You won't hear them say it out loud, but traditional drug companies wading into the business of dietary supplements may get nostalgic from time to time for the strict regimen that governs the pharmaceutical business. They may chafe under the intense regulatory scrutiny of the FDA and complain about the time and expense involved in navigating a new drug through the agency's approval process. But at least everyone knows the rules. Not so in the nutraceuticals market. If labeling drugs is a science, it's much more of an art for dietary supplements. What else can you say about a regulatory structure where it's okay to market a product that "maintains regular bowel function" but illegal to claim that it "alleviates constipation"?
A little confusion may seem like a small price to pay to grab a share of a growing multi-billion dollar market. Regulatory uncertainty hasn't deterred pharmaceutical leaders like American Home Products, Novartis, Bayer and others from making big investments in nutraceutical product lines. But as dietary supplements become a mainstream industry, manufacturers are waking up to the same legal headaches that have long plagued traditional drugs. The FDA and FTC are cracking down on companies that step over the fuzzy legal line in labeling and advertising. And shrewd plaintiffs' lawyers, who have built careers with mass tort litigation against drug and medical device companies, are likely to find the big money in dietary supplements an irresistible new target.
Word Games
Theoretically, the labeling requirements for nutraceuticals are straightforward. Any claim you make must be truthful and not misleading, and the ingredients you use must be safe. There are also some basic legal requirements. A dietary supplement must specifically be labeled as such, and the label must include information regarding the product's identity, quantity, directions for use and manufacturer or distributor. The FDA also released regulations this year requiring a Supplement Facts panel, similar to the Nutritional Facts now required on most processed food products, which provides details about the nutritional ingredients included in the product. That's where the simplicity ends.
In 1994, thanks to a strong grassroots campaign by manufacturers and consumers, Congress passed the Dietary Supplement Health and Education Act (DSHEA), which severely restricts the FDA's authority to regulate supplements. The law gives manufacturers broad latitude in marketing, but the new freedom has had unusual side effects. Manufacturers now walk a regulatory tightrope between the more liberal provisions of DSHEA and the tight control maintained by the FDA over food additives, drugs and health claims.
For example, Hain Foods (now the Hain Celestial Group) had introduced a line of soups containing herbal supplements such as echinacea. But the company marketed the products not as foods, but as supplements, in order to avoid the costly process of obtaining FDA approval for echinacea and other herbs as "food additives." FDA was not impressed and the soups were subsequently pulled from the market.
In addition, FDA in February took action against Carlson "Easy Soy Gold" Drink Mix, asserting that the product, while marketed as a supplement, was really a conventional food product with traditional nutritional labeling. While the agency noted that the ingredients in the product would likely fall under the category of approved food additives, its actions were a clear signal to manufacturers that FDA sees such functional foods as falling outside the scope of DSHEA, which excludes items "represented for use as a conventional food."
A recent Federal Appeals Court ruling also bolstered FDA's enforcement authority. In Pharmanex v. Shalala, the 10th Circuit Court of Appeals concluded that "Cholestin," a cholesterol-lowering supplement whose active ingredient is chemically identical to that of the prescription drug "Mevacor," could not properly be considered a "dietary supplement" and thereby qualify for the lax regulatory and labeling standards of DSHEA. The manufacturer had argued that, because it was only selling the active ingredient and not an exact replica of Mevacor, its product should still be considered a dietary supplement. But the court upheld the FDA's power to regulate the same compounds the same way, mainly to prevent drug manufacturers from making an end-run around the new drug approval process.
Health Or Well-Being?
The real balancing act for manufacturers, however, is to label properly what a supplement does.
So-called "health claims," which suggest that a product can prevent, treat or cure disease, are strictly regulated by the FDA. Under DSHEA, however, manufacturers of supplements can make "statements of nutritional support" without FDA approval, as long as a statement is true and not misleading. Such statements usually describe the supplement's effect on the "structure or function" of the human body (known as "structure/function claims") or the effect on a person's general "well-being."
Not surprisingly, manufacturers take great pains in product marketing to use statements that qualify as structure/function claims, not as health claims. This often requires linguistic somersaults. A manufacturer of saw palmetto, for example, cannot claim that its product "prevents prostate cancer," but can say instead that the product "helps maintain prostate function."
Even appropriate structure/function claims don't enjoy a free ride. Manufacturers must include a disclaimer that the claim has not been evaluated by the FDA and that the product is not intended to treat, cure or prevent any disease. Manufacturers must also notify the FDA of their claim within 30 days of marketing the product. And, of course, they must be able to substantiate their claim as true.
In January, FDA released final regulations to help manufacturers distinguish between permissible structure/function claims and regulated health or "disease claims." Under the guidelines, a manufacturer cannot claim that a product has an effect on a disease or its characteristic symptoms or that a product can be substituted for a particular therapy or drug in treating a disease or its effects. The agency also advised manufacturers not to make claims related to pregnancy or its effects, such as morning sickness. The guidelines don't just cover labels; product names, logos and other techniques that might be used to link the product to combating a particular disease are prohibited.
But manufacturers have had some success fighting the government over health claims on a First Amendment basis. In Pearson v. Shalala, the D.C. Circuit Court of Appeals ruled that product disclaimers such as, "The evidence in support of this claim is inconclusive" or "The FDA does not support this claim" were sufficient and reasonable to protect public health. The Court noted, however, that there may be instances when the misleading nature of a health claim could not be cured by a disclaimer.
