DSHEA at 25: In conversation with Scott Bass and Loren Israelsen

Scott Bass​ and Loren Israelsen​, two of the key architects of the actual law, tell the story here exclusively on NutraIngredients-USA.

Bass and Israelsen discuss the genesis of DSHEA, the political intrigue, and the industry personalities seeking to stamp their influence on the bill that would subsequently become the law of the land.

“Loren and I became good friends in 1990 when we were drafting the NLEA [Nutrition Labelling and Education Act] exception for supplements and then I remember to this day that DSHEA really started in a call between Loren and me in December of ‘91,” ​says Bass.

“It was a snowy day, we were all flying in to Colorado for a meeting of industry and we looked at each other and said, this is it. The FDA has fired a shot across the bow by saying that herbs were not nutritional. And that’s when Loren… the people in Utah went to Hatch, and that’s how it started.”​

“What people don’t release is that this unanimously passed law was actually passed only because of the brilliance of the strategy of Senator Orrin Hatch,” ​adds Bass.

The passage was not straightforward, and there were many twists and turns as the language of the bill took shape.

“This was the Rasputin Bill: It lived and died more times than you can imagine,” ​remarks Israelsen.

“One of the interesting battles and this where you saw the two factions of the industry go at each other is that there was one group that much preferred the term ‘nutritional’ supplement and then there was the other group that insisted that it had to be ‘dietary’, because on those two words would hang all the difference.”​

Bass and Israelsen also discuss the ​successes and shortfalls of the law over the past 25 years, and looks ahead to what comes next.

“I think that the failure of every major health care system in the world and it is in the world is what’s driving the $40 billion market because people A. don’t want to go to a hospital and B. can’t afford to,” ​says Bass. “So, they’ll do everything they can to prevent disease or maintain their health even if they have a condition even by taking a product. It may not be a dietary supplement, it could be a medical food or FSDU [foods for special dietary use] but it’s something….”​

There has been a lot of talk in industry circles about modernization of DSHEA – or DSHEA 2.0, as Israelsen calls it – and what that would look like.

“If we’re really going to put a table out, invite people to sit there and say, ‘What do you think?’ we better come prepared with some very clear and specific ideas of what we think the future should look like in terms of a statutory framework,” ​says Israelsen.

“I would be intrigued to see to what degree the industry reveals its populist side in that, which will be there. And to see if there’s a new generation of leaders who would arise because there’s an opportunity now to be a leader in a new way.”​

A full transcript can be read below...

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DSHEA at 25: Video transcript​

Stephen Daniells:​ On signing the Dietary Supplement Health and Education Act or DSHEA in to law on October 25^th​ 1994 president Clinton said and I quote “After several years of intense efforts, manufacturers, experts in nutrition, and legislators, acting in a conscientious alliance with consumers at the grassroots level, have moved successfully to bring common sense to the treatment of dietary supplements under regulation and law.”

Now the industry was valued at about 4 billion back then with about 4,000 products on the market. Today it’s between 40 and 50 billion dollars and there are upwards of 80 thousand products around. While the word has changed significantly over the last 2 and a half decades, the regulations underlying dietary supplements have endured, with few key amendments. Now over the course of the next hour we are going to take a deep dive into DSHEA. We are going to take a little trip down memory lane and we’re going to look at how the industry has evolved of the last 25 years and then we’re going to talk about what comes next. And who better to lead us on this little trip than two of the key architects of the actual law. Now I am very pleased to be joined by Loren Israelsen who is the president of the united natural products alliance and Scott Bass who is a partner at Sidley Austin. Now gentleman, thank you very much for joining us today.

Loren Israelsen: ​It’s a pleasure.

Scott Bass: ​It is

Stephen Daniells:​ So now I’m going to start off and say the doors are locked and we’re not leaving here until we get through all my questions. But don’t worry if you get hungry either, I have a salami sandwich that you can share. And I believe there is a story about the doors being locked in and a pastrami sandwich. Am I right Loren?

Loren Israelsen: ​You are correct

Stephen Daniells:​ You need to lead me off. Take me back to that night.

Loren Israelsen: ​We are locked up in the…. It was the Russell building I recall and this was the negotiating team, we were down to the final days of DSHEA and we were literally locked into a room and the deal was if anybody left that was it, you were out of the room. So, there were no breaks, there was no foods and Scott and I were sitting next to each other and little do I know he smuggled in a sandwich. So I began to hear the little rustling sound and as I look over the next thing I see he’s slipping me half a sandwich so we can try and stay in the game here on the view that this was going to go on quite a while. One of the many memories of the DSHEA heroes where Scott and I were flying wing man for each other, over what was really a remarkable ride that deserves to be told. The story has never been fully told so we appreciate this opportunity.

Stephen Daniells:​ Alright, so take me back Scott to that night and then we’ll go back a little further before then. Those last few hours of DSHEA, I imagine it was very tense people are haggling over some of the things, it can even be make or break at some point. Take us back… what was that like?

Scott Bass: ​What people don’t release that this unanimously passed law was actually passed only because of the brilliance of the strategy of Senator Orrin Hatch, what happened was Loren and I were in that last ditch effort to revive the law he just described and we spent… what was it, 10 hours in the basement and then the following week our counter negotiator Senator, I mean Congressmen Waxman’s lead person had made an deal on the Senate to kill the bill. So the Senate kept the clock as they often do, the session ended for the year at midnight but it was now almost 3am and they moved the clock back in their hands and 5 minutes before the end of the session or 10 minutes the Metzenbaum pulled DSHEA as a matter of right. But Senator Hatch had been prepared with all of the liberal democratic Federal judicial nominees and pulled those. So, in the last minutes there was suddenly a hand vote I guess, unanimously passing along then in the house and that law, after two and a half years of contentious wild behavior became a law.

