MVS Solutions - The Technology Realization Company

Interview - Nutrition Business Journal (NBJ) and Dr. Louis M. Scarmoutzos

Annual Overview Issue: Science and Nutrition


NBJ: Describe your consultancy and your clients (In other words, tell us about your company and the type of work you do (studies, products, basic research, clinicals, new formulas, claims support, etc.)

We are what I would call generalists - we provide scientific, technical and business assistance to suppliers, manufacturers and marketers. We have a strong and formal background in the physical sciences- which allows us to cut across the interdisciplinary matters that confront most of our clients. Our clients include other consultants- those firms that are weak in the scientific and technical arena- as well as product manufacturers, suppliers and marketers. Most of our work has been in the areas of product development, intellectual property and research studies. But I want to emphasize that we do not conduct any work in the area of clinical studies- we've made a conscientious decision not to work in this area, for reasons that will become apparent further along in our discussion.

NBJ: In your view, what are the most noteworthy clinical trials that have been released in the last 1-2 years, and what effect might they have/are they having on the market?

I'd like to highlight two studies. One is actually the group of studies on Vitamins E and C, which have generated mixed conclusions. The other study relates to the existence of the placebo effect, an effect that just about everyone has accepted to be fact.

A study that I believe will have a long-lasting effect on future studies is the relatively recent study reported in the New England Journal of Medicine (May 2001). The results of this study strongly suggest that there is no placebo effect. If this is borne out by future studies, then this raises a host of issues, including questions concerning studies and comparisons made against a placebo as well as if you do observe an effect and the effect is similar to placebo in magnitude, what does that mean? Does that mean you have a positive result when compared to having no effect at all?

Separately, the mixed results reported from the Vitamin C and E studies have been particularly noteworthy. These research studies underscore the difficulty in interpreting clinical and related studies as well as the difficulty in conducting and developing well-designed studies.

I also believe that these mixed results are providing an "education" to the non-scientists amongst us. Science doesn't always present immediate answers nor does it always allow you to draw immediate conclusions.

I'll come back to this again later on in our interview.

NBJ: Historically (let's say in the last 10-20 years) what have been the most important landmark studies that have had notable impact on industry usage? (e.g., heart and vitamin E). Were they privately funded or funded by government?

I would have to say the studies of antioxidants (including Vitamin E and Vitamin C) and their effect on cardiovascular disease and their effect on cancer. But it has been a bumpy ride.

I believe government or non-profit agencies have funded most of these studies.

NBJ: Who should be conducting the groundbreaking clinicals of the future? Government? Universities? Pharmaceutical corporations? Dietary supplement manufacturers, ingredient companies?

This is not a simple question.

It depends- and I will elaborate on this a bit more.

But first of all- I think anyone who has the money and resources to do so, and wants to do so- should go ahead and sponsor whatever clinical trials they like.

Now, with that said- I think you have to ask yourself why would a dietary supplement company sponsor a major study costing them several hundred thousand dollars- what is in it for them? Prestige? Will they have a monopoly on the dietary supplement upon completion of their study? What will prevent others from using the same research studies to support their dietary supplement claims?

The situation is much different for pharmaceutical companies who are sponsoring a clinical trial on a synthetic drug or related material. Here they will have a strong patent position- they will have a composition of matter patent. So, no matter what and who formulates their drug or active ingredient with- the parent pharmaceutical company will still have a monopoly position on the product.

Analogously, the agbiotech companies who are genetically engineering agricultural products enriched with dietary supplements will have a strong intellectual property (patent) position.

So, in these cases- there is a powerful financial incentive operating here.

You can't say the same for dietary supplements. Now, before everyone starts jumping up and down shouting that you can patent dietary supplements- their formulations, applications and manufacturing processes- let me say that yes this is true, but they are, by far, considerably weaker than a composition of matter patent- you are on a totally different playing field here.

Most of the patents I've seen coming from the dietary supplement industry are "relatively weak" patents. They are relatively easy to work around or they would not withstand a strong challenge from a company with sufficient resources or a desire to do so.

So, for most if not all dietary supplement manufacturers, suppliers, and ingredient companies- the time and costs associated with a major clinical study, coupled to the fact that they will not be left with a strong patent (monopoly) position, even if the outcome is positive - precludes them from sponsoring a groundbreaking clinical trial.

I think that, in reality, and in this country- dietary supplement clinicals will be coming from government and non-profits that can afford to take on these tasks for the public good. There just is no incentive for private industry to do so.

Of course all this could change with legislative changes- Congress could enact new law(s).

NBJ: If I'm a medium or small company, what's the minimum cost to do a research study that will be of some use to me? What should a company seek to achieve in the "least-cost" scenario?

I'm assuming you mean clinical studies.

Work through this with me:

It takes about $2,000- $7,000 per patient for a drug company to run a clinical trial- depending on the nature of the disease or condition and the drug. Dietary supplements will be on the very, very low end of this scale. Let's say it costs about $1,000 per patient to conduct a worthwhile clinical trial on a dietary supplement.

