August 5 , 2002

Sami Labs - Pioneer in nutraceuticals

SAMI LABS is an Indian pioneer in the relatively new field of nutraceuticals and has been manufacturing natural pharmaceuticals and chemical intermediates in its own facilities in Karnataka since 1991.

In addition to its own R & D centre and four manufacturing facilities, Sami markets its products in the U.S. through its affiliate Sabinsa Corporation and all natural products in a standardised form. These products include Guggulsterone, Boswellin, Ursolic acid, Garcinia extract, Tetrahydrocurcumin, Curcumin, Glucosamine HCl, Piperine from Black Pepper, Fenufibers from Fenugreek, Forskholin from Coleus forskholii and Garlic Selenium along with L-Selenomethionine. Sami and Sabinsa have been conducting IND's for Gugulip and Boswellic acids in the U.S.

In the year ended March 31, 2002, Sami Labs' turnover was Rs. 66 crores. The turnover is expected to reach Rs. 150-200 crores by 2005.

Sami's efforts have been recognised by the Central Government in the form of number of awards for export performance. Sami has seven U.S. patents with 15 patents pending. These are mostly application patents.

Muhammed Majeed, Managing Director, Sami Labs, in an interview with N. N. Sachitanand said the major reason for success of Sami had been due to its efforts to develop good documentation for safety and efficacy and for conducting its clinical trials in the U.S. on American population that was crucial in establishing its bonafides. Excerpts.

QUESTION: What are nutraceuticals?

ANSWER: Nutraceuticals encompass a large group of preventive and curative health care ingredients that have been predominantly derived from long-standing medical traditions such as Ayurveda, Tibetan, Chinese and Japanese medical systems. Nutraceuticals are primarily obtained from plants especially those with a well-established use as foodstuff. The blend of these pharmaceutical and nutritional characteristics resulted in the name "Nutraceuticals,'' to denote the nutritional origins and the design moulded on pharmaceuticals, that is, standardisation, efficacy and predictability of action.

The nutraceuticals owe their beginnings to alternative medicine movement and to people who recognised that health care especially in the U.S., obtained from physicians, pharmacists and other health professionals needed to be supported by safe, effective cost effective and more accessible healthcare products.

There is some confusion about the difference between herbal extracts, nutraceuticals and ayurvedic drugs. Can you clarify?

Herbal extracts are products derived from herbs, that is, plants.

Nutraceuticals are derived from nutritional compounds having therapeutic value in contrast to straightforward "Pharmaceuticals.'' Nutraceutical need not only be derived only from plants. Even vitamins, minerals and some synthetic compounds are classified as Nutraceuticals. Ayurvedic drugs not only include plant-based products mentioned in Ayurveda, but also minerals in the form of "Bhasmas'' and the like.

Nutraceuticals have been till now regarded as OTC products for general health purposes. Are they now entering the area of prescribed medicines?

"Nutraceutical'' in the U.S. continue to be available as non-prescription dietary supplements. In the mid-1980s, when they started, they were accepted as part of "alternative'' medicine; by mid-1990s, they were being spoken to as part of "complementary'' medicine; and by year 2000-01, they are part of the so-called "integrated'' medicine. They are recognised as: (a) safe; (b) as preventives; and (c) useful in chronic disorders. The Allopathic physicians are beginning to prescribe them as well now, although they do not require the USFDA regulations at present.

How many years old is the global nutraceutical industry, what is its present size and projected rate of growth?

The nutraceutical industry dates back to the 1980s and its present global size is in the region of $100 to 125 billion. The leading market for nutraceuticals is the U.S., with a turnover of about $29 billion. However, other countries are also starting to promote nutraceuticals. The projected rate of growth in the U.S. is about 15 per cent per annuam.

Several major companies such as Amway, Twin Labs, General Nutrition Centers and Solgar Inc., which have pioneered the marketing of nutraceuticals in the U.S. Because of the tremendous commercial success of these companies, virtually every major pharmaceutical company has in the last two to three years entered the nutraceutical business either by acquisition of existing smaller companies or starting their own divisions for nutraceuticals. These include pharma companies such as Johnson & Johnson, American Home Products and Procter & Gamble. Also a number of cosmetic companies such as Estee Lauder, Avon and Revlon have entered the market with "Cosmeceutical products'' for skin and hair care.

In India almost all major pharmaceutical companies have either entered or are in the process of getting into this line of business with standardised Ayurvedic products or nutraceutical/dietary supplements.

Are there any international standards for nutraceuticals? Do the manufacturers have to get any approvals from watchdogs such as the USFDA or the Indian Drug Controller before releasing their products in the market?

