Sexual health OTC revolution

Building on the news covered in last week’s blog that Sanofi is planning to implement the US Rx-to-OTC switch of erectile dysfunction treatment Cialis by end-2024, this week we look at another major development in the OTC sexual health & fertility category – the announcement by the UK’s MHRA that it has launched a public consultation on the reclassification of two progestogen-only contraceptive pills containing desogestrel, marking the first time the agency has considered such a change.

MHRA is asking the public and stakeholders for their views on whether two continuous-use oral contraceptives – HRA Pharma’s Hana and Maxwellia’s Lovima, both as 75mcg film-coated tablets in 28-count packs – should become pharmacy medicines and available OTC, without a medical prescription (although, in parallel, desogestrel 75mcg will also remain available on prescription, with women potentially able to switch between prescription or pharmacy supply at different times). The agency notes that if the products are reclassified, pharmacists will have access to training materials and a checklist to help them to identify women who can receive the two medicines safely. Two separate consultations are open until 5th March (Hana link; Lovima link).

Following the switch of Adamed’s Maxon Forte (sildenafil 50mg) in Poland in early 2020, the rollout of OTC Viagra (Viatris) to Norway and Ireland in 2020, plus the EU centralised Rx-to-OTC switch of Fortacin (Recordati for Plethora Solutions) for premature ejaculation – formulated with lidocaine 150mg + prilocaine 50mg – in September 2020, the past year has seen a rapid expansion in the availability of OTC sexual health & fertility medicines. With OTC ED on the near horizon in the US market, the UK approval of the daily contraceptive pill as an OTC medicine could lead to a wave of similar approvals worldwide, and inject substantial growth into the global CHC market over the coming years.

CHC.NewDirections Consulting Editor, Nina Stimson adds: This really is an exciting proposal – not only a first for the UK, but also the first significant bid to offer oral contraceptives without prescription outside the Asia Pacific region – China and South East Asian markets lead the way, although sales in most markets are relatively small. If the proposal is approved, will UK pharmacists actively support the switch and help build OTC supply (and will the pharmacy protocol be sufficiently user-friendly not to push women back to the doctor)? And will any price differential between Rx or OTC supply be a factor? Not all ambitious switches in the UK have succeeded in the past, but we have high hopes for this one. Time will tell …

You can save up to GB£1,350 when you pre-order our forthcoming report from CHC New Products Tracker, Innovation in CHC: 2020’s NPD & Launch activity under the spotlight before 31st March! As well as looking in more depth at the latest OTC sexual health & fertility developments, the report also showcases the top 100 innovations in 2020 and features major ingredient trends, delivery format trends and much more. For more information, or to pre-order your copy, please contact melissa.lee@NicholasHall.com.

Sanofi CHC on track to be standalone unit by end-2022

At Sanofi’s Capital Markets Day 2021, the company’s Head of Consumer Healthcare, Julie Van Ongevalle, shared her vision for the business: “With the ongoing implementation of our fully integrated standalone model, we look forward to being more agile and reducing the complexity of our portfolio to drive growth with our consumer-centric, data-driven marketing approach.” The aim is to divest around 150 brands (from the current 250) in the next two years to focus on “priority categories”, such as allergy, body pain, general pain and mental wellness – particularly sleep aids – via a “granular approach”.

Rx-to-OTC switch has already been a key factor in driving growth in one of Sanofi’s priority categories, allergy remedies, thanks to the successful global OTC rollout of Allegra (first available in the USA in 2011) and launch of Xyzal Allergy 24HR (USA, 2017). Josephine Fubara, Chief Science Officer at Sanofi CHC, noted that Sanofi continues to make progress in bringing two potential OTC switches to the market in the coming years, erectile dysfunction treatment Cialis and flu antiviral Tamiflu, presenting a blockbuster opportunity with a combined sales potential of €1bn in the US market alone.

Source: Sanofi Capital Markets Day 2021 presentation

Sanofi also stated that it is on track with its plans to be a standalone CHC business by end-2022. The company said that the overall planning for the transition was complete, and that the majority of its standalone CHC legal entities would be operational by end-2021. Among the benefits that Sanofi believes this transition will bring include the agility to reignite its innovation engine and reduce time-to-market by around 20%.