Taking Action
Since DSHEA became law, the FDA has taken about 100 actions, mostly warning letters, against manufacturers that have violated labeling requirements. Following dozens of reports of adverse health effects and one death, the agency asked for a voluntary recall of gamma butyrolactone (GBL), a supplement often promoted for bodybuilding. The agency has similarly targeted products advertised as "herbal fen-phen" because of implications that it replaced traditional pharmaceuticals. In February, FDA released a warning about the interaction of St. John's Wort with indinavir and other drugs used in combating HIV and has been working with manufacturers to modify supplement labels to include appropriate warnings.
While FDA oversees product labeling, FTC polices advertising. The overlap of agency responsibilities often adds to the confusion when marketing supplements. An otherwise valid structure/function claim may, according to FTC, "also convey to consumers an implied claim that the product provides a disease benefit," which is impermissible. On the other hand, FTC also notes that there may be "certain limited instances when a carefully qualified health claim in advertising may be permissible under FTC law, in circumstances where it has not been authorized for labeling."
FTC, like FDA, has taken action against companies that stray across the line. In June, the agency took aim at two companies promoting shark cartilage and skin cream as cancer cures, including the unique step of charging false claims because of the company's use of website metatags such as "cancer treatment" and "non-toxic cancer therapy." In July, the agency filed suit against Rexall Sundown for unsubstantiated clams that its product "Cellasene," which contains ginkgo biloba and other herbal ingredients, eliminates or substantially reduces cellulite.
Congress has been monitoring the situation, too. In late 1999, Rep. Frank Pallone introduced the Nutraceutical Research and Education Act (NREA) in response to the "current regulatory and epistemological chaos" regarding health claims for dietary supplements. The bill would establish a new category of "nutraceuticals" to include dietary supplements, food or medical food and would establish a simplified process within the FDA to review claims of health benefits. In contrast, two other bills introduced in 1999 and 2000 would ease enforcement of claims regarding dietary supplements even further than DSHEA. So far, no action has been taken on any of the bills.
The Next Mass Tort?
The real danger of the labeling game may not be from government regulatory authorities, but from consumers and plaintiffs' lawyers. With supplement use growing exponentially, conditions are ripe for the kind of mass litigation that has been mounted against a wide variety of traditional drugs, such as fen-phen, Bendectin, DES, Prozac, Halcion, Rezulin, Propulsid and many others. While dietary supplements have so far not attracted large numbers of product liability lawsuits (with the prominent exception of L-Tryptophan, which generated thousands of suits nationwide), there are many factors that suggest that supplements will be the next target for mass tort litigation, including:
Money. Dietary supplements have become a multi-billion dollar industry, with traditional, "deep pocket" manufacturers introducing nutraceutical product lines. Plaintiffs' lawyers generally don't pursue industries where the potential for recovery is small–but supplements are now big business.
Looser Regulation. The very marketing freedom that makes supplements attractive also gives consumers and plaintiffs' lawyers more legal room in which to make claims against manufacturers. Traditional drug companies generally have years of research, and the seal of FDA approval, to use in their defense. Supplement manufacturers generally don't.
Consumer Awareness. As more and more consumers use dietary supplements, they are also becoming more attuned to potential health risks, even from so-called "natural" foods. In addition, national media reports now routinely publicize medical problems associated with specific supplements.
Sloppy Competitors. Respectable manufacturers may get tarred with the same brush as less-than-reputable competitors. For example, a study of ten brands of St. John's Wort found that seven of ten had significantly less of the active ingredient than was listed on the label. Consumer Reports found similar problems in studies of echinacea and ginkgo biloba brands and ConsumerLab.com reported high levels of pesticides in eight of 21 brands of ginseng. As FDA notes on its website, "the growing market for supplements in a less restrictive regulatory environment creates the potential for…quality control problems."
Unexpected Results. The growth in supplement use and the looseness of labeling requirements may also lead to greater interaction of supplements with prescription drugs, leading to unexpected adverse effects. The problem noted with St. John's Wort in conjunction with anti-HIV drugs is a good example of the kind of unanticipated problems manufacturers may encounter as their products become more broadly used.
Legal Remedies. All states make manufacturers legally responsible for inadequate or misleading warnings or labels. Litigation has already been filed against supplement manufacturers for negligence, breach of warranty, consumer fraud and other types of legal claims, often with demands for both compensatory and punitive damages.
In the long run, the arrival of traditional pharmaceutical companies in the supplement market may help the industry through its period of growing pains and labeling uncertainty. Even FDA has welcomed the new players, suggesting to consumers that "supplements made by a nationally known food and drug manufacturer...have likely been made under tight controls because these companies already have in place manufacturing standards for their other products."
Indeed, quality control will be essential for manufacturers in navigating the regulatory challenges of labeling and in preventing or defending against product liability litigation. While all manufacturers want to market creatively and aggressively, they should do so with certain principles in mind: maintain detailed records of your substantiation of labeling claims; have labels and claims checked by counsel before releasing to the market and make sure your product contains what you say it does. Under those circumstances, the labeling game will seem less like art and more like science.NW
About the author:
Mr. Price, partner at the Minneapolis law firm of Faegre & Benson, is chair of the subcommittee on Nutritional and Dietary Supplements of the Defense Research Institute. He can be reached at 612-336-3159 or jprice@faegre.com.
