Three companies chargedThe hearing was titled "Parents be aware: health concerns about dietary supplements for overweight children", but it turned into a more general attack on the credibility of the entire dietary supplement sector with chairman James Greenwood describing it as an industry in which "scam artists can make a lot of money".
The FTC charged three Florida-based companies at the hearing - namely Dynamic Health of Florida, Chhabra Group and DBS Laboratories - and their principals with making false and unsubstantiated claims in connection with the advertising for "Pedia Loss," a purported children's weight loss product.
According to the FTC, the accused advertised Pedia Loss through their company websites and in Cosmopolitan magazine, claiming that it encourged weight loss in overweight or obese children aged six and over by suppressing appetite, increasing fat burning, and slowing carbohydrate absorption. The FTC stated that there is no competent and reliable evidence to support these claims.
Self-policing by industry
Marc Ullman, partner at Ullman, Shapiro and Ullman, stressed the immediate need for the industry to start showing that it is capable of policing itself.
"We have to show we can take responsibility for our actions and act with restraint if we are going to avoid disaster," he said.
Both he and Judy Blatman, the vice president of communications at the Council for Responsible Nutrition, agreed with the FTC's defence that it has been working more and more to stop fraudulent producers and distributors getting their products on the market. But, as Ullman pointed out, the companies under the spotlight yesterday were not small, unknown firms.
"The organizations we saw being grilled were not some fly-by-night operation working out of a garage," he said. "Perhaps this is the time to set up an independent board, like the Better Business Bureau, to regulate what is happening in the supplements industry."
Children and supplements
Blatman believed that there is already enough regulation and checks in place and took the more resigned view that there will always be "an unfortunate few" who will try to break the law. She was most concerned by the paucity of information concerning how supplements work in children and what supplements are suitable for them.
Blatman even questioned whether children, especially those who are obese, should be given supplements over and beyond multi-vitamins.
"We always remind people that supplements are supplements not substitutes," she said. "People cannot sit on the couch all day and lose weight and for children the most important way of staying healthy is always to do exercise and to eat a balanced diet. A doctor should always be consulted before giving a child weight-loss supplements."
Howard Beales, director of the FTC's bureau of consumer protection, stressed that the FTC was aware of this and will continue to be extrememly strict with suppliers in this market."Obesity among children is a serious and growing concern," said Beales. "Marketers who exploit parents' concerns should expect close scrutiny from the FTC."
The NNFA downplayed the significance of the hearing, asking for the issue to be "put into perspective".
"We support the committee's intent to protect children from products that might cause them harm and share the concern over the growing number of children and adults whose weight endangers their health," said David Seckman, director and CEO of the NNFA.
But he wanted to focus attention on the fact that the committee had only identified three products as fraudulent. "0ne of which was prevented from ever reaching the market place and the other two were under regulatory scrutiny, indicating the current regulatory system is working."
The hearing refused to stick to children's dietary supplements. When its remit was questioned, Greenwood announced: "We are here to talk about the entire industry."
In particular, the subcommittee questioned the research supporting PediaLean, a product developed by Basic Research and marketed by Klein Becker USA, at one point describing the research as "laughable."
Basic Research's response
The complaint also challenged advertising disseminated by the accused for "Fabulously Feminine", a supplement purportedly designed to enhance female sexuality. The complaint alleged that the claim that Fabulously Feminine will increase a woman's libido, sexual desire, and sexual satisfaction by stimulating blood flow and increasing sensitivity is unsubstantiated.
One of the companies in the witness box, Basic Research, hit back straightaway with a defensive statement from Dennis Gay, the company's president and CEO.
"After three years of cooperation by Basic Research, and providing over 55,000 pages of documents including reams of substantiation for some of our weight-related products, the FTC abruptly terminated negotiations and filed an administrative complaint against our company."
Gay denied that the company had seen the complaint and accused the FTC of releasing it "along with three inflammatory press releases before presenting it to our attorneys. Since the FTC has not seen fit to share it with us, we cannot comment on specifics. But from what we do know, we disagree in the strongest terms possible with the FTC's allegations."
He concluded by affirming the safety and efficacity of his companies' products and suggesting that the FTC should have more confidence in the American public.
"It is sad that the FTC and certain members of Congress think so little of the over 40 million Americans who take supplements each day," said Gay. "It is sad they do not believe that American consumers are capable of informing themselves and making their own purchasing decisions."
A growing industry
The dietary supplement industry represents a substantial and growing segment of the consumer healthcare market with industry sales for 2002 estimated to be $18.8 billion. A recent survey of complementary and alternative medicine use in the US shows that one-third of adults over the age of 18 are turning to alternative medicine, including herbal products, enzymes and other dietary supplements.
The market for children's supplements has also been growing and industry analysts estimate annual sales of children's supplements reached $510 million as of July 2002, representing one of the top niche markets in the supplement industry.
Products promoted specifically to children extend beyond traditional multivitamins to include preventives and cures for a variety of childhood ailments ranging from colds to more serious conditions like attention deficit/hyperactivity disorder (AD/HD).