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Spa line: A medspa menu of branded products can mean profit for physicians who know their stuff

Article-Spa line: A medspa menu of branded products can mean profit for physicians who know their stuff

Dr. Fields
San Francisco Selling cosmeceuticals can be either financially rewarding or a practice liability depending on various factors — especially a physician's understanding of what he or she is selling.

"When a doctor considers selling a line, he or she and the staff should be on it, and they should make sure it works," Kathy A. Fields, M.D., San Francisco-based dermatologist and assistant clinical professor at University of California, San Francisco, tells Cosmetic Surgery Times .

According to Dr. Fields, physicians typically acquire cosmeceuticals in one of three ways: they purchase and sell ready-made products under the products' established name; they purchase ready-made and tested products and market them under private labels that bear the physician's or practice name; or they create the formulas themselves.

FROM SCRATCH Dr. Fields says that developing a proprietary cosmeceutical used to be relatively easy and inexpensive.

Years ago, there was little competition and the chemicals were reasonably priced. Since the medspa boom, however, the market has become saturated with new cosmeceuticals and the innovative, high-profile chemicals, such as peptides, can be cost prohibitive.

For product formulation, physicians need to have a chemist on board. And they need to own their own formula, she says. But purchasing strategic chemicals, such as the newer antioxidants or peptides, can be extremely expensive, costing thousands of dollars a gram. Large orders of the ingredients can help to bring costs down, she notes.

"It takes years, a lot of money, time and effort to create a formula, get it stable, and do the clinical studies that are necessary by the [U.S. Food and Drug Administration]. You have to do antimicrobial, stability, heat and light testing, and really work that formula through," Dr. Fields says.

THE BETTER MOUSETRAP Dr. Fields, who is co-inventor of ProActive Solution, advises that physicians who go the route of developing their own formulas should be very confident that what they have to offer fills an unmet need. She helped develop her benzoyl peroxide acne solution 14 years ago when the available products were not working, she says.

"If you can do it better and can think it through — whether it is psoriasis, acne, antiaging — then, it is worth the time to find the right chemist and develop a very unique system," Dr. Fields says. But she adds that developing the product is only part of the expense and effort. Other considerations include marketing, packaging and distributing.

"Creating a formula today can cost more than $100,000 and just selling it in your office is impossibly prohibitive. If you are going to market to the masses, you have to get your message above that of the competition, which is hard to do," she says. And not everything pans out, notes Dr. Fields. Even great ideas fizzle.

"Prevage (Allergan) was a great idea; we have heard about the science forever." But, she recalls, its uptake in the market was stalled due to the skin irritation some patients experienced.

The prohibitive cost and risk of proprietary product development lead many physicians down the private label road. In this business model, companies that can afford to study expensive chemicals are willing to put physicians' names on the product labels — for a price. Sometimes, such companies offer practices unique formulations.

"These companies, for example, will already have a benzoyl peroxide formula. Physicians can private label the products they like or sell them in the office as is," she explains.

Ethically, Dr. Fields notes, physicians who put their names on existing products should not claim to have developed the products. In her experience, patients are most concerned about whether their physicians really believe in what they are selling — not whether the doctor has developed it.

Sometimes, it does not pay to change the name. Some products have been marketed and have developed reputations and followings, so keeping the name of the product offers a marketing benefit.

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