Stephen Daniells:​ Wow. So take me back to the early 90s now because this was a period of just immense activity in and around supplements right. So in 1990 you have the Nutrition Labelling and Education Act which kind of set the rules for health claims. You’ve got FDA stating that herbs were not eligible for health claims because they were not recognised as nutrients and then you got Senator Hatch floating a 1 page bill and then agreeing to the Health Freedom act of 1992.

Scott Bass: ​I always remember that, Loren and I became good friends in 1990 when we were drafting the NLEA exception for supplements and then I remember to this day that DSHEA really started in a call between Loren and me. In December 91 a snowy day we were all flying in for – to Colorado for a meeting of industry and we looked at each other and said, this is it. The FDA has fired a shot across the battle and that statement you made about herbs not being nutritional. And that’s when Loren… the people in Utah went to Hatch and that’s how it started.

Stephen Daniells:​ So it was very much Utah who was the driving force of this.

Loren Israelsen: ​It was a center piece for several reasons, Senator Hatch who I had known since the late 70s, having worked in his office of his first year if his first term and he is a true believer. He uses dietary supplements, he respects the natural health and wellness for philosophy, practises it and he had long said to many of our friends in Utah “should the time come and you need my help let me know.” And the casket of events that Scott mentions began to build up, on top of that there were other crazy things that were happening. It was the raid on Dr Jonathan Wright’s clinic in Tacoma Washington that sparked fury in the media, in the North West and this is a guns drawn, flat jackets, everybody on the ground raid, of a doctor’s office – he was using injectable vitamin B12 and selling supplements. For this interview, I pulled the file out and re-read the clippings of that time and it just immediately took me back, to the energy of the time and there was this growing foreboding in our industry that the FDA had been taking aggressive actions against companies. That this task force report the FDA issued in June of 1992 was alarming and erm…

Stephen Daniells:​ So, this was the one that was about the one that amino acids should be regulated as drugs because of l-tryptophan

Loren Israelsen: ​… correct, this was known as the Dykstra report after Gary Dykstra who’s a senior official at the FDA who had the misfortune sharing this taskforce, a very nice guy. And he had the unfortunate job of taking this assignment on. When you read the report, it there was any doubt in anyone’s mind where the future was as far the FDA was concerned…. it was right there and in text that vitamins would be capped based on potency. That was the working premise and that they would use the OTC monogram process to do that. Amino acids would largely be seen as drugs and others as it was then called would remain food additives to allow FDA maximum enforcement discretion, with that couples with the NLEA which had cut out non nutrients. Scott and I and others were desperately trying to get Congress to understand that they were, doing something good creating health claims but in the course of doing that they created a real problem for all of these non-nutrient products. They didn’t have time to deal with it, NLEA passes, so that was when the clock really began to tick in terms something is likely to happen… then in 92 you have this boom boom boom of events. And in Utah being an Epi-centre of the industry there was a deep sense of threat

Scott Bass: ​Did you say an Epi-centre, how can it be an Epi-centre

Loren Israelsen: ​A epi-centre. I’ve always been corrected 

Scott Bass: ​I know, I just.. Loren. By the way one thing…

Loren Israelsen:​ The English teacher

Scott Bass: …​there is a very good point you made. This goes back to 1964. So, Utah became a big player in late 70s but starting in ‘64 you had people in the east who were rebelling against all this vitamin-mineral limits and there were major cases against FDA for the period of 10 years, which they lost by the way. And all citizen marches on Washington in 1973 leading to the Proxmire Amendments in 1973. This was all, actually you’re right, it wasn’t just all the whole effort by Commissioner Kessler, it was also 30 or 40 years resentment, bad court decisions and FDA using crazy theories to keep products as Loren said as food additives, so they can have pre approve authority so really built up and you had two groups. I always found it interesting, you had the far right and the far left

Loren Israelsen: ​It's true. It was a very odd collection of political views, of regionality in the industry that there is a very distinct North East corridor in Long Island in particular. You had the Utah culture and then you had the West Coast which was essentially seen as the hippie community within the industry. And when you got these three sets together it was hilarious, you could tell who was who with one glance.

Scott Bass: ​It was messianic and it was religious, at least 2 thirds was religious

Loren Israelsen: ​yeah and a third were high, and a third were sober and a third were cutting deals on the side.

Scott Bass: ​Exactly

Loren Israelsen: ​It was a strange combination of players that got together but under a common banner. And with any interesting movement you would typically see that and this was certainly true of our industry is that we had an common enemy as it were and a common object as it were and we set aside a lot of the usual differences that would express itself in the course of the industry. But we did see over the course of DHSEA that flared often is that we had as much trouble trying to negotiate within the industry as we were dealing with members of Congress that were on the other side of the table. And it was not without note that very often people were trying to cut side deals and it was a sense of allegiance I think that you really had to trust people. That when you’re in a room and you’re working with very sensitive negotiations that it’s paramount that it stays in the room. And I think that’s one thing Scott and I had absolute trust with each other. It was in the vault, it was protected for sure.

Stephen Daniells:​ so were some of the key personalities back then from all these different fractions and who was responsible for…

Scott Bass: ​Other than Loren… I guess Gerry Kessler who passed away

Loren Israelsen: ​Gerry Kessler would have to…

Scott Bass: ​Talk about masonic

…be on the list. Gerry was a very unusual colorful guy, very tall and he had a very distinctive booming voice. He was also physically quite distinct, that you would always know Gerry was coming, just by his gate. And he had a very clear sense, literally masonic, not making that up. It was Scott’s job to manage Gerry, you were both east coast guys you deal with each other. Gerry was very difficult to manage but Scott did it as well as he could. Gerry had a ranch right next to Michael Jackson’s in California, so we had what was it Neverland and we had Gerryland and there were a couple of meetings at his ranch that were interesting.

Scott Bass: ​Where everyone were jockeying to be leaders, he and I would be sitting there on the hill and elsewhere being like sure, sure, sure and trying to keep these people, give them there….. And then we had the citizens group, do you remember?

