Product Positioning in Nutrition and Health &    Wellness: Bringing your Supplements, Medical     Foods and Pharmaceutical...
Purpose of Presentation• Introduce Nutrition Capital Network (NCN):  Create context for upcoming events• Discussion on pro...
Nutrition Capital Network Mission• The mission of Nutrition Capital Network (NCN) is to:   – facilitate the financing and ...
NCN‟s Focus   Companies in the nutrition and health &   wellness industry across the value chain   including the following...
Sponsors   Law Firm Partner              NCN Investor Meetings are presented in                                 associatio...
NCN 2011 Cornerstone Investors      May 24, 2011               6
NCN Historical Summary43 of 89: 48% thru NCN 4; 66 of 180: 37% thru NCN 6      NCN          Apps/Eval. Pool   Selected   S...
NCN Deal Flow SummaryApparel and textiles                  3       <1%Functional Beverages                 87       12%Fun...
NCN 2011 CalendarNCN Seminar at Expo East - Baltimore•   September 21-24, 2011NCN at Supply Side West: Las Vegas•   Octobe...
Nutrition Capital Network Selection                 CriteriaNCN and members of our screening committee use the following b...
Nutrition Capital Network Selection             Criteria (cont’d)Insulation• Protectability of product or service or techn...
Nutrition Capital Network Selection             Criteria (cont’d)The Management Team• Pertinent experience of executives: ...
NCN Results• Evaluated 832 companies since Oct. 2007• Selected 200 companies to present at 11  NCN events – 8 dedicated me...
U.S. Condition-Specific Supplement, OTC,     Rx Sales & Growth in 2009 ($bil)                              Supplement    S...
Todd HarrisonTodd A. Harrison, Partner: Washington, DC Office. T 202.344.4724 F 202.344.8300taharrison@Venable.comAREAS OF...
Todd HarrisonTodd Harrison focuses his practice on Federal Food and Drug Administration (FDA), United States   Department ...
Todd HarrisonPUBLICATIONS•   December 2010, Congress Passes S. 3386 Restore Online Shoppers‟ Confidence Act, Client Alerts...
Key Definitions   Key DefinitionsMay 24, 2011            18
Definition of a Medical Food• A Medical Food is defined as a food   – formulated to be consumed or administered enterally ...
Definition of a Dietary Supplement• A Dietary Supplement is defined as a product   – that is intended to supplement the di...
Key Requirements for Medical FoodsKey Requirements for Medical Foods        May 24, 2011              21
Specifically Formulated and Processed • A medical food is specifically formulated and processed   (as opposed to a natural...
Dietary Management of a Patient• Medical food is intended for the dietary management of  a patient who has   – limited or ...
Unique Nutritional Requirements• Medical foods provide nutritional support specifically modified for  the management of th...
Medical Supervision• It is intended for use under medical supervision• Medical foods are intended only for patients receiv...
Path to Market for Medical FoodsPath to Market for Medical Foods       May 24, 2011                 26
Barrier to Entry is Moderate• Does not require FDA approval, but   – FDA views this category as being very narrow   – FDA ...
Unique Nutritional Need Requirement• Scientific dossier must be developed to demonstrate  that a specific disease or medic...
Safety• Medical foods, like “conventional” food products, must  contain only ingredients that are either GRAS for use in  ...
Medical Food - Effectiveness• At a minimum, FDA would require Significant Scientific Agreement  to establish the effective...
Marketing Claims• Medical Foods can be marketed with claims related to  the dietary management of a disease.   – This prod...
Marketing Channel• The Orphan Drug Act does not restrict the marketing channel that  Medical Foods may be marketed.   – FD...
Examples of Medical Foods Presently             Marketed• Axona® - A prescription medical food that is marketed  for the d...
Dietary Supplement Core ConceptsDietary Supplement Core Concepts        May 24, 2011            34
SAFETY• Under DSHEA, a supplement or dietary ingredient is  unsafe if:   – It presents a significant or unreasonable risk ...
New Dietary Ingredients• A “new dietary ingredient” is an ingredient that was not  marketed in the United States before Oc...
New Dietary Ingredients• Questions & Answers About New Dietary Ingredients:Q1: What if I know that an ingredient was marke...
