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The Natural Products Industry: A Major Money Machine

The natural products industry: A major money machine - graphic of green leaves with water droplets

I find it interesting that people seem to love to hate on Big Pharma, but attitudes towards the natural products industry seem to be much more positive. I’m not trying to suggest that Big Pharma is wonderful, because they’re not; I just don’t think the dichotomy of Pharma being bad and the natural products industry being good is an accurate reflection of reality. Both industries are out to make money off of us, and corporations’ priorities are their shareholders, not their customers.

According to Grand View Research, “The global dietary supplements market size was valued at USD 151.9 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 8.9% from 2022 to 2030.” That’s a lot of money. Granted, it’s an order of magnitude smaller than the global pharmaceutical industry, which was valued at $1.27 trillion in 2020 by Statista, but it’s definitely not small potatoes.

Regulation

In both the US and Canada (and probably elsewhere, too), governments don’t regulate supplements the same way as pharmaceuticals. The US Food and Drug Administration website says that the FDA “is not authorized to approve dietary supplements for safety and effectiveness before they are marketed. In fact, in many cases, firms can lawfully introduce dietary supplements to the market without even notifying FDA.” Furthermore, “If the dietary supplement contains a NEW ingredient, manufacturers must notify FDA about that ingredient prior to marketing. However, the notification will only be reviewed by FDA (not approved) and only for safety, not effectiveness.”

The FDA also says, “Unlike drugs, supplements are not permitted to be marketed for the purpose of treating, diagnosing, preventing, or curing diseases.”

Pharmaceuticals, on the other hand, are subject to much stricter regulations, and both efficacy and safety must be demonstrated in order for them to make it to market. A given drug may not work for you, but it had to work for some people to make it to market. There’s no requirement for a supplement to demonstrate any effectiveness for anything in order to be sold. As a 2020 Washington Post column pointed out, “Most dietary supplements don’t do anything. Why do we spend $35 billion a year on them?”

Research & development

According to a 2021 report by the US Congressional Budget Office, on average, pharmaceutical companies spent almost 1/4 of their net revenue on research and development in 2019. The same report says that only 12% of drugs that enter clinical trials end up being approved by the Food and Drug Administration (FDA).

The natural products industry, on the other hand isn’t doing that kind of R&D. That means that for supplements, a greater proportion of the selling price is going to net profit.

The natural is better myth

The whole idea of natural = good for you is nonsense. Whether it’s blowfish with their deadly botulinum toxin, plants like poison hemlock or deadly nightshade, viruses like Ebola or rabies, or a whole host of bacteria, nature is very happy to kill you if it gets the chance.

Back in the day when everything was more “natural”, infant mortality was high, and the average lifespan was 30-something. Better sanitation helps to lower the infant mortality rate and extend the human lifespan, but you know what’s really made a difference? Vaccines, antibiotics, and all that other stuff that didn’t exist back in the day when people were dropping like flies.

So yes, there are things found in nature that are good for you and things made in labs that are bad for you, but simply knowing whether something is found in nature or made in a lab has no bearing on whether that particular substance will help or harm you.

The almighty dollar

Just because a company is selling a supplement rather than a drug doesn’t magically make them any less money-hungry or any more altruistic. None of this is to say that supplements are bad and pharmaceuticals are good; both have the potential to be bad or good, and what’s good for one person might be bad for another person. My point is that the companies that are making supplements don’t have their angel halos on. They’re just as focused on the almighty dollar as pharmaceutical companies are, and they’re making a whole heck of a lot of those dollars.

There’s nothing wrong with using supplements, and some do have research evidence to support their effectiveness for certain conditions (like L-methylfolate for depression). But don’t be deceived into thinking that “natural” automatically means good for or that the companies selling these products to you are focused on your best interests. They’re not; they’re focused on dollars, just like the pharmaceutical companies are. It’s up to us to be wise consumers.

Do you tend to view the pharmaceutical and natural product/supplement industries differently? Do you think it’s possible that one might be just as money-hungry as the other?

