Nicholas Hall’s Conference Report

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Nicholas Hall sends this report from the 30th European CHC Conference, held last week in Vienna.

Well, after three days packed with expertise and insights, my key takeaways from the Vienna are as follows:

• Consumers are increasingly demanding personalisation of products and services, with digitalisation key to both driving and meeting this demand

• Digital is disrupting conventional paradigms of healthcare

• The empowered consumer expects to sit at the centre of their wellbeing, playing an active role in their healthcare choices. The role of HCPs is moving away from paternalism and closer to that of a mentor or coach

• In terms of technology, we must ensure we are delivering real added value to the consumer, using insights to generate a deeper understanding of what motivates them

• Don’t be afraid to partner with other companies and service providers to deliver the holistic care consumers increasingly seek

After I took to the stage to give my keynote reviewing the trends of the past year and outlining what is next for CHC, Tamara Rogers, SVP & Region Head, EMEA Consumer Healthcare, GSK reviewed the Consumers of the Future = CEOs of their Own Bodies.

She explained that the wealth of data available offers great opportunities to the consumer healthcare industry, but that we must have the ability to interpret it and leverage insights to better know, understand and connect to the consumer.

Tamara was followed by Luca Pagano, Group CEO, BeMyEye, who explained how the BeMyEye disruptive technology allows marketers to maximise the performance of their brands in the retail space, delivering actionable insights to constantly monitor their in-store execution. The most transformational companies are implementing new methodologies for their go-to-market strategies. BeMyEye allows marketers to respond to retail trends in real-time, enabling them to implement continuous performance improvements.

After the presentation of our Awards shortlists, Grigoris Karelos, Country Director, Greece & Cyprus, J&J, asked us “whether we create “Love Brands”? He argued that, by definition, communication about healthcare products is negative as we discuss illness and symptoms. Therefore, the way we talk about our brand is crucial. We must create emotional connections based on consumer insight to create impactful and relevant communication. It is important to have a clear and consistent brand belief if we want to create long-lasting relationships with consumers. However, the ways in which we communicate this message must evolve in order to stay relevant.

We were then lucky to be joined by Daragh Anglim, Managing Director, Prohibition Partners, to explore the Medical Cannabis landscape of Europe.

This is such a fast-paced and exciting category, yet Daragh explained there is a real lack of education for HCPs on this subject – it has been legal in the UK since November 2018, but has yet to be prescribed on the NHS, with doctors taking a risk-averse approach.

There is a need for education and clarity about the medical use of cannabis. There’s an existing user base for the product, so it’s not about educating on what it is, necessarily, but rather its safe usage, therapeutic applications and medical benefits

Medical cannabis offers huge growth potential, but independent and reliable data is necessary to drive the category forwards.

The Business of Being & Feeling Well was the next topic presented by both Dr Rodney Collins, Regional Director, EMEA, McCann Truth Central and Harjot Singh, Chief Strategy Officer, McCann Worldgroup EMEA. They argued that the notion of wellness and what it means to be well have evolved, with people today regarding it more as a state of mind, and one of the largest unmet needs is helping people to be happy and stay positive. Technology is improving peoples’ sense of wellness, but we must ensure that the technology is relevant and delivers added value, or else it becomes technology for technology’s sake.

Dr Iris Hardewig, Senior Consultant, Analyze & Realise explored Digitalisation in the Natural Health Space, and identified key areas in the natural health sphere where digitalisation plays a role, including growing interest in personalised products. Consumers increasingly want to know more about themselves, possible through tools such as tracking and genomics, and are willing to invest in personalised natural health products to supplement their health and lifestyles. Prevention has been a growing theme in recent years, albeit at a slower pace in Europe, and we see continued investment in this segment. Much of the investment in personalisation of supplements and natural products – achieved via digitalisation – comes largely from start-ups, rather than established pharma players.

Iris was then followed by a series of Innovation talks over coffee, led by Don McKernan of Impact and our partners at The CHC Innovation Connection.

