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Washington and the Natural Industry

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Washington and The Natural Industry Washington and The Natural Industry

The Participants Are:

• Jonathan Emord, Esq., President, Emord & Associates, Washington, D.C., www.emord.com

• Karen Howard, CEO and Executive Director, Organic and Natural Health Association, Washington, D.C., https://organicandnatural.org/

• Mark LeDoux, Chair and CEO, Natural Alternatives International (NAI), Carlsbad, CA, www.nai-online.com

• Dan Lifton, President, Maypro Ventures, Purchase, NY, http://maypro.com/

• Steve Mister, President and CEO, Council for Responsible Nutrition (CRN), Washington, D.C., www.crnusa.org

Whether wrestling with or working with Washington, our panel of experts weights in on some of the biggest, and trickiest issues of 2018 and early 2019, including CBD (cannabidiol), phenibut, the Farm Bill, the National (GE) Food Disclosure Standard, the new acting FDA (U.S. Food and Drug Administration) commissioner, and more.

NIE: Inside or outside the Beltway, what were the most important events of 2018 that impacted the dietary supplement industry, and why?

LeDoux: Several events were seminal during 2018. The imposition of tariffs on Chinese goods had a nominal impact, but the real likelihood that these converted from 10 to 25 percent in June was destined to have a detrimental impact on supply chains that rely heavily on Chinese manufactured raw materials.

The other reality of 2018 was the surge of all things CBD, as evidenced by the consumer appetite for these products. The licensing of a prescription drug with identifiable levels of CBD contents for the treatment of epilepsy by GW Pharma also has changed the landscape.

Recently, the FDA ODSP (Office of Dietary Supplement Programs) reiterated that the agency does not have discretion in enforcement of federal laws, so this is going to be a virtual “sticky wicket” for the foreseeable future. I would expect to see some enforcement shortly against product claims for curative powers at the very least.

In any event, CBD presented in edibles such as solid dosage forms and gummy formats is probably illegal per se and adulterated under the FD&C Act, given the lack of safety data and the submission and acceptance by the agency as a new dietary ingredient.

Mister: 2018 had high and low points for the industry. CRN was both pleased and disappointed with the passage of the 2018 Farm Bill. We applauded the inclusion of the Hemp Farming Act that removed hemp, including cannabidiol (CBD), from the definition of marijuana in Schedule I of the Controlled Substances Act. The provision removed one of the barriers to the lawful marketing of CBD in a range of dietary supplement, food and personal care products. Since the passage of the Farm Bill, CRN has been working with FDA and Congress to remove the remaining barriers and establish a lawful pathway to market CBD as a dietary supplement or food.

However, CRN was disappointed that the SNAP Vitamin and Mineral Improvement Act was dropped from the conference version of the Farm Bill. This was an important step toward bridging nutrition gaps and improving the nutrition status of low-income Americans. The provision would have allowed Supplemental Nutrition Assistance Program (SNAP) recipients to purchase a multivitamin-mineral dietary supplement with their program benefits. We remain committed to expanding consumer access to multivitamins and continue to support policies that ensure all Americans have access to good nutrition.

Another challenge CRN and the industry faced in 2018 was a challenge to lawful importation of esterified EPA fish oil by the prescription drug firm, Amarin Pharma, Inc. In 2017, Amarin asked the International Trade Commission (ITC) to declare concentrated EPA fish oil to be a drug and to prohibit its importation for use in supplements. CRN filed two legal briefs with the ITC and strongly urged FDA to weigh in on the usurpation of its authority to determine what is a drug under federal law. The ITC decided not to pursue that investigation. However, the case did not go away and in 2018, Amarin appealed the ITC’s decision, leading CRN to submit another amicus brief, this one to the U.S. Court of Appeals for the Federal Circuit. The case finally ended in May of this year when the Court of Appeals affirmed the ITC’s decision not to investigate Amarin’s complaint.

Lastly, 2018 saw the realization of several self-regulatory initiatives to improve quality and efficiency among third party certification programs. Programs like the Supplement Safety & Compliance Initiative (SSCI) and the Global Retailer and Manufacturer Alliance (GRMA) are great examples of industry self-regulation combined with collaboration between retailers and manufacturers to create efficiencies in the audit process to increase consumer confidence in the industry and its products.

