The nutraceutical revolution: its impact on food industry R&D
Stephen L. DeFelice, M.D.
Trends in Food Science & Technology, February 1995, Vol. 6
The nutraceutical revolution is in full swing and will dramatically
change the nature of the food industry by the year 2000. The two primary
messages are: (a) the industry must develop proprietary patented products
and (b) the industry must develop the capacity to demonstrate the clinical
benefits of such products. In this way the growth of the market as well
as profit margins will significantly dramatically - increase. Presently,
food companies lack the necessary know-how and must quickly and effectively
obtain it if they are to join the nutraceutical revolution.
The nutraceutical revolution will lead us into a new era of medicine
and health, in which the food industry will become a research-oriented one
similar to the pharmaceutical industry. It is interesting to note that the
US food industry presently spends less than 0.5% of gross sales on R&D,
whereas the pharmaceutical industry spends well over 10%.
A few years ago I coined the term 'nutraceutical' in order to give a
much needed identity and legitimacy to this amorphous nomenclatural area.
A nutraceutical is any substance that is a food or part of a food and provides
medical or health benefits, including the prevention and treatment of disease.
Such products may range from isolated nutrients, dietary supplements and
specific diets to genetically engineered designer foods, herbal products,
and processed foods such as cereals, soups and beverages. It is important
to note that this definition applies to all categories of foods and parts
of food, ranging from dietary supplements such as folic acid, used for the
prevention of spine bifida, to chicken soup, taken to lessen the discomfort
of the common cold. This definition also includes a bioengineered designer
vegetable food, rich in antioxidant ingredients, and a stimulant functional
food or pharmafood.
The nutraceutical revolution began in the early 1980s, sparked off when
the actual or potential clinical benefits of calcium, fiber and fish oil
were supported by clinical studies published in distinguished medical journals,
and when physicians began to educate their colleagues and consumers about
these substances via the mass media. A continuous stream of published clinical
studies followed, defining the potential benefits of a growing range of
products on a rapidly expanding array of specific disease processes. Examples
include the use of 13-carotene to prevent certain types of lung cancer,
niacin to prevent recurrent heart attacks, pyridoxine to treat and prevent
depression, vitamin A to treat measles, magnesium to treat hypertension,
garlic to reduce atherosclerosis, fish oil for hypertension, cranberry juice
to prevent urinary tract infections, antioxidants to reduce damage from
heart attacks, and countless others. For the first time in US medicine,
physicians - convinced by the published clinical data - joined consumers
in their broad belief that foods or parts of food have medical value. This
marked the entry of nutraceuticals into the mainstream of clinical practice,
giving rise to an increasingly urgent need to rationalize the scientific
and medical development of these products, their commercial availability
and the communication of information about them to the primary dual audience
of physicians and consumers. Nutritionists, armed with more clinical as
well as preclinical data, will play a more critical role in bringing about
an effective physician-consumer interface.
Regarding the promise of nutraceuticals, they should be considered in
two ways - potential nutraceuticals and established nutraceuticals. A potential
nutraceutical is one that holds a promise of a particular health or medical
benefit; such a potential nutraceutical only becomes an established one
after there are aufficient clinical data to demonstrate such a benefit.
Thus, folic acid was a potential nutraceutical until aufficient clinical
evidence for its role in the prevention of neural tube defects was generated
to make it an established one, whereas ginseng tea remains a potential nutraceutical
because of a lack of aufficient clinical evidence for any indications. It
is disappointing to note that the overwhelming majority of nutraceutical
products are in the 'potential' category, waiting to become established.
This sad situation spells the need for a dramatic increase in basic and
clinical research. The food industry is presently comfortable with basic
research but almost totally ignorant of the clinical research process.
The basic ingredients of any innovative or discovery process are: first,
having an idea and second, testing it. The fewer obstacles between these
two steps, the greater the innovative potential. For example, if Einstein
or DaVinci felt the urge to create, they could simply walk to the blackboard
or easel to express such creativity. The innovative process in assessing
a nutraceutical, however, is considerably more difficult. It involves the
identification of the nutraceutical substance (the idea), and its clinical
evaluation (testing it). Thus, penicillin in a test tube is 'undiscovered'
unless it is clinically tested and found to be medically useful. Similarly,
antioxidants that have been found to protect rodents from deleterious cardiovascular
conditions should not be recommended for humans until they have been proven
clinically effective in humans too. In order to join the nutraceutical revolution,
therefore, the food industry must take a giant step into an unknown area
-- the clinical evaluation of its products for medical and health benefits.
