Eurofins, other TICs dubbed ‘gatekeepers’ in wake of new Amazon dietary supplement policy

In a recent policy shift, Amazon granted three testing, inspection and certification (TIC) organizations the exclusive role of verifying test results intended to confirm the safety and compliance of three categories of supplement products before they can be sold on the massive e-commerce platform.

The move has positioned the TICs — Eurofins, NSF International and UL Solutions — as “gatekeepers in the Amazon marketplace,” according to Robert Marriott, director of regulatory affairs at the American Herbal Products Association (AHPA).

Per the policy, which launched in April, dietary supplement products in the muscle building, weight management and sexual enhancement categories are required to provide proof that the products meet safety standards by having test results from third-party and in-house labs verified by one of the TICs.

The categories of dietary supplements above are notorious for containing drug-spiked adulterants, such as sildenafil, the active ingredient in Viagra.

The TICs selected by Amazon are among the largest testing and certification organizations in the dietary supplement industry. Eurofins, for example, has more than 900 labs in 62 countries, according to its website.  

Élan Sudberg, CEO of Alkemist Labs, a third-party lab that specializes in plant and fungal identity, potency and contamination, suggested the policy puts pressure on brands that want to sell their products on Amazon quickly to work directly with one of the three approved TICs versus partnering with smaller third-party labs.

Related:Amazon dominates dietary supplement market in wake of Covid-19

“The industry will act on, ‘Can I sell on Amazon fast or not?’” he explained. “Now there's this gate that is being held by the industry's biggest and most profitable entities.”

Eurofins, NSF International and UL Solutions did not respond to multiple requests for an interview.

Amazon is the No. 1 retailer of dietary supplements, and raked in more than $12 billion in vitamin, mineral and supplement sales for the 12 months ending in August 2023.

That creates “a sizable amount of pressure and control through this policy,” Sudberg said.

Amazon last updated its policy guiding supplement quality in 2020, when it began requiring brands to maintain certain documentation to support compliance — like product images and a certificate of analysis (CoA) — in order to sell supplement products on the e-commerce site.

The 2020 policy update was welcomed by industry, though concerns remained about whether Amazon’s oversight of the category was sufficient.

The concerns were proven valid. Counterfeiting, products with low potency and products with adulterants are just a few of the quality issues that continue to plague Amazon’s dietary supplements category.

Related:Amazon's GMP policies not perfect, but praised by supplement stakeholders

The latest policy takes Amazon’s quality control efforts a step further by requiring test results that indicate quality and compliance to be verified by one of the three approved TICs. Specifically, the supplements affected by Amazon’s policy must verify the products:

• Were manufactured in a cGMP (current good manufacturing practice)-compliant facility.

• Contain the ingredients claimed on the label.

• Do not contain contaminants or undeclared pharmaceutical ingredients.

• Do not make illegal disease claims.

The move toward greater compliance is, again, largely supported by industry.

“Certainly, there will be products taken off the platform as a result of this policy,” Marriott said. “Hopefully, that includes a lot of illegal products that can contain drug ingredients.”

However, the industry has also responded to the policy with criticism, highlighting a number of concerns.

Perhaps the most critical concern about Amazon’s new verification standard is whether the policy will be effective in eliminating from its platform adulterated, contaminated and otherwise defunct supplement products.

Related:Amazon dominates supplement sales but is absent from industry trade groups

“I applaud Amazon for taking steps to reconcile the issues,” James Kababick, founder and director of Flora Research Laboratories, said. “But I also think that the way Amazon has set up the program … has created a lot of issues.”

For nearly 30 years, Flora Research Laboratories has specialized in dietary supplement testing and, specifically, the detection of “clandestine” adulterants like pharmaceutical drugs and unapproved new drugs.

Kababick asserted Amazon’s new policy will give “bad actors” a heads-up on which compounds the approved labs are required to screen for.

“Essentially, what they’ve given to the bad actors is a list of things not to use,” he remarked.

Further, the TICs use “targeted” testing methods that may be ineffective in detecting “unknown” adulterants.

“These labs test for [known] compounds, and if they're not there, they issue a report saying they're not there,” Kababick said. “But they could still be massively adulterated.”

Anabolic steroids and PDE5 inhibitors are common adulterants used to spike illegal products for sexual enhancement and muscle building, two of the product categories targeted by Amazon’s policy update. There are over 600 known anabolic steroids and around 160 analogue drugs of PDE5 inhibitors like Viagra, Cialis and Levitra, Kababick explained. Amazon’s policy only covers “a small handful,” he added.

Flora Research Laboratories utilizes non-targeted screening to detect adulterants versus targeted methods that test for specific, known compounds, Kababick said. Non-targeted screening is a method that takes “a lot more work” and “a lot more attention,” he added, “but we catch products that get passed by other labs routinely that are adulterated. It's a big issue.”

