**Docket No. 96N-0417**

**BEFORE**

**THE UNITED STATES OF AMERICA**

**DEPARTMENT OF HEALTH AND HUMAN SERVICES**

**FOOD AND DRUG ADMINISTRATION**

**COMMENTS OF**

**Herbalist & Alchemist, Inc.**

**ON THE PROPOSED RULE FOR**

**Current Good Manufacturing Practice**

**in Manufacturing, Packing or Holding**

**Dietary Ingredients and Dietary Supplements**

**August 11, 2003**

Thank you for the opportunity to comment on the PROPOSED RULE FOR GOOD
MANUFACTURING PRACTICE IN MANUFACTURING, PACKING OR HOLDING DIETARY
INGREDIENTS AND DIETARY SUPPLEMENTS ("Proposed Rule").

Herbalist & Alchemist, Inc. is a small company, located in rural Warren
County, NJ. We employ 10 people full time, 3 people part-time, and work
with some very dedicated independent sales reps. The Company has been in
business for 20 years. We purchase the majority of our raw materials
directly from small farmers.

Known for our reputation of producing high quality, traditional style
herbal products, we have a strong commitment to education and to
maintaining quality in the industry.

Most of our employees have attended, at a minimum, a 2-year, 5 hour a
week educational program on botanicals and their uses. We have two
professional members of the American Herbalists Guild on staff. Our
Product Developer and Chief Herbalist, David Winston, is a well-known
ethnobotanist and trained Cherokee Medicine person Our Chief Executive
Officer, Beth Lambert, has served on the Board of the American Herbal
Products Association for 4 years and was elected Chairman of the Board
this year.

First, let us state that we support the concept of Industry cGMP's. As a
small company dedicated to quality, we want to see quality in all
products made for consumers in our industry. We appreciate the FDA spent
a considerable amount of time drafting its Proposed Rule, **however we
strongly believe that they have underestimated the economic consequences
of the Proposed Rule** in light of what they have stated to be consumer
benefits. We believe the rule as proposed will:

-   Significantly increase costs to the consumer

-   Reduce the number of traditional botanicals available to consumers

-   Drive small, traditional rural-based quality companies out of
    business

-   Significantly hurt the rural farming and wild-crafting communities

However, we believe that the FDA can achieve its objective of having
meaningful cGMPs and providing consumers with high quality products,
with some changes to its Proposed Rule. We have worked very hard with
our trade association, the American Herbal Products Association (AHPA)
to develop such meaningful changes that we believe meet all mutual
objectives.

**I . Preparation for cGMP's - Investment To Date:** Knowing since 1994
that the FDA would issue cGMP's, we have spent years and invested a
considerable amount of money in preparing to meet this, until recently,
unknown obligation. To date we have made ***Investment of at least
\$52,800*** and **Annually Spent \$84,254** to develop our Quality
Standards. Details follow:

1\) **Documentation and Training** - We participated in a year-long ISO
9000 training course and developed our own quality system with
documented procedures in conjunction with a consultant assigned to our
company over following year. This course was offered by the NJ
Department of Labor. All management staff went through procedure writing
and audit training.

-   **Investment Cost -- *Approximately \$30,240 in personnel time over
    a 2-year period and approximately \$300 in supplies.***

2\) **Herbarium and Samples** -- As part of our establishing our
botanical standards we developed an in-house herbarium. Plant specimens
were keyed and validated by our senior herbalist/ethnobotanist.

-   **Investment Cost** -- ***Approximately \$2600 in personnel time
    over a multi-year period and approximately \$2000 in supplies.***

-   **Annual Cost --** ***Approximately \$1268 in personnel time and
    \$150 in supplies.***

3\) Time to **Review and Understand original industry proposed GMP's**
and intergrate them into our documented Quality System --

a.  Read/review by management and staff and meeting time for discussion

b.  Industry meetings and seminars -- including testifying in Washington
    and attending Washington DC Seminar by FDA on microscopy.

c.  Integration into Quality System

-   **Investment Cost *-- \$9400***

4\) Time **to Review and Understand FDA's proposed cGMP's** and prepare
responses

> a\. Read/review by management and staff and meeting time for
> discussion:
>
> b\. Industry meetings and seminars and e-mail discussions --

a.  Cost research and comment

-   **Investment Cost *-- \$7355***

5\) **Procedure Maintenance and Audit** -- Cost to annually maintain
procedures and internally audit---18 scheduled audits; document
revisions and management review.

-   **Annual Cost** -- ***Approximately \$11,640 and approximately \$200
    in supplies***

6\) **Ongoing Going** **Training to maintain Qualified Employees** --
Every employee that works with our products is given a basic GMP
training course and those directly working in the production area are
given intensive training on specific procedures for their jobs. Training
is recorded and kept in employee files

-   **Annual Cost** ***-- Approximately \$500 for General training.
    Specific Training varies by area and Employee salary***.

