Key Regulatory Concerns in Starting a New Food or Dietary Supplement Business

As its name suggests, the US Food and Drug Administration, or FDA, regulates drugs and foods. Drugs are subject to extensive review by the FDA. The applicant or “sponsor” must use data from scientific studies to convince the FDA that a drug is safe and effective to treat, cure, diagnose or prevent a disease or condition when used as directed. Drugs require pre-marketing approval by the FDA and cannot be legally marketed and sold in the US until the FDA has approved them.

Foods as defined by law (the Federal Food, Drug and Cosmetic Act) include articles used for food or drink, chewing gum and components (ingredients) used in either of these. Foods do not require any data to be submitted to the FDA to prove the food is safe and effective. Foods do not require pre-marketing approval before they can be legally marketed and sold in the US. But the FDA is concerned that foods are safe and accurately labeled. The Center for Food Safety and Applied Nutrition (CFSAN) is the branch of the FDA that is responsible for ensuring this. CFSAN has oversight of almost all food products available in the US. Notable exceptions are certain meat, poultry and egg products which the US Department of Agriculture oversees. Other consumables that are not regulated solely by the FDA include certain alcoholic beverages and non-bottled drinking water. But bottled water and some alcoholic beverages (such as certain beers) are subject to the FDA oversight and regulations.

CFSAN establishes food standards. These food standards include standards of identity (for example, what the requirements are for a product to be labeled "yogurt" or “Swiss cheese”) and standards of maximum acceptable contamination. CFSAN also sets the requirements for nutrition labeling of most foods. These standards are written in the Code of Federal Regulations (or “CFR”). In addition to the regulations, which are binding, the FDA publishes guidance documents. Although the guidances are often called “non-binding”, as you might imagine, it’s a good idea to follow them.

Dietary supplements, sometimes called nutraceuticals or functional foods, could seem to fall into a gray area between foods and drugs. This impression is probably a result of nutrition science establishing the importance of certain dietary requirements to human health (like vitamin and mineral RDAs) and industry marketing efforts (like those for fish oil). But no matter the name, dietary supplements are, by law, regulated like foods and not like drugs. They are not subject to extensive safety and efficacy testing like drugs are. They have no pre-marketing approval requirements like drugs do. Most FDA enforcement action against dietary supplements comes either after they are proven to be unsafe or when the rules concerning their manufacture and labeling aren’t followed.

So what are the regulatory concerns for someone opening a human food or dietary supplement business? Federal requirements that apply to most food / supplement businesses are discussed below in this blog. Some products (acidified foods, milk, eggs, infant formula, bottled water, etc.) have other specific requirements. What follows is a rather summary overview of the federal regulatory requirements related to a food or dietary supplement business. Thus, we suggest that you consult with the appropriate regulatory authorities and obtain expert advice early in your planning process. For instance, you should check with the FDA and other federal, state and local regulators to see if other requirements apply to your products where they will be made, marketed, sold or held and to your facilities where they will be located.

Facility Registration: Unless specifically exempted, all facilities that manufacture, process, pack or hold food / dietary supplements intended for human consumption in the US must register with FDA before any of these activities start. Some examples of the types of facilities that may be exempted include: private residences, municipal water systems, transport vehicles, farms, restaurants, retail food establishments, nonprofit food establishments, fishing vessels and facilities regulated exclusively and entirely USDA. Because the determination of whether a facility is exempt from the requirement to register can be complicated, it is wise to consult an expert in the area before deciding that your facility is indeed exempt.  Facilities required to register must renew registration every other year.

Recordkeeping:
     A. Pedigrees – The US Bioterrorism Act requires food / dietary supplement manufacturers, processors, packers, transporters, distributors, receivers, holders and importers that must register with the FDA under that same act to keep records regarding the pedigree of their products. The required pedigree record identifies the immediate previous sources of ingredients and intermediate products and the immediate subsequent recipients of the products handled by the facility. This is commonly called "one up, one down" in the distribution chain. These records must be made available to the FDA upon its request to see them.

     B. Other records – A food / dietary supplement business may have to keep records in addition to the pedigree record required under the Bioterrorism Act. The types of records that must be kept, for instance records related to cGMP, depend on the type of products and processing operations of the business. These records must be provided to the FDA if it asks to see them.

Current Good Manufacturing Practice (cGMP): If your business makes, packages, labels or holds a conventional food or a dietary supplement, Current Good Manufacturing Practice (cGMP) regulations probably apply to you. Due to inherent hazards, particular product characteristics or special manufacturing processes, some products have additional requirements. General requirements are found in the Code of Federal Regulations at 21 CFR Part 110 (food) and 21 CFR Part 111 (dietary supplements). In addition to the CFR, the FDA website can be consulted for more information about specific product requirements, e.g., low acid foods and acidified foods.

Labeling: Food and dietary supplement labels must be truthful and not misleading.The FDA has detailed and complex guidelines for labeling of food products and dietary supplements. The guidelines cover everything from required label content and parts to font size. The label must be in English (with the exception of foods distributed solely in Puerto Rico which may be in Spanish.) In either case (food or supplement), the label should include at least 1. the name of the product, 2. the amount of the product, 3. the nutrition labeling, 4. the ingredient list, and 5. the name and place of business of the manufacturer, packer, or distributor. Additionally, dietary supplement labels must include "a domestic address or domestic phone number through which the responsible person … may receive a report of a serious adverse event with such dietary supplement." The dietary supplement is misbranded if the label does not include the required domestic address or phone number for adverse event reporting. Also, labels must include labeling for the major food allergens.

