Medical cannabis round-up

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Medical cannabis is a dynamic and fast-moving market, and of increasing interest to many Pharma and Big Tobacco marketers. In North America and Europe, several countries now allow, or are considering allowing, the medical use of cannabis or cannabinoids in some form, while CBD supplements are widely available.

Already in 2019 we’ve also seen new developments in this field in the Middle East and Asia-Pacific, with Israel’s Parliament, the Knesset, agreeing to the export of medical cannabis. Once the decision is formally approved by the Cabinet, this will allow Israel to participate in the rapidly expanding global cannabis market, and exports may begin in mid-2019. As for Thailand, its National Legislative Assembly has just passed the second and third readings of an amendment to the Narcotics Bill to allow the production, import, export, possession and use of cannabis and kratom products for medical and research purposes.

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One notable recent launch in the USA was Foria Basics Suppositories, a cannabidiol-based product formulated primarily to relieve menstrual cramps and discomfort. It also claims to relieve menopausal symptoms, inflammation and pain. The all-natural formula, which also includes 100% organic fair trade cocoa butter, delivers broad-spectrum CBD 100mg directly to the muscle and vascular tissues of the upper vagina and uterus. What’s unique about Foria Basics Suppositories is not just the delivery format, but also the menstrual pain positioning.

Medical cannabis was one of the hot OTC innovation trends of 2018, and Nicholas Hall’s OTC New Products Tracker now lists over 100 medical cannabis launches in its ever-growing archive. In 2018, we tracked 66 medical cannabis innovations, the majority emanating from the US market, followed by Germany and UK. 

Stay informed about the latest cannabis-related scientific and regulatory developments by subscribing to our sister publication OTC.NewDirections — the reliable source from NHC to keep up with all relevant developments in this fast-developing market worldwide. For more details, or to arrange a trial subscription, please contact melissa.lee@NicholasHall.com

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East to power global economy in 2019

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According to the latest research from the Economist Intelligence Unit (EIU), several countries in Asia-Pacific, the Middle East and Africa will produce the highest economic growth in 2019, while North America, Europe and even Latin America will lag behind. There are some exceptions to this trend (like Poland and Ireland in Europe, which are forecast to outperform the global economy in 2019) but the general picture shows that the highest GDP growth will be in the east.

Although there are concerns about the economic slowdown in China – see our blog just before Christmas and the recent letter from Apple CEO Tim Cook to investors – the country is expected to remain among the best-performing economies in 2019, with a growth forecast of 6.3%. The EIU revised up slightly its China forecast for 2019, following the agreement reached between the US and China at the G20 to delay planned tariff actions. However, it remains uncertain whether a bilateral trade deal will be reached.

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China’s troubles may actually be providing a boost to neighbouring Asia-Pacific markets, such as Vietnam, which offer an alternative manufacturing location. Also, as we’ve highlighted on the blog previously, several African markets have likewise been boosted by their growing status as manufacturing hubs, notably Kenya. As for India, it is forecast by the EIU to be among the Top 5 fastest-growing economies in 2019, continuing its strong 2018 upturn – according to the latest OTC DASHBOARD data for the MAT Q3 2018 period, India is the fastest-growing OTC market in Asia-Pacific, up 8.8%.

At the other end of the scale, key Latin American markets Venezuela and Argentina are forecast to be among the Top 5 worst-performing economies in 2019, while Mexico and Brazil are also expected to perform below par this year. However, high inflation has helped to boost OTC growth in these markets. As for Europe, several western European markets are forecast to produce low growth, while Japan, Turkey and South Africa are all expected to produce growth in the 0-2% range, with the US performing slightly better.

