Approaching the Legal Aspects of Starting a Supplement Company
Starting your own nutritional supplement company be an enriching experience, but it's not as easy as it sounds. You must be able to market your product, distribute it, have complete consumer knowledge, and comply with both government and industry regulations. You must be able to market your product, distribute it, have complete consumer knowledge, and comply with both government and industry regulations.
Additionally, if your product follows appropriate legal regulations, the chances are high that informed consumers would purchase it. And of course, there won't be any production or marketing setbacks due to the same. With over 77% of Americans consuming dietary supplements each year [i], there's truly a bright future for aspiring brand owners, as well as current brand owners, looking to establish or expand their footprint in the supplement market.
For those of you just starting out, read this article to understand the legal aspects associated with starting a supplement company and selling finished nutraceutical products.
FDA Regulations for Dietary Supplements
You should be sure that your formula complies with the Dietary Supplement Health and Education Act of 1994, including the New Dietary Ingredient regulations (NDI). Usually, dietary ingredients marketed for use as dietary ingredients in the U.S. before the passage of DSHEA from 1994 are exempted into compliance under the NDI regulations.[ii]
Many new dietary ingredients that came to the market after 1994 are required to have a new ingredient notification submitted to the FDA before use in products.[iii] The FDA can question you if you don't provide the appropriate notice. If you are using popular ingredients that are widely used in the market such as calcium, whey protein, vitamin-D, etc. – generally you are safe. Still, it is always a good idea to confirm this before you move forward into the supplement manufacturing process.
Learn why using ingredients that aren't NDI, ODI, or GRAS can land you in hot water with the FDA. Read our blog “Avoiding the Use of Dietary Supplement Ingredients that Aren't NDI, ODI, or GRAS” for the complete information.
For more information about FDA regulations, including how does the FDA regulate vitamins, what claims can I make about my dietary supplement product, and can I use the FDA logo on my supplement label, watch this podcast that I recorded with our Vice President of Sales, Blayney McEneaney:
Can FDA violations destroy your supplement business’ reputation? Absolutely! Refer to our blog “Regulatory Pitfalls That Supplement Brand Owners Need to Avoid” and learn how to avoid them.
What are the FDA's Packaging and Labeling Guidelines for Dietary Supplements?
Make sure your supplement's labeling and packaging adhere to the FDA guidelines. They have a detailed guide that discussed the do's and don'ts of a supplement's label. But the general guideline states that:
- A dietary supplement label should have 5 statements:
- The statement of identity - the name of your dietary supplement
- Net quantity of content - amount of dietary supplement in the package
- Nutrition labeling
- Ingredient list
- Name and place of the manufacturer, packer, or distributor
- All the aforementioned label statement should be either placed on the front label - the PDP (principal display panel), or on the information panel which is located to the right of the PDP.
- The main components of PDP include a statement of identity and the net quantity of content. In contrast, the information panel consists of - "Supplement Facts" panel, ingredient list, name, and place of your business.
- Examine dietary supplement claims that are made on the labels. Supplements must be marketed with the disclaimer required by the FDA
- i.e. "This statement has not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure, or prevent any disease." If your supplement label fails to align with this, it would be considered as an illegal drug and can face unwanted government setbacks.[iv]
RELATED READING: Learn the latest FDA dietary supplement labeling requirements
FTC and FDA's Role in Advertising Campaigns and Claims
The FTC – Federal Trade Commission and the FDA – Food and Drug Administration are the ones that closely monitor dietary supplements. The FDA is responsible for monitoring the claims on product labeling, including packaging, inserts, and other promotional materials distributed at the point of sales.
On the other hand, the FTC is responsible for regulating the claims made in advertising - print and broadcast ads, infomercials, catalogs, and similar direct marketing materials. Internet marketing is also subject to these regulations in the same way as promotions through any other media.