Looking ahead, Sanofi is targeting above average market growth, driven by its focus on priority categories and Rx-to-OTC switch, with a view to becoming the best-in-market CHC performer by 2024-25. Supporting this objective will be a focus on consumer insights, an emphasis on e-Commerce and digital channels and the operational independence provided by Sanofi’s standalone model.

Save up to GB£1,350 when you pre-order our forthcoming report from CHC New Products Tracker, Innovation in CHC: 2020’s NPD & Launch activity under the spotlight before 31 March. The report showcases the Top 100 innovations in 2020 and features major ingredient trends, delivery format trends, and much more. For further details, or to pre-order your copy, please contact melissa.lee@NicholasHall.com.

Historically slow cough, cold & flu season

Now that four (P&G, J&J, GSK and Sanofi) of the world’s Top 6 consumer healthcare marketers have reported their latest quarterly results, two of the key takeaways are that 1) industry growth has proven very resilient in the face of the challenges posed by the pandemic, and 2) we are in the middle of an historically slow cough, cold & flu season in 2020-21, and CHC marketers with portfolios that skew heavily towards CCA products will continue to feel the impact of this trend on overall growth.

Figures from the WHO’s FluNet service show the quasi-total wipeout of flu at a global level. Despite some signs of very low levels of flu circulation in certain regions tracked by WHO, including Africa and the Western Pacific, the overall picture at a global level is stark, with an almost complete drop-off in global infections since Q1 2020. The data shown in the WHO chart below are provided remotely by National Influenza Centres (NICs) of the Global Influenza Surveillance and Response System (GISRS) and other national influenza reference laboratories collaborating actively with GISRS, or are uploaded from WHO regional databases.

Source: FluNet (www.who.int/flunet), GISRS

This trend is backed up by recent reports at a country level too. According to data obtained by The Times newspaper, UK flu cases are down by 95%; in the second week of January – the peak of the season – the number of reported influenza-like illnesses was 1.1 per 100,000 people vs a 5-year average rate of 27. This reflects similar trends in many other countries, including USA. While a billion people typically get flu globally each year, “much less than a tenth” of that figure will do so, according to leading expert John McCauley. There are a number of theories for the decline; lockdown restrictions, social distancing and the wearing of masks, and an increased focus on good hygiene practices have helped to prevent Covid, but also reduce the spread of other contagious illnesses. A major fall in international travel has curbed infections, while there has also been a huge take-up of the influenza vaccine. Meanwhile, some experts believe the spread of Sars-CoV-2 may have raised immunity against other viruses.

Nicholas Hall said: “Before Covid, we thought we knew the dynamics of consumer healthcare very well. I’ve given endless presentations quoting the three practical drivers of demand: Switch, the Emerging Markets and very importantly Cold & Flu pandemics. It’s fair to say that, without Covid, we would by now be lamenting a year of poor CHC sales. The actuality is that, with the exception of Voltaren Arthritis Pain and Differin in USA, there have been no significant switches in the past 3-4 years. The Emerging Markets still deliver, of course, but not at the stellar levels of the recent past; and we would by now be reading of the low impact on sales of the cough, cold & flu season.”

Explore the impact of lockdown on cases of cold & flu, and what the implications may be for CHC medicines, in our recently published Cough, Cold & Allergy report. For more information, or to order your copy, please contact melissa.lee@NicholasHall.com.

Q4 2020 results round-up

Early signs from quarterly results published last week by CHC marketers, with both a global (P&G) and European (Galenica, Alliance Pharma) focus, indicate that consumer healthcare growth continued to be robust in the final quarter of 2020. There are some warning signs on the dashboard, notably P&G’s reference to a “historically slow start” to the cough, cold & flu season – which inevitably will impact its key CHC brand and global No.1 Vicks – but the strong performance of the former Merck KGaA OTC products that P&G acquired in 2018, including various VMS brands (Neurobion, Seven Seas, etc) which produced growth in the “high teens” in Q4, point to the importance of a strong portfolio mix.

