Editorial: Sun Tzu and The Science Of Regulation

By Len Monheit

Engage in three industry conversations, anywhere in the world, and it’s likely that in at least one, if not two, the topic of regulations comes up. You just can’t get away from the subject, as it pervades so many of our day to day business realities. Whether the subject is ingredients (approved, unapproved, equivalent, non-equivalent), what you can say (claims, labels, advertising), or what you can develop, buy or sell, regulations play a key role. In fact, even the categories and conditions you need to target are more and more influenced by regulations, indicating that regulatory assessment, earlier in the development process, is becoming absolutely mission critical. For some companies, the intent or even necessity to develop, change or augment regulations becomes part of the development process, as evidenced by the recent announcement from Cargill and Coca-Cola, regarding rebiana as a safe sweetener (http://www.npicenter.com/anm/templates/newsATemp.aspx?articleid=21248&zoneid=28) and of Cargill’s intention to market its Truvia™ product (http://www.npicenter.com/anm/templates/newsATemp.aspx?articleid=21247&zoneid=9). What we have here is a tactical difference, one that quite frequently is the earmark of market makers – the willingness to create an opportunity rather than react once it’s been created. Essentially, this is the difference between proactive and reactive decision making, the last all too frequently the hallmark of much of the industry activity we see. (Quite a lot of this observation is quite understandable though, with business and regulatory uncertainty, and the high cost of developing and supporting research and intellectual property development.)

I am struck by a couple other notable exceptions to this apparent rule of “wait until regulated’, including the early call by the American Herbal Products Association for mandatory serious adverse event reporting, well in advance of a Federal regulation on the subject, and by UNPA’s relatively immediate unanimous declaration of non-ephedra status. In other cases, businesses have gone to the wall, to the absolute eleventh hour, pending new regulation with no or little idea on how they will comply. One can only hope that the pending GMP compliance dates for US supplement manufacturers is not yet another example.

Frequently, when legislators are moved to legislate (which obviously can be for a number of reasons and under a number of ‘influences’), industry has no choice but to react to the best of its abilities. Such is the case with movement by the pharma industry with the American Dietetic Association to claim the lucrative weight loss category for its products, and one can argue, also somewhat behind movement in Canada to propel forward Bill C-51, legislation that at least on the surface, looks to supersede the 2004 Natural Health Products regulations by placing more and different enforcement powers with officials and the ministers and classifying NHPs as ‘therapeutic products’ (along with drugs and medical devices), allowing the minister to make non-substantiated decisions, as well as ambiguous and onerous-appearing clinical trial requirements for these same NHPs. In both of these jurisdictions, even if the issues are satisfactorily resolved, precious resources are wasted , resources which could have been better utilized to build infrastructure and foster compliance. In the Canadian environment, at least, any amendment to the Food and Drug Act should certainly create the wished-for third category of Natural Health Products, distinct from food and drugs, an action being called for by the Canadian Health Food Association. (After all, the argument all along was that revising the Act prior to NHP regulations being developed was too problematic and NHP regulations were needed sooner rather than later. ie. could not wait for a revision of the Act. ) If the Act is being revised anyway, that argument (onerous) goes away, so presumably, this is the glorious opportunity industry in Canada has been waiting for. Hopefully mobilization efforts for this cause are successful.

Going back to the reactive/proactive equation, I am often struck by the company that has an absolutely brilliant idea, light years ahead of its time, then goes through the vetting process which ultimately involves getting client and consumer reviews through surveys and focus groups. How often do these turn out to be negative, ultimately killing a project, when the reality is that the originating company had both the insight and opportunity to be a market and category-maker? If the fate of computers and the Internet had been left to a focus group, where would business and communication be today?

Similarly, some companies know when (and how) to push for proper, supportive, market-expanding regulation.

And sometimes the best of all these opportunities are manifest when both markets and regulations are in flux. Smart companies are vesting in these markets as we speak.

Additional resources:

Bill C-51: http://www2.parl.gc.ca/HousePublications/Publication.aspx?DocId=3398126&File=24

CHFA Bill C-51 FAQ: http://www.chfa.ca/default.asp?action=article&ID=353

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