Beware the AER Scare
by David Taylor, President, Natural Products Association

They’re at it again and no e-mail inbox or fax machine is safe. Seems like every year around this time there is a new crisis that will result in dietary supplements being banned and health food stores losing down. Last year the fear mongering reached new heights with alarmist messages that international regulations would overturn our dietary supplement law —DSHEA. I remember reading in e-mails from several of these sources that stores would need to shut their doors by June. Then it was July.  Then August. You get the idea.

The latest industry scare is adverse event reporting. Like its predecessors, this crisis will—you guessed it—result in dietary supplements being removed from the marketplace and health food stores closing. I’m a natural products store owner, not a lawyer, so you can read a detailed analysis by the Natural Products Association legal counsel elsewhere in the Issue Center. However, I would like to say a few words about why the Natural Products Association, and we as an industry, should support this new bill.

First, is a bill that requires reporting of adverse events potentially related to dietary supplements a bad thing? It could be, if we didn’t have our champions in Congress working to make sure it’s fair and balanced and our concerns addressed. And I can assure you that if there is a change in leadership in either the House or Senate this year, it could put some of our greatest critics in a position to draft a bill that will be bad. It could be that AER legislation a year from now looks a whole lot different, and not in a good way. That’s one of the reasons we support this bill and hope to see it passed this year.

Second, this bill will not—I repeat — WILL NOT—ban dietary supplements and lead to massive closures of health food stores. Opponents of the bill say this will happen because publicly available reports of adverse events potentially linked to supplements will result in lawsuits that will force manufacturers out of business. That sounds scary unless you know that adverse event reports about dietary supplements are already publicly available and have been for some time. So why haven’t the plaintiffs’ attorneys already shut this industry down? For the simple reason that no matter how many adverse event reports you have, you must still prove that a dietary supplement actually caused an injury. And that’s not likely or easy.

The other popular mythical claim by the anti-AER folks is that it will result in tens of millions of consumers reporting that a dietary supplement has caused them to become ill. And by “ill” I don’t mean a headache or upset stomach, but a health complication so serious it requires a doctor’s care or hospitalization. Now I can’t speak for your own situation, but I can say that not one of my customers has ever complained about taking a dietary supplement and having an experience that threatened heir life or health. I’ll go out on limb here and say that I’m probably not the only retailer or supplier who has experienced this.

For all the rhetoric (mine included), let’s not lose sight of what must occur on the most practical level for an AER bill to harm the industry: Hundreds of thousands of dietary supplements consumers would need to have actual life-threatening experiences from routine use of one of our products. Not only would this need to be reported, but also proven. Both research and my own experience in the natural products community tell me that this is inconceivable.

But why should you listen to the Natural Products Association? I guess I would re-phrase that question; why shouldn’t you? For 70 years this association has helped the industry grow and prosper, particularly by protecting it from bad laws and supporting good ones. You may remember that there were those who wanted to amend DSHEA immediately after its passage. And just like DSHEA, we might find that there are some things we would’ve liked in and some out. But rest assured that if this AER bill—or any other piece of federal or state legislation—would do the kind of damage that some suggest, the Natural Products Association would be leading the charge to defeat it. We have for our first 70 years and will for the next 70.

Why the Natural Products Association (formerly NNFA) Supports the AER Bill

The Dietary Supplement and Non-Prescription Drug Consumer Protection Act (the “AER Bill”)— legislation that resulted from political compromise among a number of senators with input from industry—was introduced June 21, 2006. If this bill becomes law, it would amend the federal Food, Drug and Cosmetic Act to require the reporting of “serious” adverse events for both over the counter (OTC) drugs and dietary supplements.

As word of AER-related legislation spread, it has become clear that many in the industry can benefit from information regarding the background of this bill, including what would be required (and of whom), what is not required, and the likely impact of the legislation on the industry. The biggest benefit of the bill to the dietary supplement industry is that it will thwart continuing press articles stating that dietary supplement safety is not monitored.

Background: Political Compromise Among Policymakers and Industry Representatives
The AER bill was the result of a political compromise and a collaborative effort among such industry Congressional Champions as Sens. Orrin Hatch and Tom Harkin, on one hand, Sen. Richard Durbin (who favors more stringent regulation of the industry, including pre-market approval), on the other hand, and Sens. Michael Enzi and Ted Kennedy (the leaders of the Senate Committee on Health, Education, Labor and Pensions), with input from members of the dietary supplement and OTC drug industries.

