The FDA and Health Claims as it relates to MLM Companies

"...the Dietary Supplement Health and Education Act of 1994... was signed into law in October, 1994. It has had profound impact on the network marketing industry, an industry which is historically dominated by the sale of nutritional and dietary supplements."

The FDA And Health Claims

By Jeffrey A. Babener

FDA PROPOSES NEW HEALTH CLAIM RULES

Four years after the passage of the historic Dietary Supplement Act of 1994, in April 1998, the FDA has proposed rules on permissible health claims for dietary supplements. Positive health support claims are "in" and disease claims are "out." The FDA is struggling on this issue and has invited public comment. The proposed rules start a "working dialogue." In a year or two the U.S. should have permanent rules.

A HISTORIC ACT

It is officially called the Dietary Supplement Health and Education Act of 1994 and it was signed into law in October, 1994. It has had profound impact on the network marketing industry, an industry which is historically dominated by the sale of nutritional and dietary supplements.

It was not necessarily an end to the war between the FDA and the health food supplement industry, but it was a major victory for marketers of vitamins and dietary supplements. At issue in the battle has always been whether or not the industry could market its vitamins, amino acids, nutritional supplements, etc. and what could be said about their products. From time to time, the industry has been labeled by the FDA as a bunch of snake oil salesmen, and the industry has accused the FDA of inflexibility and intolerance of its products and health messages. As late as the 1980s, the FDA was accusing breakfast cereal manufacturers of peddling drugs because of health messages regarding the relationship between fiber and cancer. Over the ensuing years, the FDA began to recognize the role and relationship between diet and disease, but the love-hate relationship between the FDA and health food industry continued to cycle every few years.

Prior to the 1994 legislation, relations between the FDA and the dietary supplement industry reached a new low. The industry was genuinely concerned that the FDA's new proposals might mean an end to a variety of dietary supplements on the shelf, as well as the stifling of the communication of dietary supplement information to the public. Senator Orrin Hatch and Congressman Bill Richardson ushered through Congress the Dietary Supplement Health and Education Act of 1994 to protect the right of the industry to distribute its products and disseminate information. Although it doesn't accomplish everything the industry wanted, the industry breathed a major sigh of relief at its passage. At its bare bones, the new legislation does the following:

Allows third party literature about dietary supplements to be disseminated,
Allows labels on dietary supplements to describe how supplements provide nutritional or dietary support for a person,
Places the burden of proof that a dietary supplement is unsafe on the FDA,
Provides that the dietary supplements are not "food additives" and that the FDA may not arbitrarily remove supplements from the marketplace by labeling them as unapproved "food additives,"
The Act provided for a presidential commission of unbiased experts in dietary supplements during the next two years to provide recommendations and established procedures for evaluating health claim label statements. After that the FDA was to issue proposed rules and invite public comment.

THE PRESIDENT SPEAKS

There can be no mistake that this legislation is intended to limit what the industry has felt has been intrusive regulation by the FDA. In signing the legislation into law, President Clinton issued a statement which summarized the frustrating relationship:

"After several years of intense efforts, manufacturers, experts in nutrition, and legislators, acting in a conscientious alliance with consumers at the grassroots level, have moved successfully to bring common sense to the treatment of dietary supplements under regulation and law.

"More often than not, the Government has been their ally. And the private market has responded to this development with the manufacture of an increasing variety of safe supplements.

"But in recent years, the regulatory scheme designed to promote the interests of consumers and a healthful supply of good food has been used instead to complicate choices consumers have made to advance their nutritional and dietary goals. With perhaps the best of intentions agencies of government charged with protecting the food supply and the rights of consumers have paradoxically limited the information to make healthful choices in an area that means a great deal to over 100 million people."

AND CONGRESS SPEAKS OUT

And, Congress itself made it very clear that the role of dietary supplements was to play an important role in our health care system and the dissemination of information. In its preamble to the Act, Congress made the following findings:

"(1) improving the health status of United States citizens ranks at the top of the national priorities of the Federal Government;

"(2) the importance of nutrition and the benefits of dietary supplements to health promotion and disease prevention have been documented increasingly in scientific studies;

"(3)(A) there is a link between the ingestion of certain nutrients or dietary supplements and the prevention of chronic diseases such as cancer, heart disease, and osteoporosis; and

"(B) clinical research has shown that several chronic diseases can be prevented simply with a healthful diet, such as a diet that is low in fat, saturated fat, cholesterol, and sodium, with a high proportion of plant-based foods;

"(4) healthful diets may mitigate the need for expensive medical procedures, such as coronary bypass surgery or angioplasty;

