Companies with strong compliance efforts could create competitive advantage.
Food and Drug Administration (FDA) Commissioner Scott Gottlieb has announced the agency will increase its oversight of dietary supplements, partially in response to the growth of the industry, which has exploded from $4 billion to $40 billion since 1994.
Oversight appears to be on the rise in many areas, and those direct sellers with strong compliance efforts well may gain an advantage in the coming year over those who get snared in both federal and state scrutiny.
Unsubstantiated medical claims appear to be a primary area of increased attention and enforcement in the FDA announcement, although unapproved ingredients and failure to perform as promised also are areas of concern. We plan to cover this announcement in depth next month.
This month, our cover story explores some of the ways in which the latest lawsuit against LuLaRoe seems to be expanding the definition of a pyramid scheme into legitimate direct selling practices such as team building and rewarding hostesses with product; however, it also appears evident that the company wasn’t carefully reading the signs of the times.
Lavish lifestyle claims, bestowing oversized monthly checks showing hundreds of thousands of dollars on leaders at conventions, and asking leaders to talk about their large checks publicly are all practices that have become giant, blaring targets for lawmakers and regulators.
Public appetite for such practices seems to have disappeared completely. As such, maintaining awareness of and sensitivity to the environment surrounding us is increasingly looking like a competitive advantage.
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Warmly,
Teresa Craighead