Q4 2017 Update Now Live!

We’ve just updated the OTC DASHBOARD website with full-year 2017 data and trends for all regions and all 64 countries that we track worldwide. There’s no better way to start exploring this vast reserve of information than our new homepage, which provides at-a-glance global OTC sales by region, marketer and category, as well as an interactive global map with data on the Top 20 countries. Here, we round up some of the highlights from the latest Q4 2017 update.

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One of the major trends in Q4 2017 was the drop-off in global OTC growth. A 4.1% rise in 2017 was the lowest annual growth for the global OTC market since 2014, with Europe (+2.7%) and North America (+2.9%) at the heart of the slowdown. Asia-Pacific was up 4.3%, while the two smallest major regions – Latin America (+11.8%) and the Middle East & Africa (+6.7%) – grew fastest.

Looking at categories, Derma (+2.5%) underperformed most, while CCA growth slowed to just 4.3% by end-2017, with vitality continuing to drain out of allergy remedies (+3.1%). Cough remedies (+5.4%) and systemic cold & flu (+4.0%) also reported much lower growth by year-end, especially in Europe.

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The overall shares of the global OTC market by major category remained stable in 2017. Analgesics (+4.5%) and Lifestyle OTCs (+4.5%) were the main driving force behind OTC growth, and the Rx-to-OTC switch of Viagra Connect in the UK in 2018 bodes well for development of the erectile dysfunction category. GIs advanced by 4.3%, while VMS (+4.2%) produced another year of solid growth.

As for marketers, the Top 5 remained unchanged in 2017 despite further M&A activity and speculation; in Pfizer’s earnings call yesterday, CEO Ian Read said he has not yet received an acceptable offer for the OTC business and may decide to retain it. The major recent M&A news was that P&G has agreed to buy Merck KGaA Consumer Health and at the same time to dissolve its PGT joint-venture with Teva. By our calculations, the new P&G will rank 7th in the global OTC marketer rankings by value, and the new Teva (assuming it retains its OTC business) will rank 12th.

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Other highlights:

• Looking at OTC brand rankings, analgesics Tylenol and Advil – both of which are former global No.1 OTC brands – now trail by a fair distance behind new No.1 brand Vicks, which grew by 12% in 2017

• Abbott moved ahead of Merck KGaA to claim a spot in the global OTC Top 20, following dynamic growth of 10.6%, including double-digit rises for laxative Duphalac in Russia and antidiarrhoeal Pedialyte in the USA

Log on to OTC DASHBOARD now for access to all Q4 2017 data and trends.

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OTCs in Action Episode 62: Countries claiming climbing CAGRs!

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This week, OTCs are in Action all over the world as we post the top-performing markets in terms of compound annual growth rates. First, kudos to my colleagues on the DB6 OTC database team. Thanks to their amazing expertise and hard work, Nicholas Hall Companies has just published the DB6 global OTC database, which tracks sales at the brand level in 64 countries.

The leading OTC market in the world is the USA, with turnover of $31bn, while the smallest market is Slovenia, with OTC sales generating $61mn. Both are mature markets, with the US posting a CAGR of 3.3% from 2011-2015 — Slovenian OTCs were close behind, achieving growth of 3.2%.

Looking at the Emerging Markets, China’s performance was strong with CAGR of 7% and sales of $21.6bn last year. Russia’s CAGR was 12%, reaching $3.3bn in 2015. Brazil performed a point better with growth of 13% to achieve sales of $2.7bn, whilst India’s CAGR was significantly slower at 9% to generate sales of $2.6bn last year.

Turning to more mature markets, Japan’s OTC CAGR for the period was flat with sales of $7.1bn in 2015, while the $4.9bn Germany OTC cart sputtered forward with a CAGR of 2.3%. In France, CAGR was negative 1% to $3.9bn. The UK and Canada drifted equally with a 2.3% posted in both markets, with sales of $2.9bn and $2.1bn, respectively, in 2015.

Which markets were stimulated by Rx-to-OTC switches? Where in the Emerging Markets did Lifestyle OTCs outpace other categories? DB6 subscribers know the answers. Visit the DB6 OTC database 2016 website to learn more about this valuable service, used by leading OTC players around the world.

DB6 Global OTC Database

OTCs in Action Episode 24: Worldwide sales up 4%

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Nicholas Hall & Company has now published its global OTC sales database, DB6, and it was heartening to see that self-medication drove overall market growth of about 4% to $119bn in 2014. OTC sales in the US account for 25% of worldwide turnover, but growth there was only 2.7% in the past year.

So where are OTCs in Action? China, the second largest market with an 18% share, grew by 7%, while in Brazil OTCs grew by 11% to claim a 3% worldwide share. Close competitor, Russia, also took a 3% share with growth of 9%. That said, Brazil and Russia’s rate of growth has slowed considerably in the past year. The last BRICs market, India, saw sales increase by 8%, a bit slower than at its peak a few years ago as well. The Indian OTC market captures only a 2% share of the global OTC pie at the moment, but will become an increasingly important market as its economy develops.

In contrast, OTCs were not in Action in Japan and France, which have seen declining sales for several years, although they did level out with only slight drops in 2014 to claim a 6% share and 3.5% share of the world market, respectively.

Gastrointestinals were the star performers on the global stage last year, with a sales increase of 5.2%, to account for 12% of the market. Analgesics, another very mature category, grew by 4.9% for a 13% share. Skin care products turned in the next best performance with sales growth of 4.4% and a 14% share, while Lifestyle OTCs grew by 4.2% for a 9% share. Cough, cold & allergy products slowed to 3.7% growth to take a 20% share of the market, while the largest market, VMS, was weak with growth of 3.2% to take a 30% share.

Around the world, healthcare is shifting from clinics to kitchen counters as people take control of their therapeutic and wellness regimens at home. OTCs are the most effective and safest way to empower people to self-medicate and, at the same time, reduce government healthcare spending.

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.