Playing cat and mouse: Contests over regulatory categorization of dietary supplements in the U.S.

Regulatory categorization can be a matter of life and death to firms as it sets legal limitations to the production and sales of their product. In this paper, we set out to uncover this critical process, for which there is only anecdotal information in extant literature, by asking, how are regulatory categories determined through the strategies and interaction of firms, regulators and other category audiences? We use extensive archival data to examine how US dietary supplement makers first moved from drug to food category in 1976 and when faced resistance from the FDA, created an entirely new category in 1994, which fueled their explosive market growth since then. Our findings show that regulatory categorization is a contest between firms and the regulator, where firms try to disrupt unfavourable regulation by overpowering the regulator through hard power imposed by other state actors, which is achieved through pressure from another category audience, consumers, who are themselves won over through soft power. In uncovering this process, our findings contribute to extant literatures on institutional work and corporate political strategy, which have largely remained independent despite dealing with many of the same issues.