Update on and Notice Regarding California Transparency in Supply Chains Act of 2010
On January 1, 2012, the California Transparency in Supply Chains Act of 2010 (SB 657) ("Act") went into effect in the State of California. The Act is an attempt to seek the elimination of slavery and human trafficking from product supply chains and requires that companies disclose their efforts to ensure that their supply chains are free from slavery and human trafficking. Nutraceutical opposes slavery and human trafficking in any form and urges governments and government agencies around the world to take measures to eradicate these activities by outlawing and prosecuting violators. We are committed to supporting these efforts as a small cap company in the United States if there are viable steps we can take. We describe our current practices below.
Overview of Natural Ingredient Sourcing
Nutraceutical currently sells over 7,000 SKUs of products which incorporate over 2,000 raw materials, with their ultimate sources likely including regions in virtually every country in the world. Many of these ingredients are planted and harvested using traditional techniques developed over centuries if not millennia, while others are harvested using modern techniques. The suppliers can range from large businesses to small, family-owned farms, co-ops and harvesting operations, where products are sometimes wild-crafted (i.e., harvested from the wild). In some traditional family operations, family members of all ages may participate together and support each other and in fact enjoy working together, just as many farming operations in the United States have done since the founding of this country. Since growing conditions can change from year to year and season to season, buyers who work for Nutraceutical and for the natural product suppliers we purchase from must source these materials from a wide variety of vendors, which can change from year to year or even season to season. All of these factors create a particularly challenging situation for any company of our size to make a meaningful contribution in this area.
Supply Chain Standards
Nutraceutical expects its suppliers to ensure that quality and safety standards are maintained throughout our supply chain by well-treated, fairly compensated workers in accordance with all applicable laws. Our current efforts include the following:
Update on "Dietary Supplement Safety Act of 2010" and Other Attacks on DSHEA
In 2010, Senator John McCain (R-AZ) and Senator Byron Dorgan (D-ND) proposed The Dietary Supplement Safety Act of 2010 (DSSA). As written, it would have had the effect of gutting key protections currently provided by the Dietary Supplement Health and Education Act (DSHEA). It would have also restored virtually unlimited control to the FDA to decide what supplements you can take and at what levels - within this agency are many individuals who have long tried to shut down the natural health industry. DSSA denies individuals the freedom to protect their own health. We were opposed to its passage.
After Washington D.C. was flooded with hundreds of thousands of phone calls and emails from concerned citizens, and after a phone call and public letter from Senator Hatch, Senator McCain withdrew his sponsorship for this bill. However, we should all remain vigilant to avoid any further erosion of the protections provided by DSHEA, no matter who is sponsoring the proposal and no matter what bill it is hidden in.
Here is some background:
Update on Red Yeast Rice Products
Some customers have contacted us regarding negative publicity about red yeast rice products marketed under our Solaray®, Natural Balance® and VegLife® brands. This publicity originated with a ConsumerLab review.
We want to reassure you that our manufacturing and testing processes are designed to ensure that our products meet applicable safety standards in the United States. We believe that our products are safe when used as directed. The ConsumerLab review should not be construed as evidence that our products are unsafe.
REGULATORY BACKGROUND ON RED YEAST RICE
We sell traditional red yeast rice which is produced from the natural fermentation of the yeast, Monascus purpureus, on rice. Red yeast rice traditionally contains trace amounts of lovastatin - however, due to the regulatory status of red yeast rice, we focus our efforts on sourcing red yeast rice that has been manufactured according to traditional methods, which is the only kind of red yeast rice that meets FDA's regulatory requirements. Traditional red yeast rice has been consumed for centuries.
We think it is important to note that FDA has historically pursued regulatory action against manufacturers and products that have moderate to high levels of lovastatin or make claims about the presence of lovastatin on their labels. See for example these warning letters:
Consumers should be cautious about purchasing products that are manufactured using techniques that increase or concentrate the amount of lovastatin above what is found in traditional red yeast rice. Some manufacturers may even be adding lovastatin. In either case, FDA would take the position that such products should not be sold or purchased as they violate the law in numerous respects, including lack of assurance of safety.
The ConsumerLab review contains some errors. One of the primary errors is its failure to note that among health food store brands tested by ConsumerLab, only Solaray®, Natural Balance® and VegLife® products contained levels of lovastatin within the range that FDA considers naturally occurring and safe. In fact, the ConsumerLab review suggests that consumers may wish to consider purchasing products with moderate to high levels of lovastatin - the very products that could be and have been subject to regulatory action and that FDA considers to be unacceptable and unsafe for dietary supplements.
