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Editorial: Encouraging, Healthy, Legal Competition

By Len Monheit

For at least the next several months, industry will be faced with ephedra fallout, which unfortunately will distract regulators, legislators and the media, not to mention trade associations and others trying to build better dialogue and relationships to take the sector into its more responsible and mature future. Much of the goodwill generated from industry's support for last year's steroid legislation and current efforts towards AER guidance will be lost. Against this backdrop, commercial interest and opportunism is already emerging as it often does whenever a market is created, or in this case, reawakened.

Taking a step back from the specifics (ephedra in this case), a market is created by opportunity and largely, unfilled need, or put another way, unfulfilled demand. Well, this week, demand and interest has been rekindled (with great enthusiasm, judging from the comments and inquiries we've received) and the capacity to satisfy this demand will emerge. In fact, it never really went away, which is why it'll be up and running in pretty short order. The same is the case in any legitimate, black or gray market, made doubly dangerous by a lack of enforcement will or regulatory clarity. In the minds of many, we might have both of these circumstances, (lack of enforcement and lack of regulatory clarity) with ephedra. With other fringe or outright illegal products (steroids come to mind), demand has not stopped, we're not exactly sure where enforcement priority is, and in the meantime, unscrupulous illegal operations continue to 'work the community' and rake in the bucks.

Let's switch gears for a second and consider some industry advertising and marketing practices which everyone realizes are either right on the edge or downright illegal. It may be an issue of claims that are grossly unsubstantiated or misrepresented (a study on a topical used to support a supplement), it might be testimonials or third party literature. In Canada, where new products theoretically require a Natural Health Product License, it might involve a product for which eligibility for a natural health product license is uncertain at best, but in the absence of many actual licenses being awarded, who's to really know the difference? And ignorance is bliss - or at least, taking advantage of ignorance, in the absence of repercussions, can be lucrative.

So what to do, and whose problem is it anyway? So long as reward outweighs risk, business principles will prevail – acted upon by someone, usually the most unscrupulous. Now that demand has renewed and the regulatory environment for ephedra has 'grayed', we'll see product 'out there'. The repercussions of this will largely not fall on the manufacturers of these products - it will fall on industry. Until industry had excised steroids and steroid precursors from the realm of supplements (they were never there under DSHEA, but it took an outright ban on the entire category to have them excised in the minds of most media and organizations), the entire industry, steroid supplying or not, was involved and tainted to much the same level as those actually supplying the product. It may not be right - but how can you argue perception and conviction?

Answering the 'what to do' question is quite difficult, made more complex with a fragmented industry, with diverse sub-sectors and interests. In general, the risks associated with illegal activity must be made greater. Awareness of the 'big picture' must be raised in and amongst companies in this industry. Differentiation strategies must take on a whole new dimension, education, along the value chain and to consumers, must be a priority. And you're saying - All right, we've certainly heard all this before. and yes, to be honest, we've seen substantial and successful steps.

Where is a successful mechanism for self-regulation in the absence of adequate enforcement will? And here I'm not only talking about in the United States, but on a global level. One hears consistent rumblings about illegal practices, and moaning about the loss of competitive advantage, but nothing appears to be done. Is there differentiation value in obeying the letter of the law? How does a company communicate and substantiate that effectively? When a company's competitors repeatedly talk about relief from joint pain and osteoarthritis what should you do? When they say that ephedra is now legal, how should you react? These are the types of questions faced daily, in fact, both have been asked of me this week and I'd be very curious about suggested responses.

I think the high road operators really want to know what to do.

Look forward to hearing from you.

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