Clinical trials are statistical studies. Let me say that again- because many people have forgotten this. Clinical studies are statistical studies, which only have real significance when conducted in large numbers. Otherwise, the results are difficult to interpret- they often just contribute to the noise.

The most convincing studies are those conducted with several hundred people: 300 to 400 patients (N=300 or N=400) - the more the better, assuming a properly designed and unbiased experimental protocol.

Now, do the math. For N=300 or N=400 that means a $300,000 to $400,000 study.

I don't know if many small or medium companies can or want to take on the risk of conducting such a study- whose outcome is uncertain. In addition, a positive outcome would not provide them with a monopoly position.

I think clinical trials with N=10, 20 or 30, etc. are difficult to interpret and are, for the most part, just contributing to lots of baseline noise. Other than prestige- I don't see a lot of gain here.

As a matter of fact, one practice I see that is gaining in popularity is the conducting of clinical studies with small numbers of patients (N= 10-30) which are "specifically designed" with a desired outcome in mind.

These sorts of studies don't add to our knowledge base- they are marketing studies. Their science is pretty much transparent- and are easily discerned as such (and readily dismissed) by other scientists and those skilled in this area of technology.

This bias in experimental design is no different than the bias you see with, for example, the clinical trials conducted comparing St. John's wort with a strong anti-depressant.

In both cases, you've designed or engineered your study with a particular outcome already in mind.

Again, this biasing as well as these sorts of studies (N= 10-20) don't contribute to our knowledge base or our understanding- they are just generating a lot of noise.

NBJ: The industry is criticized for being short on science. Do you agree? Do you see this changing? If so, where are the changes happening?

Yes, I agree- it has been short on science. But this is changing- and in a positive way.

I see more and more of the larger companies hiring experienced, technical people from the food and pharmaceutical and related industries.

Most of this science activity has been in the quality (QA/QC) and analytical areas- areas in which this industry has been strongly criticized as lacking. I think this will translate into some very positive effects in quality as well as for the industry as a whole over the next several years.

I also think there is a great deal more educating that needs to be done. Particularly regarding science and technology and their contribution to the company's long-term growth.

I don't see much of a coherent research program anywhere- the building of product pipelines and technical portfolios with short, medium and long term products/projects and goals.

NBJ: Can you give us any examples of research findings that have translated into sales or market advantage?

I believe sales of antioxidants have increased due to research findings. By antioxidants I mean not only the water soluble and insoluble vitamins (for example, Vitamins C and E), but also the xanthene class of antioxidants such as astaxanthin, lutein and related carotenoids; and, the phenolics and polyphenolics.

Also, studies regarding calcium and folic acid have generated increased demand and sales.

NBJ: To the best of your knowledge, are large pharmaceutical corporations engaged in significant supplement trials/clinicals? Any comments regarding their role or responsibility as researchers into the science of supplements?

Not to my knowledge.

Several years ago, there was a strong interest in Coenzyme Q-10. The in vivo synthesis of Coenzyme Q-10 in your body lies along the same metabolic pathway in which the statin drugs inhibit (i.e. shut off). So, those folks on statin drugs may have lower natural levels of Coenzyme Q-10 in their bodies. However, I have not seen much activity or studies in this area in recent years, namely in the private sector here in the United States.

Separately, some of the larger Japanese companies have done a good deal of work with Coenzyme Q-10.

I think the large pharmaceutical companies will do whatever is profitable for them to do. By profitable I mean from a monetary perspective as well as from a public opinion perspective (public relations) and a marketing perspective. They are businesses with profit motives and shareholders to answer to.

NBJ: It is said that supplement companies generally don't allocate a percentage of revenues to research - do you find this to be true? Who are some of the notable exceptions in our industry?

Well, if supplement companies are spending on research at all, then they are allocating some percentage of their sales to research. I think the key issue here is the amount of revenues allocated to research.

Historically, pharmaceutical companies have funded anywhere from 10%- 20% of sales to R&D (Research & Development). It can be argued just what R&D means, but I don't want to get into that right now.

But I think you would be hard-pressed to find any supplement company that is funding research on the order of 10-20% of sales, historically as well as in these economically difficult times.

Not surprisingly then, there is a great deal more research studies supporting pharmaceutical products and their claims.

I know that I am painting somewhat of a simplistic picture here- largely due to issues of intellectual property- but nonetheless there is a large gap between what the pharmaceutical companies spend and what the supplement companies spend in terms of percent sales reinvested in their R&D programs.

NBJ: Can companies cooperate on joint research? Can industry associations spearhead efforts to collectively fund research?

Yes, it has worked successfully in several other industries. There are already several existing "models" for these sorts of joint efforts- notably from the microelectronics and pharmaceutical industries.

NBJ: We hear consumers are confused by the number of supplement products available and by the onslaught of claims being made (or implied). How do we ensure that new science (which may be very valid) doesn't simply add to this "white noise" and further confuse the consumer. How can the consumer be expected to differentiate between marketing claim based on a weak study versus one based on a sound and meaningful study? (I'm not a scientist and get tripped up by this all the time!!)

