Natural product industry partnering with drug companies

The natural products industry requires an innovator and disruptor. Industry should encourage collaboration with pharmaceutical companies to bring two major stakeholders in the health care space into a single platform.

Sudhir Ahluwalia

November 21, 2017

5 Min Read
Natural product industry partnering with drug companies

The earliest drug discoveries were of organic origin. But soon, the drug industry found it made business sense to shift focus and look for a more stable source. Natural products offered challenges of consistency and reliability of raw materials supply. Chemicals were a better alternative. Soon, these became the main source for all new and existing drugs. 

This shift took place in spite of the fact that the natural products based nutrition and medicine had a 5,000-year history. This does not mean, though, that the world’s interest in natural products has in any sense waned.

Dozens of scientists across the globe are working on natural products. High-impact scientific journals have numerous papers documenting experiments that present positive and negative effects of natural products on living organisms. Many trials have validated natural products based ancient remedies too. However, most scientific literature has rarely gone beyond animal trials. Cases of human trials that have conclusively demonstrated the efficacy of natural products are too few.

The hunt for natural products based next blockbuster drug continues to evade science. The pharmaceutical industry that has the financial and technical strength has so far not shown much inclination to invest into natural products based research.

The natural products industry is just too fragmented and small to fill the breach.  To try to get an industry perspective on the subject, I chatted with Paul Willis, CEO of Cypress Ingredients, a U.S. based ingredient supplier.

Cypress Ingredients emphasis is on manufacture of science-based dietary ingredients. High Selenium yeast is the main product of Cypress Ingredients. This company has an 18-year-old partnership with the Division of Cancer Prevention and the U.S. National Cancer Institute. The institute has conducted trials on the high selenium yeast products. These have shown that high Selenium yeast provides protection to the body against cancer.

Cypress Ingredients has built a robust marketing support infrastructure too. Two of the largest functional food industry ingredient suppliers—AIDP and Cornell Brothers—are distributing their products in North America and Asia. In spite of developing a science based ingredient product and a decent marketing arrangement, I would not put the company in the category of high-growth businesses. 

Functional foods and products based on natural products have been known to provide effective protection to the body. However, for effective production, these ingredients have to be consumed in sufficiently large quantities. These should also be bioavailable for them to be effective. Willis claims his high-selenium product is not just science based, but also bio- available in quantities that make them effective protection against cancer.

Still, mainstream modern society prefers a doctor over an alternative medicine physician. We pop a vitamin, an antacid, a pain killer all of chemical origin without thinking twice. And when it comes to natural products based medicine, FDA only permits their use as functional foods and supplements. But we are taught from our childhood to eat a lot of veggies with a lot of fiber.

Why is the natural products industry so fragmented and full of small companies? Why is big pharmaceutical and health care firms unwilling to commit resources into natural products-based drug research and development (R&D). To get insights and answers to these questions, I interacted with clinicians, natural medicine healers, doctors and industry.

These discussions revealed that there exists reluctance and intellectual disbelief on the other’s product. The conservative mindset of big pharma and the rich neighbor attitude to a poor cousin is not helping either. This is nothing surprising or unique to this industry. Behemoth multinationals are great executors and marketers of products and services.

Disruptive advancements and growth in health care have come from genomics, biotech and single molecule producing startups. Once a product has been shown to be promising, the startup becomes a target for acquisition. The cycle of innovation and consolidation thus goes on hand in hand.

Clearly the natural products industry requires an innovator and disruptor. To kick start this cycle, the industry probably needs big brother pharmaceutical industry encouragement and financial support. But is there interest in such collaboration?

I asked Willis if pharmaceuticals companies have shown interest in the natural ingredients industry in general and his company and his science based products. I was encouraged when he mentioned Bayer. Bayer attended some events organized by him. They were enthusiastic participants in scientific deliberations. 

This is probably an early sign of things to come. The pharmaceutical industry should be willing to collaborate. This trend needs to be encouraged and opportunity exploited. Multidisciplinary content providers like Informa can play an important role in bringing the two major stakeholders in the health care space—natural products and pharmaceutical industry providers on a single platform.

Industry associations like the American Herb Products Association (AHPA) and others industry bodies will have to play their part too. Discussions and exchange of ideas between the two will help build bridges and trust.

The world is waiting for the next big discovery in health care. It is highly probable that this will come from a natural product. Once that happens, the funding tap will be opened, innovators will jump in and regulators will work overtime to make regulation conform to this next disruption. I am bullish on the future. Each one of us needs to pitch in with our bit to make it happen.

Sudhir Ahluwalia is a business consultant. He has been management consulting head of Tata Consultancy Services, an IT outsourcing company in Asia, business advisor to multiple companies, columnist and author of upcoming book on herb, “Holy Herbs." He has been a member of the Indian Forest Service.

About the Author(s)

Sudhir Ahluwalia

Sudhir Ahluwalia ( is a business consultant. He has been management consulting head of Tata Consultancy Services, an IT outsourcing company in Asia, business advisor to multiple companies, columnist and author of the book "Holy Herbs."  Ahluwalia was also a member of the Indian Forest Service.


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