Global CHC market +2.6% in MAT Q3 2021

The latest update from Nicholas Hall’s CHC database, DB6, shows that in MAT Q3 2021, the store retail CHC market advanced by 2.6%, a continued improvement over results seen throughout the year (vs -0.6% and +1.7% for MAT Q1 and Q2 respectively).

• Vitamins, Minerals & Supplements (+6.1%) maintains its position as the fastest-growing category, albeit at a slightly slower rate. Stabilising immune-associated segments still contribute to a healthy topline performance as consumers continue to bolster natural defences; this, coupled with improvements in other subcategories (notably a return to growth for probiotics) has helped to keep the largest major category buoyant

• Lifestyle CHC growth advanced to +5.9%, with eye care — the largest subcategory — returning a mid-single digit increase (+5.4%); this, alongside sustained double-digit increases in sedatives & sleep aids (+13.8%), as well as smaller categories such as emergency hormonal contraception and erectile dysfunction, boosted the topline

• Gastrointestinals growth improved (+5.2%) with all subcategories once again seeing an upturn over the previous reporting period — a return to some “normalisation of life” (travel, dining out, etc.) has helped the wider category advance

• Analgesics saw a further improvement overall (+3.6%) boosted by systemics returning to growth (+1.9%) after successive negative results, as well as consistent gains in topical formats (+7.2%)

• Dermatologicals slowed further to +0.6% (vs +3.9% MAT Q2 21), a trend heavily impacted by the performance of antiseptics & disinfectants — the subcategory now declining by 9.8% following high growth levels seen in the peak of the pandemic

• Cough, Cold & Allergy remains negative, with sales retracting by 5.3% in the 12 months to end-Sept 21. However, the macro trend continues to improve over the previous reporting periods (-14.5% and -9.7% for MAT Q1 and Q2 respectively) as incidence of typical seasonal pathologies rises vs a low comparator in 2020, with many players reporting improvements in quarterly terms

In terms of geographies:

• Americas advanced by 2.4% (vs +1.3% MAT Q2 21) – N America now displaying a positive trend with continued improvements in USA & Canada. LatAm markets remain strong, with another double-digit result in Brazil (+12.1%), the most robust of the Top 20 markets

• Asia held on to mid-level growth (+4.8%) in the reporting period; while the region continues to be impacted by loss of revenue from overseas visitors in key markets Japan (-2.1%) and Australia (-2.9%), steady single-digit increases in China and India helped to maintain the topline

• Europe’s performance has flattened; Western European markets are improving (-2.0% vs -4.4% MAT Q2 21), impacted by the analgesics growth trend returning to positive, plus a softening decline for CCA over the previous reporting period. CEE markets advanced further, aided by mid-single-digit gains in Poland (+4.8%)

Nicholas Hall commented: Good news! My colleague Kayleigh Griffin-Hooper tells me that the latest DB6 data show that the store retail CHC market continued on a path to recovery in the 12 months to end-September. Broadly speaking, the majority of markets are returning to slightly stronger growth – or softer declines – compared to MAT Q2. Trends remain heavily influenced by the impact of Covid-19 across several healthcare segments – both positively and negatively – resulting in low level advances on a global level.

In three months’ time, when we have sales data for the Internet channel, it will be interesting to see whether this high-growth sector fully balances the softness in store retail sales.

We are pleased to announce that Nicholas Hall’s DB6 MAT Q3 2021 update is now available! Subscribers can access over 150,000 pieces of data, with more than 30,000 records covering 13,000+ brands and 3,000 companies across 63 countries. To find out more, or to set up a free demo, please contact kate.holdcroft@NicholasHall.com.

Highlights from OTC DASHBOARD’s Q2 update

The latest quarterly report on the global OTC market is now available on the OTC DASHBOARD website, including data & trends on the market’s performance at a global, regional and Top 20 country level in the year to end-June 2019. Here we highlight some of the key topline trends from this Q2 update, selecting one major global development from each of our company, category and brand watch sections.

Company Watch

M&A activity completed in 2019 has seen a reshuffle in the rankings of the top global OTC marketers; most notably, GSK is now by far the No.1 consumer healthcare marketer globally, following the closure of its OTC merger with Pfizer in August 2019, giving it a 6.8% share. This consolidation has led to the emergence of new competitors, most notably By-Health, which has broken into the global Top 20 and now claims 15th spot.

While decelerating growth in Emerging Markets, especially China, has been a key macroeconomic trend affecting the wider economy and the consumer healthcare industry, one company that has bucked the trend with accelerating growth (+31%) is By-Health. China accounts for over 90% of By-Health’s OTC portfolio turnover, with Australia accounting for the remainder. In China, the company fields brands including dynamic longline range By-Health and glucosamine supplement Keylid, backed by an intensive A+P strategy.

