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The lines between the pharma and food industries are blurring, presenting a great opportunity for life sciences firms to diversify - as long as they understand the regulatory differences, writes Peter Muller.
The lines between the pharma and food industries are blurring, presenting a great opportunity for life sciences firms to diversify - as long as they realise that other manufacturers they acquire or partner with are unlikely to have the same regulatory controls in place, writes Peter Muller.
Labeling on food is becoming as important as that for pharmaceutical products - a situation that will increase as regulators challenge manufacturers’ claims and force them to be more transparent. This has implications for life sciences firms that have identified new business opportunities in ‘wellness’ as a complementary revenue stream.
Regulators’ growing interest in food and ‘nutraceuticals’ (also known as ‘functional foods’ - ie. those with added health benefits) reflects growing government interest in helping consumers to make better dietary choices. For packaged food now, companies need to be more consistent, emphatic and transparent about what’s in their products and how this relates to current health advice. In nutraceuticals, the expectation is that companies should not make unsubstantiated claims, and that they provide adequate warnings around portions and doses of active ingredients.
The pharma industry wants its share of these adjacent market opportunities, not least as a means of reducing its reliance on expensive blockbuster drugs. When the industry talks about the need for transformation, much of this is to do with adapting to the new thrust in healthcare towards prevention over cure. This is a significant shift in strategy for life sciences, whose entire business model up to now has been based on addressing ill health. Transparency Market Research estimates that the market for functional foods alone could be worth as much as US $278.96 billion globally by 2021.
But whether they expand into adjacent markets organically, or through partnership or acquisition, life sciences organisations need to be prepared for a relative lack of maturity in the discipline of regulatory compliance – a situation that will be challenged as national and international authorities expand their controls over food claims and information.
Regulators’ growing appetite for food controls
Accurate labeling will be a big area. On May 20, the FDA in the US issued new guidance on food labeling, to drive greater standardization in the way health and nutrition information is presented to the consumer, bringing national requirements more in line with Europe.
Its new Nutrition Facts label guidance, which applies to packaged foods, will ensure that labelling reflects the latest scientific information, including the link between diet and chronic diseases, for example. New requirements also include updated serving sizes, and a refreshed design which highlights information such as calorie content, portion size, added sugar content. New nutrients must be declared too, including Vitamin D and potassium, to combat associated deficiencies.
Most manufacturers will have until July 26, 2018 to comply with the final requirements; smaller players will have an additional year to make the changes.
Food labeling changes in Europe are further ahead. New requirements issued in 2014 will need to be met from December this year. Key changes include improved legibility of information (minimum font size for mandatory information); clearer and harmonised presentation of allergens (e.g. soy, nuts, gluten, lactose) for pre-packed foods (emphasis by font, style or background colour) in the list of ingredients; requirements around certain nutrition information; specific detail on the vegetable origin of refined oils and fats, and of substitute ingredient for 'Imitation' foods; and clear indication of "formed meat" or "formed fish", as well as products that have been frozen and defrosted.
Health Canada has issued its own proposed guidance which is now with the industry for comment, so we can expect to see more requirements filtering through in due course.
No one wants to get caught out by the new requirements. Food recalls are an almost everyday occurrence. Just recently, The Nut House in the UK was forced to recall cakes containing whey powder, because this wasn’t mentioned on the label. Another labelling error saw Lidl UK recall an Italian chicken product, while rival Aldi had to withdraw a range of yoghurts because the labels failed to mention hazelnut among the ingredients.
Nutraceuticals trigger additional need for vigilance
In the soaring nutraceuticals market, rules are becoming stricter too. In addition to meeting emerging standards on what is presented, and how, companies will need to watch that they aren’t making claims they can’t substantiate about a product’s secondary benefits. Authorities in Scandinavia have been quite clear that if nutrition companies are going to start making medicinal claims about their products, they must categorise themselves as pharmaceutical businesses and be bound by similar requirements.
Japan, where functional foods first took hold, probably has the most evolved approach to associated labeling. Requirements cover 16 areas ranging from ingredients and recommended daily intake, instructions and precautions, and various safety notices.
