What Business Are You In?

The supplement industry must clean up its image in order to gain the respect of the medical and business communities.

ByErik Goldman

In his “Regulatory Update” session at the recent Natural Products Expo West show and conference, industry consultant Loren Israelsen painted a disturbing picture of the industry at a critical juncture in its history—a turbulent interval that many saw coming but few took appropriate action to avert.

According to Mr. Israelsen, the strong consumer support that has always been the industry’s economic and political backbone has eroded over the last de-cade. Consumer confidence has been greatly damaged by exaggerated claims, poorly sourced and manufactured products, suboptimal ingredient levels, virulent marketing of sometimes dangerous “performance enhancement” and weight loss products, and questionably de-signed but highly publicized negative clinical trials.

Many middle-of-the-road Americans, “do not understand the value of high quality dietary supplements. And this is so because we have devalued ourselves,” he said. Industry players have been competing on price, rather than establishing value, and it’s gotten to the point where people can buy supplements for a dollar in discount stores. This, he believes, is lethal for the industry as a whole.

“It is expensive to produce good quality natural products, and you cannot do this and also have dollar pricing. We really need to re-think and re-establish the value proposition,” he explained.

The crisis of confidence is all the more intense among healthcare practitioners, especially among conventionally-trained MDs, who are inherently skeptical of natural products and deeply biased by their training to favor pharmaceuticals. Mr. Israelsen cited increasing scrutiny and criticism of the supplement industry from medical professionals, managed care organizations, pharmacists, and the military healthcare system in recent years.

Chances are, if you’re reading this column, you are part of the solution, not the problem. You already know that clinicians demand a higher level of commitment to GMP manufacture, clinical efficacy, scientific substantiation and safety testing. You also understand that exaggerated claims may offer short-term economic gains, but exact long-term tolls.

The problem is, only a relatively small segment of the medical community—well-trained naturopathic doctors, some chiropractors, and holistic physicians and nurses—recognizes your efforts and the value that your products can bring to their patients. Unfortunately, the vast majority of healthcare practitioners see little difference between you and the great, amorphous “unregulated” mass that has metastasized throughout the industry. A quick stroll through the supplements pavilion at Expo West would do far more to confirm a physician’s worst fears than allay them. In short, the industry as a whole has an image problem.

It seems as if many supplement industry executives have forgotten what business they’re in. The commoditization of products, the use of inferior or even contaminated source materials, and price chopping in an effort to goose up “next quarter’s sales” reflect more than the ordinary pressures of business; they re-flect an absence of vision. To paraphrase Mr. Israelsen, the industry really needs to re-establish the “values” equation.

Whether you realize it or not, you are in the business of healthcare. You produce products that promote health and help prevent or in some cases mitigate diseases (though, granted, under DSHEA you can’t say that). This means the health professionals and the patients they serve rely on you to provide the highest quality. You and your colleagues are not selling widgets!

Mr. Israelsen called for zero-tolerance of bad manufacturing practices within
the industry, and I couldn’t agree more. Skimping on quality not only hurts the consumers, it jeopardizes the future of the entire natural medicine movement. Reputable manufacturers need to take the unscrupulous ones to task. If we wait for FDA and FTC to step up their enforcement efforts—and there’s every reason to be-lieve they will in the coming years—many good companies will suffer with the bad.

While our industry struggles with its demons, mainstream medicine is boiling in its own pot of troubles. The healthcare system as it now exists is increasingly un-sustainable. Physician morale has never been lower, patient dissatisfaction has never been higher, and clear answers on what to do have never been more elusive.

This could be an excellent window of opportunity for leaders in our industry to step up and show what is best about the preventive, non-invasive and cost-effective aspects of natural products and holistic medicine.

In his talk, Mr. Israelsen pointed out that, politically, the industry has been relying almost exclusively on the efforts of Senators Tom Harkin (D-IA) and Orrin Hatch(R-UT) for far too long. Both senators are finishing their fifth terms and are unlikely to run again. But, as Mr. Israelsen pointed out, “Who’s going to take their place? This is a critical moment in which to develop better liaisons and alliances in Congress. But it takes years to cultivate these relationships and allay their fears and concerns. If we burn our political capital, we’re sunk.”

It is clear that the industry needs new friends in high places, and it seems to me that medical professionals—increasingly disgruntled with the state of mainstream medicine—represent a huge power block that could be leveraged, if the industry can win their confidence. Likewise, large em-ployers, strangled by the costs of healthcare benefits, are seeking new “employee-centered” approaches to benefits programs. These include health savings accounts and other strategies that shift the cost, responsibility and choice in healthcare decisions back to employees. Corporate leaders represent a strong and largely untapped potential ally for the natural products industry, again, if the industry can win their trust.

Building alliances with the medical and business communities will take considerable leadership and vision. It will also take serious data that document, in real-world economic terms, the clinical efficacy, preventive value, and cost-efficacy we all like to believe natural products and holistic medicine can provide. Last year’s Lewin Group study (sponsored by the Dietary Supplement Education Alliance) showing the huge potential cost savings from routine use of lutein, zeaxanthin and omega 3 fatty acids in preventing disability among the elderly, was a good start. We need to undertake more of that kind of work.

Are you ready to play your part in the nation’s healthcare? Is your company ready to step up and prove its worth? I certainly hope so. The future health of our country, not to mention the nutrition and natural products industry, rests in large part on the companies who can confidently answer, “Yes!”NW