Back to the main stage, the next presentation showed us How Digital is Changing People’s Relationship with Health, and was led by Milena Leone, Head of Innovation & Digital Consumer Healthcare, Sanofi. She argued that in terms of digital, pharma lags far behind other industries. Through the creation of the ÜWell digital platform, Sanofi has sought to meet the needs of consumers who are becoming more curious, demanding and impatient. She explained how the ÜWell digital health platform is designed to simplify, speed up and improve consumer access to HCPs and healthcare services. ÜWell is an omni-channel strategy that allows consumers to manage their health independently, acting as a personal digital health coach.

Our final presenter of Day 1 was Dave McCaughan, who took a lighthearted look at the “History of Underwear” to explain that we must recognise and react to social change in order to maintain a meaningful relationship with the consumer, adapting to an evolving society in order to remain relevant. Stressing the importance of recognising social shifts to create meaningful relationships with consumers, Dave stated, “we live in a world driven by emotional benefit. Science and technology are the support”.

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Opening Day 2 was Niklas Larsson, PhD, Research Director, Probi, who took a detailed look at Probiotics and Female Health , exploring New Benefits and New Consumers.

He reviewed how probiotics for women’s health have historically focused on vaginal health, yet Probi is going beyond this and addressing other concerns that primarily affect women: anaemia (largely in teenagers and women of child-bearing age) and osteopenia and osteoporosis (in post-menopausal women). Niklas proudly reported that the products have strong efficacy, backed by animal trials and clinical trials, and offer health benefits for women throughout various stages of their lives.

Next up was CEO of Austria’s Institut AllergoSan, Anita Frauwallner, with a presentation entitled “With a little help from my friends” Or How Tiny Bacteria Helped Me to Outperform the German and Austrian OTC Market.

Established in 1991, Institut Allergosan began with a focus on innovation, employing a different approach to probiotics which included high CFU and multiple strains. Its first clinical trial was so successful that it’s still viewed as one of the Top 12 ever probiotic clinical trials in the world, according to the World Gastroenterology Association. Highlighting the importance of R&D in her business model, Anita detailed that they have more than 40 trials running currently, and research co-operations with all five university hospitals in Austria, as well as international co-operations. For Anita, research not only helps you realise what’s possible, but it builds trust in what you do.

Our data partners for France, OpenHealth Company, were represented by Nicolas Grelaud, Commercial & Marketing Director, who explored Meeting New Health Consumer Expectation: Engaging Experiences and Naturals. A complex subject by definition, we face challenges in multiple areas, including changes in demographics, culture and technology. Nicolas recognised that we must recognise the increasing demand for natural products, with 1 in 4 consumers preferring to take a natural treatment rather than a medicine. We are witnessing a shift in the consumer paradigm. Our health consumers used to be patients, and then became consumers, and they have now evolved to “Consum’actors”, who are open-minded and engaged in their healthcare decision-making process, often seeking natural and local alternatives and asking for personalised solutions. Nicolas stated that pharmacists must evolve, adapt and reinvent in light of this new healthcare consumer, becoming the place of truth that the consumer is expecting.

Our next presenter was Martyn Hilton, Chief Global Commercial & Marketing Director, HRA Pharma, who explored How the Digital Landscape is Changing the HRA Pharma Business Model. Detailing the digital strategy behind HRA Pharma’s two focus brands, ellaOne and Compeed, Martyn explained the importance of understanding the role the digital environment plays in the consumer journey today, as well as tomorrow, and also urged delegates to identify where we can look to intercept and influence consumers. We must create content that‘s relevant and in the right format for our intended audience.

Pointing to disruption in the way consumers access medicines, through tools such as telemedicine and mail-order, Martyn detailed that HRA Pharma invests in click & collect and delivery methods for ellaOne in certain markets, which have been received positively.

Alessia Scarpocchi, Market & Digital Strategies Director, Apoteca Natura, Strategic & Web at Aboca Group gave a presentation reviewing An Integrated Digital System to Evolve Customers’ Healthcare Journey: The Apoteca Natura Experience.

