Sep 17, 2012
DALLAS, TX (August 22, 2012) – Essential Formulas Incorporated, a Dallas-based dietary supplement distributor, presented testimony before the 2012 Republican National Convention Committee on Resolution during its August 19 -20 sessions held in Tampa, FL. Presented at the request of Rep. Marsha Blackburn (R-TN), co-chair of the Committee, EFI addressed the struggle of small businesses to remain viable in a challenging economy rife with federal, state and local regulatory requirements, many of which are unjustified burdens on the business community, in general, and the dietary supplement industry, in particular.
After experiencing triple digit growth from the company’s beginning in 2000 until 2009, CEO and President of EFI, Michael Schoor, reports that EFI has seen only modest growth in the last several years.
“With the failure of the economy to bounce back after 2009, we are very worried about our continued growth and corporate vitality. One of our most important concerns is the devaluation of the dollar,” said Mr. Schoor. “A strong dollar is paramount to our continued growth since we must buy our probiotic products and other dietary supplements from a well respected Japanese supplier and thus pay in yen. Today, this significant devaluation of the dollar cuts directly into our ability to pay salaries and fund business expenses.”
Due to the dollar’s devaluation, economic uncertainty and regulatory burdens, Mr. Schoor has been reluctant to fill positions within his company that were made available during the last year when several employees resigned for various reasons.
In addition to addressing the federal deficit, EFI’s testimony also stressed that the Federal government must revisit the regulatory policies that are putting undue burdens on small businesses. The testimony states that with regard to the dietary supplement industry, the United States Food and Drug Administration (FDA), Federal Trade Commission (FTC) and several other agencies promulgate the major regulations. Many in the dietary supplement industry believe some of these agencies may be attempting to make new law via the regulatory process, and in the case of the FDA, through their issuance of guidances such as the Guidance on New Dietary Ingredients (NDI) for Dietary Supplements.
“Unfair regulatory burdens on dietary supplement businesses are unjustified and must be revisited and lifted where appropriate,” said Mr. Schoor. “Our industry has complied with the Dietary Supplement Health and Education Act of 1994 (DSHEA) while ensuring that dietary supplements remain safe for consumption”
The testimony goes on to explain that with regard to NDI matters, many in the industry believe FDA is using this “guidance” to posture the dietary supplement industry into seeking pre-authorization from the FDA before a dietary supplement may be introduced into the marketplace. This would be a major divergence from DSHEA and will lead to devastating results.
In an exhaustive economic study of the potential impact of the NDI guidance on the dietary supplement industry, Emory University professor of law and economics, Joanna M. Shepherd Bailey, Ph.D., commented that the NDI Guidance would force between 22,240 and 41,700 dietary supplements to be removed from the market at an economic loss of between $5.6 billion and $10.5 billion. Dr. Bailey further noted: “The Guidance will cause a total economic loss of $21.2 billion to $39.8 billion annually in the economy. It will also cause 127,598 to 239,247 jobs to be lost throughout the U.S. economy.”
EFI’s testimony strongly urged the 2012 Republican National Convention Committee on Resolutions to include in its platform a statement (1) recognizing the importance of the dietary supplement industry and the American consumers of dietary supplements to the overall economic health of America and (2) urging Federal agencies to work with the industry in a spirit of cooperation when these agencies seek to enforce DSHEA and other relevant laws. Also, EFI requested the Committee to urge the FDA to proceed through rulemaking with regard to implementing the types of policies and requirements set forth in the NDI Guidance Document, as required under the Administrative Procedure Act (“APA”).
It goes on to recommend that the FDA should be encouraged to reconsider positions articulated in the Draft Guidance that are contrary to the statute and Congressional intent, contrary to science and to reasoned policy considerations, and overly burdensome. These include not only new policies but also the agency’s continued policy of treating the New Dietary Ingredient (“NDI”) notification provision as a premarket approval provision. In addition, irrespective of the administrative process, FDA must fully analyze the economic impact on small businesses of compliance with the NDI notification submission requirements under the Draft Guidance.
Note – Committees of the national conventions prepare reports for the conventions on delegate credentials, rules of procedure and party platforms. The full convention ratifies or amends the respective recommendations from each of these committees.