Striving for Success in Latin America

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Though it still only accounts for a small share (just under 6%) of the global OTC market, Latin America remains by far the most dynamic region, with growth of 12% in the MAT Q2 2017 period. As the second-largest market in the region after Brazil, Mexico has seen its OTC growth accelerate in recent quarters thanks to rising consumer confidence throughout 2017, and its vibrant capital – Mexico City – was the venue for our 3rd Latin American Conference held last week.

Focusing on the theme, “Striving for Success in Latin America”, the conference was opened by Nicholas Hall and his annual keynote speech, highlighting key trends across the region – such as an increasing consumer preference for prevention, the widespread use of social media and a lack of regulatory improvement – and the impact these will have on the future of the industry.

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Summarising his speech in 9 key points, Nicholas Hall said: “We must manage our brands in a more effective way if we are to sustain the current rate of growth, bearing in mind that Latina will probably be a late adopter of many features of the New Paradigm, including digital marketing for CHC products:

  1. With the flood of new products each year, it is essential that our brands stand out in a sea of mediocrity, by clear positioning that demonstrates both new functional benefits and emotional benefits
  2. Most successful brands in Latina and globally are old brands — the CHC market is unique in rejecting new brands in favour of those that are tried and tested; we should search for hidden gems that can be dusted off and given a new lease of life
  3. There is a constant reference from all quarters to the need for more innovation and I agree!! The best strategy is to bolt on a new ingredient, with an improved positioning, to a famous and trusted brand name
  4. There are many opportunities in LatAm: we have conducted Gap Analyses in many countries, including Brazil and Mexico. We found lots of open gaps with unmet or only partially met demand, many in adjacent categories, as most launches are in the mainstream categories rather than emerging niches — please contact my colleague Ekaterina Panteleeva (ekaterina.panteleeva@NicholasHall.com) for more information on the way we conduct Gap Analysis
  5. TV is still the main medium, but not without problems of loss of viewers, so we should test-market more for optimum spend
  6. The retail sector is consolidating fast, yet we don’t engage with the big chains through modern Key Account Management programmes, and the concept of Category Captaincy is hardly known; not least we must work with the big chains to manage the inevitable growth of private label
  7. There has been much talk of liberalisation, but the regulations are still quite drastic and are preventing more Rx-to-OTC switches, especially in Brazil
  8. Overall, the region is growing well at 10% (constant currency) in the past 5 years and is forecast to grow by 8% in the next 5 years
  9. So let’s work hard to maintain double-digit growth. To misquote President Trump, “Let’s make CHC great again!”

Monica Feldman also provided an insightful regional overview, reminding us of the major differences between certain markets (such as mass market vs pharmacy sales) and the growing prevalence of digital health. Hector Bolanos and Juan Knobloch both emphasised the importance of lobbying government for an improved regulatory framework in Mexico, while Henry Adler discussed diversification strategies as a means of avoiding regulatory delays in Brazil.

Rodrigo Arcila drew attention to Colombia’s dynamic Rx-to-OTC switch environment and rapidly-advancing national health system, while the day’s final speaker, Anne Engerant, focused on how OTC companies can help combat wider public health issues, such as antibiotic resistance, and promote responsible self-medication. Day 1 closed with a panel discussion moderated by Monica Feldman: Roy Bateman and Maria Barros y Muradas debated the mid-term future of the industry, including digitalisation and the evolution of POS, before the floor was opened to questions.

This week, Nicholas is back in India for the 2017 Annual Conference in association with CubeX. As consumers exist in a volatile, uncertain, complex and ambiguous marketplace, we can say that today’s self-care landscape is a VUCA world, which is why this year’s theme is Consumer Healthcare in VUCA World. With seats still available, you can secure your place now by emailing conference@cubex.co.in

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Nicholas Hall’s Closing Speech at 4th Asia Pacific Conference

Nicholas Hall’s 4th Asia-Pacific Conference has just taken place in Singapore, which included the APAC Consumer Healthcare Awards, an opportunity to recognise innovation in Asia-Pacific’s OTC industry that produced the following winners:

Asia-Pacific Creativity in Consumer Healthcare Award

Panadol 1st

Systane 2nd

Bactidol 3rd

Worldwide Digital in Consumer Healthcare Award

Insto 1st

OBH 2nd

APAC New Product of the Year in Consumer Healthcare Award 

Scotts DHA Gummies 1st

Dimetapp Ultra Plus 2nd

As Nicholas Hall made clear in his closing speech, which you can watch in full above, the high number of companies supporting their awards entries with passionate case studies was an encouraging sign in an OTC industry currently undergoing huge disruption. Some of the uncertainty is emanating from the renewed focus on M&A activity.