Category Watch

Analysing the performance of the major OTC categories at a global level, gastrointestinals enjoyed the fastest growth in the MAT Q2 2019 period, with sales up 4.9%. Antinauseants (+15.9%) performed especially well, recorded a strong performance in Asia-Pacific, the largest regional market for GIs, owing to increasing levels of travel and changing diets.

Antidiarrhoeals, antispasmodics & IBS remedies and liver & bile remedies were the other best-performing categories, powered by new product innovation, as explored more fully in our Q2 update. One cloud on the horizon for GIs are the global concerns and recalls affecting antacids containing ranitidine, after some medicines were recently found to contain a nitrosamine impurity called N-nitrosodimethylamine (NDMA) at low levels — see our previous blog for more details.

Brand Watch

Two OTC brands have global sales of over US$1bn — Vicks (P&G) and Tylenol (J&J) — and both continue to outperform the global OTC market. No.1 Vicks produced above-average growth of 5.7%, despite difficult conditions in the global cough, cold & allergy market.

A strong return to growth in North America for Vicks was at the heart of this upturn, allied with continued strong growth in Latin America, helping to offset the moderate continued decline in Europe. A major factor driving faster growth in North America for Vicks is the sedative & sleep aid range Vicks ZzzQuil, which was boosted by the US launch of a new Pure Zzzs line in 2018. This range has been extended further with Pure Zzzs Kidz in Q3 2018 and several beauty and de-stress gummy supplements in 2019.

Whether you are in the office or on the go, you can access reliable CHC data and trends from OTC DASHBOARD, accessible on tablet, smartphone and desktop, and covering 63 markets across the world. Contact Hannah.Burke@NicholasHall.com to find out how you can benefit from OTC DASHBOARD by setting up a free trial today!

Ranitidine under regulatory spotlight

Two weeks ago, the FDA put out a statement saying it had learned that some ranitidine medicines were found to contain a nitrosamine impurity called N-nitrosodimethylamine (NDMA) at low levels, which it classifies as a probable human carcinogen. In response, the FDA is conducting an ongoing investigation, working with international regulators and industry partners to determine the source of this impurity. Though the FDA made clear it is not calling for individuals to stop taking ranitidine, its advice to people taking OTC ranitidine was to consider using other OTC medicines approved for their condition.

Last week, the FDA alerted healthcare professionals and patients to a voluntary recall of OTC ranitidine tablets (75mg and 150mg) labelled by Walgreens, Walmart and Rite-Aid, and manufactured by Apotex. Sandoz (Novartis) also said it would no longer be distributing generic versions of ranitidine. This was followed by an announcement over the weekend that US retailer CVS is pulling the No.1 ranitidine-based OTC brand, Zantac (Sanofi), from its shelves over the possible links to cancer. CVS’ own generic ranitidine-based OTC products will also not be carried in the stores moving forward.

Heartburn remedy Zantac is comfortably the No.1 ranitidine-based OTC brand, with global sales of around US$160mn (the vast majority of which are generated in North America). Chattem (Sanofi) markets Zantac in the USA in 75mg and 150mg OTC versions, while Aspen markets the brand in Australia and Perrigo is the UK marketer. In August 2018, Chattem extended its Zantac 150 line-up with two larger, value size 90-count SKUs, boosting sales significantly.

In a statement published in USA Today, Sanofi spokeswoman Ashleigh Koss said the company has no plans to halt shipments in the US market, adding: “The FDA reported that the levels of NDMA in ranitidine in preliminary tests barely exceed amounts found in common foods. We are working closely with the FDA and are conducting our own robust investigations to ensure we continue to meet the highest quality safety and quality standards.”

Take an in-depth exploration of the Lower GIs market in Nicholas Hall’s Lower GIs: Trends & Opportunities in Laxatives, Antidiarrhoeals, Probiotics, Antispasmodics & IBS remedies report. This key title includes dedicated case studies, NPD, innovative line extensions, coverage of 10 major markets, sales data and forecasts, plus much more! To find out more or to order your copy today, please contact melissa.lee@NicholasHall.com.

Food intolerance category shows huge promise

For the next instalment in our series of blogs on Nicholas Hall’s Infinity Zones for future CHC growth, we take a closer look at the growing issue of food intolerance, driven by unhealthy eating and the rise of processed food with additives, as well as changing diets across the world. Currently a driver of GIs growth, food intolerance has the potential to break out and become its own OTC category, and Nicholas Hall is urging CHC companies to seize this huge opportunity in the face of any future competition that might come from mainstream food companies, as was the case with functional foods.

