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Federal authorities will return $22 million in funds owed to Inter-Mark member salespersons which were seized in 2010 amid accusations that Inter-Mark, an Internet-based multilevel marketing firm, actually was a Ponzi scheme.
The money will be distributed to 75,000 Inter-Mark member salespeople as commissions owed to them. According to a report in the Minneapolis Star-Tribune, some Inter-Mark members could receive as much as $200,000.
A special administrator working with Inter-Mark will verify claims and disburse the funds.
While the government would say only that they didn’t want the members deprived of their money, Inter-Mark is taking the action as an admission by the government that the company did nothing wrong.
Just last week, the Food & Drug Administration issued draft guidelines for when manufacturers and distributors of dietary supplements need to notify the FDA of so called “new dietary ingredients” and to provide the agency with evidence of the safety of the ingredient. The requirement to provide the FDA with notification of new dietary ingredients and evidence of their safety has been around since the Dietary Supplement Health and Education Act (“DSHEA”) was enacted in 1994. However, it appears that there has been a substantial lack of compliance with this legal requirement. According to various media reports, the FDA has received around 700 such notifications since the law went into effect in 1994. Additionally, a law enacted just this past January (the FDA Food Safety Modernization Act) required FDA to issue the guidelines.
Under DSHEA, a manufacturer or distributor of a dietary supplement that contains a new dietary ingredient must provide FDA with pre-market notification of the new dietary ingredient together with “information, including any citation to published articles, which is the basis on which the manufacturer or distributor has concluded that a dietary supplement containing such dietary ingredient will reasonably be expected to be safe.” Where such notification is required, it must be given at least 75 days before the product is introduced into interstate commerce. If this is not done, the dietary supplement will be deemed to be adulterated.
So now, you are probably asking what is a “new dietary ingredient”? A new dietary ingredient is a dietary ingredient (a vitamin; a mineral; an herb or other botanical; an amino acid; a dietary substance for use by man to supplement the diet by increasing total dietary intake; or a concentrate, metabolite, constituent, extract, or combination of any of the foregoing dietary ingredients) that was not marketed in the United States in a dietary supplement before October 15, 1994. Note that the pre-market notification described above is not required if the new dietary ingredient has been “present in the food supply as an article used for food in a form in which the food has not been chemically altered.” In other words, the pre-market notification will not be necessary if the new dietary ingredient (a dietary ingredient that was not present in a dietary supplement in the U.S. prior to October 15, 1994) is derived from something that was in the food supply of the U.S. prior to that date and has not been chemically altered.
Because this is all somewhat confusing, the FDA has prepared the draft guidance, which you can view here. The draft guidance answers questions in a FAQ format to assist manufacturers and distributors in determining whether they need to file the pre-market notification and evidence of safety. It also contains templates for the preparation of a new dietary ingredient pre-market notification. In addition, if you are so inclined, you can even comment on the draft guidance, although in order for your comments to be considered by the FDA, they must be filed within 90 days of the date that the notification was published in the Federal Register. The notification was published on July 5, 2011—see here.
FDA hopes that with the publication of these guidelines that compliance with the pre-market notification requirements will improve. Only time will tell.