A BETTER NATURAL PILL; BIG DRUG MAKERS ENTERING HERBAL REMEDY MARKET.

Byline: Michelle Fay Cortez Bloomberg News

Powerhouse pharmaceutical companies are shaking up the multibillion-dollar herbal remedy market, lending their technology, their brand names and their reputations to products with roots in folk medicine.

American Home Products Corp.'s Centrum, Bayer AG's One A Day and Warner-Lambert Co.'s new Quanterra back their health claims with extensive research and manufacturing technology designed to ease concerns about the potency and purity of traditional herbal therapies. Manufacturers say their scientific approach, and multimillion-dollar advertising budgets, should boost sales in the $2 billion to $4 billion industry.

``We knew consumers were confused by the herbal category and they wanted a big brand name to bring some legitimacy,'' said Michaela Grigg, product manager for Bayer's new One A Day.

Bringing high technology and name brands to the traditional healing arts poses a challenge for current manufacturers like Rexall Sundown Inc., Twinlab Corp., NBTY Inc. and Weider Nutrition International Inc., which have racked up double-digit annual sales increases in recent years. ``Competition is probably going to be much more intense and severe than it would be for proprietary drug companies,'' said Mike Yellen, portfolio manager of the AIM-Global Health Care Fund.

Centrum is banking on a process developed by PharmaPrint Inc. that identifies the cream of the herbal crop, then encapsulates active components by spraying the raw material with a waxy, protective coating. That way, partner American Home can guarantee Centrum herbals remain powerful even after sitting on a store shelf for two years.

``This requires pharmaceutical techniques and state of the art pharmaceutical thinking,'' said Michael Tempesta, senior vice president at PharmaPrint.

Bayer, with its new One A Day Memory, One A Day Tension and other herbals, is betting on simplicity. In seven new products, it combines the most effective ingredients - such as echinacea, Vitamin C and zinc for colds - to give the consumer the most, and easiest, bang for the buck.

``We've given you the best ingredients, having done the homework,'' said Bayer's Grigg.

Meanwhile, Warner-Lambert is touting the science behind its Quanterra line. ``Not all herbal supplements are alike,'' its ads proclaim. ``That's the Quanterra difference: clinically proven effective by doctors.'' It's easy to see why pharmaceutical companies are drawn to herbal supplements, where some manufacturers have operating margins exceeding 20 percent with consistent double-digit sales growth.

``This is a tremendous growth opportunity'' for gaining acceptance among both consumers and physicians, said David Barger, unit director of Warner-Lambert's complementary medicine business.

Even advice columnist Ann Landers has jumped on the bandwagon. In a recent column she touted herbal remedies for impotence as less expensive with fewer side effects than Pfizer Inc.'s blockbuster Viagra.

The growth is being fueled by 76 million baby boomers entering middle age, many disenchanted with mainstream health care. A 1997 Gallup poll found 33 percent of American adults used herbal supplements during the year, up from 19 percent a year earlier, while newly published studies consistently show Americans embracing alternative medication.

Safety and effectiveness are key areas where the pharmaceutical companies - long used to dealing with the U.S. Food and Drug Administration's exacting standards - feel they have an advantage.

Reports of irregularities in purity, potency and safety have long shadowed the supplements, notoriously hard to produce consistently because of variations in crops and processing.

Existing products are subject to little regulation by the FDA, and that makes it easy for small, inexperienced manufacturers to penetrate the market, analysts and company officials say.

``This is a very high margin business and some of these little companies are making a lot of money,'' said Ira Loss, an analyst at HSBC Washington Analysis. ``Having the more legitimate companies, the established companies, move in will have the effect of driving a lot of the snake oil companies out of business.''

For their part, the existing manufacturers say they welcome the new competition because of the attention and growth it will inevitably bring.

``At the end of the day, these entries are going to create a better shopping environment for consumers,'' said Rexall President Damon Desantis. ``We believe we're in a position to capitalize on it.''

CAPTION(S):

Drawing

DRAWING: (Color) no caption (Herbal medicine cabinet)

Bradford Mar/Daily News