A couple of newsletters ago, I mentioned that a major topic of discussion among industry leaders at the Supplyside West show concerned the number of attacks that have been launched against the supplement industry over the last 24 months. I’d like to elaborate on that comment.
First, you need to understand that, unlike the Natural Product Expos that are open to the public, the Supplyside shows are designed for people involved in the industry. They provide an opportunity for ingredient and service providers to get together with manufacturers and retailers as well as industry experts to share business cards, cut deals, and—most importantly—share information. As you might guess, without the general public being present, that information sharing is more open than you will find at an Expo. With that in mind, let me note that saying that attacks against the industry were a “major topic of discussion” would be a bit of an understatement. In truth, there was a palpable fear running through the gathering—at least behind the scenes. The bottom line is that anyone who is paying attention is very nervous about the future of the industry.
Let’s now delve deeper and see why everyone is so concerned.
Eric Schneiderman, New York Attorney General, Strikes Again
Back in February, Eric Schneiderman, the Attorney General of New York, launched his first assault on the supplement industry by accusing GNC, Target, Walmart, and Walgreens of selling supplements that were both “contaminated” and did not contain key ingredients listed on the label. But as we explained back then, these conclusions were based on inaccurate and inappropriately implemented DNA Barcode testing. Quite simply, the charges were embarrassingly incorrect. Unfortunately, GNC handed Schneiderman the opportunity to turn a huge embarrassment into a PR victory by cutting a deal with him. Notably, as part of the agreement, GNC was immediately allowed to sell their “deficient and contaminated product” in their stores once again—obviously proving that nothing was ever wrong with them in the first place. Nevertheless, thanks to GNC’s acceptance of DNA barcoding in principle in exchange for getting their product released, the New York Times was able to ignore reality and tout the agreement as a great victory for consumers against the sleazy supplement industry.
In April, Schneiderman struck again, continuing his disingenuous assault on the supplement industry by recruiting 13 other Attorneys General to ghost sign a letter to congressional leaders that he had crafted asking for a “comprehensive inquiry” into the supplement industry. The letter also asked lawmakers to consider “a more robust oversight role” for the U.S. Food and Drug Administration. It’s worth pointing out that Schneiderman actually tried to recruit all 50 state Attorneys General to sign the letter but only got 14—and to get 14, he had to include American Samoa, Puerto Rico, and the District of Columbia. Nevertheless, it worked in the sense that he got the media to report the event as though it was a big deal.
On a roll, he struck for the third time in September, sending out letters to 13 dietary supplement makers and distributors (including Kroger, Vitacost, and Nutraceutical International Corp) demanding that they halt the sale of “adulterated” products that claim to be derived from the devil’s claw plant (Harpagophytum procumbens)—and recalling any product already on the shelves.1 “Misbranding/Adulteration of Devil’s Claw Dietary Supplements.” Attorney General Eric T. Schneiderman. Sep 9. 2015. http://www.ag.ny.gov/pdfs/enforcement_letters.pdf As the letter stated, a study conducted by the New York Botanical Garden determined that supplements made or distributed by the companies contained a cheaper related species, Harpagophytum zeyheri. Specifically, the letter said:
As a matter of commerce, science, and law, Devil’s Claw (Harpagophytum procumbens) and the Substitute Plant (Harpagophytum zeyheri) are distinct species:
- Commercially. Devil’s Claw is preferred in virtually all respects, is scarcer, and commands a higher market price. After contacting several suppliers, the Office of the New York Attorney General received price quotes for Devil’s Claw root that were two- to three-times higher than a similar quote for the Substitute Plant.
