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    Columns

    Convergence of the Health Practitioner Channel & Medical Foods

    Medical foods continue to grow as a class of products, in tandem with health practitioner influence.

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    Gregory Stephens, RD, Windrose Partners06.03.13
    The market for nutraceuticals continues to rebound; this includes dietary supplements, medical foods, functional foods and quality bioactive ingredients. Digging deeper, each of the major distribution channels is realizing growth, including traditional food/drug/mass/club, natural product stores, multi-level marketing, e-commerce and the exploding healthcare practitioner channel (HCP). In fact, the HCP channel exceeds $2 billion, growing at an estimated 8% annually. So what is driving this unprecedented growth?

    Beyond the occasional multi or letter vitamin recommendation and printed “diet sheets,” traditional or allopathic physicians in general have been slow to support nutritional interventions. Not that they don’t believe in them; rather, most often, it seems there’s a lack of knowledge. As basic as nutritional biochemistry is to cellular level metabolism, physician education in nutrition has and continues to be limited.

    Yet while most medical schools are struggling to find the time in the student curriculum to strengthen nutrition education, doctors are becoming more nutritionally savvy. Some of this is related to the Internet. Both patients and practitioners have access to a wealth of scientifically substantiated information. Also, practitioners are being educated by their #1 source of product information—pharmaceutical companies. For example, how much do you think the growing awareness of Lovaza (Rx omega 3s) has influenced physicians to feel comfortable recommending omega 3 dietary supplements? A lot. Similarly, probiotics are more often being recommended to patients undergoing certain antibiotic therapies. This increase in awareness and recommendation will continue as quality research is conducted and presented in professional journals, at medical conferences and incorporated into sales calls.   

    What do health practitioners look for in nutritional products? Quite simply: safety, quality and efficacy. Safety is a given; they expect this from any company selling to or through them. One physician related it to the game of poker, “safety is an ante; it is a requirement just to get in the game.” Next, they want products that work and are supported by well-designed clinical trials published in peer-reviewed journals. And to be comfortable recommending a product, practitioners want high-quality. Many health practitioners have the perception that products sold through retail “box stores” are inferior in quality, driven by low-cost price points (e.g., $9.95 for a 30-day supply). Surveys of practitioners who dispense supplements from their office have cited “quality” as the number one reason for providing this service to their patients. Interestingly, the benefit of providing their patients with high-quality products is more important to the practitioner than the increased revenue they may generate.

    What do patients expect from their practitioner related to nutritional needs? Clearly, patients are more likely to purchase a nutritional product if it is recommended by their physician. More importantly, with the physicians recommendation they are far more likely to repurchase—that is continue using the products after that first purchase. This is particularly important for products providing preventative health benefits versus those that provide immediate or therapeutic benefits. When a patient realizes or feels the benefit (e.g., joint pain) before the first purchase has exhausted, they are more likely to purchase the second and ensuing quantities. With physician recommendation and follow-up they also report being more compliant with dosage recommendations. For products providing benefits down the road (preventative in nature), a practitioner recommendation is very influential toward compliance with recommended or long-term usage.

    For more information on the health practitioner channel I refer you to Holistic Primary Care’s just released 2013 Physicians Survey report. It is the most detailed and up-to-date assessment of primary care physician engagement with nutrition, natural medicine and dietary supplements. (Primary Care Physicians & Holistic Medicine: Approaching the Tipping Point: www.holisticprimarycare.net/health-practitioner-marketing-forum.)

    Health Practitioners & Medical Foods
    The importance of health practitioners’ influence goes beyond the products sold from their offices. Consider the influence of the practitioner in recommending products that the consumer purchases at retail. A good example of such nutritionals is “medical foods,” a distinct regulatory class of nutritional products. The market for medical foods in the U.S. alone is approaching $3 billion. This includes products sold at retail and those used in institutional settings (e.g., hospitals and nursing homes).

    As discussed in the September 2012 Business Insights column (“The Emerging Market for Medical Foods”), there has been a proliferation of medical food launches over the past few years. In the U.S. and globally there have been more than 100 new medical food product launches annually since 2009 (Innova Market Insights, 2011). It appears that many of these products do not meet FDA requirements for medical foods but because no pre-market approval is required for medical foods, they sometimes  “fly under the FDA radar” until they achieve significant sales and visibility. I will be moderating a Medical Foods Expert Panel at the NBJ Summit (July 23-26) where this and other regulatory and business issues will be discussed.

    Traditional medical food products include Glucerna and Boost Glucose Control—both for the dietary management of diabetes. These and other medical foods are a class of therapeutic nutritionals that are not only permitted by FDA to make label reference to a disease state, but are actually required. Thus it is not surprising that health practitioners are supporting these products. As a matter of fact, strong relationships with health practitioners have fueled the growth of medical foods.

    Actually, there are quite a few similarities between the current medial food products sold at retail and dietary supplements sold through the practitioner channel.

    • Each leverages a relationship with the healthcare professional to assure patient/consumer trial and compliance;
    • In general both classes of product are of high-quality and demand higher prices;
    • They both are supported by strong clinical substantiation;
    • They share a perception of unquestionable safety.

    Marketing Nutritional Products to Health Practitioners
    In April of this year the inaugural Health Practitioner Marketing Forum was held in Long Beach, CA. The forum was an executive summit on strategies to capitalize on the rapidly expanding health practitioner market for dietary supplements and medical foods. From my experience, it is the first time thought leaders from the practitioner channel for supplements and medical foods came together to identify synergies and lessons to share. Mike Katke described the origins of Metagenics and how they grew to become a premier player in the practitioner space. Trish Cadwallader and others shared insights in building Abbott Nutrition’s multi-billion-dollar medical foods business. A healthy dialogue ensued throughout the two-day conference sharing ideas and strategies for growth in each market and more importantly, how we see the channels merging into a large, rapidly growing market for therapeutic nutrition. For those unable to attend the forum, copies of presentations can be obtained through the conference website (http://hpmforum.com).

    The market for dietary supplements driven by health practitioners is growing tremendously. More practitioners are selling supplements from their practices, and not just those that are sometimes referred to as alternative practitioners. The growth is driven by a wide range of “traditional” and “alternative” practitioners. The class of medical foods is growing along with dietary supplements, expanding beyond the traditional institutional “tube-fed” products. The growth and range of nutritional products driven by health practitioners will have a significant impact on the nutraceutical market in the coming years. 

    ____________________________________________________________________________________________________________

    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 215-860-5186; E-mail: gregstephens@windrosepartners.com.
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