Nicholas Hall pointed to the uncertain future ahead of us, arguing that there are now no guaranteed business models for OTC companies. That said, he believes that brands will survive, as long as marketers and product managers “feed and water them” and also convey real emotional benefits to consumers.

Though the OTC industry is currently experiencing poor rates of growth across the world – with the exception of some markets like Vietnam – Nicholas Hall remains positive for the future, insisting on the need for OTC marketers to constantly refresh their portfolios, while also engaging more with the digital world. Now more than ever, the global OTC industry is desperate for continuity and innovation.

Following on from the Asia-Pacific Consumer Healthcare Awards Ceremony at our Singapore Conference, we now look ahead to our 2018 European Marketing Awards! Click here for more details on the awards for which you can enter. With entries closing on 1st February, please contact jennifer.odonnell@NicholasHall.com to find out about entry criteria or to book your place at the conference now!

Pfizer OTC up for sale: How the OTC industry could be transformed

Near the end of last week, a Reuters news story broke indicating that Pfizer would be opening an auction process for its OTC business as early as this November, and that preliminary discussions had already taken place. GSK and RB have been tipped as frontrunners in securing a deal, though P&G, Sanofi, J&J and Nestlé have also been cited as possible bidders.

In Friday’s OTC.Newsflash bulletin, Nicholas Hall stated that there could possibly be 3-4 strategic buyers in the final bidding, and that the eventual selling price of Pfizer’s OTC unit could rise above US$20bn.

During GSK’s Q3 2017 results presentation, CEO Emma Walmsley confirmed that the company is interested in bidding for Pfizer’s OTC division and “building up our Consumer business”. However, there was a note of caution when the GSK CEO stated that “our first focus in capital allocation was clearly around our biggest business in Pharma, and R&D within that”. 

Using the latest DB6 figures for the MAT Q2 2017 period, now available on the OTC DASHBOARD website, we have created a graph below showing how the global Top 5 in the OTC industry would be transformed if GSK was to snap us Pfizer’s OTC business (assuming, of course, that there wouldn’t be any divestments):

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As you can see, the deal would put GSK far ahead of its rivals, and make it the standout OTC marketer in what it is currently a very tight and competitive Top 4. Likewise, we also analysed the data to see the impact of RB acquiring Pfizer’s OTC unit on the global Top 5 and again the result would likely be a clear new global No.1:

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As ever, it’s hard to be sure how the situation will unfold, and it’s possible that Pfizer may even decide to hold on to its OTC business, but whatever happens we’ll be sure to keep you updated with the latest news and analysis here at OTC DASHBOARD.

Hollywog unveils smartphone-controlled pain device

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As revealed by our recently published MAT Q2 2017 info, global sales of topical analgesics (+8.2%) fast outpaced systemic analgesics (+3.8%), owing to higher levels of product innovation. This trend was particularly noticeable in North America, where sales of topical analgesics were up 16.2% in the year to end-June 2017.

One specific area of dynamism has been topical pain relief devices, specifically TENS machines, with a variety of smaller marketers and established OTC players launching such products in recent years. For example, Bayer launched TENS device Aleve Direct Therapy in summer 2016.

The innovation stakes have now been raised higher with the launch of a smartphone-controlled TENS device by US marketer Hollywog. The WiTouch Pro Bluetooth TENS Therapy device is paired with the WiTouch Pro App to provide stimulation pain therapy to the lower back.

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According to Chuck Thomas, CEO of Hollywog: “This launch signals an important innovation for Hollywog, where our new patented pain management solution, the WiTouch Pro, offers a drug-free digitally-enabled alternative to block pain and keep moving. People are looking for a discrete solution that is personalised for their pain and with this launch we deliver on that need.”

This trend is likely to accelerate, with marketers like Purdue Pharma already looking at how to deliver pain therapy via smartwatches too.

Futuristic “smart bandages” can repair your body

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Bandage technology has gradually been revolutionised in the 100 years since Band-Aids were first introduced. Researchers from the University of Nebraska-Lincoln, Harvard Medical School and MIT are now ready to introduce the next century of wound care with the “smart bandage”.