- Scientifically. The two plants are separate species that can be easily distinguished in the wild. Herbalists link the purported therapeutic properties of Devil’s Claw-which are not generally accepted in the medical community or approved by the FDA–to certain naturally-occurring chemical compounds, specifically iridoid glycosides. These chemicals tend to occur naturally in Devil’s Claw at much higher concentrations. They also appear in different ratios in the two plants, and at least one chemically potent phenol glycoside in Devil’s Claw (6-acetylacteoside) is missing from the Substitute Plant. Moreover, supplements derived from the Substitute Plant–even those “standardized” to deliver a promised percentage of certain iridoid glycosides–are also likely to expose users to other chemicals that are either absent from Devil’s Claw or present at lower concentrations.2
On the face of it, that certainly sounds bad. But once again, the New York AG has bent reality to suit his intent. Unlike his previous attacks which misused DNA barcoding to come up with erroneous data, this time the data is accurate. Unfortunately, the conclusions based on that data are totally misleading. The reality is that the two plant species have been recognized by European authorities as interchangeable and have been used as such for years.2 “Harpagophytum.” European Medicines Agency. http://www.ema.europa.eu/ema/index.jsp?curl=pages/medicines/herbal/medicines/herbal_med_000113.jsp&mid=WC0b01ac058001fa1d#summary , 3 “COMMUNITY HERBAL MONOGRAPH ON HARPAGOPHYTUM PROCUMBENS D.C. AND/OR HARPAGOPHYTUM ZEYHERI DECNE, RADIX.” European Medicines Agency. 10 Jan 2008. http://www.ema.europa.eu/docs/en_GB/document_library/Herbal_-_Community_herbal_monograph/2010/01/WC500059017.pdf In fact, it is the genus Harpagophytum that is identified as devil’s claw, and that genus contains two species: procumbens and zeyheri. The primary active ingredient is harpagoside, which is found in both species with values ranging from 1.0% to 3.3%.4 “Harpagoside.” NIH PubChem Open Chemistry Database. http://pubchem.ncbi.nlm.nih.gov/compound/5281542#section=Top Now, while it is true that procumbens “generally” contains higher levels of bio-actives than zeyheri, that fact actually undercuts the AG’s main point and reinforces the problem with his original attack on the supplement industry in February. DNA barcode testing can only tell you what DNA is present, not what bio-actives are present. On the other hand, as I pointed out in a previous newsletter, other forms of testing such as infrared spectroscopy, which is already in place, do in fact accurately assay the bio-actives in plants. And in the end, what you’re really looking for from supplements is the bio-actives, not the DNA. Quite literally, DNA has zero impact on herbal efficacy. An extract made from high quality zeyheri is going to be stronger than a powder made from low grade procumbens. And for that matter, a standardized extract of either species is going to be standardized to whatever it says on the label.
As Loren Israelsen, President of the United Natural Products Alliance,5 http://unpa.com/ said of the AG’s office, “I do disagree with their conclusion that one species is better than the other or the two cannot be sold interchangeably. That will become a central question that we are going to debate not just for devil’s claw, but a number of other plants will have that same question arise.”6 Josh Long. “Devil’s Claw Probe Raises Question for Supplement Industry: What Plant Species is Next on NYAG’s Radar?” Natural Products Insider. October 06, 2015. (Accessed 21 Nov 2015.) http://www.naturalproductsinsider.com/blogs/supplement-law/2015/10/devil-s-claw-probe-raises-question-for-supplement.aspx And as Mark Blumenthal, executive director of the American Botanical Council7 http://abc.herbalgram.org elaborated, Schneiderman is “splitting hairs” and should consider investing his resources in more problematic areas impacting the supplement industry.
The Problem with Settling
Unlike most major industries–such as the pharmaceutical industry, that even though it is highly competitive in the marketplace tends to lobby with one voice–the supplement industry does not. Although the supplement and natural food industry is very large, it simply does not speak with one voice. Yes, there are associations such as the Natural Products Association8 http://www.npainfo.org/ that claim to represent the industry as a whole, but they don’t really. They primarily represent the largest companies, and, even at that, most of their members march to their own drummers. In truth, the vast majority of companies involved in health and nutrition view themselves as mavericks, looking out for their own self-interest.
As I mentioned earlier, back in February when GNC, Target, Walmart, and Walgreens were accused of selling contaminated supplements, GNC decided to break ranks—to not speak with one voice. They determined that Ben Franklin was wrong when he said, “We must all hang together, or assuredly we shall all hang separately.” In an attempt to gain an edge over their fellow accused, they chose to cut a separate deal with Schneiderman—thereby granting legitimacy to his false claims. This is something no major player in a mature industry such as the pharmaceutical industry would ever do. They understand the long game. If only GNC had chosen to hang with their fellow martyrs, Schneiderman’s error would have been laid bare and the movement against supplements would have lost steam—at least for this year. Instead, GNC broke ranks, thereby granting the AG legitimacy, and unleashing the “annus horribilis” that is now the focus of industry panic. How poetic that Karma came back to bite GNC later in the year. (More on this later.)