She explained what Abioa are doing to keep ahead in the digital age – going beyond simply providing products and services to purchase, the company instead wants to offer health solutions for people, with the individual at the heart of its mission. Digital tools are key to supporting  this ambitious positioning, with a range of training materials available for pharmacists, as well as a multi-channel approach to its direct-to-consumer communication. The company launched its Health & Wellness System 1.5 years ago, with digital dashboards developed for all stakeholders, including the possibility of loyalty system for consumers. The MyApotecaNatura app includes a number of tools and functions to allow consumers to engage in their health management, including tracking metrics, creating a health profile and accessing healthcare information. Initial result are very encouraging, with around 175 thousand app downloads and impressive levels of user engagement.

From TV-centric to Digital-led: A Paradigm Shift in Consumer Healthcare – our final speaker was Maurizio Luongo, Corporate Consumer Health BU Director for Menarini. Pointing to the evolving consumer who demands more digital tools to make personal healthcare choices, Maurizio outlined how Menarini has risen to the challenge of the shifting paradigm, with two of the key elements in the digital journey being attention and relevance. He concluded that we must combine technology, processes and organisational structure if we are to achieve digital operational excellence.

Alongside these inspirational sessions, we were so proud to host various networking opportunities, and of course to celebrate successes with our Marketing Awards. We were grateful to be joined by MSF to discuss their charitable activities, and to present them with a donation from The Nicholas Hall Group.

As I wrapped up the event yesterday, I announced that our 2020 meeting will be in Athens, where I hope to see many of you again!

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CHPA Report & Conference

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Last week, to tie in with its Annual Executive Conference (AEC), the Consumer Healthcare Products Association released a white paper that found, on average, every dollar spent on OTC medicines saves the US healthcare system around US$7.20, resulting in nearly US$146bn in savings annually. CHPA President & CEO Scott Melville commented that the “healthcare system undervalues the contribution of our industry’s products”, and explained that the research will support legislative initiatives promoting financial incentives for consumers to buy OTCs using health insurance flexible spending plans.

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Done in partnership with IRI, the study was conducted in part to raise the profile of OTC products in USA. It found that around 90% of people who buy an OTC product for a condition would seek medical care if the OTC product had not been available. The study analysed nine OTC categories to identify the primary contributors of cost savings to the healthcare system. The categories include allergy, analgesics, antifungals, cough / cold / flu, lower GI, medicated skin, upper GI, sleep and smoking control. The research showed that OTC medicines provide additional value through expanded access to more than 27mn consumers who would otherwise forgo treatment – more than 13mn Americans for allergies alone.

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Writing from Florida, Nicholas Hall said: “Trust was a major theme of CHPA’s Annual Executive Conference … Edelman presented data showing that consumer trust of healthcare is improving after plummeting last year. Speakers agreed that trust goes beyond building brands. In a session I moderated on Tuesday, Bayer CH President Heiko Schipper said that our industry needs to, “articulate better what we do. We are doing a lot of good things like being responsible for the environment and employee diversity”.

Taisho Executive VP Ken Uehara agreed: “Trust can’t be built instantly, certainly for our company, it’s our most important asset.” Alan Main, Executive VP, Sanofi, commented that in the past it was about building the brand: “I still think the brand comes first in people’s minds, but we have to look after the brands, not just for five years but for 30-40 years.” Katie Devine, who is moving into a new leadership role at J&J, said companies can choose not to reply to every tweet, but should maintain a fact-based conversation about being responsible in the treatment of employees, the population and planet.

Other questions I addressed to the Leadership Panel concerned the lack of Rx-to-OTC switch (Alan Main said switch has an important role to play in the future of self-care); CBD (all panellists believe it will develop well beyond the current US$500mn quoted by IRI, although Katie’s point, “I know how to switch from Rx to OTC, but not from illegal to legal”, was well taken); and the number one item on their wish list — speed to market and improved innovation were favourites … I liked the concentrated format of this year’s AEC, with two half-day sessions, which allowed time for networking, and was proud to have been one of three Preferred Sponsors of the meeting, in the good company of Google and the Emerson Group.”

Nicholas Hall will discuss the latest Market Trends and Innovation impacting the CHC market at our annual North American CHC Conference (26-27 June) in collaboration with our partners EverythingHealth. As well as the chance to network with other industry players, you can hear from Google, Jefferson Health, Persuadable Research and other industry experts. Don’t hesitate — book before 31 March to save with our generous early-bird booking discount! To find out more about this event, please contact elizabeth.bernos@NicholasHall.com.

