Alternative Medicine

1
Alternative Medicine
and
Nutraceuticals
Erwin H. Pete Peters, Ph.D. Vice President and
Managing Director 11960 Westline Industrial
Drive Suite 180 St. Louis, Missouri
63146 Telephone [phone] Fax [phone]
2
National Center for Complementary and
Alternative Medicine (NCCAM)
Grants, Grant Dollars and Budget
Source NIH NCCAM
3
Grant Titles and Principal Investigators, FY 1993
-1997
NCCAM
4
U.S. Healthcare Industry
( in billions)
Traditional Medicine
Chiropractic
Massage Therapy
Acupuncture Chinese Medicine
Homeopathy
Other Alternative / Complementary
U.S. Healthcare Industry, 1998 1,000 billion
Source Nutrition Business Journal, 1999
5
The U.S. Nutrition Industry in 1998
The Total U.S. Nutrition Market
Source Nutrition Business Journal, 1999
6
The global market for VMS products was estimated
by the Nutritional Business Journal in
conjunction with Euroconsult to be worth 43
billion at the retail level in 1998. Assuming
average growth of 12 in the USA, 7 in Europe,
and 9 elsewhere, the market will grow to 82
billion by 2005.
Global VMS Market
7
This market started in specialist stores and with
alternative medicine practitioners and they still
account for more than half of the market.
Recently it has branched out into mass
merchandisers, mail order and multi-level
marketing.
The U.S. Nutrition Industry in 1998
( Billions)
The Total U.S. Market
Source Nutrition Business Journal, 1999
8

• Drivers for future growth include
• VMS products become mainstream
• Big Pharma enters the market
• Big increase in consumer advertising
• Scientific justification for use is demonstrated
• Demographics favor prophylaxis
• Reimbursement becomes more common
• Some VMS products enter the Rx market
• Functional foods become commonplace
• Drug costs continue to rise
• Physician / health organization dissatisfaction
• Increased awareness / acceptance of the Internet

Strategic Considerations
9
A recent poll conducted by NPR and Kaiser found
that only 18 of adult men and women are
currently regular users of supplements. There is
an increased tendency to use supplements with
increasing age, although it is less pronounced
than that for Rx products. However, those less
than 65 years old have a significantly greater
belief in the usefulness of supplements than
those over 65, suggesting a rapid growth of use
in the next decade.
U.S. Nutritional Market
Source NPR / Kaiser Family Foundation / Kennedy
School of Government Survey of
Americans on Dietary Supplements, February 1999
10
U.S. Nutritional Market
11
U.S.A.
Retail Sales of Herbal Supplements
1997
1995
millions

millions

Echinacea
260
7.5
180
7.2
Ginseng
270
7.8
210
8.4
Gingko
240
6.9
160
6.4
The U.S. Market for Botanicals
Garlic
200
5.8
150
6.0
St. John's Wort
200
5.8
10
0.4
Goldenseal
160
4.6
60
2.4
Saw Palmetto
130
3.7
40
1.6
Other (50) single herbs
810
23.3
680
27.2
Combinations
1,200
34.6
1,010
40.4
TOTAL
3,470
100.0
2,500
100.0
Source
Nutrition Business Journal
, 1998
12
A significant feature of the rapidly growing
categories is that many of them are exclusively
or largely related to aging.
Growth of the U.S. Market For Botanicals
Source
SPINS,
June 1998
13
Herbs Thought to Be Effective
Herb
Indications
Activity
Black Cohosh
PMS painful menstruation
estrogen substitute and LH Suppressor
symptoms of menopause
Capsicum
shinglestrigeminal
depletes Substance P, a
neuralgiacluster headache
neurotransmitter involved in pain
muscle spasmarthritis
perception
Echinacea
colds flu UTIs wound
immunostimulant however lacks direct
healing.
antibiotic action
Feverfew
migraine
parthenolide normalises blood vessel
responsiveness serotonergic
Garlic
viral, fungal and parasitic
allicin is a potent antibiotic
infections cholesterol lowering
inhibition of clot formation
Ginger
anti-nauseant motion
may promote secretion of saliva?
sickness post-operative
These represent only some of the botanicals for
which there is substantial clinical evidence of
efficacy, but they are heavily represented in the
previous table of rapidly growing products. As
more European and North American botanicals are
studied clinically, it is anticipated that this
list will grow. In addition, the botanicals of
most of Asia have not yet been studied clinically
in the West.
Herbal Products With Substantial Clinical
Justification
nausea
Ginkgo
antihypertensive SDAT
enhances blood flow and increases
memory enhancer
oxygen utilisation during hypoxia
Kava
anxiety stress restlessness
muscle relaxant and anticonvulsant
sleep promoter
Milk Thistle
hepatoprotective
allimarin promotes excretion of toxins
and stimulates liver neogenesis
Psyllium
laxative cholesterol reducer
soluble carbohydrate fibers bulk stools
colorectal cancer prophylaxis
and lubricate
Saw Palmetto
BPH
antiandrogen and anti-inflammatory
St. John's Wort
depression anxiety
hypericin not definitively identified as
the active ingredient
Valerian
anxiety insomnia
mild tranquillizer
14
The corollary, however, is also true. As more
botanicals are subjected to rigorous scrutiny,
more will be found to have adverse effects,
placing their manufacturers at risk of lawsuits,
especially when there are deep pockets, like
those of Big Pharma, involved. As this category
grows, marketing companies will be forced to pay
more attention to the potential for adverse
events associated with botanicals.
Herbal Products With Substantial Problems
15
Grow old with me! The best is yet to be.
U.S. Demographics

