Nutraceuticals – Insights on Industry & Associated IP Rights
Attention to health and related parameters has been a focal point in the current world scenario. Subsequently, the healthcare market has gained precedence and commanded strong market hold. While the healthy food movement has been on the trend for the past few years, its significance has gained priority ever since the current pandemic set in. People have realized the importance of a healthier lifestyle, and this is where the products under Nutraceuticals fit right into the puzzle.
In this article, the basics of Nutraceuticals are discussed, along with their types and benefits. It also highlights the market demand and how innovations in this field can be protected through intellectual property rights. So let us first understand the world of nutraceuticals.
What are Nutraceuticals
The term “Nutraceutical” combines two words – nutrients and pharmaceuticals. It implies that Nutraceuticals offer nutrients essential for a well-functioning body and some therapeutic utilities. Stephen DeFelice coined the name in 1989 to describe products that are based on natural food sources and offer some additional health benefits. These foods focus more on prevention than on cure and help promote general well-being, prevent malignant processes in the body, and modify diseases to reduce their severity.
Types of Nutraceutical products
Nutraceuticals can be classified under four categories based on their natural sources, pharmacological conditions, and chemical constitution. These are:
- Dietary supplements: These products contain nutrients derived from natural food products and are concentrated in liquid, capsule, or powder form, such as l-arginine, casein, etc.
- Functional foods: These types of foods are enriched and fortified with additional nutrients that are not found in their natural form. Thus, they offer more health benefits to reduce the risk of some severe diseases.
- Medicinal foods: These foods are very specific to their purpose and are used in the dietary management of a condition. They are administered under the supervision of a medical professional.
- Farmaceuticals: As evident, the word is a combination of ‘Farm’ and ‘Pharmaceutical’. It is used for the foods that are attained from modified agricultural crops or animals. These foods have medically valuable components and are highly cost-effective.
Benefits of Nutraceuticals
The continuous rise in the popularity of these products is a result of the immense health benefits they bring to us. So let’s discuss them one by one:
- A positive role in biological processes: Nutraceuticals play a positive role in several biological processes. This includes providing defense against antioxidative stress, managing cell proliferation, enhancing gene expression, and safeguarding mitochondrial integrity.
- Increase life expectancy: It is expected that Nutraceuticals may increase life expectancy by supporting the functions of the body and maintaining its integrity. In addition, they have been suggested to improve the quality of life by preventing chronic diseases, slowing down aging, and improving overall health. Thus, increasing the quantity as well as the quality of life.
- Disease-modifying tendency: Nutraceuticals may boost immunity and reduce susceptibility to certain diseases. Moreover, they have also been found to show disease modification tendencies, i.e., affecting the pathophysiology of the diseases to reduce its activity and progression and result in a better outcome.
Nutraceuticals Industry: Market Demand
In the early 90s, the nutraceuticals industry first started to emerge. However, it underwent phenomenal growth during the 2000s based on its unique ability to merge scientific discoveries with the ever-growing demand for health-enhancing products. Moreover, it also works as a cost-effective substitute against expensive treatments across various markets. Thus, consumer demand will remain the primary driver for the solid growth of the market.
And riding on this high consumer demand, it is expected to reach USD 826 Billion at a CAGR of 8.9% during the period 2021-2028. To put it in perspective, it stood at USD 278.8 Billion in the year 2020.
Further, the prominent markets for these products in the current scenario are – United States, Europe and India. However, China is expected to surpass them all by 2030.
At present, the United States represents the largest Nutraceutical market globally. An increasing number of US companies are looking to include Nutraceuticals in their product line. This inclusion results from a push from highly health-conscious consumer demands.
Next, the European Nutraceutical market is anticipated to register a growth rate of 7.5% CAGR during 2020 – 2025. While the Netherlands, Germany, and Sweden may emerge as innovation hubs for the Nutraceuticals market, Spain and Great Britain may prove to be the decisive test markets for new products.
Lastly, the nutraceuticals market in India is projected to grow from USD 4 billion in 2017 to USD 18 billion in 2025. There are various factors for it. The first, and the most obvious one, is the rising demand for dietary supplements. Secondly, around 15 percent of the Indian population is malnourished, which is a large number considering the huge population in the country. And the government has taken several measures to reduce the same, such as Integrated Child Development Services (ICDS), National Health Mission (NHM), and the mid-day meal scheme. Nutraceuticals have an essential role in these services by fulfilling the nutritional demands at affordable prices.
Regulations and the challenges therein
The regulations in the Nutraceutical sector pose a crucial challenge. The prominent concern is about the variation in definition across the market. This discrepancy hampers the goal of globalizing the product. For example, in Japan, functional foods are defined based on ingredients, and they should exclusively include natural ingredients. On the other hand, in the United States, functional foods offer some health benefits over and above the apparent essential nutrition. Moreover, they can include biotechnological products. In addition to it, there are no specific regulations to deal with Nutraceuticals, as we will see in the next section.
Starting with the US, Nutraceuticals are regulated under Dietary Supplement Health and Education Act (DSHEA). Under these regulations, manufacturers are responsible for the safety of the product. Therefore, the registration of the product before making it public is not mandatory. However, they have to ensure that the information on the label is genuine.
They are moving to Europe, legislations related to food come under European Food and Safety Authority (EFSA). Under this umbrella, the regulation of food supplements comes under Directive 2002/46/EC. Moreover, in contrast to the US, new products in Europe undergo stringent requirements to ensure safety before they arrive at the market.
Lastly, the next big market is India. Here too, no specific regulation has been assigned to Nutraceuticals. However, it comes under the Food Safety and Standards Act (FSSA). The manufacture, storage, distribution, sale, and import of nutraceuticals are regulated in India under the Food Safety and Standards Act of 2006.
Intellectual Property in Nutraceuticals: Patents, Trademarks, and Trade Secrets
The above discussion on Nutraceuticals lays certainty on the dynamic and growing nature of the industry. A high rate of innovation is expected with large-scale mergers and acquisitions being witnessed already – the latest being acquiring Bettera Holdings for $1 Billion by Catalent Inc.
That is why Intellectual Property (IP) becomes indispensable when capturing the Nutraceuticals market. The reason is that the market is relatively new, and it is booming with innovation. Thus, investing in IP will protect the innovators against competitors and enhance the overall value of the company and attract more investors to it. Moreover, the new players entering the market should also be wary of infringing the IP of existing players as well.
In the next section we will discuss about the different types of IP and the related concepts and how they can help you leave a mark in the Nutraceuticals industry.
Patents protect innovation
To protect your innovation, it is indispensable to get a patent grant. There are two type of protection provided under patents:
- Utility Patent
- Design Patent
Utility Patent can provide legal protection to the novel and the non-obvious composition, formulation, manufacturing process and the method of usage of a nutraceutical product. You can refer to this case study to better understand utility patents. On the other hand, the design patent protects the distinctive visual qualities of a manufactured item, such as packaging material. You can read the article to know more about design patents.
Further, filing a patent is a complex task requiring a fair knowledge of the patenting processes, its technical aspects, and the patentability of the innovation. For a better start to the process, you can read this article on patent filing strategies.
Trademarks protect your brand
Trademark establishes your unique market identity. A good trademark helps in identifying the original manufacturer of the product. In addition, it offers protection to the labeling and packaging of the product along with the slogan and logo of the company. Thus, it confers a competitive advantage to the business by developing goodwill with consumers. This could be particularly useful for Nutraceutical companies and a trademark specialist can help such a company to decide the aspects that can be protected, as mentioned above.
Our guide on trademark can help you choose the best one for you.
They are intellectual property rights that protect a business secret via legal secrecy. In order to be recognized under trade secrets, the information should have the following:
- It should have a commercial value.
- It should be known to a limited number of people.
- It should be reasonably protected by the rightful secret-holder.
Unlike patents and trademarks, neither the trade secrets require registration, nor do they expire, and nor do they get exposed to the public.
There are various types of information that a Nutraceutical company would like to protect through trade secrets. This includes examples such as protecting the manufacturing process that could otherwise be detected through reverse engineering if the process was protected via a patent. Similarly, the list of suppliers providing ingredients can also be kept as a trade secret. Moreover, a particular physiological mechanism that enhances a physiological function can be regarded as a trade secret. Lastly, even the amount of individual ingredients within a proprietary blend can be kept as a trade secret – assuming other FDA requirements are met. The only downside to this can happen if a proprietary formula can be reversed engineered – in which case it will cease to remain a secret and acquiring a patent instead might be the correct approach in this particular scenario. Similarly, ‘negative know-how’* can also be protected.
*Negative know-how refers to information derived during the development stage that states formulations or processes, etc., that do not work. Such information can be critical as a time-saving measure and should be protected from a competitor.
Before a Nutraceutical product is launched, it is a best practice to know if it has the freedom-to-operate in the market. Please read this article to know the role of FTO and why an FTO analysis is paramount so that a Neutraceutical company can modify the product or packaging to mitigate potential infringement risk and protect its brand reputation.
To conclude, the Nutraceuticals industry has great potential to offer its consumers innovative products that serve their immediate health-conscious needs. Therefore, protecting that innovation is crucial to gaining market traction. Implementing a suitable Intellectual Property Right (IPR) based on your individual needs can be tricky. Our experts in IPR can guide you.
- Shweta Sharma (IPP) and the Editorial Team