Exclusivity for claims
In the USA, the Foundation for Innovation in Medicine has proposed a
Nutraceutical Research and Development Act (NRDA)'. Because of the many
new economic and regulatory problems as well as opportunities presented
by the nutraceutical revolution, and the emergence of a worldwide nutraceutical
industry, we have urged Congress to pass the NRDA. Its key elements include
a mechanism to create exclusive rights to medical or health claims for companies
that invest in nutraceutical research and development, and the creation
of appropriate channels for the review, approval and regulation of new products
and claims. [The present Nutrition Labeling and Education Act (NLEA) provides
for generic and not exclusive claims. The recently enacted Dietary Supplement
Health and Education Act (DSHEA) is difficult to interpret but certainly
provides a window of opportunity for some degree of claim exclusivity regarding
structure, function, deficiencies and wellbeing.]
With regard to exclusivity, it is well established by practical experience
that the availability of research-based proprietary claims leads to a research-based
industry, stimulates the development and availability of technological advances,
and provides a basis for regulations that facilitate and ensure accurate
and approved information from companies. From a purely economic standpoint,
companies desire to make health claims for food products because they increase
sales. As the claims at present are not proprietary, however, the vast percentage
of industry spending for such products is allocated to promotion instead
of research and development. On the other hand, in the traditional pharmaceutical
industry, where exclusive claims are usually created by the patent protection
available to new molecular entities, investment in research and development
is robust and the total of the combined US pharmaceutical research budgets
exceeds that of the National Institutes of Health.
Perhaps the best evidence that exclusive claims will create a research-based
industry is the US Orphan Drug Act (2), which was designed to facilitate
the commercial development and availability of 'orphan' drugs, whose development
costs are not recoverable by the developer, because the prevalence of the
indicated disease is small. [That portion of the Orphan Drug Act that amended
the Federal Food, Drug and Cosmetic Act (FDC Act) is entitled Drugs for
Rare Diseases and Conditions; the Orphan Drug Act also amended section 227
of the Public Health Service Act (3), and the Internal Revenue Code (4).]
Under the orphan drug system, testing requirements may be reduced and exclusive
claims can be made based on company-sponsored research for a period of seven
years after approval - regardless of the presence or absence of patent protection.
In the 17 years before the approval of the Orphan Drug Act in 1983, there
were only 34 approvals for orphan drugs. Since then, however, over 400 orphan
drugs have been approved or are in the research and development pipeline
for the treatment of over 100 diseases - an example of an outstandingly
successful piece of legislation creating a new research-based health industry.
Regarding reliable information to the physician (who is the key player
in the nutraceutical revolution) and the consumer, clinical studies conducted
for orphan drugs are presented at scientific forums and published in peer-reviewed
medical journals, and thus become part of the system where data are reviewed
and scrutinized within the medical scientific community. This, in addition
to a formal approval structure for health and medical claims by companies,
has resulted in a medical and consumer media milieu that strives for accuracy.
Using the Orphan Drug Act as a model for providing proprietary claims for
nutraceuticals, companies that make the necessary investment in research
and development should be granted exclusivity for seven years for health
and medical claims on approved proprietary research. At the same time, the
NRDA would create a system that determines the appropriate level of research
requirements for individual nutraceuticals, allows accurate promotional
claims, and provides the methodology for the review and approval of product
innovations. The NRDA would also increase the safety of nutraceuticals by
ensuring the adequate assessment of risk potential and appropriate quality
standards providing post-marketing surveillance, and facilitating accurate
and sufficient information on their proper use.
Because of the increasing role of nutraceuticals as competitors for pharmaceuticals
both in the treatment and the prevention of disease - the almost religious
tenet held by the US nutrition community that the role of nutrition should
be that of prevention only, rather than prevention and treatment, is not
at all supported by the literature and should be buried for ever- the NRDA
provides a comprehensive and logical framework for the review of products
and claims, utilizing what the Foundation terms the 'nutraceutical index'.
Using the nutraceutical index, independent experts selected by a Nutraceutical
Commission (NUCOM) would evaluate a submission for registration both in
terms of the advantages and disadvantages of a product's availability and
unavailability. Each submission would then be classified as either a medical
nutraceutical (promoted to physicians only) or a consumer nutraceutical
(promoted to physicians and consumers as well as other health professionals),
depending on the request of the submission's sponsor and the subsequent
evaluation of the data.
