Legal and Regulatory Aspects Moving Forward

1. Legal and Regulatory Aspects Moving Forward Presented by: Zackler & Associates www.foodlaw.com (510) 834-4400

2. Overview of Regulatory Sources and Methods • Regulatory Sources • Methods of Regulation Zackler & Associates

3. Regulatory Sources • Federal Government/Executive Branch Agencies • State Government • Local Government • Private Legal Actions • Industry Standards Zackler & Associates

4. Federal Government / Executive Branch Agencies • USDA Regulates the Farm • FDA Regulates the Processing, Distribution and Labeling of Food and Dietary Supplements • FTC regulates advertising Zackler & Associates

5. State Government(“Federalism”) • On-site food preparers (cafeterias, restaurants) and retailers • Who will regulate restaurants? • Tougher state regulations • Will restaurants seek federal protection? • Can ban food items or ingredients (ephedrine) • Off-label regulation • Websites Zackler & Associates

6. Local Government(“Localism”) • Zoning—(GMO farming bans in California counties) • Bans, labeling requirements? Zackler & Associates

7. Private Legal Actions • Obesity Litigation • Pelman v. McDonald’s under N.Y. Unfair Practices Act • California Unfair Practices Act • Hardee suit against makers of reduced sugar cereals Zackler & Associates

8. Industry Standards • Trade Associations • Unilateral Actions by Food Processors • McDonald’s eliminates supersizing; and promotes exercise • Kraft voluntarily limits advertising to children • Increased Regulatory Pressure Zackler & Associates

9. Means of Regulation • Prohibition • Remediation • Warning labels Zackler & Associates

10. Prohibition • Food Ingredients • Not practical • No public acceptance • Backdoor prohibition by warning label (trans fat) • Advertising Restrictions • Children • Legal Restraints (COPPA) • Voluntary Restraints (Kraft) Zackler & Associates

11. Remediation • McDonald’s approach • End supersizing • Put “healthy” alternatives on menu • Encourage exercise • No voluntary change in product formulation or promotional activities • Not a viable alternative to warning labels and advertising restrictions Zackler & Associates

12. Warnings on Food Labels and Restaurant Menus “Caution: this food contains excessive amounts of fat and may be hazardous to your health.” Zackler & Associates

13. Legal and Regulatory Aspects Moving Forward—Overview of Current Federal Regulation • Claims that can be made by foods and dietary supplements • Nutrient Content Claims vs. Health Claims (Statutory and Qualified) • Statutory vs. Qualified Health Claims • Structure/Function: Food vs. Dietary Supplement • FDA vs. FTC Enforcement Zackler & Associates

14. Claims That Can Be Made By Food & Dietary Supplements Zackler & Associates

15. Statutory vs. Qualified Health Claims • Procedure • Standard of Approval • Approved Claims Zackler & Associates

16. Statutory Health Claims—Standard of Approval • Significant Scientific Agreement (“SSA”) • “There is significant scientific agreement among experts qualified by scientific training and experience to evaluate such claims, that the claim is supported by the totality of the publicly available scientific evidence including evidence from well-designed studies conducted in a manner that is consistent with generally recognized scientific procedures and principles.”1 1 Source: Guidance for Industry, Qualified Health Claims in the labeling of Conventional Foods and Dietary Supplements, 12/28/2002) Zackler & Associates

17. Statutory Health Claims—Approved Claims • 21 CFR 101.72 to 101.83. • Total 12 and include claims such as: • calcium and osteoporosis • fiber and cancer • fiber and heart disease (five of these claims pertain to heart disease) • folate and neural tube birth defects. Zackler & Associates

18. Qualified Health Claims—Legal Source Decision of the U.S. Court of Appeals for the District of Columbia in Pearson v. Shalala which held that it is a violation of the First Amendment to prohibit food manufacturers from making scientifically based health claims that have not been approved by the FDA. Zackler & Associates

19. Qualified Health Claims—Procedure • File petition for review by FDA • Response within 270 days Zackler & Associates

20. Qualified Health Claims—Standard of Approval • Totality of publicly available evidence supports the claim. • Uses a “B, C, D” grading system. • B = evidence is not conclusive • C = evidence is limited and not conclusive • D = little scientific evidence Source: Interim Procedures for Qualified Health Claims in the Labeling of Conventional Human Food and Human Dietary Supplements, (07/10/2003) Zackler & Associates

21. Qualified Health Claims—Approved Claims Qualified Claims About: • Cancer Risk • Cardiovascular Disease • Cognitive Function • Neural Tube Birth Defects Zackler & Associates

22. Qualified Health Claims—Approved Claims Qualified Claims About Cancer Risk: • Selenium & Cancer • Antioxidant Vitamins & Cancer Zackler & Associates

23. Qualified Health Claims—Approved Claims Qualified Claims About Cardiovascular Disease: • Nuts & Heart Disease • Walnuts & Heart Disease • Omega-3 Fatty Acids & Coronary Heart Disease • B Vitamins & Vascular Disease • Monounsaturated Fatty Acids From Olive Oil and Coronary Heart Disease Zackler & Associates

