Saturday, April 7, 2007

04/07/07 - MLMs, AERs, SoPs, FDA on CAMs

1. MLM – Multilevel Marketing
2. Wanted: Testing for Supplements
3. Updated SoP Outline
4. AHPA on AERs
5. FDA to issue Guidance on CAM – comments requested!

1. MLM Marketing

MLM Marketing, of which Online Affiliate Marketing is a subset, appears increasingly important in the Vitamin Industry, while, at the same time, every successful MLM seems to feature vitamin products. Here is what Wikipedia has to say about Multi-Level Marketing" -

"In a typical multi-level marketing or network marketing arrangement, individuals associate with a parent company as an independent contractor or franchisee and are compensated based on their sales of products or service, as well as the sales achieved by those they bring into the business. *** Multi-level marketing has a recognized image problem due to the fact that it is often difficult to distinguish legitimate MLMs from illegal scams such as pyramid or Ponzi schemes. MLM businesses operate legitimately in the United States in all 50 states and in more than 100 other countries, and new businesses may use terms like "affiliate marketing" or "home-based business franchising". However, many pyramid schemes try to present themselves as legitimate MLM businesses."

And what it says about "Pyramid Schemes" -

"A pyramid scheme is a non-sustainable business model that involves the exchange of money primarily for enrolling other people into the scheme, usually without any product or service being delivered. Pyramid schemes have existed for at least a century. *** There are other commercial models using cross-selling such as multi-level marketing (MLM) or party planning which are perfectly legal and sustainable."

It was in 1979 that the Federal Trade Commission (FTC) ruled in the case of In re Amway (93 F.T.C. 618) that MLM marketing was legal. Some of the largest marketing companies in the world use MLM systems to provide goods and services to the public. Some famous examples come to mind. Amway. Mary Kaye. Market America. Nikken. Shaklee or Tupperware. These companies market billions of dollars in products and services annually.

It can be fairly said that Multi-Level Marketing appears here to stay and has been strengthened by the rapid development of the Internet Market (for both ease of record keeping and direct online sales). While, in the past, there may have been some abuses by some companies, the continued participation by millions of people in MLM companies (around the world) and the rapid growth of online affiliate sales, shows strong market acceptance and a continuing role in the global economy.


2. Wanted: Testing for Supplements – An important Nutraingredients commentary:

02/04/2007 - The dietary supplement industry needs an independent testing program that is recognizable to consumers in order to enhance the credibility of its products as well as encourage solid science and sourcing.

As it stands now, the industry lacks a familiar stamp of approval on labels that can let consumers know if the product in their hand stands out in any way from others on the shelf. This means companies that go the extra mile - those that invest heavily in research and development or oversee all sourcing of their ingredients - are not necessarily rewarded.

Many other consumer goods industries - such as dental products - have stamps of approval that can help point consumers to products with effective value-added ingredients, etc. The dietary supplement industry should apply a similar model, but with the added clout of a testing program behind the labels.

The obstacles frequently cited against this type of program are the cost of such an initiative, as well as what group or groups would assume the responsibility.

While the Natural Products Association, NSF International and US Pharmacopeia offer testing programs in the United States, they are either not yet wide enough in scope, or are not recognizable as label 'stamps of approval' to consumers.

The story in Europe is differs slightly with the finer points of the 2002 food supplements directive (especially vitamin and mineral) still to be hammered out. EU regulations. But even though industry may have its eye elsewhere, building consumer confidence in should always be a priority.

As such, a universal testing program would require an advertising campaign to familiarize consumers with the concept so that they know what to look for on product labels.

And once consumers start to look for stamps of approval on bottles, industry will be compelled to follow all the necessary steps to get such certification. This will also buffer the effect of allegations in the industry that target some companies and not others.

In January, American allegedly found high lead content in certain supplement brands, including a multivitamin for women sold by The Vitamin Shoppe. Traces of dangerous compounds are a genuine concern for the industry and until one independent body tests decides what constitutes 'dangerous' levels, the charges made by businesses such as will continue to scare consumers without providing any straight forward solution.

An independent testing program would also urge companies to become accountable for their ingredients and oversee the entire supply chain before their product goes to market. This could dissuade companies from relying on suppliers that contract from other suppliers in such a way that the end manufacturer has never even set foot in the facility where its product may have originated.

Also, any companies that cut their active ingredients with undeclared fillers would also be punished or, at least, would lose out on the bonus of certification.

Adulterated versions of relatively expensive ingredients such as hoodia gordonii or saw palmetto would become less easy for companies to proffer. Sold as an appetite-suppressant, cactus-like plant hoodia is sourced from South Africa, while saw palmetto for supporting prostate health is sourced and wild-harvested from Florida.

Consumers would finally know that what is on the label is what is really in the bottle.

However, none of this will come about until the majority of the industry is motivated enough to invest in its own long term livelihood instead of letting some companies take the easy way out while others invest in science and the consumer is caught somewhere in the middle trying to decide which product is legitimate.

Clarisse Douaud is a reporter with and has lived and worked in Canada, Ireland, Argentina and France. If you would like to comment on the piece, send an email to: clarisse.douaud'at'


3. SoP Outline Web Page

I’ve compiled the information presented in various Update eMemos regarding Standard Operating Procedures on the updated outline page at:


4. AHPA on AERs

The natural products industry is starting to get ready for Adverse Event Reporting, as this article shows -

“4/4/2007 - The American Herbal Products Association has joined the ranks of trade associations preparing the dietary supplement industry to comply with impending adverse events reporting (AER) legislation... Known as the AER bill, the amendment to the Food, Drug and Cosmetic Act was introduced in June 2006 as a means of obliging supplement manufacturers, packers and distributors to notify the Food & Drug Administration (FDA) of any serious adverse events reports. The AER legislation is set to come into practice by the end of 2007, meaning companies will have to have their reporting systems in place… Following the bill's passing at the 'eleventh hour' in December, the responsibility of informing industry was left in the hands of trade associations…. AHPA claims companies will be able to distinguish between a complaint and an adverse event.”

More on AER services:


5. FDA to issue Guidance on CAM – Comments requested!

The Food and Drug Administration is about to issue its “Guidance for Industry on Complementary and Alternative Medicine Products and Their Regulation by the Food and Drug Administration.” The “guidance” is just as bad as you imagine… however, first, they have to accept comments from the public on the proposal, and we hope to force a public hearing. Comments due by April 30th.

Guidance at:

You can submit your comments through Natural Solutions Foundation at:

I helped write the NSF comments and would appreciate your support by submitting your comments in support of ours!

Well, wish me a Happy Birthday – I was born this date in ’45.
Ralph Fucetola, JD - The Vitamin Consultancy
All Rights Reserved

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