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Townsend Letter Editorial On Vitamin Cartel: A Swiftian Proposal By Any Other Name
3 January 2000
by Ed Fry

Reading the Townsend Letter editorial "Vitamins Inc. Cartel" was like reading Jonathan Swift's "modest proposal" to eat our young as a means of resolving human population pressures. The editorial, however, lacked Swift's irony and wit, and certainly didn't read like satire.

[Read Collin's editorial now or at end of this editorial.]

In lieu of a trip to Lilliput, the Townsend editor might consider traveling to Germany to observe the kind of regulatory environment he seems to invite: one shaped to the needs of huge pharmaceutical interests. Since shortly after World War II, big drug companies there have functioned as self-serving virtual monopolies, turning what otherwise might be an open, cost-efficient marketplace beneficial to consumers into a virtual monopoly with attendant high prices.

In Germany, the enormous profits and political might of the large pharmaceutical corporations has enabled them to shape the regulation of dietary supplements. The coziness of pharmaceutical producers with legislators and regulatory agencies has driven the near exclusive use of allopathic, chemical drugs as medical therapies. The identification of novel chemicals as "medicine" is today almost the exclusive basis for drug manufacturing worldwide.

Such is the influence of drug companies abroad that consumer access to a whole array of nutrients that Americans can buy directly off the shelf is highly restricted in Germany and most of the Common Market countries. Point of example: Vitamin C, a basic nutrient we in the US take for granted is available without prescription only in very restricted doses. Ditto the B vitamins.

Most of Europe has followed the example of its most powerful economy and created similar regulations. This, of course, has all been done in the interest of "public safety," with Norway even trumping the "cautious" Germans by forbidding vitamin C in any dosage form without a prescription (although C powder is still permitted as a food preservative).

Impact on US

Such regulation means that big drug companies have complete control of the nutrient market, from production of basic raw materials to the marketing of finished consumer goods. The net effect is a limited supply of products and drug-like prices. Consumer outrage is muted by the presence of socialized medicine, with government-subsidized dietary supplements becoming a cash cow for the big drug companies.

The profit potential in such a model is not lost on some American supplement producers, but the loss of personal freedom and product quality implicit in a manufacturer-HMO model predicated on prescribed supplements and high prices should give us all pause.

Reflecting the sentiments of former FDA officer Gary Dykstra, drug companies abroad have assured that dietary supplements do not act as a "disincentive for the development of new drugs." (New drug development is where the serious profits are.)

"What's that got to do with us?" you might ask, perhaps thinking such restrictions couldn't happen here in the US given the passage of the Dietary Supplement Health & Education Act (DSHEA) and the powerful voice of grassroots consumers who stand behind it.

Legislative and regulatory environments are not static. For example, read the risk assessment proposal for nutrients developed by the National Academy of Sciences www.nas.edu for the FDA, which in turn has presented the document at Codex Alimentarius meetings -- with the assent of members of the US vitamin industry. The Codex Alimentarius negotiations, under the auspices of the UN's World Health Organization (WHO) and Food and Agriculture Organization (FAO), are intended to set international standards for food and supplements in order to facilitate global "free trade."

Open to interpretation

This poses a potentially serious threat to US law and regulations. Codex decisions are overseen, interpreted, and enforced by the World Trade Organization (WTO), with its Dispute Settlement Body (DSB) acting as a final arbiter. The short history of the WTO and DSB demonstrates that domestic laws intended to protect a nation's people (in this case, the American people) are not inviolable, being open to international interpretation and the threat of trade sanctions.

And who influences WTO and DSB policy? No one in the public knows for sure, but based on past decisions, it would appear large corporate interests wield disproportionate weight. Ordinary citizens, the public interest, as it were, seem to count for little.

The NAS Risk Assessment proposal presented at Codex and supported by vitamin industry representatives would limit the prescriptionless dosage level of supplements to the "Lowest Observable Adverse Event Level" [LOAEL]. For niacin, this is 35 mg, thereby averting "skin flushing," hardly a sufficient rationale for such stringency.

While 35 mg is 175% of the Daily Value [DV], and is adequate to prevent clinical deficiency states, much higher amounts are commonly and safely used by individuals for supporting healthy blood lipid levels and enhanced neurological function.