Robert Browning
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U.S. Demographics
17
U.S. Demographics
18
U.S. Demographics
19
U.S. Demographics
20
U.S. Demographics
21
U.S. Demographics
22
U.S. Demographics
23
U.S. Demographics
24
Population Trends - U.S.
25
Median Age of the U.S. Population
Population Trends - U.S.
Years
Source U.S. Bureau of the Census
26

• In July of 1994 there were 32.2 million elderly
  (aged 65 ) 18.7 million 65 - 74, 11.0 million
  75 - 84, and 3.5 million 85
• From 1900 to 1994 this group grew 11 fold, was
  compared to 3 fold growth for those under 65.
  From 2010 to 2030 these rates will increase
  dramatically
• From 1960 to 1994, the oldest old (85) increased
  274, compared to 100 for the over 65 group.
  The oldest old will double to 7 million by 2020
  and could hit 27 million by 2050 under some
  scenarios
• The number of centenarians (100) has more than
  doubled since 1980 80 are women
• The elderly were more than 20 percent of the
  population in 400 US counties in 1991 more than
  30 in 11 counties, 6 of which were in Florida.
• In 1994, there were 3 elderly women for every 2
  elderly men. In the oldest group the ratio was 5
  to 2, primarily because higher death rates for
  males in these age groups
• During the period 1946 to 1964, 75 million babies
  were born. This was a 70 increase over the
  previous two decades. These are the Baby
  Boomers, who are now raising their families, the
  Baby Echo.
• The future elderly will be better educated than
  the current elderly. Bachelors degrees among the
  elderly will increase from 11 in 1990 to 24 in
  2030.
• The percentage of elderly who reported voting
  in presidential elections has steadily increased
  from 66 in 1964 to 70 in 1992. Those in the 65
  to 74 year old group voted 74 in 1992. This
  compares to 58 for the 25 to 44 age group.

Population Trends - U.S.
27

• Poor health is not as prevalent as assumed. In
  1992, 75 of non-institutionalized elderly
  considered their health good, very good, or
  excellent about 66 of the 75 and over said the
  same
• About 70 of those persons who died in 1991 were
  elderly
• Heart disease was, and still is, the leading
  cause of death in this group in 1991, followed by
  malignant neoplasms, cerebrovascular disease,
  pneumonia and influenza, and chronic obstructive
  pulmonary diseases, in that order. The first
  three accounted for 70 of the deaths.
• As medical technology provides more ways to save
  lives, we can expect to see the duration of
  chronic illness, and consequently the need for
  help to increase. Current daily assistance rates
  range from 2.4 of those less than 65 9.2 for
  those 65-69 11.0 for those 70-74 19.5 for
  those 75-79 31.2 for those 80-84 and 49.5 for
  those 85.
• Elderly white men are more likely to commit
  suicide than die in a motor vehicle accident and
  are much more likely to commit suicide than their
  contemporary females.
• Most elderly men are married and living with
  their spouse while most elderly women are not
  (71 vs. 41)

Health Trends
28
Daily Assistance - 1996
29
Daily Assistance - 2030
30
Daily Assistance - 2050
31
Elderly Political Power
32

