FSAI HEALTH CLAIMS SEMINAR - Food Safety Authority of … · The Impact of the Nutrition & Health...

The Impact of the Nutrition & Health Claims Regulation

and how it will change the way we do business

JOHN REDMAN

GROUP MD, MERCK CONSUMER HEALTHCARE UK

& VICE-CHAIR HFMA (UK),

Dublin – 25th May, 2010

FSAI HEALTH CLAIMS SEMINAR

HEALTH FOOD MANUFACTURERS’ ASSOCIATION (HFMA)

• Founded in 1965

• Founder member of EHPM

• >125 member companies

• Represents manufacturers, distributors, brand owners (and exporters) of Food Supplements

• Members include many SMEs

A heritage spanning more than 40 years

Agenda:• Setting the scene

• Impact Assessment

• Observations & Outcomes

• Marketing Strategies

• Impact on R&D and investment

• Global Impact

• Conclusions



Why is the Food Supplement Industry concerned about the potential impact of NHCR?

• The market for Food Supplements is driven by claims

• Many countries already have robust regulation regarding use of unfounded & unsubstantiated claims

• EU threatens to prohibit 000’s of claims, mainly relating to ‘other substances’ that have been used legally… until now

Focus on the Article 13.1 list:


• 2006: concerted action by European industry federations- CIAA – EHPM – ERNA – EBF- Common methodology, because of lack of guidance on EFSA’s requirements

•‘Generic’ list of claims- Defend Claims that are generally recognised- Enable SMEs to make use of such claims without having to undergo an authorisation- Essential for food supplements to be able to indicate the role of nutrients and other substances

• Should be established by January 2010

The Article 13.1 list:


• Issues re procedure for compiling the list- Member State deadline for submission January 2008

• 43,420 submissions received from the Member States• Compiled by the EC after further consultation

- EC working document (17/06/2008) clarified the process- Yet further consultation on missing entries

• Submission to EFSA- EFSA list published January 2009: - 4,185 main entries [+ 10,000 similar claims] + Terms of Reference - Half sent back to EC for further clarification - Plus Addendum, now 4,637 main entries

NHCR IMPACT ASSESSMENTS

• January 2009:‘Worst Case’ survey among UK members

• November 2009:Further survey of Regulatory Impact on UK Market

• Key Assumptions:– Use of claims is extremely fragmented hence

submission of >4,000 claims to EFSA

– No single claim has high ‘market share’

– Claims for ‘Other Substances’ enjoy significantly greater commercial importance than claims for Vitamins & Minerals

JANUARY 2009 PRELIMINARY IMPACT ASSESSMENT OF LOSS OF ARTICLE 13.1 CLAIMS


• Worst case scenario: – All Vitamin & Mineral and ‘Other Substances’

health claims are prohibited

– Prohibition applies to all commercial communications

– Operators outside the EU not subject to these restrictions

– No sell-through period allowed, as per Regulation

• Potential Impact– 82% of companies forecast sales loss up to 80%

– On average, approx ⅓ of sales will be lost

– Absence of transitional relief will incur further €55m penalty cost

– Threatens financial viability of many SMEs, manufacturers, distributors & retailers


NOVEMBER 2009 SURVEY

• Objective– If claims for ‘Other Substances’ and Botanicals

are prohibited and have to be withdrawn from the market, 6 months after publication of negative lists:

– Estimate number of companies impacted

– Estimate total cost impact

• Assumptions: – All generic Claims for ‘Other Substances’

(Glucosamine, Probiotics, Fatty Acids etc) and Botanicals (eg herbs as FS) are prohibited

– Sales of these products continue but without any nutrition or health claim

– Prohibition applies only to all commercial communications within the EU

NOVEMBER 2009 SURVEY

NOVEMBER 2009 SURVEY - SCOPING THE MARKET VALUE

• Methodology:– Outcomes of the HFMA member survey were applied to the

UK market data

– Market data is based on extensive collated data from an expert representative group comprising manufacturers, retailers, direct marketing/mail order, direct selling and sales via HCPs

• Market Value by Sector:€M

VMS 275Other Substances excluding Herbals & Joint Health 248Herbals/Botanicals 110Joint Health 192

825

• Assumptions:– Review only discrete products not different pack sizes– Many products contain variety of ingredients – to avoid

double counting products allocated to main Claim category

Product Category Total SKUs

VMSOther Substances excl Herbals/Joint HealthBotanicalsJoint HealthTotal

10,0005,0007,5002,500

25,000

NOVEMBER 2009 SURVEY - SCOPING THE MARKET COMPLEXITY

• Assumptions:– Most UK companies market products from 2 or 3 different

categories– There is major overlap– 360 companies are SMEs (turnover <€50m)– SME companies estimated to employ c 10,000 staff

