Pharma’s strategic path to growth in the nutra maze

The nutraceutical market is expanding rapidly, valued at $6.11 billion in 2024 and projected to reach $11.55 billion by 2030, according to a GlobeNewsWire report. However, pharma companies eager to tap into this growth, face a complex road ahead. Regulatory ambiguity, for instance, serves as a double-edged sword. On the one hand, relatively less regulatory control eases market entry; on the other, they expose pharma players to intense competition from both established FMCG brands and agile startups, quick to respond to shifting consumer preferences.

Adding to these challenges, unethical marketing practices continue to undermine consumer trust with misleading claims about product efficacy and outcomes. Despite these obstacles, opportunities remain significant, particularly given pharma companies’ strong foundation in clinical research and established consumer trust. The question remains—how can they navigate these challenges and build strategies that foster long-term credibility and growth in the nutra sector?

Industry tug-of-war

Recent developments in India’s nutra sector have been nothing short of a rollercoaster ride from the pharma industry’s perspective. On one hand, the Indian government has taken proactive steps to explore bringing nutra products under the purview of the Central Drugs Standard Control Organisation (CDSCO) by setting up a government-constituted panel in February 2024. This move has been largely welcomed by pharma players as a step towards stricter oversight and standardised practices.

On the other hand, the recent revisions to Schedule M—which ban the production of nutra products in drug-licensed facilities to prevent cross-contamination—have ignited a heated debate. While these changes aim to enhance product safety and delineate clear boundaries between pharma and nutra manufacturing. However, they impose significant operational hurdles for pharma companies that also produce nutraceuticals. Meanwhile, standalone nutra manufacturers see this as an opportunity to compete on more equal footing.

Adding to the uncertainty, the Karnataka High Court’s temporary stay on the revised Schedule M has provided manufacturers with a momentary reprieve, leaving the sector in a state of limbo.

For pharma players, the situation underscores not only the need for balanced regulations that safeguard public health while fostering the coexistence of both industries but also serves as a clear call to action. It’s a pivotal moment for pharma companies to strategically assess their position, adapt to evolving dynamics, and carve a sustainable path in the rapidly growing nutra sector.

Guideline gaps

One of the major challenges in the current regulatory landscape is the ambiguity surrounding guidelines and the prevalence of low-quality benchmarks in the nutra sector. 

Antony Prashant, Partner, Deloitte India, explains, “The nutra market currently lacks the regulations found in the pharma industry. This significantly impacts product quality and safety, with potential for adulteration. Nutra products may interact with medications, increasing the need for regulation and consultation by healthcare professionals. The Ministry of Health and Family Welfare is planning to bring these products under the supervision of the Central Drugs Standard Control Organisation (CDSCO).”

Giving insights on the value that pharma companies can bring to this segment, Nandini Piramal, Chairperson, Piramal Pharma outlines, “Navigating regulatory challenges in the nutra sector requires a clear focus on quality and transparency. Pharma companies can lead the way by applying their research and quality control expertise to create safe, effective products that consumers can trust”.

Piramal also suggests that building strong relationships with regulatory bodies like FSSAI and actively participating in industry associations can help address these challenges. “By prioritising quality and collaboration, pharma companies can not only tackle regulatory hurdles but also set a higher benchmark for the entire industry,” she opines.

Kalka Prasad, AVP – Marketing, Crius Life, Crius Group, advocates for stricter regulations, particularly in India, where nutra standards are still evolving. He stresses the need for a collaborative effort between industry players and regulatory bodies to establish clear guidelines that ensure the safety and efficacy of products. “It is not justifiable to compare pharma products, where a lot of work has already been done and well-documented with international harmonisation (e.g., USP, EP, IP) on quality standards, with nutra products, which are still in their native stage and offer much scope for improvement. A collaborative effort from both industry and governing bodies is needed to bring about the drastic change,” he opines.

