Loren Israelsen10.01.00
Most everyone senses we have a problem: a near empty new product pipeline. What happened? The answers are becoming clear. We squeezed the life out of the top ten botanical extracts (mostly from Europe) by borrowing (a charitable description) the scientific and medical investments of a handful of companies who can no longer compete on price (because of the underlying costs of this research), with a host of generic equivalents being sold at far cheaper prices.
The Supplement Facts Box has turned formulations and proprietary processes into percentages and ratios that, to consumers, make our products look and act the same. How is the consumer to know the difference between a truly superior and proven product versus one of highly uncertain quality or reliability? Consumer surveys and store sales data suggest people can't tell the difference and are now buying our products largely on price. Why would anyone pay $17.95 when they can pay $7.95 for "the same thing"? The answer is that you wouldn't, unless you understood there are important differences between many ostensibly similar products. For manufacturers and raw material producers, this reality has become a struggle for survival. Having used up and devalued many of the dietary ingredients with a rich scientific and medical pedigree (ginkgo, St. John's wort and saw palmetto, for example), we are beginning to realize we chopped up the piano for firewood. How will we now invest in resources to create the next ginkgo or St. John's wort? In my view, we won't.
Here is the current thinking of one of Europe's leading botanical extract houses on this issue:
"...the botanical products that have been introduced into the dietary supplements market, products like ginkgo, saw palmetto, silymarin, grape seed extract, St. John's wort, etc., have all been developed as drugs in Europe. It took about 15-20 years for European drug companies to assemble full dossiers for these products. These products have now been exploited by [a] dietary supplement industry that wants new products, while the pipeline of old European products is now empty...for these reasons, we are thinking about decreasing our investments in this industry. We prefer to address our main efforts toward our core business, the pharmaceutical market, where the rules of the game are clear for everybody and where we have always historically been successful."
This view is shared by many of the leading European natural product houses.
So realistically, we cannot look to Europe to bail us out of this R&D drought. Few domestic companies have or can commit the resources to an aggressive R&D program, but even if they could, why would they, having seen what happened to the Europeans? To give a current example of the scope of the problem, Paul Rubin, Ph.D., an Emory University economist, stated, "Dietary supplement companies would have to spend between $58 million and $348 million for NDA-type approval for each of six health claims they seek to make under FDA's significant scientific agreement standard...approval for health claims for vitamin E/heart disease, folic acid/neural tube defects and omega 3 fatty acids/coronary heart disease would be $58 million each...In affidavits filed with FDA, the supplement marketers who have petitioned to use the six health claims say they cannot afford the $58 million minimum research investment estimated by Dr. Rubin...Julian Whitaker, M.D., says the sum 'represents more than 50% of the average annual sales revenue of the companies to which I license formulas.'"
DSHEA, which has done so much to build this industry over the past six years, cannot help us either. DSHEA is actually part of the problem. To survive, we created a law that protected our right of access to dietary supplements. It did not recognize or attempt to create commercial incentives to advance our knowledge for the discovery process for dietary supplements. We are also witnessing a fundamental change in our belief system. We are becoming (or we say we are) an empirical science-driven industry, not a nature-as-healer culture. Yet we remain scientific scavengers. We borrow scientific advances from other industries as the basis for our own. This is not a sensible or sustainable practice. Either we get serious about science and pay our way and respect the investments of others or we doom ourselves to a subsistence economy that relies on the occasional new product success that we all share and devalue together. We must also count on the regulatory charity of the FDA and FTC, who we hope won't ask any hard questions about safety, efficacy or substantiation of our products.
Dr. Stephen L. DeFelice has been a long-time observer and proponent of nutraceutical research incentives. In a recent op-ed article published in the San Francisco Chronicle, he noted:
"But how can consumers separate the wheat from the chaff? The answer is that manufacturers must be given incentives to undertake clinical research on the nutraceutical products they sell. Only by testing products in well-conducted human studies can we know whether they are safe and effective."
"What kinds of incentives are needed? Specifically, companies need to be granted exclusive rights to make health claims about their products. Under current laws and regulations, even if a company sponsored a clinical study that shows that a mixture of herbs reduces the toxicity of highly damaging anti-cancer drugs, it could not make this claim; manufacturers are prohibited from making health claims about their products unless they conduct research according to time consuming and prohibitively expensive guidelines demanded by the Food and Drug Administration. The Nutraceutical Research and Education Act (NREA), [first proposed in] 1989, would change current laws and allow manufacturers to make health claims about their products. The NREA is based on the principles of the Waxman-Hatch Act (also known as the Orphan Drug Act), legislation aimed specifically at developing cures for extremely rare diseases. The law ultimately led to the manufacture and use of both natural and artificial products that have saved the lives of thousands of patients."