In September’s Devil’s claw attack, unfortunately, as happened in February, Schneiderman got one manufacturer, Nature’s Way in this case, to quickly cave and provide cover for his bad science by agreeing to “improve its manufacturing practices and compensate New York consumers who purchased its misbranded devil’s claw supplements.” As an important side note, compensation is pretty meaningless in this case because very little devil’s claw is actually sold in the US–somewhere between $250-500 thousand a year in total. And that’s for every company that sells it, and those sales are spread across all 50 states. For Nature’s Way, then, their share as but one company in New York is literally next to nothing. So from Nature’s Way’s POV, it’s a no-brainer. Spend next to nothing and make the problem go away—at least for them…for the moment. However, it once again allows Schneiderman to claim victory in the press and continue his assault on the supplement industry, which brings us to what everyone was talking about at Supplyside West.
What Industry Leaders Are Saying about the Future of Supplements
Not surprisingly, the vast majority of discussion centered round DNA Barcoding–thank you very much GNC and Nature’s Way—and opinions are all over the map. In general, though, the feeling is that Schneiderman’s attack on the industry is just the beginning of a non-stop, Chinese water torture kind of credibility issue that will ultimately impact consumer confidence in the industry unless something is done quickly.
Those connected with the legal side of the industry—mainly the industry lawyers—are concerned about the potential for class-action lawsuits that may arise as a result of the AG’s actions. And in fact, three suits were filed within days of the AG’s first announcement.9 Josh Long. “Supplement Lawsuits Piling Up in Wake of NY AG Investigation.” Natural Products Insider. February 16, 2015. (Accessed 14 Nov 2015.) http://www.naturalproductsinsider.com/Blogs/Supplement-Law/2015/02/Supplement-Lawsuits-Piling-Up-in-Wake-of-NY-AG-In.aspx In fact, with each story that breaks, the number of class action suits will only increase. Make no mistake, it has nothing to do with protecting consumers. It’s all about the money. It truly is like sharks smelling blood in the water. Is it any wonder there are so many lawyer/shark jokes (Q. Why won’t sharks attack lawyers? A: Professional courtesy.) We’ll talk more about class action lawsuits in a bit.
As part of a panel discussion, Michael McGuffin, president of the American Herbal Products Association,10 http://ahpa.org/ cautioned that any industry response may lead to “self-inflicted” damage. He also quite rightly stated that small-time botanical operations would be killed by costs from any additional regulations, not to mention the fact that the new regulations in the Food Safety Modernization Act would likely shore up deficiencies in the supply pipeline over the next three years anyway.
Steve Mister, president and CEO of the Council for Responsible Nutrition,11 http://www.crnusa.org/ suggested responsible companies in the industry should take the lead in implementing voluntary measures “that says accountability to consumers,” and then take that test case and make it mandatory throughout the industry in a couple of years.
“This is just the beginning of what’s going to be a series of attacks,” Loren Israelsen told NewHope360.12 Todd Runestad. “DNA barcode testing will rock the supplements industry.” newhope360. Oct 14, 2015. (Accessed 22 Nov 2015.) http://newhope360.com/breaking-news/dna-barcode-testing-will-rock-supplements-industry “How much can we take as an industry? Is this our Volkswagen moment? This is a big mess, and it will go on for months and years. There will be big reverberations in the supply chain, because suppliers will bear the cost of testing.”
Then there are those such as Mark LeDoux, president of Natural Alternatives International, a contract manufacturer, who wants to go in the complete opposite direction. Forget DNA barcoding health claims. As far as LeDoux is concerned, they don’t go far enough. He wants to see all supplements registered as drugs so that he can make drug claims for supplements. Now what could possibly go wrong with that approach!!!? Not to mention the fact that the pharmaceutical industry would never allow that kind of competition to happen. Push too far in that direction, and you’re likely to end up with all the red tape and expense of having to register your products, but with still no ability to make any claims of any kind for them. But even more significantly, as I’ve explained in many previous articles, historically, we’ve been down this road before. The entire pharmaceutical/drug industry is an outgrowth of the herbal industry. Many, many prescription drugs are based on the active ingredients found in medicinal plants.13 Leslie Taylor. “Plant Based Drugs and Medicines.” Rain-tree. October 13, 2000. (Accessed 22 Nov 2015.) http://www.rain-tree.com/plantdrugs.htm Tamiflu is a plant extract from the Chinese star anise. Digitalis is derived from foxglove, aspirin from white willow bark, and Tamoxifen from the Pacific yew to name just a few. Do we really want to turn the natural supplement industry into the second coming of the pharmaceutical industry? Do we really want to do that?
