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.

IRI: Top Product Claims, Retail Trends

New research by IRI points to some of the consumer retail trends that have emerged in the US market in the past year as a result of Covid. Looking at the entire CPG (consumer packaged goods) market in the USA, IRI’s recently published Leader Board report for 2020 highlighted some key trends, including consumers of all income levels driving more growth of premium and super-premium products, with health and wellness and self-care products experiencing higher demand. Among the fastest-growing categories in 2020, IRI listed home health care / kits (+172%), personal thermometers (+127%) and sleeping remedies (+28%).

The report also lists some of the marketers and categories that benefited from the strong shift to e-Commerce, including Vi-Jon (marketer of hand sanitiser Germ-X) and external analgesic rubs, as well as highlighting the leading product claims among both edible and non-edible consumer goods. As the chart below from the report indicates, “more vitamin C” was one of the fastest-growing claims in terms of sales (+24%) in the edible sector, while hemp seed oil (+110%), aromatherapy (+37%) and sleep health (+34%) were all in the Top 10 non-edible product claims in 2020.

_{Copyright: 2021 Information Resources Inc. (IRI).}

Further IRI research found that small and extra-small CPG manufacturers’ and retailers’ own brands gained US market share vs larger players during 2020. Of the CPG industry’s US$933bn sales in measured channels in 2020, large manufacturers lost 1.3 share points (US$12.1bn in sales) to smaller players, owing to channel and category shifts and supply constraints. The CPG industry grew 10.3%, with smaller manufacturers (annual measured channel sales <US$1bn) capturing nearly one-third of that and private label products accounting for roughly 18%. This resulted in smaller manufacturers and PL gaining 1.1 and 0.2 share points, respectively, from larger manufacturers (measured channel sales exceeding US$5.5bn annually), which have lost market share in each of the past five years, but still represent 46.7% of total US sales in measured channels.

Comment from President of Strategic Analytics for IRI, Dr Krishnakumar Davey: The consumer shift towards smaller manufacturers and PL products is something that IRI has been documenting for several years, and we saw the trend accelerate during the pandemic. Many large manufacturers were not able to meet the surge in demand in Q2 when they lost most share to smaller players, who seized on this opportunity. Several brands attracted a number of new buyers as in-home consumption surged. Large manufacturers fared relatively better in Q3, but still lost significant share. Q4 saw some improvement and reversion to historical trends. Many extra-small manufacturers are mostly new entrants to the market into supply-constrained categories (e.g. soap, hand sanitisers, home healthcare kits). Small manufacturers playing in high-demand categories such as hygiene, personal care and health & wellness saw high growth.

Nicholas Hall will be joined online by experts from GSK, J&J and Convert Group during our European e-Conference 2021. Taking place on 28 & 29 April, there are options for individual passes or corporate licences. Take the chance to keep up with what’s happening in consumer healthcare today by contacting elizabeth.bernos@NicholasHall.com to reserve your space.

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.

Global CHC Market Movers, MAT Q3 2020

We have now published our latest Market Movers update on the CHC Dashboard website, highlighting 6 brands that have been driving growth in the global CHC market in the MAT Q3 2020 period, as well as 6 brands in fast decline, and below we look at the trends behind these exceptional brand performances.

As was the case in MAT Q2 2020, a common thread among the fastest-growing brands is immunity positioning, with four of the six products highlighted below – Dabur Chyawanprash (India), Yiling Lianhua Qingwen (China), Airborne (USA) and Arbidol (Russia) – boosted by heightened consumer demand during the pandemic for products that boost immunity.

Germ-X (Vi-Jon) is a new entry in the Top 6 fastest-growing brands, and one of several antiseptics & disinfectants that posted a steep rise in growth in the year to end-September 2020, along with ArtNaturals (ArtNaturals) and Suave (Unilever) in the US market and Dettol (RB) in China. Meanwhile, global No.2 CHC brand Tylenol (J&J) continued to close in on global No.1 Vicks (P&G) with dynamic growth (+30%) in the USA, boosted by Covid-related demand for painkillers and innovation, notably the Q2 2020 launch of Tylenol Extra Strength Dissolve Packs.