R&D advantage

Looking at the sunny side, pharma companies’ established expertise in R&D, clinical trials, and regulatory compliance can give them a distinct competitive edge in the nutra market. Piramal believes that pharma companies are well-positioned to create high-quality, sciencebacked products in a sector where quality standards can be inconsistent. “Their ability to validate health claims with rigorous trials and meet strict quality requirements builds trust and sets them apart,” she says.

Prashant shares a similar sentiment, noting that pharma companies have the advantage of well-established R&D capabilities. These capabilities allow them to create nutra products that cater to specific health needs while adhering to higher standards. “Pharma industries can leverage their R&D capabilities to innovate and develop products targeting specific diseases,” says Prashant. “With increased pharma involvement in the nutraceutical domain, this will help streamline process compliance, raise product quality standards, and provide safety labeling, which will enhance consumer awareness and acceptance, ultimately fueling sector growth,” he adds.

Evidence-based marketing: An imperative

Amid growing concerns over misleading marketing, pharma companies face challenges in the market where smaller or new entrants can quickly compete by making false claims, often blurring the lines of credibility and trust.

Piramal stresses the importance of education-driven marketing to foster consumer trust. “Ethical marketing focuses on education rather than exaggeration, empowering consumers with accurate information about product benefits. By staying true to their reputation for reliability and putting consumer well-being first, pharma companies can build lasting credibility in the nutra space,” says Piramal.

Prashant also emphasises the importance of educating consumers on the risks associated with unregulated nutra products. “There is a need for strengthening the regulatory framework governing the nutra sector in India to regulate the quality of products being manufactured,” he explains. Consumer education is critical, as many nutra products may interact with medications, potentially causing adverse effects.

Prasad agrees and adds another perspective, “This is imperative to say that it must involve stricter laws and regulations, coupled with stronger law enforcement, to restore consumer trust.” He also calls for uniformity between laws governing food, food supplements, and medicines. “We should be more concerned about ensuring the quality of food and its derivatives,” he concludes. 

The winning formula

As the nutra sector grows, pharma companies see opportunities for expansion. However, breaking into this competitive space demands a strategic approach. According to Piramal, pharma companies can position themselves for long-term success by focusing on innovation and evidence-backed products tailored to consumer health needs. She emphasises the importance of investing in clinical research to build trust with consumers while proactively navigating regulatory challenges. “Pharma companies can focus on innovation, creating evidence-backed products tailored to consumer health needs, and investing in clinical research to build trust,” says Piramal. She also underscores the need for collaboration with partners across the value chain to ensure compliance and efficiency. “Understanding regional preferences while maintaining global standards is key, as is building trust through education-driven marketing. By blending science with a consumer-first mindset, companies can carve a sustainable path in this growing industry,” she adds.

Prasad supports this view, stressing the importance of aligning with market dynamics. “The strategy should focus on two aspects: understanding market dynamics and innovating according to consumer needs, while executing these competencies through the core principles of the 4Ps of marketing—Product, Price, Place, and Promotion.”

Brimming with potential 

Looking to the future, the nutra sector is expected to experience tremendous growth, with projections indicating a six to seven fold increase over the next decade. All three spokespersons agree that pharma companies will play a critical role in this growth by leveraging their R&D expertise and regulatory experience to bring high-quality products to market. Piramal notes that pharma companies can bridge the gap between food and medicine, helping shape the evolution of the nutra industry. “By blending science with a consumer-first mindset, companies can carve a sustainable path in this growing industry,” she says.

Prashant also foresees the growing involvement of pharma companies in the nutra space, driving innovation and product diversification. “With increased awareness among consumers about health benefits, pharma industry involvement in nutra will help redefine rules and regulations,” he adds.

Charting the course

As the nutra sector evolves, pharma companies have the potential not only to enter and sustain their presence but also to lead the sector. By honing their strengths and adapting to the fast-changing landscape, they can capitalise on the growing public awareness of healthier lifestyles. 

neha.aathavale@expressindia.com

nehaaathavale75@gmail.com