(5) preventive health measures, including education, good nutrition, and appropriate use of safe nutritional supplements will limit the incidence of chronic diseases, and reduce long-term health care expenditures;

"(6)(A) promotion of good health and healthy lifestyles improves and extends lives while reducing health care expenditures; and

"(B) reduction in health care expenditures is of paramount importance to the future of the country and the economic well-being of the country;

"(7) there is a growing need for emphasis on the dissemination of information linking nutrition and long-term good health;

"(8) consumers should be empowered to make choices about preventive health care programs based on data form scientific studies of health benefits related to particular dietary supplements;

"(9) national surveys have revealed that almost 50 percent of the 260,000,000 Americans regularly consume dietary supplements of vitamins, minerals, or herbs as a means of improving their nutrition;

"(10) studies indicate that consumers are placing increased reliance on the use of nontraditional health care providers to avoid the excessive costs of traditional medical services and to obtain more holistic consideration of their needs;

"(11) the United States will spend over $1,000,000,000,000 on health care in 1994, which is about 12 percent of the Gross National Product of the United States, and this amount and percentage will continue to increase unless significant efforts are undertaken to reverse the increase;

"(12)(A) the nutritional supplement industry is an integral part of the economy of the United States;

"(B) the industry consistently projects a positive trade balance; and

"(C) the estimated 600 dietary supplement manufacturers in the United States produce approximately 4,000 products, with total annual sales of such products alone reaching at least $4,000,000,000;

"(13) although the Federal Government should take swift action against products that are unsafe or adulterated, the Federal Government should not take any actions to impose unreasonable regulatory barriers limiting or slowing the flow of safe products and accurate information to consumers;

"(14) dietary supplements are safe within a broad range of intake, and safety problems with the supplements are relatively rare; and

"(15)(A) legislative action that protects the right of access of consumers to safe dietary supplements is necessary in order to promote wellness; and

"(B) a rational Federal framework must be established to supersede the current ad hoc, patchwork regulatory policy on dietary supplements."

IMPACT ON NETWORK MARKETING INDUSTRY

Can network marketers of dietary supplements sleep better after this legislation? The answer is an absolutely qualified "Yes." Keep in mind, however, that the new legislation is not intended to open the floodgates to unsubstantiated health claims. On the other hand, the new legislation will be helpful in many ways to marketers of nutritional supplements.

THIRD PARTY LITERATURE

The most significant tool to network marketers to come from the legislation is its pronouncement on third party literature. Prior to the new legislation, passing out third party literature about a dietary supplement constituted "labeling," rendering the dietary supplement to the classification of a drug by the FDA. The new act provides as follows:

"DIETARY SUPPLEMENT LABELING EXEMPTIONS

"SEC. 403B.(a) IN GENERAL.--A publication, including an article, a chapter in a book or an official abstract of a peer-reviewed scientific publication that appears in an article and was prepared by the author or the editors of the publication, which is reprinted in its entirety, shall not be defined as labeling when used in connection with the sale of a dietary supplement to consumers when it--

"(1) is not false or misleading;

"(2) does not promote a particular manufacturer or brand of a dietary supplement;

"(3) is displayed or presented, or is displayed or presented with other such items on the same subject matter, so as to present a balanced view of the available scientific information on a dietary supplement;

"(4) if displayed in an establishment, is physically separate from the dietary supplements; and

"(5) does not have appended to it any information by sticker or any other method.

"(b) APPLICATION.--Subsection (a) shall not apply to or restrict a retailer or wholesaler of dietary supplements in any way whatsoever in the sale of books or other publications as a part of the business of such retailer or wholesaler.

"(C) BURDEN OF PROOF.--In any proceeding brought under subsection (a), the burden of proof shall be on the United States to establish that an article or other such matter is false or misleading."

What does all this mean? Because of the breadth of this section, there may be a long period before the health industry and FDA agree about what legislation means. But at face value, it would suggest that network marketers may pass out third party articles or books on dietary supplements in conjunction with the sale of their products if the information is not false and misleading and does not promote a particular brand of product. Inasmuch as there is a wealth of scientific literature, articles and books on dietary supplements, this may mean the free flow of information for the first time.

CERTAIN NUTRITIONAL HEALTH CLAIMS CAN BE MADE

The new Act provides that a statement for a dietary supplement may be made if

"(A) the statement claims a benefit related to a classical nutrient deficiency disease and discloses the prevalence of such diseases in the United States, describes the role of a nutrient or dietary ingredient intended to affect the structure or function in humans, characterizes the documented mechanism by which a nutrient or dietary ingredient acts to maintain such structure or function, or describes general well-being from consumption of a nutrient or dietary ingredient.