This "risk" approach to evaluating nutrient safety is modeled on the way that the EPA evaluates toxins, having been developed by John Hathcock, a former FDA employee who now works for the Council for Responsible Nutrition. CRN was founded in the 1970s by long-time members of the vitamin industry like Bill Thompson, who felt good science should be the foundation for the vitamin business. But CRN's membership today is dominated by large corporate drug producers whose impulse to gain competitive advantage and its attendant profits may exert undue influence on regulatory and quality concerns.

Why are key representatives of the vitamin industry supporting such a restrictive measure as the NAS Risk Assessment? Several industry trade group officials say "it's the best science we have," yet top scientists in the field of nutrition say this interpretation is based on a false premise. A model for determining the "risk" of essential nutrients (life-giving molecules) based on the EPA's methodology for evaluating the dangers of toxins (killer molecules) is far-fetched at best.

Point of fact: the safety record of dietary supplements surpasses that of common foods. Will the FDA next seek to establish risks and "safe upper limits" for apples or water? Wouldn't a better and more accurate definition of the "best nutritional science" be one that includes an attempt to identify optimal nutrient intake levels, instead of levels that, by arcane and tortuous means, merely identify "risk"?

"Representing" the trade

Vitamin company personnel who "represent" the trade at Codex negotiations have no voting power. As sole US government representative, only the FDA votes. Members of industry are present only to offer perspective. The prevailing view is that the NAS/FDA Risk Assessment document, its imperfections already noted, has the best chance of mollifying the "international community," as influenced and exemplified by the German position.

Surely an American advocate for the benefits of dietary supplements would oppose a focus on risk and instead offer an affirmative agenda. Indeed, why should the United States representative be willing to negotiate a lowest common denominator approach? As a representative of a free, vigorous and health-affirming sector of the world's leading economy, wouldn't it make more sense to lobby for research and standards that seek to identify optimal nutrient intake levels? And where is the arms-length relationship that should exist between industry and the FDA?

As someone who has worked in the vitamin industry for 30 years (but not as an owner or corporate executive), I have observed the common phenomenon of smaller producers selling their businesses to larger drug companies. In itself, of course, there is nothing wrong with business owners taking profits.

But when such profits are earned at the expense of a free market, especially given the tendency of acquiring companies to come from the drug sector which is scrambling after consumers of vitamins and other natural products, then such notions as "natural," "cost competitive," "and "quality based on personal integrity" are brought into question -- all at the expense of the consumer.

What interest, for example, would a drug company have in promoting St. John's wort which might directly threaten a proprietary position in hugely profitable serotonin re-uptake inhibitors? In such a scenario, would the company, at the risk of its own market position, bear the expense of educating health providers as to the relative and comparative benefits of its proprietary prescriptive and a commonly occurring herbal?

Big corporate money

A commitment to optimizing human nutrition may seem fanciful or naive to cynics. The fact is, although the vitamin industry was once the target of big money-inspired regulatory assaults, it now faces the danger of being overwhelmed by big corporate money.

"If you can't beat 'em, buy 'em up," may be useful business school strategy, but intelligent consumers of dietary supplements must exercise special vigilance if the freedoms of DSHEA are to be retained -- and giant drug manufacturers stopped from overwhelming the marketplace with self-serving regulations created by their friends in the FDA.

If big business interests think they're going to win competitive advantage by imposing needless regulations on how dietary supplements are produced and regulated, they are mistaken. Transportation, communications and banking have all gained substantially from deregulation. The computer industry has become the colossus of global industry in a largely self-regulated environment.

If the current trend continues, we must prepare to witness a rapid decline of products available without prescription, along with sky-high price inflation for whole constellations of supplement products we now take for granted as inexpensive and widely available. Such a Lilliputian outcome is unacceptable and should be met with vigorous resistance. Health freedom must not only be protected, it must be reaffirmed through action. Excessive dietary supplement regulation is a good place to draw the line.

And in addition

  1. No one is "running to Congress to ask that labeling requirements on vitamin products should be given free reign [sic]". Virtually every reputable vitamin company is complying with the latest FDA regulations. Those who believe otherwise need only speak with companies spending millions of dollars to comply with FDA regulations governing what can be stated on labels and how.

