By Greg Stephens, Windrose Partners, and Sandy Bigelow, Vanguard Associates11.07.22
When I began writing this Business Insights column nearly 20 years ago, medical food products were developed and marketed almost exclusively by nutrition divisions of a few large pharmaceutical companies. Dietary supplement companies were in a distinctly different category perceived by Big Pharma as less scientific, “Mom & Pop” companies.
With passage of the Dietary Supplement Health and Education Act (DSHEA), the general population began to use supplements more, and for purposes beyond simply avoiding deficiency of vitamins and minerals.
DSHEA also allowed companies to make structure function claims, albeit somewhat restrictive, enabling communication about clinical and health promotion benefits of supplements.
The FDA began cracking down on supplement companies that were encroaching into disease prevention and therapeutic claims. At this time, our consulting practices, with a strong background in medical foods, began receiving calls from food and supplement companies interested in understanding the potential
market opportunity.
Most companies were legitimately interested in the category. Others simply seemed intrigued by the idea of making “disease management” claims in a self-regulatory category that did not require FDA approval, or even notification.
At the same time, major pharma companies saw the impressive growth of dietary supplements as an additional opportunity. They saw the potential of leveraging their large R&D departments, direct-to-consumer and health practitioner marketing competencies, and deep pockets. Thus, the blurring of lines between food and pharma began, and double-digit growth continued in the broad nutrition sector.
Today, the U.S. market for medical foods is estimated at $6 billion, with global sales valued at $21 billion. Annual market growth is projected to be more than 5% over the next 5-8 years. (Medical Foods Market Size & Share Report, 2022-2030, Grand View Research). Growth is driven by demographics, primarily the increasing geriatric population, along with the increased prevalence of diseases that can be managed, at least partially, by nutritional interventions.
Industry consolidation in the clinical nutrition industry is also expected to propel market growth over the forecast years. Mergers and acquisitions, new products, and licensing opportunities are expected to further market growth.
During the early years of medical food growth in the U.S., the market was controlled by two large companies, Ross Laboratories (now Abbott Nutrition) and Mead Johnson Nutrition. Products were almost exclusively sold to hospitals and nursing homes. Today, there are over 100 companies developing and marketing new medical foods in the U.S. alone.
Most of these companies are adhering to standards set by the early pharma companies, with a few taking advantage of the chance to make “disease management” claims without needing FDA approval. Monitoring a market with two major players was far less cumbersome for regulatory agencies to oversee compared to today.
In the early growth days of medical foods in the U.S. (1980s and 1990s), products were sold primarily to healthcare institutions (hospitals, nursing homes, and home care settings). This distribution has declined to approximately 40% of sales due to factors such as, for example, significantly shorter lengths of patient stay in acute care hospitals.
Retail and internet sales have increased during this period partially driven by direct-to-consumer advertising and purchasing convenience. Keep in mind, even though the FDA requires medical foods to be used under medical supervision, there is no succinct requirement that they are prescribed by a physician.
healthcare professionals.
Medical foods were originally developed to address inborn errors of metabolism (i.e., phenylketonuria) and their development has been expanded to uses for other physiological conditions whose maintenance and progression are known to be altered by chronic dietary intakes. Biomedical evidence shows the presence of genetic variants in individuals has marked effects on the disposition of dietary constituents (e.g., folate) and their health outcomes. This knowledge enables the development of next-generation medical foods to address specific dietary requirements in these patient populations.
Some conditions for which medical foods are highly effective include hyperglycemia, chronic obstructive pulmonary disease (COPD), chronic kidney disease, acute inflammatory pulmonary conditions, gastrointestinal malabsorption, intolerance or injury, external wounds, metabolic stress and trauma, liver disease, cachexia, Alzheimer’s disease, and immunosuppression. Collectively, the healthcare costs associated with these diseases total more than $800 billion annually in the U.S.
Medical foods were originally defined by the Orphan Drug Act of 1988 and are now largely defined under 21 CFR 101.9(j)(8) as foods that:
medical evaluation.
