Image courtesy of National Health Federation

Drug Industry Acquisition of the Supplement Marketplace

by Attorney Jonathan Emord


When I fought the Pearson v. Shalala battle against FDA in the late 1990s, the industry was far different than it is today (not only were consumers willing to pay a premium for specialty products in a highly diversified marketplace but also the industry was far less tolerant of government restraints). At that time I warned that hamstrung in its efforts to consolidate and tame the industry with claims regulation, FDA would resort to an expansion of its adulteration powers, where judicial deference would be greatest. When leaders in the industry looked at the GMPs as a means to rid the market of bad actors and secure for themselves a cozier relationship with FDA and less competition, I warned that this move would backfire, redounding to the ultimate detriment of everyone in the supplement business; I explained that those counseling the industry misunderstood the industry’s relative significance in FDA’s universe.

FDA has long regarded the drug industry as King, respecting it greatly, and the supplement industry as a mere pawn, disrespecting it greatly. The metaphor I used in speeches at the time and since was that of a rogue elephant (the drug industry), ridden by a blind mahout or elephant driver (the FDA), equipped with a riding crop (regulation). A pesky flea on the flank of the elephant represented the dietary supplement industry. Ridden by a blind driver, the elephant could go wherever it wanted; the blind mahout was dependent on the elephant for guidance. The mahout’s only concern was to help the elephant avoid distress; so long as the flea avoided any action that would irritate the elephant, it could abide in peace but, whenever the flea annoyed the elephant, the mahout would use his riding crop to hammer the flea into quiescence.

In short, by comparison with the drug industry, the supplement industry has virtually no clout. Anything desired by the supplement industry will come to pass only if there is no objection from drug industry lobbyists. When the industry went to the FDA with the GMP proposal, FDA seized the day. Unwittingly, the industry had delivered its own head to FDA on a silver platter. Rather than cause FDA to increase its respect for the industry, the proposal gave FDA the ammunition it needed to consolidate and tame the supplement marketplace, an objective FDA consistently endeavored to achieve for over a half century. FDA adopted the GMPs and, predictably, ratcheted them up several notches, tightening the noose not only for small players but also for the big ones. Suddenly, many of the major industry parties that had advocated the GMPs opposed part or all of them, realizing that the economic burden imposed would be great for them as well, but it was too late. Watching bemused, the drug industry encouraged FDA to adopt the GMPs and use them to rid the market of supplement companies, behaving like hyenas observing wounded prey.

Although the GMP and FSMA provisions continue to drive small and mid-sized companies out of the market, those regulations have tamed the remainder, making them far less contentious in defense of their rights. The ultimate beneficiary of FDA’s supplement crackdown has not been supplement industry leaders but the drug industry. For decades the drug industry has encouraged FDA to rid the market of any supplement products marketed for uses that could be viewed as competing with drugs either by supplement claims or supplement design. Therapeutic claims were to be the exclusive province of the drug companies, a speech monopoly. As science continues to support the notion that certain nutrients have therapeutic effects, the drug industry has come to revise its strategy. It no longer views the lucrative supplement market as in need of destruction but as a source for market diversification, worthy of purchase at bargain rates following market consolidation achieved through the hammering of FDA regulation.

As the drug industry keeps moving to take over segments of the supplement industry, we will likely witness the claims regime evolve yet again. I predict as this process of acquisition plays out there will arrive a tipping point where suddenly the drug industry leans on the agency to grant it favorable claims treatment for supplements it produces, enabling the drug players to use claims comparable to over-the-counter drugs with less restrictive agency review. Suddenly, the decades long prior restraint on the communication of nutrient-disease information that has kept from the market so much information of benefit to consumers will bit by bit give way: at first case by case and then ultimately through removal of the legal barriers. Favored by statute and by FDA regulation for decades, the drug industry is enjoying market expansion opportunities delivered courtesy of an FDA intent on consolidating the supplement marketplace. Once consolidated and humbled into FDA compliance, those supplement companies become ripe for the drug industry’s picking. As the drug industry acquires more and more supplement companies, FDA will be driven like the blind mahout to a place it has not been to before, where speech concerning supplements therapeutic effects is allowed to enter the market to a far greater extent than in years past.

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Jonathan W. Emord is an attorney who practices constitutional and administrative law before the federal courts and agencies. Congressman Ron Paul calls Jonathan “a hero of the health freedom revolution” and says “all freedom-loving Americans are in [his] debt . . . for his courtroom [victories] on behalf of health freedom.” He has defeated the FDA in federal court a remarkable eight times, six on First Amendment grounds, and is the author of the bestseller Global Censorship of Health Information.

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