Join Nicholas Hall and The CHC Training Academy in Vietnam on 28 February. Focusing on the central theme of Winning Together in Consumer Health, this unique workshop will enable you to develop essential skills to succeed in the new era of collaborative partnership approaches between retailer and supplier for strengthening categories together, plus deep insights on key stakeholders. Don’t delay — book your place before 17 January to save with our generous early bird discount! To find out more, please contact elizabeth.bernos@NicholasHall.com

Uncertain economic outlook in 2019

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As well as the ongoing uncertainty over Brexit, another cloud on the economic horizon for 2019 is the health of the US retail sector. According to a report over the weekend by the FT, shares in US retailers are set for their biggest quarterly sell-off since the financial crisis. This follows weak economic data in Asia-Pacific, especially China where retail sales hit a 15-year low in November 2018, and Europe, prompting concerns about a global economic slowdown.

Tariffs, and the threat of tariffs, have been one factor. Some US retailers are reportedly now having to offload surplus stock at a heavy discount, after accelerating imports in recent months to avoid planned higher tariffs (which are now on hold), while the fall in industrial output in China is partly linked to US tariffs that have been imposed. Also, concerns have resurfaced among investors about the ability of bricks & mortar retailers to navigate the e-commerce revolution. As a result, shares in various US retailers have fallen sharply, from high-end to mass market chains, like Target (down 23%).

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Amazon shares have also declined this quarter, though the e-commerce giant still looks on course to disrupt pharmaceutical distribution and reimbursement in 2019, a fact that hasn’t eluded many top pharma executives. J&J CEO, Alex Gorsky, in an interview with Fortune, said: “We have conversations at all levels going on with Amazon. I think Jeff (Bezos) and as importantly Amazon is a very innovative organisation, and they see this as an opportunity to make a difference. Just as we are partnering with them today in areas of our consumer products, we’ll look forward to partnering with them in the future in some of these other areas as well.”

Pfizer Chairman & CEO Ian Read also said late last year: “Any system of distribution that can cut costs and get a wide availability of products to patients is something that the whole industry would be interested in.” This disruption to pharma distribution, allied with the current economic uncertainty, looks set to make for a volatile year in 2019. According to Nicholas Hall, the “Big Beasts of Big Pharma are right. Amazon and Alibaba are today the most powerful disruptors of the healthcare industry. Some brand marketers will embrace this change, most will not … until it’s too late.” 

Nicholas Hall’s New Paradigms for CHC 2019: Over the Horizon, our upcoming new Signature Report written by Nicholas, focuses on a range of important issues surrounding the CHC Market, including Innovation, Success Factors, Digital Engagement, Competition and much more. It is an essential read for all players striving to compete in this rapidly evolving marketplace. To find out more or to place your order, please contact melissa.lee@NicholasHall.com

App Store trend of 2018: Self-care

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Apple’s distribution platform for mobile apps, the App Store, recently selected self-care as its trend of the year. Wellness apps designed to encourage healthy habits, improve sleep, reduce anxiety and increase mindfulness have been the major trend on the iOS platform over the past year, according to Apple.

Fittingly, one of these popular apps is called #SelfCare, launched by TRU LUV Media in summer 2018. Designed like a game, the app promotes emotional wellbeing via breathing exercises and other small acts of self-care. Another is called Shine – Self-Care & Meditation, which delivers free daily motivational messages, 5-minute affirmations and meditations, plus tips on how to reduce stress, improve sleep and increase focus.

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The popularity of such apps is good news for OTC marketers, especially those operating in lifestyle and VMS categories that focus on mental wellbeing, i.e. sedatives & sleep aids and herbal memory & brain health. Apple noted that apps for physical health, such as those that track calories and steps, have long been popular with iOS users, but emphasised that this trend towards apps for mental health is a new phenomenon.

That said, what may be somewhat concerning to OTC marketers is that this evolving definition of self-care doesn’t appear to include self-medication. While OTC New Products Tracker lists medical device launches in 2018 that incorporate an accompanying app – such as Nokia Sleep and Natural Cycles, the latter designed to aid conception – supplements or drugs backed by a mobile app are much thinner on the ground.