A 2016 Nielsen study showed a high prevalence of food intolerance across various regions – the percentage of those who say someone in their household has food intolerances / allergies was 22% in Europe, 31% in North America, 34% in Latin America and 42% in Asia-Pacific, with children more likely to suffer than adults. Food intolerances (lactose, cruciferous vegetables, gluten, fructose, etc) can cause a variety of challenging symptoms for those affected, and new product development is catering for this fast-growing market.

Lactose intolerance is the most established niche, with lactase supplements (an enzyme that helps digest lactose) generating sales of roughly $65mn in 2018. Lactase supplements are fairly well-established in North America and Europe, with J&J’s Lactaid a key brand in the USA, while Latin America – especially Brazil – remains a current hotbed of innovation. Other intolerances are also increasingly being catered for with new products such as GluteoStop (Ineo Pharma) in Germany / Switzerland and Glutenam (Named) in Italy for glucose intolerance, and Fructaid (Pro Natura) in Germany for fructose intolerance.

Marketers of diagnostics and probiotics have also recognised the potential of this category. Lykon has launched MyNutrition 100 in Germany and UK (retailing for between $110-125), an at-home kit positioned to test for food intolerance across the 100 most common foods, while Montefarmaco extended probiotic brand Lactoflorene in Italy in 2019 with Lactoflorene Digest, claimed to promote the balance of intestinal flora that can be compromised by digestive disorders such as lactose intolerance.

Food intolerance will be one of the key topics in our upcoming report, Nicholas Hall’s New Paradigms for CHC 2019: Over the Horizon, written by Nicholas himself! Examine each aspect of the CHC industry in 20 chapters, with a focus on major issues including Regulation, Pharmacy Point-of-Care, M&A, Switch and much more. Nicholas will also unveil in more detail the “infinity zones” he has identified as being crucial to the future growth of the industry. In addition to this, you can upgrade your purchase to include a customised in-house presentation or webinar with Nicholas for an additional GB£10,000. To find out more or to place your order, please contact melissa.lee@NicholasHall.com.

CHPA Report & Conference

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.

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.

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.

Esomeprazole, Ibuprofen OTC Changes Take Effect In Canada

In February this year, Health Canada announced its intention to make two changes to the Prescription Drug List (PDL). Specifically, it was proposed that the PDL be amended to allow an OTC version of esomeprazole for heartburn and to make technical changes that would permit modified-release ibuprofen products available for self-care.

While this announcement was not a surprise as the six-month period for comment elapsed on 5th August, the delay in making the change effective (18th August) was more likely owing to administrative matters than anything therapeutic in nature. The two changes to the federal list are as follows:

• Esomeprazole or its salts except when sold for the 14-day treatment for frequent heartburn at a daily dose of 20mg
• Ibuprofen or its salts except:
  1. An oral dosage form that provides 400mg or less per dosage unit; or
  2. A modified-release oral dosage form that provides 600mg or less per dosage unit

While the Federal decision had no further restrictions attached, the provincial scheduling of these products do take on some further limitations as decided by the National Association of Pharmacy Regulatory Authorities (NAPRA).

Now that the federal switches are finalised, the interim decision made by NAPRA becomes effective. Specifically, the provincial decision on these two items were:

• Ibuprofen or its salts, when sold in a modified-release oral dosage form that provides 600mg or less per dosage unit would be placed into Schedule III (sold only where a pharmacist is present)
• Esomeprazole or its salts, when sold for the 14-day treatment for frequent heartburn at a daily dose of 20mg, in package sizes of no more than esomeprazole 280mg would be assigned to Schedule II (available only from a pharmacist directly)
• Esomeprazole or its salts, EXCEPT when sold for the 14-day treatment for frequent heartburn at a daily dose of 20mg in package sizes of no more than esomeprazole 280mg will not be switched provincially (it will remain in Schedule I – Rx only)

The ibuprofen decision was notable since the regular dosage form is available as an unscheduled item (available through any outlet when sold in package sizes of up to 18,000mg) while the modified release product is restricted. The esomeprazole decision matched the decision made for omeprazole in 2014.

OTCs In Action: Innovative Ayurvedic Acid Relief On the Go

OTCs are in Action in India, where Sun Pharma’s new Pepmelt updates traditional Ayurvedic medicine with fast-melt granules for speedy relief of acid indigestion and heartburn, allowing Indians to enjoy impromptu meals with friends or new acquaintances.

