Exploring transitions and intersections of the pharmaceutical and nutraceutical industries.  

The pharma and nutra industries are increasingly merging, adopting aspects of the other to meet consumer demands for solutions for health. Pharma companies are entering the health and nutrition space and vice versa. To understand more about this pharma to nutra transition and how it is impacting the nutraceutical industry, we talked to Dilip Gosh, the principal consultant at NutriConnect in Australia.  

Tune in to hear more about: 

• How nutraceuticals are being reshaped and linked to the pharma industry  
• The market dynamics and drivers for the pharma to nutra transition  
• How emerging markets are expanding into this fast-growing space and insights about market perspective, consumer and branding  
• Scope overview on the current pharma ‘high-risk, high-margin’ business model to ‘low-cost, high-volume’ nutra business, and the ‘blockbuster’ concept  
• The regulatory landscape and considerations around pharma to nutra changes  

Guest: Dilip Ghosh, Principal Consultant at NutriConnect

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Welcome to the Vitafoods Insights podcast. Join us as we explore the latest science and innovation, helping the global health and nutrition industry connect, develop and progress. Today's host is Natalia Franca Rocha, content producer.

Hello and welcome to another Vitafoods podcast episode. Today we'll be exploring the topic of Pharma to Nutra transition. I'm joined by Dilip Ghosh, who's the principal consultant at NutriConnect in Australia and who's also part of our own Vitafoods Content Advisory Board. Thanks so much for joining us today, Dilip, to talk about this Pharma to Nutra transition intersection that we're seeing more of these days.

My pleasure

To get us started then, can you share more with our listeners that are tuning in: How are nutraceuticals being reshaped and linked to the pharma industry?

If you see in the past few decades, the world has witnessed explosive growth of multi-billion dollar industry are known as functional for nutraceutical or Phytomedicine. So nutraceutical appears to be the benefit in both ways, nutraceutical in some cases that can prevent or cure the disease. But most of the cases, consumer use nutraceutical as a preventive or reduced conventional medicine also. From a scientific point of view, as you know, the pharmaceutical is mostly a single molecule, pure product, but nutraceutical mostly made from the multiple component. So that means there is some action you cannot get from pharmaceutical, but you can get from nutraceutical from synergistic activity. The healthcare industry around the world, they are undergoing a tremendous functional and structural changes, that is some fee for service to the value based service most of the countries. There are many bioactives, sometimes we call that pro drugs, like the polyphenols, fibres, friendly bacteria, essential fatty acid, synbiotic. They are sitting in between drug and the food also. So that means is very important area and most of the pharma company, they are also looking as an alternative for their blockbuster philosophy. And that is a simple diversification.

And what would you say are the market dynamics and drivers for the Pharma to Nutra transition?

Yeah, if you see the current market share of nutraceutical, including herbal and all other nutraceutical, that is 400 billion US dollars, that is phenomenal growth. Whereas the pharmaceutical industry, that is definitely much, much higher than the Nutra industry, but that is 1.27 trillion. But most of the country, the growth of the pharmaceutical industry is 2% to 5%. In Australia, the pharmaceutical growth is 2%, whereas the nutraceutical industry some country like China, India, and all these emerging market, like the Russia, Argentina, Brazil, their market growth is around 15% to 16%. So there's a huge, huge potential in this area. If you see the last few years current trend, that is published in 2019, the four major health platform that is cognition, brain health, heart health, digestive health, and bone & joint, and these are all reflection of the body's ageing, and they have plenty of money to purchase this nutraceutical product. And these are healthy ageing products. They driven the market in a new direction also.

That this sounds like a very exciting and also fast growing sector, especially for the emerging markets as you mentioned. Now with our listeners in mind and brand owners looking to expand into this space, can you share more about the market perspective, consumer and branding as well?

Yeah, if you see the both pharmaceutical industry and nutraceutical industry, they're interdependent and also they have some shared challenges also. Pharma industry in most of the country, they are very mature industry, but whereas the functional food nutraceutical industry at a growth phase or in some country at the very infancy. But, I personally think all nutraceutical industry, they are targeting some health benefit or disease claim also, they should follow the pharma model of product development, but at the same same time, they should be focused on the consumer centric. That means, all their reengineering, marketing and branding strategy that should be focused on the consumer, but pharma industry they don't care consumer. So, if you can mix these together, then you can lead the market.

What about the current pharma high risk, high margin business model to low cost high volume neutral business? and the replacing of the blockbuster concepts? Can you share more insights on those?