In its January 2021 investor presentation, Swiss-based Galenica said it has slightly exceeded its sales guidance (+2-5%), generating a 5.4% rise in net sales in 2020 to CHF3.5bn (US$4bn). Health & Beauty recorded net sales of CHF1.7bn (US$1.9bn, +3.1%); Retail accounted for CHF1.5bn (US$1.7bn, +2.7%); and Products & Brands CHF111.7mn (US$126mn, +9.4%). Cold, beauty, travel-related and ibuprofen products were very negatively impacted by Covid-19, with additional sales from hygiene and prevention products only partially compensating for this. Growth was driven by expansion activities such as acquisitions in the pharmacy network and product portfolio. In its facts & figures for 2020 (see below), Galenica pointed to several CHC trends, such as the sharp decline of cough products and the rise of antiseptics & disinfectants like Septo Clean.

Source: Galenica

According to an unaudited trading update for the year ended 31st December 2020, UK-based Alliance Pharma said that “see-through” revenues (including underlying sales from Nizoral anti-dandruff shampoo) for 2020 were down 5% on the prior year at £137.5mn (US$188mn), both on a reported and constant currency basis. The company noted this reflects the impact of Covid-19. Consumer Healthcare revenues were up 1% to £93.0mn (US$127mn). Scar treatment Kelo-cote revenues rose by 12% to £34.7mn (US$47mn) and Nizoral was 4% ahead at £21.0mn (US$29mn). The recent acquisition of US-based Biogix, which brought Amberen – a fast-growing brand for the relief of menopause symptoms – into the group, is expected to be earnings-enhancing in FY 2021 and significantly earnings-enhancing from FY 2022.

Alliance Pharma CEO, Peter Butterfield, said: “The group continued to deliver a robust operational and financial performance in H2 2020, despite the ongoing challenges of the pandemic. While topline revenue growth has been constrained overall, our Consumer Healthcare business has performed well given the market backdrop and we have seen some strong performances from a number of our brands, in particular Kelo-cote.”

We have just announced a full schedule of webinars to take you through 2021. Exploring a range of trends and issues impacting the industry, we are kicking off with regional overviews of the Sleep, Memory & Mood markets. You can sign up for either the Asia-Pacific Hot Topic Webinar on 24 February, or the North America & Latin America Hot Topic Webinar on 3 March. Find out about the rest of our online events for 2021, by contacting elizabeth.bernos@NicholasHall.com.

Innovation: CES 2021 Health & Wellness Roundup

As our infographic this week indicates, health & wellness led the way in terms of high-quality innovation at this year’s CES (Consumer Electronics Show). Here, we highlight some of the new health & wellness products that were rewarded by judges for the key criteria of excellence in engineering, aesthetics and design, uniqueness, and the innovation they bring to the consumer market.

The winner of the Best of Innovation award in the health & wellness category was Epsy Health, a leading digital health platform for the management of epilepsy that “empowers patients, caregivers and healthcare professionals”. The Epsy app is free to download on both Apple and Android platforms, currently in the USA only, and helps in managing epilepsy by “creating a data rich diary to track seizures, medication compliance and triggers”.

The other level of recognition in each CES category is “Honorees”, i.e. products that score above the threshold in terms of innovation criteria for any given category, and there were several digital healthcare tools here, including Algocare, an IoT (Internet of Things) solution that provides personalised nutrition management at home and at work. Algocare Labs, based in South Korea, claims that the health questionnaires on the Algocare app and its unique algorithm, which analyses thousands of scientific journals, combine to deliver a tailored VMS mix to be dispensed via Algocare’s innovative device. Another CES Honoree was Oova, a high-tech home diagnostic fertility test, which measures luteinising hormone and progesterone in the urine, thanks to its cutting-edge test pads and supporting smartphone app.

Other notable consumer health & wellness innovations at CES 2021 included Flō, a handheld device for managing allergic rhinitis (or hayfever). When placed in the nose and activated, the company says the product projects lights to trigger reactions in the body which limit uncomfortable allergy symptoms. Marketer Fluo Health said it is seeking OTC approval from the FDA, and expects the device to be available to consumers later this year. Another medical device of note was Temp Pal, a smart thermometer from Taiwan-based iWEECARE, which is designed to be placed under the armpit of small children and transmits its readings wirelessly for remote monitoring – according to the company, it measures a child’s temperature within an accuracy of 0.05 degrees Celsius.