"(B) the manufacturer of the dietary supplement has substantiation that such statement is truthful and not misleading, and

"(C) the statement contains, prominently displayed and in boldface type, the following: 'this statement has not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure or prevent any disease.'"

Four years after the legislation and in the aftermath of the recommendations of a Presidential commission, the FDA in April 1998 issued proposed rules on permissible "structure/function" claims versus prohibited "disease" claims. Permanent rules will follow after a public comment period.

It is clear the FDA is struggling with this issue. The FDA appears to embrace general health claims that support healthy body function, but wishes to prohibit "disease" claims in which a dietary supplement is to be used to treat a disease or medical condition.

Here is how the FDA attempted to draw the line on the "semantics" of claims:

Bold = Prohibited Disease Claim

Italics = Permissible structure/function health claim

Under proposed rules, a statement would be considered a claim if it explicitly or implicitly claimed an effect on a specific disease or class of diseases. Examples of such disease claims include: "protective against the development of cancer," "reduces the pain and stiffness associated with arthritis," "decreases the effects of alcohol intoxication," or "alleviates constipation." Claims that do not refer explicitly or implicitly to an effect on a specific disease state would not be disease claims under this criterion. Examples include: "helps promote urinary tract health," "helps maintain cardiovascular function and a healthy circulatory system," and "promotes relaxation." FDA has tentatively concluded that these examples do not contain express or implied references to specific diseases. Instead, they refer broadly to body systems or functions without sufficient reference to specific abnormalities or symptoms to be understood as references to particular diseases.
The proposed rules define disease as any one of several types of abnormalities that are "manifested by a characteristic set of one or more signs or symptoms." FDA believes that reference to a characteristic set of signs or symptoms, even in the absence of the name of the disease, can be understood as a reference to the disease itself. Under proposed rules, a statement would be considered a disease claim if it explicitly or implicitly claimed an effect (using scientific or lay terminology) on one or more signs or symptoms that are recognizable to health care professionals or consumers as being characteristic of a specific disease or of a number of diseases. Examples of such disease claims include: "improves urine flow in men over 50 years old" (characteristic symptoms of, e.g., benign prostatic hypertrophy); "lowers cholesterol" (characteristic sign of, e.g., hypercholesterolemia); "reduces joint pain" (characteristic symptom of, e.g., arthritis); and "relieves headache" (characteristic symptom of, e.g., migraine or tension headache). In each of these cases, the symptoms described are sufficient to characterize one or more specific diseases.

Claims of an effect on symptoms that are not recognizable as characteristic of a specific disease or diseases would not constitute disease claims. Examples include: "reduces stress and frustration," "inhibits platelet aggregation," and "improves absentmindedness." In these examples, the signs or symptoms noted may be broadly associated with a number of diseases, but are not, by themselves, sufficient to characterize a specific disease or diseases. If the context did not suggest treatment or prevention of a disease, a claim that a substance helps maintain normal function would not ordinarily be a disease claim. Examples include: "helps maintain a healthy cholesterol level," or "helps maintain regularity."
Certain natural states, such as pregnancy, aging, or the menstrual cycle, that are themselves not "diseases," are sometimes associated with abnormalities that are characterized by specific set of signs or symptoms, and thus meet the proposed definition of disease.

