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CBD: A legal and regulatory update

Over the past few years, cannabidiol (CBD) has become a household term. Moms, dads, brothers, sisters and even grandparents know what CBD is. At the least, they have probably heard of it. Cannabis sativa L. is a plant that includes both marijuana and hemp. CBD is a naturally occurring cannabinoid found in the cannabis plant. Hemp has a much lower concentration of delta-9 tetrahydrocannabinol (THC), the psychoactive chemical found in high amounts in marijuana.

On Dec. 20, 2018, President Donald Trump signed the Agriculture Improvement Act of 2018 (2018 Farm Bill), changing the landscape for companies involved in the hemp industry. Prior to the 2018 Farm Bill, the 2014 Farm Bill governed the growing and cultivation of hemp in the United States. The 2014 Farm Bill allowed for the growing and cultivation of “industrial hemp,” which was defined as “the plant Cannabis sativa L. and any part of such plant, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.” The 2018 Farm Bill significantly broadens the definition of “hemp” to mean “the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.” Notably, the 2018 Farm Bill simply states “hemp” in its definition, rather than “industrial hemp,” and it includes the specific parts of the plant and its chemical constituents.

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State of the Nutraceuticals Industry for 2019

In October 2018, Nutraceuticals World conducted a survey of readers to gain insight into their perceptions and attitudes toward the state of the industry. We received responses from 142 qualified industry members working at companies that manufacture, market, or distribute finished nutraceutical products—such as dietary supplements, functional foods, or nutritional beverages—or raw nutritional ingredients for inclusion in finished consumer products. The charts and graphics that follow illustrate results.

Highlights
Overall, confidence in the future of the nutraceuticals market was high; 85% of respondents said they are “very” confident in the future, and another 14% said they are “somewhat” confident. Compared to last year, 60% of respondents are more confident this year and only 12% are less confident.

Among the biggest concerns were regulations (65%), negative or misleading news about the industry (55%), and quality issues (43%). Also of note, 69% of respondents indicated their company is interested in implementing or planning to incorporate clinical research into their business plans. Another 52% cited “increased transparency,” and 51% said delivery/dosage technologies.

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Farm bill is now law, will ‘unleash the full potential of hemp’

Ask around, and there’s a palpable buzz in the air.

Passage of the 2018 Farm Bill was a rare bipartisan affair—last week it passed the U.S. Senate, 87-13, and it passed the U.S. House, 369-47. President Trump signed the bill into law Thursday, Dec. 20.

Already, there’s an estimated 750 brands in the hemp-derived CBD business, according to a market assessment by Colorado-based brand Functional Remedies.

Is there room for 750 more?

In 2016, there was 9,000 acres of industrial hemp grown in the U.S., according to Vote Hemp. In 2017, it nearly tripled, to 25,000 acres. In 2018, it tripled again, to 77,000 acres. How many triples can U.S. hemp farmers hit?

The Farm Bill, which removes hemp from the Controlled Substances Act and thus takes the DEA out of the picture, is a bellwether event—akin to dropping the rope on the Oklahoma border in 1889 for all those sooners to grab their share of free land.

Even without the Farm Bill, CBD in 2018 grew by more than 80 percent, reaching an estimated $590 million, according to the Brightfield Group.

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Experts debate pros, cons of mandatory product registry for dietary supplements

A veteran lawyer in Washington supports a requirement that companies register their dietary supplement product labels. The general idea—incorporated in legislation introduced in previous years on Capitol Hill—could lead to reform of the Dietary Supplement Health and Education Act of 1994 (DSHEA).

“I really believe that this movement has picked up speed this year,” said Scott Bass, an attorney who heads the Global Sciences team at Sidley Austin LLP.

Based on his discussions with myriad groups, the lawyer revealed, the idea’s “time has come.” He said it was possible to see “activity on this front as early as the fourth quarter” of 2018.

“And I don’t mean activity in the sense of the law passed,” Bass acknowledged, “but I mean serious legislative attention.”