Throughout the legislative process, the Natural Products Association and other associations have been given the opportunity to provide input into the AER bill. The Natural Products Association team emphasized that a meaningful and fair AER bill must:

• Be limited to serious adverse events only and not require reporting just any complaint
• Include OTC drugs
• Not require retailers to report
• Be limited to products sold in the United States
• Allow third parties to report or evaluate claims
• Preempt state AER legislation

Because these objectives were achieved and for some of the reasons discussed below, the Natural Products Association Board of Directors decided to support the AER bill.

Key Provisions of the AER Bill
If the AER bill becomes law, it will require “responsible persons”— defined as manufacturers, packers or distributors of OTC drugs and dietary supplements—to submit any serious adverse event to the U.S. Food and Drug Administration (FDA) within 15 business days of learning of it. The responsible persons must submit any additional information concerning the adverse event of which they become aware within one year of the initial AER (within 15 days of receiving the additional information). The AER bill makes it unlawful to submit false serious adverse event reports to a responsible person or to FDA.

The reporting requirements do not apply to retailers who do not market products under their own name. Although the reporting requirements apply to “distributors whose name…appears on the label,” a retailer who has private label products and whose name appears on a supplement label may, by agreement, authorize the manufacturer or packer of the product to submit all of the required reports and thus not bear responsibility for reporting to FDA.

The AER bill, which will take effect one year after becoming law, defines a “serious adverse event” as an experience that results in any of the following:

• death
• a life-threatening experience
• inpatient hospitalization
• a persistent or significant disability or incapacity
• a congenital anomaly or birth defect
• requires medical or surgical intervention to prevent the above outcomes

Although the AER bill only requires that reports of “serious” adverse events be submitted to FDA, records of other types of product complaints or adverse events must be maintained for a period of six years by the responsible person. To reiterate, this recordkeeping and reporting provision does not apply to retailers.

AERs Not Proof of Causation
The AER bill provides that the submission of any serious adverse event report shall not be construed as an admission that the product caused or contributed to the adverse event. Also, all serious adverse event reports submitted to the FDA pursuant to the AER bill would be considered to be safety reports and would be available only through a Freedom of Information Act (FOIA) request and will not be disclosed unless all personally identifiable information is redacted.

Other State and Local AER Related Laws Not Identical will be Preempted
Over the past couple of years, some states have considered mandatory AER reporting in various dietary supplement related bills. The New York State General Assembly and Senate filed bills that would require mandatory reporting of all AERs—as opposed to limiting reporting to “serious” AERs. These bills are still pending, but because of the Natural Products Association’s efforts, are now unlikely to pass. Similar legislation was proposed in California last year, but did not pass, largely because the federal AER bill was imminent.

The federal AER bill would preempt all state and local laws or regulations relating to adverse events that has different requirements than this legislation. Because state and local governments will be prevented from enacting different AER reporting requirements, the industry will not be forced to adhere to varying (and potentially more onerous) requirements from state-to-state.

Impact on the Industry
The mandatory reporting requirements of the AER bill will add to manufacturers’ record keeping responsibilities. Although there has been much confusion about specifically what level of reporting would be required, “responsible persons” will only be required to report to FDA adverse events that qualify as “serious.”

These increased responsibilities on the part of manufacturers will likely benefit the industry in the long run. First, the AER bill will help improve the public perception of the dietary supplement industry by demonstrating that—contrary to media reports—the industry is regulated.

Second, over time, the recordkeeping and reporting requirements also will substantiate what many in the industry have long been saying—that the safety record of dietary supplements compares favorably to other health-related products.

Ultimately, safety reporting is the right thing to do. A responsible industry and responsible manufacturers put consumers first. An industry system that puts consumers first will increase consumer confidence and will reap the corresponding benefits.

Contributed by Daron Watts, Esq., a member of the Natural Products Association’s legal counsel team at Sidley Austin LLP.

