Home > Blog > Pharmaceutical Companies Look To Capitalize On The Vitamin Market

For those of you who have turned to vitamins and supplements in an attempt to move away from prescription drugs, the drug companies are on to you.  More and more pharmaceutical companies are broadening their horizons and vying for a piece of the vitamin world.

Recent proof of this comes as Schiff Nutrition International, a vitamin and over the counter drug maker based in the U.S., became the subject of a massive bidding war between Bayer and Reckitt Benckiser.  Bayer lost, but it already produces the massively successful One A Day line.  If they haven’t already, almost all the major drug companies are following suit.

What’s behind this trend?  Consider that in 2011, the global worth of the vitamin market was $84 billion.  It is the fastest growing subset of the worldwide consumer health market.  There is nothing to get the drug companies going like billions of dollar signs.

The fact that the vitamin industry is booming is no surprise.  In developing countries, more people are using vitamins to try to counteract nutritional deficiencies.  In economically advanced countries, as prescription prices sky-rocket, more and more people are turning to these supplements.  Many people have also watched the actions of the drug companies and feel less and less inclined to contribute to such a self-serving industry’s profits.  What they may not realize is that the major pharmaceutical companies might not appear to be behind their favorite neighborhood vitamin store, but they are.  Using small operations is just another marketing tool that the drug companies exploit.

Big Pharma sees hopes to capitalize on this growth further.  In a note, Bernstein Research states “Pharma companies are much more interested in consumer health than they were 5-10 years ago.  The stable growth and cash flow generated from their consumer health businesses contrasts to the instability and patent risks of their core pharmaceutical businesses.”

The vitamin industry is also nowhere near as cohesive as it could be, providing an opportunity for the drug companies to bring structure and consolidation to a fragmented market.

But are there indications that entry into the vitamin market might not be as rosy as Big Pharma hopes?  Of course.  The vitamin market is notoriously unstable.  While the U.S. has seen big growth in the last five years, there are constantly new studies being published questioning the efficacy and usefulness of these supplements which can sway public opinion against the industry.  And while the U.S. has been in a growth phase, the U.K. has been only stable.

In addition, hopes to expand to Eastern markets might not be as easily fulfilled either.  Markets such as India and China have their own herbal treatments that they have relied on for centuries, and will likely be suspicious of Western alternative treatments.  Finally the regulatory atmosphere might not remain as favorable.  The European Union is already requiring claims regarding OTC drugs and supplements to have legitimate scientific backing.  As this sector grows, other countries are likely to soon follow.

And what does all this growth mean to the consumer?  Will the involvement of the drug companies mean that your favorite vitamins and supplements are more or less safe?  Experts think it could go either way.  On the one hand, they might be more particular about having quality products that live up to their promises because on the large scale, they have more to lose.  On the other hand, they might insist on cheaper ingredients and be more inclined to get them, therefore leading to an inferior product.

Don’t forget that because of The Dietary Supplement and Health Education Act of 1994, vitamins and supplements are exempt from having to be approved by the FDA.  Although the FDA has adopted “good manufacturing practices” to help ensure quality and safety, it is hardly the same bar as FDA approval.  Do not assume that these products can not be harmful, because they most certainly can be, regardless of who is manufacturing them.

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