In an interview during an annual symposium in California for the dietary supplement industry hosted in October by the Council for Responsible Nutrition(CRN), Bass laid out his support for a mandatory product registry.

“Unless we have a system where FDA can say, ‘We know what’s on the market in the list’ [of registered products] and then can easily find out what is not on that list and can easily enforce, we’re not going to be able to stem the rising tide of illegal products,” he asserted. “There really is no choice because FDA can never enforce against outliers unless they know what’s on the market legitimately.”

Added Bass: “Second, how can a company offer a product to consumers that is supposedly a health product and then say, ‘But I don’t want the government to know about it.’ It just makes no sense.”

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IP trends in sports nutrition

Patent filings directed to sports nutrition continue to generally grow year over year. The trend is particularly pronounced on a global scale.

The increase in patent filings (through 2016) of sports nutrition products has been occurring outside the United States, with a large portion of filings in China. Brazil and Russia, which are not usually on the top filer lists, have weighed in with a significant amount of patent filings specifically associated with sports nutrition.

Sports nutrition ingredients may be formulated into food products, such as modified foods or complete food formulations. Alternatively, specialized ingredients may be incorporated into single or multi-ingredient nutritional supplements. To be patentable, these types of formulations must include a unique non-naturally occurring single ingredient or a previously unknown combination of ingredients, among other innovative features.

Trademarks for sports performance products include some expected terms like “sport,” “perform,” “strong” and “fast.” Since these terms are common, they cannot be registered in trademarks on their own. Common terms and variations thereof must be coupled with more distinctive terms to obtain trademark registration.

Careful consideration is required to determine if a particular combination is available. Trademark availability searches from trademark counsel can help find a potential trademark that does not encroach upon the rights of a third party’s trademark.

Finally, a steady increase in the term “performance” may indicate the sports nutrition performance field is still growing. Opportunities still exist for innovative products and brands to carve out their exclusive rights in an exciting area of nutritional products.

This is an excerpt from the article, “Intellectual property trends in sports nutrition.” To read the complete article, download the Sports nutrition: Performance digital magazine.

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FDA still finding same cGMP deficiencies at dietary supplement facilities

FDA investigators who inspect dietary supplement manufacturing facilities for compliance with cGMPs (current good manufacturing practices) are still often finding the same deficiencies more than a decade after the regulations were adopted.

In fiscal year 2018 (FY18), 75 inspections—or about 24 percent of firms that received a Form 483 inspection report for “observations,” or alleged cGMP violations—were cited for failing to establish product specifications for the identity, purity, strength and composition of the finished dietary supplement, FDA data revealed. This was the most common cGMP observation in FY18 year as well as in FY17 when 24 percent of firms (89 inspections) were cited for the same infraction, according to FDA data INSIDER obtained through the Freedom of Information Act (FOIA).

Over the years, FDA has repeatedly emphasized the importance of setting and following specifications for the identity and other key attributes of a dietary supplement. Without doing so, FDA and outside cGMP consultants have said, manufacturers have no reliable way to know and verify what is in their products.

Nearly half (274 inspections, or 46 percent) of the 591 inspections in FY18 didn’t receive a Form 483, which suggests those dietary supplement manufacturing facilities are fully compliant with the cGMPs.

Warning Letters

There may be another silver lining. Data analyzed by the Natural Products Association(NPA) suggested an increasing number of firms cited in Form 483s for failing to establish product specs make the necessary corrections without requiring an admonishment from FDA in a subsequent warning letter.

NPA, a trade association founded in 1936 and led by former FDA officials, reviewed FDA warning letters to analyze alleged infractions of the cGMPs.

In reviewing the data dating back to 2010, NPA identified a change in the most cited cGMP violation. Through the first nine months of 2018, FDA most commonly cited dietary supplement firms in warning letters for failing to establish and follow written procedures for the responsibilities of quality control operations. In FY18 Form 483s, the latter cGMP infraction was the second most cited cGMP observation (52 inspections, representing around 16 percent of all Form 483s).

