Distribution Channels: Supplements

| 5 minutes

AdvaCare’s range of supplements are branded as AdvaLife Nutraceuticals. All supplements are made under this brand, with some products also having a product brand name specific to that product. The general rule is that more popular common products and formulations with many ingredients will have a product brand name, whereas less popular products with one or few ingredients will not have a brand name and instead only the name of the ingredient. For example:

That are one or a few ingredients, and condition-specific products, will have a brand name, whereas less popular ingredients will not have a brand name and instead the product name will only be the name of the ingredient(s). For example:

● Popular, common product with product brand name:

Calcium + Vitamin D3 tablets/gummies/effervescent: Adva-Cal

● Omega-3 softgels/gummies/syrup: Adva-Omega3, Adva-Omega3 MAX, Adva-Omega3 KIDS
● Condition-specific formulation with many ingredients:

Growth & Appetite Support Syrup: Adva-Growth KIDS

● Less common, niche product with 1 ingredient:

Apple Cider Vinegar tablets/capsules: Apple Cider Vinegar

Firstly, it is important to understand the classification of dietary supplements. These are considered food products, and not pharmaceuticals or any form of medicine that is intended to treat, cure or prevent diseases. Claims to do so are generally not allowed, but it depends on the country for the claims that can be made on the packaging of supplement products.

Secondly, supplements are retail oriented products, and require more brand awareness compared to medicines which are purchased to treat a specific illness. Supplements are more of a luxury, a healthcare product that is purchased by health conscious consumers that have disposable income or place importance on preventing illness and remaining healthy.

Types of Supplements

There are no specific types of supplements as all are considered food products. Manufacturers of dietary supplements do not require a pharmaceutical manufacturing license or GMP, but rather a food production license (only the US issues GMP for supplements), as well as quality certifications such as HACCP, NSF, ISO, etc. and some are also Halal. However, many countries will regulate the dosage/strength of some vitamins and minerals that could be considered pharmaceuticals in high dosages. In this case, the same vitamin, mineral or nutrient can be considered as OTC or a pharmaceutical depending on the dosage. For example:

● Vitamin D: high dosages might be required to register as a pharmaceutical in some countries, for reasons that high dosages might be used as a treatment for specific conditions or could be toxic if overused, and therefore are regulated.
● Folic Acid (vitamin B9): commonly used in higher doses during pregnancy, or to treat specific health conditions.
● Iron: Iron deficiencies and anemia are common enough to require higher than normal doses of iron, but this specific mineral has to be regulated as it can be toxic in high doses.
● Calcium: higher doses are commonly given to individuals, especially the elderly, with osteoporosis or hypocalcemia.
● Potassium: commonly given to individuals with severe deficiencies or specific medical conditions.
● Vitamin B12, B6, B Complex: in addition to being available as OTC, these common vitamins can also be considered a pharmaceutical in some developing countries.
Note: many vitamins, minerals and amino acids are available in injection form, in which case any product in injection form is classified as a pharmaceutical.

What is Product Registration?

Supplements are regulated, but much less so than pharmaceuticals and medical devices. Regulation takes the form of a supplement product requiring product registration with the local health authority, such as the FDA, MOH or other name of the official agency that regulates medicines and food products. The amount of regulation greatly depends on the country, whereas some countries are not regulated and others are more regulated. There is an important dynamic in this regulation, which we can generally divide between developed and developing countries:

● Developed countries:

Following the logic of pharmaceuticals, it would be easy to assume that developed countries would be far more regulated for supplements than developing countries. However, the opposite is often the case. In the US and Europe, supplements do not require product registration, while in most developing countries it is required. However, there are still requirements for labeling, ingredients and packaging.

● Developing countries:

Most developing countries will require product registration for supplements, even though these are considered food products. Sometimes the reason will be an attempt to protect the public from subpar supplement products, yet other times the health regulatory agency of the country might not have a framework for how to regulate supplements, and instead just require registration by applying some of the same procedures as for pharmaceuticals, although the process will usually be more simple and faster.

Advantages vs. Disadvantages

Before getting started with the details of our Distribution Channels, it is important to understand the competitive advantages and disadvantages of our supplement product range:

CHALLENGES OF DISTRIBUTORS
ADVANTAGES DISADVANTAGES
  • USA brand with competitive price points.
  • As supplements are a retail product, branding is important. AdvaCare has a well developed brand that distributors can use for marketing purposes.
  • Manufacturers cannot produce such a wide scope of dosage forms, usually 3-4 forms at most because each form requires a production line. AdvaCare has ~150 supplement products in 9 dosage forms.
  • CMOs (Contract Manufacturing Organizations) are not organized or have sufficient infrastructure to undertake the complexity of coordinating hundreds of data points: products, countries, certifications, etc. AdvaCare is well organized with substantial infrastructure.
  • CMOs lack in-house regulatory capability. Manufacturers of supplements often are not strong with documentation. However, AdvaCare has a dedicated Regulatory Affairs Dept.
  • AdvaCare can leverage the strengths in supplement manufacturing of both China and India. For example, India is stronger at producing syrups, whereas China is not due to not much demand in the domestic market.
  • Some distributors only want to work directly with manufacturers because they perceive prices to be more competitive. However, AdvaCare has a wide manufacturing network to leverage lower cost options.
  • Some distributors want to work directly with manufacturers because they perceive decreased risk with quality control as another party in between manufacturing and the distributor can create more barriers for reimbursement.
  • Manufacturers of supplements are usually not restricted by insufficient certifications to meet regulatory requirements, due to the fact that supplements do not require special certifications.
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