Anyway, what this means is that although there is industry wide concern about the way things are going, there is no industry wide consensus about what it means or what should be done about it. In fact, there isn’t even agreement about whether or not the assault on supplements has damaged consumers’ confidence in the products they buy. Some, ostrich-like, have their heads buried in the sand and say there has been no impact. Others cite polls that show there has indeed been significant erosion in consumer confidence in supplements since last February.14 James Johnson. “NBJ Data Corner: The supplement industry’s problem with trust.” Nutrition Business Journal. Jul 31, 2015. (Accessed 14 Nov 2015.) http://newhope360.com/supplements/nbj-data-corner-industry-s-problem-trust The truth probably lies somewhere in between. Yes, there has been erosion of confidence, but the public tends to be forgiving. If the industry can get its act together, it can easily repair the damage and move on. If not, if the assault continues unabated, at some point, the damage will be permanent and people will look elsewhere for alternatives.
The FDA Gets Reinforcements
As we’ve discussed in other newsletters, the FDA is significantly undermanned. Yes, they have 10,000 agents; but those agents have far more on their plate than a mere 10,000 agents can handle. The FDA’s own website states that the FDA is “responsible for protecting the public health by assuring the safety, efficacy, and security of human and veterinary drugs, biological products, medical devices, our nation’s food supply, cosmetics, and products that emit radiation. The FDA is also responsible for advancing the public health by helping to speed innovations that make medicines and foods more effective, safer, and more affordable; and helping the public get the accurate, science-based information they need to use medicines and foods to improve their health.”15 “What We Do.” FDA. (Accessed 25 Nov 2015.) http://www.fda.gov/AboutFDA/WhatWeDo/default.htm That’s a massive purview.
One of the first things you might notice about the FDA’s responsibilities is that nutraceuticals and herbal supplements do not even rate a mention. Why? Quite simply, total sales for all herbal supplements in the US are just a little over $6 billion a year.16 “Herbal Dietary Supplement Sales in U.S. Rise 6.8% in 2014” NSF. September 10, 2015. (Accessed 24 Nov 2015.) http://www.nutraceuticalsworld.com/contents/view_breaking-news/2015-09-10/herbal-dietary-supplement-sales-in-us-rise-68-in-2014 That may sound like a lot until you realize that sales for statin drugs alone are estimated to reach $1 trillion dollars worldwide by 2020!17 Gordon Sun. “Statins: The Good, the Bad, and the Unknown.” Medscape. October 10, 2014. (Accessed 24 Nov 2015.) http://www.medscape.com/viewarticle/832841 And that number is dwarfed by what we spend on food. Supplement sales/companies are like an annoying gnat to the FDA. And remember, the FDA’s kingdom includes not just drugs and our food supply, but also cosmetics, and veterinary/pet products. Again, although important to us, alternative health is a low priority to the FDA, one they are loathe to expend resources on. The bottom line is that it’s easy to see that 10,000 agents aren’t close to enough to truly monitor even one aspect of their primary responsibilities–let alone waste them on watching over supplement companies. This creates a vacuum in both oversight and enforcement in the supplement industry and explains why so many companies get by with such bad behavior for so long.
The bottom line is that nature abhors a vacuum, and many Attorneys General now seem willing to fill that oversight and enforcement vacuum.
On November 2nd of this year in St Louis, there was a meeting of the National Association of Attorneys General. Its focus was dietary supplement adulteration and spiking. In attendance were not only Attorneys General but officials from the Federal Trade Commission as well as medical critics of the supplement industry such as Pieter Cohen, MD. To be fair, they also invited representatives from the supplement industry such as Rend Al-Mondhiry, regulatory counsel at the Council for Responsible Nutrition. She tried to point out that the problem doesn’t center round DNA barcoding, but comes from criminals who flout the laws and regulations governing dietary supplements and their ingredients by illegally spiking their formulas with illegal, often pharmaceutical, ingredients.
Oregon and GNC
And speaking of illegal adulterants in supplement formulas, remember when I mentioned GNC and karma at the top of the newsletter? On October 22nd, Oregon Attorney General Ellen Rosenblum filed a lawsuit against GNC, accusing them of selling dietary and nutritional supplements that contain ingredients not approved for sale in the U.S. The lawsuit zeroed in on two ingredients: picamilon and BMPEA. Picamilon is a synthetic chemical used as a prescription drug in some countries to treat neurological conditions. BMPEA is a chemical similar to amphetamines, and the World Anti-Doping Agency has banned its use by athletes.
