Mumbai: Five foreign direct marketing firms are awaiting clearance from India’s Foreign Investment Promotion Board, or FIPB, the government arm that approves any foreign investment in India, and planning to sell health care and nutritional products in the country, even as some such companies already operating in India continue to sell drugs that they claim will cure most conditions.
These drugs, such as one sold by 4Life Research USA Llc., have no legal sanction and are the so-called magic remedies sold unchecked through direct marketing involving several layers of distributors and retailers before finally reaching customers.
The five companies are XanGo Llc., Nu Skin Enterprises, Usana Health Sciences Inc., Lifestyles International Holdings Corp. and Vemma Nutrition Co., and they plan to use the so-called multi-level marketing approach to sell their dietary and nutritional supplements.
In multi-level marketing, an independent distributor recruits people not only to buy and sell products but also to recruit more people. The new hires, in turn, recruit more people forming a chain. Each member earns a commission for expanding the network as well as selling the product.
Medical malady: Drugs sold by direct marketing firms, such as 4Life Research, claim to cure most conditions, but have no legal sanction.
Of the five companies, at least one, XanGo, has a history with regulators. The US Food and Drug Administration (FDA), that country’s drug regulator, in a September 2006 letter to XanGo, said it had “serious concerns” regarding the promotion of the company’s mangosteen juice concentrate. According to a Salt Lake Tribune report, FDA obtained brochures promoting the health benefits of mangosteen juice through contact information provided at a XanGo recruitment seminar.
The brochures claimed that mangosteen juice combats, among other diseases, Parkinson’s, Alzheimer’s, glaucoma, cataracts, cancer and viruses such as HIV, the report added.
Following the run-in, XanGo products now carry a label on their products stating: “Information and statements regarding dietary supplements have not been evaluated by the Food and Drug Administration and are not intended to diagnose, treat, cure or prevent any disease.”
Email queries sent to the five companies on Saturday seeking details on the products they plan to launch in India and asking if they will be seeking clearances from the country’s drugs regulator remained unanswered. Mint made phone calls to the five companies on Monday evening but automated replies from three of them said the companies had not opened for the day. An Usana employee who attended the phone said the company’s corporate office would not open until much later, while Vemma’s office could not be contacted.
Pranjal R. Daniel, chief strategist, Strategy India, a multi-level marketing advisory firm advising the five companies in India, said they do not plan to promote their supplements as drugs or medical products.
But he did say more foreign multi-level marketing companies are flocking to India to expand their businesses. Currently, there are eight foreign multi-level marketing companies operating in the health care and nutritional market in India, besides 100 other small and medium domestic players.
As Mint reported on 3 March, with no effective rule in the existing food and drug control law to regulate the proliferation of such wonder drugs, regulators are still groping in the dark.
Chennai-based Conybio Health Care Pvt. Ltd, the Indian arm of Malaysian multi-level marketing company, and US firms such as 4Life Research and Amway Corp. have already been marketing their health-care products in India under the guise of dietary supplements.
Products marketed as dietary or nutritional supplements have not yet been brought under a specific regulatory framework in India. Though the recently amended Food Safety Act refers to dietary supplements and nutraceuticals, neither a regulator nor a set of rules to licence such products have been established.
India’s Drugs and Magic Remedies Act, a law that is rarely enforced, gives drug regulatory departments or the police the right to take action against misleading advertisements related to the treatments, including arrests and seizure of the products.
Agel Enterprises Llc., which claims to sell nutritional and skin care supplements, is among the latest entrants to start selling its products here. The company’s proposal to start operations in the country was cleared by FIPB last March.
The US-based multi-level marketing company, which operates through a network of independent distributors, says on its website that its nutritional products provide “supplements made of the finest vitamins, minerals and herbs…”, while its skin care products include cleansers and moisturizers.
Agel also says its members are prohibited from making any medical claims and that its products are not intended to diagnose, treat, cure or prevent any disease.
Clearly, that is not a practice followed by Agel’s employees and members in India. The company’s Chennai-based customer care manager Gayathri Muralidharan said that UMI, one of the company’s four products launched in the country, “has the potential to cure lethal diseases including cancer. It has remarkable benefits of fucoidan (sulfated polysaccharide found mainly in various species of brown sea weeds), which is used for curing cancer.” “Our another product FIT reduces the appetite and inhibits fat,” she added.
India’s Drugs and Cosmetics Act, which defines the regulations for approving drugs for marketing in the country, says any product that claims medical benefits should be backed by adequate safety and clinical data and be ratified by drug regulators—a process that could take years to complete.
The multi-level marketing channel provides an easier route. Its person-to-person approach means the promotion for the products are discreet and do not attract the attention of the authorities.
An official at the Kerala state drug control department said most multi-level marketing companies secure import licences under the guise of consumer products.
“However, when they market the product through direct selling, they push it with health and therapeutic claims,” added this official who did not wish to be identified.
A couple of years ago, the Kerala government had banned the products of Conybio Healthcare, which sold undergarments, stockings, bangles and mattresses that it claimed would cure diabetes, arthritis and heart ailments.
Meanwhile, a recommendation to update the Drugs and Magic Remedies Act that was submitted by a special committee set up by the government in 2006 to expand the scope of the law to cover new business and advertisements models, is gathering dust at the Union ministry of health.
The proposed amendment to the Bill was not presented in Parliament as there was a lack of clarity on how to treat the claims in advertisements and surrogate promotions, said former Drug Controller General of India M. Venkateswarlu.