Capsaicin is the pungent ingredient found in chili peppers from the genus Capsicum (Solanaceae) and, when eaten, gives the peppers their "hot" taste.1,2  As it relates to its use in medicine, capsaicin is most commonly used for the treatment of pain and can be purchased in the form of a topical cream or gels in concentrations ranging from 0.025% to 0.075%.  Common brand names include Arthicare, Capsagel, Capzasin-P, Zostrix and Zostrix-HP and can be without a prescription in most countries.  The most common pain syndromes treated with topical capsaicin include rheumatoid arthritis, osteoarthritis and psoriasis.2-4 Topical capsaicin can be a useful adjunct in pain management, especially when escalating doses or addition of other medications is likely to lead to intolerable systemic side effects or drug interactions.1-4  Unfortunately, this treatment is plagued with a slow onset of therapeutic benefit, during which time patients frequently experience feelings of pain or burning, redness, and  possibly minor swelling in the area of application. 

Why and how does capsaicin cause this side effect prior to producing noticeable pain relief for the patient?
In the skin, there any many free nerve endings that are connected to and activate sensory afferent nerve fibers when stimulated. Sensory afferent nerve fibers carry nerve impulses generated in the peripheral tissue toward the spinal cord, which then communicate with other neurons in the spinal cord to eventually deliver the message of pain for perception and interpretation by the brain.5  The nerve impulse or fiber is sensory if it carries pain, temperature, touch, vibration, pressure or proprioceptive information to the brain.5  Also, it is important to know that there are different types of pain conducting sensory nerve fibers such as A-alpha, A-beta, A-delta, and C, which are listed from fastest conduction velocity to the slowest.5  Therefore, C-nerve fibers are the slowest and can be further differentiated from other nerve fibers as they are also  unmyelinated.5  

Why is this level of differentiation of sensory nerve fibers so important when considering capsaicin's initial mechanism of action?
Acute pain is transmitted primarily by A-delta sensory nerve fibers to the spinal cord and chronic or slow pain is transmitted primarily by unmyelinated C sensory afferent nerve fibers (C nerve fibers).5  The lack of myelination is, in part, why the pain is transmitted slower with C nerve fibers than A-delta fibers.  Interestingly, capsaicin is a noxious substance that basically stimulates the free nerve endings of the C nerve fibers (see figure 1).6  Upon binding and activation, capsaicin causes the C nerve fiber to enter an excitatory state that will ultimately result in the brain interpreting the depolarization as a painful or burning feeling.  This is most prevalent during the initial stages capsaicin use.

References:

1. Holzer P. Capsaicin: cellular targets, mechanisms of action, and selectivity for thin sensory neurons.  Pharmacol Rev  1991;43:143-201.
2. Mason L, Moore RA, Derry S et al.  Systematic review of topical capsaicin for the treatment of chronic pain.  BMJ  2004;328:991.
3. Deal CL, Schnitzer TJ, Lipstein E et al. Treatment of arthritis with topical capsaicin: a double-blind trial.  Clin Ther  1991;13:383-95.
4. McCarthy GM, McCarty DJ.  Effect of topical capsaicin in the therapy of painful osteoarthritis of the hands.  J Rheumatol  1992;19:604-7.
5. Snell RS.  Chapter 4. The Spinal Cord and the Ascending Pathway and Descending Tracts.  In: Clinical Neuroanatomy.  6^th Ed.  Snell RS eds.  Lippincott Williams and Wilkins.  Philadelphia, PA.  2006.
6. Marsh SJ, Stansfeld CE, Brown DA et al.  The mechanism of action of capsaicin on sensory C-type neurons and their axons in vitro.  Neuroscience  1987;23:275-89.
7. Holzer P.  Local effector functions of capsaicin-sensitive sensory nerve endings: involvement of tachykinins, calcitonin gene-related peptide and other neuropeptides.  Neuroscience  1988;24:739-68.
8. Maggi CA, Meli A.  The sensory-efferent function of capsaicin-sensitive sensory neurons.  Gen Pharmacol  1988;19:1-43.
9. Helke CJ, DiMicco JA, Jacobowitz DM et al.  Effect of capsaicin administration of neonatal rats on the substance P content of discrete CNS regions.  Brain Res  1981;222:428-31.
10. Gamse R, Molnar A, Lembeck F.  Substance P release from the spinal cord slices by capsaicin.  Life Sci  1979;25:629-36.
11. Saria A, Gamse R, Petermann J et al.  Simultaneous release of several tachykinins and calcitonin gene-related peptide from rat spinal cord slices.  Neurosci Lett  1986;63:310-4.

Capsaicin, Capsicum, Solanaceae, Arthricare, Capsagel, Capzasin-P, Zostrix