In 2020, the category of vitamins and dietary supplements unexpectedly surpassed that of OTC drugs for the first time, according to Euromonitor. This event had been projected, but the pandemic fast-tracked its occurrence by a few years. It not only speaks volumes about shifting consumer attitudes from treatment to prevention, but also of the increasing importance of supplements to the pharmaceutical industry. That sector’s profit and loss charts are being squeezed on both ends by generics, increasing operational costs, decreased influx of new small molecule drugs, and, recently, the losses in the cold and flu segment. But why are nutraceuticals such an attractive new source of income?
Regulatory requirements are much less demanding, so cost of development and time to launch are consequently less, and growth has been consistently high for a long time. Additionally, it is now clear that promotion through the channels pharma companies normally use for OTC drugs (a combination of medical detailing and ATL marketing) is possible and successful also for supplements. The entry of pharma companies into the nutra space, especially because of their modes of promotion, brings a certain pressure on nutraceutical B2B service providers, such as ingredient suppliers, contract manufacturers, and private label providers.
Because pharma needs its products to convince healthcare professionals, the scientific background has to be solid with either clinical trials done on the exact ingredients used, or—preferably—on the finished products. The latter used to be a rare phenomenon in nutraceuticals but is now increasingly noticeable, even though running clinical trials represents a substantial investment. It is evident that due to the size of pharmaceutical companies, the convergence with nutra is affecting mostly supplement companies and service providers, as they either try to adapt to be able to cooperate with pharma or keep up with the competition they bring.
Luckily for the consumer, this is resulting in positive effects on product quality. Not only are clinical trials increasingly common at all product stages, but the offer of standardized, traceable, branded ingredients is becoming more abundant, and product stability is under more pressure. While most countries still do not require evidence that the stated amount of active ingredients is present in supplement products at the end of the shelf-life, analyses by organizations such as the FDA, WHO, or consumerlab.com are a very real threat to brand image. Pharmaceutical companies, with more history and investment riding on their brands, are not willing to take any risk of product recalls and tend to demand stability data for finished products. This encompasses not only microbiological stability, but also oxidation stability, stability of taste, smell, and, perhaps most importantly, stability of ingredients within the finished product. Food supplements are usually much more complex formulations than single-component drugs and often come in a more complicated delivery format than pills. It is very difficult to achieve stability in formulations where reactive vitamins and minerals are combined with full plant extracts and placed in a liquid medium, yet the expectations of pharma quality control are similar as when dealing with an OTC drug. The challenge of manufacturers to satisfy pharmaceutical demands is thus great and often the difference between success and failure to secure a client.
Catering to a pharmaceutical partner requires not only the exchange of higher quality materials, but also of intelligence. It includes availability for consultations, holding workshops, and preparing specific materials. It is providing the experts to speak at the client’s brand’s launch event, educating their medical representatives, consulting them on the positioning and campaigns—it is a continuous exchange of information after the purchase of the product. While this does create a much more competitive environment for nutraceutical service providers, it ultimately results in consumers receiving products of higher quality and efficacy.
Matevž Ambrožič is the marketing and PR director for PharmaLinea Ltd.