If you see last one decade trend, the industry, most of the pharma industry, they have some three interrelated tipping points. I say very, very challenging points, that what the industry sells first tipping point, that is service model versus therapies; second to whom they sell: mass market or niche market. And the last thing, how it should be organised? the marketing connection versus the integration. That transition from high risk, high margin pharma model to low risk high volume neutral model is inevitable. If you see the patent case, most of the blockbuster patent that already expired. So if you see in 2011, the four blockbuster drugs patent that expired that is Lipitor (atorvastatin), Caduet (amlodipine/atorvastatin), Combivir (lami vudine/zidovudine), and Solodyn (minocycline extended release tablet). So that means the pharma company, they are looking for alternative route to generate their new revenue. And that's why they have to move to a new domain where they not only treat the patient, but also they can support their consumer or patient for their wellness. And particularly after these COVID pandemic, the entire world, they moved from that pharmaceutical, that illness, to wellness. So we are all looking for our healthy life, healthy body. And you know, that immune boosting is so common in today's world also. I think we need very strong reform in both industry. And if you see industry like GSK, Pfizer, their hardcode pharma company, they are moving to the nutraceutical space, where the traditional food company like Nestle is the very common example, they are moving to the medical food category. They bought maybe 10 companies in last six, seven years. So I think it's inevitable. And if you see the business model also, particularly the pharmaceutical company, they are moving from treatment to the outcome. A great example is the Novo Nordisk. This is the world leading pharma company in diabetes control, but they are not only selling the diabetic drug, but they are selling the deliveries. They are supporting diabetic clinicians. They are giving free diabetes testing instrument to the patient. And they are giving millions, billions dollars of diabetic instrument to the clinician or healthcare industry. So that's why the industry is moving also from treatment to the service model.

That's so interesting. Thanks so much for sharing lots of good information for our listeners tuning in. And now considering regulations aspects of things, how is the regulatory landscape around pharma in Nutra changing?

I think this is a little bit tricky area because the inter commercial focus is now the emerging market. As I mentioned, China, India, Brazil, Argentina, Romania, South Africa, there is a tremendous growth and demand from the consumer in this area, but there are regulatory platform that is not harmonised. So, different country has different regulatory regime also. But good thing is, some big countries like India, they introduced one very, very unique platform, phyto pharmaceuticals, that is pharmaceutical, but derived from the plant. It is not a drug as a single molecule. It should have four minimum ingredients. But doctors can legally prescribe this vital pharmaceutical. So this is a scheduled drug. Australia also, TG, also introduced a new category that is listed assess complementary medicine. That means if you have clinical trials, you can go for a special claim, high level claim with your products. So that means that there is some regulatory evolution in different countries, some big markets also, but still, we need some global harmonisation in this area. My advice for your big budget it for R&D. Go to the third world country like India, China, and do your research work in this country, you will get a high level of clinical trial at the minimum price also, and also develop the partnership. Without partnership, without collaboration, you cannot do anything. So that means the pharmaceutical and nutraceutical partnership is very important.

Amazing. That's great advice for our listeners and the companies out there. Thank you so much Dilip up for providing us with such great insights today. I'm also sure it's being of great benefit for our listeners to understand more about this trending topic and the emerging market countries focusing around this transition from pharma to nutra. So thank you for that. And before we wrap things up, do you have any final thoughts that you'd like to share with our listeners today?

As you see, the present that medical food or nutraceutical disease focused nutraceutical area that is controlled by pharma industries, and all the big pharma industries like GSK, Novartis, Pfizer, Abbott, at their most revenue coming from the nutraceutical or medical food business. So to be successful in this area, my suggestion, you should always follow the pharma driven product development that is the evidence based product development. But you have to change your focus from illness, sickness industry to the wellness industry, so that means the nutraceutical industry. That means you have to focus more on prevention and promotional aspect. So there are many peripheral opportunity for the nutraceutical industry to treat some chronic diseases like obesity, tuberculosis, diabetes, arthritis, malaria type of things. So that means it is not only prevention, you can go for the treatment also some disease. I think the combination therapy is the breakthrough concept. So there are few products in the market. They combine with the pharmaceutical entity, with the functional food entity, and that not only cured the patient, but they only reduce the economic cost of these healthcare industry also.

That's a great way to end the show and we certainly look forward to keep up with the market updates around Pharma and Nutra. Thanks again for coming on the show.

My pleasure.

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