One of the most significant shifts has been the focus on authenticity. Brands are hyper-focused on targeting social issues, how their customers feel about the sustainability of the materials they use, or why their "influencers" connect with consumers.
Consumers are looking for a deeper meaning from the brands they support. Though it can't be seen as pandering, there has to be alignment with the messaging and their actions to be an engine for the growth of the brand. It makes sense, and we have seen the rise of marketing language/terms to embrace authenticity factors uber alles, including but not limited to morality, transparency, being rooted in their values, consistency, and expressing consumer identity. The last one is essential, the most important for both the industry and the brands, yes, the dreaded writing tease.
While all of this is exciting for brands and has fostered a peacetime industry model, times of peace don't describe the DNA of our industry or the consumer identity. Additionally, brand management books tend to be written by management consultants and "thought leaders" who study successful companies during peace. Our industry has existed in times of peace and conflict. However, we have long since been at war with the external world. While this is an uncomfortable analogy during these harrowing days of actual war, the threats by those who want to see the industry cease to exist in its current form are clear and present. While there is much peace internally, the company's focus on authenticity and marketing to expand and reinforce the company's strengths is a viable strategy. Still, it can't be used universally for an industry or a brand under attack from conscious and external opponents. Nor can an industry make the mistake of thinking that external forces can be turned from foe -to friend in the same way internal alliances can be formed. Peacetime techniques encourage broad-based creativity and contribution across a diverse set of possible objectives. In wartime, an industry or brand typically cannot afford to lose a singular battle or miss a shot as that will lose the war. Wartime survival depends upon strict adherence and alignment to the mission at all costs.
The reaction by many in business to wartime is revulsion, or avoidance, as the resultant chaos is not without casualties. However, avoiding the problem doesn't make it go away. While movies and biographies often make wartime generals out to be successful due solely to a larger-than-life personality, the reality is wartime is won by strategy, not emotion. The 30th anniversary of DSHEA serves as a reminder of such, while there was a great deal of emotion involved, what won the day was a strategy that stood united.
Many in the industry today may not have been involved then or are familiar with the "war stories" and may only know things through the lens of peacetime. Others may see that our adversaries were not present at that time either. However, they are strategically aligned with the emotionally based attacks against our industry that were used during DSHEA and have been used against other industries since. Additionally, some have heard these criticisms of the industry so many times and have since grown apathetic, "the sky never fell before, and it won't now," so we don't need to do a thing is their mantra. This assumes that the difference between winning and losing is so vast – that such a gulf could never be bridged. That sentiment isn't consistent with a focus on authenticity. Is the message to the millions of Americans who use Natural Products daily for their health and wellness from the industry to reward their confidence with inaction authentic?
NPA has an almost 90-year history of action speaking advocacy to power, so of course, we're biased, but it doesn't mean we are wrong. When benchmarked to industries of standard economic scale, our industry lags in association membership (as a percentage of industry participation), lobbying, and campaign contributions. One of the industries we need to catch up on is the cruise ship industry. Their engagement is more substantial than ours. Is that the message we want to send to those who rely on the industry?
In times like these, I cannot stress the need for effective communication between the Natural Products industry and policymakers. With some 4,000-plus associations in D.C., policymakers often need a deeper understanding of practices and the challenges faced by any given industry. Bridging this gap will take engagement, unlike the current status quo. There must be an emphasis on active participation through organizations like NPA to convey concerns and set the record straight on misconceptions. More importantly, for us to have real staying power, none of the marketing in the world can rival the government's ability to change a vibrant marketplace to one filled with uncertainty in an instant. Real industry power isn't a buzzword or marketing campaign; it's the ability to predict and stabilize to chart new courses. While market forces are cyclical, some smarter than predictable, forces of influence on policy aren't. Not having a deep bench of advocates for Natural Products in the legislative branch across party lines to value the merits of the industry and ensure that policies are conducive to the industry's growth and sustainability will not result in a future course that exceeds our present reality.
