What sort of winter for CHC is coming?

With the northern hemisphere estimated to generate around 90% of sales in the global CHC market, the impact of the coming cough & cold season is crucial to the market’s performance in Q4 2020. Recent indications from the southern hemisphere gave us some clues of what’s to come – according to a recent report by the CDC, from April to July (peak flu season in the southern hemisphere), there were only 51 positive flu tests out of more than 83,000 people tested in Australia, Chile and South Africa, for a positivity rate of 0.06%. In contrast, during April to July in the years 2017-19, nearly 14%, or 24,000 out of 178,000 people, tested positive for flu in those three countries.

Despite the expected low positivity rate of flu in the northern hemisphere in Q4 2020, as a result of improved hand hygiene and social distancing, the return to school in many countries is likely to lead to an uptick in cough & cold infections. According to Lucy Rigby, Senior Brand Manager of UK cough remedy Tixylix (in a quote to Wholesale Manager): “Going forward, we believe that parents will be much more conscious of their children’s health risks as schools and nurseries reopen, and are likely to stock up on OTC medicines prior to the peak winter months.” In addition, Paul Trethewy, Controller for Wholesale and Convenience at GSK, said: “With the NHS continuing to face overwhelming pressure and with GPs de-prescribing cold medication, we’re expecting the impulse channel to be an important provider of OTC cold & flu treatments.”

Source: Nicholas Hall’s upcoming Cough, Cold & Allergy Report

Whether any upcoming surge in demand for OTCs leads to the same constraints on supply seen in Q2 2020 remains an open question. Europe’s OTC industry body, AESGP, last week welcomed European Parliament plenary approval of the Report on shortages of medicines — how to address an emerging problem. AESGP agrees that shortages are of particular concern when they affect medicines for which no or limited alternatives are available, however in the case of OTC medicines, because substitution is possible and alternatives exist in most situations, it believes any shortage of a product will translate into little to no impact on the outcomes of self-care. Though the AESGP considers diversification of the supply chain to be a long-term strategic option, including greater independence brought by onshoring manufacturing and production of certain non-Rx medicines and APIs, it said this strategy was hardly actionable in the short-term.

One ingredient that remains under the spotlight is paracetamol (acetaminophen). India lifted restrictions on the export of APIs of paracetamol in late May 2020, but has continued to monitor usage of the ingredient in the domestic market. According to an article in Business Standard, OTC paracetamol sales have taken a hit in India over recent months owing to government legislation designed to monitor use of the ingredient, as well as CCA remedies, but these restrictions are now starting to ease and a spokesperson at GSK expects “sales to pick up in the coming months”. GSK’s Calpol and Crocin brands have been two of the products impacted by this extra vigilance over paracetamol use, but the short-term outlook for the ingredient and India’s OTC market is now improving.

With less than two weeks to go, register now for our new hot topics webinar! You will hear about key trends, including the impact of Covid-19, Distribution, e-Detailing and Sustainability. To find out more, or to register to join on 30 September, please contact elizabeth.bernos@NicholasHall.com.

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