We are all confused- or more correctly we are all confused about the mixed claims and test studies. This confusion is just a natural outcrop of the perils associated with research studies and our desire to draw immediate conclusions and gain immediate satisfaction.

You have to look at the sum total of the evidence regarding the studies on some particular supplement. Over the course of time, the signal to noise ratio (S/N ratio) will be large enough to generate lasting conclusions regarding the claims and their supporting studies.

Lasting scientific conclusions are based on generating a growing consensus formulated over years, often decades, of research studies.

To draw a sports analogy, we don't judge a championship team by how they've played in one or two games- but how they've done all season. Looking at the results of one or two games would be very misleading.

Separately, and as I mentioned earlier, the growing trend of conducting small and biased clinical studies will do more harm than good in the long term, particularly concerning industry credibility.

NBJ: Where does the media fit into the picture? In many respects they've done what they do best by building up certain supplements only to knock them down. How can the industry do better at managing the media? Is the media even remotely managable?!

As I mentioned earlier, the media as a whole is relatively weak in their understanding of science and technology and they often have to rely on what others have to say. Because of this, they can be relatively easy to manipulate, particularly regarding scientific findings and conclusions.

I also think that the media often takes it upon itself to interpret research findings, often out of context and/or somewhat in a vacuum. More often than not, when you read the primary scientific literature - which is peer reviewed - the researcher has carefully chosen his or her wording and drawn his or her conclusions. In the primary scientific literature - you can read the conclusions and interpret the results differently.

What you read in the primary scientific literature and what you read in the newspapers and hear on TV are often a world apart. The media often "cuts and pastes" the news out of context and often adds sound bites.

Unfortunately, not all of us have sufficient skills to read and understand the primary scientific literature and are not able to make these judgments for ourselves.

I believe the industry has already started managing the media - by providing a second and even tertiary opinion. Several industry groups have been formed and I think we will start to see more complete viewpoints.

NBJ: What conditions are being targeted by research right now? What are the trends? (e.g., arthritis, anti-aging...)

The research trend is to target those conditions or diseases that are closely associated with an aging population and demography. The baby boomers are growing older.

Alot of research, both applied and basic, is targeted towards arthritis, anti-aging, sexual dysfunction, neurodegenerative conditions (e.g. Alzheimer's, Parkinson's, etc.), in other words just those conditions and maladies associated with older age.

Against this underlying trend there is always the "big two" targets: cardiovascular disease and cancer.

It's all just a matter of market size.

This is true in both the supplement and pharmaceutical industries.

NBJ: Does U.S. have the lead in particular areas of nutritional science?

No, not really.

NBJ: What's the most appropriate role for government to play in nutritional science? Directly funding studies, education, other?

All of the above. I think the government should continue if not increase its role in funding more studies in nutrition science as well as educating the public and disseminating information regarding nutrition science.

NBJ: Some theorize that, over time, consumers will get supplementation through functional food products at the expense of supplements-do you agree?

That's a tough thing to do- predict the future.

Most supplements taste horrible, they taste just awful actually. When you add them to foods- you have to mask their taste using flavoring agents or masking agents. There have been great strides in this area and I think it is just a matter of time before the consumer will have a number of choices in this area. So, I think there is the potential of gaining some market share here.

However, it may not be practical to supplement foods- for reasons of taste or consistency- to the extent and levels many consumers will want. So supplementation will continue to be a viable alternative.

Also, with food comes calories - and there are a lot of us watching our weight - so again, there will always be a role for supplements.

Separately, I think functional food products have been in existence for a long time already without much of a detriment to the supplement industry. Look at calcium supplementation in orange juice, or Vitamin D in milk, or already enriched foods- such as breads with vitamin B and folic acid, etc.

I think the greatest challenge facing the supplement industry is the biotech industry, notably genetically engineered foods with broadened and increased nutritional composition and value.

NBJ: What advice would you give to a manufacturer who has decided that they want to get into doing their own scientific research.

Think mid-to-long term. Be prepared for increased capital spending.

Just like the stock market and modern portfolio theory - minimize your research risks by crafting a portfolio of high risk and low risk research programs of long, medium and short-term duration.

And don't forget to take your R&D tax credits!

* * * * *

Dr. Louis M. Scarmoutzos, or "Dr. Lou" as his colleagues and friends fondly call him, is a Managing Partner and Founder of MVS Solutions Incorporated- a Research and Development (R&D) company and consulting firm that provides scientific, technical and business assistance to business, government, and nonprofits in the biotech, chemistry, life sciences, medical device and technology and related industries. Dr. Lou can be reached at lscarmoutzos@mvssolutions.com or at (617) 283-2182.

The Nutrition Business Journal (NBJ) covers the nutrition industry including supplements, herbal and vitamin sales reports, organic foods, functional foods, nutraceuticals, sports nutrition and natural personal care. Additional information concerning NBJ can be found on the Internet at www.nutritionbusiness.com



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