Market Entry and Regulation - Vitafoods Asia · Market Entry and Regulation, Vitafoods™ Asia 2018, Singapore We are a healthcare activation leader in providing strategic solution

Market Entry and Regulation

Regulatory overview: Latest regulation landscape and

market trends in South Korean Health Functional Food

(HFF) and Processing Food

Speaker:

Sun-Ho Frank Kim, President, SEAH Bio Solution (South Korea)

Regulatory overview: The latest regulation landscape and market trends in South Korean Health Functional Food (HFF) and Processing Food

SEAH bio solution™

11th September 2018

Dr. Sun-Ho Frank Kim (Ph.D.), President

Market Entry and Regulation, Vitafoods™ Asia 2018, Singapore

We are a healthcare activation leader in providing strategic solution

for the Rx/ OTC, health supplements, processing foods, cosmetics

and medical networking business with extensive market knowledge.

Who we are?


Regulatory Consulting Services

Pharmaceutical compliances and Quasi drugs

Health supplements (HFF/Korea, NDI/US FDA, FFC/Japan)

Processing foods (Korean Codex) and additives

Cosmetics

Clinical & non-clinical research service

Strategic Business Consulting

Regulatory Documents Translation/ e-Newsletter monthly

Distribution of health supplement and processing foods

Business model


Key Accounts



SEAH bio solution™ 食品の機能性評價事業結果報告書. 日本消費者廳 (平成 24年)

The World Regulations –Health Claims on Food Label

CountryNutrientfunction

claim

Biologicallyactive function

claim

Disease riskreducing claim

Authority Assessment stage

Codex Ο Ο Ο

USA Ο (Dietary Supplement) Ο FDA Ingredient

EU Ο Ο Ο EFSA Ingredient

KoreaΟ

(Health Functional Food; 健康機能食品)MFDS

Ingredient, followed by finished formulation

China Ο (Health Food) X SFDA Finished formulation

Australia X X Ο FSANZ Ingredient

New Zealand

X X Ο FSANZ Ingredient

Canada Ο Ο Ο HC Finished formulation

Japan

Ο(Food with

nutrient function claims)

Ο(Food for specified health uses/Food

with function claims)

Ο(Food for

specified health uses)

Consumer Affairs Agency

Ingredient (Food with nutrient function claim)/Finished formulation (Food for specified health uses/Food with function claims)

한국의 인허가

▪ The Health Functional Food Act was enacted in August 2002 to ensure

the safety of health functional foods with certain health claims for

consumer information. Product intended for use to enhance and

preserve the human health with one or more functional ingredients or

constituents was defined as the "Health Functional Food (HFF)".

▪ Certain products in the form of tablets, capsules, powders, granules,

pastes, gels, jellies, bars were covered by the Act, and the scope was

extended to include all types of formulations by the revised act in

2008.


What is Health Functional Food (HFF)?

Source: Ministry of Food and Drug Safety (2015)

Substances intended for use in the diagnosis, cure, mitigation, treatment, or prevention of

Disease.

A processing food used with intention enhance and preserve human health by Physiologically functional ingredients and/or components in forms of tablet, capsule, powder..

All edibles intended for human consumption excluding medicinal use

Food and beveragesfor sales


Definition of HFF

Pharmaceutical HFF Food



History of the HFFA (Health Functional Food Act)

• Enactment of HFFA (2002)

• Enforcement of HFFA and HFF Code (2004)

• Establishment of Standard on GMP (2004)

• Introduction of framework for scientific evaluation on HFF (2004~2007)

• Renewal of HFF Code (2008)

• Introduction of traceability system for HFF (2008)

• Development of framework for scientific evaluation on HFF (2008~2011)

• A comprehensive regulatory framework for Health Functional claim

• Re-evaluation of health claim of the functional ingredients and HFF

Introduction (2002~2007) Development (2008~2011) Improvement (2012~)


The regulation framework keeps improve development


Classification -HFF

Classification Definition Available labeling (example)

Nutrientfunction claim

Relates to any physiological role of the nutrients in growth, development and normal functions of the human body.

"Physiological effect of nutrients onhuman body“(Scientific evidence)

Biologicallyactive functionclaim

Relates to any positive contribution tohealth to the improvement of afunction, or to modifying or preservinghealth in the context of the total diet.

"May improve / increase /decrease...“ (Convincing)

Reduction ofdisease risk

Relates to the reduced risk ofdeveloping a disease or health-relatedconditions in the context of the totaldiet.

"Can help to reduce the risk of dentalcarries“

Source: Notice No. 2016-141 Ministry of Food and Drug Safety (2018)

This claim categorization system is compatible with the guidelines established by the

Codex Alimentarius Commission (2004)

Listed HFF• Authority provides the monographs

standards and specifications formanufacturing, usage andmaintenance of health functional food[Article 14(1)].

• 95 ingredients included in HFF code,covering nutritional supplements (28types) and functional supplements (67types).

☞ Pre-Market Notification


Classification –HFF

Product Specific HFF• Authority has ownership in the

authorization of the individualintellectual property.

