Ease of market entry poses risk for entire industry

By Hank Schultz

- Last updated on GMT

© Getty Images / Pat_Hastings
© Getty Images / Pat_Hastings
Does DHSEA contain within it the seeds of the industry’s downfall? The freewheeling marketplace this regulation created has placed the barriers to entry so low that less than reputable companies have room to maneuver, creating risk for the whole industry.

Lest you assume I am overstepping my bounds, I’m not suggesting that the industry, robust as it is, is in fact teetering on the brink of some catastrophe.  But there are risks to the industry posed by this shady and growing penumbra, risks that the mainstream stakeholders are aware of but seem powerless to do anything about.

Existence of fringe fuels criticism

The existence of this shadowy fringe has informed the view of some prominent critics of the sector, including Dr Victor Navarro, MD and Dr Pieter Cohen, MD.  The former is a liver specialist practicing in Philadelphia and is the director of the National Drug Induced Liver Injury Network. In his practice Dr Navarro has seen a repeated scenario in which young workout enthusiasts who have been bingeing on sports nutrition supplements come to his clinic with jaundice and other signs of liver injury.

During a couple of appearances at an annual industry event, Dr Navarro has voiced his frustration with his inability to pin down what exactly is in these products​ so that he could figure out what is making his patients sick. In his view, the quality control on supplements is poor in general and the safety information is hard to verify.

Dr Cohen, who is associated with Harvard Medical School, is similarly unimpressed with the industry’s safety assurances. He has pointed to several prominent studies, including a study about emergency room visits relating to dietary supplement use​ (which he found particularly persuasive) to make his point.  On his own account, Dr Cohen has coauthored several papers that delve into quality control and safety issues with supplements, including a recent study​ that found unpredictable amounts of a poorly understood stimulant​ in weight loss and sports supplements.

Industry stakeholders have raised concerns​ about the conclusions of both Dr Navarro and Dr Cohen.  But these are both highly accomplished health care professionals whose views cannot be dismissed out of hand. They do not agree with the standard blandishments that their criticisms apply only to the outliers of the supplement industry. “We’re the good guys,” ​the mainstream industry stakeholders seem to be saying in response to these criticisms.  “Your problem is with ‘them'.”

So what? A supplement’s a supplement, and the marketplace is set up in such a way that it is very difficult for the average consumer to tell a responsibly manufactured supplement from the junk.

Ease of market entry

The conversation I had with one contract manufacturer at a trade show illustrates the issue.  This particular company caters to individuals who want to try their hand at selling supplements on the internet. The company representative called these clients “my guys”. “Some of my guys start out with just a couple of hundred bottles,” ​he said. “And now some of those guys are my biggest sellers.”

I had identified myself as a journalist, so there was no attempt on my part to entrap this individual. I wan’t interviewing him on the record; I just wanted to get a feel for the mindset, which perhaps made him a bit more voluble than he would have been otherwise. 

I came away from that discussion with a not-so-good feeling about the rigorousness of that enterprise.  There didn’t seem to be much attention paid to regulatory considerations, such as specifications and finished product testing for the bottles for all of those ‘guys’.  Granted, a lot of these were standard formulas off the shelf, for which some of those boxes may have already been checked.  But I formed the impression that quite a few of them were not standard products.

Dodging a bullet?

When I got into this industry almost eight years ago, the discussions behind the scenes at that time were about what to do if the industry were to be slammed with some big, melamine-type event. One which got a lot of news coverage and in which some people were injured or worse.

Such an event has already happened.  In 2013, a wave of non viral hepatitis reports struck Hawaii​, which resulted in 29 acute cases, two of which required liver transplants.  The cases were traced to a product which was quickly taken off the market. The company is now out of business.

Rapid action by FDA (as well as the product’s niche market position) prevented this from becoming a national scandal.  So, did the industry dodge a bullet?  Or was this an example of the robust adverse event monitoring system, and is in fact proof of the strong safety guardrails within which the industry operates?  Take your pick.

Where do we go from here?

The marketplace DSHEA created is now almost 25 years old.  No pre-market approval of supplements was one of the core tenets of the writers of the law, and remains an industry touchstone today.  But there is a growing consensus that a lot has changed in the past quarter century, including the rapidity with which new brands can pop up in the marketplace.  With direct access to consumers that the internet affords and the help of an eager contract manufacturing partner, in a month, maybe less, I could become one of the ‘guys'.  It seems odd to me that I could much more easily become the next dietary supplement marketer as opposed to founding the next brand of toilet paper.

The industry now seems to be coming around to the idea that some changes to DSHEA might be considered​.  In a future installment in this series I’ll compare how market access in this industry compares to some others critical to consumers’ well being, such as personal finance. And I’ll place that in the context of how DSHEA might be altered to create an industry that both puts out better products when considered in aggregate as well as one that is more immune to criticism.

Hank Schultz, Deputy Editor of NutraIngredients-USA, is an experienced nutrition industry journalist. Prior to joining the industry he worked in the newspaper industry for more than 20 years. When not in front of a computer, Hank can be found on a bicycle, a mountainside, or at the helm of a sailboat.

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