Loren Israelsen: ​Yes. Citizens for health was an important group, there were a number of people that were involved in that it became a real grass roots entity. They did a lot of hard work and made a real difference trying to

Scott Bass: ​Oh there was a true story right that the phones rang off the hook so much that the legislators couldn’t get calls out and they had, they had more calls and letters than this than any issue since the Vietnam War

Stephen Daniells:​ And that was coordinated or that was…

Loren Israelsen: ​yes that was coordinated

Scott Bass: ​Everybody, we had a blackout day of all retail stores

Loren Israelsen: ​Multiple blackout days. They would cover in some black, what every black you wanted – just cover the supplement section - customers would walk in… what’s the deal with this and they would say, that’s what your future would look like if you don’t sign this petition and make a phone call and on the checkout counter there would usually be a phone and there would be an petition form. And remember this is 1992/94 – this is pre internet. DHSEA passes and the internet’s born the next morning, it’s basically what happened.

Scott Bass: ​It’s interesting. Loren always had a better handle on the court concept, because I was trying to draft a law, so the concept is an over running concept, which he understood really deeply, which was the freedom of choice. I kept saying hey what that’s not the legal concept and Loren will talk to me and say yeah but we got to remember that’s what’s unifying everybody and that was it.

Loren Israelsen: ​That was the unifying principal. Interestingly today is Tuesday, yesterday Monday Commissioner Gottlieb issues a press date, noting that now 25 years after that the anniversary of DSHEA, here we are the FDA is interested in updating its process, procedures and its views about how dietary supplements should be regulated and they noted, interestingly that they felt that it would be appropriate to examine amendments to DSHEA and that’s another fascinating point that no doubt we will get to is that how adorable this statue was in terms of its water tight wielding and a lot of people tried to crack it open over the years.

Scott Bass: ​But you know, you and I, never wanted one change… I’ve actually changed my mind because of this mandatory listing issue and also because I know the FDA we have now is the best FDA we can get. It’s a FDA that actually believes… I thought that announcement gave credibility for the first time in 50 years by FDA to the legitimacy of this industry, to innovation but also called… you know Loren and I have talked about this. I think the industry has never grown up and taken on responsibilities, it needs to and it’s time for a change on both sides.

Stephen Daniells:​ I want to get to the Gottlieb stuff right at the end so we can kind of look forward. So I want to kind of pull you back

Loren Israelsen: ​Sorry we jumped ahead

Stephen Daniells:​ Yeah, it’s alright, it’s alright. So yeah pulling you back to when you, Scott were drafting it and how quickly did it come together as a law and how much chopping and changing

Scott Bass: ​You know Loren was heavily involved in a lot of the key provisions later. But it started out from the Bill Richardson, Congressman Richardson’s first bill which was a glomeration and we had a meeting in my office and Loren of course was a key player there. Everybody just gave us what they cared about, the 9 things they cared about that went in as the first DHSEA law and then it went to Hatch’s office where it was rewritten and every single word and every definition became a major rallying cry … people accused each other. They had law suits over provisions, so he and I kept a steady hand. As he said he with the rather, how can I say the active Utah folks who always wanted to take charge and he kept everybody in line and I wasn’t as successful as some people in Washington but there were a lot of groups trying to take credit all the time and it was he and I really who were behind the doors. It was interesting to watch and to your point or question, what happened there was the fundamental concepts didn’t change from day one: No food additive, meaning no prior approval; announcements to the industry of enforcements; no drug treatments – no backdoor GMPs that would treat them as drugs – and the ability to make, to have literature, it was called the balanced food case…to have literature available on everything for people under the First Amendment… I guess those would be the primary things.

Loren Israelsen: ​There were keys and I think the starting point is what is now I think section 201 of Food Drug Cosmetic Act as the definition section and  we felt it was paramount to redefine what is a dietary supplements, bearing in mind that term didn’t  lawful exist until the statue passed.

Stephen Daniells:​ so ‘94 was the first formal definition

Loren Israelsen: ​That was the first time there was an actual legal definition of dietary supplements

Scott Bass: ​Did you mention by the way as the representative of the herb industry that the herb isn’t a dietary supplement. That’s the irony of the law, herbs are drugs but FDA… he tried for years to get FDA to acknowledge them as traditional medicines. He even got ambassadors and others and they just refused

Loren Israelsen: ​Yeah, they were not having it

Scott Bass: ​This was, DSHEA was the tail that wagged the dog, it was about a drug category, herbs, being a leading supplements.

Loren Israelsen: ​That is a really key point. One of the interesting battles and this where you saw the two fractions of the industry go at each other is that there was one group that much preferred the term nutritional supplement and then there was the other group that insisted that it had to be dietary, because on those two words would hang all the difference. Nutritional had a very specific understanding, dietary is anything you add to the diet and that crafting and thought and language was very intentional and if you look back the drafts, I’ve got many boxes of the old original drafts is that you can see the mark ups, back and forth, back and forth…. Where dietary would be stricken out and replaced by nutritional and back the other way. And this went on for quite a long while

Scott Bass: ​Still going on to 201 ff 1.e it’s still the fight over that we took nutritional out and FDA trying to put it back.

Loren Israelsen: ​so we knew, we became very, very clear about what the fundamentals had to be and where the line had to be drawn. That turned out to be a key one. Literature was really important, again this is pre… well Amazon was found in the 1994 as a point of reference and so if you look at the evolution of what has happened from then to now on that side of the word and you look at DSHEA, which was formed against the backdrop of 40/50 years of history. That we really I think understood pretty clearly what had to change in order to protect consumer access to supplements. But also something that could be defended in court and that led to a lot of interesting examples that we discussed in detail... How do you take a dietary supplement? It had to be ingested. Well there was litigating over dietary supplements that you would squirt up your nose, put in your ears, on the skin and we have, always Scott and I resolutely said that statues really clear – is you need to ingest it. Now how exactly you do that when you put it in your mouth, there’s some room for discussion there. But these, and many people say these are the details… yeah these are the details that matter, that on which an industry turns. That investors are willing to put in a great deal of money because their lawyers tell them that, that’s pretty secure, yeah… you can make an investment based on what we’ve read here.