  2. The Townsend Letter editor's comments notwithstanding, such is the scope of FDA authority that it absolutely does have the power to keep even safe products off the market. Free form, synthesized l-tryptophan is daily administered in significant doses to infants and the infirm in the form of infant formulas and parenteral feeding preparations. Yet tryptophan is deemed dangerous and is forbidden as a supplement for healthy adults.

    In a widely-publicized incident over a decade ago, batches of improperly made trypotophan circulated in the US, causing death and injury. It is arguable that the FDA might have intercepted the foreign-made substance at its port of entry. Less arguable is tryptophan's utility as a serotonin precursor and its relatively low cost and safety when properly used.

    By coincidence, Prozac¨, a serotonin reuptake inhibitor, was introduced concurrent with the permanent removal of tryptophan from the US market, thus eliminating a potential drug "competitor" that had been selling at an estimated value of $150 million annually. Prozac sales are reckoned in the billions!

  3. The Townsend Letter editor, instead of directing allegations at "proprietary vitamin manufacturers," might venture a clear expression of outrage for admitted drug corporation perpetration of conspiracy and price fixing. The conspiracy to raise, fix, and control prices of vitamin raw materials compromised the health of countless people, particularly those requiring, but least able to afford, vitamin enriched foods and supplements. For nine years, consumers and consumer product manufacturers were defrauded and overcharged, yet the Townsend editorial somehow uses the fact of price fixing of raw material production by huge drug conglomerates as a basis for more stringently regulating smaller consumer product companies.

  4. Should mislabeled, fraudulent, and potentially harmful products be removed from the market? Absolutely. Are regulations in place that would sanction such enforcement? Yes, indeed. Yet the FDA too often behaves like a traffic cop at an intersection, tallying instead of ticketing red light runners in order to build a case for more bureaucratic powers.

    The FDA continues to lament its lack of authority over dietary supplements rather than sponsoring initiatives for developing quality programs at the producer level. It has sponsored studies by the private National Academy of Sciences and traveled abroad to Codex meetings as the sole voting representative of the US for the establishment of trade standards and policies. In this latter role, the FDA should be present only in an advisory capacity to assure no weakening of its mission to protect the nation's food and drug supply. Its mission is not to facilitate "harmonization" of US regulations to international trade standards.

  5. If the editorial seeks to seriously discuss the corrupting influence of profit, it might better begin with a careful analysis of pharmaceutical drug development costs (Is it possible they are inflated?) and various attempts to "patent" natural substances. It might note that drug corporations are large enough to manipulate the crafting of the very regulations that govern their operation, the very laws that affect their ability to cross international boundaries with minimal regulatory interference (just enough to keep small, upstart competitors from emerging).

    It might mention that drugs have historically generated the greatest profits of any industry. It might also note the dietary supplement margins are modest by comparison, as are industry profits. Yet without the means to do business in a minimally regulated market, the obvious social benefit of such a circumstance -- low prices -- might evaporate.

  6. Would it be better to regulate supplements as drugs? Better for whom? By publicly televised Congressional testimony, over 100,000 Americans die annually from appropriately prescribed and properly administered drugs (drugs that ostensibly have been determined to be safe and efficacious).

    This is the equivalent of a fully loaded 747 crashing every day, or of the US troop casualties from two Vietnams every year. This figure does not include errors in prescription or administration leading to death. How would such a system assure greater integrity and safety of supplements, which today, with the exception of accidental overdosage of iron, harm virtually no one?

  7. No rational or honest purveyor of vitamins argues for freedom from regulation on the basis that nutrients are "natural". Someone with but a modest knowledge of the value of dietary supplements would argue instead that supplements, and the physiological molecules they contain, are safer by orders of magnitude than xenomolecular, pharmaceutical agents. Because supplements are also safer than the US food supply, they therefore require less stringent regulations.

  8. The remark that "ascorbic acid supplements are synthetic" could readily be interpreted by uninformed readers to mean that such supplements are made from petrochemicals or contain the kind of artificial (xeno-) molecules found in patent pharmaceuticals. While it is demonstrably true that co-nutrients found with vitamin C in nature contribute to ascorbate's value, only an uninformed person would argue that the vitamin C in oranges is chemically superior to the identical compound synthesized from sugar (food), the same means by which organisms biosynthesize the substance.

