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Clinical Nutrition ESPEN 25 (2018) 133-138

Is multi-level marketing of nutrition supplements a legal and an ethical practice?

Diana Cardenas (1,2) and Vanessa Fuchs-Tarlovsky (3)

1 Facultad de Medicina, Carrera 9 No. 131a-02. Bogota, Colombia.
2 Escuela de Medicina, Ciudad Universitaria Rodrigo Facio, Sector Norte, San Pedro de Montes de Oca, San José, Costa Rica.
3 Pabellon 111. Doctor Balmis No 148. Col. Doctores, Del. Cuautemoc ZIP 06726 Mexico, D.F.

Summary

Background: Multi-level marketing (MLM) of nutrition products has experienced dramatic growth in recent decades. ‘Wellness’ is the second most popular niche in the MLM industry and represents 35% of sales among all the products in 2016. This category includes dietary supplements, weight management and sports nutrition products. The aim of this paper is to analyse whether this practice is legal and ethical. Methods: An analysis of available documentary information about the legal aspects of Multi-level marketing business was performed. Ethical reflexion was based on the “principlism” approach.
Results: We argue that, while being a controversial business model, MLM is not fraudulent from a legal point of view. However, it is an unethical strategy obviating all the principles of beneficence, nonmaleficence and autonomy. What is at stake is the possible economic scam and the potential harm those products could cause due to unproven efficacy, exceeding daily nutrient requirements and potential toxicity. The sale of dietary and nutrition supplements products by physicians and dieticians presents a conflict of interests that can undermine the primary obligation of physicians to serve the interests of their patients before their own.
Conclusion: While considering that MLM of dietary supplements and other nutrition products are a legal business strategy, we affirm that it is an unethical practice. MLM products that have nutritional value or promoted as remedies may be unnecessary and intended for conditions that are unsuitable for self-prescription as well.

https://clinicalnutritionespen.com/article/S2405-4577(18)30104-9/fulltext

Excerpts:

"In 2015, more than 103.3 million people around the world worked for MLMs, creating a retail turnover of approximately 183.7 billion US dollars . ‘Wellness’ is the second most popular niche in the MLM industry, after cosmetics and personal care products only. This category represents 35% of sales among all products in 2016 and includes dietary supplements, weight management products and sports products..."

"Among the top 20 MLM companies by global revenue in 2017, eleven companies are devoted to selling ‘wellness’ products...Some companies such as Herbalife and Usana are specialized in dietary supplements and weight control, other enterprises sell dietary supplements as well as a wide range of products such as disinfectant cleaners, skincare, make-up, air purifiers and cookware. On their official websites, these companies claim a wide range of benefits to nutritional status and health. In fact, companies are responding to people's deluded demands for health and fitness maximization, anti-aging solutions, immunity improvement, boost of metabolism, weight loss, vitality or organs ‘detoxification’. Moreover, some distributors make illegal claims, for example, that nutritional supplements can cure all sorts of diseases or illnesses. In 2016, the watchdog organization Truth in Advertising investigated the 62 companies selling nutrition supplements that were members of the Direct Selling Organization. They found that 60 of them (97%) had illegally claimed or were claiming – either directly or through their distributors – that their products could treat, cure, prevent, alleviate the symptoms of, or reduce the risk of developing diseases or disorders.  They found more than 2000 problematic product claims made by those companies. The list can be consulted at: https://www.truthinadvertising.org/mlm-health-claims-database/

"Consequently, the lack of truthfulness within the MLM strategies has become particularly problematic. We must also ask whether this marketing strategy for nutrition supplements is legal and ethical in and of itself? Can physicians and dieticians legitimately become distributors?"

"Selling dietary supplements through MLM strategies can be considered legal when the company and its distributors follow the legal framework and regulations made by the different legislations around the world. In The United States (USA) the regulation of MLM business is made by The Federal Trade Commission (FTC) and in Europe by the Directive 2005/29/e of the European Council which regulates unfair commercial practices.

"However, some legitimate MLM organizations share many of the same characteristics of illegal marketing scams (called pyramid scheme companies).  Looking at this market from a legal point of view, the issue is not black and white and entails more complicated consideration. Sometimes it is a challenge for regulators and for customers to identify companies that operate in the 'grey area'."

"...the primary distinction between the two [pyramid scheme and MLM] is that the latter compensates their salespeople for selling products or services to ultimate consumers and not simply for recruiting people. This difference is blurred and difficult to prove."

"The ethical principles of autonomy, beneficence, nonmaleficence and justice as proposed by Beauchamp and Childress, are internationally recognized."

"First, the principle of beneficence imposes an obligation to act for the benefit of the patient and physicians and healthcare professionals have to follow professional obligations and standards. Do dietary supplements and other nutrition products provide a benefit to customers? This means questioning the efficacy of the products."

"However, the scientific evidence about the efficacy of dietary supplementation with vitamins and other nutrients to treat or control diseases other than those caused by nutrient deficiency is scarce and frequently lacks any solid clinical trials."

"Nevertheless, the MLM dietary supplements strategy is founded on the assertion that all people need a dietary supplement every day and for a number of reasons. For example, Nutritilite states that supplementation is intended to fill dietary nutrient gaps 'between what we need and what we eat'..."

"Accordingly, everybody will find a product that will fit his or her need. But those affirmations lack any scientific grounding.

"Thus, from an ethical point of view, to supplement diet is a good practice when it is framed by an expert knowledge to ensure benefit. Worryingly, any person can become a nutritional supplement MLM distributor and whoever signs an agreement with a company such as Herbalife or Usana becomes a 'health advisor'. There aren't any requirements and the person need not be knowledgeable in the health or nutrition field."

"The principle of nonmaleficence imposes an obligation not to inflict harm on others."

"The most significant safety concern posed by supplementation is the sale of adulterated products...The number one adulterant in dietary supplement is drugs, followed by an unquantified number of NDIs [new dietary ingredients] that were not submitted to the FDA prior to marketing. Both are illegal.

"Adverse effects of nutrition supplements are responsible for an average of about 23,000 emergency department visits per year, according to a study published in 2015 in The New England Journal of Medicine."

"Thus, from an ethical point of view, the respect of the nonmaleficience principle is at stake largely when a non-expert distributor, not knowing these risks, recommends a dietary supplement to customers."

"It isn't unusual for healthcare professionals, (i.e. physicians, nutritionists, dentists, or dermatologists) to sell nutrition supplements in their offices. However, it is ethically questionable when healthcare MLM distributors exploit their professional status and their trusting relationship with their patients to increase their profit."

"While considering that MLM of dietary supplements and other nutrition products are a legal business strategy, we affirm that it is an unethical practice. MLM products that have nutritional value or promoted as remedies may be unnecessary and intended for conditions that are unsuitable for self-prescription as well. The respect of the principles of beneficence, nonmaleficence and autonomy are at stake. Under no circumstance is it an ethical practice for physicians or other healthcare professionals neither for non-health professionals distributors. The general public should avoid nutrition and health-related multi-level products altogether while government enforcement action against multi-level companies should be more vigorous and aggressive worldwide. Healthcare professional organizations should define policies and ethical recommendations on how, who and when should prescribe dietary supplements to avoid this practice."


To legalize fraud is fraud. To legalize legalizing fraud is fraud. The word "legal" only means: "allowed by the state mafia".