Stephen Daniells:​ and what compromises did you make along the way? Did you or did you…

Scott Bass: ​I think the biggest compromise in the definition what Loren was saying you know one of the provisions that he’s talking about… (ff) is the definition section sub 3 is what we call the race to market, if it was a drug first it can’t be a supplement (although now there’s a dispute about what if the drug was abandoned), but that was a big one and also there was much stronger feeling, particularly in Utah having no manufacturing standards set forth. That was I wouldn’t say compromised but essential view. Loren and I have always been of the same line we have been the fiercest defenders against all changes as you call it the welded together statute but as I said too and we’ll get to it later I think that time has changed, meaning now after 25 years but I think the big compromise is… Loren as I recall in that last meaning in the basement were the definition provision on other ingredients. It was partial… although we won on nutritional and then I guess the limitations they put on the structure function claims, right?

Loren Israelsen: ​Yeah that was a clear compromise. What we now call structure function claims… where we had to compromise – if you look at the title of that section 6 its statements of nutritional support. That’s where we couldn’t get the word dietary changed, that was one at the end of the day agreed to live with. I wish we could have had a harmonious definition dietary throughout. And that we knew and have seen it since that has been a problem going forward.

Scott Bass: ​And health claims. People mistakenly thought needed health claims and I’ve always knew they are worthless for supplements because they’re too long… but people fought very hard for those and we didn’t get what some people wanted.

Loren Israelsen: ​In fact, what we now call structure function claims turned out to be something quite desirable that the food industry wishes they had. The pharma industry feels like we’ve encroached on what the consumer perception is of a health benefit for products and if you line these products up OTC drug, a fiber product and a dietary supplement. Food, drug and dietary supplement, can you really tell them apart and we felt that would likely be the case. There would be a convergence over time and I think that

Scott Bass: ​there is

Loren Israelsen: ​That’s what’s happened

Scott Bass: ​January 16,000 federal register noticed structured functional claims… exactly what you said. 6 years later, convergence

Stephen Daniells:​ I read an article you wrote Scott and I think you said, you know with the passage of DSHEA basically 40% of the OTC was seeded to dietary supplements

Scott Bass: ​Is that the figure I used

Stephen Daniells:​ it was sizeable

Loren Israelsen: ​It was a big number. I don’t know what it was but it was pretty big number

Scott Bass: ​The line they drew was between occasional versus recurrent, If you have for example sleep product for constant sleep use it’s a drug but if it’s occasional sleepless it’s a supplement same thing with constipation and with fiber and all that stuff

Loren Israelsen: ​Chronicity turned out to be an important distinguishing point. The other one is I’m thinking of is on the NDI provision we had a terrible time, trying to coming up with a working process and that was one of the last things that was put into the bill. We worked out a lot of the other parts and then there was a lot of concern with Senator Kennedy specifically and Henry Waxman and their staffers who were very capable people. Bill Schultz who was the staffer for Waxman, was and is an exceptional bright, capable guy and part of the fun of DSHEA using that term advisedly is that there were a lot of extremely capable people that were in these final negotiating sessions

Stephen Daniells:​ on both sides

Loren Israelsen: ​On both sides.

Scott Bass: ​That’s a good point. Actually 4:13 never worked. It’s got too many controversy definitions through the grandfather processes and new dietary ingredients. But one of the things is that it has to be fixed by FDA now in fact is that, I think we know how to do it

Loren Israelsen: ​Yeah, agree. I think we felt that we had not fully resolved the whole NDI approach and process. The definitional piece which is not actually in the statute, it’s in separate language that defines what constitutes a change, which we could have something that was more clear and robust, we didn’t have time. 

Stephen Daniells:​ I did want to talk about the little disclaimer you see on all the packages as well. This statement has not been evaluated by FDA… this product is not intended to diagnose, treat, cure, prevent any disease. Where did that come from?

Scott Bass: ​Can I tell you a funny story. That comes from the same source as 4:13, Bill Schultz. I’m going to tell you something funny about this… I’m driving the day before the bill passed and I get a call that the whole things being killed because one of the trade associations had some large members who thought there will be a problem selling the product. I said, are you kidding, call Loren he’ll tell you the same thing I will that, that’s going to be an asset in selling the product that it wasn’t approved…

Loren Israelsen: ​That’s a badge of honor

Scott Bass: ​Yeah exactly. Nobody reads that number, number 1 and number 2… the fact that non-approved is for consumers to…

Loren Israelsen: ​For our consumer it was no problem. I recall I was hunkered over a fax machine, with Peter and Trish that were senator of Hatch and Harkin’s chiefs, at that time health policy staffers. As I remember, Scott was…. See I was on the Senate’s side, I can’t remember where I was but Scott was trying to control fire someplace else and we were waiting for a response from the Waxman office. We had proffered this… no they proffered the ledge work, they sent it over and I remember the fax kicking off and the old thermal paper rolls out and we look at this and then they said if you will accept this wording, we’re good. We looked at it and looked at each other and said we’re go! And we sent it back to Schultz. And there was this incredulous, you’re really willing to accept that?

Stephen Daniells:​ They thought that would kill it.

Loren Israelsen: ​They thought that would kill it. If there was one miscalculation in retrospect on their side, that was it

Scott Bass: ​You know why… because the player he relied upon, you know who I’m talking about, told him it would be a killer but nobody else thought it was.

Loren Israelsen: ​That worked out and so the language went on and I don’t think it’s an overstatement to say they were dumbfounded because of their world view, why would anyone buy a product that would carry such a disclaimer. Said, well you clearly don’t know our consumers

Stephen Daniells:​ okay, so you’ve got everything ready to go. This the 103^rd​ congress if I remember, if my research is right.

Loren Israelsen: ​That is correct.