24. Qualified Health Claims—Approved Claims Qualified Claims About Cognitive Function: • Phosphatidylserine & Cognitive Dysfunction and Dementia Zackler & Associates

25. Qualified Health Claims—Approved Claims Qualified Claims About Neural Tube Birth Defects and0.8 mg Folic Acid & Neural Tube Birth Defects Zackler & Associates

26. Structure/Function Claims Food vs. Dietary Supplements • Types of Claims Permitted • Procedure • Labels Zackler & Associates

27. Structure/Function—Food • Types of Claims Permitted: • Nutritive Structure/Function (“S/F”) claims (e.g. claims based on GRAS ingredients) • Procedure: • No FDA approval or notice required • Labels: • No FDA disclaimer required Zackler & Associates

28. Structure/Function—Dietary Supplements • Types of Claims Permitted: • Nutritive S/F claims • Non-nutritive S/F claims (e.g. antioxidants) • Procedure: • Manufacturers must notify FDA of the claim within 30 days after putting the supplement in retail distribution • Labels: • “This statement has not been evaluated by the Food and Drug administration. This product is not intended to diagnose, treat, cure or prevent any disease.” Zackler & Associates

29. FDA vs. FTC Enforcement • FDA • Public health, welfare—foods, drugs, cosmetics, dietary supplements • Prohibits adulteration/mislabeling • FTC • Economic regulation • Prohibits unfair methods of competition or deceptive acts or practices affecting commerce Zackler & Associates

30. Legal and Regulatory Aspects Moving Forward • Current Regulatory Topics • Low Carb • Glycemic Index • USDA Food Pyramid • Obesity Zackler & Associates

31. Current Regulatory Topics—Low Carb • Claim was never approved by FDA as a nutrition or health claim (statutory or qualified) • “Industry civil disobedience” Zackler & Associates

32. Current Regulatory Topics—Low Carb Why no FDA Action? • Deregulatory mindset? • Indecision? • Low Carb is scientifically sound? • FDA Working Group On Obesity recommended approval of low carb type nutrient content claims Zackler & Associates

33. Current Regulatory Topics—Low Carb Why no FDA Action? (cont’d) • Glacial responsiveness • Inside the beltway politics • Too many other things on FDA’s plate (e.g. bioterrorism) • PR problem with general public clamoring for Low Carb food Zackler & Associates

34. Current Regulatory Topics—Glycemic Index Which road will be taken? • Formal approval by FDA as a nutritional claim • Low Carb (non-approval) model Zackler & Associates

35. Current Regulatory Topics—Obesity • FDA Working Group on Obesity • “Calories Count” • Calories & Nutritional Labeling • Calories & Serving Size Regulations Zackler & Associates

36. Current Regulatory Topics—Proposed New Serving Sizes Effect on Nutritional Claims • Negative claims—“low in” • Positive claims—“high in”

37. Current Regulatory Topics—USDA’s New “MyPyramid”Everyone’s Confused… Zackler & Associates

38. Current Regulatory Topics—USDA’s New “MyPyramid” • Based on the principles of the USDA’s 2005 Dietary Guidelines for Americans • Customized guidelines depending on age, sex and physical activity Zackler & Associates

39. Current Regulatory Topics—New USDA Food Pyramid 2005

40. Current Regulatory Topics—New USDA Food Pyramid 2005 Primary challenge in using the new pyramid is how to formulate and market products that accurately reflect all of the variations among the various types of pyramids. Zackler & Associates

41. Current Regulatory Topics—New USDA Food Pyramid 2005

42. Legal and Regulatory Aspects Moving Forward—Conclusions • More state and local regulation of processed food industry • More regulatory flexibility at federal level • More willingness by industry to assert nutritional claims and health claims without explicit FDA approval Zackler & Associates

43. Zackler & Associates www.foodlaw.com 3824 Grand Avenue Oakland, CA 94610 (510) 834-4400 azackler@foodlaw.com sweinstein@foodlaw.com

44. Appendix Zackler & Associates

45. Nutrient Content Zackler & Associates

46. Health Claims

47. Statutory Health Claims—Legal Source §403(r) of the FDCA authorizes the Secretary of Health and Welfare to approve health claims Zackler & Associates

48. Statutory Health Claims—Procedure • Claims approved through a petition process involving public rule making under the Administrative Procedure Act (“APA”). Approved claims are published as regulations in the CFR. • See Sample Petition Zackler & Associates

49. Current Regulatory Topics—USDA Dietary Guidelines 2005 • Food Groups to Encourage • Fruits, vegetables, whole grain, fat-free/ low fat dairy • Nutrients • Fats • Carbohydrates • Sodium and Potassium Zackler & Associates

50. Current Regulatory Topics—USDA Dietary Guidelines 2005 Key Food Groups to Encourage • Two cups of fruit and 2 1/2 cups of vegetables per day for a reference 2,000-calorie intake • Choose a variety of fruits and vegetables each day (select from all five vegetable subgroups Zackler & Associates