02 February 2017 | Column | By Dr RB Smarta
Nutraceutical industry in India
With changing health trends and rising healthcare costs; responsible healthcare and accountable healthcare or in simple words preventive healthcare is the best way to good health. People are becoming more and more aware of the importance of prevention and management of diseases as well as management of good health. Moreover, rising healthcare costs increases the need to look at prevention rather than treatment.
During the last two to three years, the shift from cure to prevention has become more and more evident. India is one of the largest economies among developing nations to have high purchasing power parity. The per capita income of individuals has increased over the past decade, paving the way to changing lifestyles. Changing food habits, lack of physical activity and increasing number of people involved in sedentary jobs have increased the incidence of lifestyle diseases such as diabetes mellitus, obesity, cardiovascular disease etc. Also, increasing awareness among consumers, increasing healthcare costs, health professionals’ focus on management of diseases rather than treatment, pharma companies venturing into health and/or food supplements sector have propelled this shift towards health and prevention.
Nutraceutical working towards pharma applicants
For instance,Fruitflow®, a nutraceutical ingredient, is a breakthrough in the industry contributing to healthy blood flow. It is proven to maintain healthy platelet aggregation thereby improving the flow of blood. This will help in the prevention of hypertension and thereby future heart related issues.
The nutraceutical market is filled with a wide range of ingredients of different categories benefiting the consumer by improving, sustaining optimum body functioning.
Nutraceuticals has already started taking a centre stage in preventative & proactive healthcare and management of diseases. People today are aware and conscious about health, nutrition and healthy living. This is creating a shift in the mindset of people from treatment of a disease to disease prevention which is going to aid in the growth of nutraceutical industry.
The pharmaceutical companies are pushing through to become the leader in the nutraceuticals market due to the challenges faced by the pharmaceutical industry which are:
Over the last few years, many pharmaceutical companies have lost a lot of revenue due to one primary reason - the patent cliff, a series of expirations of blockbuster drugs. As a result of patent cliff, a multitude of small pharmaceutical companies have entered the space of mass production of generic versions of major drugs, leading to steep revenue losses for big pharmaceutical companies. The patent cliff is bound to have serious implications on the future of pharmaceutical industry. With the market being dominated by generics, the pharmaceutical industry will face lack of funding and drive for innovation.
A change in development phase, particularly in market segmentation and brand development, is another change that pharmaceutical companies will have to face due to patent cliff. There would be a greater need for pharmaceutical companies to create drugs that are specific and differentiable for patenting purposes and portfolio diversity.
Having an experience of marketing medicines with more margins for a niche group of patients with selective and particular diseases, companies will have to change to a model such that it takes maximum benefit from the market evolution. It has to shift from serving a niche group to a bigger group of patients with not so specific but every kind of disorder or disease. They will have to operate at lower margins and perhaps at lower costs! The challenge is to change the style of operations and orient management mindsets to suit the new environment.
As times change, pharmaceutical companies should come up with strategies keeping in mind the patient pull approach. Also, to gain higher consumption, ideally there should be a shift from R&D department and product centricity towards patient centricity.
Higher investment and lesser output is a reality of R&D today. Hence, R&D needs to be revamped using different models to become cost-effective.
People are pursuing a sedentary lifestyle nowadays. This change in lifestyle and no time for self has led to the development of obesity, CVD, diabetes Mellitus etc.
Today people are well informed about their disease condition or what is likely to be diagnosed well before their visit to the doctor. This is due to information available on the Internet. The awareness also raises a question in the minds of the patient regarding the mode of treatment suggested by doctors.
Nutraceuticals, an opportunity for pharma, food companies
These challenges have left pharmaceutical companies to find nutraceuticals as a lucrative option to grow their business. Hence, many pharmaceutical companies are diversifying into nutraceuticals. Food companies have entered the nutraceutical industry mainly through functional, fortified foods, and functional beverages. The food category of nutraceuticals is dominated by FMCG companies in India, while the dietary and herbal supplement is dominated by pharmaceutical companies.
While pharma companies have an edge over FMCG with respect to science, innovation and technology, the latter have an upper hand in terms of distribution (retail), and consumer preference of formats (food).
Do we follow pharma route or food route?
For any business, growth is the most crucial aspect for survival. The nutraceutical industry in India is at an infancy stage and growing at CAGR of about 17 per cent due to increased awareness of health among consumers, increase demand for nutraceutical products in the market, increase in diet related health problems etc. It is one of the fastest emerging market in the health and wellness sector.
Pharmaceutical and nutraceutical sectors co-exist. It can be observed that in a cycle of care both the sectors are absolutely important for the betterment of society. Pharmaceuticals and nutraceuticals can work hand in hand to ensure complete wellness in the treatment cycle of healthcare as they could be used at different stages.
The treatment of a chronic disease through pharmaceutical products can be further hastened if it is supported by nutraceutical products and hence they go hand in hand and it can be said that nutraceutical is pharma driven.
Nurturing Double Vision Coexistence Model
The present model of nutraceuticals is pharma driven. It focuses on cure for diseases or ailments for their customers in the sick care sector. But where the needs and trends in the environment are changing, the focus of the nutraceutical model will have to shift from sick care to healthcare (i.e. Preventive and Promotion aspects). From pharma driven perspective, there exists peripheral opportunities for chronic lifestyle diseases and ailments prevailing in the sick care sector as well as preventive opportunities in the wellness sector. The pharma driven model does not address all the need for both prevention and promotion aspects.
Can it be driven by food?
With the emergence of lifestyle changes, addition of chronic lifestyle diseases and ailments like obesity, tuberculosis, diabetes, arthritis, malaria, cholera and many more, the diseases can be managed through preventive efforts. Although lifestyle diseases cannot be completely cured they can be well managed through the nutra medium. In a densely populated country like India where lifestyle diseases are catching up in the urban and rural areas, the middle class population drives the need for conscious preventive and curative disease management rather than just curative aspects.
More market driving force comes to play from food driven nutra!
Above model, suggests that more opportunities would follow, by bone health, obesity and weight management, gut health as the model follows the food route. There has to be a parallel opportunity between the ‘needs of the sick care and wellness market’ and ‘opportunities at the peripheral for nutraceuticals’. Transition from sick care to healthcare market is the need of the hour for disease management.
The Healthcare Continuum looks as follows:
So, with so much of changes occurring in favour of nutraceutical industry, will pharmaceutical and nutraceutical co-exist in the future? Will they follow pharma or nutra model?