In this article, we will deal with the current landscape of Food for Special Medical Purposes in China, highlighting the size and characteristics of this market, the strategies adopted by multinationals and the policies that are making this possible.
FSMP in China
Special medical food refers to food specially formulated to meet the special nutrient needs of people with limited food intake, digestion and absorption disorders, metabolic disorders or specific disease states. In the past, this category was administrated by regulatory authorities as a pharmaceutical and because of the complexity inherent in pharmaceutical clinical trials, many companies did not consider this as a viable market.
The 2015 release of China’s New Food Safety Law saw FSMPs newly designated as foodstuffs. A further milestone was passed in 2016 with the implementation of “Administrative Measures for Registration of Foods for Special Medical Purpose”. The latest regulations on FSMP are “Requirements for Application Materials for Registration of Foods for Special Medical Purpose (Trial)” and “Stability Study Requirements for Foods for Special Medical Purpose (Trial)”.
Market Size and Growth
According to statistics from China Nutritional and Health Food Association, the total value of annual consumption of special medical foods in the world is estimated at 56 billion to 64 billion yuan, increasing at an annual rate of 6%. In the United States. 65% of patients with feeding problems use FSMP.
Growth expectations for this market are corroborated by Nielsen's statistical data, clearly showing the unstoppable surge of FSMP sales in recent years. The milk protein allergy market alone has a capacity of about 1.2 billion yuan, and it is expected to reach 2.2 billion yuan by 2021, with a compound annual growth rate of 20%.
However, as Gu Xinxin, president of Nestle Health Sciences Greater China stated in a recent interview, “FSMP has been developing abroad for more than 50 years and there are thousands of products, while there are only a few FSMP that have previously been used as medicines in China and only for a few years”.
FSMP Market Access Strategies
Many multinational corporation, including Danone, Abbott, Mead Johnson, and Beingmate are willing to enter this market but at the moment, only six FSMP products have been successfully registered. The list is destined to become longer as both Synutra and Beingmate have announced the submission registration applications. H&H Group also stated that it submitted a product registration dossier and application for a hydrolyzed protein powder to the relevant state authorities, while on April 22, Mead Johnson declared their intention to register Anmingen LGG, aimed at infants and young children with milk protein allergies.
However, some companies are adopting a different strategy. On April 24th 2018 Nestlé opened a Nestlé Health Science branch factory in Taizhou China Medical City, Jiangsu province. The first-phase investment in the project exceeds 1 billion yuan in an area of 13 hectares. Nestlé said that this plant is destined to become one of the most technologically advanced in the country. As it is Nestlé's first China FSMP factory it can be considered to be an important strategic precedent. At the factory's completion ceremony, Nestle Greater China Chairman and CEO Robert described it as a “milestone” in Nestlé’s health sciences, and expressed the ardent hope that the factory would bring about very rapid growth in performance.
The development of a "Healthy China" is central to the Chinese Government’s agenda for health and development and this is the reason for the medium to long term strategic plan in the health sector called Healthy China 2030. The plan is inspired by WHO 2030 Agenda for Sustainable Development and aims to ensure health equity by 2030. Besides healthy lifestyle and healthy cities, the plan also stresses promotion of medical science and technology.
Nutrition during hospitalization is a crucial problem that can impact the effectiveness of treatments, as the average liquid diet falls short of supplying all the nutrients needed by the body. Failure to supplement nutrition in time can cause malnutrition, leading to increased complications, prolonged hospital stay, and increased hospitalization costs. To prevent the risk of malnutrition, patients need to be provided with FSMPs in a timely manner and this is one of the purposes of the “Plan”, as stated in the National Nutrition Plan and confirmed by Gu Xinxin.
On April 26, National Health and Nutrition Committee held a special press conference to introduce the development of the “Internet + health care” and hospital Internet health care services. Jiao Yehui, deputy director of the Medical and Health Administration of NHFPC (Now called National Health Commission), admitted that there are plans for the opening up of hospital prescriptions and third party distribution for chronic patients.
According to industry insiders, FSMP will be available in almost all clinical departments such as oncology, endocrinology, surgery, ICU, etc. only by doctor's prescriptions but they will not count as medicines. As a consequence, more and more doctors, nutritionists and patients in the country are now beginning to realize the importance of the clinical application of FSMP.
Given these developments, the FSMP market is expected to expand and flourish, but the competition between companies will be fierce and the regulatory thresholds will be very high. We will follow any developments in this field and keep you updated.