At the moment, companies in the U.S. cannot make any therapeutic claims on the label according to DSHEA (Dietary Supplement Health and Education Act) which was passed by the U.S. Congress in 1994. This Act while promoting the use of dietary supplements or nutraceuticals has tried to prevent "tall'' claims by unscrupulous elements. Indian drug authorities apparently have taken a similar stand. However, a number of "nutraceuticals'' are now being included in the official Pharmacopoeial compendiums for their curative value. For example, Guggul for lowering cholesterol has been included in the Indian Pharmacopoeia; L-Selenomethionine as a source of `essential' selenium has been included in the U.S. Pharmacopoeia and Glucosamine for arthritic pain is now being included in the U.S. Pharmacopoeia. Also a large majority of the nutraceuticals find a place in the European herbal/botanical compendium as botanical remedies.

Does your industry have to undertake mandatory multiphase clinical trials?

Successful nutraceuticals have to establish their efficacy and safety like any other health care product. There are no mandatory multiphase clinical trials required. However, a company, which has conducted multiphase and multi location clinical trials, has a distinct marketing edge. Safety per se for these products is less of an issue because a number of them have their origin in existing alternative systems of medicine or has been used as food for many years.

Which are the major ailments that can be treated by nutraceutical products?

All therapeutic areas (such as anti-arthritic, pain killers, cold and cough, sleeping disorders, digestion, prevention of certain cancers, osteoporosis, blood pressure, cholesterol, depression and diabetes) have been covered by nutraceuticals. Newer ones are being found on a continuing basis. It is believed that almost all ailments will be covered in the next few years because one has to remember that synthetic drugs really did not come into being till about 1940 and till that time most systems of medicine (for example, Ayurveda) has had plants and minerals identified for almost all diseases.

There is tremendous resistance here by NGOs to natural products and age-old remedies being given patents. What is your position?

Our position is that age-old remedies where the knowledge for their use was in the public domain, should not be given patents. However, new applications of known natural products can be patented for those "applications'' but they must not be given "product'' patents. The potential for patenting newer applications of some of the traditional remedies is tremendous. Companies which obtain these patents will definitely benefit.

For the end consumer, are nutraceuticals a cheaper alternative to pharma products or ayurvedic formulations?

For the end consumer, nutraceuticals do provide more affordable alternatives. One must remember that one of the main reasons that nutraceuticals developed originally in early 1980s was that the high cost of healthcare/pharma industry had become prohibitive in the U.S.

How widespread is the backward linkage system, like tissue culture and contract farming in the nutraceutical industry?

In this country, it is a relatively new industry. Backward linkage like contract farming is inevitable because the wild resources from where plants are being collected now are limited. Companies in this business would have to evolve more adaptable varieties and varieties suitable for cultivation in order to survive in this business. It is a function of time that backward linkages will be established as indeed they have established in the U.S. Example: Cultivation of saw palmetto in Florida.

Does the nutraceutical industry lend itself to small-scale operations like the pharma formulations sector?

Yes, but small-scale units will have to find niche markets. For example, a company may specialise in two or three nutraceuticals based with availability of the raw material in its area of operations.

What are the natural advantages that India has for the nutraceutical industry? What is the size and structure of the Indian industry?

India is home to almost all kinds of plants ranging from tropical, sub-tropical and temperate zone plants. Also the advantage of knowledge based remedies gives India tremendous leads in finding newer applications (because of Ayurveda). Indian Scientists have been active in this field for decades; pay off period is here now!

India is relatively a new market. The size of the Indian industry is likely to reach about Rs. 1,000-1,200 crores in the next four years.

As mentioned earlier, all major pharma players are in the process of entering this market. This will become particularly important post 2005 when WTO patent regime will be implemented in the country. For natural products there will be obviously no product patents. Scale of operation may give advantage to existing pharma players because of their marketing and distribution channels are already in place.

The level of exports from India is still small, perhaps less than Rs. 750 crores if one excludes Psyllium. The major importing countries are the U.S., Europe and Japan.

What are the steps to be taken to make India a big player in this industry?

India can become a big player in this industry if it develops clinical documentation and scientific basis to support claims of safety and efficacy. Companies such as Sami have succeeded because they have developed the required clinical documentation and have done clinical studies in the U.S. thus developing credibility. This will become even more important if India wants to become a major player.

How about competition from China?

Chinese exports of nutraceuticals are huge. Chinese expatriate population do form a major section of consumers but it is the belief of general American population in alternative system of medicine that has driven the Chinese exports. India with its well established Ayurvedic system has an opportunity because existing Indian exports are not even 5-7 per cent of exports in value terms when compared with Chinese.

N. N. Sachitanand,