• Require evidences that the newfunctional ingredient is safe and effectivebefore marketing with establishment ofthe standards and specifications.

☞ Pre-Market Approval Registration

European Food Safety Authority (2018)

Ministry of Food and Drug Safety (2018)

International standards and protecting public health trend

lead the Health/Functional Food Act as “alive”.

한국의 기능성


New Product Specific HFF ApplicationManufacturing part

• Manufacturing method

• Characteristics

: description, property of matter, etc.

• Identification

: content(s) of active component(s), structure, production yield, MoA, etc.

• Standards and specifications of hazardous substance

: residual solvent, heavy metals, microorganisms, antibiotics, etc.

Safety part

• Safety

: toxicology studies conducted at GLP compliance lab.

Summary part

• Overall Summary

• Development, reason for the development, usage and legality in other countries

• Storage and shelf life

• Evidences that the product is not a pharmaceutical drug

Efficacy part

• Efficacy

: non-clinical (in vitro & vivo, mode of action) and clinical studies for human

• Proper daily intake amount and direction for intake


Review for Evaluation

(Standard/Specification/Safety/Efficacy..)

Approval of HFF Ingredient

Code of HFFs

120 working days

Finished product containing the approved HFF ingredient

Overview in approval process of Product Specific HFF

SEAH bio solution™ Source: Ministry of Food and Drug Safety (2015)


Label of HFF -example

(health claim) “Vitamin-E may protect cell from the

oxidative radical”

Source: SEAH bio solution


Market Overview and Trend of

Health Functional Food (HFF) in Korea


Korean Pharmaceutical & Health Functional Food Market

Korea National Statistical Office (2018)

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2008 2009 2010 2011 2015 2017

($Mil.)

Rx

OTC

HFF

CAGR (2008-2017)

= 11.7%

CAGR (2008-2017)

= -14%

CAGR (2008-2017)

= 24.1%

The Market Size and Growth –Production ($ Mil.)

SEAH bio solution™ Ministry of Food and Drug Safety (Aug. 2017)

Red Ginseng, 493.0

Product Specific HFF, 195.0

Vitamin & Minerals, 67.0

Probiotics, 53.0

Aloe, 45.0

Garcinia Cambogia,

41.0

Omega-…Ginseng, 39.0

Milk Thistle, 26.0

GLA, 16.0

etc, 122.0

The Market Size and Growth –Import ($ Mil.)


Vitamin &

Minerals, 137.5

Omega-3, 49.1

Product Specific

HFF, 17.8

Protein, 16.9

Probiotics,

15.7

Aloe,

12

GLA, 8.1

Dietary

fibre, 7.1

CLA,

6.1

Garcinia

cambogia, 6

etc, 46

The Market Size and Growth –Product Specific HFF


0.0

10.0

20.0

30.0

40.0

50.0

60.02011

2012

2013

2015

2016

Perc

enta

ge (%

)

Leading top 4 Product Specific HFF


Cynanchum wilfordii extract (PMS) Oriental raisin extract (Liver health)

Dong quai extract (Immunity)

Astragalus extract (Growth Stimulation)

http://www.google.co.kr/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRxqFQoTCP60ver34ccCFYihlAodSk0G3Q&url=http://www.junggi.co.kr/article/articleView.html?no%3D8469&bvm=bv.102022582,d.dGo&psig=AFQjCNGamPxgunHIfHraeOpnKxWupYilsw&ust=1441612667667670

http://www.google.co.kr/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRxqFQoTCMH9vv_34ccCFYmblAodfngLmw&url=http://www.jhnews.co.kr/news/articleView.html?idxno%3D270766&bvm=bv.102022582,d.dGo&psig=AFQjCNFHaDvdTrVLQY7SOr2YmT6I5Dv4RQ&ust=1441612704102920

The Market Size and Growth –Health Claim


Immunity Enhancement

25%

Blood Circulation22%

Anti-oxidant20%

etc.8%

Nutrition Supplement

6%

GI tract5%

Body Fat Reduction

4%

Hepatoprotection3% Skin Health

3%PMS2%

Sports Nutrtion2%

Health claim approval trend of Product Specific HFF


2004~2006

• Hypertension and

Hyperglycaemia

• Tooth health

• Cognitive

• Body fat

• Bone health

• Immunity

• Skin health

• Anti-oxidant

• Gut health

• Prostate health

• Liver function

2007~2009

• Prostate health

• Eye care

• Sports nutrition

• Calcium absorption

• Anti-fatigue

2010~

Premenstrual and postme

nopausal syndrome

Men’s health

Sperm activity

Vagina health

Height growth for kids

Bladder function

Hyper sensitive skin

Gut health

Chronic disorder Specific function


Marketing Strategy of

Health Functional Food (HFF) in Korea

Asian and Latin

American Origin↑

• Ayurveda (India)

• Jamu (Indonesia)