7\) Qualified **Employees** Highly **Skilled in Botanical ID** --
Company pays for courses in basic Botanical education and advanced
Botanical Education where appropriate. Company pays premium compensation
to Production staff trained in botanical ID.

-   **Annual Cost** ***-- Up to \$5000 for Education. Premium salaries
    range 23-40% over other management/staff for those with Advanced
    Botanical Experience or Training.***

8\) **Quality Plant Material** -- The company pays a premium for
Certified Organic or Ethically wild-crafted botanicals grown by
knowledgeable growers/farmers/collectors.

-   **Annual Cost** ***-- Varies, but can be significantly higher.***

9\) Cost to **maintain daily documentation** of current procedures --
Current level of Documentation adds approximately 15% more time to our
production and product sales processes.

-   **Annual Cost** ***--\$64,980 for staff time; \$250 for data/sample
    collection and back-up materials (includes \$11,640 in #5 above for
    Procedure Maintenance and Audit).***

10**) Tape Back-up System**- We have maintained a tape back up system
for our electronic records for years and just recently upgraded that
system.

-   **Investment Cost --** ***Material cost of \$724 and \$200 for labor
    for installation.***

II**. Increased Costs to Comply with GMP's as Written.**

The standard as written are less strict in some areas than our current
internal fully documented procedural standards and add new costs in
other areas. We have first tried to analyze the additional cost, the
regulations will add as written. We believe we would face a minimum
one-time **Investment of \$189,129** and **Annual Costs of at least
\$561,436**

At present we are not certain that we would be able to continue as a
going concern without significant restructuring.

In addition, when final rules are passed, we might have to make
adjustments to our own current system due to the changed emphasis of the
FDA. In relying less on internally audited and reviewed procedures and
more on testing, the FDA will force us to shift resources to what we
believe to be unnecessary testing requirements and building construction
burdens that are inappropriate for our class of goods. We believe that
these changes will increase costs to the consumers without improving the
quality of the products that we are currently delivering to the market.

The following reflects our analysis:

1)  **Sanitize** to "achieve a reduction of 5 logs". Without the change
    suggested by AHPA, this implies that we would have to prove this
    issue every time.

    a.  Cost to test before and after: Micro tests cost \$320 if above
        50% alcohol. We clean surfaces approximately 30 times a day. Not
        only would this halt production---as we have to send samples out
        every time, but this is just impractical. AHPA's simple change
        would just let us ascertain that we were using a proper cleaner.

        -   **Annual Cost: *If every time - \$2.4 million (\$320 x 30 x
            250 working days). If 1x per day \$87,500 (but these tests
            take days to culture-have not factored in lost production
            time.)***

2)  **Training OR Experience**---Sections 111.12 (b) and 111 .13 (b) and
    Section 111.15 training or experience. Working in rural Warren
    County, we often get job applicants with experience that is relevant
    to a job, but perhaps without formal training. In hiring that
    candidate or promoting someone from within our company, we make the
    judgment that the person has the ability to perform the job, given
    adequate training, and then through our evaluation process, make the
    further judgment that the employee is performing the requirements of
    the job. To have to meet the standard of someone who is both trained
    and experienced, our search costs would increase, we might not be
    able to promote our own staff and we would most likely have to
    increase the amount offered to attract a candidate for a job with
    very narrow industry experience. Up to 20% increase in staff costs.
    A simple word change suggested in the AHPA comments relieves this
    burden.

    -   **Annual Cost: \$86,600**

3)  **Water supply**-we use water supplied by the local water company,
    which is rated drinkable. Cost for water tests: \$30 each. We intend
    to install filters in the production area. Cost \$50 per filter unit
    per sink. Filters cost approximately \$15 to replace.

    -   **Investment Cost: \$100**

    -   **Annual Cost: At least \$360 plus testing**

4)  **Smooth/Hard Surfaces in Lab** -- We approached outside vendors to
    locate materials that would comply with this requirement. We
    measured all area, discussed costs of all components with
    contractors. Cost to up grade current facility estimated to be a
    minimum of **\$82,924** for smooth hard surface material and changes
    lighting/electrical to accommodate these surfaces. That figure might
    have to be revised upward when we learn more about the type of
    accommodations for the lighting. We did not actually have our
    electrician come out to visit our site and spec out the job, as we
    did not want to have him forego income. This was an estimate. A
    simple change as suggested by AHPA comments to cleanable surfaces
    would be sufficient.