Explore the latest cutting-edge consumer healthcare devices, as well as major delivery format and ingredient trends, in our upcoming report from Nicholas Hall’s CHC New Products Tracker, Innovation in CHC: 2020’s NPD & Launch activity under the spotlight! Pre-order your copy before 31 March to save with a generous pre-publication discount. To find out more, please contact melissa.lee@NicholasHall.com.

Switch: 2020 Review and 2021 Prospects

According to our CHC New Products Tracker tool, which covers 20 key markets globally, 2020 was a relatively good year for Rx-to-OTC switch activity, not quite at the level of particularly active years like 2018, but above average in terms of switch-related launch developments, and with some notable breakthroughs such as GSK’s switch of Voltaren Arthritis Pain (diclofenac) in the USA and Glenmark’s Momate Rhino Advance Nasal Spray (mometasone + azelastine) switch in Russia.

Thanks to the Rx-to-OTC reclassification of Voltaren Arthritis Pain, as well as eye allergy itch relief range Pataday (Alcon), the US market led the way in terms of switch developments in 2020, along with Poland, Germany and China. As for category switch trends, looking at Tracker data for the past 8 years (2013 to 2020), allergy remedies has been by far the most active OTC subcategory in producing new products following switch activity, with double the amount of NPD activity as the next nearest subcategory, cough remedies.

Looking ahead to 2021, one of the first switch developments this year will again be an allergy remedy. The UK’s Medicines & Healthcare products Regulatory Agency granted GSL status to Sanofi’s Allevia tablets for seasonal allergic rhinitis (fexofenadine 120mg; 12+ years; 1 tablet per day) in late December 2020. Once Allevia and other OTC fexofenadine products are launched, they will enjoy mass market distribution from the outset (it is more common in the UK for switched ingredients to be granted pharmacy-only OTC status). This is the second Rx-to-GSL UK allergy remedy switch in as many months, following approval for J&J’s Rhinocort Aqua budesonide 64mcg nasal spray in November 2020 (to be marketed as Benacort Hayfever Relief).

In addition, Poland remains at the forefront of global switch activity, with the country’s medicines agency (URPL) recently approving the Rx-to-OTC switch of Famotydyna Ranigast film-coated tablets (Polpharma; famotidine 20mg). Claimed to relieve indigestion, heartburn and hyperacidity for up to 12 hours, this is the first famotidine option available OTC in Poland. Meanwhile, Australia’s TGA is seeking comments until 27th January 2021 on proposed amendments to the Poisons Standard, which will be discussed at the March 2021 meeting of the Advisory Committee on Medicines Scheduling, including adding the following pharmacist-only medicines to Appendix H to permit consumer advertising: prochlorperazine and metoclopramide for the treatment of nausea associated with migraine; and chloramphenicol for ophthalmic use.

We are delighted to announce that our annual European e-Conference 2021 will take place online on 28 & 29 April! With options for individual and corporate site or global access, take the chance to keep up with what’s happening in consumer healthcare today and contact elizabeth.bernos@NicholasHall.com

Ad Watch: 2020 A+P Trends

Two advertising stories caught our attention this week. First was the news that P&G is no longer the world’s No.1 advertiser, with Amazon taking the top spot, according to Ad Age, which publishes an annual list of the largest marketing spenders. The online retail giant spent US$11bn on A+P in 2019, 34% ahead of 2018, when it ranked fifth. P&G was placed second, with US$10.7bn in ad spending in its fiscal year ending in June 2020, while L’Oréal came in at No.3, spending US$10.3bn in 2019. Ad Age notes: “2020 ad spending figures for top marketers are going to be depressed – with exceptions for some advertisers that increased spending to take advantage of market opportunities amid the coronavirus pandemic.”

Secondly, Contagious published its review of the biggest trends in advertising and the best campaigns of 2020. Among the Top 25 campaigns of the year, there were several healthcare & beauty brands listed, including RB’s Dettol, backed by a huge social media initiative on TikTok (#HandWashChallenge) in India. According to Contagious, the campaign involved some of India’s biggest influencers and generated over 125bn views on Dettol’s TikTok page.