Yes, GNC deserved to be called out for potentially dangerous adulteration, but what makes this suit particularly disturbing is that the affidavit for the suit was written by Cara Welch, acting deputy director of the FDA’s Division of Dietary Supplements Program (DDSP). As Daniel Fabricant, the Natural Products Association Executive Director, warned: the use of the affidavit by state prosecutors is improper under federal regulations.18 Rick Polito. “Oregon sues GNC over ‘spiked’ products, but is the more troubling headline the FDA’s role?” Nutrition Business Journal. Oct 22, 2015. (Accessed 24 Nov 2015.) http://newhope360.com/news/oregon-sues-gnc-over-spiked-products-more-troubling-headline-fda-s-role (And as a former head of the DDSP himself, he should know.) Continuing on, he said that allowing authorities outside the agency to use opinions like the affidavit without the agency taking action of its own is not allowed. “If the FDA had sent a warning letter first, then no problem.”
Class Action Lawsuits
As I said at the top of the newsletter, the “conspiracy” we’re looking at is not really an actual conspiracy, but more of a de facto one. It’s also a matter of sharks smelling money in the water and moving in for the kill. Some law firms have set up websites soliciting people to participate in class action suits against supplement manufacturers. For example, the firm of Morgan and Morgan proclaims on their site:
“The attorneys at Morgan & Morgan are investigating potential lawsuits on behalf of consumers who purchased certain store-brand herbal dietary supplements from Walmart, Target, GNC and Walgreens. A recent investigation found that many of these products are a scam because they do not contain the herbs advertised on the bottles’ labels. In some cases, the supplements even contain undisclosed, potentially dangerous allergens such as soy and wheat…If you or someone you know purchased one of these products, you may be able to participate in a class action lawsuit and get your money back for the supplements.”19 http://www.forthepeople.com/class-action-lawyers/herbal-supplement-lawsuit/
It should be noted that despite their claim to be “for the people,” this suit has nothing to do with the people. The “people” who participate in the suit might each get back $10 in coupons if they win the suit, but Morgan and Morgan will likely make several millions of dollars. And let’s keep in mind as I pointed out several times already, that not one person died in the US from using supplements in 2014. Not one.
And keep in mind, that this is not the first time attorneys have used class action law suits to rape the alternative health industry. In fact, it’s a constant occurrence. And homeopathic formulas have been at the top of the list for a number of years now. Companies/products that have already lost or are currently being sued include: Whole Foods, Walgreen’s, Nature’s Way, and Oscillococcinum (AKA Oscillo), to name just a few. The argument that attorneys have been using and winning with is that homeopathic formulas are, at worst, toxic, and, at best, include active ingredients in such watered-down concentrations so as to be depleted of any biological effect on the human body. Ipso facto, “homeopathic products” are worthless, and consumers should be entitled to compensation based on the companies’ false advertising and other theories.
As I have discussed in other newsletters, it’s not that there aren’t a lot of studies that support the efficacy of homeopathy. There are, and many of them are rigorous, and in a number of those studies homeopathy outperformed medical treatments.20 MIchael Castleman. “The Strange Case of Homeopathy.” Psychology Today. March 1, 2004. (Accessed 28 Nov 2015.) http://www.psychologytoday.com/articles/200403/the-strange-case-homeopathy The problem is that all of these studies are automatically dismissed by the medical mainstream because a number of homeopathy’s key concepts are not “consistent with the established laws of science (particularly chemistry and physics).” The problem is that homeopathy doesn’t require any of the original substance to be present. Its efficacy is based on the transferring of various substances’ frequencies into water — and then using that “altered” water to treat the condition. You cannot dismiss homeopathy out of hand just because it doesn’t fit into your preconception of what should be. You can’t impose your own explanation for how something works and then dismiss it because of the holes found in your explanation. That’s sophistry, and using that technique, you can make light of anything.
I’m not necessarily saying that homeopathy works. In my personal experience, I have seen some homeopathic treatments that are literally stunning in their efficacy; but I have seen many more that have no discernible effect at all. But that’s just one person’s observation over time, not a formal study. The key point in my observation, however, is that if even one homeopathic treatment truly works, then it means that there is gap somewhere in mainstream science’s understanding of the world since it is unable to allow for that efficacy…if even in just one formula. Lawsuits based on that lack of understanding, then, are therefore morally and ethically unjustified.