Companies by Sector Total

Total‘Other Substances’ excl HerbalsBotanicals/HerbalsJoint Health

400350350200

NOVEMBER 2009 SURVEY - SCOPING THE NO OF COMPANIES AFFECTED

• Assumptions– There will be many products with no claims – unchartered territory– Claims drive sales of food supplements– Unregulated sources win increasing share of a shrinking market

Cost Factor UK Companies Involved

Cost Impact

Annual loss of sales

Stock write offs/RecallPack write offs/changesReformulation/Marketing changesTraining/IT/Other CostsTotal

Over 300

Over 340Over 340Over 340

Over 300

€ 165 million(30% of Other Substances)€ 27.5 million€ 15.4 million€ 11.0 million

€ 18.7 million€ 238 million

NOVEMBER 2009 SURVEY - ECONOMIC IMPACT


EFSA Article 13.1 opinions:• 1 October 2009

94 EFSA opinions on 523 Article 13 claims

• 25 February 201031 EFSA opinions on 416 Article 13 claims

• September 2010Opinions on ± 600 Article 13 claims

• 2010-2011Opinions on ± 2250 Article 13 claims + Addendum


1st batch of EFSA opinions:Around ⅔ of the opinions are negative:• Probiotic bacteria: mainly digestive and immune health• Plant extracts: hair/skin/bone/vision/joints maintenance, body weight,

diuretic function, mood/sleeping balance, upper respiratory tract, immune health, antioxidative function…

• Vitamins and minerals: maintenance of bones/joints (Boron), skin immune response to UV radiation (beta carotene)

• Glucosamine, chondroitin sulphate, MSM, hyaluronic acid, EPA/DHA/DPA, shark cartilage, green lipped mussel extract: maintenance of joints

• Inositol: cognitive function• Soy isoflavones: bone mineral density• Astaxanthin, glutamine, taurine, GABA, phospholipids and other

substances…


2nd batch of EFSA opinions:Overall negative outcome:

• Group rejections• antioxidant effects: 173 substances• insufficiently characterised probiotics: 65 micro-organisms & yeasts• joint health: 49 substances• Blood glucose and Glycemic index: 32 + 8 substances

• Alpha-lipoic acid: fat oxidation and other effects• Lutein, mezo-xanthin: vision• Camellia sinensis (tea): anti-oxidative effect and other effects• Stearic acid: normal cholesteron• Sugar-free chewing gum: reduction of dental plaque• No single probiotic yet approved

Observations:


Different approach for essential nutrients as compared toOther Substances:

– Vitamins and Minerals: Well-established consensus• Based on well-established consensus science (e.g. textbooks)• Accepted contribution to physiological functions• 15% of RDA for claimed effect sufficient

– Other substances: Must demonstrate a measurable effect • Focus on human intervention trials demonstrating measurable

effects on validated end-points or biomarkers within a healthy population

• No value attributed to textbooks, authoritative statements, observational studies and/or traditional use, etc

• Full effective intake needed

Observations:


• Consequences?– Chances for generic approval under article 13.1 reduced

– Medicalisation of foods/food supplements

• Need to reassess the methodology used– How to consider the totality of the available evidence

– How to weigh this evidence

Outstanding Issues:


– Discussions on the wording • Conditions of use

• Variability of wording

– Opportunity to provide further input• Probiotics characterisation

• Insufficiently substantiated claims

– Discussions with EMA – EFSA – Member States• Supportive evidence from studies in patients

• Value of traditional use for botanicals in food supplements

– Borderline with THMPs

– Harmonisation of the use of Other Substances in foodstuffs

• Science is being applied using an inappropriate pharmaceutical model

• Specific categories of Claims may be lost permanently (eg Joint Health, Probiotics, Botanicals, Antioxidants & Weight Management)

• Piecemeal and arbitrary release of EFSA’s opinions distorts competition

• Destroys value of past and future R&D investment

• Consumers vulnerable to claims from unregulated non-EU operators

• The future of many SMEs is endangered

Major Takeaways:


• Practical challenges: – Piecemeal implementation may result in multiple pack and copy

changes– The requirements must be coordinated with other legislation

e.g. FSD/MPLs & Food Information Regulation– Possible product reformulation may be required– Managing the adverse PR fallout of rejected claims

Current Marketing Realities:



Les aliments diététiques passés au crible

Taking the“pro” out of probiotic

The way health claims about food are regulated is changing

Are product claims true?

Esperti EFSA ampliano i benefici derivanti dal calcio

EFSA lässt Hersteller zittern

Jedes zweite “gesunde” Produkt ist wirkungslos

L’EFSA boccia il 66% delle etichette salutistiche (350 su 523)

Probiotic health claims are “unproven”

• Practical challenges: – Piecemeal implementation may result in multiple pack and copy

changes– The requirements must be coordinated with other legislation

e.g. FSD/MPLs & Food Information Regulation– Possible product reformulation may be required– Managing the adverse PR fallout of rejected claims– Handling consumers’ expectations for more product information,

which remains available to them from other jurisdictions– Co-existing with competitors’ claims still awaiting review – Managing different enforcement authority interpretations of the

regulation– Whilst continuing to plan and justify future investment in R&D/NPD

Current Marketing Realities:


Rights of the Consumer?


