommended diet of complex carbohydrates and whole grains. How this relates to GMOs is clear to me—when wheat has been hybridized and genetically modified to yield more drought resistant dwarf wheat and withstand pesticide and herbicide exposure—the net result has been an extraordinary increase in crop yield—but ingesting of these products has also been correlated to the two health concerns mentioned. The answer here is not in having potentially 50 separate state regulations regarding disclosure—but in having a federal standard, similar to what is accomplished in other multi-party jurisdictions like the European Union.

The legislation is not perfect by any means, but with over 3,000 products negatively affected in Vermont alone prior to passage of the Federal legislation, one can only imagine the impact if 49 other states came up with their regulatory framework absent the federal pre-emption.

I am not clear that the intent of the legislation was to impact the “approval” process for genetically engineered foods, but rather to provide a mechanism whereby food producers could make information available to the consuming public in a variety of ways. The objective of the legislation was to avoid a patchwork quilt of inconsistent regulations from various states in favor of interstate commerce. Any concerns about the adequacy or inadequacy of the review process is a totally separate matter that needs further attention and dialogue.

Tips: The new law fails in at least three major respects: 1. It defines genetic engineering so narrowly that it will allow most GMOs on the market to escape from the definition; 2. It makes customers go scurrying around, having to call 1-800 numbers or else scan QR (quick response) codes just to find out if the food contains GMOs rather than simply putting the words on the label; and 3. Because it contains no federal penalties, offending companies can ignore it with impunity. In addition, the legislation violates the U.S. Constitution and, in particular, the 10th Amendment through its usurpation of states’ rights. States’ rights advocates, on this issue alone, should be opposed to the DARK Act.

NIE: This past June, a controversial bill, Puerto Rico Senate Bill 1599 was defeated. The bill was an effort to codify an order (Administrative Order 346) issued by the PR Secretary of Health that would impose a variety of extremely burdensome fees that would have effectively driven the dietary supplement business out of Puerto Rico and would have thus deprived residents of the commonwealth from a wide range of health-enhancing dietary supplements. To what would you attribute the success of this order’s defeat? Was this supposed money grab a fluke or a sign of things to come in other jurisdictions?

Levin: The lack of due process in issuing the order, and the lack of legal framework to impose new regulations, was combined with the strong lobbying of our industry to oppose and defeat the measure. We relied on our trade groups to lead the charge against this bill, and are gratified that this was successful.

Greene: CRN led the charge to defeat Puerto Rico Senate Bill 1599 earlier this summer, but similar legislation could return during a ‘special session’ being planned for early fall in Puerto Rico. The legislation was designed to legitimize Administrative Order (AO) 346, which is still in effect, and can only be repealed or revoked by the governor or the secretary of health. CRN is working to stop AO 346, and has retained an expert in Puerto Rican politics to provide counsel. AO 346 would require that natural products and dietary supplements sold on the island register and pay a fee with the Commonwealth. The Puerto Rican legislature and government have been dealing with economic crises, Zika outbreaks and government corruption, but a new governor and legislature will be elected in November. However, we’re not waiting for the new elections. On the federal level, CRN has met with the eight member Congressional Task Force created by the Puerto Rican Oversight, Management and Economic Stability Act (PROMESA), and chaired by Sen. Orrin Hatch of Utah.

LeDoux: It never ceases to amaze me how creative politicians can be in extracting “revenue” from their constituents. This whole ‘administrative order’ is such an example and frankly I believe it would never stand up in court. That said, the efforts of the grassroots and industry trade groups in Washington, D.C., and the good folks at NPA (Natural Products Association) and CRN working with Congressional staff and leaders, paid off with a temporary win for the industry. I say temporary, because until the order is challenged in court I believe the Puerto Rican authorities will still attempt to extract these ‘fees’ in an effort to bring much needed revenue into the territory.

Tips: Primarily because of its less-than-free-market policies, Puerto Rico today is an economic basket case. This bill was just another example of Puerto Rico’s complete lack of economic sophistication and the heavy lobbying influence of the pharmaceutical industry there. NIE: A revised version of the NDI draft guidance was issued this past August. By many accounts, if enforcement follows the lines of this guidance, a much larger, ever-expanding pool of NDIs will be created, one which will discourage innovation by effectively limiting process and strain-related improvements since most manufacturing changes will serve as triggers for the profoundly expensive NDI notification process. Some say that the industry need not be alarmed since this is merely a non-binding guidance. Others say, “if it walks like a duck [regulation], quacks like a duck, and looks like a duck,” it’s a duck—ODI/NDI determinations could cost industry tens or hundreds of millions of dollars, alone. The nexus of NDIs and GRAS (generally recognized as safe) determinations is not clear. Some estimates are that the industry costs could be billions of dollars all told, and consumers would ultimately suffer due to reduced product choice, less innovative products and more expensive products. Agree/disagree, and why?

