GSK and Sanofi seek to stand alone

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Structural reorganisation is on the agenda of two of the world’s leading CHC marketers in 2020. GSK’s consumer health tie-up with Pfizer in August 2019 was last year’s major M&A development and now the company’s next ambition is to list the new CHC business on the London Stock Exchange. As for Sanofi, the company unveiled a new strategy just before Christmas, including making Sanofi Consumer Healthcare a standalone business. In the meantime, both companies continue to trim their CHC portfolios.

In December 2019, Pfizer agreed to divest its topical pain management business, ThermaCare, to Italian-based Angelini for an undisclosed sum, reports apotheke.adhoc.de. In July 2019, the European Commission approved the consumer healthcare merger of GSK and Pfizer, conditional upon the global divestment of ThermaCare. The agreement follows Angelini’s acquisition of BoxaGrippal systemic cold & flu remedy and the Heumann herbal medicinal tea range from Sanofi in August 2019.

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Meanwhile, it was announced this month that BI is to sell Buscopan antispasmodic and Buscofem menstrual pain analgesic to Hypera Pharma in Brazil for Rs1.3bn (US$329mn). The deal, which is subject to approval by Administrative Council for Economic Defence (CADE), is in line with Hypera’s strategy of strengthening its portfolio with “established brands with high growth potential”. Under the terms of its 2017 business swap with BI, Sanofi has acquisition preference for the brands and could still pose a counteroffer. However, industry sources suggest that the company is unlikely to exercise this right.

In December 2019, Sanofi unveiled a new strategy to drive innovation and growth, focusing on three core global business units: Specialty Care, Vaccines and General Medicines. Consumer Healthcare will be a standalone business unit with integrated R&D and manufacturing functions. CEO Paul Hudson explained: “Our objective for the CH business is to unlock value and entrepreneurial energy by growing faster than the market over the mid-term. We believe the new standalone structure, coupled with plans to accelerate the OTC switches for Cialis and Tamiflu, will position the business well to accomplish this ambition.” Hudson added that the Rx erectile dysfunction treatment and flu remedy are expected to switch by 2026, adding around US$1bn to Sanofi’s top line.

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OTC in Action Episode 2: Seducing voters with OTC oral contraceptives?

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OTCs are in action for political gain, with US Republican Senate candidates in four states proposing the oral contraceptives should be switched from Rx-to-OTC to expand access for consumers, whilst diverting free Rx OCs for consumers from mandated health insurance coverage, according to a Wall Street Journal article published on the 10th of September.

Under the Democrat-supported Affordable Care Act, Rx oral contraceptives are a preventive health service and, as such, are covered with no out-of-pocket cost to women. Many opponents of the ACA, including Republicans and health insurers, oppose this benefit. Of course, this opposition does not play well with some voters, including women who are eligible for the OC benefits. By calling for OCs to be switched to OTC, candidates are hoping to appease voters with more convenient access, while gratifying insurance companies by taking the Rx OCs off their benefits list.

Not so fast, though, says the American Congress of Obstetricians & Gynecologists. The candidates’ use of the respected medical group’s past endorsement of OTC OCs to justify the switch may backfire. Dr John C Jennings, President of the ACOG, rebuked the candidates, commenting: “We feel strongly … that OTC access to contraceptives should be part of a broader dialogue about improving women’s healthcare, preventing unintended pregnancies and increasing use of contraception, including long-acting reversible contraception (LARC). Over-the-counter access should not be used as a political tool by candidates or by elected officials.”

Ultimately, it’s a risk-benefit decision to be made by the FDA based on scientific and consumer studies, and there appears to be no such application on the docket. However, we at Nicholas Hall & Company believe OCs will switch eventually. Last spring, OTC INSIGHT Asia Pacific reported that the progressive Medicines Classification Committee in New Zealand, which often serves as a bellwether for Rx-to-OTC switches, said the proposed switch of several OCs to pharmacy-only classification “could work” if the applicant, Green Cross Health, included more collaboration with GPs in its proposal.