Brazil- Global Herb Market

By Julie Dennis
Botanical sales continue their gradual ascent in regions across the globe regardless, or perhaps because of, economic woes.

“Part of it is economics; you can’t afford to get sick,” said George Pontiakos, president and CEO, BI Nutraceuticals, Long Beach, CA. “The trusted, consultative, medical resource is not out there; your family doctor is not there anymore and people are recognizing they have to take their health into their own hands.”

It’s not all economics, though. Many people simply want to live healthier lives and botanicals are simply part of that goal. “Consumers continue to demonstrate their interest in and demand for natural ways to improve their health,” said Mark Blumenthal, founder and executive director, American Botanical Council (ABC), Austin, TX, and editor of HerbalGram and HerbClip.

Increasing demand for botanical remedies is both a national, and international, trend. In fact, the global herbal supplement and remedies market is expected to reach $93 billion by 2015, according to a new report by San Jose, CA-based Global Industry Analysts, Inc.

<b>Brazil: Botanical Climate</b>

Another notable botanical market is Brazil, as regulations continue to change and opportunity continues to knock. The economy is relatively stable, wages are rising for many, and education and consumer demand for dietary supplements are increasing.

“Brazil is going through a period of rapid growth, and consumption of health and beauty products is growing accordingly,” said Paul Altaffer, vice president of business and product development, RFI Ingredients, LLC, Blauvelt, NY. “Supplement sales are soaring as consumers are buying international and domestic branded products. As the economy grows so does income—and Brazil’s income inequality gap is narrowing, meaning more Brazilians can afford what a short period of time ago were considered luxury goods.”

Brazil shares the same health concerns experienced by most industrialized nations, including obesity/overweight, lack of energy, stress, heart issues and immunity, according to Mr. Altaffer.

The aging population in Brazil, similar to the EU and the U.S., is also a driving force behind consumer spending. In fact, consumers over age 60 are estimated to contribute about 13% of Brazil’s total income, according to a Euromonitor report.

Addressing these concerns are some of the top-selling botanicals, including guarana, mate, acerola, acai, camu camu, cha de bugre, catuaba and boldo, Mr. Altaffer said.

But with opportunity also comes challenges, especially as regulations continue to evolve and thwart more dramatic sales increases. One factor contributing to this slowing pace is the group of South American countries currently banding together to develop uniform regulations.

Countries involved in this process include Brazil, Argentina, Paraguay, Chile and Uruguay. Consensus and stability are still elusive as these diverse countries attempt to transform the regulatory landscape.

“The system is quite bureaucratic. It becomes more complex as a result of Brazil’s (primarily) effort to come up with a common regulatory environment (similar to CODEX in Europe),” Mr. Altaffer explained. Needless to say, the pace of adopting new regulations has been slow.

The emerging regulations are intended to bring Brazil “in line with U.S. and European regulatory frameworks. Brazil emulates the Europeans. As a result, supplements must all be registered with ANVISA (Brazil’s regulatory agency for health products and services), demonstrating safety/toxicity, efficacy and so on,” Mr. Altaffer added.

<b>Botanical Drug Update</b>

The botanical drug industry is steadily growing despite high costs of approval.

Over the past decade, a new U.S. botanical drug industry has been steadily growing, according to Freddie Ann Hoffman, MD, CEO and founding member of the Washington, D.C.-based consulting firm HeteroGeneity, LLC, which focuses on the development of complex, heterogeneous products, such as botanicals, for the U.S. market.

Unlike dietary supplements, products classified as botanical drugs are intended for use in the diagnosis, mitigation, treatment, cure or prevention of disease, and also affect the structure or function of the body, Ms. Hoffman explained. In the U.S., these disease claims classify the product as a drug under the federal Food, Drug and Cosmetic Act.

Any product not already approved as a “drug” must be approved under a New Drug Application (NDA) with FDA prior to being marketed.

To study a new drug, the drug’s sponsor must first file an Investigational New Drug (IND) application with the FDA. This allows the drug to be studied in humans to obtain the safety and efficacy data required for U.S. drug approval.

Furthermore, the product must be manufactured under strict conditions with a high-level of reproducibility and documentation, including the collection of nonclinical, and clinical data, using rigorous experimental designs, Ms. Hoffman said.

Regardless of the high cost of pursuing a drug approval, for many manufacturers the appeal outweighs the price. There are approximately “500 INDs for botanical drugs that have been submitted to FDA in various stages of development. Many of these future drugs offer novel mechanisms of action,” Ms. Hoffman noted.

While not a “botanical,” FDA approved a complex natural drug from an omega 3 fatty acid rich fish oil in November 2004. This drug is now marketed as Lovaza (GlaxoSmithKline), and according to IMS Health has had annual sales exceeding $1 billion dollars since 2009.

In October 2006, the green tea extract Veregen was also approved as a “new” drug, and is now a prescription drug approved for topical use to treat genital warts. Further, several older botanical ingredients, such as psyllium, are regulated as both “food” and “drug” ingredients.

The potential benefits for the manufacturer pursuing a drug classification include significantly stronger labeling, such as direct clinical indications and promotional claims, warnings, precautions and contraindications for clinical use, and therefore “buy-in” by U.S. healthcare professionals—with possible reimbursement for prescription drugs. There is also significant protection of proprietary information, including trade secrets—i.e., competitors cannot “borrow” science, unless the second drug is a “generic equivalent.”

“To claim ‘generic equivalency,’ the active(s) from both drugs must be administered to human subjects and demonstrate comparable absorption and distribution patterns, in conformance with standardized ‘bioequivalence’ testing procedures,” Ms. Hoffman explained.

Also, approved NDAs are given a period of exclusive marketing rights wherein FDA is prohibited from accepting another NDA submission for an identical product.

“There are many diseases and conditions that do not respond to a single drug. Cancer is one of these, as is HIV infection and other infectious and inflammatory conditions. The standard of care for these conditions is to use a ‘cocktail’ of drugs,” said Ms. Hoffman. “Because botanicals are such complex products they may be able to hit multiple targets to prevent the resistance formed by malignant cells and some infectious agents, for example.”

“Nature is a fantastic biochemist, which offers infinite possibilities for drug exploration,” she said, adding that if proven to work under strict U.S. drug law, “the future for complex drugs in the U.S. is wide open and bright.” —JD