In-store OTC sales in old Europe may have been flagging for some time, but online turnover is growing, and fast! According to a study released last month by German management consultancy Sempora, online sales of non-Rx meds in Europe are set to double by 2018 to around €5bn. With its relatively restrictive “pharmacy-only” environment, Germany is the 2nd largest market for internet OTCs, just behind the more liberal UK, with the countries expected to contribute €1.6bn and €1.9bn respectively to the European total by 2018.
Heavily discounted prices from online retailers such as Shop-Apotheke and DocMorris are of course a huge draw for consumers, with many premium entries such as Pfizer’s Centrum or Verla Pharm’s Magnesium Verla doing so well online (at least in 2014/15), where the discounts are largest. Internet pharmacies have also boosted their turnovers through persistent advertising of said prices on TV, often backed by budgets from OTC marketers themselves. Indeed many German marketers offer direct links on brand websites to purchase via Shop Apotheke et al. Germany does not allow chain pharmacies, which limits small local operations to store magazines or POS marketing, which seems hardly enough to compete.
Add to this the convenience of home delivery, particularly for the rising number of elderly consumers, not just in Germany, but across Europe, and online purchase seems an obvious choice. And it’s not just VMS and lifestyle products pulling in the growth either – Nicholas Hall’s OTC INSIGHT publication showed Germany’s leading cough remedies ACC Akut (Hexal / Novartis) and Mucosolvan (BI) advancing by double digits online in the year to Q2 2015, with the former’s internet turnover equal to almost 20% of in-store sales. For real live pharmacists to compete across the continent, Point-of-Care services need to be stepped up, and fast!
To learn more about trends in Europe and how to build your OTC brand sales in-store or online, join us at our 27th European OTC Conference and Action Workshop from 13-15th April 2016. Contact Jennifer.odonnell@NicholasHall.com for details.
Recovery in US OTC analgesics typifies the trend in the wider global market
Sales of OTC analgesics in the US continued their recovery in the year to Q1 2015, with healthy growth of +4.6%. Tylenol (McNeil / J&J) was one of the fastest-growing brands of the past year, boasting +27% growth (adult, children and PM analgesics, MAT Q1 2015) as family-themed advertising campaigns helped reinforce the brand’s return to US retail stores, after manufacturing problems at McNeil’s Fort Washington plant. Stablemate Motrin is also performing well, making real gains in the paediatric niche. Meanwhile, new launch activity, such as Aleve PM (Bayer) and Excedrin Tension Headache (GSK), further boosted systemics. Sales of topicals also thrived, as brands like Salonpas (Hisamitsu) innovated in the form of jet sprays and gel patches, while several key brands, including No.1 Icy Hot (Chattem / Sanofi), have been extended with TENS devices since they were approved for OTC use in 2013.
And the global picture for analgesics is no less rosy. Q1 2015 saw sales advance at a faster pace (+6.0%) than the overall OTC market (+5.3%) globally. Below are just a handful of trends and developments from around the world helping to bolster growth:
- In Japan competition in the loxoprofen segment of systemic analgesics is increasing, with Lion launching Excedrin LOX in early 2015 and Daiichi Sankyo retaliating soon after with Loxonin S Plus
- Brazil’s topical analgesics benefited from the introduction of Dorflex Icy Hot (Sanofi) in 2014 and increased A+P support for Balsamo Bengue (EMS)
- In India increasing demand for brands targeting specific types of pain, namely headache and body pain, has opened up the topicals category to different delivery formats such as gels and sprays, in addition to the traditional balms
- Poland has seen a rise in the popularity of speciality products for the likes of migraine and joint / back pain, which carry a premium price, while there is also a trend towards larger “value packs”
To discover more about what’s driving growth (or holding it back) in the Global OTC Analgesics market, including in-depth coverage of the 14 leading countries, take advantage of generous pre-publication discounts on our upcoming report.
For more information, download the brochure or contact Nino Hunter.
Sneak peek at some highlights from Global OTC Cough, Cold & Allergy
With so much going on in the US allergy remedies category – from Allegra’s swift dash up the rankings to the switch of intranasal corticosteroid Nasacort, from new A+P campaigns to allergy extensions of blockbuster cough & cold brands Mucinex and Vicks – it is small wonder that it was the source of double-digit growth (+11%) in 2014. Not to mention 2015 developments like the February debut of Flonase and the planned launch of Rhinocort. Yet this was just one of a handful of strong performances around the globe in the past year, with the global CCA market responding positively to a spike in flu infections across several regions, switch activity, format innovation and other new launches.
