New regulations rocking the boat in Switzerland?

NicholasHallCo-AprilWhile preliminary figures for DB6 show only modest growth for Switzerland in 2014, recent developments in the Alpine state make for more exciting reading.

In December, the Swiss Parliament’s Upper House voted in favour of allowing all non-prescription medicines to be sold in drugstores, merging the Class C (pharmacy-only OTCs) and Class D categories (pharmacy + drugstore OTCs). The vote was made on the condition that the new larger category will be reviewed in the near future, to see which medicines might either be moved to the current Class E free sale category (which includes supermarkets) or reverse-switched, hopefully the former. In the short term, the measure should help to boost both overall OTC growth through increased availability, as well as the fortunes of the little over 500 drugstores in Switzerland, whose number has dwindled a little over the past few years.

As part of the same bill, the Upper House also passed a proposal giving pharmacists the ability to dispense a select list of Rx medicines to consumers without a prescription, which will depend on the pharmacists having already dealt with the purchasing consumer on a previous occasion. Given time and a healthy dose of Swiss caution from pharmacists, these medicines may also find their way on to the self-medication bill.

Meanwhile, the Swiss National Bank’s decision to remove the Swiss Franc’s cap against the Euro in January was a real thorn in the side of Swiss retailers on the nation’s borders, with numerous German pharmacists reporting floods of Swiss consumers pouring into Konstanz to stock up on cheap(er) OTCs. Whether these international pharmacy-shopping trips will continue in the long term remains to be seen, but it may take drugstores starting a price war on their new OTC options to keep the Swiss at home.

Germany finally rolling over EHC bump

Following the European Commission’s decision in January to switch HRA Pharma’s emergency contraceptive EllaOne (ulipristal acetate) to OTC status, the reaction of both government policymakers and healthcare professionals in pushing through the switch at national level has made for exciting viewing, particularly given the historically stubborn opposition to the free sale of EHCs, both among ruling politicians and GPs.

Regulatory authority BfArM, which makes regular switch proposals to the Health Ministry (BMG), had suggested the Rx-to-OTC switch of EHC levonorgestrel way back in 2003, with the recommendation last reviewed and updated in January 2014, only for Health Minister Hermann Gröhe and Jens Spahn – both CDU centre-right politicians – to resolutely reiterate the party’s age-old stance that the morning after pill would remain Rx. But the European Medicines Agency’s recommendation in November last year that ulipristal be made OTC prompted a sudden announcement by Gröhe that its classification would be reviewed, to the delight of centre-left coalition party the SPD, and the Greens.

Nevertheless, given the CDU’s resistance in the past, the speed with which the BMG initially planned to adopt the Commission’s centralised switch was surprising. Within a day of the announcement, a popular pharmacist publication quoted a BMG spokesperson as saying, “As far as we’re concerned, (the new classification)… is valid from today”, leading to a flurry of confused questions from pharmacist associations…Today? How… but… what?… Really? Manufacturer HRA Pharma even put in a request for pharmacists to be able to sell Rx packs without prescription as it had no packs ready for OTC sale, although this was refused by a local authority.

Things have slowed down a bit. As it stands, the Health Ministry has set out a decree, proposing both ulipristal and levonorgestrel be switched to OTC status, to be passed by the parliamentary Federal Council, with 15th March set as the date when consumers will actually be able to roll into a pharmacy and buy an EHC without a prescription.

Still to be decided on is whether consumer advertising should be restricted, what advice pharmacists will have to be provided alongside an EHC sale, and if a strict in-store protocol should be laid out, with GP associations extremely vocal about what they see as pharmacists’ lack of qualifications in advising on such a sensitive product, together with the frequent lack of an appropriate space for discussion between pharmacist and consumer. However, bespoke training programs and seminars led by female GPs are already underway in preparation, which should help to allay many of the safety concerns held by Health Minister Gröhe.

So despite initial confusion, the switch looks to be going ahead and it is undoubtedly a positive move, with around 60% of German consumers in favour according to a 2014 survey by research body Mingle. It is likely that the situation will be monitored for some time, to avoid the pills being dispensed “like smarties” as Mr Spahn feared they might be. German politicians need only look to responsible retailing in UK and France, where the birth rate is also markedly higher than in Germany, to see that pharmacists are unlikely to forget the “emergency” part of emergency contraception in a hurry.

Battle lines are drawn over distribution in Italy

Matteo Renzi’s Italian government is plotting a fresh wave of liberalisation reform to help stimulate the floundering economy. The package includes measures for the banking, transport, energy and insurance industries, but also for pharmaceuticals. The bill proposes allowing all non-reimbursable (Class C) medicines with prescription to be sold outside pharmacies. The move echoes the Bersani Decree of 2006 – which made all non-prescription medicines available in the mass market – and could be understood as a continuation of Italy’s more recent liberalisation measures, including the Mario Monti government’s switch of 356 formerly Rx medicines to non-prescription but non-advertisable (SOP) status in 2012, with an additional 191 switched in March 2014.

If the bill is passed in spring this year, just as with all OTCs in Italy, the non-reimbursable (Class C) Rx medicines would still have to be sold under the supervision of the many hundreds of qualified pharmacists operating in drug stores across the country. These stores require the same level of security and medicine controls as pharmacies, so issues regarding consumer safety are minimal.

Of course, the hope for our industry is that increased distribution to the Rx medicines might eventually persuade the Italian government to switch more of these to non-prescription status. Even though the 500+ formats switched since 2012 remain with SOP status, they have provided some drive to a relatively stagnant OTC market. Categories significantly boosted by the switches include anti-fungals, wound healers and eye care.

