Kevin Bell, partner at Arnall Golden Gregory (AGG), LLP., told us that the new requirements, “make contracts start to matter.
“Everyone looks at these contracts, but I’m not sure they actually read what they’re signing off on. But now you know that these documents are really important on the front end.”
Amazon announced sweeping new specifications for dietary supplements in December. NutraIngredients-USA was the first industry publication to report the specifications, which can be found HERE.
To summarize, the key aspects required by Amazon are:
1. A Certificate of Analysis (CoA) from an ISO/IEC 17025 accredited laboratory (in-house or third party) for each dietary supplement you are applying to list OR product enrollment in an Independent Quality Certification Program
2. A Letter of Guarantee from the brand owner of the product that guarantees compliance with current Good Manufacturing Practices (21 CFR Part 111); assurances that the products only contains lawful and safe ingredients (as defined in section 402 (f) of the FD&C Act); and that labels are accurate.
“Gone are the days of these handshake deals”
“Amazon is requiring the brand owner to guarantee that the product meets the specifications,” continued Bell. “In the past, some companies would not have paid attention to the documents – the CoAs, for example – and it’s not an issue as long as FDA doesn’t come looking for them. And they’d probably get away with it for a while, but with Amazon, if they catch you, that affects your bottom line.”
Abhishek Gurnani, Partner at Amin Talati Wasserman, LLP, agreed. “Gone are the days of the handshake deals,” he said. “Even before the Amazon policy people were waking up to the benefit of a good contract.
“We’re seeing way more quality agreements in the dietary supplements space. These agreements are separate to a supply agreement, which covers basics like how many days to pay, inspect or reject, delivery, indemnification, and so on. The best way to do a quality agreement is with a matrix identifying each responsibility with respect to CFR 111.”
David Trosin, Managing Director of NSF Health Sciences Certification, said that, in his experience, companies call NSF after the fact. “They’re having issues with a contract manufacturer, and the first thing I ask them is what their business agreement says, and often the end of the line goes silent. These agreements, these contracts outline your expectations as a brand,” he said.
One contract manufacturer that we spoke to – Long Island, NY-based Gemini Pharmaceuticals, Inc. – is taking the Amazon specifications in its stride. Mark Jost, the company’s Sr. Vice President, Business Development, said: “For most of our clients we already have Supply and Quality Agreements in place. Everyone is clearly aware of their responsibilities under both documents. Our Quality Partnership program has minimized the impact of the Amazon requirements on our clients.”
The letter of guarantee
A key part of the new specifications is a Letter of Guarantee, which requires that a brand owner assures Amazon that the product is manufactured under current Good Manufacturing Practices as listed in 21 CFR Part 111, and that the product only uses lawful and safe ingredients, as defined in section 402 (f) of the FD&C Act (see box at the end of this article).
“Violation of 402(f) covers a lot of things,” said AGG’s Bell. “Some of those things FDA has been complicit in looking the other way or ignoring. Is Amazon going to be lackadaisical? If they’re not, then that’s going to be problematic for companies.
“And if they don’t enforce it, that that will be an unfair playing field that favors the bad players,” added Robert Durkin, Of Counsel at AGG.
“Will this lead to another “whack-a-mole” situation, with bad players who spring up overnight, sell product, then disappear only to reappear at a different address with a different business name?” asked Durkin, who is the former Deputy Director with FDA’s Office of Dietary Supplement Programs. “Will Amazon be diligent and ensure that bad players don’t do this? This is a problem FDA has always struggled with, and I can see how foreign actors would have an advantage.”
Bell added that he already knows of one company seeking to game the system. “Amazon may need to take some time to understand the process, but I’ve already seen some – not a lot, but some – niche businesses fabricating the documents to meet Amazon requirements,” he said.
But for a company that already follows the rules, will the Amazon requirements really be much of a burden?
“I don’t see much written in here – as it’s written now – that a good player wouldn’t already be doing,” said Durkin. “Maybe a product with a longer expiration date would require an updated CoA [so that it meets the requirement that the CoA submitted to Amazon must have been issued within the prior nine months].
“Recently, FDA said there was a regulatory gap,” he added. “Is this an example of that admission? A retailer is stepping in. Essentially consumers are paying twice: Their taxes are paying for FDA, and they may end up paying more for these products.”
Time to comply
Gurnani noted that the time to comply with the new specifications is tight, and brands have two months to get their ducks in a row. “Industry has of May 3, 2021 [to submit their documents to Amazon for approval] after which the only thing you can change is the price,” he noted.
In an email sent to dietary supplement sellers in early February and shared on an Amazon Sellers forum, the retailer states: “If you do not obtain approval to sell these products prior to May 31, 2021, we may remove these listings.”