• To have access to adequate product information to make an informed choice– No claim = No information on pack, brochures, websites…– How do consumers make informed choices - 60% of UK consumers

use the internet for health information

• To have access to safe, high-quality food products– Consumers will turn to alternative distribution channels from

unregulated sources– Consumers will be vulnerable to outrageous/‘miracle’ claims

An Uncertain Future...• Much depends on attitude of new Commissioner, John Dalli (Malta)• First tranche of Article 13.1 Opinions will be on Standing Committee

(SCFCAH) agenda in July 2010• If approved as Commission Regulation, the EFSA Opinions of October 09

could be law by Spring 2011• This means removal from the market of all marketing & promotional

material e.g. on pack, literature/catalogues, websites, in-store & POS• Next 2 tranches of EFSA Opinions due September 2010 (600) and by

summer 2011 (the remainder) • Expectation that only 5% of all 4,400 claims submitted under Art 13.1

will receive a favourable EFSA evaluation


Future Marketing Strategies:

• In such an uncertain environment: – Some (larger) companies may opt to withdraw/resubmit failed

Art 13.1 claims as Art 13.5 claims, subject to cost and timescales – Some companies may remove claims and pursue alternative

communication methods beyond scope of the regulation, e.g. PR, creative online strategies such as viral marketing, social networking etc

– Creative reformulation may be a ‘back door’ for claims?– R&D investment reduced, deferred or moved to less-regulated

jurisdictions– Stifled innovation - product launches delayed or postponed– In summary: The Law of Unintended Consequences applies and creative

marketers will adapt to the new regulatory regime


Innovation:• The costs for substantiation of product-specific claims will be

substantial• Timetable from start of research to achieving a claim will be

years• Only the largest companies will be able to fund the individual

studies required• SMEs will not be able to compete in R&D and Innovation

‘I have calculated that if you want to have a dossier startingfrom scratch, it will cost you about €5m at a minimum...’

Wim Saris, Corporate Scientist, DSM


Future Investment in R&D:• Between 2000 and 2006 the proportion of the world’s pharmaceutical

clinical trials conducted in the UK fell from 6% to 2%, in large part because of more attractive regulation elsewhere

• Innovation in the Nutrition and Nutraceutical sector will define European industry’s competitiveness in the growing health and wellness global market

‘Nutrition plays a key role in the prevention of disease and the door should not be closed for the development of food ingredients that provide consumers and patients with healthier choices. To this end, the implementation of the Regulation should not solely be limited to the ‘Gold’ standard but should also encourage ‘Silver’ and ‘Bronze’ to develop their healthy ingredients, leading to a ‘race to the top’ among food companies and a renewed incentive to innovate’

Ysbrand Poortman, VP World Alliance of Organisations for the Prevention and Treatment of Genetic Conditions


Global Impact:A restrictive regulatory environment will result in:• Relocation of R&D to less-restrictive jurisdictions• Loss of leading researchers as they follow the R&D spend• Reduced innovation due to brain drain and researchers demotivated

as their life’s work is challenged as being insufficient!• Economic downturn resulting from reduced innovation• Even the possibility of certain foods being withdrawn from the

European market• ... and the world is closely watching developments in the EU,

notably USA (FTC), ASEAN, Brazil and India (Source: IADSA Feb 2010)


‘The Regulation in its current form is acting as a deterrent tofood R&D in Europe. This may pre-empt the development ofimportant nutraceuticals as well as closing the door on Europeancompetitiveness in nutrition, wellness and health’

Ivan C Baines, Scientific Coordinator, Max Planck Institute

Global Impact:

‘... the costly process of scientific and industrial innovation shouldnot unnecessarily be hampered by an approach that throws away the ‘baby with the bathwater’’

Mark Eyskens, Chairman PA Europe, Former Belgian Prime Minister


In Conclusion:


• There is an urgent need for a time-out to consider:– How the totality of the evidence can be addressed– How the evidence can be weighted and reported in terms of the strength,

consistency and plausibility of the effect

• There is a need for a constructive dialogue to enable the Regulation to achieve its goals:

– to achieve a high level of consumer protection by providing further voluntary information, beyond the mandatory information foreseen by EU legislation

– to improve the free movement of goods within the internal market– to increase legal security for economic operators– to ensure fair competition in the area of foods– to promote and protect innovation in the area of foods

• There is a need for a Regulatory Impact Assessment on all aspects of the risk management decisions

Date post:	25-May-2018
Category:	Documents
Upload:	buinhi
View:	215 times
Download:	0 times

FSAI HEALTH CLAIMS SEMINAR - Food Safety Authority of … · The Impact of the Nutrition & Health...

Documents