FOOD SUPPLEMENT OR ILLEGAL DRUG?

Trial in Utah on Cholestin is pivotal battle between FDA and booming herbal
industry

FARMINGTON, Utah -- Here in the heart of the nation's herbal and vitamin
industry, a stainless steel contraption was hard at work on a recent
morning, spitting out clear plastic capsules at the rate of 90,000 an hour.
Each contained precisely 600 milligrams of a fine, brick-colored powder
that federal health officials are trying to ban.

The powder, a pulverized strain of rice called red yeast, is imported from
China, where it has been consumed for 2,000 years, both as an herbal remedy
(it was thought to improve blood flow) and a food (it spices up tofu and
makes a tasty marinade for duck and pork).

Effect On Cholesterol

Then, five years ago, William McGlashan Jr., a young Simi Valley venture
capitalist and Stanford Business School graduate, learned that scientists
in Beijing were studying the rice for another reason: It seemed to lower
cholesterol.

Today, McGlashan's company, Pharmanex, sells the encapsulated red powder
under the trade name Cholestin in 37,000 American stores, from health-food
outlets to the giant Wal-Mart chain.

McGlashan calls Cholestin a dietary supplement. Officials at the Food and
Drug Administration call it something else: an illegal, unapproved drug.

On June 15, in the gray stone federal courthouse in Salt Lake City, U.S.
District Court Judge Dale Kimball will be asked to determine who is
correct. The case is being watched as a pivotal battle between the FDA,
which is chafing against a 1994 law that left it almost powerless to
regulate vitamins and herbal products, and the dietary-supplement industry,
which has been growing wildly since the law was passed.

At issue is not whether Cholestin is dangerous; no one argues that it is.
Rather, the FDA contends that Cholestin has crossed the increasingly murky
boundary that separates dietary supplements from drugs, because it contains
an ingredient, lovastatin, that is the key component of a
cholesterol-lowering drug. Pharmanex says the lovastatin occurs naturally
and that Cholestin is more akin to a food than a drug.

The outcome of the case could affect the medicine and kitchen cabinets of
millions of American consumers, including many doctors and scientists, who
have come to believe that herbs such as ginkgo, echinacea and St. John's
wort are as important to good health as aspirin and antibiotics.

Aside from the turf battle between the supplement industry and regulators,
the dispute raises crucial questions: What is the distinction between these
herbal products, which may contain naturally occurring chemicals as potent
as those in any drug, and drugs themselves?

Must products like Cholestin be subjected to the rigorous testing that
drugs undergo?

``You see more and more dietary supplements sold right next to
over-the-counter drugs,'' said William Schultz, the FDA's deputy
commissioner for policy. ``There is a risk that the line will blur.''

The FDA has struggled with such questions for decades. But with the passage
of the 1994 Dietary Supplement Health and Education Act, the law under
which the Cholestin case will be decided, the agency's task grew even more
vexing.

The new law took dietary supplements out of the underground and into the
mainstream, giving manufacturers like Pharmanex the long-sought right to
advertise the potential benefits of herbs, even if the evidence for those
benefits was sketchy. If the products were safe, companies could say what
they wished, so long as they did not claim their products could prevent,
treat or cure disease. McGlashan can advertise that Cholestin ``promotes
healthy cholesterol,'' but not that it ``prevents heart attack or stroke.''

``For the first time,'' he said, ``we can educate the American consumer
about what the product does. We don't have to rely on a person in a
health-food store to explain it.''

Since the law was passed, the FDA has received about 2,300 notifications
from manufacturers intending to make claims about their products, and has
objected to about 150 of them.

But these actions, said former Food and Drugs Commissioner David Kessler,
are hardly enough to make a dent in the rampant proliferation of herbal
remedies that he says are ineffective at best and unsafe at worst.

`Out Of Control'

``Just walk into your pharmacy; it's out of control,'' said Kessler, who
waged a bitter, unsuccessful battle against the 1994 law as commissioner.
``Efficacy is now defined as what sells off the shelves. The agency is
powerless.''

While the law was a disaster for regulators, it was a windfall for
businesses that sell herbs and vitamins. After the act was adopted, annual
sales of dietary supplements in the United States jumped from more than $8
billion in 1994 to nearly $12 billion last year, according to the Nutrition
Business Journal, a trade publication.

So furious has the growth been that one analyst, Matthew Patsky of the
Boston-based investment banking firm of Adams, Harkness & Hill, said some
of the nation's biggest pharmaceutical companies are planning to introduce
their own lines of herbal products.

That worries Schultz, the FDA deputy commissioner for policy. ``If
companies that would have tested their products and sold them as drugs are
now going to not test them and sell them as dietary supplements,'' he said,
``then we have lost information about the safety and efficacy of those
products.''

While the court case is pending, McGlashan said, sales of Cholestin are
booming.

Larry Barbella of Cupertino Natural Foods said among his customers there is
moderate interest in the product. ``There has been no stampede of interest
but (there have been) regular requests. It has name recognition; people
come in off the street and ask for it.''

Mercury News Staff Writer Lisa Krieger contributed to this report.