Some people who buy supplements to avoid Big Pharma drug companies may find themselves doing business with Big Herba, instead.
Some of the same companies that mass-produce drugs in huge chemical labs also churn out vitamin and herbal pills sold in bottles with rainbows, sunrises and flowers on their labels.
Dozens of other supplement makers reap more than $100 million in annual sales. One of the largest – NBTY Inc., on New York’s Long Island – sold $2 billion last year in the United States alone. Its brands include Nature’s Bounty, Vitamin World, Puritan’s Pride and Sundown.
“They used to be mom and pop operations but now they’re major companies,” said Bruce Silverglade, chief lawyer for the consumer group, Center for Science in the Public Interest.
There are hundreds of small firms, including niche players with only a few products. But they account for a slim slice of total sales, industry experts say.
Supplements often are sold through multilevel marketing – distributors and franchise holders earn commissions by selling and recruiting others to sell for a large company at the top of the pyramid.
Even many ingredient suppliers are multimillion-dollar firms that do business all over the world.
Little herbal stores are only “what the consumer sees when they’re shopping,” while the large companies that supply them are mostly invisible, Silverglade said.
The industry’s little-guy, granola image has been a great marketing asset, allowing it to tap into Americans’ frustration with big medicine, big prices and big risks. Supplement makers are dwarfed by leading pharmaceutical firms, whose drugs command sales in the tens of billions of dollars. Yet the reality is that natural remedy makers constitute a sizable business that doesn’t have to play by the same rules as companies that make prescription or over-the-counter medicines.
The Dietary Supplement and Health Education Act of 1994 exempted supplements from needing federal Food and Drug Administration approval, or proof of safety and effectiveness, before they go on sale.
Americans spent more than $23 billion on vitamin, herb and other supplements in 2007. That’s less than a tenth of the amount spent on prescription drugs last year, though much of that cost was paid by insurers. Growth in supplement sales soared after the 1994 law but sputtered in the late 1990s, when the FDA linked scores of deaths and heart problems to diet supplements containing ephedra, which it ultimately banned in 2004.
After ephedra, “the growth fell off and has never returned” to double-digit rates, although sales still are rising at a more modest pace, said Michael McGuffin, president of the American Herbal Products Association.
In 2007, the FDA adopted good manufacturing practices, or GMPs, that set broad goals for companies to ensure quality and safety of their products, which still won’t need FDA approval to be sold. Big companies now must meet those standards, while small businesses have until next year to comply.
Of the 1,460 supplement firms in business when the rules were adopted, FDA said more than half were small, with less than 20 employees and median annual revenue of less than $1 million. Another 526 had 20 to 500 workers and median annual sales of $5 million to $10 million. That leaves 160 large companies, with 500 or more employees and sales over $10 million a year, said McGuffin, who was on a panel advising FDA on the rules.
“Responsible companies put in very strict” manufacturing practices voluntarily, before the FDA acted, said NBTY’s president, Harvey Kamil. His company makes 50 billion capsules and tablets a year, plus extracts, aromatherapies and nutrition bars. It sells mostly to mass-market retailers who want to see certifications and “seals of approval” by the Natural Products Association and other such groups that set quality-control standards, he said.
The Pharma giant Wyeth makes Centrum and other supplements, and Bayer HealthCare of aspirin fame makes the One A Day line. Unilever, Novartis, GlaxoSmithKline and other big pharmaceutical firms also make or sell supplements.
“They’re moving into more and more of these products,” said Steven Mister, president of the trade group, Council for Responsible Nutrition.
Big companies may be more likely to make a product that is pure and contains what it claims because “they have more to lose” by selling something that’s inferior, said Dr. Tod Cooperman, president of ConsumerLab.com, a testing service.
However, size does not guarantee quality. Big companies are more likely to seek out bulk ingredient suppliers in less developed countries, said Jana Hildreth of the Analytical Research Collective, a group of scientists advocating better supplement testing.
“They’re going to demand lower prices, and with the prices they demand comes lower quality. You basically get what you pay for,” she said.
The bottom line: “Consumers need to be cautious,” Cooperman said. “To get into the game doesn’t take very much. Anyone can sell a pill.”
Date: June 9, 2009
Source: Associated Press