September 18, 2012
No matter who takes the White House in January 2013, the administration will certainly work with the dietary supplement industry. Its true President Barack Obama or his challenger Massachusetts Governor Mitt Romney would present different obstacles and improvements to industry, but both are sure to understand the importance of dietary supplements.
Both Obama and Romney will work with us because our industry is so important to millions of Americans," noted John Shaw, executive director and CEO, Natural Products Association (NPA). They have a fundamental understanding of how important a large industry segment, such as ours, is to the overall economy. Many people in the current administration and in Romney's staff understand the importance of supplements and understand consumers need to have access to them."
The dietary supplement industry has historically felt more regulatory pressure when Democrats were in the White House. While the major, industry-friendly Dietary Supplement Health and Education Act of 1994 (DSHEA) was passed while Democrat President Bill Clinton was in office, this legislation came after years of increasing pressure and moves by federal agencies to regulate supplements as drugs.
Industry had numerous disagreements with Clinton's appointed FDA Commissioner, David Kessler, M.D., who said FDA would not approve any proposed disease prevention claims for dietary supplements, even though the Nutrition Labeling and Education Act (NLEA) of 1990 gave the agency authority to do so. Kessler also said dietary ingredients (other than essential vitamins and minerals) should be considered illegal food additives and therefore should be removed from the market.
Such outrageous statements led to industry outcry and consumer support for a new law that would offer a regulatory framework for supplements; DSHEA filled the void. Since then, legislators on both sides of the aisle, including Democrat Sen. Dick Durbin (IL) and Republican Sen. John McCain (AZ), have proposed bills that would increase regulation on supplements, but so far, DSHEA has not been compromised.
During President George W. Bush's administration, supplement industry regulation was lax, and, under DSHEA, industry flourished. A few setbacks notwithstanding (the ephedra ban in 2004, for instance), FDA under Bush was relatively quiet.
However, when Obama took office in 2008, he appointed Margaret A. Hamburg, M.D., as FDA Commissioner, and as she promised in a December 2010 letter, the agency has increased its presence in the dietary supplement industry. Under her, federal GMP (good manufacturing practice) regulations have been implemented, and the agency released a draft guidance for new dietary ingredient (NDI) notifications. These were both mandated by DSHEA, but were not executed under the previous Republican White House. In the past four years, FDA has also increased its facility inspections, warning letters and injunctions against dietary supplement companies.
Most in the industry champion GMPs and have been following industry-created GMP standards long before the federal requirements were in effect; therefore, increased enforcement in this area is welcome and applauded. Increased enforcement means increased safety and, eventually, a potentially better image of the industry as fly-by-night companies that are more focused on getting a quick payoff rather than establishing long-term customers are weeded out of the market.
The NDI draft guidance is another story. Industry decried the draft guidance FDA released in July 2011 as overstepping its authority as outlined in DSHEA in a number of areas. In June 2012, industry trade organizations announced FDA agreed to rewrite and rerelease its NDI draft guidance to take into account many of industry's concerns, showing that even with increased enforcement under a Democratic White House, the agency is willing to work with the industry.
As Shaw noted, "We encourage our members to be politically active and support those who support industry. It's really not about being Democrat or Republican; it's about who supports the very valuable products we make and deliver to American consumers."
Still, uncertainty looms as we get closer to the November election day. As long as the decision is up in the air, industry may have a difficult time planning and forecasting for next year and beyond. If Obama wins, its expected FDA will continue on its increased-enforcement path of the last few years; if Romney wins, its expected FDA will loosen its grip.
'Forward' with Barack Obama
The most recent national poll results, at press time, showed Obama was leading, but only slightly. A CBS News Poll survey of 1,218 adults from Aug. 22 to Aug. 26, 2012, showed 46 percent favored Obama, while 45 percent chose Romney; 6 percent were undecided and 2 percent said they wouldn't vote. Shaw noted if Obama wins the presidential election, Unfortunately, FDA may continue its attempts to over-regulate the dietary supplement industry. We're very concerned with that; however, we're happy to be working with the administration to overcome these hurdles and mutual concerns."
Jarrow L. Rogovin, chairman of the board and president, Jarrow Formulas Inc., said if Obama wins, the industry will have a more difficult time because Rogovin believes Obama is hostile to business and wants as much regulation as possible. Obama has been a disaster for business," he said. "The industry, miraculously, has been counter cyclical. We have been growing despite the rest of the economy, but at some point, things will catch up with us. We cannot remain immune from economic circumstances forever."
Under Obama, Rogovin expects more taxes, regulation and lawsuits. "[Obama] just lets FDA do what it wants," he said. "He will never be a friend of this industry."
'Believe in America' with Romney
If the voters choose Republican in November, it's generally accepted among the dietary supplement industry that a Romney administration will bring less regulation. "We don't know precisely what to expect if Governor Romney wins, but I do believe it's fair to say a Romney administration would likely be more business friendly, and understand the plight of small business and the need for fewer regulations," Shaw said.
Rogovin said a number of major Utah supplement producers met with Romney earlier this year. "Romney has not been in a position to control our industry directly, but it is clear from his meeting in Utah that we have a friend in the Governor." While Romney never represented Utah, he has a kinship with the state after he ran the Salt Lake Olympics in 2002, and shares the Mormon religion with many of the state's residents.
James J. Gormley, head of Gormley NPI Consulting and author of the soon-to-be-released book, "Health at Gunpoint: The FDA's Silent War Against Health Freedom," noted Romney's vice presidential choice Paul Ryan has also been committed to small government in his role of congressman for Wisconsin. However, Gormley added, "Ryan came into office five years after DSHEA, so we must wait and see as to what his overarching position will be on supplements."
Rogovin also expects Ryan to champion business in his role as vice president, if elected. "Ryan is about paying our bills, and he knows that a healthy business climate is what we need. Romney has his Utah connections, and Ryan, personally, is a health buff. We have two strong allies in them."
If the White House administration changes next year, we can also expect new faces at FDA and FTC. Loren Israelsen, executive director, United Natural Products Alliance (UNPA), predicted a new FDA commissioner and FTC chairman as well as a possible change of enforcement perspectives, and proposed changes to business tax rules.
A new FDA commissioner is standard fare for a new administration, but Rogovin thinks the appointments will go much further. "I think there will be a broom taken to the agency if Governor Romney prevails this November," he said. "The agency needs a top-to-bottom do over. If a new administration is going to succeed, it needs to do this to FDA and many other agencies."
Register for Early Voting
Election Day, Nov. 6, 2012, occurs during SupplySide West, so be sure to vote early. Go to the SupplySide website, and select your state to sign up for an early voting mail-in ballet.
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