Dietary Supplement Labeling: Cognitive Biases, Market Manipulation & Consumer Choice
78 Pages Posted: 8 Aug 2005
There exists increasing concern that the Dietary Supplements Health and Education Act (DSHEA) has proven ineffective. Much of the concern regards the disparity in legislative treatment between dietary supplements, foods, and pharmaceutical drugs. Namely, while pharmaceutical drugs must undergo years of costly pre-market testing, most supplements, like foods, can immediately enter the market, and only after repeated instances of adverse reactions can the Food and Drug Administration (FDA) remove them. Such a framework appears to belie both consumer expectations and marketing strategies, as supplements tend to be most perceived for their apparent medicinal qualities. This philosophy of waiting for a foreseeable harm also strikes many as unnecessary, inefficient, and immoral.
On the other hand, most supplements have proven safe and either benign or reasonably effective. Moreover, before policy-makers mandate extensive pre-market testing of all supplements, consider the likely effect on production: a certain percentage of supplement makers will find the economics of production too costly and will thus leave the market. Granted, foreign markets for supplements might still provide the requisite incentives for production, but a more costly entrance fee into the U.S. market would clearly deter some level of production and convince a number of makers to leave the market altogether. Equally troubling, companies which choose to remain in the market would presumably pass on a portion of the increased costs to consumers, who often bear the costs of heightened regulation. Consequently, many beneficial supplements would be priced out of the reach of consumers who either have become users of those products or could become users.
The issue then is one of nuance. Rather than sweeping regulatory intervention, perhaps more carefully-tailored alterations would prove most desirable. This philosophy appears desirable given informational deficiencies among dietary supplement consumers, particularly those with exploitable cognitive biases. Promisingly, such deficiencies may be ameliorated through low-cost measures that promote enhanced communication of product characteristics.
For these reasons, this Article proposes a refined approach to dietary supplement labeling that would legally distinguish them on the basis of potential risk and anticipated benefit. Indeed, the existing legal construct of the phrase dietary supplements is both curious and overly simplistic. It includes minerals, vitamins, herbs, botanical extracts, and amino acids - items that are not only functionally different, but which present radically different risks and benefits. Along those lines, the very consumers of supplements should be more carefully distinguished.
How might such a revised communicatory model work without precipitating material price increases or deterring beneficial production? One method would entail more carefully-contemplated labeling requirements. Such requirements should enhance consumer risk-assessment and reward reputable supplement manufacturers. To accomplish these goals, labels should reveal potential interactions with pharmaceutical drugs and other supplements, warnings of over-usage, predictable distinctions between health claims and structure/function claims, and a recommended intake range based on age and gender, among other personal characteristics. Of similar benefit would be assured ingredient content, as well as greater coordination between the FDA and the Federal Trade Commission (FTC) in regulating false or misleading supplement claims. Importantly, because such labeling requirements would impose only minimal cost increases to manufacturers.
A second method would require supplement manufacturers to register ingredient contents with the FDA and to report adverse reactions. These two concepts are related in practice and in form to enhanced labeling disclosure and would remedy a framework whereby the FDA fails to learn of over 99 percent of adverse consumer reactions. Such requirements would appear consistent with efficient modeling, particularly given the FDA's limited resources; for the FDA to pursue information already possessed by manufacturers appears wasteful and unnecessary. In addition to providing consumers with more timely and crucial information, such requirements would enhance lines of communication between the FDA and manufacturers, as industry and governmental actors would share product information. This in turn would enhance the reliability of adverse event reporting and offer promise for greater industry-governmental relations. Moreover, like enhanced labeling, registration and reporting are low-cost, informational directives that preserve the production incentives and pricing schemes of supplement manufacturers.
Imposing such informational duties would thus enhance consumer information, as well as the level of informed risk and assessable benefit. Moreover, by avoiding incentive-altering regulation, production incentives would remain intact, particularly for those who sell verifiable products. Prices for such products should also remain within reach of current and future clientele. In addition, by calibrating supplement information, consumer confidence in the much-maligned dietary supplement industry should rise, thus offering a corresponding benefit to manufacturers. Better informed consumers and more legitimized products would also supply manufacturers with additional protection from product liability claims.
In exploring these ideas, this Article will canvass the dietary supplement industry and explore how cognitive biases affect supplement consumers. This Article will also examine the salience of legislative choice in promulgating dietary supplement laws. In doing so, this Article will compare American and European models of consumerism in the dietary supplements context. Lastly, this Article will examine the prescription of new informational duties for supplement manufacturers and how such duties might enhance consumer choice without deterring production.
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