But there’s a long way to go. The voice of the pharmacy lobby in Italy is a powerful one. Mario Monti’s government tried to push through the same measure in its early crisis days in December 2011, but met with a wave of protest, having to settle instead for the slightly softer mass Rx-to-SOP switch.

As expected, pharmacy-owners have again kicked up a tremendous fuss over the potential loss of earnings the new bill might bring, coupled in public statements with concerns relating to possible widespread medicine misuse and the all-too certain belief that the measures will bring no growth to the economy, with many citing that 7 years after the big Bersani decree, only around 10% of OTCs/SOPs are sold outside of pharmacies… So on that basis, the pharmacy-owners won’t lose too much. Way to shoot yourself in the foot. In fact industry sources put pharmacy earnings through Class C medicines – including OTCs and SOPs – at just over 15%, so if around 10% of this were to leave the pharmacy, it wouldn’t be a huge loss after all.

The bill is up for discussion at by the Government’s Council of Ministers meeting on 20th February 2015. Time to smear on the war paint…

Italian Market Unconvinced by E-cigarettes

British American Tobacco announced in October that it is to invest $1bn over 5 years into the e-cigarette industry in Italy. While global e-cigarette consumption has undoubtedly soared since their introduction, and the debate surrounding their safety rumbles on, much of Southern Europe already seems to be over the hype.

In Italy, the introduction of e-cigarettes has led to around 6,000 stores trading them in 2012, but a May 2014 study by statistics institute Doxa revealed that over half of these have already closed, with the number of habitual users falling from over 2mn in 2013 to 800,000 in 2014. At the same time, the number of regular smokers has stayed relatively constant since 2008, while the percentage of consumers smoking cheap hand-rolled cigarettes has tripled since 2009. In Spain too, where tobacco consumption is particularly high, e-cigarette association ANCE reported in November 2014 that many of the several thousand e-cigarette stores that had sprung up across the country since 2011 have shut up shop.

As global regulators argue over their positioning in the market, consumers may be finding it equally hard to know what to make of e-cigarettes. With no firm backing as yet from healthcare professionals, they can’t be judged a completely safe substitute to NRTs or even regular cigarettes. On the other hand, as a leisure / lifestyle product, despite their ability to deliver nicotine, e-cigarettes still do not seem to afford the user nearly as much satisfaction as regular or hand-rolled cigarettes. As one character from Italian TV series Gomorrah crudely put it when asked about e-cigarettes, “it’s like comparing crap to the sweetest donut”, a feeling echoed in a number of my conversations with smokers over the past year. Furthermore, hand-rolled tobacco products often command a lower retail price for the consumer than premium e-formats, a significant factor in Southern European economies badly hit by the recession.

So while the early findings of the Cochrane Collaboration suggest that the crossover from toxic tobacco-based cigarettes to e-cigarettes is beneficial to health, manufacturers should note that there is still considerable room for innovation with regards to creating a product which delivers similar satisfaction levels to cigarettes, without the harmful toxins found in them alongside nicotine. It will be interesting to see whether Big Tobacco is able to bridge this gap in an already disenchanted Southern Europe, and whether OTC marketers of traditional NRTs take the opportunity to invest more in promoting the health benefits of their own products, particularly while doctors and pharmacists are still very much onside. Watch this space…

For more discussion and debate on e-cigarettes, please check out our weekly news bulletin OTC.NewDirections, bringing you all the latest updates on regulation and science in the self-care industry.

Health Ads To Make You Laugh (or Cry)

Disgusting? Definitely. Funny? I reckon. Memorable? Yes. Novartis’ recent UK TV ad for its Otrivin topical decongestant has probably turned a few stomachs, but also managed to capture the attention of a UK national newspaper and earned close to 3.5mn hits on YouTube at the time of writing. The ad features under-the-weather overweight office worker Kenneth who fantasises about his female co-workers drooling over him as he spreads menthol rub over his unsightly chest, before being advised by the narrator to take Otrivin instead. The message of efficacy is perhaps not immediately as clear as in previous promotions for the product, starring an animated nose and mouth, or a man surrounded by tissues, but the new content is ridiculous enough to deserve another watch… and then another, until the product’s claimed benefits do stick. It is not the first time Novartis has pushed the comedy boat out for Otrivin. Back in 2011 the marketer won a Cannes Lion Advertising award for Swiss ads featuring “mouth breathers”, or people unable to breathe through their blocked noses, carrying the tagline, “You look dumber with your mouth open”.

Comedy was at the heart of the Nicholas Hall & Company’s coveted Best European OTC Advertising Award in 2014, with Dr Reddy’s ad for its Nise topical analgesic winning over delegates. As Russian soldiers line up on the training ground, one poor soldier is utterly unable to twist his neck owing to muscle pain, a piece of slapstick with a message so simple that there is no need to understand the Russian orders barked at him by his commanding officer. The campaign certainly didn’t do Nise’s Russian sales any harm, with the brand posting impressive growth in 2013.

If you have an OTC ad campaign you’re particularly proud of, funny, serious, simple or surreal, which ran between 1st February 2014 and 31st January 2015, why not enter it into the Nicholas Hall Awards? Shortlisted entries will be judged and the winner announced at the OTC Marketing Awards Ceremony on 16th April 2015 in Paris. The categories include, “The Most Innovative Global OTC Marketing Campaign” and “The Colin Borg Award for the Best European OTC Advertising”, while we will also crown the winner of “The Most Innovative European New Product of the Year”.

Deadline for entries is 1st February 2015. For more info on entry requirements, please download our brochure or contact Jennifer O’Donnell.