DNR addresses a pathophysiologic condition that exhibits a suboptimal nutrient status in the body to manage a disease, based on medical evaluation and nutritional intervention to restore optimal nutrient status and/or loss of function or physiological imbalance, expressed in terms of a nutrient amount per patient per day.
It’s reasonable to anticipate that distinctive nutritional requirements can arise in disease states other than those of inherited etiology, such as those of congenital etiology, especially for those diseases which are idiosyncratic in nature.
Regarding medical food use, it would unnecessarily confine the medical community to provide patient care by limiting the scope of physiological state(s) based on a particular disease etiology, many of which can manifest distinctive nutritional requirements in later ontological time frames.
FDA has rejected the notion that medical foods can be used for diseases such as diabetes, even though the scientific, medical, and clinical nutrition community say otherwise. FDA’s repeated attempts to disentangle the wide spectrum of products it regulates into discrete regulatory categories have fallen short, as history has shown their difficulties in regulating combination products separately as drugs or foods.
One realistic perspective is that FDA regulates a continuum of products, rather than silos of product groups. In a 2013 guidance, without the benefit of rulemaking, FDA restricted the scope of indicated use(s) for medical foods more than that for orphan drugs and “humanitarian” medical devices.
This field of endeavor is young and growing, and the use of medical foods to address the clinical manifestations of diet-related conditions is still developing. Clearly, scientific findings can be matched to the market needs to develop novel medical food products. Moreover, genomic methods coupled with supporting clinical findings can catapult the development of a new generation of medical foods without making huge investments. The science supporting the development of medical foods has come full circle, from its origins of addressing dietary needs of inborn errors to genomic findings, all of which relate to heritable variations of DNA on diet-related clinical conditions.
Medical foods represent a legitimate pathway for advancing nutrition science. Limiting use of this class of products effectively denies patient care and increases healthcare costs, stifling the ability to translate scientific findings into patient benefits, and diminishing investment and industry growth.
Industry investment and future growth should not be stymied by arbitrary regulatory distinctions. Additionally, clinical findings for medical food use can be used to develop appropriate marketing claims for dietary supplements and conventional foods.
About the Authors: Greg Stephens, RD, is president of Windrose Partners, a company serving clients in the the dietary supplement, functional food and natural product industries. Formerly vice president of strategic consulting with The Natural Marketing Institute (NMI) and Vice President of Sales and Marketing for Nurture, Inc (OatVantage), he has 25 years of specialized expertise in the nutritional and pharmaceutical industries. His prior experience includes a progressive series of senior management positions with Abbott Nutrition (Ross Products Division of Abbott Laboratories), including development of global nutrition strategies for disease-specific growth platforms and business development for Abbott’s medical foods portfolio. He can be reached at 267-432-2696; E-mail: gregstephens@windrosepartners.com.
Sandy Bigelow, PhD, principal, Vanguard Global Associates LLC, is a research and development professional with more than 20 years of experience in leading global technology responsibilities in the food, nutrition and medical device industries. He can be reached at sandy@vanguardglobalassociates.com.
With passage of the Dietary Supplement Health and Education Act (DSHEA), the general population began to use supplements more, and for purposes beyond simply avoiding deficiency of vitamins and minerals.
DSHEA also allowed companies to make structure function claims, albeit somewhat restrictive, enabling communication about clinical and health promotion benefits of supplements.
The FDA began cracking down on supplement companies that were encroaching into disease prevention and therapeutic claims. At this time, our consulting practices, with a strong background in medical foods, began receiving calls from food and supplement companies interested in understanding the potential
market opportunity.
Most companies were legitimately interested in the category. Others simply seemed intrigued by the idea of making “disease management” claims in a self-regulatory category that did not require FDA approval, or even notification.
At the same time, major pharma companies saw the impressive growth of dietary supplements as an additional opportunity. They saw the potential of leveraging their large R&D departments, direct-to-consumer and health practitioner marketing competencies, and deep pockets. Thus, the blurring of lines between food and pharma began, and double-digit growth continued in the broad nutrition sector.
