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Risk Management: Thoughts on the NY AG’s Investigation of Herbal Supplements

April 2015

Recent enforcement and policy activities by the New York State Office of the Attorney General (NY AG) directed at herbal supplements—as well as the related industry response and follow-on private class action cases—serve as a timely reminder to manufacturers and retailers of the importance of implementing an active risk management program that incorporates not only compliance with current legal standards but also familiarity with the production process and appropriate controls and accountability from acquisition of raw materials to sale of the finished product.

In accordance with the Dietary Supplement Health and Education Act of 1994 (DSHEA), the U.S. Food and Drug Administration (FDA) regulates dietary supplements, including herbal supplements, as foods rather than drugs. Under DSHEA, manufacturers and retailers market dietary supplements without prior FDA approval, but they are responsible for notifying the FDA of any new dietary ingredients, making sure that the supplements are safe, complying with FDA labeling and current Good Manufacturing Practices requirements, and reporting adverse incidents. The FDA can intervene to prevent further marketing of dietary supplements that don't comply with labeling requirements or that are unsafe, such as dietary supplements that are "adulterated" with drugs or other unlisted active ingredients or contaminants.   

As has been widely reported in the media, the NY AG has acted on multiple fronts to question the effectiveness of the FDA's regulation of herbal supplements, particularly with regard to the authenticity and purity of ingredients. In the past three months, the NY AG has:

  • Sent cease-and-desist letters and requested "detailed information" from four national retailers after its "ongoing investigation" of herbal supplements (including ginkgo biloba, St. John's wort, garlic, echinacea, and saw palmetto) raised concerns that some of the retailers' private label products allegedly did not contain the active ingredients listed on the label and did contain additional unidentified ingredients, including contaminants and potential allergens.
  • Formed a coalition with Attorneys General from Connecticut, Indiana, and Puerto Rico to "further investigate the business practices of the herbal supplement industry" and to "enhance transparency and ensure that the [industry] tak[es] the steps necessary to validate their marketing claims, including as to authenticity and purity."
  • Entered into a "no liability" agreement with GNC, one of the letter recipients, in which GNC agreed to implement heightened ingredient authentication and contaminant testing procedures for its herbal supplements during and after production and provide notice to consumers about "the difference between whole herbs and extracts." Even though it found that GNC complied with the FDA's current Good Manufacturing Practices and with standard industry practices, the NY AG disagreed with GNC about "the sufficiency of federal rules and testing requirements and their relationship to state consumer protection laws."
  • Joined 13 other state Attorneys General in a letter to House and Senate leadership asking the appropriate subcommittees to "launch a comprehensive congressional inquiry into the herbal supplements industry, and to weigh a more robust oversight role for the [FDA]," and citing not only the NY AG's investigation but also FDA enforcement activities and "a series of troubling reports that suggest broader problems" from the "scientific community and the media."

The responses to the NY AG's activities from the supplement industry—including the Natural Products Association, the American Herbal Product Association, and the Council for Responsible Nutrition (CRN)—and from consumer health choice advocacy groups such as the Alliance for Natural Health have been prompt, forceful, and supportive of DSHEA and the current FDA regulatory framework. For example, CRN called the NY AG's conclusions that supplements contained no herbal ingredients "unjustified" in a detailed critique of the NY AG's use of DNA barcoding analysis, and characterized the GNC agreement as a "mistake" and "a real disservice to consumers." In addition, in its response to the state AGs' letter to the Hill, CRN reiterated its status as "a strong and vocal advocate for more resources to FDA for stronger and swifter enforcement of these existing regulations," acknowledged "some problems facing our industry," and expressed the "wish that the state AGs had focused their efforts on helping solve the serious problem of criminals who spike products with illegal drugs and market them illegally as dietary supplements."

The response from the private sector has been equally prompt, with multiple class action complaints filed in multiple state courts against each of the retailers identified by the NY AG.

Given the widespread popularity of dietary supplements, the nature of FDA funding and priorities, and the availability of state and private causes of action, it isn't clear that the recent activities by the NY AG and others will result in significant changes in FDA activity or federal oversight of dietary supplements. However, the speed with which the issues unfolded on multiple fronts, the intensity of reactions on all sides of the issue, and the amount of media coverage illustrate the importance of being able to respond quickly, confidently, and appropriately when hot-button issues arise.

Whether in the dietary supplement industry or otherwise, the ability to respond effectively to complex situations such as the one described here requires advance preparation. Consumer product manufacturers and retailers will be in the best position to respond to consumer, media, law enforcement, and other high-profile issues when they

  • Understand existing legal requirements, industry best practices, and developing trends;
  • Implement a sound compliance and risk management program;
  • Work closely with their vendors and business partners to create accountability throughout the supply, manufacturing, distribution, and marketing process; and
  • Designate a multidisciplinary response team that regularly conducts tabletop exercises to practice responding to complicated and unexpected internal and external issues.

For more information, see our Consumer Product Safety: Compliance Programs and Risk Mitigation Strategies video and our Crisis Management Handbook.

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For more information, please contact the professional(s) listed below, or your regular Crowell & Moring contact.

Peter B. Miller
Senior Counsel – Washington, D.C.
Phone: +1 202.624.2506