Medical cannabis diversification

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In terms of number of innovations by OTC subcategory, medical cannabis moved into the Top 20 in 2018 according to OTC New Products Tracker, with 86 new product developments. Europe and North America have been driving the trend in terms of high-quality innovations, from Swiss Cannabis Gum in Switzerland to PharmaCare’s Naturopathica lozenges in the UK and Foria Basics Suppositories in the USA.

As well as an ever-growing diversity of delivery formats, another characteristic of the emerging medical cannabis category is the increasing width of positioning. This is exemplified by a new range of hemp-based hair & body care products launched by HempMeds. Distributed by Naturewell in the US market, the personal care line is composed of 4 products – shampoo, conditioner, body wash and body lotion – all formulated with CBD oil (derived from hemp) and natural extracts such as argan and goji berry (shampoo), argan and green tea (conditioner), peppermint and liquorice root (body wash) and jojoba oil and almond oil (body lotion). 

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Available now to buy online, this new range was just recently showcased at the Natural Products Expo West in California, where HempMeds President Todd Morrow said that design and development of the line was “focused on consideration of women in particular”.

According to a recent report by Eaze, the number of US women buying cannabis products almost doubled in 2018, up 92%, and women now make up 38% of all US cannabis consumers. This report shows that not only is the medical cannabis product mix diversifying in terms of format and positioning, but the consumer base is also widening too, with more women and older people now entering the market.

Review 17,000+ new launches and innovations with OTC New Products Tracker, the ultimate competitive intelligence tool! Products are given a star rating, with “me too” items ranked 1*; launches / line extensions in a new category / adjacency 2*; major launches / line extensions with strong new benefits / positioning 3*, and 1st Rx-to-OTC switches in a category, creation of a new OTC class or other major leaps in innovation 4*. With a recently-released major update including eye-catching new graphics and powerful search filters that help you visualise and explore the vast archive according to your exact specifications, now is the perfect time to set up your free trial. For a demo or more information, contact waisan.lee-gabell@NicholasHall.com.

OTC Innovation Report 2018

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Lamenting the fact that Scott Gottlieb is stepping down as FDA Commissioner, Nicholas Hall commented in Friday’s OTC.Newsflash that: “Although producing few tangible results so far, FDA under Gottlieb has displayed a greater openness to finding new switch models at a lower cost and with shorter lead times, including the use of new technologies.” Nicholas Hall also said that “government support is vital to our industry” and that “more liberal regulations are at the heart of a successful self-care sector”.

A drop-off in switch activity over the past year is part of the explanation for lower levels of high-quality OTC innovation. In 2018, OTC New Products Tracker awarded just six products with 4 stars – eye care brands Lumify (USA) and Zabak Eye Drops (Poland), antacid Reza Band (USA) and antispasmodic Scopolan Compositum (Poland), plus Viagra Connect (UK) and allergy remedy Talerc (Brazil). Compared to previous years, this marked a falling-off in terms of 4-star innovations.

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The number of total OTC innovations (3,747) in 2018 was roughly in line with the previous year, and still much higher compared to 2014, 2015 and 2016. However, the number of 2* (528), 3* (94) and 4* (6) innovations was much lower, while the number of 1* innovations (3,119) was at an all-time high.

VMS continues to be a major source of innovation, with three of the Top 5 subcategories in 2018 – probiotics, multivitamins and hair & beauty supplements. Derma is another key source of innovation, with three of the Top 10 – acne remedies, eczema & psoriasis and lip care. The three other innovative subcategories which complete the Top 10 are sedatives & sleep aids, topical analgesics and sore throat.

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Please contact us for the full report. You can also review 17,000+ new launches and innovations with OTC New Products Tracker, the ultimate competitive intelligence tool! Products are given a star rating, with “me too” items ranked 1*; launches / line extensions in a new category / adjacency 2*; major launches / line extensions with strong new benefits / positioning 3*, and 1st Rx-to-OTC switches in a category, creation of a new OTC class or other major leaps in innovation 4*. With a recently-released major update including eye-catching new graphics and powerful search filters that help you visualise and explore the vast archive according to your exact requirements, now is the ideal time to set up your free trial. For a demo or more information, contact waisan.lee-gabell@NicholasHall.com.

