The 'other' side of the industry creates most of the problems, but has most of the new blood, too

The barriers to entry in the dietary supplement industry are low, it’s true.  Are they too low?  That’s a matter of debate. But the fact remains that anyone reading this article, without spending too much money or very much time, could have their own line of dietary supplements out in the marketplace if that was their desire.

Low barrier to entry seen as weak point

To the mind of the more established players in the industry this low barrier to entry has always seemed to be a weakness.  Companies started in this way might have the interests of the entire category at heart.  They might be working toward having enough revenue to hire competent counsel, join trade associations, engage with their local legislators, etc.

Or they might not.  They might be the kind of player who provides fodder for the warning letter mill.  It’s often observed that many of the companies receiving warning letters are ones almost no one has ever heard of.  The warning letters addressed to these kinds of firms are usually but not always predicated on noncompliant disease claims.  Cancer, depression, Alzheimer’s disease; for almost any disease or condition you can name some dietary supplement promoter has at some time claimed to be able to prevent, treat or cure it. 

And the warning letters sent to these kind of players, after dealing with the disease treatment claims violations, typically launch into a laundry list of GMP failures.  As part of my job I’ve read a lot of these and in many cases the regulators could have just started at the beginning of what’s required under dietary supplement GMPs and proceeded right to the end and said, “You didn’t do any of this.”​

Smallest companies make most of the GMP mistakes

These kind of companies then figure into the not very pretty GMP compliance statistics.  FDA officials haven’t had much to say on this score recently, as they’ve been distracted by other matters such as the vociferous CBD debate.  But in years past the consistent message has been that the industry had stalled at a not disastrous but also not laudatory level of compliance.  Officials like Cara Welch, PhD, now deputy director of the Office of Dietary Supplement Programs, have stated that FDA sees many of the same mistakes over and over again, which begs the question of whether the industry really intends to come into full compliance.

The statistics have shown that the compliance rate of the largest firms is very good, and is also quite good in the middle tier companies, those with between 100 and 500 employees.  It’s in the smallest range of companies where most of the problems occur.

I don’t have any statistics for the churn rate in the dietary supplement industry. In the wider economy the oft quoted statistic is that only about half of new companies survive through their fifth year. How many of those warning letter recipients are new players?  To be fair, a company has to survive in business for at least a year or two to even be eligible, if that’s the right phrase, to get a warning letter.  While any company is theoretically subject to an FDA inspection as soon as they submit their facility registration, the lag time between an inspection, an unsatisfactory response and a subsequent warning is at least a number of months up to a year or more.

How could barriers be raised in a way that’s fair to new entrants?

So yes, these smaller and in many cases newer companies are the ones making most of the black marks on the GMP compliance ledgers.  Should the barriers to entry be raised as a result?

The idea has been suggested in a desultory fashion in recent years. Those who have pitched this idea to me are hazy as a rule on how this might be done. And it does smack a bit of the pull up the ladder syndrome, as in, I’ve made it;  the rest of you can take a hike.

The plus side of this low barrier to entry is the ease with which new ideas and dynamic new personalities can enter the trade. Some of that dynamism was on display at the recent Sports Nutrition Summit 2020 put on by NutraIngredients-USA in San Diego.  I had the pleasure to meet entrepreneurs who had followed their passion to found new brands backed by the best science and using efficacious dosages of top shelf ingredients.  In a sector of the industry that has a closet so full of skeletons that it’s bursting at the seams, these entrepreneurs represented the best of the best.

Many of the lions of this industry are getting somewhat long in the tooth.  If the industry is to thrive through the middle of this century it is the entrepreneurs and young scientists entering the arena now who will carry it there.  However this issue of the rogue elements at the fringes of the trade is dealt with, let’s make sure it is done in a way that ensures that bright young minds still have the same fair shot at opportunity that their forbears did.