This year saw the implementation of the European Health Claim Directive EC 1924/2006, which is currently having a significant impact on the market. In June, the European Commission published a positive list of permitted generic health claims, which, broadly speaking, makes all claims not on this list illegal unless a manufacturer has received permission to use a product-specific, proprietary health claim. At present, interim rules apply that make it possible to sell off products still carrying their old claims. The implementation will be in full effect by December 2012.
Larger companies have responded to the change in the regulatory landscape by removing all non-approved claims from the labels of their products in a somewhat pre-emptive strike, trusting in consumer knowledge and brand confidence. For example, until recently, Danone’s Actimel yogurt brand claimed increased immune defense through its probiotic properties. Since the claim was rejected by the European Food Safety Authority (EFSA), this is no longer a permitted health claim, and so Danone was forced to remove it.
Smaller companies, for the most part, are taking a wait-and-see approach and are making use of the interim rules. Some have been warned by watchdog authorities to document and substantiate their health claims with appropriate data found in the public domain, which is a taste of things to come with the full implementation of the regulation in December.
Apart from the health claims effect, another impact of the new regulation has been a marked decrease of innovation. Generic (article 13.1) health claims can be used by anyone who meets the respective ingredient’s condition of use, which has led to a host of products containing nearly the same amount of vitamins and minerals making the same claims.
Unfortunately, generic health claims currently only exist for a small number of ingredients, and most notably, do not exist for botanicals; assessments of botanical health claims are on hold. A botanical product marketed before 2006 can use the present claim until the EU Commission finally approves or rejects the applications—whatever the case may be.
However, the situation is different for new products. With assessments of botanical health claim applications on hold and no decisions in sight, currently, the only way to use a health claim for a new botanical product is to file a product-specific health claim application—a costly and time-consuming process. It has become clear that EFSA will only accept gold-standard clinical trials as evidence supporting a claim, and this alone constitutes a step that companies—and especially small to medium businesses—are generally not prepared to take.
Meanwhile, the European nutrition market is experiencing only moderate growth. According to Nutrition Business Journal, Boulder, CO, supplement sales only rose 2% and total nutrition 2.4% in 2010. This has not changed during 2011. The economic situation is slowly recovering, but the current regulatory landscape is not exactly conducive to growth.
Within supplements, one of the few segments seeing an increase is weight-loss products, which coincides with demographic developments. Just like everywhere else, European waistlines are expanding. In Germany, 70% of the male population and about 50% of females are overweight-to-obese, and consumers are looking to the supplement sector for help.
On the other hand, traditionally well-selling indications such as immunity and menopause have decreased. A reason for this could be, once again, the Health Claim Directive, since most of these products use botanicals, whose claim application assessments have been put on hold. This leads to a general insecurity and pre-emptive removal of health claims on supplement products, which in turn leads to consumers inability to realize the health benefits of the botanicals.
Ginkgo biloba products are an interesting case study. In Germany, ginkgo products have historically been medicinal products with a specified pharmacologically active dosage. By definition, a dietary supplement cannot have a pharmacological effect. Manufacturers wishing to market a ginkgo supplement product responded by lowering the daily dosage to below the threshold of pharmacological action, which is considered to be 120 mg/day, thereby saving time and money that would otherwise have gone into the drug filing process.
A number of lawsuits followed, with courts trying to decide how closely supplements may approach the pharmacologically active dosage. A functional water containing 75 mg/l of ginkgo was taken off the market, because beverages do not have a daily dosage, and thus it could not be guaranteed consumers would not drink more and thus take in ginkgo at a dosage reaching a pharmacological effect. Conversely, a dietary supplement containing a daily dosage of 100 mg of ginkgo was allowed to remain on the market.
Supplement-drug demarcation problems are one of the major causes for lawsuits in the European supplement market. Since everything hinges on the pharmacological effect of the ingredients, it does not help that “pharmacological effect” is not defined, and apparently is not definable at all. This issue leads to a number of court decisions and counter-decisions—all serving to increase manufacturer insecurity in a regulatory environment that is in flux and hard enough to navigate as it is.
In Europe, as everywhere else, Internet sales are increasing in importance. The World Wide Web makes it possible to purchase products from anywhere, even from outside the EU, and thus obtain products that may not comply with EU regulations regarding marketability of ingredients or health claims. This is still a legal gray zone, but authorities are working on ways to regulate Internet sales.
American products are still a rarity on EU shelves, mostly because of marketability issues and varying labeling requirements. This is different for the Internet platform, but, as stated above, regulators are working on closing the loopholes. Another important channel for American products in Europe is multi-level marketing (MLM). Products that are not on the shelves are harder to regulate, making MLM an attractive channel for products that may not conform to regulations as tightly as they should.
This development is true not just for American products. Generally, modern marketing channels such as MLM, TV sales and Internet sales are increasing in importance, while the classic channels such as pharmacy and drug store are barely increasing, if at all. By and large, this is another effect the Health Claims Regulation is having on the European market.
It remains to be seen how these development will continue come December of this year. Currently, the lenience or strictness of watchdog authorities concerning the implementation of the Health Claims Directive is unknown. But one thing is certain: the entire health claim landscape will change, with a number of consequences for the market. Experienced consultancies such as analyze & realize ag stand ready to assist manufacturers in navigating the new terrain.
Dr. Joerg Gruenwald is President of analyze & realize ag, a specialized business consulting company and CRO in the fields of nutraceuticals, dietary supplements, herbals and functional food, and author of the PDR for Herbal Medicines. He can be reached at analyze & realize ag, Waldseeweg 6, 13467 Berlin, Germany; +49-30-40008100, Fax: +49-30-40008500; e-mail: firstname.lastname@example.org, www.analyze-realize.com.