    -   **Investment Cost: \$82,924**

5)  **Requirement for fans and other air-blowing equipment/Equipment
    that controls temperature and humidity**. The way this section is
    written it requires fans and other air-blowing equipment or
    equipment to control temperature and humidity. Given that we live in
    rural NJ in a temperate climate, we do not always need this
    equipment. We, of course do use fans, air conditioning and heating
    as appropriate to prevent adulteration and maintain a comfortable
    working environment, but some days, in our judgment, we don't need
    anything. Again AHPA's simple changes relieves this burden.

    -   **Investment Cost: \$need more research**

6)  **Raw Material receipt area construction**. Often we receive
    material directly from a grower that requires additional washing
    before we bring these material into our processing area. Similar,
    but in most instances cleaner than the area they would have been
    gathered in, we have an outside washing station. It has a concrete
    base and is elevated. We perform final washing and often will
    examine plant material for foreign material at this station, before
    it is brought into our production area. If we would have to create a
    separately enclosed area for this purpose, we would incur
    significant initial costs. Here again, AHPA's changes to reflect
    procedures that insure that standards are met appropriately would
    take care of this issue.

    -   **Investment Cost***: \$25,795 for new structure, not including
        installation.*

7)  **Instrument calibration**, when instrument not critical to
    achieving specifications. Press, moisture balance

    a.  Currently calibrate our balances according to procedure. To
        purchase additional weights to calibrate more frequently in
        house

        -   **Investment Cost: \$400 to \$1400**

    b.  Other instruments, such as our press, graduated cylinders,
        measuring spoons and cups are not currently calibrated. Weight
        is the defining component of the relationships established by
        the Master Manufacturing Record. AHPA's wording change would
        relieve this burden.

        -   **Investment Cost: \$need more research**

8)  **Testing Requirements**

    a.  Botanicals-we consulted a leading outside testing lab to
        ascertain the costs of the following tests. Last year we
        received 200 lots of botanical material and made 178 products
        (note some botanicals were repackaged as smaller sizes of bulk
        dried herbs). Applying the test costs outlined below, which
        depending on the product would range from between \$825 to \$975
        per product, we would increase costs **by \$311, 850 to
        \$368,550**. These testing costs alone represent a **327% to
        368**% increase in our total cost of goods sold. Some products
        we make in very small batches to accommodate traditional uses.
        We would obviously no longer be able to make these
        products---and we would have to increase prices on our other
        products. We have been 20 years in business without a recall,
        primarily purchase certified organic herbs, and have invested
        significantly in a documented quality system with procedures to
        avoid such problems. This represents an enormous cost to the
        consumer, without delivering any observable benefit. Our prices
        would have to increase immediately by a significant amount to
        just to cover these costs. AHPA's changes, though complicated in
        this area, are standards that accommodate our scale of
        production.

        i.  ID- TLC \$150

        ii. Micro - \$350-360 if below 50% alcohol and \$320 if above
            50% alcohol

        iii. Pesticides - \$225

        iv. Heavy Metals - \$150

        v.  Aflatoxins - \$100

    b.  Ingredients (Alcohol, Water, Glycerine, Vinegar, Essential Oils,
        etc.) With 28 lots received in 2002, the additional costs would
        be **\$23,100 to \$27,300**. We believe that it is unreasonable
        to have to verify goods already made to USP standards. AHPA's
        changes reflect this issue. We would review procedures to make
        sure we meet standards.

        -   **Annual Cost: *\$334,950 to \$395,850***

9)  Software back-up -- It is illegal in most instances to copy
    software. And our software is constantly being updated. We keep
    records and have invested in a tape back-up system.

-   **Investment Cost: *\$924 (already made see above)***

10) Establishing a quality control unit-we have an existing Quality
    system with checks and approval built into that system. With 200
    botanical lots and 178 finished products and 28 lots of ingredients
    that will need to be tested, we will have to add at least one
    additional person, just to track test receipts and sample
    submissions to outside labs. Again AHPA's changes reflect our work
    done to date to meet the "spirit" of this issue.

-   **Annual Cost:** ***at least \$35,000 plus full health benefits and
    401k costs.***

    a.  Additional Sample costs

-   **Annual Cost: \$need more research**

11) Master Manufacturing Record Upkeep and Changes - In Video Tape
    Presentation by FDA staff of the proposed regs, there was a
    discussion indicating that the "Master Manufacturing Record" must
    indicate a Specific Quantity and Weight for each ingredient see
    111.45 (b) (3) ---BUT

    a.  Our Product Master File and BOM's set relationships, not
        specific quantities. Each record is then developed from the
        amounts input---most often for an extract batch, it is a
        function of the raw material weight after garbling out inferior
        material (excess stem, grass seed. etc.)

    b.  As a small company, we often bottle large sizes to demand and
        adjust quantities for manufacture and bottling, based on demand
        and product availability. The specific RELATIONSHIPS are
        therefore defined by the Product master file or BOM, but the
        batch size of bottling run is calculated, based on product
        availability. Our lab and bottling managers have been trained to
        perform those calculations. And our procedures provide adequate
        checks on their calculations.

    c.  Our output is a flow based output. Amounts vary by press used.
        For certain products, volume returns can be over 100%, for
        certain highly resinous materials on rehydration. We have a
        reasonable expectation of output based on history, exceptions
        are examined.

