CEO Adolfo Graubard told NutraIngredients-USA.com that the idea was born out of his own experience in the nutraceuticals industry - that there is an increasing demand for evidence from clinical trials to back up the efficacy of products, both from consumers and from regulators.
Consumers are increasingly demanding evidence that a product actually works, and being able to cite clinical trials on the packaging of food, supplement or cosmetic products can imbue the marketing effort with a greater degree of credibility.
What is more, the FDA's qualified health claims process has opened up new demand for clinical trials, as companies need to provide solid scientific evidence to back up a proposed link between an ingredient and a health condition.
"I believe that natural products have to prove their worth to the FDA and FTC even more than pharmaceutical products," said Graubard.
"The days of putting out products without any responsibility on our part that they work are over.
We have lost credibility with consumers."
Yet conducting such trials in the US is a costly process.
A trial involving 30 patients and lasting for six months could cost between $90 and $120,000 - more than many of the small players in the nutraceuticals market can afford.
Graubard believes that the solution is to conduct clinical trials overseas.
In partnership with Miami-based clinical laboratory HCIS, Nutrition Formulators is offering trials conducted in Columbia by well-qualified, published scientists with experience of conducting trials for the likes of Merck and Pfizer.
This, he expects, will slice the cost of conducting a clinical trial in half.
"We also hope it will make US-based clinical trial services more competitive," he said.
Graubard noted that when large pharmaceutical companies are testing a new product or drug, their initial trials often take place in third world countries.
Only if the results are there do they invest in US-based clinical trials.
He explained that, under the Helskinki Accord, the FDA must accept as evidence from third world trials as long as they are conducted using a well-designed protocol, are approved by an US-based Institutional Review Board (which also warrants that the rights and safety of human subjects are not infringed) and the credentials of the doctors are internationally recognised.
It is also important that trials should involve statistically significant groups of people - although there is no hard and fast rule as to how many people constitute a significant group.
Rather, this depends on the product and the claims in question.
Graubard also plans to work closely with the FDA to ensure that the clinical evidence is admissible.
He has requested a meeting to go through the protocol of the first planned trials, including one involving a protein supplement for patients with renal failure.
"We are expecting guidance to ensure we meet their standards," he said.
As well as helping companies to file health claims petitions, Graubard believes that cheaper clinical trials will help relatively new players on the market to prove their worth.
"I envy those guys like Nature's Bounty who came to the market 20 years ago.
They hit a home run, they had the opportunity to grow.
How do we grow?
I believe clinical trials are the way."
External links to companies or organizations mentioned in thisstory: Nutrition Formulators