Trump exec orders will affect guidances from FDA and FTC, expert says

By Hank Schultz contact

- Last updated on GMT

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Related tags: regulations, Claims, Fda, Ftc, Ndi draft guidance, Ndi notification

New Trump Administration executive orders on guidance documents from regulatory agencies likely will affect the dietary supplement industry, an attorney says.

The new executive orders, which were signed on Wednesday, address the practice of federal regulatory agencies issuing guidances on how a given agency intends to interpret the laws governing the class of goods or services that agency regulates.

Under the Administrative Procedures Act (APA), agencies are empowered to issue rules that have the force of law.  An agency might do this when the marketplace has developed in such a way that it is unclear how underlying statute that serves as the agency’s roadmap addresses a new situation.

The rule making procedure is a protracted one which includes a formal notice and comment period.  Three to five years is often given as the most expedited version of this process.

'Rule making by guidance'

In lieu of this procedure, some agencies, including the Food and Drug Administration and the Federal Trade Commission—those most applicable to the dietary supplement industry—issue guidance documents that are meant to clarify how the agency intends to interpret the law as applied to a new situation.

While these guidances do not formally qualify as new administrative law, critics of the practice say that federal agencies carry out enforcement actions based on these guidances pretty much as they would as if they were formally instituted rules.  The practice has been branded as “rule making by guidance.”

The While House on Wednesday issued two executive orders. One applies to the practice of relying on guidance documents while the other addresses the ways in which these guidances documents have been used in enforcement actions.

In the executive order concerning the issuance of guidance documents​, the Administration said that, “agencies have sometimes used this authority inappropriately in attempts to regulate the public without following the rulemaking procedures of the APA.” 

The order goes on to state that guidance documents “may carry the implicit threat of enforcement action if the regulated public does not comply. Moreover, the public frequently has insufficient notice of guidance documents, which are not always published in the Federal Register or distributed to all regulated parties.” 

The order lays out three new stipulations for the issuance of guidance documents.  Those documents must be linked in a searchable database so that it will be easier for the public to see which guidances say what.  Also, in the issuance of new guidances, language must be included to make it clear that the guidance does not carry the force of law.  Finally, future ‘significant’ guidances, defined as those that have a more than a $100 million impact on industry, have heightened issuance requirements, including a 30-day comment period, approval by a Office of Information and Regulatory Affairs and a review by the Office of Information and Regulatory Affairs.

The second executive order​ would seem to make it more difficult for federal agencies to use the language of guidances in enforcement proceedings. The executive order states, “When an agency takes an administrative enforcement action, engages in adjudication, or otherwise makes a determination that has legal consequence for a person, it must establish a violation of law by applying statutes or regulations.  The agency may not treat noncompliance with a standard of conduct announced solely in a guidance document as itself a violation of applicable statutes or regulations.”

NDI draft guidance in crosshairs

Attorney Katie Bond, of the firm Amin Talati Wasserman, put out a summary of the executive orders for the firm’s clients.  In her view these orders could significantly change the regulatory landscape for the supplement industry.  One document that would seem to be in the immediate crosshairs is the long delayed and much hashed over Draft Guidance on New Dietary Ingredient Notifications, which was first issued in 2011 and was put out again in 2016.

“I think everyone in the industry is going to have that same reaction,”​ Bond said. “That guidance is one that many would argue goes beyond what the law says.”

While the new executive orders might ameliorate the effect of some guidances that industry might find burdensome, such as the NDI guidance, Bond said they could also cloud the picture for some guidances that have been useful.

Affects on FCT guidance

One such is FTC’s Dietary Supplements: An Advertising Guide for Industry.  ​Bond said this guidance would seem to fall under the $100 million stipulation for a ‘significant’ impact, and thus would be subject to the heightened requirements.  Bond summed up the potential impact like this:

  • The guidance lacks the full force and effect of law, meaning that the FTC cannot rely on statements, examples, or policies reflected therein as a basis for liability under the FTC Act. 
  • The FTC may not ask a court to give deference to it.
  • It must remain accessible on a single, searchable index, with a notation about its lack of legal effect.
  • Any modifications must meet the heightened issuance requirements. 

Bond said while this guidance has been helpful in figuring out how to craft compliant claims, even here there has been significant friction and apparent regulatory creep.  At one point, FTC had begun demanding a standard of two randomized, placebo controlled trials as the scientific backing for claims, which many observers opined went beyond the law.  That standard was adjudicated in the Bayer​ case, and was backed down to one trial.

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