Emord: The FDA increased its enforcement activity against supplements it viewed as adulterated, including those containing Tianeptine, Phenibut, DMHA and high levels of concentrated or pure caffeine. It also, remarkably refrained from taking enforcement action against those who sell CBD despite representing repeatedly that CBD was unlawful to sell in dietary supplements. It appeared to limit its action against sellers who made therapeutic claims for the CBD products they sold.

NIE: Regarding the obvious growth of online sales of ingestible natural products, does this suggest that there is an army of online-only “barbarians at the gates,” web-exclusive companies that are flying under most regulatory radar, are often not participating as members of industry organizations, programs and initiatives, but still selling as if they were? Does the FTC’s (Federal Trade Commission) online monitoring and enforcement programs, in addition to the FDA’s, provide sufficient protections for consumers of online-only supplements? Or are online-only sales somehow a good thing? Please explain, either way.

Lifton: While the barriers to entry (and exit) for online-only infomercial sellers appear to be lower, all of the same laws still apply. I would think that half-baked “supplements” sold at gas stations and bodegas would be more questionable than supplements sold online. I would also think that online sales and websites can be monitored more easily than can fly-by-night products with a P.O. box or foreign website address sold on the gray market.

LeDoux: There are substantial numbers of products which are illegal being sold via internet sales channels. Responsible companies have compiled lists and shared them with various district offices of the FDA, but the government appears unwilling to prosecute, except in cases of gross potential harm and safety concerns. This is unfortunate to say the least, because inaction fosters more access through a host of platforms to willing and or gullible consumers, not to mention less than savory business characters all too willing to exploit this field.

Failure to enforce the law especially when products are being sold with APIs (Active Pharmaceutical Ingredients) in a non-disclosed format through a “supplement,” which is often replete with “proprietary blend” components is a real problem. The agencies have the authority, but perhaps lack the manpower or conviction of partner agencies such as the Department of Justice in prosecuting people trafficking in adulterated or misbranded goods.

Mister: A number of reputable companies making high quality products are choosing to stay online. Online sales are positive for consumers and for companies, especially when first rolling out their brand. Online channels can offer high end companies an innovative way to get products into the marketplace. Companies who go this route establish brand recognition and build a following first at less expense than going through an established brick-and-mortar retailer. Some of those brands will eventually migrate to brick and mortar as well, but other’s entire strategy relies on staying online and offering a premium experience or an exclusive product to the consumer.

However, that doesn’t dismiss that there are companies that choose to market their products online because they think it is less likely to draw attention or get noticed by law enforcement. But the reality is the FTC does monitor online sales of dietary supplements and is receptive to complaints about online marketers who make skirting the law. In addition, a number of CRN’s NAD challenges have targeted companies where questionable claims are being made online.

Emord: There are risks and benefits to both models, but on balance online sales provide ready access without delay and the cost and inconvenience of travel, thus making such sales inevitably predominant. Brand identification, loyalty and trust are the principal market means for ensuring quality. Market competition has generally been a far superior means of protecting public health than federal or state regulation. Moreover, regulation is selective, driven by political desires that often reflect anti-competitive bias and industry-capture, rather than protection of public health.

NIE: Phenibut is a chemical that’s similar to the brain chemical, GABA. It is promoted to help with anxiety, insomnia, stress and to improve cognition. Serious side effects have been associated with ingestion of this compound, which is sold by some marketers as a dietary supplement. Industry trade associations have warned retailers and consumers about this compound. Please comment.

Emord: FDA enforcement action against Phenibut seems to have had an in terrorem effect, dissuading sellers from offering the product. Whenever there is such an enforcement action, there are ordinarily some who will remain at risk in the market to profit off of increased sales. Depending on FDA enforcement priorities, they may be eliminated over time.

Mister: CRN, along with AHPA (American Herbal Products Association), CHPA (Consumer Healthcare Products Association) and UNPA (United Natural Product Alliance), warned consumers about the dangers of phenibut, a substance being illegally marketed in products fraudulently labeled as dietary supplements. We believe that it was the early action of the trade associations that may have nudged FDA to act, and act quicker than the agency would have otherwise.

Phenibut does not meet the statutory definition of a dietary ingredient and is still listed as an illegal ingredient on FDA’s website. There is no question that this ingredient should not be in the marketplace.

