Starting a Supplement Company – Our Insights

If you’re here, you’re thinking about starting a supplement company. You’ve probably already read the following popular articles:

You’re probably asking: why is an insurance agency is offering advice on starting a supplement company? The short answer: we want our clients to succeed! We insure hundreds of dietary supplement companies and we insure dozens of new supplement companies every month. We see which supplement companies succeed and which ones fail, and why. And we understand the dangers and pitfalls of the dietary supplement business.

Your Unique Niche

Trademark

It is important to know that a trademark for your dietary supplement product will not be approved or verified by a government agency prior to selling your product. This differs from pharmaceuticals, which are reviewed to confirm that there is no confusion with existing drug names. This means that more legwork is required to confirm that your trademark does not infringe on an existing product.

Product Labels

Dietary supplements require nutrition labeling similar to foods and beverages, but with different formatting and content. “Supplement Facts” identify only nutrients, and “dietary ingredients” identify herbal and botanical ingredients.

Supplement labels and advertisings cannot claim or suggest that they “treat, diagnose, prevent, or cure disease.” FDA may classify any dietary supplement that makes these claims as a pharmaceutical, which requires FDA approval. A product with unauthorized labeling may be confiscated by the FDA.

FDA Concerns

The Food and Drug Administration (FDA) regulates labeling of dietary supplements and supporting literature. While it is not necessary to obtain FDA approval before selling your nutraceutical or dietary supplement product, FDA will take action against any mislabeled dietary supplement product after it reaches the market. As a seller of dietary supplements, you are responsible for making sure that your product labels will meet the scrutiny of the FDA before you start distributing your product(s). The FDA will not review your labels prior to selling them, unlike pharmaceutical products.

Current Good Manufacturing Practices (cGMPs)

Below is a concise summary of the US current Good Manufacturing Practices (cGMP) for dietary supplements under 21 CFR Part 111 (“CGMP Rule”), tailored to what a compliant operation must implement:

Scope and responsibility

Applies to all domestic and foreign firms that manufacture, package, label, or hold dietary supplements for U.S. distribution. Brand owners are responsible for compliance even when operations are outsourced.
Goal: ensure supplements are produced consistently to meet established specifications for identity, purity, strength, composition, and limits on contaminants.

Quality system and personnel

Establish a quality system with designated quality control (QC) personnel independent from production, empowered to approve or reject components, in-process materials, labels, packaging, finished product, deviations, investigations, and reprocessing.
Maintain competent personnel: documented training, education, and experience; written job responsibilities; hygiene and health practices.

Facilities and sanitation

Adequate facility design, space, and environmental controls to prevent mix-ups and contamination.
Written sanitation procedures for buildings, equipment, utensils, water quality, pest control, and handling of toxic or allergenic substances to prevent cross-contact and adulteration.

Equipment and instruments

Design, install, and maintain equipment to be cleanable and suitable for intended use.
Calibrate, qualify, and maintain instruments; keep logs of use, cleaning, maintenance, and calibration.

Components, packaging, and labeling

Supplier qualification program with documented approval, ongoing verification, and change control.
Identity testing: conduct at least one appropriate test or examination to verify the identity of each incoming component that is a dietary ingredient.
For non-identity specifications, you may rely on a certificate of analysis only if the supplier is qualified and each COA is verified as reliable.
Quarantine and release procedures; traceability by lot.

Production and process controls

Written Master Manufacturing Records (MMRs) for each formulation and batch size detailing components, weights/measures, equipment, theoretical yields, in-process controls, packaging/labeling, and critical parameters.
Batch Production Records (BPRs) that document exact execution of the MMR, including component lots and quantities, equipment lines, in-process test results, actual yields, deviations, and operator/QC signatures with dates.
In-process controls to ensure specifications are consistently met (e.g., blending uniformity, compression force, fill weight, torque/seal integrity).

Specifications and testing

Establish specifications for components, in-process materials, labels/packaging, and finished products (identity, purity, strength, composition, and contaminant limits like microbes, heavy metals, residual solvents).
Use scientifically valid methods; ensure laboratories are suitable, with validated or verified methods, trained analysts, and appropriate reference standards.
Finished product testing or scientifically justified testing of in-process materials to ensure final product meets specifications; document rationale if not testing every finished lot.

Packaging and labeling controls

Control label issuance to prevent mix-ups; line clearance and reconciliation of label counts.
Packaging system suitability (e.g., moisture/oxygen barrier), tamper-evidence, and legible, accurate labeling consistent with 21 CFR 101 for supplement facts and claims.

Material review, deviations, and reprocessing

Procedures to handle deviations, OOS/OOT results, and nonconforming material; QC material review and disposition decisions with investigations and corrective actions.
Reprocessing allowed only with documented scientific justification and QC approval.

Returned product and complaints

Written procedures for receiving, evaluating, and dispositioning returns; assess adulteration or mislabeling risk.
Product complaint handling system with timely review; investigate quality-related complaints and document findings and actions. Serious adverse events are reported under DSHEA requirements outside Part 111.

Holding and distribution

Storage conditions that protect quality (temperature, humidity, segregation). FIFO/FEFO as appropriate.
Reserve samples of each finished lot retained in the same or equivalent container-closure system to support investigations through shelf life or expected period of use.

Records and retention

Records must be contemporaneous, legible, attributable, and change-controlled.
Retain records for 1 year past shelf-life date or, if none, 2 years beyond the date of distribution of the last batch associated with the records.

Contract operations

Written quality agreements defining roles, testing, release, and deviation/complaint handling.
The responsible firm maintains oversight via qualification, audits, and performance monitoring.

