Nutraconsensus Emerging Insights on Nutraceuticals - Players and Policy Makers

Nutraconsensus Emerging insights on Nutraceuticals - players and policy makers A whitepaper prepared by Grant Thornton and FICCI FICCI-HADSA Nutraceuticals 2012 “Regulation, Categorisation and Commercialisation” 6 November 2012, Mumbai Nutraconsensus 1 Disclaimer: The information and opinions contained in this document have been compiled or arrived at from published sources believed to be reliable, but no representation or warranty is made to their accuracy, completeness or correctness. This document is for information purposes only. The information contained in this document is published for the assistance of the recipient but is not to be relied upon as authoritative or taken in substitution for the exercise of judgment by any recipient. This document is not intended to be a substitute for professional, technical or legal advice. All opinions expressed in this document are subject to change without notice. Whilst due care has been taken in the preparation of this document and information contained herein, neither Grant Thornton nor FICCI nor other legal enti- © Grant Thornton India LLP. All rights reserved. ties in the group to which they belong, accept any liability whatsoever, for any direct Member firm of Grant Thornton International Ltd Offices in Bengaluru, Chandigarh, Chennai, Gurgaon, Hyderabad,or consequential Kolkata, Mumbai, New loss Delhi howsoeverand Pune arising from any use of this document or its contents or otherwise arising in connection herewith. Nutraconsensus 2 Contents Page Foreword – FICCI 3 Foreword – Grant Thornton 4 A framework of definition 5 A framework of operation 10 A framework of regulation 31 Recommendations 42 © Grant Thornton India LLP. All rights reserved. Member firm of Grant Thornton International Ltd Offices in Bengaluru, Chandigarh, Chennai, Gurgaon, Hyderabad, Kolkata, Mumbai, New Delhi and Pune Nutraconsensus 3 Foreword: FICCI Mr Ajit Singh Chairman-FICCI Task Force on Nutraceuticals Chairman-ACG Worldwide President-Health Foods & Dietary Supplements Association (HADSA) As we enter our fourth successive year, FICCI and HADSA are delighted to bring together another edition of the developments in the Nutraceuticals sector. This whitepaper attempts to bring out the key trends in the developments of the nutraceuticals seg- ment in the BRIC regions over the last few years. It further benchmarks the regulatory aspects and challenges in operation, quality, control and market dynamics. While strategies adopted by key market players are often specific to countries, they often serve as an effective medium of learning for other regions with similar demographic profiles and population characteristics. Increased consumer awareness, changing lifestyles and a marginal degree of under-satisfaction from traditional drugs has given adequate impetus to this industry to expand its presence and visibility through innovative marketing channels and riding the retail boom in countries like India. The year 2012 is being envisioned as the year of nutraceuticals in India with a positive beginning in the form of crystallisation of licensing, registration and quality control standards by the Food and Safety Standards of India. Although much needs to be done to strengthen the mechanism of imple- mentation and application of these guidelines, this has been a move which has been welcomed by the industry and other users alike. © Grant Thornton India LLP. All rights reserved. Nutraconsensus 4 Foreword: Grant Thornton Mahadevan Narayanamoni Practice Leader, Healthcare and Life Sciences Advisory Partner, Corporate Finance Grant Thornton India LLP It gives us immense pleasure to participate as Knowledge Partners with FICCI and HADSA for the 4th International Nutraceutical Conference on Regulation, categorisation and commercialisation of Nutraceuticals. As the world celebrates a 100 years of Vitamins, India continues to remain a leader as one of the most undernourished populations in the world. Past efforts for removal of malnutrition have been ad- dressed through some national efforts by the government and global aid agencies in the form of fortification and specific eradication measures. India can now be viewed both as a developer and manufac- turer of nutraceutical ingredients and products, and also as one of the strongest emerging market for nutraceuticals. Players, domestic and international, have expressed a high degree of satisfaction with the country moving towards a more regulated environment and see this as an enabler for weeding out unproven and unapproved products which find a place on the retail shelf and are often administered/ used without appropriate medical advice/ knowledge. This whitepaper attempts to bring out issues and concerns in the emerging markets and undertakes