Stephen Daniells:​ You had a democrat in the White House, you had democratic majorities in both chambers, you had some big names, like you’ve already mentioned… Waxman, Kennedy who were not very supportive of this

Scott Bass: ​Metzenbaum, Dingle

Loren Israelsen: ​Dingle was very important, very important

Stephen Daniells:​ And yet this went through. So, how did that look behind the scenes playing the game?

Loren Israelsen: ​Well, I’ll tell you about one meeting. Were you there at the Richardson meeting? After it passed through the Senate committee.. we had a meeting

Loren Israelsen: ​I’m sure, I’m pretty sure… Yeah I was there

Scott Bass: ​We had a meeting, 5 of us were there and he looked at us tie loose and said look I’m not your boy Orrin, he said this bill’s dead, it’s not going anywhere unless Orrin can cross from this from Senate in the house and save it, it’s over. This is 2 weeks before, 3 weeks before it passed. So, that’s when the famous meeting with Loren and me in the basement. Hatch called up Dingle, who was on the other side but they had a lot… but in those days people on opposite parties actually worked together occasionally. And so he said do me a favor, have your senior staffer, he a brilliant senior staffer.. put together a meeting and Trish Knight came over. She was and Peter were great, great staff members who were really smart and that’s the meeting we had to save the bill. It was basically dead 3/ 4 weeks before it passed. That was the behind the scenes that I saw… and know you saw it

Loren Israelsen: ​Yeah yeah, this was the Rasputin bill… it lived and died more than you can imagine. Moments of revelations when we finally thought we got this thing… the problem was that it never went through a mark-up in the house… never. That is extremely unusual for a major piece of legislation to pass without ever going through a mark-up on one of the two chambers. I was concerned for the same reason Scott was that the setup had been organized basically is to hand a live grenade to the Senate’s side. The driver… there were two things. One that the republican wave, you could feel in Congress they could see that the democrats were probably going to get wiped out and somewhere along the line the light when on for some of these key senior leadership offices is, you know there’s very, very pesky group that wants this dietary supplement bill are driving a tremendous number of consumers. We have seen them, the calls, the faxes, the rally’s… is if we can work a deal out maybe that will dissipate a lot of the anger that would be likely be channeled against the democrats and the October 1994… November ‘94 elections. In my view that was a motivator… the speaker of the house was Tom Foley. He lost in that election that followed. Newt Gingrich came into power as the speaker and Foley the democrat from Washington State was defeated. So, the midnight passage of the bill of the house side was remarkable and then the hand off to the Senate side. Now you guys can take care of business because the procedural rules are different, any member of the Senate can pick up the phone, which happened to be Senator Metzenbaum to put an hold on the bill. That would effectively kill it. So as you’re going through these final UC or unanimous consent readings, we’ll all you got to do is put the bill on hold and it literally gets pulled out of a stack. Unless you can get it put back into a stack, they’ll get read through… gavel’s done, everybody’s out of there.

Scott Bass: ​And that was all set up the day we had that basement meeting, when we reached agreement with Waxman’s person. He set it up so whatever we agreed to would be killed at the last minute.

Loren Israelsen: ​We were not unaware of that, and part of the challenge was to figure out who would be the sniper. We had 3 or 4 ideas of who it might be

Scott Bass: ​But those two don’t forget drafted Hatch-Waxman together

Loren Israelsen: ​That’s right. So, it was a really unusual dynamic as between Senator Hatch and Senator Kennedy, very good friends as everyone knows… a very unlikely combination of personalities and political views but you had the same with Senator Hatch and Harkin. Tom Harkin really came onto the scene and did a masterful job to really carry the water on the democratic side of the Senate. This really the, as it is referred to often, the Hatch Harkin Bill. And what still is a testament to how Congress should work is two offices, the Hatch Harkin offices had a highly trusted relationship between their staffers, who are still very active in the industry, thankfully. They carry an institutional knowledge of what happened. That would become very important now going into, what some would refer to as DSHEA 2.0 time period.

Stephen Daniells:​ I also want to talk about David Kessler. So, he was commissioner of the FDA at the time and there was an article that was authored by Peter Barton Hutt who is obviously a name everyone in the industry knows and he made this statement “In retrospect, the entire dietary supplement industry owes its current stature and economic strength to Kessler. Without him, DSHEA would never have been enacted. It was his arrogance and political insensitivity that allowed the champions of dietary supplements to carry their message to the American public, and it was the American public that rejected Kessler’s attempt to ban dietary supplements. I have often remarked that the dietary supplement industry should erect a monument to him in commemoration of his tremendous service to the industry.”

Scott Bass: ​I will tell you a very funny story that embodies that. Loren and I… I was called by commissioner Kessler the 15 people who led the industry effort, I shouldn’t say 15 because it was fewer then that because Trish and Peter were there and we were all summoned into a round major office of the commissioner where had everybody behind him standing in public service whites, essentially navy uniforms… white hat, white uniform. He had two desks facing each other, each about 15 feet long. He sat in the center of one and Loren and I sat with another lawyer, the center of the other. And the meeting began as follows: He stood up, he yelled and pointed his finger at me and said Scott you can’t win when the meeting started, this was August of 1993.  So I looked around conferred with Loren and said you can’t win, it’s not about money. And that’s how…that’s the embodiment of what you just asked about. He was a brilliant guy and still is, I think there was just… I think historical antipathy towards supplements goes back to medical school, since post WW2 and that carried over. And that arrogance was just an assumption that you can run because so many of the players were, shall we say, not university professors.

Loren Israelsen: ​Yes. It was highly unusual for an FDA commissioner to get that personally and politically involved in any Bill before Congress. That is highly unusual. Normally FDA stands off and HHS the parent agency will do that sort of liaison work with Congress. And this is an exception to that general principal. As Scott said earlier, and I fully agree, that we had an opportunity with the current commissioner who I believe has both understood the lessons of the past and brings a very different view and very different temperament to this discussion that we will be having. That is a very encouraging sign and that the leadership at the office of dietary supplements at FDA likewise has shown, I would say not only a spirit of cooperation, but a sincere interest to continue to allow broad consumers access but to carry out their mandate, which is the point they are making.