Food products’ labels must have a panel called “Nutrition Facts” that must contain very particular information in a particular format. Dietary supplements’ labels must have a corresponding panel called “Supplement Facts”. The food / supplement manufacturer is responsible to determine and provide the nutrition / supplement information. This task can be handled internally if internal resources are available, or it may be contracted out to a qualified laboratory. Some small businesses are exempted from providing the nutrition information. More information about the exemption is available here. The United States Department of Agriculture’s Food Nutrient Database is a useful tool for developing appropriate nutrient information for products. Also, the FDA provides a manual with technical instructions for developing nutrition information. Note that the FDA has proposed changing the Nutrition Facts and Supplement Facts panels (comments being accepted through August 1, 2014) so the example in the manual may become out dated if the changes are implemented.

A significant concern in the labeling arena is about “claims” made on the labeling or in advertising of foods and dietary supplements. Dietary supplements are the primary source of allegedly improper claims. Claims made concerning food are treated differently than claims concerning dietary supplements:
     Dietary Supplements: Dietary supplement claims are subject to special regulatory requirements and procedures. Three types of claims (explained later) may appear on dietary supplement labeling. These claims do not require any pre-approval by the FDA. But the manufacturer must be able to substantiate that the claim is truthful and not misleading. The FDA has some guidelines for what it considers “substantiation”. No later than 30 days after the dietary supplement with the claim is marketed, the manufacturer must submit the text of the claim to the FDA.

The three types of claims are: claims of general well-being, structure/function claims and claims related to a nutrient deficiency disease. General well-being claims describe a general well-being from consumption of a nutrient or dietary ingredient. Structure/function claims may describe the role of an ingredient in the normal structure or function of the human body. A common example of this is the claim "calcium builds strong bones." A structure/function claim may also describe the way an ingredient acts to maintain the body’s structure or function, such as "fiber maintains bowel regularity."

Nutrient deficiency disease claims involve a link between a nutrient deficiency and a disease. For instance, the link between deficiency of vitamin C and scurvy is well known. Nutrient deficiency disease claims must be accompanied by a statement of how widespread the disease is in the United States.

If a dietary supplement label includes a claim, it must also include a "disclaimer" that FDA has not evaluated the claim. The disclaimer must also state that this product is not intended to "diagnose, treat, cure or prevent any disease." Only a drug can legally make a claim to diagnose, treat, cure or prevent any disease and drugs (as discussed at the beginning of this blog) require FDA determination that the drug is safe and effective based on the data submitted by the drug’s sponsor. If the latter type of claim is made, the FDA will consider the supplement an unapproved new drug and may issue a warning letter accordingly.

The above information is only a very broad overview of the complex and detailed requirements for dietary supplement label claims. Further information regarding claims for dietary supplements can be found here. Because this is a complicated area, we advise you to consult with an attorney or other expert regarding any label claims you intend to make for your products.

     Conventional Foods: Claims made for conventional foods typically involve the nutritive value of the food. This is in contrast to claims for dietary supplements that usually involve non-nutritive effects. Conventional food manufacturers do not need to advise the FDA about any claims and they are not required to include any disclaimer related to the FDA evaluation of the claim in the labeling. But remember, the label information must be truthful and not misleading.

Reporting: There are various reporting requirements for a food or dietary supplement business. When they become aware of it, registered facilities are required to report reasonable probabilities that the use of, or exposure to, an article of food or dietary supplement could cause serious adverse health consequences or even death. Where conventional food is concerned, such information may be reported on the FDA’s Reportable Food Registry. In addition, conventional food manufacturers, processors, packers, transporters, distributors, receivers, holders, and importers may file Form 3500 to report serious adverse events to the FDA.

Serious adverse events related to dietary supplements must be reported to the FDA as well. The manufacturer, packer or distributor whose name appears on the label of a dietary supplement is legally required to report serious adverse events to the FDA. More information on the reporting requirements is available here.

Preventive Controls: As a result of the FDA Food Safety Modernization Act (FSMA) of 2011, the FDA is to be more proactive than reactive to food safety problems. The FDA hasn’t yet finalized its regulations implementing the FSMA, but a few things are certain:

Food facilities must implement a written preventive controls plan that involves: 1. evaluating the hazards that could affect food safety, 2. specifying the preventive measures that will be used to minimize or prevent the hazards, 3. stating how the facility will monitor the effectiveness of these measures, 4. maintaining records of the monitoring, and 5. specifying what actions will be taken to correct any problems.

Importers of food products are required to certify that the products meet US food safety standards and are not adulterated or misbranded within the legal meaning of these terms. Importers are required to verify that their foreign suppliers have adequate preventive controls in place to ensure that the food is safe.

There will be additional record keeping requirements for “high risk foods”.

Inspections: The FDA routinely inspects facilities associated with making, processing, packaging, distributing or holding conventional foods or dietary supplements. If you plan to do one or more of these activities in the US, your facility will be subject to these inspections. The inspection may be announced in advance or unannounced. So, you should be prepared for the FDA inspection of your facility and be sure your records and operations are all in compliance at all times. State and local regulators may also conduct inspections.

.      .      .     .

     This blog focuses on FDA based requirements for foods and dietary supplements. Other laws and regulations may apply to your planned products. For instance, the Federal Trade Commission (“FTC”) regulates advertising and has a helpful Q & A on its website regarding basic advertising regulations. Again, this blog is a general overview of some of the regulatory factors that must be considered before starting a new food or dietary supplement business. It is wise to consult the federal, state and local authorities about your specific products and plans. It is also advisable to consult industry experts to be sure your planning has accounted for all the laws and regulations that govern your new food or dietary supplement business.