a benchmarking of the cultural issues, operating and regulatory dynamics across these regions and in- cludes recommendations for a multi-pronged strategy to address the nutritional needs of a vastly grow- ing, ageing and unhealthy population. © Grant Thornton India LLP. All rights reserved. Nutraconsensus 5 Nutraceuticals and functional foods combine traditional nutri- tive with drug-like functions of prevention © Grant Thornton India LLP. All rights reserved. Nutraconsensus 6 Clarity in Definition Although not clearly defined as such in regulatory parlance, the term “Nutraceuticals” has been a part of our medical history, knowingly or unknowingly, for the last several decades. Formally christened as “Nutraceuticals” in 1989 by Dr. Stephen De Felice (Foundation of Innovation in Medicine), they can be defined as “a food or part of a food that provides medical or health benefits, including the prevention and treatment of a disease”. While this definition has seen a contin- uous evolution over the years, nutraceuticals are now broadly defined “as natural, bioactive chem- ical compounds which have a health promoting, disease preventing or medicinal properties”. The food versus drug debate…… Often regarded as synonymous to a drug, the key differentiator between a drug and a nutraceutical is the ability of the drug to act as a “treatment” for a disease whereas nutraceuticals simply have a supportive function and are often just used as “supplements”. Drugs (which are patent protected for the first few years) also need to confirm to stringent compliances (including clinical and animal trials) prescribed by regulators in respective countries. Nutraceuticals on the other hand are not subject to independent guidelines (more stringent in the US and Europe) and have a comparative- ly shorter approval process without the need for conducting clinical/ animal trials. Accordingly, nutraceuticals lie somewhere between a food and a drug. NUTRITION plus PHARMACEUTICAL equals NUTRACEUTICAL DRUGS HEALTH AND WELLNESS COSMECEUTICAL PHARMACEUTICAL NATURAL/ ARTIFICAL SUPPLEMENT PRESCRIPTION THERAPEUTIC CLAIMS REGULATION BABY BOOMERS SAFETY PROBIOTICS AND PREBIOTICS MEDICINE FUNCTIONAL FOODS © Grant Thornton India LLP. All rights reserved. Nutraconsensus 7 Celebrating a hundred years of Vitamins - 2012 1980’s – 1990’s Emerging physician acceptance Awareness through numerous journals and articles on benefits 1912 1934-1987 “Vitamin” coined by Industrial Casimir Funk production of 1910 vitamins Umetaro 1912-1913 Suzuki dis- 13 Vitamins identified 2000 onwards covers prod- and characterised Deficiencies uct, later identified in identified as several indus- Vit B1 trialised countries 1924-2000 Mandatory fortification of salt, flour, cereals, sugar, wheat, maize, dairy in many countries. Control over deficiencies such as iodine, iron, vitamin A,D, B 1900 1950 2000 Vitamins are organic nutrients which are essential Unlike micronutrients such as vitamins and miner- for life. The human body requires very small als, macronutrients are required by the body in larger amounts of these nutrients to ensure normal me- amounts and include proteins, carbohydrates, and tabolism, growth and physical well-being. Most fats. They, too, are indispensable for our health and vitamins are not made in the body or only in insuf- well-being. ficient amounts to meet our needs. They therefore have to be obtained primarily through the food we Each of the 13 vitamins known today has specific eat in which they are present in minute quantities. functions in the body, which makes each of them unique and irreplaceable. No single food contains Minerals, as with vitamins, are indispensable (essen- the full range of vitamins, and inadequate vitamin tial) in small amounts to ensure that the body intake results in vitamin deficiency disorders. A bal- grows, develops, and stays healthy. Minerals are anced and varied diet is therefore vital to meet the found in wide range of foods. The body uses min- body’s vitamin requirements. Of the 13 known vit- erals to perform many different functions — from amins, four are fat-soluble, namely vitamins A, D, E building blood and strong bones to transmitting and K. The others are water-soluble: vitamin C and nerve pulses and maintaining a normal heartbeat. the B-complex, consisting of vitamins B1, B2, B6, B12, niacin, folic acid, biotin and pantothenic acid. © Grant Thornton India LLP. All rights reserved. Nutraconsensus 8 Segmentation Dynamics Nutrition is needed not only for sustaining growth but also for combating diseases in the human life cycle. They can be classified on the basis of the form in which they are consumed, on the basis of their possible health benefits or even on the basis of the type of the user. Regula- tions in each country

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