AER Law FAQs

What is the purpose of this new law? Why do we even need one?
The AER law will amend the federal Food, Drug and Cosmetic Act to require the reporting of “serious” adverse events for both over the counter (OTC) drugs and dietary supplements. As currently proposed, it will require “responsible persons” to submit any serious adverse event to the U.S. Food and Drug Administration (FDA) within 15 business days of learning of it. The responsible persons must submit any additional information concerning the adverse event of which it becomes aware within one year of its initial AER (within 15 days of receiving the additional information).

While the industry has maintained that dietary supplements are generally safe, the withholding and subsequent release under subpoena of several thousands of AERs relating to ephedra has led some in Congress to question whether there are thousands more adverse experiences that are going unreported because the current system is voluntary.

When will the AER law become effective?
 The AER law will become effective one year after its signing by the president on December 22, 2007. 

Does the law cover any reaction or complaint to any product I carry or manufacture—no matter how minor?
No.  The AER law will not require reporting of all complaints; but instead will be limited to serious adverse events.  “Serious” adverse events as defined in the law are: (1) death; (2) a life-threatening experience; (3) inpatient hospitalization; (4) a persistent or significant disability or incapacity; (5) a congenital anomaly or birth defect; or, (6) require medical or surgical intervention to prevent the above outcomes.  Although the AER law only requires that reports of “serious” adverse events be submitted to FDA, records of other types of product complaints or adverse events must be maintained for a period of six years by the responsible person.

As a retailer, what am I required to do under this AER  law if a customer of mine has an adverse reaction to one of the products I carry?
If a complaint is received on a branded product, retailers will not have any obligation to report such adverse events to FDA. The manufacturer of the product—in this case the “responsible person”—will have the legal responsibility of reporting serious adverse events in connection with these products.

If a complaint is received on a private label product sold by the retailer, defined as “distributors whose name…appears on the label,” the retailer will have to make a decision about who will be the “responsible person” for the purposes of the AER law. Such retailers will have to make a choice to either assign the reporting responsibility to the manufacturer of their private label products; or to report serious adverse events themselves.

I’m a retailer. What would I be required to do in the following situation: a customer comes into the store and says they had to go to the hospital because of supplement they bought from me?
What you describe would fall under the definition of “serious”. If the product is not marketed under your name, you are not required to do anything. If it was your private label product and you and the manufacturer have agreed that such complaints would be handled by them, it could be as simple as providing the phone number of the manufacturer to the customer. In this situation, there also would be no recordkeeping requirements for the retailer.

 If as a retailer you have elected to handle adverse event reports yourself, you would then be required to follow the reporting and recordkeeping steps as outlined in the law.

How does this new AER law differ from the current reporting system?
FDA’s current system—the CFSAN Adverse Event Reporting System (CAERS)—is voluntary. The proposed AER bill would make reporting serious adverse events a legal requirement for “responsible persons,” as discussed above.

Did the Natural Products Association have any input into the law?
Yes. Throughout the legislative process, the Natural Products Association and other associations were been given the opportunity to provide input about the AER law.   The Natural Products Association team took care to protect retailers and the industry by emphasizing that a meaningful and fair AER law must: (1) be limited to serious adverse events, not require reporting just any complaint; (2) include OTC drugs; (3) not force retailers to report; (4) be limited to products sold in the U.S.; (5) allow third parties to report or evaluate claims; and (6) include a state preemption provision.  Because these objectives were achieved and for some of the reasons discussed below, the Natural Products Association Board of Directors decided to support the AER law.

Will this AER  law help trial lawyers with evidence against the industry for lawsuits?
The AER  law provides explicitly that the submission of any serious adverse event report shall not be construed as an admission that the product caused or contributed to the adverse event or otherwise caused or contributed to a death, serious injury or illness. Keep in mind that anyone—including trial attorneys—can already access dietary supplement adverse event reports under the current CAERS program.

How can the AER  law help the industry?
These increased responsibilities on the part of manufacturers will likely benefit the industry in the long run in a few ways: It will thwart continuing press articles stating that dietary supplement safety is not monitored; It will help improve the public perception of the dietary supplement industry by demonstrating that—contrary to media reports—the industry is regulated; and Over time, the recordkeeping and reporting requirements will substantiate what many in the industry have been saying—that the safety record of dietary supplements compares favorably to other health-related products.