Dan Richard, VP of global sales and marketing at NOW Health Group, also contended Amazon’s testing policy isn’t likely to stop brands that are selling adulterated products and supplements that don’t meet quality standards. He called out the “very limited” number of SKUs affected by the new policy, which means “cheating brands can just move to other products” and “may well pass the new rules by finding workarounds.”

That means compliant brands may still be competing with illegal products on Amazon’s platform.

“Most of the dietary supplement industry is made up of good companies that comply with regulations,” Kababick said. “But they're now having to jump through all these hoops to compete against bad actors who will disappear and reappear by changing brands, labels [and] falsifying data.”

Increased cost of quality control

For supplement brands that want to sell their products on Amazon, receiving verification from one of the Amazon-approved TICs adds an extra cost.

NOW Health Group has about 50 products that will require verification through one of Amazon’s approved TICs in accordance with the policy. That amounts to more than $100,000 per year in additional costs, Richard estimated.

“The cost is significant … and from our perspective unnecessary for brands like NOW that have demonstrated label accuracy and regulatory compliance,” he asserted, adding that NOW already conducts required tests using internal and external labs.

Per Amazon’s policy, the verification process must be completed on an annual basis, which means the cost will be ongoing for supplement brands.

“This is a warning for all brands for what’s coming in the future,” Richard said. “Higher quality costs are certainly part of it.”

However, he said the cost is “well worth it” if the policy “moves the needle to help clean up the low-quality brands.”

Implications for non-TIC labs

According to Marriott, among AHPA’s membership, manufacturers and testing labs that are not TICs have expressed the strongest response to the new policy.

“Labs that are not TICs are, in many contexts, competitors with the TICs,” he explained. “This creates a challenging dynamic for information sharing, particularly about testing methods … so, there's a challenging interaction for an individual manufacturer who may have a long-established relationship with a smaller third-party lab, but who is now having to work through the TIC interface and provide information to the TIC in order to access Amazon.”

Amazon’s new verification requirements will inadvertently give the TICs Alkemist’s methods and client lists, according to Sudberg.

He noted, “If [the TICs] said, ‘Hey, can we have a client list?’ we'd say, ‘No, thank you.’ And if they said, ‘Hey, can we have all of your methods?’ we'd say, ‘No, thank you.’ But now through this policy, our results are siphoned to these labs.”

Exact Scientific Services is a third-party lab that provides a range of testing services to various industries, with much of its work focusing on dietary supplements. Among its offerings is DNA sequencing and identification via an Illumina MySeq system.

Kent Oostra, CEO of Exact Scientific Services, described the technology as a “very powerful tool,” and said his company is “one of the few [private] labs in the nation” to use sequencing. Further, the DNA method employed by Oostra’s lab is “unique.”

“If somebody came along and said, ‘… I need to see all your validation,’ I'm basically handing them the method because nobody else has done it our way is my understanding,” Oostra said.

Plus, he contended the TICs wouldn’t understand the methods, creating a separate challenge. “It's a concept that I would have to explain and walk these labs through, and they don't understand it,” he noted.

Per Sudberg, “pumping the brakes on results” because the TICs “don't fully understand them” creates “downstream pressure to the customer to ultimately say, ‘Why don't I just go to the TIC for the testing and the inspection and certification so I can just finally sell my stuff on Amazon?’”

He called the situation “classic David and Goliath.”

An optimistic outcome

Oostra said his lab, which was founded in 2006, experienced its first month of net losses in May, the month following Amazon’s announcement of its new verification process. He pointed to widespread confusion about the policy as a likely reason for the drop.

“People were confused about what could be tested where, so there were some implications,” he explained.

Marriott, too, cited an “increase in uncertainty” as the “primary impact” of the Amazon policy. “In terms of the lawful dietary supplement marketplace, a lot of that uncertainty has to do with the specifics and the nuances of how the policy winds up applying to testing and working through the individual TICs,” he added.

In September, AHPA hosted two sessions about the new policy as part of its Regulatory Congress.

Marriott said his association’s role is serving as a “venue of communication” by identifying areas of the policy that need clarification, and “bringing that back to Amazon in regular meetings in order to get Amazon to clarify the policy.” Since launching the policy, representatives at Amazon meet with AHPA once per month, he added.

Despite confusion and concerns, industry remains largely optimistic about Amazon’s efforts to clean up its dietary supplement category.

According to Marriott, Amazon has “shown greater openness to communication with AHPA and with the broader community than I have seen at any previous point in our relationship, and they're showing a strong interest in improving that communication and in improving their policy to match.”

That’s encouraging news for the industry,  considering the head of one trade organization earlier this year charged Amazon with operating in a “silo,” despite its spot as the industry's No. 1 retailer.

“Good news,” Sudberg said, “I feel confident that Amazon is going to make the right choices. They’re just in a weird spot right now, and they’re going to sort it out.”