AI to power personalised nutrition

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An article that appeared over the weekend in The New York Times by US cardiologist and digital medicine researcher Eric Topol pointed to the power of artificial intelligence to provide personalised diet and nutrition advice. Algorithms that could advise us on what’s lacking in our diet and recommend supplements or foods that would fill those gaps hold great promise for both consumers and VMS marketers, and rapid advances in AI technology are bringing such a reality closer.

However, Topol says that the science of nutrition still remains in its infancy, and that most studies rely on observational data such as food diaries, unreliable sources of information which prevent any high-quality trials establishing cause and effect. More importantly, Topol says the central flaw in this field of research is the idea that there is one optimal diet for all people.

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One pioneer in the field of personalised nutrition is US supplement marketer Thorne, which repackaged its products and launched a new range of at-home diagnostic tests in 2018, providing personalised health and diet plans, including VMS supplement recommendations. Other US VMS marketers operating in this emerging field of personalised nutrition, and which have launched products recently picked up by Nicholas Hall’s OTC New Products Tracker, include Ladder and Persona.

There is also the emerging field of nutrigenomics, with companies marketing DNA tests that offer personalised diet plans, though Topol advises caution here, saying that a truly personalised diet would involve taking many more factors into account than just genetics. He cites the importance of microbiome analysis, lifestyle, medication, family history, immune system and many other factors, and says that no AI is yet on the market that can analyse all this data and offer personalised solutions.

But there is cause for hope. Studies monitoring spikes in blood glucose levels after eating have made some breakthroughs, pointing to the importance of our gut microbiome, and there is now a commercial version of the DayTwo personalised nutrition test available, based on the research of Dr Segal and Dr Elinav. Topol also mentions other advances, such as AI deep learning tools that can analyse smartphone photos of a user’s meals to record nutritional intake, replacing the need for food diaries. Topol also stresses the importance of wearables, such as smartwatches and skin patches, as aids in unlocking a future of virtual health coaches offering personalised nutrition advice to us all.

Review 17,000+ new launches and innovations with OTC New Products Tracker, the ultimate competitive intelligence tool! Products are given a star rating, with “me too” items ranked 1*; launches / line extensions in a new category / adjacency 2*; major launches / line extensions with strong new benefits / positioning 3*, and 1st Rx-to-OTC switches in a category, creation of a new OTC class or other major leaps in innovation 4*. With a recently-released major update including eye-catching new graphics and powerful search filters that help you visualise and explore the vast archive according to your exact requirements, now is the ideal time to set up your free trial. For a demo or more information, contact waisan.lee-gabell@NicholasHall.com.

RB 2.0: E-commerce a key focus

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With CEO Rakesh Kapoor retiring at the end of the year, and ambitious plans for RB 2.0 to be implemented within the next year, this is without doubt a transformational time for RB. Nicholas Hall believes RB 2.0 will lead to the “end-point of divesting the Hygiene Home business, and with the company quickly moving on to v3.0 and a major merger. I can think of at least four CHC companies that may want to be associated with RB v3.0, not all of whom could be considered equals, but who would be attracted by a cashless transaction and the benefits of scale.” 

RB released its full year results last week, with net revenue in 2018 up by 3% on a like-for-like basis, while Health grew by 2%. Within Health, the OTC segment rose by 5%, driven by innovations (Nurofen 24-hour patch, Strepsils flurbiprofen spray) and strong regional performances (Lemsip in UK, Luftal in Brazil, Moov in India and Tempra in Mexico). As part of its RB 2.0 mission, the company is planning to “supercharge” innovation even further, focusing on new categories (i.e. the launch of brain health supplement Neuriva later in H1 2019), new consumers and new channels (i.e. MegaRed and Move Free in e-commerce outlets in China).