Levin: The NDIs appear to be a dramatic departure from previous guidance in the 1990s and from the congressional intent in authorizing NDI regulation in 1994. A different process should not automatically trigger a change of status unless that process introduces a relevant new factor to the ingredient in question. For example, if the same ingredient is extracted using various solvents—hexane, alcohol, CO2 or water—then as long as that solvent is not in the ingredient in significant amounts to present a health hazard or change the way that the ingredient provides a health benefit when we take it, and as long as the substance extracted is still measurably equivalent to the original source, it should not logically become an NDI. If a carotenoid was extracted with hexane pre-1994 and now is extracted by CO2, that actually is more pure and safer process with less potential for toxicity, so it should not become an NDI. As long as the same carotenoid is still retained by the process, why should the FDA (U.S. Food and Drug Administration) become involved in what amounts to a neutral or beneficial process improvement? Fortunately, it is unlikely that Congress would vote to dramatically expand the size and power of the FDA to regulate what it has long defined as foods, not drugs, absent some compelling safety concern that doesn’t seem to exist.

DuBeau: Agree. The agency’s interpretation of what constitutes ‘chemically altered’ is extremely broad and would encompass everything other than the most basic manufacturing processes. But that’s just the beginning of the problems with this document. The guidance imposes safety requirements on new supplements that are not even expected of drugs. In most cases this guidance simply doubles down on what was in the original guidance. When the original guidance was released, an economic analysis conducted by an Emory University professor estimated that the guidance would result in the elimination of tens of thousands of supplements from the market, an industry-wide cost of between $2 billion and $165 billion in animal and human product safety studies, and the loss of tens of thousands of jobs. If finalized as is, this guidance will eliminate consumer access to supplements they rely on to stay healthy.

LeDoux: Twenty-two years have passed since the signing into law the Dietary Supplement Health Education Act. I remain mystified how the issuance of this guidance is a “shock,” especially to many of those expressing this concern—who were at the negotiations and passage of the enabling legislation. Is the new NDI guidance perfect? Of course not. There is a lot of effort in providing data without sufficient clarity on what is the real definition of “safe.” There is a paucity of benefit from an intellectual property standpoint. There is the whole subject as yet unaddressed as to how the FDA is going to have resources to address what may be a congested and compressed time frame of multiple filings, and of course, there remains the real potential for ‘legislative fixes or enhancements,’ especially in light of a new president and Congress in 2017. Just having the guidance out for public comment, albeit four years after the first guidance came out, is an indication of a positive willingness to have the agency engage with the industry and public on what will be an important matter for our industry.

I also think it is time for the industry to show some maturity and leadership in this discussion. We have to stop this nonsense of constantly saying that regulations are killing us and they are excessive. The passage of DSHEA created an industry which has flourished, but which has also been a breeding ground for consumer fraud, willful criminal activity of illegally spiking supplements with active pharmaceutical agents without disclosure or permission, and making a quick buck. Responsible industry needs to partner with government regulators to help clean up the messes, learn from them and provide means to prevent further abuses of what has been a landmark piece of legislation. I think this is what the FDA and responsible industry are trying to achieve here, and while there is substantial room for improvement within the recently released guidance document, we need to stop grousing about the costs of doing business appropriately.

Tips: I most definitely agree that the revised NDI guidance for supplements that was just issued by the FDA will prove to be a disaster for both the supplement industry and for consumers in that innovation, favorable pricing, and extensive choice and availability will all be sacrificed on the altar to the false god of consumer safety. Nothing will be gained by the FDA’s actions except to greatly jack up supplement prices, strangle availability and choice, and drive consumers into the greedy hands of the pharmaceutical industry. Notice that the FDA’s actions in this regard are cleverly dovetailing with Obamacare’s similar effect of driving patients away from natural care and into the death grip of the pharmaceutical and medical industries. I agree with what the ‘others’ are saying and disagree with those who say we should not be alarmed. Over time, the FDA’s acts will drive smaller supplement companies out of business and consolidate the industry into, maybe, 10 top companies. The kind of concentration in the industry will not be good for innovation, nor will it be good for the consumers.

NIE: What should be the industry’s next steps on the NDI guidance, assuming the comment period is extended?

Levin: While our industry must follow federal regulations, we have the right to actively lobby against unreasonable rules. Preventing the implementation of the draft NDI guidance by opposing funding for the massive increase in agency size required to manage the expanding program is the first step. Working with congressional champions and opponents of government expansion—especially in the area of agency rule-making that exceeds congressional intent—should help to block the most onerous parts of the NDI Guidance and guide it back to the intended limits of government power over commerce.

LeDoux: We need to identify those areas which are of greatest concern to the industry and which could yield unintended consequences of excessive burden without the quid-pro-quo of some economic or market benefit. We also need to understand how the FDA works and how it doesn’t. This means we need to have a dialogue with stakeholders in industry, the government and the legislative branch to see how funding is allocated on a risk basis to the agency. The definition of adequate standard for safety needs to be codified and priced against the risk profile of the status quo. Finally, we need a serious look at the economics of the proposed NDI guidance done by experts in statistics and mathematics as well as life sciences.

Tips: Legislation and/or lawsuits against the FDA and its actions in this regard must be commenced. The FDA could care less about our comments.

NIE: What are the biggest challenges or blind spots that the natural products industry has, and how can these vulnerabilities be proactively addressed by industry to improve itself and enhance consumer confidence in the safety and efficacy of the finished natural products we sell?

