Jonathan Collin, MD
with permission from the December 1999 issue of the Townsend
Letter for Doctors & Patients. Also
read our columnist's commentary
on this editorial, and Collins'
the last ten days of May the US Justice Department disclosed and
fined a European vitamin cartel composed of 3 of the biggest pharmaceutical
companies. It is no surprise that Switzerland's Roche, Germany's
BASF and France's Rhone-Poulenc manufacture the lion's share of
ascorbic acid, tocopherol and beta-carotene. These raw material
vitamins are only manufactured by several concerns, then distributed
to the world markets for middleman distribution to privately owned
small vitamin companies primarily in the US. What is surprising
is that this so-called Vitamins Inc. blatantly set up pricing for
the raw materials to the nearest penny, allocating specific quotas
to the different firms as to their market share of sales, even providing
for repurchasing between cartel members when one company sold more
than its agreed upon allotment. The US justice department's Joel
Klein, head of the anti-trust division, who has been especially
visible in Microsoft's anti-trust litigation, apparently has had
time and resources to expose what has been called a textbook conspiracy
of vitamin manufacturing. In its action in May two of the largest
manufacturers have accepted record fines, Roche and BASF agreeing
to $500m and $225m respectively. Rhone-Poulenc escaped monetary
punishment by supplying US prosecutors with evidence to expose the
we consumers and physicians may applaud the workings of the Department
of Justice in discovering and punishing the players of Vitamin Inc.,
we are left wondering about the legitimacy and ethics of the vitamin
industry as a whole. At the top end it is clear that ascorbic acid
is being produced by pharmaceutical giants primarily in Europe.
Other world-wide manufacturers do exist, (for example, in China)
who are not members of such a cartel, but the majority of US vitamin
raw materials appears to come from Europe. Jobbers sell batch supplies
of ascorbic acid in barrel shipments to dozens of proprietary companies
primarily in the US. These companies either tablet, encapsulate,
or repackage the ascorbic acid with other ingredients and excipients
under their own label or label for some other party. The pricing
for the new product is based first on the raw material charge which
has now been established to have been set by a cartel. However,
the proprietary company pricing is then set individually dependent
on cost of ingredients and tableting. One often hears the cry at
vitamin manufacturer expositions and physician conventions that
vitamins are natural and therefore should have limited regulation
by government. In fact, this entire episode demonstrates quite nicely
that for one, all ascorbic acid vitamin supplements are synthetic,
and two, the pricing of these products falls entirely upon the typical
day-to-day business arrangements of large and small manufacturers.
This is an industry which is primarily centered on the bottom line,
all the way from the top where a cartel of big players set the costs,
to the middle where a number of smaller but otherwise well-compensated
individuals tablet a proprietary product, to the health-food store/physician
or pharmacy dispensary/multi-level distributor system which handsomely
increases pricing on the cost of these products.
are led to believe that because the vitamin products contain vitamin
constituents natural to the body that the products themselves are
natural. In fact, any ascorbic acid, vitamin E or beta-carotene
contained within the supplement is synthetic and is being manufactured
and tableted like any pharmaceutical drug for profit. The screams
that we hear from various parties that regulations will hurt the
little operators are ridiculous; the little operators purchase their
vitamin C from the same place as the big players - Roche and BASF.
When we run to Congress to ask that labelling requirements on vitamin
products should be given free reign, understand that we are asking
for the freedom to publicize a product made synthetically which
was originally manufactured by a pharmaceutical giant. The argument
that if the FDA regulates vitamins, that vitamins will then be produced
by drug companies, available only by prescription, is an exposition
in confusion. The vitamins are now being manufactured by drug companies;
this is not something new. The fact that a smaller concern has a
pretty label on the side does not offset the fact that pharmaceutical
companies are producing the ascorbic acid and other ingredients
found within the vitamin bottle. Just like aspirin and cold medicine,
one does not need a prescription to purchase a drug-company manufactured
vitamin supplement. Of course, there are many products being sold
which contain proprietary formulas, some of which are labelled as
food-produced. So if I take a juice product and mix it with ascorbic
acid, I now have a supplement of juice made by one of the large
food conglomerates mixed with ascorbic acid from a drug manufacturer.
Hello: this is still a synthetic vitamin mixed with a food. Adding
foods to supplements does not make the supplement natural.
we are now seeing the production of a variety of so-called immune
supporting agents which are touted as being natural because they
derived from various animals, plants, minerals. It is clear that
these products are being extracted and purified, again by large
manufacturing or pharmaceutical concerns, leaving a synthetic animal
or plant or mineral derivative which is then peddled as "natural."
Let's be clear: there are no strictly natural supplements, all supplements
are derived from constituents produced by pharmaceutical houses,
and everyone involved wishes no regulations to intefere with their
own personal bottom line.
one prefers no regulations in the US vitamin industry, it is clear
that we have a burgeoning industry composed of differing players,
all sharing one basic motive: profit. Just like in any other industry,
if there is no regulation, the unscrupulous will move in and begin
to produce shoddy or fraudulent products. The Vitamins Inc. cartel
spells out that the raw materials all come from essentially the
same source at the same price. Although it is unlikely that US proprietary
companies have their own cartel(s), it is not impossible to think
that such agreements do exist among certain parties. Finally, certain
mail order houses offer vitamin products at ridiculously low pricing.
If these products are being manufactured with adulterated vitamins
at prices below the Vitamins Inc. cartel, there appears to be a
need for regulation in the vitamin industry.
with permission from:
Townsend Letter for Doctors & Patients
911 Tyler Street, Port Townsend WA 98368-6541
Three Apples Are Rotten, Do We Throw Out The Whole Bunch? Editorial
by Ed Fry. Reading the Townsend Letter editorial "Vitamins
Inc. Cartel" was like reading Jonathan Swift's "modest proposal"
to eat our young as a means of resolving human population pressures.
The editorial, however, lacked Swift's irony and wit, and certainly
didn't read like satire. In
lieu of a trip to Lilliput, the Townsend editor might consider
traveling to Germany to observe the kind of regulatory environment
he seems to invite . . .