In other markets, parameters are still being set. In the EU, products that claim to be a ‘nutraceutical’ must be certified by the European Food Standards Authority. In the US, products don’t (yet) have to pass stringent government tests as long as they are not claiming to treat or prevent a specific disease. But the likelihood is that the authorities will have to clamp down. The public will expect it, and there may be risks to consumers if they aren’t given adequate and consistent guidelines on when and how to use a nutraceutical product, or about the possible contraindications if they are already taking other dietary supplements.
Health Canada too is currently working out how functional foods should be defined; whether such products ought to remain as either foods or drugs under the Food and Drugs Act; what kinds of health claims (if any) should be allowed on food labels; and what standards of evidence would be necessary and sufficient to prove a health benefit. And the signs are that India will take a tough line, so that global players trust its products. Earlier this year, its Food Safety and Standards Authority ordered companies to follow strict norms in manufacturing and testing of health supplements.
Preparation is everything
All of this means that organizations with an interest in health foods and nutraceuticals must start putting in place processes and systems to handle all of the new requirements, to avoid costly mistakes being made on product labels and packaging. They will need skills, processes and systems that span the whole production chain, and which they can show to auditors.
Without automation, ensuring accurate, complete and up-to-date labeling is a full-time job. One approach that has found appeal in life sciences is to accelerate initial rounds of label checks, using sophisticated text verification – a process which can very quickly pick up even the tiniest discrepancies between regulatory text, artwork briefs and packaging artwork. This can save on several rounds of laborious proofreading, freeing up skilled resources for more specialist work and maintaining momentum as products are prepared for distribution.
It is no coincidence that the food industry is now beginning to look to pharma for guidance on best practices. The pharma industry has 20-30 years’ experience of managing complex control processes of the kind needed now in adjacent markets, so provides a valuable reference point.
The labor-saving techniques it has embraced should now be considered by adjacent sectors, as organizations there too prepare to meet growing regulatory demands without taking resources away from their commercial priorities.
 Global Nutraceuticals Market to Reach US$278.96 bn by 2021 owing to Increasing Demand for Nutritional Diet, Transparency Market Research, April 2016: http://www.transparencymarketresearch.com/pressrelease/global-nutraceuticals-product-market.htm
 Changes to the Nutrition Facts Label, FDA: http://www.fda.gov/Food/GuidanceRegulation/GuidanceDocumentsRegulatoryInformation/LabelingNutrition/ucm385663.htm
 Food information to consumers – legislation, European Commission: http://ec.europa.eu/food/safety/labelling_nutrition/labelling_legislation/index_en.htm
 Consulting Canadians to Modernize and Improve Food Labels: What We Heard, Health Canada: http://www.hc-sc.gc.ca/fn-an/label-etiquet/modernize-report-moderniser-rapport-eng.php
 Japan’s New Health Claims Labeling System Creates Opportunities, USDA FAS GAIN report, August 2015: http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Japan%E2%80%99s%20New%20Health%20Claims%20Labeling%20System%20Creates%20Opportunities_Tokyo_Japan_8-3-2015.pdf
 Nutraceuticals and the future of intelligent food, KPMG/PMlive.com, September 2015: http://www.pmlive.com/pharma_news/nutraceuticals_and_the_future_of_intelligent_food_827879
 Archived policy paper: Nutraceuticals/Functional Foods and Health Claims On Foods, Health Canada, June 2013: http://www.hc-sc.gc.ca/fn-an/label-etiquet/claims-reclam/nutra-funct_foods-nutra-fonct_aliment-eng.php
 Draft Food Safety and Standards (Food or Health Supplements, Nutraceuticals, Foods for Special Dietary Uses, Foods for Special Medical purpose, Functional Foods, and Novel Food) Regulations, Government of India, Ministry of Health and Family Welfare, Food Safety and Standards Authority of India 2015: http://www.fssai.gov.in/Portals/0/Pdf/Draft_Regulation_on_Nutraceuticals_WTO_23_07_2015.pdf
 New FSSAI rules on nutraceuticals may leave companies like Sun Pharma, GSK ailing , The Economic Times, April 2016: http://articles.economictimes.indiatimes.com/2016-04-01/news/71977410_1_supplements-food-safety-notification