Levin: It would be helpful for supply side to join forces to develop quality testing that bears up to external scrutiny, to manage claims to avoid those that seem excessive (a claims database?), and to create and manage a reputable NDI database to help avoid excessive federal regulation that isn’t needed for product safety. We have sometimes overlapping organizations that sometimes cooperate to great effect, such as the Dietary Supplement Caucus briefings. More cooperation in the interest of the industry will encourage our congressional champions and discourage our adversaries.

LeDoux: The industry needs to demonstrate some adult behavior and step up to more responsible and transparent behavior. This also means that retailers, distributors, producers and suppliers need to work together to raise the bar on standards, and adhere to those standards. While there were some serious concerns with the New York attorney general’s methods of evaluating products via DNA testing, the resulting impact on the industry has been positive, in that it has brought all the stakeholders together to recognize they all share in risk. The establishment of the Natural Products Dietary Supplement registry by the CRN in conjunction with Underwriters Laboratories, and the separate finished goods testing programs being created by the Natural Products Foundation of NPA under the Tru-Label program, are two benchmarks and I believe seminal events in the past year that signify the recognition by industry leaders that credibility is essential for our continued vibrancy as an industry.

Tips: The biggest challenge that the natural-products industry has is to recognize that if it is to grow or even to stay intact, then it absolutely must fight for its existence now. Appeasement, complacency, and acceptance of others’ slow noose-tightening around the industry’s collective neck will only aid in the demise of our industry. We must fight for our rights, now more than ever, and not be hesitant at all to leap at the FDA’s throat and take it down when the FDA is wrong (which is usually always). It is a huge mistake and utterly naïve to think that the FDA is simply misguided and with the proper advice from us will ‘do the right thing.’ It must be trapped, caged, and tied down like the wild animal that it is.

NIE: Given limited resources for advocacy, should companies focus more on state issues where the immediate threats to supplements are potentially greatest (such as New York), or on federal issues?

Levin: While national organizations have a role in both federal and state regulations, it is often more effective for regional or local grassroots efforts to help manage state actions. The regional NPA organizations have often proven their effectiveness in those areas, and magnify the resources of the national organizations with local activism. Companies with a presence in a state often have a greater ability to be part of the conversation and to impact the results than “outside” national groups, which offer support in terms of financial resources, lobbying and scientific expertise, and organizational help.

Greene: If companies aren’t already members of a trade association, then they should join one and work with the great consumer groups in our industry. It’s more important than ever that all of us who care about dietary supplements speak with one voice on key issues and convey similar messages whether it be in Washington, D.C., in the states or locally. When we are all in agreement and working together, we get things done for the good of our consumer. It all comes down to the many Americans who love and regularly take our products. In addition, I would argue that federal and state issues are equally important. CRN has an active state legislative subcommittee that is defending the dietary supplement industry by actively lobbying, testifying, engaging, and opposing bad bills early and first. We defend the industry equally among all 50 states, commonwealths and territories and on the federal level. Bad policy is bad policy. Because states move quickly, we need to do more about educating state legislatures about the benefits of dietary supplements and natural products to preempt future problems. And we need to be present in states like New York, California, Massachusetts, New Jersey, and others where issues come up quickly, but can be stopped quickly too. The best way to address limited resources is to join a trade association like CRN, a company shouldn’t have to make a choice between federal or state. Both are necessary.

LeDoux: The first part of the question you raise is troubling, namely “given the limited resources for advocacy.” If this is truly the way our industry approaches advocacy, then we have a fundamental problem. Advocacy should be a significant and visible component of any company’s business plan. Failure to invest in the future will yield very poor results indeed. I think companies should step up their involvement with their trade groups, with their local, regional and national legislators and get serious about contributing real money into the world of political action committees that undertake the heavy lifting of educating the folks in power. The time for letting others do it is over.

NIE: What are other issues of great importance you would like to discuss: the definition of natural? The growth of the cannabis market? Food safety scares? What should industry be doing right now in these and other important areas?

Levin: The definition of “natural” is not legally defined by the FDA and has been the subject of litigation. We support the concept of a federal standard, but would want that definition to match that of our broad industry. GMOs and artificial food chemicals cannot be “natural,” though others will push to dilute the standard to include those ingredients. It would be wise for our industry to adopt a voluntary standard that we agree on, and lobby to match that with a federal one.

Greene: I believe we must be vigilant about protecting and promoting DSHEA and following the outcome of the revised, draft NDI notification guidance. The older DSHEA gets the more attacks and concerns will be raised that it is not capable of appropriately regulating the dietary supplement industry. We must continue to defend the law, but recognize when it is time to update, change or improve upon the great work that was done in 1994.

Tips: Frankly, the natural products industry should be supporting those health-freedom organizations, such as the National Health Federation and others, that are out there fighting at international and national levels, and on meager funds, to defend the industry’s very future against the much larger pharmaceutical and commercial agriculture businesses. The natural products industry’s failure to adequately insure its own future through such funding is one of the largest blind spots in the industry’s vision. NIE

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