  9. The editorial confused and failed to distinguish commonly marketed forms of natural (food) source beta carotene and vitamin E from the chemical versions of those nutrients manufactured by big drug companies. Natural beta carotene is always derived (commonly from micro-algae) amidst an array of other, natural, physiologically useful carotenoids.

    Natural source, vegetable-oil derived, d- form vitamin E is chemically distinct from the synthetic dl- form, which does not exist in nature. There is ample evidence that chemically derived and isolated b-carotene and synthesized dl- vitamin E act differently in the body and are inferior to natural (food) source forms.

  10. The muddled syntax and logic at the end of the editorial make it difficult to determine just how the editor justifies his intent that supplements be further policed. It's suggested that makers of pricey and profitable faux drugs (i.e., "so-called immune supporting agents") should be reined in for insisting that their products are natural. It is never made clear why natural molecules that are derived or processed from various sources by large concerns, and then "peddled as natural" require more regulation.

The author's final admonition is that vitamins, if found to be adulterated, would seem to be in need of regulation. Again, the FDA can remove an adulterated product from the market in a heartbeat. However, the implication that inexpensive readily translates to adulterated is not borne out by studies. Several independent trials have demonstrated that inexpensive supplements are no more likely to be deficient or adulterated than higher priced brands.

It's not difficult to identify dietary supplement makers who mimic the profit strategies of drug makers, wherever possible patenting ingredients, processing methods, or uses. To maximize profits, many have adopted the practice of developing formulations with suggestive, trademarked names -- and have thereby grabbed a share of the kind of proprietary advantage and profits for which drug companies are famous. Is this praiseworthy? No, but if fraud or malfeasance is alleged, regulatory remedies presently exist. The FDA (or FTC) has but to enforce, instead of stumping for expanded powers.

Finally, a tip from a long-time vitamin industry employee: the fifty-year standard in the industry has been the 100% mark-up. A manufacturer sells a product that costs $10 to produce to a retailer for $20. The retailer sells it for $40. A review of consumer websites shows that many name-brand vitamin manufacturers are sticking with this profit structure.

Some manufacturing companies and retailers, however, have determined that the market is now large enough to rely on velocity and volume of sales for bottom line growth. These companies are satisfied with quick nickels in place of slow dimes, i.e., food profit margins. There are reputable brands and retailers today selling vitamins at a 30 to 35% profit margin, not the traditional 50 to 70%. This is of enormous benefit to consumers on one hand, while on the other showing that price alone is not a test of quality.

If one buys a clearly labeled product from a company recognizable as being large enough to have a stake in doing things correctly and avoiding litigation (look for published quality standards, clear, easy-to-read materials and recommendations from knowledgeable health providers, retailers and consumers as well as passing grades from such new testing web sites as Consumerlab.com) one might conclude that a low-priced product is what it purports to be. Quality as an abstraction is indeterminate. The determination and measurement of ingredients as claimed on the label of a supplement product is definitely achievable.

Companies that need a reminder about how to keep the substantive elements of product quality consistent with their advertising claims would do well to consider the work of the Dietary Supplement Quality Initiative, the organization that sponsors the website on which this article originally appeared (www.SupplementQuality.com). DSQI's approach offers a standards-based framework for providing safety and quality assurance in a self-regulating environment, while preserving consumer access -- a proposition that large drug producers and the government agencies that serve them would do well to observe.

About Ed Fry, our SupplementQuality.com columnist

Edward Fry has worked in virtually every phase of the dietary supplement business, ranging from the importation and procurement of raw materials, through formulation and marketing of consumer products, to the wholesale and retail distribution of supplements. Ed believes that the free flow of coherent, truthful, and empowering information is as essential to the well-being of consumers as the products themselves.end-of-story


Vitamin Inc. Cartel: In the last ten days of May the US Justice Department disclosed and fined a European vitamin cartel . . .

Collin's reply to Fry editorial: I feel honored to be compared, if only derisively, to the English author Swift. And I do regret that I don't have wit. The points made in Mr. Fry's commentary are certainly meritorious. However . . .




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