So, make sure you're making product claims that are backed by substantial scientific evidence and studies. And when you make advertising claims – that an xyz supplement can cure/treat/prevent/diagnose abc disease – know that FTC is watching and can lead to severe consequences if you step over the line.[v]
What is GMP and What's Its Association with Dietary Supplements?
GMP stands for Good Manufacturing Practices. These are best practices for dietary supplements in the United States and are established and maintained by the FDA. They cover everything from labeling and packaging to ingredient sourcing and formulations.
The GMPs ensure the dietary supplements' authenticity, purity, validity, quality, and safety. These regulations help prevent and reduce the instances of product:
- harmful effects
- product failures
- other errors and lawsuits that may arise from defective products
So, if you're planning to produce supplements – the related facilities need to be GMP-certified.
What does that mean?
In the world of nutraceuticals, supplement manufacturers are inspected 1-2 times a year by third-party organizations – usually the NSF – to make sure the facility is following the mandated rules and regulations. Among other things, a manufacturing facility that earns GMP certification implies that the producer's process for manufacturing products, the storage warehouse for raw materials and finished products, labs for research, and product testing are well within the set government standards.
To learn more about the GMPs, read the answers to the 11 most-common questions asked by dietary supplement brand owners.
What are the Licenses Required to Start a Supplement Line?
Certain state and federal licenses are required to start your supplement line. These may differ from state-to-state. Failure to acquire specific permits and licenses for your supplement business can result in hefty fines. You can find answers to your question on the Small Business Administration website that covers the federal, state and local licenses, and permits you need.[vi]
Advice: Look into all the legal aspects of starting a supplement line such as business structure, liability, insurance, taxes, etc. You may want to set a budget for taking care of legal fees, insurance, and other legal documentation right from the beginning—when you are starting your business.
Want to know how to start your own supplement company from scratch? Refer to our guide, “How to Start a Supplement Company- Quick 10-step Guide” and learn what you need before starting a successful supplement company.
What are the Common Myths Associated with Supplements?
Myth 1: The FDA approves all dietary supplements.
There is no such thing as an FDA approved dietary supplement. "Supplements aren't proven safe by the FDA before," says Dena Champion, a registered dietitian at Ohio State University's Wexner Medical Center. "In fact, the FDA's role comes after the supplement is on the market." The brand owners are responsible for ensuring the product is safe before it enters the market.[vii]
Myth 2: Supplements always do what they say they do.
While supplements can improve health in people with particular deficiencies, not every supplement carries the benefits it claims. According to the FDA, supplements cannot lawfully claim to treat or prevent disease. So, your label and marketing claims need to be in-line with this.
Myth 3: Work with the contract supplement manufacturer that promises the lowest price and fastest lead time.
The old adage, “you get what you pay for", holds true as it relates to selecting a dietary supplement contract manufacturer. There are several factors that play a significant role in the making of a good quality supplement, and all of them come with their share of investment. And by investing that kind of thought and money, can you be successful in the market. Otherwise, it can put your brand name, revenue, relationship with stakeholders, and lot of other aspects at risk!
The nutraceutical market is subject to several legal regulations. Failure to adhere to them can lead to unimaginable consequences. So, it is better to have a contract manufacturer who can help you in every step of the way, helping you focus on your business more.
At NutraScience labs, we can help you understand the kind of structural and functional claims that you are legally permitted to make. Moreover, our team can also assist you in understanding the overall legal aspects associated with producing and selling dietary supplements.
We can take care of all the production phases, and you can focus more on growing your business. The facilities we utilize to contract manufacture dietary supplement are GMP Certified and our team possesses more than 120 years of nutraceutical industry experience.
From custom product manufacturing to product testing, packaging & labeling, and fulfillment services, we can help you create a high-quality dietary supplement that will stand out in today's competitive market. To get started, call 855-492-7388 to speak with one of our knowledgeable production specialists or send us your request to receive a FREE supplement manufacturing price quote.