Yet, thanks to the NPA membership, NPA continues to execute effective and impactful initiatives, and this year, we took our efforts a step further to expand our reach. Throughout 2023, we have seen significant accomplishments along with areas of concern that need to be addressed by the entire industry.
TINA and STRIPED
For several years, so-called consumer advocacy groups have used emotion, hysteria, and pseudo-science to push an unsubstantiated claim that dietary supplements and other products, such as energy drinks, are unsafe for consumers. This push by groups like STRIPED and TINA has resulted in a flurry of legislative initiatives to restrict and prohibit access to our products. In early January, the NPA responded to letters sent on behalf of TINA and the Rudd Center to manufacturers of energy drink products regarding their concerns about compliance with federal law.
NPA and our member companies take truth in advertising very seriously, and our organization's educational foundation, the Natural Products Foundation's truth in advertising program, was created to ensure compliance with federal law and educate members about the overlapping jurisdiction between the FDA and FTC.
While we certainly appreciate any group looking out for America's youth's well-being, proposals to change policy must be rooted in science. Leveraging decades of research and investments in scientific research, NPA has dedicated itself to finding solutions to combat misguided policy. America's natural product companies are at the forefront of a robust public health system emphasizing the importance of health and wellness. The industry's unique role in developing safe, effective, and reliable health supplements is a testament to why nearly 80% of Americans use at least one dietary supplement as part of their health and wellness routines. Despite this, the push to regulate natural products more similarly to pharmaceuticals and mandate who can and cannot use health supplements has continued to grow.
The industry has battled cancerous policy proposals to restrict and prohibit access to dietary supplements. In years past, the NPA defeated proposals in California, Illinois, Maryland, Massachusetts, Missouri, New Jersey, Rhode Island, and others. However, this year, despite intense lobbying and grassroots efforts led by the NPA, New York enacted a new law restricting access and making it hard to purchase dietary supplements. This is significant because the state represents billions of dollars for industry and establishes a precedent that other states will follow. The NPA was the only association to recently file a lawsuit, we believe the court will recognize the serious concerns raised and declare it unconstitutional. Independent of outcome, we know ourselves and our enemy; why aren't we more in the fight against such derision?
Supporters of the proposal believe our products cause eating disorders despite lacking scientific evidence. It should be evident that NPA believes eating disorders are a serious disease that requires medical attention. However, the lack of scientific evidence is damning, and this lousy policy gives state governments unfettered discretion to restrict access to health products consumers use for their health routines. Despite being in the judicial process, we anticipate these proposals will be returned to other states, and the industry needs to be prepared to participate in the legislative process.
Following several years of being closed to the public due to the global pandemic, members of NPA gathered in Washington, D.C., for a wildly successful fly-in day to advocate on behalf of the natural products industry. Bringing together prominent industry stakeholders from across the country, NPA's fly-in day participated in meetings with over 100 congressional offices advocating for greater access to supplements through pre-tax accounts, ensuring the FDA is protecting consumers against adulterated products and strengthening the dietary supplement supply chain through friend-shoring and reshoring. Many of the initiatives NPA supports gained significant traction during our Fly-in Day, and we are excited to continue building the foundation for greater success headed into 2024 and at our 2024 Fly-in Day.
Typically, the year before a presidential election is rather mundane. However, this year was anything but mundane for Congress. If there were any indication this year would be one for the ages, we'd look back at the 19-floor votes to select a Speaker of the House. As a result of several items, including the notoriously drawn-out leadership change, Congress still has many items it still needs to resolve, including budgetary items. For example, Congress must act to fund discretionary programs, which make up about 30% of all federal spending and require the passage of annual appropriations bills. Congress faced the threat of a government shutdown from failing to pass these bills twice this year, the first on September 30th at the end of the fiscal year and again on November 17th after a short-term extension expired. The most recent short-term extension of government funding lasts through January 19th for four of the appropriations bills. If action is not taken by January 19th, there will be a partial government shutdown for agencies and programs funded by the Agriculture, Energy & Water, Military Construction-Veterans Affairs, and Transportation-HUD appropriation bills.