> Very simple changes submitted by AHPA take care of this issue.
>
> **Annual Cost:** ***at least \$11326 for changes, record-keeping and
> audit.***

12) Additional Documentation

    a.  Documentation of "Standards" to comply with Regs-Staff and
        Management time to write-up, format and review existing
        standards ***\$57750***.

    b.  Review of Procedures to make sure they comply with New
        cGMP's-internal audit and re-write ***at least \$22160***

-   **Investment Cost:** ***at least \$79,910***

13) Returns Costs-we have internally established standard to accepting
    returned finished stock as qualified for resale. Product must be
    examined and meet our standards. Most of our business is wholesale.
    Returns accepted are returned within a short time, ie wrong item
    ordered or sent---seals must be intact, labeling acceptable, etc. If
    we lose the ability to set our own standards for such items, we
    incur the indicated cost. Again, AHPA changes reflect the need to
    set our own standards:

-   **Annual Cost:** ***at least \$5700***

III\. **Requested Changes** that will not compromise the intent of FDA's
mission of Quality Industry Products and Consumer Safety, but that will
ease the cost burden of Proposed cGMP's for Quality, Traditional, Small
Botanical Products Company.

1**) American Herbal Product Association Submission** - We have spent a
considerable amount of time participating in Trade Association Meetings
to review the proposed cGMP's. We support all comments and changes
proposed by The American Herbal Products Association in its submission,
particularly its detailed mark-up of the FDA's cGMP's. We have submitted
specific comments, which have been incorporated in AHPA's Documents.

We thoroughly believe that we will bear increased costs especially in
the areas outlined below:

-   Reviewing our existing documentation (most significantly reviewing
    all raw material and product standards and make sure that our
    botanists/herbalists have complete files that reflect their
    knowledge) --

    -   **Investment Cost: *\$79, 910***

    -   **Annual Cost:** **\$need more research**

-   Adding additional filtration for water supply (which is already
    delivered by a water company who has to meet drinking water
    requirements)

    -   **Investment Cost: *\$100***

    -   **Annual Cost: *At least \$360 plus testing***

but that these costs can be borne by increasing operating efficiencies
and by increased prices to the consumer. We believe that consumers will
accept these costs.

2\) We support **American Herbal Pharmacopoeia** (AHP) as a standard
setting entity.

Our trade association, the American Herbal Products Association, has
indicated its support for the scientifically valid standards established
by the American Herbal Pharmacopoeia (AHP), the European Pharmacopoeia
(EP), and the World Health Organization (WHO). **[We strongly support
this position]{.underline}**.

Combined, these three organizations have developed standards for more
than 100 different botanicals as reflected in their currently completed
monographs. The monographs of AHP and WHO contain methods of
identification not contained in other sources, such as accurate
morphological and microscopic descriptions. AHPA notes that non-chemical
analyses, such as organoleptic and microscopic analyses, are extremely
important, and often times more useful, in determining plant identity.
Thus, methods or references that are relevant to these methodologies are
essential. Additionally, each of the monographs of these organizations
have been developed and reviewed according to rigorous guidelines and
subjected to international peer review prior to their adoption.

AHPA has found the AHP monographs to be among the most useful and
scientifically credible sources of information about botanical
ingredients, including information on identity testing and quality
control parameters. Unlike other authoritative sources, AHP monographs
provide numerous illustrations and photographic images detailing the
gross and microscopic characteristics of each botanical, along with
detailed chromatographic imagery relevant to chemical analysis. This
information provides a valuable resource for assuring identity and
quality of botanical ingredients, as a production sample received by a
firm can be tested with the various methods and references published in
these texts. AHP monographs also provide information regarding optimal
harvest times and handling and drying conditions. These parameters are
valuable for botanical ingredient quality control and are not addressed
by any of the identified compendial sources.

The information in the AHP, EP, and WHO monographs is extremely valuable
to AHPA members, **such as our company-Herbalist & Alchemist**, in
complying with cGMPs and should be recognized as such by FDA as
scientifically credible resources for identifying botanical dietary
ingredients. Such recognition would provide AHPA members and other
manufacturers with clearer guidance to assist in accessing
internationally recognized standards for more than 100 botanicals.