• Future Of Dietary Supplement Industry Financially Imperiled By Proposed New FDA Guidelines; Retail Prices Of Vitamin Pills Would Skyrocket Says Consumer Advocate

    Posted August 4, 2011: by Bill Sardi

    Bill Sardi responds to proposed FDA guidelines that would plunge dietary supplement industry into catastrophic decline

    San Dimas, CA (July 28, 2011) – Efforts to comply with newly proposed FDA guidelines for New Dietary Ingredients would likely plunge the growing multi-billion dollar dietary supplement industry into unprofitability, result in the disappearance of thousands of dietary supplements from store shelves and would more than quadruple the retail price of vitamin pills, says Bill Sardi, president of Knowledge of Health, Inc, and supplement industry watchdog.

    According to Sardi, compliance with the proposed New Dietary Ingredient guidelines recently published by the Food & Drug Administration would roughly require eight years of all the profits generated by dietary supplement sales to pay for initial safety testing.

    Toxicity, gene mutation ($4 billion est.) and birth defect tests ($15 billion est.), by conservative estimation, could cost ~$20 billion to put 40,000 of the estimated 56,000 dietary supplement on store shelves through a battery of tests to prove they are safe, says Bill Sardi, president of Knowledge of Health Inc, and long-time health writer, dietary supplement advocate and formulator.

    The dietary supplement industry generates ~$25 billion in annual sales and with an guesstimated 10% pre-tax net profit ($2.5 billion), it would take eight years of all industry profits to pay for the tests, says Sardi.

    The industry would have to loan money to stay in business and be forced into steep leverage for years, he says. “Essentially, the banking industry would own the industry for decades on end,” he adds.

    “Assume the industry is able to pay down 10% of the principal on this debt annually, the supplement industry would pay for decades to meet the initial round of safety studies proposed by the FDA,” says Sardi. New products would also be required to undergo safety tests, adding to the above totals.

    Furthermore, the cost of re-testing could be steep, more than doubling the above estimates, says Sardi. “In a review of 249 NDI submissions, less than 3 out of 10 were accepted outright, meaning the cost of re-submission should also be calculated into future industry profit/loss projections,” notes Sardi.

    The dietary supplement industry has been growing by 5.9% per year in recent times, and the NDI guidelines would certainly put a crimp on that growth rate, even plunging the industry into negative growth.

    Sardi estimates thousands of existing dietary supplements would disappear from store shelves, as their sales would not justify the cost of NDI safety testing. If 16,000 of the 56,000 products on store shelves disappear because their cost/profit ratio is negative, anticipate industry sales to plunge by billions of dollars, adds Sardi. “You’re talking maybe $5 billion of sales going right out the window,” Sardi emphasizes.

    Furthermore, new product introductions could be delayed for up to 4 years or more, with the assumption the FDA approves their NDI on first application.

    “Some of the products that would likely disappear would be children’s vitamins and pre-natal vitamins, since they would require more expensive and time-consuming 1-3 year testing for possible birth defects. There is no way companies could afford to keep most of these products on the market,” says Sardi.

    “Thousands and thousands of jobs would be lost, all for meeting a government agency requirement that won’t likely improve upon the safety of dietary supplements,” Sardi lament.

    “One industry source informs me it cost one company $80 million to get a single a new food ingredient accepted by FDA’s New Dietary Ingredient requirement, so maybe my estimations are far from the real financial burden the NDI guideline would place upon industry,” says Sardi.
    Recognize, during the past 16 years since the Dietary Supplement Health & Education Act of 1994 was passed and New Dietary Ingredient guidelines had not been published and only 700 suppliers chose to undergo the NDI process, there were no outbreaks of toxicity or birth defects in the dietary supplement industry.

    Less regulated dietary supplements are ironically safer than tap water, table salt and aspirin tablets, says Sardi.

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