As the old saying goes, “some people eat to live;
others live to eat.” Now, with an increasing convergence of food and
medical science, some people will eat to maintain their health or
become healthy.
The
term “medical foods” refers to food that is developed to target an
array of diseases and health issues. Medical foods commonly treat
metabolic diseases, oncology, diabetes, Alzheimer’s, and
osteoarthritis. With an aging population, this market is expected to
grow significantly in following years. The industry reported
approximately $9 billion in sales in 2011, and is expected to grow at
an annual rate of 10%. In 2013, there was a total of 82 medical
foods on the U.S. market.
In this
market, as with every other industry, research and development is
critical for product success. The leading medical food manufacturers
have contingents of food scientists and engineers constantly developing
new products that treat an increasing number of diseases.
Industry start-ups are also developing innovations with the hope of
reaping the rewards of breakthrough product innovation. When companies
of any size engage in activity such as this, they may be eligible for
Research and Development tax credits that are intended to stimulate
innovation.
The Research & Development Tax Credit
Enacted
in 1981, the federal Research and Development (R&D) Tax Credit
allows a credit of up to 13% of eligible spending for new and improved
products and processes. Qualified research must meet the following four
criteria:
New or improved products, processes, or
software
Technological in nature
Elimination of Uncertainty
Process of Experimentation
Eligible costs include employee wages, cost of supplies, cost of
testing, contract research expenses, and costs associated with
developing a patent. On December 18, 2015, President Obama signed
the bill making the R&D Tax Credit permanent. Beginning in 2016,
the R&D credit can be used to offset Alternative Minimum tax and
startup businesses can utilize the credit against payroll taxes.
Medical Foods Definition
Medical
foods, by federal definition, are those which are intended for the
specific dietary management of a disease or condition. They are foods
that are specifically formulated and processed for sick patients.
Medical foods are often confused with dietary supplements. The
two are very different products.
Unlike
dietary supplements, medical foods are intended for people with chronic
diseases rather than for healthy people. They ought to be used under
medical supervision because they are intended to manage serious
illnesses, such as Alzheimer’s. Similarily to dietary supplements,
medical foods are composed of a combination of vitamins, minerals, and
botanicals. The difference is that medical foods are formulated
specifically to manage nutritional deficiencies that impact disease
progression. While many nutrients contained in medical foods are also
commonly taken as supplements, medical foods contain specific
formulations that are intended to improve risk factors associated with
a particular disease. These foods can be consumed orally or via a
feeding tube.
The
term medical food, as defined in Section 5(b) of the Federal Orphan
Drug Act (21 U.S.C. 360ee (b) (3)), is "a food which is formulated to
be consumed or administered enterally under the supervision of a
physician and which is intended for the specific dietary management of
a disease or condition for which distinctive nutritional requirements,
based on recognized scientific principles, are established by medical
evaluation."
In
order to be considered a medical food, the product must, at a minimum,
be:
For oral ingestion or tube feeding
(nasogastric tube)
A food labeled for the dietary
management of a specific medical disorder, disease, or condition for
which there are distinctive nutritional requirements
Intended to be used under medical
supervision.
Products
The
first commercially developed medical food debuted in the late 1960’s.
It is known as Lofenalac, an infant formula created by Mead Johnson to
treat the inborn error of metabolism phenylketonuria (PKU)2. Since the
introduction of Lofenalac, the use of medical foods has grown steadily
to include varying products for the treatment of illnesses and
disorders with a nutritional association. Chronic conditions
influencing the development of medical foods include diabetes,
cardiovascular disease, osteoporosis, inborn errors of metabolism,
mitochondrial disease, wound healing, pain management, gastrointestinal
disorders, and neurological and psychological disorders such as
Alzheimer’s and depression.
Some common medical foods are highlighted
below.