Carpetbaggers and Bounty Hunters
In United States history, a carpetbagger was a Northerner who moved to the South after the Civil War, to exploit political and legal opportunities out of a desire for personal gain. They were much despised. A bounty hunter, on the other hand, is a person who hunts outlaws for the bounty offered for capturing or killing them. So how do these colorful characters relate to supplements?
In 1986, California approved Prop. 65, which states that persons doing business in California may not expose individuals to chemicals known to cause cancer and/or reproductive toxicity without first giving clear and reasonable warning. There is a major exemption in the law. The legislation says naturally occurring chemicals in foods do not count as chemical exposure to consumers. And in 2013, the California Superior Court ruled that dietary supplements should be classified as foods. (Remember this as we continue.)
Prop 65 standards are among the most stringent standards in place anywhere and are often far more stringent than federal standards. In principle, this sounds like a good thing, but there are several major deficiencies in the law.
- The law requires meaningless warnings of chemical exposures which often pose no real risk.
- No money is allocated for enforcement. Instead, the law authorizes citizens and lawyers to police the law themselves. It contains a unique private party enforcement (aka “bounty hunter”) provision that allows trial lawyers to rake in millions of dollars from businesses who knowingly or unknowingly fail to meet all of Prop 65’s requirements. This leads to two problems.
- Enforcement is inconsistent. You will often see certain products in the market with warnings–and virtually identical products without warnings.
- Prop 65 has become an enormous money machine for the attorneys representing both sides. Cases almost never make it to court as lawyers routinely settle for tens or even hundreds of thousands of dollars at the expense of businesses all over the country. Bounty hunters who turn them in collect 25% of that as their reward. Lawyers, on the other hand collect their fees, which can amount to several times the bounty itself. Once issued with a notice that one of the 800+ substances has been detected in their products, the burden of proof is then on manufacturers to prove that their products do not threaten consumers, prompting many to argue that Prop 65 has turned into a form of legalized blackmail.
So this explains the bounty hunter comparison, but what about the carpetbaggers?
Quite simply, the money being paid out is just too much to ignore for opportunists from outside the state of California. And like the Reconstruction after the Civil War, carpetbaggers who have nothing to do with health or nutrition, or the state of California for that matter, set up shop in the state to drink from the ever-flowing fountain of money that is Prop 65. I’ll give you just one example.
In 2009, Chris Heptinstall, the president of a Georgia-based company that installs backyard putting greens,21 http://allprogreens.com/pressroom-fastfacts.htm set up shop as the Environmental Research Center (ERC) in San Diego, CA. The center’s mission statement says that ERC is a non-profit, California Public Benefit Corporation whose purpose is to safeguard the public from health hazards that impact families, workers, and the environment.22 http://erc501c3.org/about/ Incidentally, when I say set up shop, I don’t mean he actually moved to CA, despite pictures of him playing with dolphins in their annual reports, merely that he established the corporation in CA so that he could gorge from the Prop 65 money trough. In fact, ERC maintains a second address in Georgia at the All Pro Golfscapes offices.23 http://www.indeed.com/cmp/Environmental-Research-Center-Inc. No joke! Meanwhile, ERC’s board and officers are staffed with family and friends from Georgia—including his sister-in-law Phyllis Dunwoody,24 http://990s.foundationcenter.org/990_pdf_archive/300/300584471/300584471_201112_990.pdf?_ga=1.180732143.952733982.1448479004 Delbert Ray Musall,25 http://www.corporationwiki.com/California/San-Diego/delbert-ray-musall/45352043.aspx and Rebecca Turner-Smith who signs all of ERC’s Prop 65 filings, while continuing to live in Georgia.26 http://oag.ca.gov/system/files/prop65/settlements/2013-00521S3917.pdf
In 2011, ERC received certification as a non-profit corporation and immediately began going after supplement companies. To date, ERC has filed hundreds of notices against supplement firms alleging that their products contain, lead, arsenic, and other products listed under Prop 65—with the following financial return. Remembering that in 2013, the California Superior Court ruled that dietary supplements should be classified as foods, ERC has nevertheless still managed to extract Prop 65 settlements from a number of companies totaling:
2011 $ 660,00027 http://oag.ca.gov/sites/all/files/agweb/pdfs/prop65/Alpert_Report2011.pdf
2012 $2,110,49528 http://oag.ca.gov/sites/all/files/agweb/pdfs/prop65/Alpert_Report2012.pdf
2013 $2,817,09529 http://oag.ca.gov/sites/all/files/agweb/pdfs/prop65/Alpert_Report2013_summ.pdf
2014 $4,905,57730 http://oag.ca.gov/sites/all/files/agweb/pdfs/prop65/2014-summary-report.pdf
In return for all this money, to fulfill their non-profit role, they offer 2 scholarships a year of $500-$100031 http://www.collegexpress.com/scholarships/erc-eco-scholarship-fund/2018661/ and educational grants to teachers for a whopping $250 each.32 http://erc501c3.org/
Look, there’s nothing legally wrong with what ERC has done. They’re simply taking advantage of the law to make money. And they are not alone. In fact, they barely squeak into the top 10 out of about 20 groups doing the same thing.33 http://iea-sd.com/wp-content/uploads/2014/11/Steve-Marsh-McKenna-Long-Aldrige-LLP.pdf In fact, since 2000, lawyers have earned over $150 million and counting cashing in on Prop 65 “citizen-suits.”34 http://prop65scam.com/ And it’s not like anyone’s any safer. After paying their extortion fees, companies merely add a Prop 65 sticker to their products, which 99% of people are so used to seeing that they simply ignore them. In effect, the warnings are so omnipresent, they have become white noise.35 Tim Cushing. “If Everything Is A Threat, Then Nothing Is.” techdirt. 16 April 2013. (Accessed 25 Nov 2015.) http://www.techdirt.com/articles/20130416/16513122731/if-everything-is-threat-then-nothing-is.shtml Heck! Even the coffee you buy at Starbuck’s carries them.
Prop 65 has simply become a way for carpetbaggers, bounty hunters, and lawyers to extort money from businesses, who then pass those costs along to you. This has nothing to do with protecting the environment or consumers. It’s all about sucking money from the system. And make no mistake. In the end, you’re the one who pays that money. Companies simply pass the costs along to you.
Let me be clear. I don’t think anyone believes that supplements are about to be banned or pulled from the market. However, there is genuine concern that:
- Costs could go up significantly—cost that will ultimately be passed on to you.
- There will be a major shakeout in the number of companies allowed to play in the game. As regulations and costs go up, smaller companies will no longer be able to compete. They will either fold or be absorbed by larger companies. As for small start-up supplement companies going forward, you can forget it. Unless they choose to exist beneath the law, the cost of opening their doors will simply be too high. Ultimately, this will mean fewer choices for you the consumer–as well as some of your favorite companies and products disappearing.
- Eventually, we will see fewer raw material vendors and simpler formulas from manufacturers because the cost of testing so many ingredients in short run formulas will just not be worth the expense.
- There will be far less innovation in the industry because the costs of bringing new ingredients to market will be prohibitive except for the largest companies—the companies least inclined to innovate.
- There will be an ever increasing number of actions by Attorneys General looking to get some cheap, no-risk publicity as well as class action lawsuits by lawyers looking to cash in where the law allows. Again, these costs will ultimately be passed on to you.
- We are also likely to see a metaphorical return to the Old West in terms of regulation enforcement, with increasing numbers of bounty hunters and carpetbaggers looking to cash in on a bleeding industry…not to mention ever increasing numbers of Attorneys General looking to grab some low-risk headlines to bolster their next career moves.
Look, do I believe there is a grand conspiracy among the FDA, the pharmaceutical companies, and politicians actively looking to bring down the supplement industry? No, not at all. In fact, as longtime readers know, I’m not very big on conspiracies. The vast majority of so-called conspiracies simply don’t hold up under scrutiny. But just because there is no coordinated, calculated conspiracy doesn’t mean there isn’t a de facto conspiracy—a coincidental, opportunistic lining up of forces and events that have all the appearance of an actual conspiracy—including all its detrimental effects. And because it’s not an actual conspiracy, it’s that much harder to deal with because there’s nothing to expose, no one thread to pull to unravel its fabric. It’s more like the mythical hydra. Every time you cut one of its heads off, two grow in its place.
