What Affects Dietary Supplement Pricing?
Posted on March 29 2017
5 Key factors that influence the price of your supplement.
Regulatory ComplianceLet’s dive into the first and most important issue, which is regulatory compliance. There is a lot of confusion by consumers who falsely assume that the dietary supplement industry is unregulated. In 1994, the Dietary Supplement Health and Education Act (DSHEA) defined dietary supplements as a category of food; therefore, regulations are in place for all dietary supplement manufacturers and brands. Some dietary supplements are formulated under careful conditions in clean, controlled environments, and are labeled accurately while some have been found to contain none, few, or even adulterated versions of the substances listed on their labels.
In order to standardize a safe and quality level of manufacturing, the FDA introduced Dietary Supplement Good Manufacturing Practices guidelines (dsGMP). These guidelines require all dietary supplement manufacturing facilities and supply chains to comply with proper procedures, processes, and staff training. This includes but is not limited to key areas such as validated methods of cleaning equipment, laboratory testing of products and their ingredients, specific operating systems documentation, and continued staff training and education, as well as structural changes to the building to ensure separation of certain ingredients to prevent cross contamination. In order to ensure compliance with these regulations and confirm the manufacturing process is being followed to the requisite level of quality, testing of input and output materials is essential.
Premium products require premium ingredients. This means that ingredients must be carefully selected, sourced, and processed. Ingredients such as omega-3’s, vitamins, minerals, and enzymes can come from many different sources. And source matters! Ingredients of various sources are often absorbed, distributed, excreted, and metabolized differently in the human body. A prime example of this is an omega-3 derived from fish oil or flax seed. Although both contain omega-3, the body converts it differently and thus changes the bioavailability of omega-3 into the body. There is a need for both types of omega-3 to be available in the market, and thus, it is imperative that the consumer knows why he/she is taking a particular supplement.
Products that use premium ingredients will cost more because these ingredients often undergo extensive analytical laboratory testing. They are likely to have also been through clinical trials to ensure evidence of safety, absorption, and efficacy. This scientific data confirms that the products you consume have substantiated backing. There is great variability in methods for extraction and harvesting, storing practices, and manufacturing procedures. These are diverse due to technology and emerging sciences. This variation causes the same ingredients, when compared, to have structure, purity, or concentration differences. As a result, these elements can influence the final product quality.
Third-Party CertificationsThird-party certifications take the demonstration of quality to the next level and ensure additional consumer transparency. These certifications may deal with testing, process verification, and sustainability. Premium quality products are more likely to have 3rd party certifications, which are inherently unbiased and independent. These programs allow brands and their suppliers to showcase their premium quality to consumers and retailers, but also raise the bar on transparency. In the case of fish oil supplements, testing based 3rd party certification for oxidation, toxicity, and freshness is performed to ensure a quality product. These tests are conducted and documented for every single batch that comes from the manufacturer and brands must follow strict procedures and standards to get approval. Samples are sent to regulated and inspected labs that are appropriately equipped with the correct laboratory equipment and validated testing methods. Results are also readily available to the public in a consumer friendly format. The law does not require 3rd party testing and certifications, but they are important to you, the consumer. This adds to the final cost of a product, but also provides great peace of mind and is worth a final product premium.
Dietary supplement brand companies are required to have a safety reporting procedure in place for Adverse Events (AEs) and Serious Adverse Events (SAEs). Safety Reporting occurs when a health care practitioner or product user believes that he or she has suffered an AE or SAE and reports a safety issue to the company. Once an event is reported to the company and a Serious Adverse Event is determined to have occurred, it must be reported to the FDA within 15 days. Although mandatory reporting is limited to serious adverse events, a company is obligated to document and assess every allegation of an adverse event associated with a dietary supplement to determine whether or not it meets the “serious” criteria for reporting to the FDA. All records related to any adverse event report must be kept for no less than six years, regardless of whether the adverse event was reported to FDA. These records must be readily available for inspection by FDA compliance officers upon request. This is no small task and requires resources that increase the final cost of the product. Although this is not optional, not all brands comply with this regulation. There are various 3rd party services which fulfill this requirement for dietary supplement products.
Premium supplement brands implement more advanced and vigilant systems which create more transparency and accuracy while ensuring additional safety measures to the consumer for long term use. This includes signal detection activities to assess ongoing product safety or relevant scientific evaluation and medical literature for safety-related reports. These are additional value added activities that makes a brand stand out from the rest, but also truly add value and credibility to the entire industry. Look for additional details in future articles on the topic of product safety reporting!
ResearchSome brands will go the extra mile and do clinical research on their final product formula as opposed to simply using clinical research from one ingredient within a complex formula. This is important because each ingredient has its own properties and these properties can change when combined with other ingredients. These changes in properties are not necessarily negative. Most of the time they are synergistic and thus enhance the benefits. In small instances, it may merely inhibit one ingredient from working as effectively as it could and thus make it less useful in the formula. New technology uses or testing methodologies are also subject to extensive research for effectiveness, accuracy, and commercial scale up. Alas, human clinical trials, analytical testing, newly adopted processes, and new technologies can cause expenditure increases, which in turn increases the cost of the final product to the consumer.
SustainabilityNew technology brings us to another critical issue, which is sustainability. Sustainability is a hot topic in every industry. For the development of earth friendly products and packaging, companies may have to purchase new machinery to eliminate certain by-products during manufacturing, or perhaps they had to undergo significant changes in practices that take on another level of commitment and resources. All these efforts must be validated and regulated. To ensure companies comply with regulations and diligently maintain sustainability efforts, 3rd party associations exist to communicate, assist, and monitor companies that partake. These associations are usually non-profit companies, and they charge supplement brands to take part in their programs.
Brands that value the consumer’s demand for a better tomorrow will partner with these associations and comply with their sustainability rules. This money is well spent on further research, clean-up efforts, and education. The long-term financial and ethical benefits of these efforts outweigh the immediate financial strains during implementation and daily compliance. Not all systems and ideas are perfect, and we may have a long way to go, but your decision to support companies that embrace these changes helps move this process along. Progressive change is what you are paying for when you support brands that take sustainability as seriously as you do.
Don't Forget!We must not forget adding a few other points that may influence the final cost of your supplement. Economies of scale will play a role in the cost of brands: a new brand or a small company must comply with aforementioned regulations and hopefully also partake in other value added programs to ensure a sustainable, effective, and high quality product, but for new companies there are fewer sales to absorb some of the associated costs and thus influence price point.
You can now consider yourself a savvy shopper when it comes to supplements. I urge you to choose a supplement brand that is in line with your personal philosophies. Support brands that have gained your trust by their due diligence, their compliance, their transparency and integrity. Share your find, stay loyal, and help them help you. Your peace of mind and ultimate health is worth an extra few dollars!