Once a submission is judged approvable, final labeling - including product
claims - would be determined and approved by NUCOM. The regulation of truth
in claims in advertising and educational programs would be the responsibility
of existing regulatory bodies such as the Food and Drug Administration,
the Federal Trade Commission and the US Department of Agriculture.
Product quality, good manufacturing practices and other requirements
could also be monitored and enforced by existing agencies under already
established regulations and procedures. As an additional safety precaution,
a post-marketing surveillance process, similar to that for drugs, could,
on a caseby-case basis, be required to identify any adverse reactions or
product quality deficiencies as well as continued or additional efficacy.
Labeling might be modified by NUCOM if warranted by positive or negative
findings revealed by the surveillance process or by subsequent research
Frankly speaking, it is highly improbable that a logical system of approved
exclusive claims will be enacted in the USA, Europe and Japan within the
near future. Though moving in the right direction, we are observing instead
a gradual ad hoc approach, whereby governments are relaxing the ground rules
for nutraceutical medical and health claims in unsophisticated ways that
encourage corporate spending towards promotion rather than research.
Is this a cause for pessimism regarding a renaissance of nutraceutical
research? I think not. In my crystal ball, I see another force that is rapidly
arising and will force governments to pass reasonable laws regarding claims
in order to encourage discovery research - the force of the marketplace.
Food companies are now beginning to realize that value-added products -
products with profit margins higher than those of their competitors - will
somehow be associated with nutraceutical benefits. Indeed, a survey in the
New York Times reports that 40% of all food products in the USA either indirectly
or directly make nutraceutical claims. This awareness coupled with the huge
capital capacity of food companies will necessarily force companies to spend
money on the research and development of such products, not only as a new
market opportunity, but as a strategy for survival.
Returning to the issue of exclusivity, companies need not wait - at least
in the USA - for government reforms. As mentioned previously, certain types
of medical or health claims are now permissible under the recently enacted
DSHEA. The message is clear - companies must now patent products with some
type of advantage such as taste masking, etc., perform the clinical trials
to demonstrate the general as well as the particular clinical benefit of
the patented product and market it in a way that clearly distinguishes it
from similar competitive products. Conceptually, this is not difficult to
do. On the other hand, the food industry know-how is presently lacking.
Regarding market size, the total US retail food market in 1992 was $503
x 109 ($320 x 109 at home and
$183 x 109 at out-of-home locations such as restaurants).
This market far exceeds the combined US pharmaceutical (~$70 x 109)
and over the counter (OTC) (~$24 x 109) 1992 retail
markets that total $94 x 109. It is not unreasonable
to assume that 50% of this food market includes foods that are used for
nutraceutical reasons by consumers. It is generally accepted that dietary
supplements, sugar substitutes, fat substitutes, fiber-enriched foods, vegetables,
virtually fatless meat, skim milk, lowcalorie diets, and so on, are consumed
for health or medical reasons. Couple this with the fact that 100 million
Americans take dietary supplements daily, and it becomes compellingly evident
that an enormous foundation for an established nutraceutical market already
exists. Using 1992 data, and assuming that at least 50% of food is used
for medical or health reasons, we arrive at a $250 x 109 potential US nutraceutical
market, which is ~2.5-fold greater than the combined ethical pharmaceutical
and OTC markets. It is not unreasonable to assume that in the European Community,
with a larger population than the USA, the potential nutraceutical market
is at least equal to ours, which adds up to a combined market of $500x109.
In conclusion, I believe that the vastness of the potential nutraceutical
market will be substantially more persuasive for much-needed change than
the failed common sense and historical precedence approach. I am fairly
sure that once this vastness is adequately understood and believed - in
one way or another - nutraceutical research will begin to flourish mightily
owing to the energy and creativity of corporate capitalism.
1. Regulatory Affairs (1993) A Comparison of the US, European
& Japanese Nutraceutical Health and Medical Claim Rules, Vol. 5, Regulatory
Affairs Professionals Society
2. United States Code (1983) (Suppl.) [21 U.S.C. §360aa-360ee],
US Government Printing Office
3. United States Code (1983) (Suppl.) [42 U.S.C. §236],
US Government Printing Office
4. United States Code (1983) (Suppl.) [26 U.S.C. §281,
US Government Printing Office