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In its 2018 results presentation, RB emphasised its “best-in-class digital and e-commerce capability” as a key driver behind RB 2.0 growth, highlighting the specific case of China where the company’s online sales already outweigh “offline” sales thanks to strong partnerships with the likes of Alibaba and JD.com. Innovations such as MegaRed CoQ10, Move Free Ultra and Move Free Advanced have been specially developed for the e-commerce channel in China and the USA. 

In its results, the company also reported that 9% of RB Health sales are generated in the e-commerce channel, which it says ranks second among its consumer healthcare peers, while its operating margin of 28% is way ahead of the consumer healthcare average. RB attributes its success in e-commerce to its FMCG heritage and its strong margins to the relatively high proportion of its portfolio devoted to Consumer Health vs key OTC competitors.

Nicholas Hall’s New Paradigms for CHC 2019: Over the Horizon, our upcoming new Signature Report written by Nicholas, includes a chapter dedicated to reviewing M&A within the CHC industry. Exploring recent transactions, multiples and the buyers and sellers — with predictions of likely future deals — Nicholas also asks whether M&A actually works and examines the role of private equity. An essential read for all players striving to compete in this rapidly-evolving marketplace, for the full table of contents or to pre-order your copy, please contact melissa.lee@NicholasHall.com.

 

High on innovation, but CBD faces regulatory uncertainty

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Various Nicholas Hall publications, notably OTC.NewDirections and OTC New Products Tracker, provide in-depth coverage of medical cannabis developments owing to the category’s huge potential to boost future consumer healthcare growth. High levels of innovation, both in terms of positioning and delivery format (like those detailed below), continue to characterise the category, but recent regulatory moves by the WHO and EU mean that the status of CBD supplements remains far from settled.

Looking at delivery format innovations, recent developments include a new mouth spray in the UK (Natures Aid CBD Oil Spray from Thornton & Ross / Stada) and a new nasal spray in the USA (Rhinodol from New Leaf Pharmaceuticals). The latter claims to deliver the highest concentrations of medical CBD at an affordable cost (US$69.99). According to New Leaf, the oral administrative route provides the lowest bioavailability, owing to the digestive processes that occur when CBDs enter the blood stream (a significant amount of CBD goes into the liver and is broken down into unusable compounds).

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Screenshot from New Leaf Pharma’s website

Meanwhile, attitudes to CBD and cannabis are changing at a regulatory level. According to news sources, a leaked World Health Organisation internal letter to the UN Secretary-General recommends that whole-flower cannabis and its resins should be removed from Schedule IV of the Single Convention on Narcotic Drugs (1961), the most restrictive international drug category. Cannabis scheduling was discussed at the Expert Committee of Drug Dependence 41st meeting in November 2018 but the discussions have not been published. The letter also clarified that cannabidiol should not be scheduled within the International Drug Control Conventions, while tinctures and extracts of cannabis should also be deleted from Schedule I. WHO recommendations will be voted on by the UN’s Commission on Narcotic Drugs, which could take place in March 2019.

In Europe, marketers of CBD supplements are facing new regulatory hurdles. The European Food Safety Authority has amended the entry for cannabinoids on the Novel Foods register, which now states: “Extracts of Cannabis sativa L. and derived products containing cannabinoids are considered novel foods as a history of consumption has not been demonstrated. This applies to both the extracts themselves and any products to which they are added as an ingredient (such as hemp seed oil). This also applies to extracts of other plants containing cannabinoids. Synthetically-obtained cannabinoids are considered as novel.”

This means that CBD supplements are now classed as a novel food in Europe and manufacturers face the prospect of having to take their products off the market while they apply for approved novel food status, which can take around a year. In December 2018, Austria banned the sale of CBD extracts, stating that the ingredients fall under the EU’s Novel Foods regulations and cannot be marketed without authorisation.

Join Nicholas Hall at our upcoming New Jersey meeting, hosted with our partners Everything Health. Based on the theme, Innovate, Digitize, Integrate, the meeting takes place on 26-27 June, with representatives from Perrigo, MarketHub, Google and many others, joining us to discuss and debate topics including:

  • Market Trends and Innovation
  • Key Developments in the Cannabis Market
  • Connected Health
  • Consumer Insights using Artificial Intelligence