Market Growth and Development
The FDA re-classified medical foods from drugs to foods in 1972 because of their intended use to sustain adequate nutritional status of patients. Medical foods are regulated with the same requirements for manufacturing and labeling controls as those for conventional foods. Since 1972, medical foods have been developed to address the nutritional needs of patients with a variety of medical conditions, including:- Gastrointestinal diseases and disorders;
- Kidney diseases and disorders;
- Liver and biliary system diseases and disorders;
- Pancreatic diseases and disorders;
- Inborn (inherited) errors of metabolism; and
- Miscellaneous conditions (including burn and trauma patients).
Today, the U.S. market for medical foods is estimated at $6 billion, with global sales valued at $21 billion. Annual market growth is projected to be more than 5% over the next 5-8 years. (Medical Foods Market Size & Share Report, 2022-2030, Grand View Research). Growth is driven by demographics, primarily the increasing geriatric population, along with the increased prevalence of diseases that can be managed, at least partially, by nutritional interventions.
Industry consolidation in the clinical nutrition industry is also expected to propel market growth over the forecast years. Mergers and acquisitions, new products, and licensing opportunities are expected to further market growth.
During the early years of medical food growth in the U.S., the market was controlled by two large companies, Ross Laboratories (now Abbott Nutrition) and Mead Johnson Nutrition. Products were almost exclusively sold to hospitals and nursing homes. Today, there are over 100 companies developing and marketing new medical foods in the U.S. alone.
Most of these companies are adhering to standards set by the early pharma companies, with a few taking advantage of the chance to make “disease management” claims without needing FDA approval. Monitoring a market with two major players was far less cumbersome for regulatory agencies to oversee compared to today.
In the early growth days of medical foods in the U.S. (1980s and 1990s), products were sold primarily to healthcare institutions (hospitals, nursing homes, and home care settings). This distribution has declined to approximately 40% of sales due to factors such as, for example, significantly shorter lengths of patient stay in acute care hospitals.
Retail and internet sales have increased during this period partially driven by direct-to-consumer advertising and purchasing convenience. Keep in mind, even though the FDA requires medical foods to be used under medical supervision, there is no succinct requirement that they are prescribed by a physician.
Regulatory Definitions
Medical foods are intentionally designed to target the nutritional aspects of disease conditions, thus augmenting the effectiveness of other interventions and improving the patient’s condition. Medical food-drug combinations work together as interventions to ameliorate disease conditions, just like many drug-device combinations historically used byhealthcare professionals.
Medical foods were originally developed to address inborn errors of metabolism (i.e., phenylketonuria) and their development has been expanded to uses for other physiological conditions whose maintenance and progression are known to be altered by chronic dietary intakes. Biomedical evidence shows the presence of genetic variants in individuals has marked effects on the disposition of dietary constituents (e.g., folate) and their health outcomes. This knowledge enables the development of next-generation medical foods to address specific dietary requirements in these patient populations.
Some conditions for which medical foods are highly effective include hyperglycemia, chronic obstructive pulmonary disease (COPD), chronic kidney disease, acute inflammatory pulmonary conditions, gastrointestinal malabsorption, intolerance or injury, external wounds, metabolic stress and trauma, liver disease, cachexia, Alzheimer’s disease, and immunosuppression. Collectively, the healthcare costs associated with these diseases total more than $800 billion annually in the U.S.
Medical foods were originally defined by the Orphan Drug Act of 1988 and are now largely defined under 21 CFR 101.9(j)(8) as foods that:
- Are specially formulated and processed (as opposed to a naturally occurring foodstuff used in its natural state) for the partial or exclusive feeding of a patient by means of oral intake or enteral feeding by tube;
- Are intended for the dietary management of a patient who, because of therapeutic or chronic medical needs, has limited or impaired capacity to ingest, digest, absorb, or metabolize ordinary foodstuffs or certain nutrients, or who has other special medically determined nutrient requirements, the dietary management of which cannot be achieved by modification of the normal diet alone;
- 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;
- Are intended to be used under medical supervision; and
- Are intended only for a patient 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.