Under proposed rules, a statement would be considered a disease claim if it explicitly or implicitly claimed an effect on a consequence of a natural state that presents a characteristic set of signs or symptoms recognizable to health care professionals or consumers as constituting an abnormality of the body, such as toxemia of pregnancy, premenstrual syndrome, or abnormalities associated with aging such as presbyopia, decreased sexual function, Alzheimer's disease, or hot flashes. Claims that did not refer to a recognizable abnormality resulting from a natural state or to it signs or symptoms (e.g., "for men over 50 years old," and "to meet nutritional needs during pregnancy") would not be disease claims under this criterion. These examples do not include references to specific abnormalities or symptoms. FDA thus believes that they would not be understood as references to particular diseases.
Various aspects of a product's labeling may be used to express or imply that the product will diagnose, cure, mitigate, treat, or prevent disease. Under proposed rule, a statement would be considered a disease claim if it explicitly or implicitly claimed an effect on disease through one or more of the following factors:
1. Otherwise suggesting an effect on disease by use of pictures, vignettes, symbols, or other means (e.g., electrocardiogram tracings, pictures of organs that suggest prevention or treatment of a disease state, the prescription symbol (Rx), or any reference to prescription use). A picture of a body would not constitute a disease claim under this criterion.
Certain product class names are so strongly associated with diagnosis, cure, mitigation, treatment or prevention of a disease or diseases, that a claim that a product belonged to such a class would be understood as a disease claim. Under proposed rules, a statement would be considered a disease claim if it claimed that the product belonged in a class of products recognizable to health care professionals or consumers as intended for use to diagnose, mitigate, treat, cure, or prevent a disease (e.g., claims that the product was an "antibiotic," a "laxative," an "analgesic," an "antiviral," a "diuretic," an "antimicrobial," an "antiseptic," an "antidepressant," or a "vaccine"). The foregoing examples do not constitute an exclusive list of product class names that convey disease claims. Claiming that a product was in a class that is not recognizable to health care professionals or consumers as intended for use of diagnose (e.g., an "energizer," a "rejuvenative," a "revitalizer," or an "adaptogen") would not constitute a disease claim under this criterion.
A statement may imply that a dietary supplement has an effect on disease by claiming that the effect of the dietary supplement is the same as that of a recognized drug or disease therapy. A statement may also imply an effect on disease by suggesting that the dietary supplement should be used as an adjunct to a recognized drug or disease therapy in the treatment of a disease. In both cases, the statement implies that the dietary supplement is intended for the same purpose as the drug or disease therapy, i.e., for the diagnosis, cure, mitigation, treatment, or prevention of disease. Under proposed rules, a statement would be considered a disease claim if it explicitly or implicitly claimed that the product was a substitute for another product that is a therapy for a disease (e.g., "Herbal Prozac") or that it augmented a particular therapy or drug action (e.g., "use as part of your diet when taking insulin to help maintain a healthy blood sugar level"). A claim that did not identify a specific drug, drug action, or therapy (e.g., "use as a part of your weight loss plan") would not constitute a disease claim under this criterion.
A statement may contain an express or implied disease claim if it suggest that the product cures, mitigates, treats or prevents a disease or diseases by augmenting the body's own disease-fighting capabilities. Under proposed rules, a statement would be considered a disease claim if it explicitly or implicitly claimed a role in the body's response to a disease or to be a vector of disease. A vector of disease is an organism or object that is able to transport or transmit to humans an agent, such as a virus or bacterium, that is capable of causing disease in man. A claim that a product "supports the body's antiviral capabilities" or "supports the body's ability to resist infection" would constitute a disease claim under this criterion. Infections are well-known disease states that result from the action of pathogenic (disease-causing) microorganisms, such as bacteria and viruses, and are deviations from and impairments of the normal structure and/or function of the body with characteristic signs and symptoms. Claims that a product is intended to affect the body's ability to kill or neutralize pathogenic microorganisms, or to mitigate the consequences of the action of pathogenic microorganisms on the body (i.e., the signs and symptoms of infection) are disease claims because they are claims exclusively associated with the body's ability to prevent or respond to infectious diseases. A more general reference to an effect on a body system that has several functions, only one of which is resistance to disease, would not constitute a disease claim under this criterion (e.g., "supports the immune system").

Claims that a product is intended to counter adverse events resulting from medical intervention are claims that the product is intended as a part of the treatment program and, as such, are claims that the product is to mitigate, treat, or cure the disease state. Under proposed rules, a statement would be considered a disease claim if it explicitly or implicitly claimed to treat, prevent, or mitigate adverse events associated with a medical therapy or procedure and manifested by a characteristic set of signs or symptoms (e.g., "reduces nausea associated with chemotherapy," "helps avoid diarrhea associated with antibiotic use," and "to aid patients with reduced or compromised immune function, such as patients undergoing chemotherapy"). A claim that did not mention a therapy for disease (e.g., "helps maintain healthy intestinal flora") would not constitute a disease claim under this criterion.

As can be seen, defining "prohibited disease claim" vs permissible "health support claim" is a gray area. It is one that the FDA, Heath Industry and the public will probably be debating a decade from now, even after the FDA adopts permanent rules to the Dietary Supplement Health and Education Act. The proposed rules, after public comment, may not see the light of day, but they start a "working dialogue."

CONCLUSION

The Dietary Supplement Health and Education Act should have a profound impact on the network marketing industry in the positive. It assures future availability of dietary supplements and dissemination of information, and establishes a framework for fitting dietary supplements into the future of our health care system. It is certainly not the end of the issue, it is merely one step in a very positive process for the American consumer.

Jeffrey A. Babener Babener & Associates 121 SW Morrison, Suite 1020 Portland, OR 97204	Jeffrey A. Babener, the principal attorney in the Portland, Oregon law firm of Babener & Associates, represents many of the leading direct selling companies in the United States and abroad. www.mlmlegal.com
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