• There will be more chronic disease patients
• Traditional medicine will be forced to shift its
  focus from acute to chronic care
• Elderly patients will be better educated and more
  participatory that the current elderly patients
• The future elderly will be more politically savvy
  that their current counterparts
• Significantly more elderly will require daily
  assistance.
• The improved economic status of the elderly
  coupled with their strong desire to live
  independently have contributed to an increasing
  proportion who opt for independent living. More
  elderly will utilize home healthcare services
• Increasing age leads to more persons with
  multiple impairments. Multiple impairments lead
  to institutionalisation. The large increases in
  the elderly population will significantly
  increase the need for institutions.
• An increased proportion of the health care dollar
  will go to the elderly
• The median age of the voter will rise to
  approximately 50 years in 2020 if todays trends
  continue, compared with 43 years in 1992. The
  elderly will have an increasingly
  disproportionate voice in political decisions.

Implications
33
Throughout the world, drug use is heavily
dependent on age. The chart below shows relative
drug use by age group in the U.S. In the U.S.,
the over 65 population accounts for 12 of the
population and almost 40 of drug use.
Polypharmacy
34

• While elderly adults currently are about 12 of
  the population, they account for almost 40 of
  the prescriptions filled. Todays elderly are
  estimated to take an average of 7 medications
  daily 3 are prescription and 4 are OTC.
• Multiple impairments lead to increased numbers of
  medications per patient. Increased numbers of
  medications taken per day result in more
  non-compliance.
• These medications cost over 3 billion annually,
  little of which is reimbursed by third-party
  payers.
• Current estimates suggest that more than 10 of
  geriatric hospital admissions are due to drug
  reactions most with prescription products, but
  20 with OTCs.
• Little is known about the effects of multiple
  medications on the human. There have been no
  controlled clinical trials with more than 3
  medications circulating at once.
• Adverse drug reaction increases exponentially
  with each new agent a patient takes. With five
  drugs the risk is estimated at 50 with eight it
  is 100.
• The large anticipated growth of the elderly
  population will send large numbers of patients to
  hospitals due to drug interactions and
  non-compliance.

Polypharmacy
35
Awareness
36

Pharma Industry DTC Spending Trends
Estimated
Source The Mattson Jack Group
37
Advertising has been expanded from print and
radio to include TV, which has caused the other
media to take notice, generating substantial free
publicity for the industry. The cost of entry
into the mass market, however, has increased
substantially and has put a premium on the
promotional skills of the marketing company.
Estimated 1998 U.S. Herbal Mass Market Advertising
Expenditure
Company (Brand)
Supplement Advertising in the U.S.
( million)
Sunsource (Chattem)
43
Bayer
35
Lichtwer Pharma
28
Celestial Seasonings
25
Pharmaton
25
Pharmanex
15
Warner-Lambert
15
American Home Products
12
Pharmavite (Natures Resource)
5
TOTAL
204
38
Connectivity
39
Internet Use
40
Nutrition Industry Sales Via Internet
Nutrition Industry 1998 Total Market 25.8
billion 1998 Total Mail Order Sales 1.06
billion
Estimated Supplements natural foods,
personal care Source Nutrition Business
Journal, 1999
41
Dissatisfaction
42
Health Maintenance Organization - U.S.
Source U.S. Bureau of Census Statistical
Abstract of U.S., 1997 1999
43
Top 50 Drugs Used by Seniors
Annual Percent Change in Price
Source PRIME Institute, University of
Minnesota for Families USA, Pub. 00-103, Apr 2000
44
VMS Drivers
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Growth Strategy Consultants to the Pharmaceutical
and Healthcare Industries

• Product Forecasting / Portfolio Analysis /
  Market Models
• Strategic Analysis and Planning
• Science and Technology Assessment
• Strategic Market Research / Best Practices
• Corporate Development Services
• Licensing / MA

The Mattson Jack Group
Offices in ? Saint Louis ?
Philadelphia ? New York ?
Phoenix ? London ? Tokyo
46
The End
47
Grant Titles and Principal Investigators, FY 1993
-1997
NCCAM
48
NCCAM
Grant Titles and Principal Investigators, FY 1993
-1997
NCCAM
49
NCCAM
Grant Titles and Principal Investigators, FY 1993
-1997
NCCAM
50
NCCAM
Grant Titles and Principal Investigators, FY 1993
-1997
NCCAM