Dietary Supplement Claims• Health Claims• Qualified Health Claims• Nutrient Content Claims• Structure / Function Claims   ...
Dietary Supplement Claims:                 30-Day Notification• No more than thirty (30) days after a supplement bearing a...
Dietary Supplement Claims:                 Disclaimer• The FD&C Act requires the following disclaimer to appear in  connec...
Dietary Supplement Claims:                Substantiation• In considering the number and type of studies required to  subst...
Drug, Medical Food, or Dietary Supplement:   The Pros and Cons of Each Approach    Drug, Medical Food, or Dietary         ...
Drug, Medical Food, or Dietary Supplement:   The Pros and Cons of Each Approach        GRAS                               ...
Drug Pros• Pros of marketing drugs that have gone through FDA‟s  approval process   – Make express disease claims   – Excl...
Drug Cons• Cons of marketing drugs that have gone through FDA‟s  approval process   – Extensive amount of R&D time   – Dru...
Medical Foods Pros• Pros of marketing a product as a medical food   – Lower barrier to market entry   – FDA premarket appr...
Medical Foods Cons• Cons of marketing a product as a medical food   – Extensive amount of R&D time   – Requires at least S...
Dietary Supplement Pros• Pros of marketing an ingredient as a food or dietary  supplement   – Lowest barrier to market ent...
Dietary Supplement Cons• Cons of marketing an ingredient as a food or dietary  supplement   – Limited to structure/functio...
Q&AAt this point, Steve Allen will kick-off Q&A  followed by the conference call moderator  to give instructions to the au...
NCN 2011 CalendarNCN Seminar at Expo East - Baltimore•   September 21-24, 2011NCN at Supply Side West: Las Vegas•   Octobe...
THANKS FOR JOINING USWe Look Forward To Seeing You atSupplyside West and NCN IX!
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Bringing Your Supplements, Medical Foods and Pharmaceutical Drugs to Market

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With companies in nutrition and health & wellness making crucial product development and marketing decisions, a clear picture of regulatory tracks for supplements, medical foods and drugs is essential. Co-hosted by Nutritional Capital Network and Todd Harrison, Co-Chair, Food, Dietary Supplements and Cosmetics Practice of Venable LLP, NCN's law firm sponsor.

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Bringing Your Supplements, Medical Foods and Pharmaceutical Drugs to Market

  1. 1. Product Positioning in Nutrition and Health & Wellness: Bringing your Supplements, Medical Foods and Pharmaceutical Drugs to Market Presentation and Conference Call Tuesday, May 24th, 2011 11am-12pm (PST) AgendaIntroduction Mike Dovbish, NCN Grant Ferrier, NCN Steve Allen, NCNLegal Perspective Todd Harrison, Venable LLPQ&A Todd Harrison and AudienceConclusions and Upcoming Events Mike Dovbish, NCN
  2. 2. Purpose of Presentation• Introduce Nutrition Capital Network (NCN): Create context for upcoming events• Discussion on product positioning for Supplements, Medical Foods and Pharmaceutical Drugs May 24, 2011 2
  3. 3. Nutrition Capital Network Mission• The mission of Nutrition Capital Network (NCN) is to: – facilitate the financing and partnering process for small and medium-sized companies – introduce investors to the next generation of successful brands and technologies in the nutrition, health & wellness, natural/organic and green product industries. – facilitating capital flow for the betterment of business and society at large.• NCN accomplishes this mission by: – creating a series of events and virtual tools to connect companies and investors • Conference Calls – Q1 “Building a Winning Team: Tips on Hiring and Team Building for the Entrepreneur” – Q2 "Product Positioning in Nutrition and Health & Wellness: Bringing your Supplements, Medical Foods and Pharmaceutical Drugs to Market” May 24, 2011 3
  4. 4. NCN‟s Focus Companies in the nutrition and health & wellness industry across the value chain including the following sectors:Dietary Supplements: VMS, Ingredients, Medical Foods,H&B, Sports, LMRs Technology for OTC/PharmaNatural & Organic Foods H&W Enabling TechnologyFunctional Foods Health & Fitness; Green ProductsHealthy Foods, BFY Foods N&O Personal Care, CosmeticsWeight Loss Household and Pet Products May 24, 2011 4