And as for NYAG, Eric Schneiderman–the focus of most of the attention at Supplyside West–there is little doubt that his actions against supplement companies has little to do with protecting consumers. Looking objectively at what he’s done, you have to believe his actions are merely an attempt to grab self-promoting headlines with virtually no chance of blowback. You doubt that? Just consider that as I mentioned earlier, zero people died in 2014 as a result of using supplements. That’s zero, nada, zilch! And no one has been bankrupted by the industry. At worst, a handful of people paid anywhere from $10-100 dollars over the course of a decade for products that delivered less than promised. And yet Schneiderman has attacked the supplement industry, not just once, but three times this year as though it were the second coming of ISIS, Wall Street, or the American healthcare system. What else need be said?
|↑1||“Misbranding/Adulteration of Devil’s Claw Dietary Supplements.” Attorney General Eric T. Schneiderman. Sep 9. 2015. http://www.ag.ny.gov/pdfs/enforcement_letters.pdf|
|↑2||“Harpagophytum.” European Medicines Agency. http://www.ema.europa.eu/ema/index.jsp?curl=pages/medicines/herbal/medicines/herbal_med_000113.jsp&mid=WC0b01ac058001fa1d#summary|
|↑3||“COMMUNITY HERBAL MONOGRAPH ON HARPAGOPHYTUM PROCUMBENS D.C. AND/OR HARPAGOPHYTUM ZEYHERI DECNE, RADIX.” European Medicines Agency. 10 Jan 2008. http://www.ema.europa.eu/docs/en_GB/document_library/Herbal_-_Community_herbal_monograph/2010/01/WC500059017.pdf|
|↑4||“Harpagoside.” NIH PubChem Open Chemistry Database. http://pubchem.ncbi.nlm.nih.gov/compound/5281542#section=Top|
|↑6||Josh Long. “Devil’s Claw Probe Raises Question for Supplement Industry: What Plant Species is Next on NYAG’s Radar?” Natural Products Insider. October 06, 2015. (Accessed 21 Nov 2015.) http://www.naturalproductsinsider.com/blogs/supplement-law/2015/10/devil-s-claw-probe-raises-question-for-supplement.aspx|
|↑9||Josh Long. “Supplement Lawsuits Piling Up in Wake of NY AG Investigation.” Natural Products Insider. February 16, 2015. (Accessed 14 Nov 2015.) http://www.naturalproductsinsider.com/Blogs/Supplement-Law/2015/02/Supplement-Lawsuits-Piling-Up-in-Wake-of-NY-AG-In.aspx|
|↑12||Todd Runestad. “DNA barcode testing will rock the supplements industry.” newhope360. Oct 14, 2015. (Accessed 22 Nov 2015.) http://newhope360.com/breaking-news/dna-barcode-testing-will-rock-supplements-industry|
|↑13||Leslie Taylor. “Plant Based Drugs and Medicines.” Rain-tree. October 13, 2000. (Accessed 22 Nov 2015.) http://www.rain-tree.com/plantdrugs.htm|
|↑14||James Johnson. “NBJ Data Corner: The supplement industry’s problem with trust.” Nutrition Business Journal. Jul 31, 2015. (Accessed 14 Nov 2015.) http://newhope360.com/supplements/nbj-data-corner-industry-s-problem-trust|
|↑15||“What We Do.” FDA. (Accessed 25 Nov 2015.) http://www.fda.gov/AboutFDA/WhatWeDo/default.htm|
|↑16||“Herbal Dietary Supplement Sales in U.S. Rise 6.8% in 2014” NSF. September 10, 2015. (Accessed 24 Nov 2015.) http://www.nutraceuticalsworld.com/contents/view_breaking-news/2015-09-10/herbal-dietary-supplement-sales-in-us-rise-68-in-2014|
|↑17||Gordon Sun. “Statins: The Good, the Bad, and the Unknown.” Medscape. October 10, 2014. (Accessed 24 Nov 2015.) http://www.medscape.com/viewarticle/832841|
|↑18||Rick Polito. “Oregon sues GNC over ‘spiked’ products, but is the more troubling headline the FDA’s role?” Nutrition Business Journal. Oct 22, 2015. (Accessed 24 Nov 2015.) http://newhope360.com/news/oregon-sues-gnc-over-spiked-products-more-troubling-headline-fda-s-role|
|↑20||MIchael Castleman. “The Strange Case of Homeopathy.” Psychology Today. March 1, 2004. (Accessed 28 Nov 2015.) http://www.psychologytoday.com/articles/200403/the-strange-case-homeopathy|
|↑35||Tim Cushing. “If Everything Is A Threat, Then Nothing Is.” techdirt. 16 April 2013. (Accessed 25 Nov 2015.) http://www.techdirt.com/articles/20130416/16513122731/if-everything-is-threat-then-nothing-is.shtml|