Distinct Nutritional Requirements
The second requirement is most often the reason the FDA determines a medical food is being inappropriately marketed as a drug: the distinct nutritional requirement, or DNR. The distinguishing aspect of medical foods is how to define the term distinctive nutritional requirements. One could define DNR as a physiological state of a disease that exhibits an altered metabolic need for nutrients and other dietary substances such that meeting the metabolic needs results in the ability to maintain sustenance for a patient—whether the disease arises from inborn errors of metabolism, congenital defects, or the progression of pathophysiological condition(s), of which these requirements are based on recognized scientific principles as established bymedical evaluation.
DNR addresses a pathophysiologic condition that exhibits a suboptimal nutrient status in the body to manage a disease, based on medical evaluation and nutritional intervention to restore optimal nutrient status and/or loss of function or physiological imbalance, expressed in terms of a nutrient amount per patient per day.
It’s reasonable to anticipate that distinctive nutritional requirements can arise in disease states other than those of inherited etiology, such as those of congenital etiology, especially for those diseases which are idiosyncratic in nature.
Regarding medical food use, it would unnecessarily confine the medical community to provide patient care by limiting the scope of physiological state(s) based on a particular disease etiology, many of which can manifest distinctive nutritional requirements in later ontological time frames.
FDA has rejected the notion that medical foods can be used for diseases such as diabetes, even though the scientific, medical, and clinical nutrition community say otherwise. FDA’s repeated attempts to disentangle the wide spectrum of products it regulates into discrete regulatory categories have fallen short, as history has shown their difficulties in regulating combination products separately as drugs or foods.
One realistic perspective is that FDA regulates a continuum of products, rather than silos of product groups. In a 2013 guidance, without the benefit of rulemaking, FDA restricted the scope of indicated use(s) for medical foods more than that for orphan drugs and “humanitarian” medical devices.
Emerging Opportunities
By merging genomic findings with dietary needs, the concept of developing medical foods tailored to a wider range of patient conditions is expanding. For example, the diet-related disease type 2 diabetes, can be described as a compilation of metabolic issues primarily related to energy utilization. Human polymorphisms related to energy utilization can be used to understand their relative contribution to diet-related disease conditions. Clinical findings based on human polymorphisms can be used to direct medical food development to address an increasing number of metabolic issues associated with type 2 diabetes.This field of endeavor is young and growing, and the use of medical foods to address the clinical manifestations of diet-related conditions is still developing. Clearly, scientific findings can be matched to the market needs to develop novel medical food products. Moreover, genomic methods coupled with supporting clinical findings can catapult the development of a new generation of medical foods without making huge investments. The science supporting the development of medical foods has come full circle, from its origins of addressing dietary needs of inborn errors to genomic findings, all of which relate to heritable variations of DNA on diet-related clinical conditions.
Medical foods represent a legitimate pathway for advancing nutrition science. Limiting use of this class of products effectively denies patient care and increases healthcare costs, stifling the ability to translate scientific findings into patient benefits, and diminishing investment and industry growth.
Industry investment and future growth should not be stymied by arbitrary regulatory distinctions. Additionally, clinical findings for medical food use can be used to develop appropriate marketing claims for dietary supplements and conventional foods.
About the Authors: Greg Stephens, RD, is president of Windrose Partners, a company serving clients in the the dietary supplement, functional food and natural product industries. Formerly vice president of strategic consulting with The Natural Marketing Institute (NMI) and Vice President of Sales and Marketing for Nurture, Inc (OatVantage), he has 25 years of specialized expertise in the nutritional and pharmaceutical industries. His prior experience includes a progressive series of senior management positions with Abbott Nutrition (Ross Products Division of Abbott Laboratories), including development of global nutrition strategies for disease-specific growth platforms and business development for Abbott’s medical foods portfolio. He can be reached at 267-432-2696; E-mail: gregstephens@windrosepartners.com.
Sandy Bigelow, PhD, principal, Vanguard Global Associates LLC, is a research and development professional with more than 20 years of experience in leading global technology responsibilities in the food, nutrition and medical device industries. He can be reached at sandy@vanguardglobalassociates.com.