In the previous three years, the most common cGMP violation reported in FDA warning letters was related to specifications to establish when devising a production and process control system, NPA reported this week in a chart within a news release. The above infraction dropped to the third most-cited cGMP violation in 2018 warning letters, while the second most commonly cited infraction related to recordkeeping requirements for production and process control systems.

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FDA’s new nutrition label regulation for fat-soluble vitamins

The international unit (IU) has been used to measure fat-soluble vitamins—vitamin A, D and E—for decades. The IU is an arbitrary amount based on the amount of a given nutrient needed to produce a biological effect. Different than milligram or microgram, the IU measurement describes something that we cannot see; the potency or biological activity of a product. While IU seemed to be an innovative idea during the time it was introduced, many would agree that this IU system is now outdated.

In the new regulation for the nutrition facts label, FDA is replacing the unit “IU” for vitamin A, vitamin D and vitamin E with the metric unit. The unit for vitamin A will be changed to micrograms of retinol activity equivalents (mcg RAE), milligram of alpha-tocopherol (mg) for vitamin E while Vitamin D will be changed to microgram, while the IU reading for Vitamin D could be displayed in parentheses. This regulation will come into effect on Jan. 1, 2020 for companies with US$10 million or more in annual sales; and Jan 1, 2021 for companies with less than $10 million in annual sales. It is expected that other countries will follow this new regulation as well to standardize the labelling system. This new supplement/ nutrition facts label hopefully will help consumers to make a better decision in terms of choosing the right vitamin A and vitamin E for their daily consumption.

Vitamin A

Vitamin A is essential vitamin for healthy vision and cellular communication. There are two main ways to obtain vitamin A in the diet, through:

(1)         retinols from animal sources and dairy products;

(2)         pro-vitamin A carotenoid from plant.

Both retinols and pro-vitamin A carotenoid are metabolized in the body into the active form of vitamin A, retinoic acid. However, retinols and pro-vitamin A carotenoid differ in their bioactivities. As an example, it takes different amount of IU from retinol, beta-carotene from food, beta-carotene from supplement or alpha-carotene to make 1 microgram of retinoic acid.

Therefore, it is vital for consumers to check the source and forms of vitamin A to ensure they get sufficient vitamin A according to the recommended dietary intake (RDI). The RDI of the vitamin A has also changed from 5,000 IU (equivalent to 1,500 mcg RAE) to 900 mcg RAE for males and 700 mcg RAE for females respectively.

The conversion of unit of vitamin A from IU to the metric unit, mcg RAE, will take into account the differences in vitamin A activity between retinols and pro-vitamin A carotenoid. In the new unit, 1 RAE will equal to 1 mcg retinol, 12 mcg beta-carotene, 24 mcg alpha-carotene or 24 mcg beta-cryptoxanthin. Hence, the change of IU to mcg RAE for vitamin A is welcomed as this will reflect the actual or reality of vitamin A activity of its different forms—retinol and pro-vitamin A carotenoid.

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Product offerings grow for the anxiety, stress, mood and sleep category

Qualifying and quantifying the market for products that address anxiety, stress, mood and sleep is a little like trying to nail jelly to the wall or define “obscenity.” Regarding the latter, U.S. Supreme Court Justice Potter Stewart famously remarked in 1964 that “I know it when I see it” to describe his threshold test in Jacobellis v. Ohio. To some extent, this also applies to the market for products that address anxiety, stress, mood and sleep.

Products addressing anxiety, stress, mood and sleep are scattered all over the marketplace. No longer are innovation opportunities limited to over-the-counter (OTC) medications and dietary supplements.

GlobalData identified product innovation oriented around anxiety, stress, mood and sleep that spans nearly 30 different product categories. Product manufacturers are addressing these needs in categories as diverse as fruit, chocolate, yogurt and beer, to air fresheners, fabric conditioners, facial-care products and more.