Ayurvedic formulation Dabur Chyawanprash (Dabur) saw sales more than double (+155%) in MAT Q3 2020, driven by strong Covid-related demand and the launch of Dabur Immunity Kit in Q2 2020, and has established itself as India’s No.1 CHC brand. Likewise, umifenovir-based medicine Arbidol (OTCPharm), which is positioned for flu as well as acute respiratory and viral infections, saw sales more than treble (+206%) in the MAT Q3 2020 period and has now become the No.1 CHC brand in Russia.

As for products that suffered falling sales in MAT Q3 2020, again the notable examples were tonics & cure alls in China – such as Dong-e E-Jiao – hit by rising raw material costs and falling demand, as well as ranitidine-based antacids – such as Sanofi’s Zantac 150 – owing to concerns around NDMA and Takeda’s Alinamin EX vitamin B supplement in Japan, affected by demographic changes and a fall in tourist spending.

You can review various NPD trends in our report from CHC New Products Tracker, Innovation in CHC. This report highlights the best innovations from 2019, looks at innovation by region and country, plus much more. For more information, or to order your copy, available with a 30% discount until 31 December, please contact melissa.lee@NicholasHall.com

CBD: European market boosted by ECJ ruling

An important recent ruling by the European Court of Justice – that an EU member state may not prohibit the marketing of cannabidiol (CBD) lawfully produced in another member state – could mark a turning point for CBD in Europe. So far, sales and innovation in this high-potential category have been driven by the fast-growing US market, where CBD is available in an ever-growing array of delivery formats and formulations.

Innovation in Europe has, until now, been more cautious. According to our CHC New Products Tracker tool, NPD activity in the region has largely been driven by the UK, along with Germany and more recently Spain. While innovation in Europe has been mainly powered by CBD specialists such as Ignite and Vitality CBD, established CHC marketers are also playing an increasing role, with Nature’s Aid (Stada) launching a range of CBD sprays and gels in the UK in 2019, while Vemedia launched new cream and capsule CBD formats in Spain in mid-2020 under its Valdispro brand umbrella.

Nicholas Hall Writes: “CBD is one of my top picks for a new CHC mega-category. Consumer demand is strong, retailers are eager to stock, there is an abundant supply chain, and very importantly CBD is highly efficacious and seems to have few if any side-effects once “bad boy” THC is suppressed within the cannabis plant. So what is holding back the creation of what we estimate as a potential US$20bn market at retail prices? The answer is clear: regulation. Usually marketers want fewer regulations, not more; but in this instance it is vital that the health authorities determine the scope of the market, indications, dosage strengths, permitted claims and production standards, which will drive away the carpetbaggers.“

“In many countries, CBD is marketed in the form of hemp. To quote the President of the European Industrial Hemp Association, Daniel Kruse: ‘This ruling is the beginning of the end of the arbitrary stigmatisation of CBD. In future, both European and national courts, politicians and authorities will have to orient themselves on the Court’s reasoning. If the hemp industry keeps being proactive and comes up with safety assessments and standards, achieved by the EIHA Novel Food Joint Application, then the products will be legally marketable all over Europe, latest in three years. The market growth will be extremely significant.‘”

CBD 2020 is one of several Nicholas Hall reports that are being heavily discounted as part of our final Q4 promotional event, which runs from tomorrow until end-December. There are also discounts to be had on our Innovation in CHC, Coronavirus 2020 and New Paradigms reports, as well as several more. For more information please contact Melissa.Lee@NicholasHall.com

CHC market shows resilience in Q2 2020

In the 12 months to end-June 2020, the global retail CHC market grew by 4.6%. This marked a slowdown vs MAT Q1 (+5.6%), but Celine Waller, Group VP, DB6, said “the market has remained far more resilient than many expected”. A boom in prevention categories such as antiseptics & disinfectants (+38.7%) and immune supplements (+38.6%) has helped to mitigate the effect of “pantry unloading” following consumer stockpiling in Q1, while strong US growth in Q2 offset weaker performances in China and Western Europe.