LeDoux: First of all, let’s be clear: This is a synthetic drug, originally produced for consumption in Russia as an anti-anxiety medication in the 1960s. In and of itself, that fact makes this substance most likely not in the food supply prior to October 1994 when the DSHEA (Dietary Supplement Health and education Act of 1994) legislation was signed into law. Placing this into a workout product, or somehow camouflaging it into some type of dietary supplement is illegal per se, and failure to disclose this component or ingredient, which is clearly and active pharmaceutical ingredient, is a clear violation of DSHEA and is deemed an adulterated and misbranded product. People should stop fooling around with these things, before someone gets hurt or potentially dies.

NIE: In late 2018, the Agriculture Improvement Act of 2018—the Farm Bill—passed. While it has provisions that some decry and some praise, certainly one major part of it was inclusion of the Hemp Farming Act, the approval of which paves the way for large-scale hemp production in the U.S. Or does it? The FDA’s very confusing statements about hemp and CBD have many wondering what is the long-term future for CBD, hemp and other hemp-derived compounds. Please comment.

LeDoux: This is clearly an open question, but the rush to produce CBD in all forms for ingestion or topical application without adequate safety or toxicology studies incumbent upon the filing of an NDI (new dietary ingredient) notification with the agency seems really risky here.

Emord: FDA appears to be limiting its enforcement action against those who make therapeutic claims for CBD products. It has allowed an international market in CBD to flourish, and it would be very difficult for FDA at this point to take more aggressive enforcement action. CBD is appearing increasingly at retail and is certainly ubiquitous in the American marketplace. I think the cat is out of the bag. I think the political repercussions would be great and unpredictable for FDA should it decide this late in the game to crack down on CBD sales.

Lifton: Suppliers would be wise to tread cautiously in the hemp and CBD arena until more definitive regulatory carve-outs or statements are made.

NIE: Also in late 2018, the USDA (U.S. Department of Agriculture) published its final rule for the National Bioengineered Food Disclosure Standard (NBFDS). Critics say the final rule jeopardizes transparency for American consumers. Criticisms also point to the proposed GE icons, both of which convey a pastoral and natural message. What should the USDA have included or changed?

Howard: The NBFDS fails consumers at every turn, and as bioengineered products continue to roll into the market, people will be sold supplements and foods created in GMO (genetically modified organism)-yeast baths with no transparency and under the false pretense of sustainability. Currently, there are more than 350 high-value bioengineered ingredients on the market, in development or being planned for development, cooked in these baths for sale in flavors, foods and supplements. Dietary supplements produced using genetic engineering and novel methods of Synthetic Biology should be evaluated as new dietary ingredients even when similar natural ingredients exist.

Anything less than 100 percent transparency completely fails consumers desires and expectations. This misstep can potentially instill consumer distrust of whole categories of dietary supplement ingredients, just as we watched happen in food products.

Any dietary supplement company that is confident in its products and respectful of its customers should have learned a lesson from that experience, and will not object to full honest disclosure of how its products are made.

Lifton: It is disappointing that these misleading icons and messages, along with very liberal voluntary standards, appear to be where the USDA has netted out. But, perhaps more importantly, this emphasizes the now greater differentiating value of Non-GMO Project Verified products. At Maypro, we are in the process of getting our PBIs verified, like we did recently with our L-92 probiotic. If consumers are offered more and more non-GMO choices, it will hopefully matter less and less what icons the GMO manufacturers put on their products.”

LeDoux: This is not a space that NAI is involved in, but the argument that the USDA may have “punted” here in the development of these standards may have some merit. The consumers of today believe in authentic transparency, and that’s why they are willing to pay more to companies that demonstrate that ethic in their packaging, labeling and independent test verifications of each batch.

When one evaluates the consumer interest in eating “meatless” meats that are biologically engineered with yeast cells, things get very complicated—so we need more public dialogue with the agency and interested consumer groups on this issue.

NIE: In February 2019, the then-FDA commissioner, Dr. Scott Gottlieb, issued an announcement which outlined new efforts to “strengthen regulation of dietary supplements by modernizing and reforming FDA’s oversight.” In your view, do existing regulations need “strengthening,” and what does that mean? Aren’t regulations merely supposed to bring laws to life, not to go below or beyond what the law states?