The smart bandage has individual fibres that store medications which can be later implemented using a smartphone or another mobile device. The bandage is made up of electrically conductive fibres that are coated in a gel that can house medications. Antibiotics and painkillers can be used within the bandage, and possibly many other effective combinations that will enhance recovery.

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Individual fibres can then be activated via voltage from a connected micro-controller no larger than a post stamp using a connected mobile device. Ali Tamayol, Assistant Professor of Mechanical & Materials Engineering at Nebraska, explained: “This is the first bandage that is capable of dose-dependent drug release, you can release multiple drugs with different release profiles.”

This is an exciting platform that can potentially be applied to many different areas of biomedical engineering and medicine. Not only could it be useful for dealing with battlefield injuries, it could also help in the treatment of chronic wounds, which are common in patients living with diabetes.

This is not the only “next gen” bandage in development. A team from Swansea University’s Institute of Life Science has created bandages laden with nano-scale sensors that can instantaneously transmit health information to medical professionals using 5G wireless data.

Voice-activated tech shows potential for diabetes care

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Diabetes affects 422mn people worldwide, including 14% of the US adult population and people in low and middle-income countries such as China, India, Brazil and Indonesia. To successfully manage diabetes, people living with it need to be mindful of and track myriad things throughout their day, from blood sugar levels to counting calories. In recent years voice-activated technologies have become an important way of helping sufferers manage their disease.

In this regard, Danish pharmaceutical company, Novo Nordisk, has teamed up with Health Innovation Technology Lab (HITLAB) to launch the 2017 HITLAB World Cup of Voice-Activated Technology in Diabetes, awarding prizes totalling US$75,000.

HITLAB_Novo-Nordisk-Voice-Activated-Technology-Diabetes

Participating innovators have been told to focus on enhancing patient outcomes, lowering healthcare costs and making the management of patients more efficient, with the goal of improving health and quality of life for diabetes sufferers.

Amy West, Senior Director, Patient Centric Marketing & Digital Health at Novo Nordisk commented: “We are constantly striving to provide solutions that minimise the burden for people living with diabetes, and believe that digital health, and specifically voice-activated technologies can be important tools for managing diabetes.”

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HITLAB has helped leading organisations create and evaluate technology-based solutions to pressing healthcare challenges for the past 25 years. Last year, 74 teams from 14 countries presented technology innovations that ranged from a tech-enabled dynamic scoliosis brace to a tool that uses 3D imaging and data analytics to better diagnose ear infections. Past winners have since raised over US$50mn in follow-on investment funding.

The submission period is currently open and will close on Wednesday 11th October. Finalists will be announced on 23rd October. They will make pitches at the HITLAB Innovators Summit, which will be held in New York City. Pitches will be judged by a panel of healthcare experts assigned by Novo Nordisk and HITLAB.

Global OTC market up 4.6% in MAT Q2 2017 period

According to the latest figures from our OTC sales database, DB6, the global OTC market totalled US$125.2bn in the 12 months to end-June 2017.

As Nicholas Hall wrote in our latest edition of OTC.newsflash: Figures released by DB6 reveal that the global OTC market posted growth of 4.6% in MAT Q2 2017, a fraction ahead of the 4.5% posted in Q1. Russia continued to spearhead global growth, with Brazil, India, Poland (+9.4%) and Turkey (+15.3%) also achieving strong performances. Growth remained low key in the US, with the Xyzal, Flonase Sensimist and Differin switches failing to make a significant impact on the overall topline. Japan remained weak, as did Australia (-0.8%) owing to a slowdown in demand from Chinese consumers buying OTCs for resale in China. Generic substitution and dereimbursement continue to hinder the large OTx sector in France, which was the poorest-performing market among the Top 20. The July 2017 reverse switch of a number of ingredients, including codeine and dextromethorphan, will further hit the market in H2 2017, but we continue to forecast overall growth of 4.7% for the current calendar year.

Top 10 Countries Q2 2017

Some further observations:

• USA and China together constitute just under 44% of the global OTC market, indicating the importance of these two OTC markets to the overall global performance

• All four BRICs markets (Brazil, Russia, India and China) are in the global Top 10 and remain the powerhouse force behind global OTC growth

• Overall, the Top 10 countries account for a 71% share of the global OTC market, while the Top 20 claim an 84% share, highlighting how top heavy the distribution of sales remains

• Turkey and South Africa (+7.8%) are the only two markets from the Middle East & Africa in the global Top 20 and their dynamism points to the growing OTC power of this region