Recently elected Speaker Mike Johnson has indicated that if individual appropriation bills cannot be enacted by January 19th, he prefers to pass a full-year continuing resolution through September 30th, 2024. The remaining eight appropriations bills, including appropriations that would impact the dietary supplement industry, face an expiration of funding on February 2nd. Should they not reach a deal, there would also be a partial government shutdown.
Despite the political drama, there is plenty of opportunity for the industry to advance legislation that is critical to the industry. One area is expanding access to dietary supplements through Health Savings Accounts, Flexible Spending Arrangements, and Health Reimbursement Arrangements. Bicameral legislation S. 3172/H.R. 4794 was introduced by Senator Kevin Cramer and Representatives Darin LaHood, Brendan Boyle, John Curtis, and Josh Gottheimer.
There have been several indications that leaders of the House Ways and Means Committee and Senate Finance Committee are exploring legislative options for tax packages aimed toward healthcare, which gives us a solid opportunity to use a larger legislative package to include expanded reimbursement eligibility for dietary supplements.
In passing the Dietary Supplement Health and Education Act (DSHEA), Congress charged the FDA to protect public health by ensuring foods are safe, wholesome, sanitary, and properly labeled. As we've seen, the statutory interplay between the race-to-market clause and the effective date in DSHEA results in a situation where an ingredient legally marketed pre-DSHEA could retroactively have become violative because of the race-to-market clause. Unfortunately, the FDA has been silent on its position concerning how it would proceed if ever presented with a situation that has led to such a confused and highly inequitable result.
FDA's change of policy relative to the status of NAC, NMN, and other ingredients is a detriment to the entire dietary supplement industry. The situation with these ingredients is yet another example of the inconsistent way the FDA interprets DSHEA. Then, it determines how to use resources under DSHEA to protect public health. Despite repeated requests from the NPA, the FDA has been unable to articulate any risk to public health posed by these ingredients when marketed as a dietary ingredient or supplement. To that end, we anticipate our lawsuit against the agency for NAC, and future action regarding agency treatment of NMN will drive the conversation for reforming DSHEA.
The FDA's proposed reorganization package is now under review at the U.S. Department of Health and Human Services (HHS), which begins the formal external review process after more than a year of work following the findings and recommendations of a Reagan-Udall Foundation evaluation, which excluded an examination of how the agency regulates dietary supplements.
This is an alarming proposal, and the industry should not minimize the announcement's significance, especially regarding budgetary allocations.
For the FDA, budget-wise, the lowest budget level is the office level, so eliminating the Office of Dietary Supplement Programs (ODSP). That budget line disappears, and we need to find out how funds are directed, whether to supplements or food additives. The FDA foods program has a clear accountability gap with Congress, industry, and Americans, as demonstrated by the Reagan-Udall Report.
Hence, it's unclear to NPA why dietary supplements would be placed within the same office as food additives, especially since there is a statutory firewall between dietary supplement and food additive regulations. While the agency continues to communicate these changes will modernize and strengthen the assessment of food chemicals and facilitate safe and innovative ingredients for use in foods and dietary supplements, the agency is not in the position to have earned the benefit of the doubt from the Natural Products Association. Our organization will ensure that ODSP will remain a free-standing office executing the agency's responsibilities under the Food, Drug, and Cosmetic Act for dietary supplements.
As the voice of the natural products industry, the NPA's advocacy work is one of its primary and core functional areas. In 2023, we ensured our members had a seat at the table by advocating, supporting, and opposing policies that broadly affected the natural products industry. Our work enabled our members to maximize their investment and value proposition associated with their membership within our organization. We are immensely grateful to our board members, sponsors, partners, and members for making 2023 a remarkable year of accomplishments as we continue to help grow the natural products industry. As we head into the new year, we are inspired and without apathy for the work ahead and the path forward in 2024.