Friday, February 6, 2009

FDA Section 912 -- A Bonanza or Distraction to Big Pharma??

Larry and I have repeatedly blogged about the declining state of Big Pharma’s pipeline and their poor future prospects. I’ve been curious, what happens next? Where does Big Pharma go to keep its revenues and earnings growing? There is an obscure FDA amendment that may potentially provide a net incremental revenue source for the industry.

Recently, the National Health Alliance (NHA), a nutritional health community political organization, published an article entitled Stealing Nature’s Thunder, Will Big Pharma be allowed to monopolize natural nutrition? ( ) expressing concern that large pharmaceutical companies could stake out exclusive turf in natural compounds and food supplements by simply conducting clinical trials. This move is not without precedence already and likely can be expanded so that "everyday" remedies become prescription and/or more regulated. To a public already suspicious of the drug companies this is just adding fuel to the fire.

Section 912 is contained in the Food and Drug Administration Amendments Act of 2007 and is viewed with considerable suspicion by the health food industry, their customers and supporters because it could permit natural compounds to be treated, and regulated, like drugs. The article mentions substances like oat bran fiber, fish oil, probiotics, CoQ10, and various vitamins, minerals, and herbal products which could move into the captive orbit of Big Pharma.

This article caught my eye because I’ve been trawling the Web and media for ideas about what pharmaceutical companies could do next to supplement their vanishing pipelines. Section 912 could be used by drug companies to extend their reach, or is it grasp, over substances traditionally viewed as natural remedies.

Companies with strong research and development groups and marketing, not to mention legal staffs, would probably benefit most from this type of move. Of course, if traditional purveyors of these natural products could find themselves at a disadvantage if they find themselves in the cross-hairs of the Food and Drug Administration (FDA). Not having the aforementioned resources would place natural remedy providers at a considerable disadvantage.

I think that we’ll see more activity in this area as we move into the next decade. The usual practices of buying up competitors, after having their purchase prices driven up in bidding wars, laying off workers, consolidating operations, and then rolling jobs offshore will probably be in use.

OK, now here’s the catch, what does Big Pharma know about natural remedies? Not a lot, I’ll wager. Some of the cynics out there among you may say that they don’t know much about the drug industry either. This will turn out to be yet another distraction from Big Pharma’s core businesses. Further, given the new administration in Washington, D.C., rolling over a successful, American industry, wrapping it up, and then rolling it offshore probably won’t make many new friends there. So, maybe this won’t come to play, but, the moths can’t seem to help themselves as they are drawn to the flame.

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Contributed by Guy de Lastin

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