The final GMP (Good Manufacturing Practices) rule, which manufacturers have been awaiting for several years, will require the establishment of controls to ensure these products are manufactured consistently as to identity, purity, strength and composition, and to ensure quality during manufacture, packaging, labeling and storing. Cost of Compliance While the industry hopes GMPs will help to legitimize their products in the eyes of consumers, this credibility will come at a cost. FDA's Regulatory Impact Analysis estimates that compliance with the new requirements will cost each manufacturer between $62,000 and $99,000, depending on the size of the establishment, in the first year alone. Annual costs after the first year will range from $38,000 to $61,000. FDA concedes that the cost of compliance with the GMP requirements could lead to an increase in the price of supplement and nutraceutical products. However, the agency believes that creating industry-wide minimum standards should reduce the occurrence of product defects, resulting in a decrease in the number of illness and deaths resulting from contaminated or otherwise defective supplement products. Moreover, the requirements will result in supplement and nutraceutical products that are of consistently high quality. Requirements of Final Supplement GMP Rule The supplement GMPs apply to all domestic and foreign companies that manufacture, package, label, or hold dietary supplements for sale in the United States, as well as nutraceutical products that are regulated pursuant to the Dietary Supplement Health and Education Act (DSHEA). In particular, the GMPs require manufacturers to evaluate the identity, purity, strength and composition of their products. Additionally, the final rule includes requirements for establishing quality control procedures, designing and constructing manufacturing plants, cleaning, and testing ingredients and finished product. The rule also establishes requirements for recordkeeping and handling consumer product complaints. The rule will go into effect over a three-year period. Large companies with 500 or more employees will have to comply with the GMPs beginning in June 2008. Small companies with less than 500 employees will have two years to comply with the rule while very small companies with less than 20 employees will have three years to comply with the new requirements. Industry Response In recent years, the supplement industry has been the target of widespread criticism for selling contaminated or ineffective products, and the media has characterized the industry as being largely unregulated. FDA has taken enforcement actions against dietary supplements and nutraceuticals due to undeclared ingredients, contamination, and subpotency. While most of the major US supplement and nutraceutical companies were already complying with FDA's GMP proposal, the industry continued to actively call for the issuance of a final rule, arguing that mandatory manufacturing standards and controls would go a long way towards increasing consumer confidence in the products they manufacture. Sarah A. Key is an associate with Foley & Lardner LLP and a member of the firm's FDA and Government and Public Affairs Practice Group, as well as the Life Sciences and Food Industry Teams. She can be reached at 202.295.4720 or by e-mail at email@example.com.