  5. 5. Sponsors Law Firm Partner NCN Investor Meetings are presented in association with Investment Banking PartnerBranding & Strategy Partner Executive Search Partner Government Trade Partner May 24, 2011 5
  6. 6. NCN 2011 Cornerstone Investors May 24, 2011 6
  7. 7. NCN Historical Summary43 of 89: 48% thru NCN 4; 66 of 180: 37% thru NCN 6 NCN Apps/Eval. Pool Selected Secured Funding I 98 24 12 II 84 22 13 III 78 22 8 IV 80 21 10 SSW Ing/Tech I 35 10 3 V 78 20 5 VI 85 19 6 SSW Ing/Tech II 35 8 2 VII 90 21 4 May 24, 2011 7
  8. 8. NCN Deal Flow SummaryApparel and textiles 3 <1%Functional Beverages 87 12%Functional Foods 63 9%Ingredients 129 18%Medical Foods 6 1%Natural & Organic Foods 162 22%Natural Personal Care & Household 82 11%Packaging 5 1%Retail & Service 50 7%Supplements 117 16%Technology 32 4%Total 736 100% May 24, 2011 8
  9. 9. NCN 2011 CalendarNCN Seminar at Expo East - Baltimore• September 21-24, 2011NCN at Supply Side West: Las Vegas• October 11, 2011: 8-10 Companieshttp://www.nutritioncapital.com/NCN_at_SupplySide _October_2010NCN IX Fall Meeting, Los Angeles• November 14-15, 2011: 20-22 Companieshttp://www.nutritioncapital.com/NCN_IX_Fall_2011NCN X Spring East Coast Meeting• May 2012: 20-22 Companies May 24, 2011 9
  10. 10. Nutrition Capital Network Selection CriteriaNCN and members of our screening committee use the following basic criteria to evaluate potential presenting companies, and believes that similar criteria would be used by any experienced investor to screen business ventures.Novelty and Unique Position• A demonstrated point of differentiation• New company or concept for investors; not „shopped around‟ too much• Potential for leadership in a defined sub-segment, channel or niche of some size May 24, 2011 10
  11. 11. Nutrition Capital Network Selection Criteria (cont’d)Insulation• Protectability of product or service or technology; defense against copycats• Intellectual property: trademarks and patentsEconomic Potential• Size and growth rate• Scalability; potential for economies of scale• Profitability; Demonstrated gross margins• Exit potential: A variety of interested parties May 24, 2011 11
  12. 12. Nutrition Capital Network Selection Criteria (cont’d)The Management Team• Pertinent experience of executives: health & wellness, medical, startups, CPG companies, a specific distribution channel and/or marketing & sales• Demonstrated track record in early stage or returning capital• Surrounding team: investors, partners, marketing & distribution alliances, legal team• Star power and charisma; name recognitionTangibles• Good branding or brand name, good quality & taste, unique packaging or presentationIntangibles• The "WOW" factor; head turning potential May 24, 2011 12
  13. 13. NCN Results• Evaluated 832 companies since Oct. 2007• Selected 200 companies to present at 11 NCN events – 8 dedicated meetings and 3 smaller satellite events• 41% of companies (61/150) that presented up to NCN 6 in April 2010 had received funding or completed a transaction as of April 2011 May 24, 2011 13
  14. 14. U.S. Condition-Specific Supplement, OTC, Rx Sales & Growth in 2009 ($bil) Supplement Supplement OTC OTC Rx RxCondition Sales Growth Sales Growth Sales GrowthGeneral Health $4,340 4% n/a n/a n/a n/aCold/Flu/Immune $1,940 6% $5,770 2% $8,220 16%Sports/Energy/Weight Loss $7,070 3% $560 -12% $150 -11%Brain Health/Mental Acuity $510 10% n/a n/a $3,970 17%Insomnia $260 12% $330 4% $2,100 -3%Mood/Depression $430 11% n/a n/a $26,630 1%Menopause $400 4% $120 0% $2,210 5%Heart Health $1,880 8% $470 2% $18,910 4%Joint Health $1,600 0% $520 -4% $11,230 14%Sexual Health $480 -1% $90 15% $1,960 12%Bone Health $1,670 8% n/a n/a $4,440 -11%Gastrointestinal Health $1,090 11% $4,520 1% $13,640 -1%Diabetes $970 3% n/a n/a $14,780 17%Vision Health $340 6% $540 3% $5,730 13%Hair/Skin/Nails $520 10% $2,830 0% $2,430 37%Anti-Cancer $1,220 0% $980 3% $8,010 9%Anti-Aging $300 3% n/a n/a n/a n/aSum of 17 Conditions $25,000 5% $16,740 1% $124,430 7%Others $1,880 30% $1,800 2% $175,870 4%Total $26,880 6% $18,540 1% $300,300 5% May 24, 2011 Source: Nutrition Business Journal 14