 “The pioneering innovation of a mouth-melt antacid arose from a big need gap our market research indicated,” said Subodh Marwah, VP & Business Head – Global Consumer Healthcare. “Consumers today lead a very hectic life, eat out a lot and are always on the move. Thus, an easy-to-carry and convenient to use mouth-melt antacid makes Pepmelt extremely relevant to our consumers’ needs. Moreover, the idea of enjoying food without any fear is a key distinction for Pepmelt’s positioning in the antacid category.”

Lowe Lintas’ digital campaign for Pepmelt welcomes heartburn sufferers to the table. “A category defining innovation like Pepmelt, which is also a category disruptive introduction, needs a distinct and refreshing insight,” observed Marwah.”The campaign idea stems from the insight of offering food to someone who’s suffering from heartburn and acidity. This insight is fused into India’s socio-cultural context to create a potentially powerful and progressive brand idea for Pepmelt.”

OTCs in Action Episode 57: IBgard, consumer healthcare trailblazer

The woman stands at her workstation, cringing and holding her stomach while the voiceover gently suggests: “Abdominal pain. Bloating. You may have IBS. Ask your doctor if the nonprescription IBgard is right for you. IBgard – calms the angry gut. Available at CVS and Walgreens.”

This week, IBgard is our OTC in Action as its blazes a new trail for self-medication. The February issue of the prominent medical journal, Digestive Diseases and Sciences, features a randomised, double-blind, placebo-controlled study which demonstrated that IBgard provides reduction in symptoms including abdominal discomfort, bloating, diarrhoea, constipation and gas.

It’s amazing that these stellar claims are not made by an Rx drug or an OTC – IBgard is a medical food that should be used under the supervision of a doctor, and does not require FDA pre-authorisation or a New Drug Application. Interestingly, its capsule formulation of peppermint oil could also be a dietary supplement, but would not be able to make disease-related claims. IM HealthScience also protected its investment by using patented Site Specific Technology in its clinically-tested peppermint oil mixture, preventing other peppermint oils from making the same claims.

OTC marketers have been endlessly searching for innovative products without dangerous side-effects; the dietary supplement folks have been craving claims substantiation and patented formulations. Oh, and by the way, over 10,000 healthcare practitioners, including 3,000 gastroenterologists, are estimated to have already used IBgard for their patients, according to IM HealthScience.

Last week, the company launched an independent spin-off called Physician’s Seal to focus on the development and commercialisation of novel and science-based dietary supplements and over-the-counter (OTC) drugs. Its non-executive Chairman is OTC veteran Fred Hassan, who stated: “We are proud to expand our family of businesses to a wider market using our exceptional science base and our broad intellectual property portfolio. We also will be leveraging the success of our initial medical foods product, IBgard, specially formulated for the dietary management of Irritable Bowel Syndrome.”

Online eating in-store sales in Germany?

Despite OTC growth in Germany remaining sluggish in 2014, online sales are starting to make serious advances. Online sales now account for a little over 10% of the country’s total OTC market, according to industry sources.

While market share is still relatively modest in traditional categories like cold & flu and GIs, online turnover for a variety of lifestyle and VMS brands – for which there is no desperate need for immediate face-to-face interaction with a pharmacist – is around 50% of that generated through pharmacies and drugstores. While convenience is, of course, a major factor, price is also significant, as consumers are often able to save €15 on premium supplements online, with savings growing further on jumbo packs. It is also noticeable that many of these double-digit sales increases are being made by products positioned for Germany’s older consumers, in particular eye vitamins with Age Macular Degeneration positioning, joint health products – now equivalent to two-thirds of pharmacy turnover – as well as herbal memory & brain health, with several premium ginkgo-based options chalking up huge increases in 2014. For the potentially less mobile consumer in the 65+ age bracket, a steadily growing demographic in Germany, the home delivery element is crucial.

So just who are the online retailers making headway? German marketing agency Dr Kaske completed a survey analysis of the 15 largest in April 2015, scoring them according to price on a select basket of common OTCs, search engine optimisation, customer service, user-friendliness and, of course, actual visitor numbers. Leader in all categories was Shop-Apotheke, a subsidiary of Netherlands-based Europa Apotheek Venlo, although the more widely known DocMorris – sold by Celesio to Swiss pharmacy retailer Zur Rose in 2012 – was a close contender, featuring the best SEO. Medikamente-per-klick and Sanicare are also noteworthy, with the latter investing heavily in TV advertising in 2014.

For more insight into trends and developments in Germany and elsewhere in Europe, why not enquire about our monthly OTC INSIGHT Europe publication? Contact nino.hunter@NicholasHall.com.