Western Europe decelerated to 1.2% triggered principally by a decline in CCA as lockdowns and increased hygiene measures resulted in reduced incidence of respiratory pathologies. Low growth in Germany (+1.5%) and the UK (+1.9%) offset moderate declines in Italy (-0.8%) and France (-1.3%).

Asia-Pacific slowed to 2.7% hindered by a weak performance in China and declines in both Japan (-2.9%) and Australia (-1.3%) caused by loss of revenue from Chinese travellers. However, India was up 11.3% driven by chyawanprash, which more than doubled thanks to its immunity positioning.

North America posted a 6.4% upturn with strong US growth spearheaded by VMS (+8.8%) and Derma (+8.4%) – the latter boosted by a doubling in sales of antiseptics & disinfectants.

Central & Eastern Europe achieved growth of 8.6% with inflation-driven growth in Russia (+10.9%) offset by a comparatively weak performance in Poland (+5.2%), while the Middle & East Africa experienced a slight slowdown (+6.9%).

Latin America grew by 11.8% with both Brazil (+12.0%) and Mexico (+11.0%) up by double digits. VMS was the key contributor growing by 16.7% in the region.

We are pleased to announce Nicholas Hall’s Asia-Pacific webinar, which will be held on 12 November! Nicholas will be joined by several regional industry experts to explore key trends in the region, including a look at regional WOW! brands, growth prospects, distribution and much more. For further details, or to register, please contact elizabeth.bernos@NicholasHall.com.

How consumer shopping habits are changing

A recent report by Global Data in collaboration with Amazon describes changing consumer shopping habits during the Covid-19 pandemic. The report highlights a stark increase in online sales, but stresses that the online channel did not dominate during the peak of the pandemic — the majority of sales during lockdown were made at physical stores that remained open. In addition, the highest growth rates over the past few months are attributed to multichannel retailers, rather than pure-play online retailers.

The pandemic has catalysed closer integration of physical retail and online spaces, with many traditional retailers emphasising or introducing additional services such as curbside pick-up. These services have been well-received; almost 68% of US consumers say they will use curbside collection more, even after the pandemic has subsided. Also, in countries that have reopened post-Covid, there has been a “mini-rush” back to bricks & mortar retailers, highlighting how much consumers – especially in the US, UK and France – have missed the social interaction that physical stores offer.

As a result, the penetration rate for online is coming down as consumers resume physical shopping. According to the survey, penetration will remain elevated compared to 2019 but the peaks seen during lockdown were exceptional, not a new normal. If anything, the report suggests that the role of the physical store is actually being strengthened in some ways. In the USA, Global Data projects around 35.7% of non-food sales transacted online will be supported by a physical store this year – more than in 2019.

Comment from Laura Howard Werling, Market Analyst CIMA, Nicholas Hall Group of Companies: The Global Data report challenges the narrative that the pandemic, and subsequent growth of the online channel, spells the end for physical retail. Instead, retail stores have performed well over the past few months and are successfully utilising a multichannel approach to adapt to the disruption. Consumers have been satisfied with this approach and it should be no surprise: the modern consumer views online and retail stores as one market and navigates both spaces seamlessly to achieve maximum efficiency when shopping.

We are pleased to announce a special Q4 promotional event, which will run until the end of the year! For October only, we are offering a 25% discount on annual subscription rates for Insight and CHC New Products Tracker, alongside up to 50% on selected reports titles. Watch this space — more promotions will be coming in November and December! To find out more, or to make a purchase, please contact melissa.lee@NicholasHall.com

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.