The Price of Dietary Supplement Contract Manufacturing

Feb 23, 2016

Given the events of the past year, contract manufacturers in the supplement industry could be forgiven for asking if theirs is a glass half full or half empty. On one hand, they’ve never been more vital to the category, as a growing class of health-conscious consumers send global supplement sales skyrocketing up at a 50%-faster rate than those of over-the-counter-drugs during the 2009–2014 period, per market research firm Euromonitor.

On the other hand—and in no small part thanks to that vitality—contract manufacturers (CMs) are feeling much the same heat as their more-visible marketer partners when lapses in product quality, identity, or safety arise. And arise they have, prompting everyone from regulators at FDA and the FTC to attorneys general and even the Department of Justice to intensify their scrutiny of supplement brands—and, by extension, the manufacturers behind them.

Which got us thinking: What do CMs have to say about the state of the industry’s reputation, their contribution to it, and the rules that tie it all together—the supplement-industry current good manufacturing practices (cGMPs)? As Shaheen Majeed, marketing director, Sabinsa Corp. (East Windsor, NJ), puts it, “There are some very good companies making quality products and adhering to the GMPs, and there are others making abysmally bad ones that do nothing to comply.” Whether that signals a glass is half full or half empty, “It certainly has been an eventful year,” he says.


Current Events

Among the more notorious events in the U.S. was the sting operation led by New York State Attorney General Eric T. Schneiderman, which called into question the compositional authenticity of major supplement brands and led him and chief law-enforcement officers from 13 other states to demand a Congressional investigation into industry practices. Then there were the multiple warnings FDA issued to companies marketing pure powdered caffeine, for example, or products containing beta-methylphenethylamine (BMPEA), an amphetamine-like stimulant the agency doesn’t recognize as a dietary ingredient.

And don’t forget the steady drumbeat of news casting doubt upon the very wisdom of supplementation. While Eugene Ung, executive vice president, Best Formulations, (City of Industry, CA), thinks “it’s too early to tell if there will be a negative impact from this press,” industry members—even those who’ve heard the allegations before—remain on guard. Notes Marc Ullman, counsel, Rivkin Radler (Uniondale, NY), “The constant negative press remains concerning. To date, the supplement industry has been pretty ‘Teflon,’ but at some point, odds are something’s going to stick.”