“In Europe, the burden that is now being put on raw materials in terms of toxicity testing is enormous,” says Frederic Demarne, head of R&D at Gattefossé. “The cost of putting a new ingredient on market is staggering. Basically, for a normal ingredient, the total cost is about €150,000. If we are looking at a [blockbuster] ingredient, we are in the € 250,000–500,000 range.”
Requirements for the European Union’s Regulation on Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) grow with the quantities that are being sold.
And the cost drains are not as simple as efficacy testing. The really impressive tools and tests—those, for example, employed by the biotech industry—are simply much too expensive.
“Unless you work in partnership with academia to develop tailor-made tests, which can be pretty cumbersome, you are left with very standard in vitro tests,” says Demarne. “Besides, finding an ingredient that is very active and has no toxicity is extremely difficult. So, once we have passed in vitro tests, we usually get stuck on clinical. As fine as our testing can get, it doesn’t tell us anything about skin homeostasis. There is no fine clinical testing unless you start doing biopsies and, again, kicking the costs far beyond what we can afford. We can only demonstrate activity in the cell and our claims are stretched between that activity and the impact on the skin itself. It is a difficult exercise.”
So the active ingredients suppliers are left with very little choices: design ingredients for the sole purpose of telling a story or design blockbuster ingredients.
Ingredients designed for pure marketing purposes will have a short life and thus need to have limited toxicity budget. But how low can a budget be allocated for those “trend” ingredients that will not be on market for more than two years?
Designing blockbuster ingredients with no or very little toxicity, and a life expectancy of at least five years, presents other challenges. Those who design active ingredients know it is a very difficult task. A blockbuster needs to be a niche product, it needs to be new and more active than what the market offers. It is, preferably, based on a new mechanism of action, or with an exotic source. It has to lend itself to a compelling story and allow the customer to get results and to dream.
Such ingredients only come around every once in a while. And they take a good three to four years to develop.
“That trend will drive the small players out of the market,” says Demarne. “The choice for actives will dry out. Besides, the brands are subjected to other pressures: things have to be green, natural, organic. We might see some drastic changes if we do not know how to deal with this. Because perfectly nontoxic yet active ingredients are very rare and really not that sexy anymore. We will be left with big brands putting products on market with ingredients of that nature, with no more room for innovation, no more room for the little guy.”
And that’s a dull vision of the future.