Review the latest new products hitting the CHC market with OTC New Products Tracker, the ideal competitive intelligence tool. We recently unveiled a major update, with eye-catching new graphs and powerful search filters that help you visualise and explore the vast archive according to your exact requirements. To trial the updated database or for a demo, please contact waisan.lee-gabell@NicholasHall.com

 

Latin America: Focus on Brazil

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Nicholas Hall’s 4th Latin American Consumer Healthcare Conference was held in Sao Paulo, Brazil last week and attracted a large and enthusiastic audience. This vitality is reflected in OTC growth trends – according to the latest MAT Q3 2018 figures, which will be published along with trend reports on the OTC DASHBOARD website soon, Latin America remains the fastest-growing region in the global OTC market, with sales up 12.8% to US$8.5bn in the year to end-September 2018.

Brazil is at the heart of this upturn, as shown by our chart below displaying the Top 5 countries in the region. Brazil’s OTC market is enjoying continued double-digit growth, and accounts for almost half of regional turnover, ahead of Mexico and Colombia. There is currently a proposal to create a legal mass market for CHC products in Brazil, which could provide further fuel for OTC growth, however there is currently strong opposition from doctors, pharmacists and, surprisingly, consumer associations, so the proposal is unlikely to be approved in its present form.

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Here’s a brief roundup of all presentations at our 4th Latin American Consumer Healthcare Conference – a fuller review will be in the next issue of OTC INSIGHT Latina:

  • Juan Thompson (ILAR): Huge savings for public health systems could be made by encouraging OTC treatment of common, non-serious conditions, thereby reducing public expenses.
  • Andre di Donato (MyPharma2go): By understanding the intricacies of the region’s regulatory systems, we can take advantage of legislation, rather than being restricted by it, and gain in-depth market insights. In particular, MyPharma2go is detailing Brazilian doctors to write prescriptions for high-strength supplements imported from the USA, which are delivered to individual consumers / patients in under 14 days — in the case of Celebrity Vitamins, the company is generating 2,000 prescriptions a day.
  • Rodrigo Ribeiro (GSK): Recommendation is the most powerful tool we have, so we cannot underestimate the importance of investing in HCP promotion and education, in addition to informative consumer-oriented advertising.
  • Tatiana Raposo Pires (Herbalife): It is likely that the food supplements industry in Brazil will benefit greatly from ANVISA’s new category definition, including specific and simplified legislation; however, there are still some obstacles to overcome, particularly relating to probiotics, which offer high-growth potential.
  • Rodrigo Garcia (Pfizer): There are many regulatory barriers to switch in LatAm, including political and social; but public education and encouraging regulatory agencies to recognise increasing consumer understanding of OTCs are key to pushing for switch.
  • Rosana Sun (Adigo) reminded us of the importance of human emotions and the essential human differences in developing relationships and interacting with others in the business world.
  • Julio Cesar do Monte (J&J): In order to survive in a changing and increasingly-digitalised environment, companies need to remain open and flexible to change, looking to technology for new ways to gain a competitive advantage.
  • Keith Garrity: Outsourcing and brand fostering is increasingly popular as part of companies’ global growth strategy, recognising the importance of local nuance and market specifics.

Stay up to date with the latest trends and developments impacting Latin America in Nicholas Hall’s OTC INSIGHT Latin America. This bi-monthly publication includes new product activity, recent LatAM news, a global OTC update and much more. To receive a sample issue or for details of subscription rates, please contact melissa.lee@NicholasHall.com

Q3 2018: Global OTC growth steady at 4.3%

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According to the latest MAT Q3 2018 figures from DB6 – released at the end of last week – the global OTC market maintained 4.3% growth in the year to end-September 2018. As our graph below shows, the world’s two largest OTC markets, USA and China, still overshadow the rest of the Top 10 and growth for both markets in Q3 was faster than any of the other Top 5 countries.

