Saturday, January 03, 2004

Capitalism & Law: Banning Ephedra... But for How Long?

At first glance, you might think consumers would stay away from a product the government considers dangerous enough to ban. Yet that’s not happening with ephedra:
Online retailers are reporting a run on ephedra products as consumers make last-minute purchases of the dietary supplement that the federal government plans to ban.

The Food and Drug Administration announced Tuesday that it will ban ephedra in March. The agency urged consumers to stop taking the herbal ingredient, which has been linked to 155 deaths in the United States.

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A sales representative at Dps Nutrition Inc., a Taylor, Pa., online supplement store, said ephedra products such as Extreme Ripped Force, ECA Stack and Diet Fuel have been dominating sales this week.

"We're seeing a record number of sales for ephedra products," the sales representative said, refusing to disclose her name., a Boise, Idaho, online supplement retailer, posted about 2,000 orders for ephedra products on Tuesday, the Los Angeles Times reported. That one-day sale doubled the company's previous record.

Metabolife's original 356 formula, a weight-loss supplement with ephedra, was selling on EBay yesterday for $60 to $100 per 104-capsule bottle. Its ephedra-free counterpart was selling for $5 to $16 per 90-capsule bottle.
The FDA is treading on shaky legal ground in banning ephedra. Herbal supplements are not subject to prior authorization by the FDA, meaning the agency must affirmatively demonstrate ephedra is dangerous in order to ban its sale. Ephedra producers will almost certainly challenge the FDA ban in court. But the fight is worth the FDA’s time, since a victory will strengthen the agency’s ability to control and regulate other supplements. Like all bureaucracies, the FDA sees itself as a guardian of the “public interest,” and the best way to fulfill that mission is by acquiring as much power as possible.

The market, however, can still undermine the FDA’s authority. Even after the ban takes effect, ephedra will still be bought and sold in unofficial markets, many of them made possible by the internet. Unlike Prohibition of the 1920s, it’s no longer necessary to organize a massive crime syndicate to undermine the government’s authority. We’ve already seen what online Canadian pharmacies have done to undercut the FDA’s ban on importing prescription drugs. The more the FDA pushes for regulation, the more the market will push back. If I were a betting man, I’d put my money on the market ultimately prevailing.

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