Scott Bass: ​I agree with that, it’s total different attitude

Loren Israelsen: ​that would be all the difference with we end up back at congress, all conclude there is a pathway to look at. And we will get to that in the conversation, what will that look like

Stephen Daniells:​ Yeah, I do want to talk about some of the various provisions in DSHEA and so we’re kind of moving on now into the intimidate period. Let’s look at the last 25 years, so GMPs were a part of DSHEA and they came in what 2007, 2010

Scott Bass: ​In 2004

Loren Israelsen: ​The first reg was ‘04 but I don’t think the final reg didn’t come into place till 2010

Scott Bass: ​to my shock by the way, I cannot devolve my source, but I’m a GMP lawyer, I’ve done a lot of civil and criminal GMP and I couldn’t understand for the life of me why nothing for 10 years nothing happened until somebody told me in the government that it was the intent of someone people very high up in the HHS to allow consumers to lose confidence in the industry because if GMPs came into effect it would be a quality leveler and therefore the government would be better of having no GMPs. And it was the courageous act really of the then FDA chief council Dan Troy who said it’s enough… you know that statute says we’re going to have GMPs so we’re going to have GMPs. And the first draft that came out, I think you remember was a thousand pages and it was basically drug GMPs was little part in the middle cut out on validation and what it ultimately evolved into was something we’ve begged the agency to do more enforcement but there were budgetary limitations.

Loren Israelsen: ​I have personally not witnessed that which is disappointing, but in the context of… just think about the post-DSHEA period, FDA was shell shocked, literally shell shocked. They couldn’t believe the bill passed. Recall there was a repudiation writing explicitly to the congressional record and the report of FDA’s abuses and that a section of provision changed the burden of proof onto FDA and any litigation. Highly unusual, to my knowledge unprecedented, that was the level of congressional revoke… understandably FDA took that quite personally and that there were a lot of people there who had been badly stung by how this all turned out. That took time to rectify that internally at the FDA again we both appreciate with that fairly wide lens of looking back and dealing with a number of commissioners over the years. This is the best commissioner I have seen at FDA in my course of…

Scott Bass: ​I will both agree with that both from my pharmaceutical medical device areas too. I think he’s the finest commissioner in my practice and his chief of staff is somebody who is extremely articulate, understands these areas in depth. And the head of the office of dietary supplements, the leadership there, as Loren said, is very interested in dialogue. So, I think we are in a different position, the other thing you should know… you asked about GMP the other thing that is key related to the 2007, I guess it was passed in ‘06 Adverse Event law. I think what people don’t release is that FDA made a conscious decision to Loren’s point, August of ‘96 it was a famous hearing on ephedra, at which FDA announced to the press… which is why you had bad press to this day that the Dietary Supplement Act tied FDAs hands behind their backs and there was nothing they could do about it. Which is of course explicitly the opposite of what we wrote in, we gave them emergency powers… having said that the press from that day on use that same line, to this day saying that it’s unregulated and they had 900 adverse offense reports on ephedra. Nobody knew at that time that they were garbage. FDA could have gone to court in one week and had injunction against ephedra forever, but instead they decided to go to the press and say we have no power in anything. And that was I think the turning point.

Loren Israelsen: ​Yes, I agree ephedra was a pimple on the face of the industry, that I lament personally.

Stephen Daniells:​ I wanted to actually talk about ephedra very, very quickly because DSHEA established two entities, right? One was the Office of Dietary Supplements at NIH and the other was this Commission on Dietary Supplement Labels, this very short lived commission which produced a report which was sent to various people in government, and in that they actually write “the commission urges FDA use it’s  authority under DSHEA to take swift and enforcement action to address potential safety issues such as those posed recently but products containing ephedrine alkaloids” so that’s in 1997 they’re saying we need to do something. It was 2002, 2003 before

Scott Bass: ​Dan Troy again, issued a regulation

Loren Israelsen: ​It was unfortunate that FDA did not use the authority which was granted to deal with that. On retrospect I think all parties would concur.

Stephen Daniells:​ let’s go and move on to now then. So the industry has it evolved the way back in 2005, I mean you could have never have known. the internet .. you had no kind of understanding how the internet could affect dietary supplements when you wrote the law. So how has that got ahead of itself…

Loren Israelsen: ​That’s a great question. It’s a little difficult to be objective, you’ve seen this grown up every day. So, it’s all familiar, all of the changes and the evolution but if you were to step back from then to now, it would be astonishing. First just in terms of its shear size and the magnitude and you can judge that by going to big shows, expos West as an example, other events. The second part is who you see, there’s a whole lot more suits and ties than we used to see. And there’s a great deal of money that’s very interested to participate in the industry. The personality has changed quite a lot, one of the things I’m concerned about. Those who own the industry have they own personal corporate financial interest. This has always been an industry that has been based on the common and a community and that means that you invest at least as much or a bit more of what you receive from it. That would be my greatest concern is that the desire to contribute to the community is not what it was and more and more we have people ask who are we. We are them the them, the them being those who we were dealing with 25 years ago, big food, big pharma. And big food, big pharma are extremely interested to know what we have to offer as are the consumers for all of us. That would be my biggest concern and can we maintain our integrity as I would say as philosophy to life and health. Is there the political will and the expertise resident in the industry today to engage in what looks to be a relook at DSHEA. The headcount is low, not without significance, Senator Hatch retired… Chairman Dingle passed away very recently. There are no remaining members of Congress that were directly involved in DSHEA. That’s now over. There are no staffers to my knowledge, as well. So the DNA strand has run out to some degree. And now with a highly divided … partisan in Congress the prospect of getting something meaningful done is an exhausting thought

Stephen Daniells:​ so the path of optimism is through Gottlieb and some of the things he’s talking…