Companies far and wide want a piece of the pie because the pie is big—and growing. GlobalData puts the global market for sleeping aids (classified as OTC health care products) at $US1.36 billion as of 2016. GlobalData expects this market will grow at a compound annual growth rate (CAGR) of just over 4.1 percent for the period from 2015 to 2020. GlobalData puts the U.S. market for sleeping aids at just under $375 million as of 2016, and projects that this market will expand at a CAGR of 3.5 percent for the period from 2015 to 2020.

But trying to measure a market like sleeping aids is not as easy as it used to be, as a growing amount of sleep-related product innovation is taking place outside of OTC health care products and supplements. It is not unusual today to see functional drinks, milk, tea, food products and even facial-care products promote enhanced sleep. Even within OTC medications, sleep aids have become a moving target as companies attempt to monetize interest in more natural and holistic formulations.

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Omega-3s market outlook

Omega-3 fatty acids are essential for overall health. Mary Ann Siciliano, national sales manager, Aristra Industries Inc., said omega-3s have been found to be particularly good for heart health, joint and inflammation support, eye health, cognitive function, pregnancy and healthy child development and immune function, among other benefits.

The omega-3s include the essential fatty acid alpha-linolenic acid (ALA), and the longer-chain eicosapentaenoic acid (EPA) and docosahexaenoic acid (DHA).

Plant-based sources of ALA omega-3 include flaxseed, chia seeds, canola, walnut and soybean oils and leafy and green vegetables. The short-chain omega-3 ALA can be converted in the body to the longer-chain omega-3s. However, the body’s ability to convert ALA into EPA and/or DHA is inefficient, making ingestion of pre-formed EPA and DHA beneficial.

The biggest challenge for both consumers and industry affecting consumption of omega-3 food supplements is taste. Marine sources of long-chain fatty acids often yield a “fishy” taste that is unappealing to consumers.

Proprietary research from the Global Organization of EPA and DHA Omega-3s (GOED) showed highest supplement use is occurring in the United States, China and Australia. Statistica 2018 estimated the supplement market for omega-3 supplements in 2025 will reach US$57 billion, compared to $33 billion in 2016. This is indeed a steep growth for an individual supplement segment.

Consumption of omega-3-rich food is reasonably high in the high-population markets of China and India, but that is largely fresh-food based. As these economies evolve and nutrition management in the nouveau riche comes to vogue, the demand for supplements will rise.

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FDA issues guidance on disclosing amount of live microbial ingredients in supplements

FDA on Thursday recognized the benefits of disclosing on labels the number of live microbials in dietary supplements—an issue of interest to marketers of probiotics.

FDA stopped short of amending its labeling regulations, denying a request filed by the International Probiotics Association (IPA).

However, the agency revealed plans to “exercise enforcement discretion” for companies that chose to declare on the Supplement Facts label the amount of live microbial ingredients based on colony-forming units (CFUs), in addition to disclosing the quantitative amount of certain dietary ingredients based on their weight per FDA regulations.

“We believe that CFUs provide a useful description of the quantity of live microbial dietary ingredients,” FDA explained in a constituent update. “Allowing firms to declare the CFUs within the Supplement Facts label will help consumers more readily identify the amount of living microorganisms for each product and more easily compare products.”

Enforcement discretion

In draft guidance published Sept. 6, 2018, FDA said it intends to exercise its enforcement discretion, provided the following conditions are met:

• The quantity is first listed in terms of weight;

• The declaration of quantity in CFUs is expressed in a manner that is clearly separate and readily distinguishable from the weight, e.g., as a parenthetical or in a subset line;

• The declaration of quantity in CFUs is formatted in clear terms that can easily be understood by a common reader, e.g., 10 billion or 300* (where the unit that “*” is intended to represent, such as million or billion, is a typical measurement of CFUs and is clearly indicated elsewhere in the Supplement Facts label)

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