• Latin American

Chronic →

Specific↑

• Metabolic disorder

• Cardiovascular

• Skin Beauty

• Hair

• Sexual Function

• Brain

• Eye care

Natural ↑

Chemical ↓

• Solvent Extract

• Synthetic

• GMO

• Supercritical

• Cold Press

• Enzymatic

• Organic

Food ↑

Pharmaceutical ↓

• Active

Pharmaceutical

Ingredients

• Local Specific

• Long historical

Food consumption

• High recognition

Geographic Efficacy Production Regulatory

Global Trends in Supplement Industry 1/2

SEAH bio solution™ Internal Report, SEAH bio solution (2017)

FI

FoodIngredients

SI

SupplementIngredients

FI SI

Past

Present

API

PharmaceuticalIngredients

API

Overlapping

Global Trends in Supplement Industry 2/2

SEAH bio solution™ Internal Report, SEAH bio solution (2017)

Ministry of Food and Drug Safety (Aug. 2017)

Convergence

Be Proprietary

Rx, OTC and Supplement Industry by value in Korea (2017)

Proprietary?

Commodities vs. Proprietaries –How to produce


Ingredient Commodity Proprietary Differentiation

Glucosamine Crustacean Fermentation No impurities/ vegetarian source

N-Acetyl-Glucosamine

Crustacean Fermentation No impurities/ vegetarian source

PUFA Fisheries Fermentation No impurities/ vegetarian source

Theanine Natural extraction Fermentation Vegetarian source

L-Citrulline Natural extraction Fermentation Vegetarian source

Sea Weed* Simple Extract Fermentation Standardized/ Multi functions

Ginseng White ginseng Red ginsengNo adverse effect/ more active components/ multiple claims

CoQ10/ Curcumin/ Phytosterol

Hydrophobic HydrophilicEase of formulation/ solubility enhancement makes high bioavailability

Internal Report, SEAH bio solution (2017)

Commodities vs. Proprietaries –Origin and others


Ingredient Commodity Proprietary Differentiation

PUFA Fisheries krillStability/ other active components shows better efficacies

AscorbicAcid

Synthetic Natural extraction Natural source

Fenugreek

Simple extract

Std. with 4-hydroxyisoleucine

Blood sugar regulation

Olive fruitStd. with Hydroxytyrosol

Heart health

Citrus fruitStd. with Rutinoside

Multi functions

Chitosan Chitosan polymerChitosan oligosaccharide

Multiple claims through highbioavailability and metabolism

Pollen* Bee Pollen Flower PollenStability/ Standardized/ Multi functions


Case study

Growth & Impediment factors of HFF


Increasing the scopes of health claim and the numbers

Increasing consumer’s awareness in prevention for health

Business opportunities emerging for the Korean Traditional botanicals

CAGR 24.1%

“Pre-market approval”

Limited Distribution Channel

Need deep global business insight and approach



Key Successful Factors of HFF

Cost of daily intake in comparison with the same health claim (e.g. $0.0x/d.)Feasibility

Unique botanicals from Clean land (e.g. Ayurveda(India), Jamu (Indonesia), Unani(Middle East), Sen (Thailand), Rongoa (Oceania))

Sourcing

Reactivation

(e.g. Glucosamine, Noni, Probiotics..)Re-Entry

Regulatory Support /Distribution /Scientific support /Language barrier..Partnering


Key Value Elements of HFF

SEAH bio solution™ Source: SEAH bio solution

CELERS model (Kim, AECES & CELERS model. 2005)

Recognition

Efficacy

Efficacy

AECES model (Marchut et al, Power of AECES. 2005)


Paradigm Shift in Regulatory Policy

한국의 인허가

Administration• Authorization by

listing in monographby Authorities

• Open for anyone to use

• Less burden onmanufacturer

USA DSHEA (1994) NLEA (1990)

Japan VM (2001)Food with Function claims (2015)

FOSHU (1991)

Korea Listed HFF (2004)Substantiation in food labeling (2019)/ Act on the Functional Food Promotion (2020)

Product Specific HFF (2004)

China VM (2016) Health Food (1995)

EU ? EFSA (2007)

Notification• Inform authorities

of market launch toallow monitoring

• Requires applicants toprovide technicaldossier

Registration• Pre-market approval

• Requires applicants toprovide technicaldossier in high level

• Protect Intellectualproperties

*Breaking News: New Korean Regulation for Foods & Supplements (March 2018)



Regulatory Framework changes in Korea –Health Claim Labelling

*FOOD INDUSTRY PROMOTION ACT (ACT No. 14302, 02. 12, 2016)

**Act on Labelling & Advertising of Food etc. (ACT No. 15483 13. 03. 2018)

***Congress Announcement: Briefing by Minister of MAFRA (2017)

Act on the Functional Food Promotion*

(enforce 2020~)

Notification

Act on Labelling & Advertising of Food etc.**

(enforce 2019~)

Substantiation

Food Sanitation Act (1962~)

No definition in claim

Health Functional Food Act (2004~)

Pre-Market Approval & Notification

Live Stock SanitaryAct (1962~)

No Definition in claim

or


Korea still is on..



SEAH bio solutionB618, 167, Songpa, Seoul, Korea

[email protected]

mailto:[email protected]

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