In a year when initial public offerings and acquisitions were almost unheard of, the supplement business saw many go public and get bought.  Only iPhone apps fared better, and not by much.

Meanwhile, the regulatory landscape tightened, but not as much as expected under a Democratic administration.  While both foods and drugs had their shares of scandals, supplement makers passed their early cGMP inspections and emerged unscathed.

Looking ahead to 2010 we envision many new challenges and opportunities for the supplement business.  In no particular order, here’s what to look for in the year ahead:

Sports supplements face stiffer regulation. Under several proposals currently being circulated in Congress, the Drug Enforcement Administration would be given increased powers to schedule substances that are chemically similar to or precursors of human growth hormone effectively banning them from use without a prescription.  Some sports supplement makers will need to reformulate their products or face enforcement action from DEA, an agency far more aggressive than the FDA supplement companies are used to.

CGMP regulations impact small supplement businesses. In June companies with 20 and fewer employees become subject to the FDA’s dietary supplement CGMP regulations.  Companies that rely on contract manufacturing will receive a rude awakening as they are subject to regulatory scrutiny they have never previously experienced.  Small supplement makers should begin to prepare themselves by implementing standard operating procedures to comply with the new cGMP rules.  Many will fail to do so and by year’s end fewer small supplement companies will be around to see 2011 as a result.

Investors get serious about supplements. Expect more merger and acquisition activity in 2010 with special emphasis on venture capital firms seeking new opportunities for profit in the supplement space.  Ingredient suppliers, contract manufacturers, marketers and retailers are all in play.

Regulators take aim at Internet supplement businesses. Armed with new rules and increased funding, regulators at the Federal Trade Commission, Food and Drug Administration and state attorneys general will step up their attack on supplements sold as drugs and deceptive and unfair sales practices.  The FTC endorsement rule will be used against bloggers and the companies that sponsor them.  Learn and follow the rules now or get caught violating them later.

By all accounts 2010 will be a great year to not just survive but thrive.  We hope to be there with you and look forward to your comments in the year ahead.

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As we have written before, makers of nutritional supplements should pay close attention to comments submitted to the FDA before February 2010. There will likely be advocates for warnings on all products that make a claim to support good health. The agency’s rules on search-based advertising for health products could encompass non-prescription items such as vitamins and muscle-building powders.

The ruckus in Washington on Nov. 12 and 13 stemmed from FDA warnings in March to drug makers that their search-based ads did not contain proper product warnings. Drug makers backed off their advertising, and the search-engine companies saw revenues plunge. Everyone hurried to Washington to ask the FDA for clarification.

Google presented a solution. It told the agency that sponsored links are now less transparent and relevant. Google then proposed a standard for product-claim sponsored links:

1. A headline that links to a product landing or home page.
2. A first line with the Web address for that page, followed by an information message.
3. A second line containing a safety warning that cannot be altered, followed by a link to a Web page with more details on the warning.

You can see sample Web pages by Google at Scribd. Other companies and public advocacy groups will likely have ideas on how to balance sales messages and product warnings. There may be software solutions such as pop-ups or Flash that could be integrated in order to present more information in an ad, but an elegant solution seems unlikely. Thus, the FDA could write rules that force makers and marketers of nutritional supplements to alter their sponsored links in ways they never wanted.

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In the trade, it is called public service journalism, but this may qualify more as a disservice.  In the Sept. 21 issue with Tim Tebow on the cover (again?), ESPN Magazine devotes two well-illustrated and detailed pages on performance-enhancing drugs. This is a must read for every attorney who represents an athlete who tests positive. The article probably should not be allowed in the libraries of middle and high schools.

Curious about how to get in shape before pro hockey or baseball season starts? Use Tri-Test, says ESPN. Want to come off a steroid cycle? Do like Manny Ramirez and take HCG. The article explains how each drug works, its legal status with the World Anti-Doping Agency, and why athletes risk taking the product.

The article gives popular other names for a drug; our favorite is Apache, Dance Fever and Goodfella, all of which refer to Fentanyl, a synthetic opiate that ESPN writes has achieved popularity among some weightlifters.

ESPN warns, “Don’t try these at home,” to which we would add, ” or in a clubhouse, at a track meet or in a weight room.”

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We are not sure of the reason, but it seems that every three months or so, a national media outlet weighs in on an old story: tainted nutritional supplements. To be sure, the story will not go away in the sports world. Athletes who test positive for steroids often say they thought they were taking vitamins.

The dietary dangers faced by professional players is a good launching point for a substantive news story. If the pros can be victims, what about the amateurs playing high school and college sports? What are the players’ coaches doing about the dangers of contaminated supplements? Are industry forces and organized sports working together to eliminate the problem? If not, why not?

No, we get a rehash of anecdotes with the same question: Are vitamins safe? So goes the Sept. 7 article in the Wall Street Journal headlined, “What’s Really in Supplements?” with the ominous sub-headline, “Regulators and Physicians Raise Alarms About Dangerous Ingredients in Many Herbal Remedies.” The illustration is scarier; it features demons escaping an opened capsule.

Among the article’s weaknesses:

• No one at the FDA raises an alarm. One FDA official says consumers should read labels and another says that the agency is doing the best it can to find and ban bad products.
• Just a few — not the headlined many — herbal remedies are cited as causing problems. The article reaches back five years to a now-banned substance as an example. Why bring up ephedra if product integrity is an issue today?
• No event gives the article urgency. No one famous has become ill or died from taking a supplement. The most notable recalled product of recent times is Hydroxycut, which gets no mention. The article says that the  FDA will hold hearings this month without giving specifics.
• The reader service is laudable, but not prominent enough. The first mention of information sources about supplements appears in the fifth paragraph, after the anecdotal lead about a policeman who unwittingly took steroids.
• Statistical evidence of the prevalence of product contamination devolves into a he-said, she-said between HFL Sports Science and the Council for Responsible Nutrition.

After all of that, the Journal article treads on much of the same ground covered in a May 18 Sports Illustrated article that also fed on fear with the headline, “What you don’t know might kill you.” Where is the news?

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