Continuous improvement

Internal audits, management review, and ongoing verification of suppliers, methods, and processes to sustain control and compliance.

Advertising and the FTC

The Federal Trade Commission (FTC) regulates the advertising of dietary supplements.

https://www.ftc.gov/tips-advice/business-center/guidance/dietary-supplements-advertising-guide-industry

Below is a brief summary of these requirements:

Truthful, non-misleading claims: The net impression of the ad to a reasonable consumer must be accurate. Omissions can mislead.
Substantiation before advertising: Health-related claims require competent and reliable scientific evidence—methodologically sound human research that matches the claim’s population, dosage, and endpoints. Animal, in vitro, or anecdotal evidence is generally insufficient.
Claim specificity matters: Stronger, more specific health or disease claims need stronger evidence. Broad benefits (e.g., “clinically proven to reduce anxiety”) typically require well-controlled human studies; qualify claims if evidence is limited.
Clear and conspicuous disclosures: Qualifying information must be proximate, unavoidable, and understandable across devices. Fine print or hyperlinks cannot cure a misleading headline.
Structure/function versus disease claims: Disease-treatment or prevention claims demand rigorous substantiation and may also trigger FDA issues; avoid implying diagnosis, treatment, or cure without solid evidence.
Comparative and “clinically proven” claims: Require head-to-head or appropriately designed trials; don’t overstate results or generalize beyond study limits.
Endorsements and testimonials: Typicality must be disclosed if results vary; material connections (payments, free products, affiliates) must be clearly disclosed. Monitor and enforce influencer compliance.
“Natural,” “safe,” and risk claims: Substantiate safety; qualify risks realistically. Don’t imply FDA approval or “doctor recommended” without substantiation.
Recordkeeping and compliance: Maintain substantiation files; review ads for net impression; train teams; correct errors promptly; align landing pages and social posts with claims in ads.

Distribution Channels

Amazon recently changed their requirements for dietary supplement sellers. In response to a study, they determined that certain dietary supplements being sold on Amazon did not contain the ingredients on the label. Amazon is also requiring dietary supplement sellers to carry General Liability (including Products Liability) insurance. Please refer to our article discussing Amazon’s insurance requirements.

Testing

Below is a summary of best practices for dietary supplement product testing to ensure identity, purity, strength, composition, and contaminant limits are consistently met.

Test strategy

Build a written plan mapping each specification to a method, sample size, frequency, and acceptance criteria; justify any skip-lot testing with risk and historical capability.
Use statistically sound sampling (e.g., ANSI/ASQ Z1.4: American National Standards Institute / American Society for Quality, Sampling Procedures and Tables for Inspection by Attribute).

Methods and validation/verification

Use scientifically valid methods; validate or verify fitness-for-purpose (specificity, accuracy, precision, linearity, range, robustness, LOQ/LLOD).
System suitability criteria and control samples each run; use qualified reference standards.

Identity and potency

Perform at least one identity test for each dietary ingredient (e.g., HPTLC, HPLC, MS, DNA where applicable).
Assay labeled actives; set acceptance around label claim with justified limits (e.g., $90\text{–}110\%$ unless otherwise supported).

Purity and contaminants

Microbiology: TAMC, TYMC, pathogens; method suitability for antimicrobials.
Chemical: heavy metals (e.g., Pb, Cd, As, Hg), residual solvents, pesticides; set limits based on exposure.

In-process and release

Blend uniformity, fill weight, tablet hardness/friability, dissolution/disintegration as applicable.
Packaging verification (moisture/oxygen ingress) and label reconciliation.

Stability

ICH-aligned stability with bracketing/matrixing as justified; support expiry.
Use same/equivalent container-closure; monitor assay, degradation, and microbes.

Data integrity and oversight

ALCOA+ (Attributable, Legible, Contemporaneous, Original, Accurate, plus Complete, Consistent, Enduring, and Available) records, second-person review, OOS/OOT investigations with root cause and CAPA (Corrective And Preventative Action).

Working with a Contract Manufacturer

Begin with a written quality agreement defining roles, decision rights, and records: specifications for identity, purity, strength, composition, and contaminants; Master Manufacturing Records; Batch Production Records; deviations; complaint handling; and release criteria under independent Quality Control. Qualify the manufacturer through audits, method reviews, and performance history; then establish a test plan that maps each specification to a method, sampling scheme, frequency, and acceptance criteria, using statistically sound attribute sampling (ANSI/ASQ Z1.4).

Require scientifically valid methods and fitness-for-purpose validation/verification (specificity, accuracy, precision, linearity, range, robustness) with system suitability and qualified reference standards. Conduct ingredient identity testing (e.g., high-performance thin-layer chromatography, high-performance liquid chromatography, mass spectrometry, or deoxyribonucleic acid when appropriate) and assay actives against justified ranges (e.g., of label claim). Control contaminants with limits in $ppm$ or $μ g / day$ ; perform microbiology (total aerobic microbial count, total yeast and mold count, pathogens) with method suitability for antimicrobial matrices.

Implement in-process controls (blend uniformity, weights, hardness/friability, dissolution/disintegration), packaging and label reconciliation, and reserve samples in the same or equivalent container-closure. Run International Council for Harmonisation stability to substantiate expiry or best before date. Enforce ALCOA+ data integrity, second-person review, and robust out-of-specification/out-of-trend investigations with corrective and preventive action.

Insurance

We have published comprehensive articles on Liability Insurance for Nutraceutical and Dietary Supplement Companies and Personal & Advertising Injury and Intellectual Property.

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