Another campaign highlighted was Bayer’s support of Berocca in Vietnam, an A+P initiative that we also profiled earlier this year. Working with digital agency Carnival, Bayer devised the Get Supercharged at 2pm campaign, creating a TikTok music video and encouraging people to post videos of themselves copying its dance moves by offering prizes for the most views. This led to 70,000 videos being created by people participating in the #BeroccaMango2PM hashtag challenge. The campaign directed users to e-Commerce platform Shopee, where they could purchase Berocca bundles and combos. Online sales rose 223% compared with the same period the year before, according to Bayer, while offline sales also increased 32%.

Various beauty brands also featured in the Contagious roundup of the Top 25 campaigns of 2020, most notably P&G’s Dove, which was backed by a Courage Is Beautiful campaign at the height of the pandemic, highlighting the strength and resilience of frontline healthcare workers. The Contagious report also cited recent YouGov research that places both Dettol and J&J’s Tylenol among the Top 25 Best Global Brands 2020 in terms of consumer awareness.

You can review innovation by region and country, including a review of the most active marketers globally in terms of NPD, in our recent report from CHC New Products Tracker, Innovation in CHC. This report also highlights ingredient and delivery format trends, showcases 100 innovative products in 2019, plus much more. For further details, or to order your copy, currently available with a 30% discount until 31 December, please contact melissa.lee@NicholasHall.com without delay. 

Allergy: NPD, switch & naturals power growth

While many of the leading CHC marketers reported declines for their cough & cold portfolios in Q3 2020, the performance of allergy remedies was more mixed, with notable variability by region. For example, Bayer reported rising sales for its Allergy & Cold portfolio in North America in Q3, partly driven by increasing sales for key allergy brand Claritin, which was boosted in early 2020 by the US launch of Claritin Non-Drowsy Chewables in a new cool mint flavour.

Likewise, Perrigo reported a strong performance for its Consumer Self-Care Americas unit in Q3, with increased OTC demand powered by allergy, pain and digestive health products. For Sanofi, while overall Allergy, Cough & Cold sales declined in Q3, portfolio sales were up in the USA, thanks to key allergy brands Allegra and Xyzal. Sanofi also launched its drug-free AllerLife range in the US market in early 2020, adding further fuel to the fast-growing naturals niche among allergy remedies.

Outside the USA, by far the world’s largest market for OTC allergy remedies, two countries that are performing very well are Germany and Brazil. Rx-to-OTC switch has been the driving factor in both markets, with various allergy ingredients – fexofenadine, ebastine and desloratadine – switched to OTC status in Brazil in recent years. As for Germany, after the switch of levocetirizine, which led to several OTC launches in April 2019, desloratadine was subsequently also approved for Rx-to-OTC switch in February 2020.

In October 2020, the EMA’s Committee for Medicinal Products for Human Use adopted a positive opinion recommending a change to the terms of the marketing authorisation for Ratiopharm’s desloratadine, potentially paving the way for an EU-centralised switch to non-Rx status for the allergy ingredient in the near future. Indications will be limited to adults only and the urticaria indication will be restricted to chronic idiopathic urticaria as initially diagnosed by a doctor.

Discover which marketers and brands stand out and how Covid-19 is impacting sales in our newly published Cough, Cold & Allergy report! Allergy remedies are just one of the many categories covered, alongside profiles of 10 major markets, forecasts and much more. For more information, or to order your copy, please contact melissa.lee@NicholasHall.com.

OECD: Covid’s impact on e-Commerce

A new report published last month by the OECD, entitled e-Commerce in the time of COVID-19, explores how the pandemic has caused an expansion of e-Commerce towards “new firms, customers and types of products, likely involving a long-term shift of e-Commerce transactions from luxury goods and services to everyday necessities”. Below we pick out some of the highlights that relate to medicines.

In the opening summary, the OECD says that, “while e-Commerce in the past for many consumer groups was centred on high tech goods, toys or books, it now increasingly involves goods for which availability is critical to a large share of the population, including groceries, medicine and other necessities.” There were two examples given by the OECD from Brazil and Germany showing how e-Commerce has disrupted the medicines market.

