Welcome to Our October Webinar For Nature’s Sunshine Consultants Keeping You Safe – A Conversation with Nature’s Sunshine’s Attorney October 20, 2011

My Contact Information Scott Terry scottt@natr.com P 801-342-4516 F 801-342-4579 75 E. 1700 S. Provo, UT 84606

This webinar will be recorded and can be viewed on www.nspwebinars.com A phone recording of this webinar is available by calling 1-712-432-0453 PIN 1384998 (This is not a toll-free call)

New Corporate Headquarters August 2012

New Corporate Headquarters August 2012

Education Week! November 14-21 11 am & 6 pm Live Mountain Time; Recordings will be provided as well Six free webinars Product discounts & specials Lots of fun giveaways on live sessions www.nspwebinars.com

Enter your questions, we’ll address them when we conclude What topics would you like to see discussed on our future consultant webinars?

Jamon Jarvis Executive VP-General Counsel, Chief Compliance Officer

Claims, Pains & Regulations: An Introduction to the Regulation of Dietary Supplements Jamon Jarvis General Counsel & CCO Nature’s Sunshine Products, Inc.

Purpose Cover the Basics Why Do “They” Care? Why Should We Care? Who Regulates Define the Terms Claims Why Do “They” Care? Why Should We Care? Practical Application Questions?

Who are the Regulators? FDA FTC Regulates over $1 trillion worth of consumer products Approximately 25 cents of every dollar spent by consumers Promote and protect the public health Guiding principles: Products must be safe, clean, wholesome, produced and stored in sanitary conditions, and truthfully labeled Priorities include dietary ingredient/supplement safety The Nation’s Consumer Protection Agency Act to prevent fraud, deception and unfair business practices Joins with FDA on dietary ingredient/supplement consumer issues

Dietary Supplement Health and Education Act of 1994 (DSHEA) DSHEA Definition The Dietary Supplements Health and Education Act of 1994 (DSHEA) amended previous statutes to encompass dietary supplement-specific provisions including the definition of a “dietary supplement”, product safety, nutritional statements and claims, ingredient and nutritional labeling, good manufacturing procedures, the classification of “new” dietary ingredients, and third-party literature/ informational materials (i.e. articles, fact sheets, etc.).

Dietary Supplement Health and Education Act of 1994 (DSHEA) Background and Overview Why? Defines a dietary supplement Reverses burden of safety The role of “third-party” materials

Dietary Supplement Health and Education Act of 1994 (DSHEA) Key Requirements New Dietary Ingredients FDA Disclaimer created Structure/Function Statements

Claims and Substantiation What Can I Say?

Permitted Claims Structure/Function Claims Nutrient Content Claims Structure/Function claims describe the role of a nutrient or dietary ingredient intended to affect normal structure or function in humans Function v. Dysfunction Nutrient Content Claims Describe the level of nutrient or dietary substance in a product (using terms such as “free,” “high” and “low”) Compare the level of a nutrient in a food to that of another food (using terms such as “more,” “reduced” and “lite”)

Permitted Health Claims (Continued) Describe a relationship between a dietary supplement ingredient and a reduction in the risk of disease or health related condition (can be used if certain criteria are met) Health claims based on authoritative statement of a scientific body of the U.S. Government, after FDA’s review of scientific evidence Qualified health claims supported by credible evidence and accompanied by a non-misleading disclaimer

Permitted Health Claim Example Calcium, Vitamin D, and Osteoporosis: Adequate calcium and vitamin D throughout life, as part of a well-balanced diet, may reduce the risk of osteoporosis. Complete List: http://www.fda.gov/Food/GuidanceComplianceRegulatoryInformation/GuidanceDocuments/FoodLabelingNutrition/FoodLabelingGuide/ucm064919.htm

Disease Claims Generally Not Permitted - Dietary supplements, in general, are not permitted to be marketed as a treatment, prevention or cure for a disease or condition Dysfunction v. Function Very limited exceptions

What is a Structure/Function Claim? DSHEA Describes role of nutrient or ingredient intended to affect the normal structure or function in humans Characterize the documented mechanism by which a nutrient or ingredient acts to maintain such structure or function Describes general well-being from consumption of nutrient or ingredient Function v. Dysfunction

When is a Structure/Function Claim Allowed? Manufacturer has substantiation that statement is truthful and not misleading What qualifies as substantiation? NSP’s Responsibility Mandatory disclaimer included “This statement has not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure, or prevent any disease.”

Permissible Structure/Function Claim Examples Pain associated with non-disease states, e.g., muscle pain following exercise Supports a normal, healthy attitude during PMS Helps support cartilage and joint function

Testimonials Distributor product testimonials – restrict claims to those similar (if not identical) to the claims contained on the product label and brochures Testimonials from doctors and scientists – no difference To be considered substantiation, must meet same standards If not proven via scientific research contemplated by the substantiation requirements, don’t say it in testimonials Can testimonials be used? Yes, if they do not make drug/disease claims If they are not false or misleading If they express product attributes such as taste, quality or nutritional content

Third-Party Literature Cannot be false or misleading Does not promote a particular manufacturer or brand of dietary supplement Does not have appended to it any information by sticker or any other method Can be a publication, including an article, a chapter in a book, or an official abstract of a peer-reviewed scientific publication Reprinted in its entirety Can be used in connection with the sale of a dietary supplement to consumers

Practical Examples (Indications and acceptable/unacceptable claims) Wrong Right Blood Pressure – Lowers Cholesterol – Lowers Blood Sugar (Diabetes) - Controls Joints - Pain Sleeplessness – Insomnia Stomach – Duodenal lesions/Bleeding Blood Pressure – Maintains normal range Cholesterol – Maintains normal range Blood Sugar - Maintains normal levels Joints – Joint function/cartilage Sleeplessness – Occasional Stomach – Upset/Sour

Practical Examples (Indications and acceptable/unacceptable claims) Wrong Right Acne – Cystic Pain – Analgesic Sex- Restores Potency Heartburn – Relief of Inflammation – Anti-Inflammatory Memory – Alzheimer’s/Dementia Calcium – Osteoporosis Immune - Wasting/AIDS Acne – Non-cystic Pain – Muscle (after exercise) Sex – Sexual Desire Heartburn – Occasional Inflammation – Inflammation Response Memory– Mild (Aging) Calcium – Helps Build Strong Bones Immune – Supports the immune system

Practical Examples (Indications and acceptable/unacceptable claims) Wrong Right Eyes – Glaucoma Constipation - Chronic Constipation Weight Loss – Obesity Hair Loss – Alopecia Mood - Herbal Prozac/Depression Flu Season Eyes – Presbyopia (Focus/aging) Constipation – Occasional - Laxative Weight Loss – Appetite Suppressant Hair Loss - With Aging Mood – Relaxed Feeling Seasonal Changes

Key Take-Aways NSP’s Policy: Actively market and promote NSP’s products within the current regulatory and legal framework, pushing for legislative change where appropriate. Any disease claim, with rare exception, regarding a dietary supplement is prohibited. Health Claims, structure/function claims, testimonials and third party literature can be valuable sales and marketing tools when used within regulatory limits. Unauthorized, unsubstantiated claims can lead to regulatory problems for the Company and its distributors. Education and corporate vigilance protects the Company and its distributors.

Thank You Jamon!

Questions & Answers

Next consultant webinar is scheduled for Tuesday, November 22nd Thanks Everyone! Next consultant webinar is scheduled for Tuesday, November 22nd