Emord: FDA spends far too much time on claims-based enforcement for products that carry little or no risk of consumer injury. Instead, it should devote its effort to removing adulterated products from the market that cause consumer injury. It is a chronic complaint that the agency, even when presented with direct evidence of an adulterated product and its threat to life at dose levels recommended for use, does nothing. Like all bureaucratic animals, FDA is politically driven. Science is a tool of politics at the agency.

Mister: DSHEA isn’t flash frozen in time. The balance the law struck in 1994 between assuring widespread consumer access and public safety should remain, but the law can and should be massaged and amended over time to reflect the current marketplace as long as it preserves those same principles.

Lifton: As long as regulation and enforcement doesn’t stray from the letter and spirit of the law, companies that comply don’t need to really worry about which ways the FDA’s supplement winds are blowing at any given time.

NIE: As of April 5, we have a new acting FDA commissioner, Dr. Ned Sharpless. In addition to his academic and clinical bona fides, he previously co-founded two early-stage biotech companies, G1 Therapeutics and HealthSpan Diagnostics. Does this suggest that the FDA is likely to be more pharma-friendly (and supplement antagonistic) than before? Are there any inklings of whether the FDA ship will be steered any differently under its new, acting, leadership?

Mister: CRN’s concern is that history has taught us that when FDA doesn’t have a permanent, confirmed commissioner in place, it tends to be less willing to make bold decisions that would affect the markets that it regulates. With issues like CBD on the front burner, we very much need a commissioner who has been confirmed by the Senate. The FDA is never as effective when it doesn’t have a confirmed commissioner in place. CRN urges the administration to nominate someone and get them through Senate confirmation so that the FDA has a clear head that can direct the agency moving forward.

Emord: Dr. Sharpless is definitely a friend of big pharma. Whether he will direct the agency, like his predecessor Dr. David Kessler, against the supplement industry, remains to be seen.

NIE: The FDA has recently asked Congress for funding to create a “mandatory dietary supplement product registry.” Some industry organizations question what would be the value-add for such a system, especially in light of the current focus on reducing regulatory burdens and red tape. What are your thoughts about such a system?

Lifton: While more transparency and accountability is always a good thing, unnecessarily burdensome systems grafted on top of existing regulations could increase costs, stifle innovation and move us closer to a “pre-approval” model, none of which would be of benefit to manufacturers or consumers.

Emord: A mandatory dietary supplement product registry is an unnecessary and burdensome additional regulation that invites agency mischief. Free enterprise suffers whenever the government adds market entry barriers in the form of compliance obligations without any proof whatsoever that the specific party being compelled to comply poses any genuine risk to consumers. The prior restraint approach so popular with regulators and Congress is the bane of innovation and freedom. Rather than take names and presume all players in the industry guilty, the government should refrain from acting except upon proof in a specific instance of actors whose actions cause demonstrable harm.

LeDoux: Having a pathway to identifying ingredients or categories of products that can demonstrate harm to consumers is a worthwhile endeavor, but if the industry is going to adopt this approach, the agency would be well-advised to provide the safeguard of federal pre-emption over various onerous and often illogical state requirements. This could also be beneficial regarding dealing with the scientifically flawed Proposition 65 levels of “chemicals known to the State of California to cause reproductive harm. . .”

Howard: Here, the bad actors, in convenience stores and on the internet, will simply not register. Unless, the manufacturer were to be held responsible, enforcement is impossible. Ensuring all products manufactured for third parties are registered and listed is a big leap and still fails to address the most important issue. Safety hinges on enforcement, not policy. Regardless of the compliance pathway, FDA lacks resources, and perhaps the will, to fulfill its obligation. Putting lipstick on the pig is not a solution.

NIE: What else would you like to add?

LeDoux: Get engaged in Washington and at your local level with your elected Representatives and Senators. Congressional folks respond to in-person visits with well-reasoned asks. The first thing I would ask for is for the FDA to do its job in fully implementing DSHEA. I would also ask that violative products turned into the FDA at the district or federal level be handled by a strike force appointed by the FDA in a timely manner. The failure to enforce the laws leads to profligacy by less than reputable actors, giving all of us who love this industry an unjustifiably tarnished reputation. Partnership requires two or more participants in addressing these issues, and the agency needs to step up its game and meet responsible industry in this undertaking. NIE

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