Report of the ACI-CRN Legal, Regulatory and Compliance Forum 2024

Operating in an environment where so many factors lie beyond our plain and immediate understanding, industry lawyers at last week’s ACI-CRN Dietary Supplements Legal, Regulatory and Compliance Forum addressed some of the myriad issues that currently come to mind.

While last year’s forum featured a worried industry hit by unprecedented regulatory activity and open questions, this year there was a sense that stakeholders need transparency, process and enforcement to avoid further confusion, especially in the face of growing existential threats.

Consider updating the regulations and tools available in the toolkit

On the eve of the 30th anniversary of the Dietary Supplement Health and Education Act (DSHEA), the legislation that launched the modern dietary supplement industry, speakers at the forum drew on discussions held at other industry events.

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

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

One hot topic that has come up has been the FDA’s current interpretation of the drug exclusion provision, which was added to DSHEA at the last minute but was intended to balance and protect the interests of the pharmaceutical industry by ensuring that items approved as drugs cannot be sold as dietary supplements. What has developed, however, is somewhat less clear-cut, with the dietary supplement side arguing that the disadvantage comes from surprise and/or questionable exclusion.

“When we think about this, part of it is considering whether it’s a problem with the statutory provision or whether it’s a problem with the way FDA is currently interpreting it, because we all know that overhauling the legislation is a really huge effort and problem,” she said Miriam Guggenheim, partner at Covington & Burling LLP. “So if we’re working on a lot of things that don’t seem to be working, trying to work with the FDA to interpret the regulations differently, that’s often the easiest way to move forward.

Just days after the conference ended, the Supreme Court’s decision to invalidate the Chevron standard — a decision that weakens government agencies’ interpretation of complex laws — could introduce another layer of uncertainty for years to come.

In discussing the modernization of DSHEA, Chris Reid, The general counsel at Plexus Worldwide cautioned that while some changes are necessary, particularly in what the industry can do to support FDA enforcement, there is a risk of opening the industry up too much.

“I worry that some critics will want to renew the whole thing and demand a pre-approval process,” he said. “I hope we don’t consider going down that route.”

In this context, several sessions examined tools currently or potentially available to regulatory agencies to respond to repeated industry calls for better enforcement of enforceable DSHEA provisions. This included action on warning letters, notification of new dietary ingredients, establishment registration and increased inspection capacity and compliance with good manufacturing practice through third party audits and more well-trained inspectors.

And of course, there was some discussion about the value of the proposed Mandatory Product List (MPL) as a new tool in the FDA’s toolbox to enable it to analyze the market accurately. Opponents continued to question whether it was more than just more work and cost to industry, since the agency currently does not pursue known bad actors. Others wholeheartedly supported its merits as a transparency tool and a way to highlight good business practices, but also acknowledged that its utility lies in the details.

Addressing the unknown risks and likelihood of a class action lawsuit

In addition to known and more identifiable issues, sessions discussed concerns about how to address the increased risks – real or perceived – arising from practical issues generated by restrictive state regulations, claims substantiation guidelines, the growing role of artificial intelligence, and complexity in both supply and sales chains channels, to name just a few.

As the industry and the Internet evolve, regulatory experts at the meeting acknowledged that maintaining control over claims across all sales channels is a challenge, especially when influencers and marketing teams are not as well-versed in specific sections of the Code of Federal Regulations.

“It’s really hard to stop influencers on TikTok from acting against their will,” said Anastasia Jones, RChief Regulatory Officer at Olly. “Influencers need to be given scripts, refreshed and educated on industry regulations.”

Barbara Sanchez, General Counsel at Nestle Health Science US, highlighted concerns about the perceived risk of online product ratings and reviews, noting that the volatility “was definitely a surprise.” In last year’s update to its advertising guide for the dietary supplement industry, the Federal Trade Commission (FTC) states that “the wide variability in research results and inconsistent or contradictory results will raise serious questions about the adequacy of an advertiser’s justification.”

“I think about the unknown risks, especially with the FTC, that could come from unexpected places,” she said. “Things beyond our immediate control create risks for us.”

Others wondered how the industry would navigate AI-generated reviews on Amazon and what impact its algorithms would have. While some panelists touted its potential as a tool that minimizes workload, provides real-time information and increases profits, some cautioned that it can also make things up because it’s only as good as the data it consumes. Then there are questions about who owns the results (spoiler: it’s not a human prompt), about the risks of AI marketing madness, and about how to manage data privacy.

In addition to deciphering guidelines and interpretations, industry attorneys have highlighted the very real and ongoing threat of class action lawsuits, which requires thorough internal prevention and preparedness protocols to withstand the wrath of plaintiffs looking to reap the low-lying fruit growing on social media, online reviews, and adverse event reporting.

“I don’t think it will surprise anyone here that a class action lawsuit is actually a major risk factor for a company in the supplement industry,” said Veronica Colas, a partner at Hogan Lovells LLP.

“In some ways it’s a lot more exciting now because there’s a lot more going on, but in other ways it’s exhausting because the possibilities of some crazy argument that someone comes up with are endless. It starts with compliance now, and that’s just the beginning, not the end. It informs you about things, but it doesn’t really get you to where you need to be.”

Sessions on this year’s program also included: assessing the impact of FDA reorganization, analyzing new state regulations, how to best approach surpluses, the validity of post hoc clinical trial results, considering the source of raw materials and ingredient interactions, managing the latest risks from emerging contaminants, justifying health claims and meeting new requirements from retailers.

Consider updating the regulations and tools available in the toolkit​

Consider updating the regulations and tools available in the toolkit