Whether this is the answer or not remains to be seen. What is certain is the urgent need to openly acknowledge this dilemma and accept that we are not going to enjoy a robust marketplace again until we offer our consumers new products of proven value created through our own efforts. Every successful and self-sustaining industry has had to do the same. There is no reason to believe we will be any different.
NW
About the author:
The Supplement Facts Box has turned formulations and proprietary processes into percentages and ratios that, to consumers, make our products look and act the same. How is the consumer to know the difference between a truly superior and proven product versus one of highly uncertain quality or reliability? Consumer surveys and store sales data suggest people can't tell the difference and are now buying our products largely on price. Why would anyone pay $17.95 when they can pay $7.95 for "the same thing"? The answer is that you wouldn't, unless you understood there are important differences between many ostensibly similar products. For manufacturers and raw material producers, this reality has become a struggle for survival. Having used up and devalued many of the dietary ingredients with a rich scientific and medical pedigree (ginkgo, St. John's wort and saw palmetto, for example), we are beginning to realize we chopped up the piano for firewood. How will we now invest in resources to create the next ginkgo or St. John's wort? In my view, we won't.
Here is the current thinking of one of Europe's leading botanical extract houses on this issue:
"...the botanical products that have been introduced into the dietary supplements market, products like ginkgo, saw palmetto, silymarin, grape seed extract, St. John's wort, etc., have all been developed as drugs in Europe. It took about 15-20 years for European drug companies to assemble full dossiers for these products. These products have now been exploited by [a] dietary supplement industry that wants new products, while the pipeline of old European products is now empty...for these reasons, we are thinking about decreasing our investments in this industry. We prefer to address our main efforts toward our core business, the pharmaceutical market, where the rules of the game are clear for everybody and where we have always historically been successful."
This view is shared by many of the leading European natural product houses.
So realistically, we cannot look to Europe to bail us out of this R&D drought. Few domestic companies have or can commit the resources to an aggressive R&D program, but even if they could, why would they, having seen what happened to the Europeans? To give a current example of the scope of the problem, Paul Rubin, Ph.D., an Emory University economist, stated, "Dietary supplement companies would have to spend between $58 million and $348 million for NDA-type approval for each of six health claims they seek to make under FDA's significant scientific agreement standard...approval for health claims for vitamin E/heart disease, folic acid/neural tube defects and omega 3 fatty acids/coronary heart disease would be $58 million each...In affidavits filed with FDA, the supplement marketers who have petitioned to use the six health claims say they cannot afford the $58 million minimum research investment estimated by Dr. Rubin...Julian Whitaker, M.D., says the sum 'represents more than 50% of the average annual sales revenue of the companies to which I license formulas.'"
The DSHEA Connection
DSHEA, which has done so much to build this industry over the past six years, cannot help us either. DSHEA is actually part of the problem. To survive, we created a law that protected our right of access to dietary supplements. It did not recognize or attempt to create commercial incentives to advance our knowledge for the discovery process for dietary supplements. We are also witnessing a fundamental change in our belief system. We are becoming (or we say we are) an empirical science-driven industry, not a nature-as-healer culture. Yet we remain scientific scavengers. We borrow scientific advances from other industries as the basis for our own. This is not a sensible or sustainable practice. Either we get serious about science and pay our way and respect the investments of others or we doom ourselves to a subsistence economy that relies on the occasional new product success that we all share and devalue together. We must also count on the regulatory charity of the FDA and FTC, who we hope won't ask any hard questions about safety, efficacy or substantiation of our products.
Dr. Stephen L. DeFelice has been a long-time observer and proponent of nutraceutical research incentives. In a recent op-ed article published in the San Francisco Chronicle, he noted:
"But how can consumers separate the wheat from the chaff? The answer is that manufacturers must be given incentives to undertake clinical research on the nutraceutical products they sell. Only by testing products in well-conducted human studies can we know whether they are safe and effective."
"What kinds of incentives are needed? Specifically, companies need to be granted exclusive rights to make health claims about their products. Under current laws and regulations, even if a company sponsored a clinical study that shows that a mixture of herbs reduces the toxicity of highly damaging anti-cancer drugs, it could not make this claim; manufacturers are prohibited from making health claims about their products unless they conduct research according to time consuming and prohibitively expensive guidelines demanded by the Food and Drug Administration. The Nutraceutical Research and Education Act (NREA), [first proposed in] 1989, would change current laws and allow manufacturers to make health claims about their products. The NREA is based on the principles of the Waxman-Hatch Act (also known as the Orphan Drug Act), legislation aimed specifically at developing cures for extremely rare diseases. The law ultimately led to the manufacture and use of both natural and artificial products that have saved the lives of thousands of patients."
Whether this is the answer or not remains to be seen. What is certain is the urgent need to openly acknowledge this dilemma and accept that we are not going to enjoy a robust marketplace again until we offer our consumers new products of proven value created through our own efforts. Every successful and self-sustaining industry has had to do the same. There is no reason to believe we will be any different.
NW