We have made some suggestions to ConsumerLab regarding its approach to creating and publishing standards and some improvements to its business model. Here is a copy of our letter to them.
We screen our red yeast rice using UPLC-MS (ultra performance liquid chromatography-mass spectrophotometer detection). Current detection capabilities are down to 1 ppm.
ConsumerLab acknowledged in its review that there is no scientific basis to determine whether or not the levels of citrinin that ConsumerLab claimed to have found in our products and other products has any adverse health effects. We have consulted an independent toxicologist who has confirmed to us that the levels referenced in the ConsumerLab report do not raise a safety issue. Nevertheless, in order to continue to assure the highest level of quality for our products, we have expanded our screening program tests for citrinin in all red yeast rice raw material down to 1 ppm.
Nutraceutical has built its reputation as a superior quality supplement manufacturer by providing ingredients with guaranteed purity and potency. We are noted for having among the most stringent testing and quality control standards in the industry and are audited by an external auditor. Routine tests are performed for aluminum, lead and other heavy metals, more than 500 pesticides, herbicides and fungicides, microbial contaminants such as E. coli and salmonella, disintegration time and, of course, potency.
You can be confident that Nutraceutical products meet their stated label claims by being manufactured under strict quality control procedures, by being thoroughly screened for suspected contaminants and by using high quality ingredients.
FDA Re-evaluates Health Claims
On December 21, 2007, FDA announced that it intended to re-evaluate certain previously approved health claims and qualified health claims involving soy proteins, antioxidant vitamins and selenium. Read a copy of Nutraceutical's submission to FDA.
A case report from the University of California - Davis reported that detectable levels of arsenic were found in kelp dietary supplement products and that an individual's adverse health symptoms may have resulted from the consumption of a kelp supplement. Subsequently, there were news and media reports on this case report and retailers and consumers expressed concerns regarding the consumption of kelp due to its potential arsenic content.
Below is some background information on this case report as well as arsenic generally, including its presence in food and the environment. This information is intended to help retailers and customers understand that Nutraceutical stands behind the safety of its dietary supplement products, including its kelp products, and uses laboratory testing guided by scientific expert input to help assure that its products are safe.
Adverse Event Reporting
On December 6, 2006 Congress passed the Dietary Supplement and Nonprescription Drug Consumer Protection Act that will treat supplements like drugs for adverse event reporting.What many people didn't realize in considering this bill is that there was already an adverse event reporting system for dietary supplements. See how you can already report adverse events to the FDA. We remain concerned that this new system that treats supplements like drugs - and supplement manufacturers like drug manufacturers - will not help consumers. Nutraceutical led the fight to protect the rights of consumers and health food stores to continue to sell safe and effective dietary supplements. For more information, click on any of the links below.
The Ephedra Decision: The Real Story
On April 14th, 2005, a Federal District Court in Utah ruled against FDA's ban on low-dose ephedra products. The plaintiffs were Nutraceutical Corporation and its subsidiary Solaray. We sued not just to protect our ephedra product, but to protect your access to other supplements. The FDA subsequently appealed the decision to the 10th Circuit Court of Appeals and on August 17th, 2006, the 10th Circuit Court of Appeals reversed and remanded. Nutraceutical subsequently petitioned for a rehearing but its petition was denied. Nutraceutical subsequently filed a petition for a writ of certiorari to the U.S. Supreme Court. On May 14, 2007, Nutraceutical's petition was denied.
In the meantime, Nutraceutical filed a motion for summary judgment with the Federal District Court in Utah, and FDA responded with a cross-motion for summary judgment. On March 16th, 2007, the Federal District Court in Utah ruled in favor of FDA. However, in its decision, the District Court held that the risk-benefit test announced in FDA's decision only applied to dietary supplements containing ephedrine alkaloids. Neither Nutraceutical nor FDA appealed this decision.
Industry-Related Codex Positions and Responses
See the Food and Drug Administration's Responses to Questions about Codex and Dietary Supplements
See the Council for Responsible Nutrition's Myths and Facts on Codex and WTO
See the National Nutritional Foods Association Position Paper as well as its Codex Alimentarius Resource Center.
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