Scott Bass: ​Well, partially I would say the engagement through Gottlieb and through dietary supplements. But you know I share Loren’s fundamental concern very much but my view is that I think it’s now a combination. I gave up on the people who had a cause and built companies around the cause because there’s only a few of those left. Loren and I still are extremely active in taking leadership positions to keep people from misbehaving essentially, as well as trying to move innovation forward but I’m not bothered by the fact that you have large responsible companies willing to invest money if they see there’s a reason to in safety studies or in substantiation in globalizing. My view, the reason I’m optimistic is I think I take from Commissioner Gottlieb’s statement this week a recognition and agreement that were not going to have a dietary supplement industry 10 years from now, we’re going to have what people have been talking about, which is a functional food industry. Medical foods, which are regulated by FDA with a 30 year out of date scheme that has nothing to do with the market or the science that’s emerging….intellectual property and exclusivity on the table which I think FDA will be willing to listen to are proposals to create exclusivity or some incentives for companies to invest. We’ve put forth a proposal that if a company spends a lot of money on safety, FDA can’t allow another company until they do an equal safety what we call defacto exclusivity. There’s are a lot of ways to move this. And I actually think as long as you have Loren around and certain other people who care because the company people aren’t there for most part. I think we can fashion something good and if it is. I think there are a lot of responsible companies in the OTC industry who would want to invest and are investing. But the interesting thing is what I don’t find tolerable is the vestigial concerns of people who are hiding behinds things like we don’t trust FDA, so we don’t want to grow up. When really all they’re trying to do is seek out some more income with low grade products or poor quality. In that part, both of us share that view and we’ve talked about this. It’s one thing to legitimately to be a small business person who needs a little easier go in order to make it. It’s a different thing to be a company in business for a long time who doesn’t want to spend the money to upgrade. And that is what a lot of the opposition is to growing up.

Stephen Daniells:​ you and I have talked about this… there’s a lot of people making a lot of money in this industry

Scott Bass: ​it’s a very profitable industry

Stephen Daniells:​ You’re right. When DSHEA, when these early seeds and sparks for DSHEA there were clear moments like this where the movement started. Today it doesn’t feel like that, there’s not that …that crisis. That would spark this… like let’s take this and do something..

Loren Israelsen: ​That’s true. The sense of urgency doesn’t exist for sure. The sense of opportunity might be the working equivalent today. Those who say, why we can’t say more about our products… or this and that. There’s a voice that still wishes there was a traditional medicines category. That should be listened to. The big ones that’s on the table is how do we integrate dietary supplements is our industries views and I would extend that now to medical foods or their equivalent and functional foods all sorts. How does that fit into that broader healthcare system? That is the trillion dollar question. And the opposition ultimately will be one we have to deal with is that to get into that system we have to make some big compromises. That is a debate we need to have… to me that is the fundamental go forward issue for DSHEA.

Scott Bass: ​In fact, Loren I think that’s the inflection point you’re talking about, Steve. I think that the failure of every major health care system in the world and it is in the world is what’s driving the $40 billion market because people A. don’t want to go to a hospital and B. can’t afford to. So, they’ll do everything they can to prevent disease or maintain their health even if they have a condition even by taking a product. It may not be a dietary supplement, it could be a medical food or FSDU [foods for special dietary use] but it’s something…. FOSHU product, you know or traditional medicine.

Loren Israelsen: ​This is the eternal river that flows through everyone who has this understanding of natural health and wellness is that we are responsible individually so what are the tools to do that. Well, it was the framework of DSHEA, it is to have access to what is valuable, useful information, high quality standards, a light touch by the regulators to step in when clearly there’s misbehavior and the let people educate themselves and make choices. They won’t always be the best decision but our fundamental view going is that it’s not the government’s responsibility to makes sure everyone makes a good decision.

Scott Bass: ​But it is responsibility industry to have a baseline safety and substantiation which they’re not meeting in the large part 

Loren Israelsen: ​Which are

Stephen Daniells:​ I also want to talk about the low barrier to entry because this is also a criticism which is levelled at the industry very often. It’s far too easy to go out there and find a contract manufacturer do up a formulation and whack your worn label on it… put it on the internet, off you go. In theory the inspectional authority were supposed to address that facilities registration, NDI notification

Scott Bass: ​Stop right there, that’s the problem… you just put your finger on it. The problem is the NDI system is not working because of what Loren said the way it was written it was a mess but also we need a mandatory listing so FDA knows what’s on the mark so they know it’s been registered. You cannot go to a contract manufacturer, slap your label on, you need to notify FDA and FDA has to know what’s in there and what the claim is. That isn’t happening now. What is it, 1% of companies are following NDI’s of who should

Loren Israelsen: ​It’s a low number

Scott Bass: ​I mean it’s ridiculous, and that’s the part of the system that needs the biggest fix

Stephen Daniells:​ That’s also going back to 1994 right, because we didn’t establish a list of grandfathered ingredients so we don’t… there are lists from that time but none of them are officially recognized. Now FDA is kind of scrambling, kind of to maybe to done

Scott Bass: ​you know that’s to me…. I know a lot of people care about that but no I mean mandatory listing meaning lets step up and say we’re proud to be on the market… just think of the concept, you go into the market you’re selling products to consumers on the internet or the store and yet you’re not willing to tell anybody that you’re on the market officially… it just makes no sense