I. Axona: This prescription medical food is
intended for clinical dietary management of metabolic processes
associated with mild to moderate Alzheimer’s disease. Axona
targets brain cells to nutritionally support cognition (the way someone
thinks, reasons, solves problems, and makes memories). The brain is a
hungry machine that requires a lot of fuel to function effectively. The
engines inside brain cells (called neurons) normally use glucose (a
type of sugar) as the primary fuel source to power the brain’s
activities. Because the brain cannot store energy, it needs a constant
supply from the blood. Glucose primarily comes from carbohydrates. If
glucose levels drop too low, brain cells cannot function properly. This
can impact the way someone thinks, reasons, solves problems, and makes
memories.
Luckily, brain cells can use a back-up fuel source called ketone
bodies. When glucose levels are low (for example, when carbohydrate
intake is minimal), the liver naturally produces ketone bodies as an
alternative fuel source for the brain. Clinical studies indicate that
raised ketone body levels can enhance memory and cognition in some
people with mild to moderate Alzheimer’s.
Axona
is an innovative non-drug prescription therapy that works by supplying
the ketone bodies that a mild to moderate Alzheimer’s brain requires to
power its activities and function properly.
II. Nepro: This is a tasty nutritional drink
designed for people on dialysis. It helps restore protein and other
nutrients that are lost during dialysis treatment. Nepro is high
in protein and low in phosphorus, potassium, and sodium.
Nepro
has a Carb Steady carbohydrate blend designed to help manage blood
sugar responses. Because Nepro contains a unique carbohydrate blend
designed to help manage blood sugar levels, it is also appropriate for
people with diabetes and on dialysis.
III. Sentra PM: This Medical Food is designed
to meet the nutritional requirements that induce sleep, promote
restorative sleep, and reduce snoring in patients who have sleep
problems associated with depression. Sentra PM provides the
amino acids that are precursors to the neurotransmitters depleted in
humans. These neurotransmitters induce sleep, promote restorative
sleep, and reduce snoring.
Sentra
PM provides the nutrients required by the brain to induce and maintain
higher quality restorative sleep. This is used as part of a program to
manage sleep, mood, and symptoms associated with fibromyalgia. The
ingredients of Sentra PM are derived from nutrient-based compounds
found in the normal food chain.
Technological Challenges
The
creation and development of a medical food product is a surprisingly
complex process. Fortunately, the developmental process for a specific
medical food is not as rigorous or as tightly regulated as that of a
pharmaceutical agent. This is because of laws enacted in the late
1980’s that are aimed at stimulating innovation. However, numerous
factors unique to the enteral formulation of a new product come into
play during product development. This includes physical/chemical
compatibility, pH, stability, bioavailability, decay, and even
palatability. The consequences of tweaking ingredients even slightly
may impact any of these factors.
Additional considerations, such as strength of health benefit claims,
packaging, or presentation, also incorporate engineering
aspects. Moreover, food scientists must establish the
proper formulation and demonstrate the product’s added value through
clinical trials. Most of this activity involves research and
development, making efforts related to creating or improving medical
foods eligible for federal and state R&D tax credits.
Insurance Reimbursement
Obtaining insurance reimbursements for medical food is under much
consideration by many families and individuals that have health
disorders. The insurance policies have different coverage
criteria, and each state also has different laws covering provisions
for various medical foods.
One
study uncovered that 11% of families’ spending was on purchasing
medical foods. In that same study, 21% of families using medical foods
reported additional treatment-related expenses of $100 or more per
month for these products.
Nestle Enters the Medical Foods Market
Nestle
is planning on entering the medical foods market. The food products
manufacturing giant recently set a $500 million budget through 2021 to
undertake research efforts in medical foods. The company performed well
in functional foods and nutritional supplements categories. Perhaps
they also see the medical foods market as a potentially large area for
growth.
Conclusion
Medical
foods are increasingly being used to treat a wide array of diseases and
medical conditions. Development of these products is a scientific
process that requires significant engineering. When companies develop
products like these, they may be eligible for R&D tax credits
available to stimulate innovation.