  15. 15. Todd HarrisonTodd A. Harrison, Partner: Washington, DC Office. T 202.344.4724 F 202.344.8300taharrison@Venable.comAREAS OF PRACTICE• Advertising and Marketing• Advertising and Marketing Litigation• RegulatoryINDUSTRIES• Consumer Products and Services• Drugs, Medical Devices and Biologics• Dietary Supplements, Cosmetics and Functional FoodsBAR ADMISSIONS• District of Columbia• MarylandEDUCATION• J.D., highest honor, University of Tulsa College of Law, 1993• Order of the Curule Chair• B.S., magna cum laude, University of Houston-Clear Lake, 1989 May 24, 2011 15
  16. 16. Todd HarrisonTodd Harrison focuses his practice on Federal Food and Drug Administration (FDA), United States Department of Agriculture‟s Food Safety and Inspection Service (FSIS)/Animal and Plant Health Inspection Service (APHIS)/Agricultural Marketing Service (AMS), Federal Trade Commission (FTC), and the Drug Enforcement Administration (DEA), as well as other federal, state, and international consumer protection agencies governing rules and regulations related to drugs, foods, dietary supplements, homeopathic remedies, medical devices, medical foods and cosmetics. Mr. Harrison works extensively in the areas of food and dietary supplement safety, labeling and advertising claims. He drafts opinion letters regarding the status of food ingredients in the United States and assisted in the preparation of food additive petitions, GRAS notifications, and new dietary ingredient notifications. He also assists companies in developing self-determined GRAS position for food ingredients.Mr. Harrison advises clients on issues related to FDA and FSIS‟s labeling requirements a well as on organic products and genetically modified organisms. Additionally, he advises clients on international food issues.Mr. Harrison has assisted companies on important FDA, FSIS, APHIS compliance issues, including HAACP, good manufacturing practice, product recalls vs. market withdrawals, inspections, warning letters, complying with FDA‟s and FSIS‟s standards of identities, importing meat and poultry products into the United States, warning letters, and record keeping.Mr. Harrison has been involved extensively on issues related to the marketing of foods and dietary supplements, including health claims, qualified health claims, structure/function claims, and nutrient content claims. He has developed strategies for companies to communicate information about their products without running afoul of FDA, FSIS and FTC regulatory requirements. He also has a successful track record of defending against U.S. FTC advertising complaints, enforcement actions and prosecutions, and defending against competitor challenges in court and other forums. May 24, 2011 16
  17. 17. Todd HarrisonPUBLICATIONS• December 2010, Congress Passes S. 3386 Restore Online Shoppers‟ Confidence Act, Client Alerts• September 2007, A Guide to the New Dietary Supplement GMPs: Reviewing the details, nuances and potential impact of the new rule• April 2007, Consumer Products Regulatory Report, Q1 2007• July 2006, Consumer Products Regulatory Report, July 2006• June 24, 2006, Pet Supplements Primer, Nutraceuticals World• April 24, 2006, Revisiting Medical Foods, Nutraceuticals World• March 2006, Consumer Products Regulatory Report, March 2006• February 24, 2006, Food Allergy Labeling is Here!, Nutraceuticals WorldSPEAKING ENGAGEMENTSMr. Harrison is a frequent speaker on regulatory law as it relates to foods, dietary supplements and functional foods.• May 24, 2011, "Bringing your Supplements, Medical Foods and Pharmaceutical Drugs to Market" for the Nutrition Capital Network (NCN)• May 3, 2011 - May 5, 2011, Response Expo 2011• March 31, 2011 - April 1, 2011, ACIs Food & Beverage Marketing & Advertising Conference• March 12, 2011, Natural Products Expo West 2011• February 28, 2011 - March 2, 2011, ERAs Great Ideas Summit• July 21, 2010, "State of the Industry" at the Nutritional Business Journal Summit 2010 May 24, 2011 17
  18. 18. Key Definitions Key DefinitionsMay 24, 2011 18
  19. 19. Definition of a Medical Food• A Medical Food is defined as a food – formulated to be consumed or administered enterally under the supervision of a physician, – that is intended for the specific dietary management of a disease or condition, – for which distinctive nutritional requirements, based on recognized scientific principles, have been established by medical evaluation• Narrowly construed – FDA warning letters have indicated that allergies, arthritis, asthma, cardiovascular disease, fibromyalgia, chronic fatigue syndrome, failure to thrive, prenatal vitamins, autoimmune disorders and diabetes are not conditions with distinctive nutritional requirements May 24, 2011 19
  20. 20. Definition of a Dietary Supplement• A Dietary Supplement is defined as a product – that is intended to supplement the diet, which contains one or more of the following dietary ingredients: a vitamin, a mineral, an herb or other botanical, an amino acid, a dietary substance to supplement the diet by increasing the total daily intake, or a concentrate, metabolite, constituent, extract, or combination of these ingredients. – ingested in pill, capsule, tablet, or liquid form. – not represented for use as a conventional food or as the sole item of a meal or diet. May 24, 2011 20
  21. 21. Key Requirements for Medical FoodsKey Requirements for Medical Foods May 24, 2011 21
  22. 22. Specifically Formulated and Processed • A medical food is specifically formulated and processed (as opposed to a naturally-occurring food used in its natural state) for the partial or exclusive feeding of a patient by oral intake or tube. May 24, 2011 22
  23. 23. Dietary Management of a Patient• Medical food is intended for the dietary management of a patient who has – limited or impaired capacity to ingest, digest, absorb, or metabolize ordinary foodstuffs or certain nutrients because of therapeutic or chronic medical needs, or – other special medically-determined nutrient requirements that cannot be addressed through modification of the normal diet alone  Ganeden Biotech 2006 Warning Letter – Psoriasis, chronic constipation, arthritis, Crohn‟s Disease and Colitis, and IBS do not have distinct nutrient requirements May 24, 2011 23
  24. 24. Unique Nutritional Requirements• Medical foods provide nutritional support specifically modified for the management of the unique nutrient needs that result from a specific disease or condition, as determined by medical evaluation – Bioenergy Corvalen Warning Letter 2010 – No distinctive nutrient need for patients with fibromyalgia, chronic fatigue syndrome, or cardiovascular disease – Nestle‟s Boost Kid Essential Warning Letter 2009 – No distinctive nutrient need for the medical condition “failure to thrive” – Efficas Warning Letter 2007 – No distinctive nutrient need for individuals suffering from allergies or asthma – Metagenics Warning Letter 2003 – No distinctive nutrient requirements for type 2 diabetes, arthritis, psoriasis, eczema, chronic fatigue, and migraine headaches. May 24, 2011 24
  25. 25. Medical Supervision• It is intended for use under medical supervision• Medical foods are intended only for patients receiving active and ongoing medical supervision, wherein the patient requires medical care on a recurring basis for, among other things, instructions on the use of the medical food May 24, 2011 25
  26. 26. Path to Market for Medical FoodsPath to Market for Medical Foods May 24, 2011 26
  27. 27. Barrier to Entry is Moderate• Does not require FDA approval, but – FDA views this category as being very narrow – FDA will require all ingredients to be GRAS-E – The minimum efficacy requirement is the Significant Scientific Agreement (SSA) standard – Distribution Channels are limited – Importing, without prior, consultation with FDA, is done at the company‟s own peril – FDA may not believe a pill is an appropriate delivery vehicle. May 24, 2011 27
  28. 28. Unique Nutritional Need Requirement• Scientific dossier must be developed to demonstrate that a specific disease or medical condition has unique nutritional needs that cannot be otherwise met through simple modification to the diet. – The nutritional need requirement will require at a minimum Significant Scientific Agreement.  It is insufficient to state the product works nutritionally if the scientific literature does not show that the nutrients you are providing are necessary. – Cannot use the Medical Food category to circumvent the New Drug Approval process May 24, 2011 28
  29. 29. Safety• Medical foods, like “conventional” food products, must contain only ingredients that are either GRAS for use in food or approved as food additives by FDA. – The ingredients must be generally recognized, among qualified experts, as having been adequately shown to be safe under the conditions of intended use.  May require at least one safety study in the intended patient population. May 24, 2011 29
  30. 30. Medical Food - Effectiveness• At a minimum, FDA would require Significant Scientific Agreement to establish the effectiveness of a medical food. – In an advanced notice of proposed rulemaking (withdrawn), FDA indicated that the scientific evidence is likely somewhere between the SSA standard and the standard for a new drug approval. – The FDA has indicated its position on this issue by stating, “it is essential that the claims made for such a product present an accurate interpretation of the scientific evidence concerning the usefulness of that product or specific formulation…, [and]…a strong standard of substantiation would be one that requires that all pertinent data be considered in the formulation of the product and in the development of any claims about its use.” FDA Advanced Notice of Proposed Rulemaking, 61 Fed. Reg. 60661, 60669-70 (Nov. 29, 1996). May 24, 2011 30
  31. 31. Marketing Claims• Medical Foods can be marketed with claims related to the dietary management of a disease. – This product is intended for the dietary management of individuals with Type 2 diabetes May 24, 2011 31
  32. 32. Marketing Channel• The Orphan Drug Act does not restrict the marketing channel that Medical Foods may be marketed. – FDA takes a limited view of the marketing channel  Hospitals, pharmacies (behind the counter), and physician offices, etc.  FDA does not believe that the products should be mass marketed – Are Glucerna and Boost Glucose Control medical foods, foods for special dietary use, or hybrids?  Labeled to be taken under the supervision of a medical practitioner  Mass marketed  Dietary uniqueness May 24, 2011 32
  33. 33. Examples of Medical Foods Presently Marketed• Axona® - A prescription medical food that is marketed for the dietary management of Alzheimer‟s.• GlycemX™ 360 – A medical food that is marketed for the dietary management of diabetes.• VSL#3® - A probiotic medical food marketed for the treatment of IBS, ulcerative colitis, etc.• Limbrel®500 – A medical food marketed for the treatment of osteoarthritis. May 24, 2011 33
  34. 34. Dietary Supplement Core ConceptsDietary Supplement Core Concepts May 24, 2011 34
  35. 35. SAFETY• Under DSHEA, a supplement or dietary ingredient is unsafe if: – It presents a significant or unreasonable risk of illness or injury, under the conditions of use recommended or suggested in labeling, or under ordinary conditions of use, or – It is a new dietary ingredient for which there is inadequate information to provide assurance that it does not present a significant or unreasonable risk of illness or injury. May 24, 2011 35
  36. 36. New Dietary Ingredients• A “new dietary ingredient” is an ingredient that was not marketed in the United States before October 15, 1994, and does not include any dietary ingredient which was marketed in the United States before October 15, 1994. May 24, 2011 36
  37. 37. New Dietary Ingredients• Questions & Answers About New Dietary Ingredients:Q1: What if I know that an ingredient was marketed before October 15, 1994, but do not have evidence? Must I submit an NDI notification?Q2: My ingredient is an extract of a food that was present in the food supply before October 15, 1994. Do I need to submit an NDI notification?Q3: My ingredient was a component of food in the food supply in chemically altered form. Do I need a NDI notification? May 24, 2011 37
  38. 38. Dietary Supplement Claims• Health Claims• Qualified Health Claims• Nutrient Content Claims• Structure / Function Claims May 24, 2011 38
  39. 39. Dietary Supplement Claims: 30-Day Notification• No more than thirty (30) days after a supplement bearing a structure/function claim is marketed, the manufacturer, packer, or distributor of the supplement must notify the FDA Office of Nutritional Products, Labeling and Dietary Supplements. May 24, 2011 39
  40. 40. Dietary Supplement Claims: Disclaimer• The FD&C Act requires the following disclaimer to appear in connection with a structure/function claim:“This/these claim(s) has/have not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure or prevent any disease.”Statement must also… Be at least 6 point font size, Be bold, Be entirely enclosed inside a box, Be listed by itself preferably on the same panel as claim or include a link to the claim. May 24, 2011 40
  41. 41. Dietary Supplement Claims: Substantiation• In considering the number and type of studies required to substantiate a claim, advertisers should consider: 1. The meaning(s) of the claims being made, express and implied; 2. The relationship of the evidence to the claim; 3. The quality of the evidence; and 4. The totality of the evidence. 5. Accepted norms in the relevant research field. May 24, 2011 41
  42. 42. Drug, Medical Food, or Dietary Supplement: The Pros and Cons of Each Approach Drug, Medical Food, or Dietary Supplement: The Pros and Cons of Each Approach May 24, 2011 42
  43. 43. Drug, Medical Food, or Dietary Supplement: The Pros and Cons of Each Approach GRAS Medical Food Food Additive Dietary Management of a Disease Intended to become component of or affect characteristics of food Intended to become Your component of or affect Product characteristics of food Intended to Intended to supplement diet diagnose, cure, mitigate or treat disease Dietary Supplement Drug May 24, 2011 43
  44. 44. Drug Pros• Pros of marketing drugs that have gone through FDA‟s approval process – Make express disease claims – Exclusivity during initial marketing phase regardless of patent consideration – Higher Price Point – Prescription drugs covered by insurance plans May 24, 2011 44
  45. 45. Drug Cons• Cons of marketing drugs that have gone through FDA‟s approval process – Extensive amount of R&D time – Drug approval process takes years – Costs will most likely be in the tens of millions, if not higher – No guarantee of approval – Significant regulatory oversight May 24, 2011 45
  46. 46. Medical Foods Pros• Pros of marketing a product as a medical food – Lower barrier to market entry – FDA premarket approval not required – Express disease management claims – Less costly to manufacture – Less regulatory oversight – FDA objects may be able to rebrand as a dietary supplement or conventional food with appropriate structure/function claims May 24, 2011 46
  47. 47. Medical Foods Cons• Cons of marketing a product as a medical food – Extensive amount of R&D time – Requires at least Significant Scientific Agreement – Clinical studies are costly – Category narrowly construed – Limited marketing channels – Lower barrier of entry – FDA may disagree that the product is appropriately marketed as a medical food May 24, 2011 47
  48. 48. Dietary Supplement Pros• Pros of marketing an ingredient as a food or dietary supplement – Lowest barrier to market entry – No FDA premarket approval required – NDI is a notification, not an approval process – Interesting issue whether FDA can deny a notification – No restrictions on marketing channels – U.S. consumers understand the implied meaning of structure/function claims – Less costly to manufacture – Less regulatory oversight May 24, 2011 48
  49. 49. Dietary Supplement Cons• Cons of marketing an ingredient as a food or dietary supplement – Limited to structure/function claims or FDA-permitted health claims – Generally not covered by insurance – Generally no barriers to entry by competitors May 24, 2011 49
  50. 50. Q&AAt this point, Steve Allen will kick-off Q&A followed by the conference call moderator to give instructions to the audience for Q&A. May 24, 2011 50
  51. 51. NCN 2011 CalendarNCN Seminar at Expo East - Baltimore• September 21-24, 2011NCN at Supply Side West: Las Vegas• October 11, 2011: 8-10 Companieshttp://www.nutritioncapital.com/NCN_at_SupplySide _October_2010NCN IX Fall Meeting, Los Angeles• November 14-15, 2011: 20-22 Companieshttp://www.nutritioncapital.com/NCN_IX_Fall_2011NCN X Spring East Coast Meeting• May 2012: 20-22 Companies May 24, 2011 51
  52. 52. THANKS FOR JOINING USWe Look Forward To Seeing You atSupplyside West and NCN IX!
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