Loren Israelsen: ​this will clearly be one of the go-forward discussions, things such as mandatory registration of a product or facility. That is a global standard basically, almost in every other country… that provision operates in some way: The US is an exception to that. The consumer’s expectations have evolved and changed and that would not, I think, unwelcomed by consumers. That would be one of the test issues, have we evolved to a point where that could be a thoughtful discussion of how would that work? And that needs to be had – that discussion. There’s a number of things and I think right now it’s fun to think about is, if we’re really going to put a table out, invite people to sit there and say, what do you think? We better come prepared with some very clear and specific ideas of what we think the future should look like in terms of a statutory framework. I would be intrigued to see to what degree the industry reveals its populist side in that, which will be there. It is always there… more quiet than other times. To see if there’s a new generation of leaders who would arise because there’s an opportunity now to be a leader in a new way. It’s an old saying of some sort, is that sergeants, colonels and generals are made in the battlefield and that will be true here. We look at the legacy group of players who worked so hard on DSHEA and remain close friends ever since is I don’t think the war time buddy analogy is inappropriate. That was a brutal two and a half years, and on the backend of it, it must have seemed like it was pretty easy, because now we’ve got the finished tidy statue and there it is, but boy oh boy to get from the beginnings of the whole idea – which were laughed at, I mean openly laughed at by almost everybody in Washington and they just thought how long is this going to last. In fact, I will digress. The bill was introduced original Health Freedom Act in 1992 was introduced in June. There was a FDLI conference in Virginia which was right over the river and I was at one round table at this big lunch and the deputy commissioner was at another and I think I remember a guy ran in and whispered in his ear and I just happened to hear: “Senator Hatch has introduced a new bill – a dietary supplement bill”. There was a short pause and he said, “Don’t worry, it’s not going to go anywhere”. And it was that dismissive sense of alright, alright… here it is. None of us could have predicted where this could have gone. Either the passage of the Bill which itself was a Hail Mary or that ten times growth over 25 years which I can think you can directly attribute to a foundation that was solid…. And enough that you could build some pretty big buildings on it in the form of investments and it’s great that this has been done and there has not been a chance for Scott and I to have a sit down and think about these things for a quite a long time. I have a pretty clear idea though that we will be once again as we move into this next phase

Stephen Daniells:​ Scott you said a few times in this past hour or so that the industry hasn’t grown up, but would you say it is growing up right. There’s things that have happened in the last 5/8 years from whether it Eric Schneiderman in New York and everything that happened from that. There are conversations, in my opinion there are conversations that are happening in the public sphere that never have happened and things that are being considered that wouldn’t have been considered, maybe 5 years ago because of the extra scrutiny the industries been under

Scott Bass: ​I agree with that in part. Schneiderman to me is a one off, there was a publicity stunt using a DNA test used for dinosaur bones and had nothing to do with herbs. But I get your point, your point is that with all the … I don’t think the scrutiny is as bad it was in the ‘90s. I actually think it was worse back then, everything was held up. No I think there’s some people, Loren and I speak to each other and it’s amazing… we’re exactly in the same place on every issue, even if he won’t admit it. The point is, we’re impatient because you know what let’s take the master listing as it the hot issue right now. I was shocked to see how many people said well I’m not sure, FDA might regulate too much… just think about the fact that you’re $40 billion dollars’ worth of product and there are companies saying… I’m not sure if I want the government to know I’m selling it. You’re willing to sell it to the consumers but you’re not willing to list it with the government so they can go after companies who haven’t filed NDIs that are putting tainted ingredients in and giving us all a bad name. I think the investment side… that’s where I said with Loren, I’m very optimistic because when you have players like established companies in the OTC drug field for example that recognize globally that nutritionals are a large part of the future, they’ll spend the time and money to check out a claim to have some safety tests and that’s not a bad thing. So, for the core people whom Loren said it’s still a cause before it’s a business, we admire those people. The fact is if you have people who are willing to make the rest grow up, I don’t think that’s anything but positive. And also the government as Loren said is now in a position where they’re saying okay there are a lot of abuses but we understand the regulatory scheme is now something that may not address, I like the way you put it, the consumer expectations have grown with the market, and I think that’s a good point. I don’t think that Schneiderman or a couple of these publicity areas have forced themselves people to grow up, on the contrary I still see defensive attitudes, I think it’s more somethings just Loren’s referring to the additional investment, globalization, the fact that all the countries have a scheme where you have to register products and also that there is a need to expand the category beyond vitamin, mineral, and herb pills to a much broader health paradigm that Loren was referring to that we require a different type of science

Stephen Daniells:​ so I want to tie it up now because we’re into the last couple of minutes… looking at the industry as of right now. What keeps you up at night when you think about this law you both wrote basically? And if you could have one thing or two things you could add to make this so much better, to take this industry to the next step. What would they be?

Loren Israelsen: ​Two things keep me up… one of them is the incident where industries all around us, in produce and food, E. coli​ contamination things of this sort. We’ve had remarkably few such incidents over the last few years that concerns me, is that it happens and it could easily happen to us. Vigilance on quality compliance is paramount, if that happens, we will lose an enormous amount of trust and confidence at the consumer level. The other one is CBD and hemp extracts, and what becomes of that. These are two worlds that is very quickly moving… one is moving faster toward us than we toward them. That is going to be a very interesting, complicated development to deal with. I suspect it will end up being put on the table as part of a DSHEA 2.0 if we use that term. That we have to think through, how that would work, if it would work, but honestly it’s just an event that really damages the industry as a whole and provokes congress who is otherwise distracted to take a look and that’s not a great way to open an discussion about where we would like to see things going forward.

Stephen Daniells:​ Scott?

Scott Bass: ​I think the number one thing that keeps me up is stagnation: This idea which I was mentioning in the context of industry not being willing to grow up. You have FDA coming out with an announcement that we applaud but why is that the industry didn’t come out with those proposals five years ago, for self-regulatory help. As Loren said, one of the premises of DSHEA id that we want to treat consumers as smart people who can figure out what’s real and what’s not real. Our only obligation is to deliver safe products, responsible claims and to innovate. That’s a big ticket but nonetheless we’re innovating in part but not doing enough to prove and establish that confidence. So, I guess it’s not one thing but that is the number one thing that bothers me and the solutions you asked what two things as I mentioned one is a mandatory listing and the other is recognizing were in a much larger health paradigm and it’s not just about supplements.

Stephen Daniells:​ Wonderful. Scott, Loren I am so glad we were able to make this happen. Thank you for joining us today. So look out for more coverage of DSHEA coming up on NutraIngredients-USA. I’ve been your host, Stephen Daniells. Thanks for listening.