Editorial: Week In Review - The Wheels Keep Turning

By Len Monheit
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From a news standpoint, it was a quiet week -- But the wheels of the industry keep on turning. And over the course of the week, we’re in contact with literally thousands of industry professionals from around the world, some offering opinions and thoughts, others seeking them. Some of these developments, observations, comments and opinions, we propose to share with you.

It seems almost as if companies in the industry have adopted a wait and see strategy, holding off on discretionary purchases and activities until the business and regulatory environments are more clear. This would account for new slumping sales and a general lack of proactive communication and initiative. The danger is that there’s a communication vacuum which often gets filled with the wrong type of material. And, as frequently is the case in quiet periods, a single announcement, initiative or development can get lots of attention.

Examining some of the week’s developments, Hormone Replacement Therapy (HRT) took several more blows including study results suggesting it increased the risk of dementia. NNFA circulated a Good Manufacturing Practices Impact Survey, seeking to present FDA with the data they seek regarding the impact of the proposed rule, prior to the comment closing period of August 11, 2003.

In international news, a Neilsen survey conducted in Australia a few weeks following the suspension of Pan Pharmaceuticals manufacturing license by the Therapeutic Goods Administration indicated that immediately after the recall and suspension, almost 80 percent of regular vitamin takers continued to take products, including those brands involved in the recall. The survey continued to say that while both volume and value sales dropped substantially in the two weeks following the recall, recovery had started in the third week.

It seems logical to conclude that lingering impact in areas affected by the recall will be a lack of available product with the production gap created by the issue and Pan’s suspension, creating all sorts of opportunities for aggressive companies seeking to take up the slack. This would include existing players in the area, but presumably there will be opportunities for others. It’s also interesting to note the consumer brand loyalty throughout the crisis.

Returning to North America, this morning word was released that Nutraceutical was in the process of acquiring Nature’s Life, and earlier in the week, the ephedra ban in Illinois was signed into law and the California Senate voted in favor of licensing Naturopathic Doctors.

With the state of Illinois becoming the first to completely ban ephedra products, how much farther along the slippery slope does this take the industry? I know some of our legal minds in the industry will say that the fight over ephedra must be fought lest our willingness to accept a product ban become a precedent for other products. Yet I can’t help but wonder how much ongoing damage is being done by the fact that ephedra is still in the news, still associated with credible and legitimate supplements companies despite theactions of several to remove it from their product lines. And a part of me can’t help but wonder at the missed Public Relations opportunity, a presentation by an industry who did not the absolute least, but instead went even further than what it was required to do in an effort to show solidarity and responsibility. Many have and will disagree with this idea.

The other observation this week is companies (in Canada and the US) are beginning to reposition themselves and supply chain partners as part of their preparation for the changing regulatory environment. I would expect this effort to pick up momentum, but the early indications are that contract manufacturing and analytical capabilities will be re-evaluated, as will current relationships in these areas.

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