Lawyers talk evolving risk in modern supplement industry

Operating in an environment where so many triggers lie beyond business-as-usual and immediate grasp, industry lawyers at last week’s ACI-CRN Legal, Regulatory & Compliance Forum on Dietary Supplements addressed some of the myriad issues now front of mind.

If last year’s forum featured a whiplashed industry​ impacted by unprecedented regulatory activity and open-ended questions, this year there was a sense that stakeholders need clarity, process and enforcement to avoid any further disorientation, particularly in the face of increasing existential threats.

Considering legislative updates and the tools in the toolbox​

On the eve of the 30th anniversary of the passing of the Dietary Supplement Health and Education Act (DSHEA), the statute that created the modern dietary supplement industry, speakers at the forum echoed discussions taking place across other industry events. 

The general premise is that while DSHEA has protected the industry and allowed it to thrive, there are also elements of the law that may be stifling, unenforced and/or misconstrued. 

“The pivotal piece of legislation enacted in 1994 has been the cornerstone of our regulatory framework for dietary supplements for nearly three decades,” said Megan Olson, forum co-chair and senior vice president and general counsel at the Council for Responsible Nutrition (CRN). “However, as our industry grows and evolves, so too should the regulations that govern it.”

One hot topic that arose was FDA’s current interpretation of the drug preclusion provision, which was added to DSHEA last minute but intended to balance and protect the interests of the drug industry by ensuring that articles first approved as drugs could not be marketed as dietary supplements. What has evolved, however, is a bit less clear cut, with the dietary supplement side arguing disadvantage due to surprise and/or questionable preclusion. 

“As we think about this, part of it is considering whether it’s a problem with the statutory provision or if it’s a problem with the way FDA is currently interpreting it, because we all know that legislative overhaul is a really huge effort and issue,” said Miriam Guggenheim, partner at Covington & Burling LLP.  “So, if we [approach] the many things that don't seem to be working by trying to work with FDA to interpret the provisions differently, that's often the easiest way to move forward. 

Just days after the conference wrapped, the Supreme Court decided to overturn the Chevron standard—a decision that weakens government agency interpretation of complex statutes and may introduce yet another layer of uncertainty in the coming years.

Discussing DSHEA modernization, Chris Reid, ​chief legal officer at Plexus Worldwide, cautioned that while some changes are needed, particularly with regards to what industry can do to support FDA enforcement, there are risks of opening it up too much.

“I’m concerned about some critics wanting to revamp the whole thing and calling for a pre-approval process,” he said. “I hope we don’t consider going down that route.”

In this context, several sessions explored the tools currently or potentially available to regulatory agencies to answer repeated industry calls for improved enforcement of the enforceable provisions of DSHEA. This covered action on warning letters, new dietary ingredient notifications, facility registration, and expanding inspection capacity and good manufacturing practice compliance with third party audits and more well-trained inspectors.

And, naturally there was discussion of the value of the proposed Mandatory Product Listing (MPL) as new tool in the toolbox to provide FDA with an accurate read of the marketplace. Opponents continued to question the purpose beyond creating more work and cost for industry when the Agency is currently not enforcing against the known bad actors. Others wholeheartedly supported its merit as transparency tool and opportunity to differentiate good business practices but also acknowledged that utility lies in the details.

Addressing the unknown risk and the probability of class action​

Beyond the knowns and the more identifiable, sessions covered concerns about how to handle the increased risks—real or perceived—born from the practical problems generated by restrictive state laws, claims substantiation guidance, the increasing role of AI, and complexities across both supply chain and selling channels, to name a few.

As industry and internet continue to expand, regulatory professionals in the room acknowledged the challenges of remaining in control of the claims across all selling channels—particularly when influencers and marketing teams might not be so well versed in the subsections of the Code of Federal Regulation.

“It’s really challenging to keep influencers on TikTok from going rogue,” said Anastasia Jones, ​regulatory affairs director at Olly. “Influencers need to be given scripts and refreshed and educated on the regulations of the industry.”

Barbara Sanchez, ​general counsel at Nestle Health Science U.S, highlighted concerns about perceived risk around online product ratings and reviews, noting that variation “was definitely a twist”. 

“I think about the unknown risk, particularly with regard to the FTC, that can come out of an unexpected place,” she said. “Things out of direct control cause risk for us.”

Others pondered how the industry will navigate AI-generated reviews on Amazon and the impact of its algorithms more broadly. While some panelists touted its potential as a tool that minimizes workload, provides real-time insights and increases profit, some warned that AI can also make things up as it is only as good as the data it consumes. Then, there are the questions about who owns the output (spoiler: it is not the human prompter), the risks of AI marketing gone wild and how to manage data privacy.

Beyond deciphering guidance and interpretation, industry attorneys noted the very real and ongoing threat of class action that requires thorough internal prevention and preparedness protocols to face a plaintiff’s bar looking to harvest the low-lying fruit growing across social media, online reviews and adverse event reports.

“I don’t think it will surprise anyone in here that class action is really the primary driver of risk for a company in the supplement space,” said Veronica Colas, partner at Hogan Lovells LLP. “In some ways it’s much more exciting now because there’s so much more action, but in other ways it’s exhausting because the possibilities of some crazy argument that someone is going to come up with is never ending. You start now with regulatory compliance, and that’s just the start, that’s not the end. It informs things but doesn’t really get you to where you need to be.”

Sessions on this year’s agenda also covered: assessing the impact of the FDA reorganization, analyzing new state laws, how best to approach overages, the validity of post-hoc clinical trial outcomes, considering the source of raw materials and ingredient interactions, managing the latest threats from emerging contaminants, substantiating health claims and complying with new retailer requirements.