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Editorial: Global Market Opportunities - Finding the Sweet Spot

By Len Monheit

I’m sitting here in yet another airport departure lounge reflecting on the week just past. Certainly, one of the highlights was participating in a panel discussion on Global Market Opportunities in Vancouver as part of the Canadian Health Food Association’s Expo West a few days ago. It’s rather obvious that we find these market opportunities at that triple juncture point where favorable market forces intersect with appropriate levels of innovation or opportunism, all juxtaposed on a favorable regulatory environment. Specific regulatory environments do not always favor all organizations. For some opportunities, different regulatory environments are more favorable, either because the organization has technology, marketing savvy, plain dollars or other assets with which to take maximum advantage. In other cases, on the ground compliance services can make a market viable, while in still others, accessible distribution channels make all the difference.

These observations struck me as significant as I listened to US companies seek Canadian market opportunities, to Canadian companies bemoan the flawed execution of their own regulatory model for natural health products, to these same Canadian organizations seeking to leverage the claims environment in Canada and translate it into US market legitimacy, and to everyone watching global forces such as sustainability, Codex, sourcing challenges and the ‘claims game’, as they evaluate the EU, ASEAN or other markets around the world.

Over the course of this past weekend, one theme was pretty dominant – “be careful what you wish for”. In speaking with my US colleagues, I am quite familiar with the challenges to build legitimacy with the low barrier to entry provided by DSHEA in the current environment of minimal regulatory enforcement. Differentiating products with substantiation and the companies behind them from either outliers or knock-offs, is an extremely difficult process. Yet industry representatives, (and this certainly came out in panel), firmly support the DSHEA-based regulatory model. At the same time, the Canadian regulatory system involving a third class of products distinct from food and drugs (pretty much exactly what industry sought) , certainly has its challenges and is not the panacea it was intended to be. Currently too, in neither environment is quality adequately supported in regulatory process as I hear repeatedly of sub-standard ingredients appearing in finished products – on both sides of the border. In the absence of methods and other analytical tools, changing this behavior is a challenge, but there are signs that exasperation and frustration at manufacturer level is leading to new transparency of practice and experience. Despite the fact that companies on both sides of the border have ‘got what they wished for’ in regulatory terms, neither market is completely satisfied and in neither environment is quality of practice and product appropriately appreciated.

This dissatisfaction in recent months has escalated in Canada to serious criticism of Canada’s Natural Health Products Directorate for its flawed execution of the regulations. Boiling over, this has led to serious challenges to Canada’s largest industry trade association, CHFA (Canadian Health Food Association), at what is a perceived inability to adequately represent industry frustration and to drive change at Directorate level to reduce backlog, increase transparency and in short, achieve the partnership between regulator and industry that was the promise of the regulations when promulgated over four years ago. A little controversy can be a good thing, as can be the shaking of paradigms and complacency. If the dialogue this past week is any indication, Canadian industry might be more galvanized than ever before to present a united front to the regulators to force change in regulatory implementation.

Somewhere in the middle is probably the regulatory happy spot. In the meantime, while we're stuck with the infrastructure of our current regulatory environment, within it, much can change to create a better, more differentiating business climate. As was pointed out by in the global market opportunities seminar, in regions where regulatory schemes are currently being developed, such as ASEAN, regulators are scanning the globe for best practices – and best implementations. Presumably something from both Canada and the US is at least being evaluated. Presumably too, companies active in these markets will find that their compliance efforts in one region continue to make compliance elsewhere simpler.

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