From the editor's desk

Is it Amazon’s job to fix a problem that was decades in the making?

By Hank Schultz contact

- Last updated on GMT

Is it up to Amazon to make sure what's on the label is what's inside the bottle? ©Getty Images - batuhan toker
Is it up to Amazon to make sure what's on the label is what's inside the bottle? ©Getty Images - batuhan toker

Related tags: online sales, understrength products

There has long been a tale within the dietary supplement business of there being two industries, the ‘good guys’ and ‘them.’ With the proliferation of fraudulent products for sale online, the question becomes, whose job is it to remedy that?

The former represents the upright, transparent side of the industry. These are companies that are proud to talk about their sourcing relationships, the testing they do on incoming raw material, and other hallmarks of quality. They’re forthright about disclosing contract manufacturing arrangements, if they have them.  And they’re the sort of companies that attend regulatory sessions at trade shows, participate in and help fund industry initiatives and so forth. 

The dark side

Then there’s the other side of the industry. Many of my sources will often remark that when they read FDA warning letters they rarely if ever recognize the names of the firms being taken to task. It’s a big enough industry that it’s hard to know everyone, of course.  But this penumbra of the business is populated with players who it seems would rather not be known, so it’s hard to put a number on how much of the overall industry these kind of companies represent. Five percent? Ten? More?

Other industries have similar issues. I live in Colorado where roof-shredding hailstorms are commonplace.  Commonplace, too, are the fleets of phony roofing trucks​ that troll neighborhoods in the wake of such an event. Get yourself a used truck, slap on a vinyl sign and—presto!—you’re a roofer.  

Low barrier to entry

It’s almost as easy to become a dietary supplement brand holder.  If I had $50,000 laying around to play with, I could pick up the phone and have some sort of product for sale somewhere in just a few weeks.  Many brand holders in that scenario rely more or less completely on their contract manufacturers for GMP compliance, CofA verification, etc.   Assuming they even know what the letters “GMP” stand for, that is (some don’t, and I’ve witnessed this in person).  Approaching the creation of a new product in that way gets this relationship exactly backward according regulators. FDA is adamant that the ultimate responsibility rests with the brand holder, which I’m sure has come as a nasty surprise to some of these neophyte firms.

Recent testing by supplement manufacturer NOW has shown that many brands being sold on Amazon are fraudulent in that they contain far less than the stated amount of the active ingredients claimed on the label. NOW tested CoQ10, SAMe​ and phosphatidylserine​ products with uniformly bad results. Few products in each case came close to meeting label claim, and many had so little of the active ingredient (or none at all) that they can clearly be classified as fraudulent. 

In the wake of that affair, the CoQ10 Association (NOW is a member) announced that it will test all of the CoQ10 products it can find for sale​, regardless of the sales venue.  NOW selected the products it tested based on cause and suspicion;  it’s expected that testing all of the available products will yield a smaller but still significant failure rate, maybe as high as 10%.

NOW said it has forwarded its findings on to Amazon, but has had little success in getting any commitment from that company to do something about it.

Amazon didn’t create the issue

But hold on a minute.  Junk supplements were for sale long before Jeff Bezos had his big idea. Almost ten years ago I remember hearing industry sources rue the fact that bottles of what were labeled as ‘fish oil’ were for sale on the shelves of a discount chain for just few dollars.  At that price the bottles couldn’t possibly contain more than trace amounts of actual fish oil, if any.  That’s far from the only example of products carrying price tags that almost guarantee their contents must be adulterated in some way.

These chiselers got their start almost with the birth of the industry after the passage of DSHEA almost 26 years ago.  Their activities have in part motivated the mainstream media Greek chorus that has been chanting “Unregulated!” all these years. 

So its it Amazon’s job to fix this problem?  Amazon is after all far from the first retailer to sell a worthless dietary supplement product.

In the view of Len Monheit, CEO of Trust Transparency Center which manages the CoQ10 Association, things now are truly different than they were before.  Brick and mortar retailers had reputations to protect and bore some liability for the products for sale on their shelves.  Monheit said there are examples of successful pressure being brought to bear against such retailing chains to restrict the sale of fraudulent products.

Amazon appears immune to pressure

But Amazon is a vast, diaphanous creature by comparison.  Immune to pressure from bit players like dietary supplement companies.  Companies in other industries like shoemakers Birkenstock​ and Nike​ have complained about fraud on the site, too.  They have also met with apparent indifference to their plight from the giant online retailer and in response, neither will now sell on Amazon.

And in Monheit’s view, the Amazon phenomenon means that the barriers to entry for new companies in the dietary supplement industry—already too low in some observers’ estimation—are now that much lower. New, adulterated products can show up with dizzying speed.

Market maker should bear some responsibility

So my answer to the question I posed earlier is yes, I think Amazon does bear some responsibility for this worsening situation. Officials at the retailer surely know that a certain percentage of the products sold via its platforms are not what they claim to be.  The company appears to adhere to the notion that it merely provides the sales venue, and it’s caveat emptor after that.  

That idea doesn’t fly in other marketplaces.  Stock markets have listing requirements, for example, to make sure that buyers get a stake in an actual going concern when they plunk down their money.

Human greed lies at the root of this problem and that’s not something Amazon could fix, even with the best will in the world. But Amazon ought not be allowed to continue to profit by knowingly allowing fraudulent products to be sold on its site.  Whatever pressure the dietary supplement industry might be able to bring to bear directly would probably be akin to mosquitos attacking an elephant.  But members of Congress and federal regulatory and law enforcement agencies carry bigger sticks, and those are avenues the industry could explore after getting stonewalled by Amazon, perhaps in concert with other industries that seem similarly put upon.  Being armed with data that comes from the kind of testing that NOW has done and and The CoQ10 Association plans to do can only help to bolster that case.

Amazon did not respond to a request for comment for this article.

Related topics: Markets, Views, Adulteration

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