Natural Products Insider

NOV-DEC 2018

INSIDER is the leading information source for marketers, manufacturers and formulators of dietary supplements, healthy foods and cosmeceuticals. Since 1997, INSIDER has been serving the needs of the global nutrition industry.

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144 INSIDER November/December 2018 SupplySide West Preview State attorneys general (AGs) have the power to enforce state consumer protection laws, often referred to as "little FTC acts." Patterned off Section 5 of the Federal Trade Commission (FTC) Act, these laws vary in some detail from state to state, but generally adhere to the same prohibitions against deceptive trade practices. Many state statutes mandate courts of that state to consider FTC's decisions and guidance in its application and analysis of Section 5. The phrase, "As goes the FTC, so go the states," is quite applicable in the world of state enforcement of consumer protection laws regarding dietary supplements. But, while any examination of state enforcement must reference FTC standards, state AGs necessarily have a larger footprint. Add to that the demands of elected AGs to be responsive to consumer complaints, and AGs are no less a focus of the dietary supplement industry than any federal agency. Generally speaking, FTC and FDA work together under a liaison agreement that governs their respective responsibilities, including dietary supplements. Under this arrangement, FTC has primary responsibility over advertising claims while FDA takes primary jurisdiction over the accuracy of product labeling. FTC pursues these matters under its authority to enforce Section 5 of the FTC Act, which prohibits "unfair or deceptive acts or practices." FTC defi nes a deceptive practice as one in which 1 a representation or omission is likely to mislead a consumer, 2 the representation or omission is viewed from the perspective of a consumer acting reasonably in the circumstances, and 3 the representation or omission is material. Sometimes, FTC pursues these matters on its own, and sometimes in conjunction with state AGs. And as referenced above, AGs can operate on their own, using their own versions of the FTC Act patterned off these same standards for deception. Perhaps the leading example of AG action in the dietary supplement industry is the efforts of former New York Attorney General Eric Schneiderman starting in 2015. In February of that year, Schneiderman sent cease-and-desist letters to four major retailers. According to the New York AG, these retailers sold store-brand herbal supplements that did not contain the ingredients listed on the labels or that contained ingredients not listed on the labels. The AG based its allegations on testing, which demonstrated that, overall, only 21 percent of the supplements tested contained items from the products' labels, and 35 percent contained items not even listed on the labels. A "large number" of these tests also did not reveal DNA from any botanical substance. Shortly thereafter, the New York AG issued subpoenas to these retailers, seeking evidence to support their labeling claims. By late February 2015, the New York AG expanded its investigation to include four major supplement manufacturers: Nature's Way, NBTY, Nutraceutical Corp. and Pharmavite. The following month, GNC and the AG announced an "agreement" that required GNC to implement new standards to authenticate herbal supplements. But the agreement also affi rmed GNC's products meet cGMPs (current good manufacturing practices) per FDA requirements and, thus, validate their quality. The New York AG's investigation into dietary supplement retailers and manufacturers also resulted in the formation of a bipartisan coalition of four AGs, thereby demonstrating another tool in the AG arsenal. And in April 2015, 14 AGs sent a letter to Congress, urging it "to launch a comprehensive congressional inquiry into the herbal supplements industry, and to weigh a more robust oversight role for the [FDA]." In another example of the bipartisan action that frequently appears in consumer protection matters, the New York and Indiana AGs sent a letter to FDA in June 2015, urging it to overhaul its regulation of the dietary supplement industry and the current cGMP regulations. In September 2015, the New York AG again issued cease-and-desist letters, this time to 13 makers of "devil's claw" supplements marketed to arthritis sufferers. According to the AG, the letters are based on a study by the New York Botanical Garden using DNA barcoding. This study concluded these supplements contained a cheaper, related species that is less desirable than devil's claw. The AG's letters requested the companies provide proposals for identifying and recalling "non-complying" supplements, identifying and compensating "defrauded or otherwise harmed" consumers, and reforming their approach to quality control (QC). Finally, in September 2016, the New York AG announced a settlement with NBTY Inc. The settlement required the manufacturer to implement new QC measures for all herbal supplements to confi rm their authenticity and purity, and to educate consumers about their chemical content. This settlement and its injunctive terms are worth noting. While the fi nancial aspects of settlement can often be large—comprising penalties due the government, restitution, disgorgement and the like—remedial efforts can, in the long term, prove far costlier. Not only does New York, Oregon Actions Highlight State AGs' Power to Police Dietary Supplements by Richard Lawson and Shoshana Speiser Attorneys General at SupplySide West Learn more about state attorneys general investigations, lawsuits and priorities from Richard Lawson during the "Responding to State Legislators & Attorneys General" Workshop on Friday, Nov. 9 at 9 a.m. at SupplySide West in Las Vegas. Scan Here

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