US growth was up slightly to 2.6% (vs 2.5% MAT Q2 2018), where a slower performance in CCA was offset by improvements across all other major categories. Asia-Pacific grew by 4.9%, with mixed performances among the top markets. While growth remained steady in China and India, Japan sales continued to weaken (+0.3% vs +0.6% MAT Q2 2018) and Australia remained subdued (+0.9%).

Top 10 CHC markets MAT Q3 2018

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Half of the Top 10 markets are still located in Europe, though growth for the two biggest – Germany and Russia – was in the 1-2% range in Q3, while for the other three – France, Italy and the UK – it was in the 2-3% range. Overall, Europe’s OTC performance remained constant, increasing by 2.9%. Western Europe was up by 2.4%, with France continuing to advance but Germany hindered by weak CCA sales, while growth in Central & Eastern Europe was up 4.1%.

Middle East & Africa growth was stable at 6.6%, with double-digit growth in Turkey (+12.9%) still behind the strong upturn. Latin America (+12.8%) growth remains driven by high levels of inflation, with the largest market Brazil up by 10.8%. Commenting on the Q3 results, Nicholas Hall said: “This [Brazil] is the world’s 8th largest CHC market, and will probably overtake Italy in 2019. The economy is totally flat and inflation is running at almost 5%; in that sense CHC is holding up well in this very important market.

Nicholas Hall’s DB6 MAT Q3 2018 figures are now available! DB6 features over 24,000 records and covers 10,000+ brands and more than 2,500 companies, offering complete coverage across 64 countries. To find out more about this essential service, or for a free demonstration, please contact kayleigh.griffinhooper@NicholasHall.com

Novartis’ OTC future comes into focus

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Still ranked No.10 globally among OTC marketers, Novartis has nevertheless been gradually disinvesting from the consumer healthcare market in recent years, as it pursues its plan to “become a more focused innovative medicines company”, according to CEO, Vas Narasimhan. Deciding on the future of Sandoz and Alcon is key to this plan, and two developments over the past week have made Novartis’ objectives clearer.

First, Alcon filed an initial Form 20-F registration statement with the US Securities & Exchange Commission in relation to Novartis’ intention to spin off its eye care division Alcon as an independent, publicly-traded company. The deal is expected to complete in H1 2019 – subject to general market conditions, tax rulings and opinions, final endorsement from the Board of Directors and shareholder approval at the 2019 AGM – and “for Alcon, it means more strategic focus and flexibility to pursue compelling growth opportunities in eye care devices, where it has the strongest portfolio and unmatched ability to serve patients worldwide,” says Narasimhan.

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Secondly, despite further spin-off rumours, a Novartis spokesman told Reuters that the company was “completely committed” to Sandoz and “looking at transforming it and making it as strong as it can be in the global generics business.” Novartis recently agreed to sell its Sandoz US dermatology business and generic US oral solids portfolio to Indian-based Aurobindo Pharma. Novartis spokesman Sreejit Mohan said: “The whole goal is to try to make Sandoz as agile as possible … to give it the autonomy to be as agile as possible. That’s essentially been the message that we’ve been delivering, so I have no idea how that led to saying ‘split off.’”

Both developments make the future of the Novartis consumer healthcare business a little clearer, with sales likely to be fairly evenly split between a new standalone Alcon division – including key brands such as Systane, Tears Naturale and Vitalux – and the legacy Novartis OTC business, largely made up of Sandoz. Both these subsidiaries, Sandoz and Alcon, were excluded from the consumer healthcare j-v with GSK, and together have helped establish a Top 10 OTC company – however, split apart, it looks unlikely either will rank in the Top 20 by the second half of 2019.

To keep track of the latest innovations to hit the CHC market, OTC New Products Tracker is the ideal competitive intelligence tool. Last week it also unveiled a major update, with eye-catching new graphs and powerful search filters that help you visualise and explore the vast archive according to your exact requirements. To trial the updated database or for a demo, contact waisan.lee-gabell@NicholasHall.com