Just the facts: the FDA doesn't want any more lies on dietary supplement labels

Entrepreneur, March, 2005 by Stephen Barlas

BECAUSE home run hitters Barry Bonds and Mark McGwire knocked dietary supplements (and steroids)into the headlines over the past year, the FDA has taken a swing at the product category.

In November 2004, the agency published a draft guidance document, which, for the first time, defined a standard--"competent and reliable scientific evidence"--that a company would have to meet before putting a "structure/function" claim on a dietary supplement. Structure/function claims state relationships such as "calcium builds strong bones." The FDA has said that about 70 percent of the nearly 30,000 supplement products sold in the United States make claims on their labels, the majority of them structure/function claims. Ninety-five percent of the 1,050 companies in the industry are small, with annual revenues below $20 million, according to the FDA

Companies do not need prior FDA approval to make these claims on product labels, nor will they need it if and when the FDA makes the guidance final. But the new language, which FDA Acting Commissioner Lester Crawford equated with "high-quality evidence/would give the FDA additional leverage when it sends warning letters to offending companies, which generally change the labels or pull the products as a result.

The FDA also highlighted the existing requirement that supplement distributors disclose all "material facts" on their labels, according to Susan Walker, director of the Division of Dietary Supplement Programs. "We want to see accurate labels on products," says Walker.

IS SARBANES-OXLEY A CLASS ACT?

The SEC set up a n advisory committee to examine the impact of the Sarbanes-Oxley Act and other aspects of the federal securities laws on smaller public companies. SEC Chairman William Donaldson states, "The time is ripe to review how the act, including internal control reporting, affects smaller companies."

STEPHEN BARLAS is a freelance business reporter who covers the Washington beat for 75 magazines.