32 thoughts on “The Natural Products Industry: A Major Money Machine”

  1. They’re both capitalistic enterprises, and I’m very wary of taking random crap not approved by the FDA (not that everything approved is necessarily great either). My mom lost her sense of taste and smell for two years after megadosing zinc on the rec of one of her nutty friends…

  2. Their both in it for a quest for profits. At least real medicine by the pharmaceutical industry has engineers and scientists behind it that genuinely want to help people. The natural industry is knowingly promoting snake oil and harm, without any scientific backing. They are homeopathic nutcases.

      1. Absolutely. One of my favorite examples of this is when The Amazing Randi would take a whole bottle of homeopathic sleeping pills and then give a talk about it. He never passed out, naturally!

  3. Given that “natural products” are on the expensive side I doubt anyone is making/distributing them out of the goodness of their hearts. I take more doctor prescribed supplements than I take prescription medication – since they are OTC, even tho doctor prescribed them I can’t claim their cost as a medical deduction. (Currently the only treatment for dry AMD is Bausch & Lomb Areds2).

  4. Thank you for putting natural in quotes! You can slap “natural” on pretty much any product. It’s a marketing ploy that means nothing but people associate it with terms like certified organic.

  5. Great post! Hadn’t considered the difference in net profit and R&D before.

    Your post got me on a train of thought and assess my own choices. I’ve never been enthusiastic about “Natural” medicines… yet I would definitely be more likely to buy cosmetics with this label than without. Do you think the positive association with “Natural” has to do with the concept that unprocessed food tends to be healthier than processed? Would be interesting to know if there’s general association in people’s attitudes regarding this.

    1. I don’t know what it’s like there, but in Canada and the US, the term “natural” isn’t regulated, so it’s all a marketing thing and basically meaningless. I’m sure that people generally tend to have positive associations with the word natural, and companies take advantage of that.

  6. Very true, both look at profit and the pharma branch has more to lose as they’re regulated. Here it’s the same. Drugs by pharma business needs to be proven to work for a certain amount of people (certain percentage). Supplements just need to add they’re not proven to help everyone and they can sell. And so e people believe that the more expensive brands must work because they’re so expensive to buy 🤔 so they make a bunch of money without, maybe, even delivering the promised goods.
    Good post Ashley, food for thought for sure!

      1. Some brands may have better percentage of “working ingredients” in their more expensive ones. But it’s not proven to really work for everyone, so what may be very expensive can also be very useless… And I guess in a very small percentage, it can even harm people that don’t check before using something. 😊

  7. Johnzelle Anderson

    “nature is very happy to kill you if it gets the chance” 🤣🤣🤣 I’m a western medicine, trial and error kinda guy. Natural remedies are less effective for me than a good ol prescription or otc medication.

  8. Nothing makes me scream like seeing “natural” on a product. As you listed, many natural things suck. Tigers are natural, but you don’t let them babysit your toddlers. As a species, we’re easily sold. Make something shiny, toss in the word “natural” or “wellness” and we’re all in.

    I think some in the industry start with good intentions, but if you backtrack who actually owns things, it’s mostly the same big companies.

    Do remember to thank Gwyneth Paltrow, currently raking in money with Goop, who said this: “We’re human beings and the sun is the sun — how can it be bad for you? I think we should all get sun and fresh air. I don’t think anything that is natural can be bad for you — it’s really good to have at least 15 minutes of sun a day.”

  9. Glad you posted this one. I’ve personally never thought that a natural product was by nature superior to a synthesized product of some sort. It seems like six of one, a half dozen of the other, whether it’s going to kill you or keep you alive.

  10. I have to say I use both big pharma and more natural remedies. I take three psyche meds without which I couldn’t function at all. So I am “indebted.” But I also take Senna for the constipation associated with psyche meds and more recently CBD oil which is helpful to my anxiety. I ride the fence and am in support of both big pharma and more natural treatments. For me it’s not either or but both.

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