In Brazil, “around 54% of Internet users had bought food or food products over the Internet in 2020, substantially up from only 22% in 2018. Significant increases were also observed for cosmetics, toiletries and medicines. As convenience has always been one of the key drivers of e-Commerce participation, it is likely that many of the new users will keep ordering at least some goods online in the future.”

As for Germany, “online sales grew significantly for medicines and groceries, historically laggard sectors in terms of e-Commerce, while overall online sales contracted by around 18% in March 2020 in comparison to the previous year.” The OECD report also highlighted the impact of Covid-19 on e-Commerce’s share of total retail sales in the UK, USA and EU.

Writing in last Friday’s CHC.Newsflash, Nicholas Hall said: “Let’s take the best case point-of-view, that the incidence of Covid-19 will shrink dramatically during the middle of 2021, with a significantly lower death rate. How do we get back to normal? Will personal and professional life pick up where it left off? I doubt that very much. It seems to me that, at the very least, working from home is here to stay, which could mean the revival of suburban shopping, with lower footfall in city centres and out-of-town shopping malls. One impact on consumer health could be a marked revival in community pharmacy and online purchases growing from 9% to 19% of total CHC sales globally in the next 10 years, and from 11% to 27% in Asia. Another fascinating statistic courtesy of Eurostat is that, uniquely, the over-55 cohort is the largest purchasing group for medicines online, which runs counter to the theory that digital equals youth.

Don’t miss out on the chance to save up to 50% on selected reports with our Q4 promotional event, which will run until the end of the year! Stay tuned for new deals coming in December! To find out what promotions are available, or to make a purchase, please contact melissa.lee@NicholasHall.com

Focus on probiotics

Generating global turnover of US$4.4bn in the year to end-June 2020, probiotics & prebiotics remain a vital source of growth (+5.8%) in the worldwide consumer healthcare market, even though this trend has slowed in recent years. As Nicholas Hall said, for a category that has a CAGR of 10%, growth has further “eased back during 2020 as consumers moved their expenditure to supplements more specifically indicated for immunity“.

The global rate of new product development for probiotics was already beginning to slow prior to the pandemic. As our CHC New Products Tracker tool indicates, after several years of impressive growth in the number of probiotics coming to market every year up until 2018, there was a slight fall-off during 2019, and early indications for this year suggest that 2020 probiotics NPD activity will struggle to match the peak of 2018.

That’s why breakthroughs, such as last week’s news of a high-tech skin care microbiome partnership between L’Oréal and Dutch-based Micreos, are so welcome. As NHC Reports Managing Editor, Ian Crook, said, “Granting L’Oréal access to endolysin technology opens a world of opportunities in consumer skincare, since products that work in harmony with the skin microbiome form an underdeveloped niche presently. The partnership may well see new safe, effective, microbiome-friendly skincare products for a host of conditions”, such as eczema, acne and wound infections.

In addition, Nicholas Hall commented: “The probiotics market has been the fastest-growing prevention category in recent years, and I am often asked if it’s too late for new participants to join the market. Of course, it’s not. To quote the great Winston Churchill after the battle of El Alamein in 1942, ‘Now, this is not the end. It is not even the beginning of the end, but it is perhaps the end of the beginning‘.

In the next few years, probiotics will be launched with a much wider range of indications; and new strains will be fermented with much more powerful efficacy, so powerful in some instances that many new products will become registered OTCs or even Rx. When we get back to normal – whatever normal is – I believe probiotics will forge ahead, with a best-case valuation of US$10bn within 10 years. Or even higher, assuming that new strains are brought to market with more demonstrable efficacy, targeting new indications including mental acuity and cardiovascular disease, and not forgetting skincare.

We are pleased to announce that our next Hot Topics Webinar will focus on Probiotics. Hosted by Nicholas Hall and Jennifer Cooper on 2nd December, join them to explore both the commercial and scientific aspects of the category, as well as insights behind the science. To find out more, or to register, please contact elizabeth.bernos@NicholasHall.com.