A handful of highlights from around the globe include:
- In Brazil the move to Rx status of vasoconstrictor-based nasal decongestants led to a significant downturn, but innovative launches subsequently revived topical decongestants sales
- China’s cough and sore throat remedies benefited from A+P targeting smokers, both for treatment of respiratory conditions caused by smoking and for freshening breath
- In France dereimbursement is gradually transforming CCA into a pure OTC market, with increasing numbers of semi-ethicals losing reimbursement and becoming pure OTCs – and so able to be advertised
- CCA is Russia’s largest OTC category by a considerable margin, with over $400mn separating it from VMS (second largest category); CCA options are prominent on a proposed mass market list
- In Turkey marketers are increasingly launching products classified as food supplements (particularly throat lozenges) and medical devices (notably saline topical decongestants) as these are less tightly controlled than registered medicines
For a comprehensive view of the Global OTC Cough, Cold & Allergy market, including in-depth coverage of the 15 leading CCA markets, check out our just-published report. For more information, download the brochure or contact Nino Hunter.
This week the people of Scotland will decide whether to end the country’s 300-year+ political union with England and the rest of the UK. As a Scot without a vote – owing to my residence in England – I’ve been watching from the sidelines while the debate has swirled around fundamental issues such as currency, the economy, EU membership and defence.
Healthcare – in particular, the NHS – has also been a key issue. This is despite the fact that, in the short-term at least, day-to-day healthcare provision will be unaffected, as the NHS and wider healthcare policy are already fully devolved to the Scottish Parliament. In addition, the Scottish Government intends to continue using the MHRA as medicines regulator, which should hopefully prevent a divergence in medicines regulation and access (imagine the absurdity of a medicine being deemed safe for OTC distribution in England but not Scotland …).
One can only guess how independence could affect health provision in Scotland in the long-term. Scotland currently enjoys higher NHS spending per head of population than England, while the Scottish Government has introduced flagship policies such as “free” prescriptions and personal care for the elderly (there’s nothing free about it of course, as patients pay for it through taxation), which it claims will be maintained if Scotland goes it alone. Opponents have questioned the affordability of such policies, casting doubt on the pro-independence camp’s estimates regarding the income it will receive through oil revenue and job creation.
What is clear, no matter which way the vote goes, is that Scotland will continue to face some strong public health challenges, with life expectancy remaining below that of the UK average for both men and women. For example, a report earlier in 2014 stated that Glasgow – Scotland’s largest city – has lower life expectancy than most of the developed world, with 25% of boys born there expected to die before the age of 65, owing mainly to poor lifestyle. Perhaps we’ll never find out how an independent Scotland would tackle these problems, but ultimately all that matters is that they are tackled.
The April edition of OTC INSIGHT Europe contains a full round-up from Nicholas Hall’s 25th European OTC Conference & Awards, held in the beautiful city of Luzern, Switzerland, last month. Innovation – or the lack of it – was the core theme, with the majority of delegates in agreement that a new approach is required in order to boost growth in our industry.
Several expert speakers reminded us that true innovation is about a whole lot more than traditional product line extensions or marketing campaigns; at its core is the desire to solve an unmet need and make a real difference to the consumer experience. How much successful innovation of this kind have we seen in the European OTC market over the past few years?
Frustrating regulatory issues undoubtedly play a part in limiting change of this kind, especially a risk-averse approach to Rx-to-OTC switch alongside a lack of incentives such as marketing exclusivity. As well as lobbying regulators and governments to explain the real public health and economic benefits offered by OTC, healthcare companies should also embrace problem solving, creative thinking and calculated risk-taking in order to have the best chance of nurturing game-changing innovation.
You can read more on about the the events within the OTC industry in Europe in our month OTC INSIGHT Europe periodical.
I have a heavy heart as I write this note, but a glint in my eyes of joy and humour. Colin Borg, a very good friend of mine for more than 40 years, died last month. He was our first Network Partner and an inspiration at our annual conferences, and so I feel it is fitting to pay him this short tribute. Continue reading
The news that the European Parliament has passed a law requiring all new EU clinical trials to be published in a publicly accessible database is a step forward for the transparency that is all-important for patients, the public, researchers and healthcare practitioners alike.
Nicholas Hall’s Postcard from London: I normally don’t send postcards from London, which is a short hop from my island paradise of Guernsey. But yesterday’s battle with floods and gale force winds was as exhausting as crossing the globe, which I will start again tomorrow. Next stops: Singapore, Shanghai, Phoenix, New York, New Jersey.
The Direct Sales channel (specifically network marketing, where sales happen either one-on-one or through a party plan) is distinguished by offering face-to-face interaction with consumers – an attractive alternative to the retail channel, standard promotional tools and online interaction. Direct Selling is huge in many markets around the world, and is one of the fastest-growing channels in several countries. The product offering ranges from cosmetics & personal care to household goods, clothing and books, but OTC accounts for a sizeable proportion of sales – over 20% share of a global market valued in excess of $100bn.
We have just published the January / February issue of OTC INSIGHT Latin America. Our Market Report focuses on Gastrointestinals and it has been a good year for the industry with each Big 4 country and all sub-categories posting growth. Lots of activity has been seen in antacids & antiflatulents where a flurry of innovative launches and line extensions have increased competition. Marketers are expanding their consumer base by extending brands into niche segments, such as Bayer’s Alka-Seltzer Boost in Mexico, positioned to relieve hangovers, while on-the-go line extensions from GSK and Hypermarcas in Brazil offer consumers convenience.