“Given that there is still a lot more clarification needed on the process, I would say that if Amazon were to start delisting by May and start forcing companies to relist their products through the application process only, that is an unreasonable timeline since it’s only a couple months away,” said Gurnani.
Gurnani added that Amazon is known to be in the process of hiring people dedicated to handling this information.
“Any standard is a work in progress”
NSF’s Trosin said he thinks Amazon “is committed to this and will do a great job enforcing it, but they’re not the only website. It’s not going to cure the industry’s issues, but it’s going to help. The lesser players will try and get around it or will simply opt out.
“And don’t forget that Amazon already has a very long list of products not permitted on the website,” noted Trosin.
“Any standard is a work in progress,” he added. “The best thing we as an industry can so is to keep our wits and stay cool. If we take the approach, “We’re going to tell Amazon…” then that’s not going to work. We have to say, “How can we help? We want to work with you.” That will be much easier for everyone and more productive.”
“This could have an impact on the global industry to harmonize standards across regions and continents”
One thing is clear, however: The proliferation of retailer quality initiatives, each with its own targets and requirements, is becoming a challenge for brands.
“There are now multiple programs initiated by retailers with no thought given by any of them to work with the industry to develop harmonized requirements,” said Gemini’s Jost. “This lack of harmonized requirements has left many brand owners confused as to what is required by each program.
“Organizations like GRMA and CRN are ready, willing and able to assist retailers to create clear, harmonized dietary supplement requirements that would ensure that only the highest quality products make it on to their store shelves (real or virtual). Thus far the retailers have not taken advantage of what is being offered by those organizations.”
Aaron Secrist, Executive Vice President of Quality, R&D and Operations, NOW Health Group, highlighted the Supplement Safety and Compliance Initiative (SSCI), being led by the Natural Products Association (NPA).
“There are detractors of our industry waiting in the shadows to pounce on these issues and Amazon’s deep pockets have certainly attracted the attention of the plaintiffs’ attorneys that will undoubtedly weigh in on these issues,” said Secrist. “I believe the real solution is a retailer driven, industry led solution such as SSCI, which is a non-profit foundation modeled after GFSI in the food industry that is comprised of major global retailers, distributors, raw material suppliers (including cultivators), raw material manufacturers, finished product manufacturers, certifying bodies, and experts in the field of quality control, quality assurance and safety of dietary supplements.
“There have been several Certification Bodies (CB) that have had their standards benchmarked against SSCI so manufacturers will be able to choose from a variety of CBs,” added Secrist. “I think it would behoove Amazon to require certification from an SSCI recognized CB in order to sell on Amazon’s platform. This would go a long way to ensuring consumer confidence in the dietary supplement products sold by the online giant!”
The initial requirements are only targeting the US market, but NSF’s Trosin wonders what the medium to long-term implications could be if Amazon were to roll out such requirements around the world.
“Amazon is truly global, and this could have an impact on the global industry to harmonize global standards across regions and continents,” he noted. “Regulations stop at borders, but best practices don’t know borders.”
402 (f) of the FD&C Act
A food shall be deemed to be adulterated
(1) If it is a dietary supplement or contains a dietary ingredient that-
(A) presents a significant or unreasonable risk of illness or injury under-
(i) conditions of use recommended or suggested in labeling, or
(ii) if no conditions of use are suggested or recommended in the labeling, under ordinary conditions of use;
(B) is a new dietary ingredient for which there is inadequate information to provide reasonable assurance that such ingredient does not present a significant or unreasonable risk of illness or injury;
(C) the Secretary declares to pose an imminent hazard to public health or safety, except that the authority to make such declaration shall not be delegated and the Secretary shall promptly after such a declaration initiate a proceeding in accordance with sections 554 and 556 of title 5 to affirm or withdraw the declaration; or
(D) is or contains a dietary ingredient that renders it adulterated under paragraph (a)(1) under the conditions of use recommended or suggested in the labeling of such dietary supplement.
In any proceeding under this subparagraph, the United States shall bear the burden of proof on each element to show that a dietary supplement is adulterated. The court shall decide any issue under this paragraph on a de novo basis.
(2) Before the Secretary may report to a United States attorney a violation of paragraph 2 (1)(A) for a civil proceeding, the person against whom such proceeding would be initiated shall be given appropriate notice and the opportunity to present views, orally and in writing, at least 10 days before such notice, with regard to such proceeding.
NutraIngredients-USA’s Spotlight on Amazon
This is part 2 in our series of articles about Amazon’s new dietary supplement specifications. Please click the link below to read part 1: