| Anil Khanna |
Finally Food Safety & Standards Act (FSSA) guidelines were drafted and finalised in the third quarter of last year, after much delay. It would be instructive to mention here that the law was passed by the Indian Parliament way back in 2006. But this speed of forward movement seems to be at par for the course in Indian scenario.
Despite the delay, we now have, at least, a clear definition and classification of nutritional food, novel food, health claim, nutritional claims etc. This is a much better situation, than having no definition of Over the Counter (OTC) medicines. Readers may be reminded that as per Indian Drug laws, there is no clear definition/ categorisation of OTC medicines, even though the OTC segment is decent in size and growing as well.
So what will be the impact of FSSA on the OTC landscape?
The clue to the answer for this question lies in a simple exercise. If we were to divide the Indian OTC landscape before 2000 and post 2000, and were to list the key OTC brands of both these periods, a clear and interesting trend emerges.
It is quite clear that, the pre-2000 period was dominated by the therapeutic/ curative segments like analgesic, cough / cold etc., while the post-2000 period is dominated by supplements brands. It seems, what Thomas Edison said long back – “The doctor of the future will no longer treat the human frame with drugs, but rather will cure and prevent disease with nutrition.” is coming true with a little twist!
Thus in this context, the final guidelines of FSSA, notified last year, have come at an appropriate time. The question is, will FSSA give further impetus to this trend and how?
While the jury is out on the likely impact, the chances seem bright that more companies will want to capitalise on this growing opportunity and regulatory clarity.
Key highlights of FSSA
Before analysing its impact, it would be prudent to briefly mention the key highlights of the Act. Key point is that this Act will impact the entire spectrum of the nutritional market, which is more than $ 1 billion plus, as mentioned below
The Act defines health supplements as foods intended to supplement the normal diet of a person, and which are concentrated sources of one or more nutrients, like minerals, vitamins, proteins, metals or their compounds, amino acids or enzymes, other dietary substances, plants or botanicals , substances from animal origin or other similar substances with known and established nutritional or physiological effect, and which are presented as such, wherein the composition of these foodstuffs differ significantly from the composition of ordinary foods of comparable nature, and are offered alone or in combination, but are not drugs as per the Drugs and Cosmetics Act 1940 and Rules made there under.
The Act also defines a novel food – as a food that does not have a history of human consumption in India or has any other ingredient used in it which or the source from which it is derived, does not have a history of human consumption as a food ingredient in India or foods and or has ingredients obtained by new technologies or processes. It includes foods and food ingredients which have been produced by a technology not currently in use or being used for the first time, where the process gives rise to significant changes in the composition or structure of the foods or food ingredients which affect the nutritional value, metabolism or level of undesirable substances.
| Categories of the nutritional market |
Foods for specific nutritional or dietary purposes are defined as foods intended for particular nutritional uses, which owing to their special composition or process of manufacture, are clearly distinguishable from foods intended for normal consumption, and are sold in such a way as to indicate its suitability for its claimed nutritional purposes.
Health claims being defined by the Act are as follows:
- Any claim that states, suggests or implies that a relationship exists between a food or a constituent of that food and health and include nutrition claims which describe the physiological role of the nutrient in growth, development and normal functions of the body
- Other functional claims concerning specific beneficial effect of the consumption of food or its constituents, in the context of the total diet, on normal functions or biological activities of the body and such claims relate to a positive contribution to health or to the improvement of function, or
- To modifying or preserving health, or disease-risk reduction claim relating to the consumption of a food or food constituents, in the context of the total diet, to the reduced risk of developing a disease or health related condition
The Act also clearly defines the labelling guidelines which are quite stringent. For example, it states that the labels shall clearly mention the purpose, the target consumer group and the physiological or disease conditions which they address, apart from the specific labelling requirements as mentioned against each type.
Thus guidelines of the Act clearly enunciate the key associated issues entirely and give a whole lot of clarity. Similar guidelines already existed in the Western countries and, in fact, in China also.
Likely impact of new FSSA guidelines
Most fundamental impact would be that it will throw open new opportunities for pharmaceutical, food companies, and FMCG companies on the common platform of ‘wellness’
So products which give some kind of instant gratification would be the best options to take the OTC route and largely be in the pharma company’s domain. So in a category like VMS, where ‘tiredness/energy/stamina’ and ‘immunity’ being the two main positioning platforms, many brands like Revital, Supractiv, A2Z or even Seacod, could be marketed as food supplements, if the respective marketers chose to do so. Some of them have already categorised themselves as ‘food supplement’ by even changing their formulation.
For food companies, the area of interest would be ‘fortified food’ – normal food enhanced by the presence of vitamins, minerals or supplements. We already have examples like iron fortified cornflakes, probiotic curd, or biscuits. This segment will most likely grow rapidly and become pretty large in near future.
Finally, in wellness space related to skin care (cosmeceuticals) FMCG companies will play a dominant role, like HUL, Dabur etc, with atleast two to three years horizon needed to build the equity.
Company will tweak their products
To take the advantage of FSSA, companies, with the intent of getting their products classified as food supplements, instead of drugs, will either modify their formulation or offer sub-therapeutic dosage of the key ingredients. This will ensure that they are out of price control and can be freely marketed.
Already many leading VMS brands (marketed both OTC and Rx way) have tweaked their formulation. Even Direct marketing companies like Amway, Daehsan Trading and Elken International, which are also planning to enter dietary supplements market, are reformulating their composition for the Indian market.
Thus FSSA will not only modify the existing VMS products, but also tweak the composition at the drawing board stage itself. What’s more, with novel foods also being defined under FSSA, it will lead to many new products being importedto India Even energy-drinks products, like Red-Bull, a very small category of less than ` 100 crore, which have high dose of Caffeine will also be covered under FSSA, as it has prescribed the cap for caffeine content in such drinks.
Marketing and distribution implications
Pricing of VMS, since they are categorised and marketed as drugs, is governed by Drug Price Control Order (DPCO), hence, in many cases is regulated. On the other hand, pricing of food supplements is out of DPCO purview, and hence is market driven.
Similarly, while VMS products, marketed as a drug, can be only distributed at pharmacists, food supplements, can be distributed through normal stores. This would be a big advantage for food and FMCG companies. Hence, it is likely that FSSA will make more food companies entering into this space due to their distribution advantage.Thus FSSA will enable wider reach & coverage of OTC products.
| Comparative drug prices | |
| Pre 2000 era | Post 2000 era |
| Crocin | Revital |
| Gelusil | Supractiv |
| Benadryl | Pediasure |
| Glycodin | Nutrigo |
| Moov | Olesan |
| D’Cold | Digene |
| Strepsils | I-Pill |
Advertising implications
Since VMS drugs operate in ‘deficiency’ space and food supplements operate in ‘improvement’ space, it will impact the kind of claims they can make. So while a drug can make a claim like, “will make you recover from illness fast”, a food supplement can make a mild claim like, “will rejuvenate you, or enhance your energy level”. Thus while food supplement will enjoy distribution advantage, they will have to live with milder claims.
While drug VMS brands can make any advertising claim which is substantiated, a food supplement has to strictly adhere to label claim due to stringent labeling norms. For example, last year, a leading children milk food drink brand faced the advertising self-regulatory body objection on both its advertising claim and label claim. It claimed four signs of brain development which was refutable and also claimed 28 ingredients, which wasn’t the case to be.
Thus, FSSA will make OTC supplement brands to be very disciplined about their ingredients and their mention on the label. Slightest of deviation will make them liable for violation of norms
Emerging opportunity
The United States Pharmacopoeia Convention (USP) has decided to join hands with Indian scientific community for developing safety standards for the entire range of dietary supplements and nutraceuticals. Central Food Technological Research Institute (CFTRI), Mysore will be the Indian side associate. This will not only help in growing the domestic nutritional supplements market, which is already more than $ 1 billion, with more companies planning to enter this space. Conversely, this initiative will help Indian companies to exploit the $ 75 billio US and European nutritional supplements market.
Thus it seems that FSSA will probably take us closer to realisation of what Hippocrates said more than a century back that “Our food should be our medicine and our medicine should be our food”. That day doesn’t seem to be too far.
The author can be contacted at anil.khanna@taipi.in