E-commerce: Amazon picks up PillPack

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Amazon’s latest foray into the healthcare sector – a definitive agreement to acquire US online pharmacy, PillPack – has huge disruptive potential for the traditional drugstore pharmacy sector. A start-up founded in 2013, PillPack is licensed in 49 US states to offer pre-sorted doses of medications, coordinate refills and renewals, and ensure timely home delivery to customers. Financial terms of the deal were not revealed, but the transaction is expected to close during Q2 2018, subject to regulatory approvals and other customary closing conditions.

Walmart was rumoured to be interested in acquiring PillPack earlier this year, and the company lost US$3bn in market capitalisation after the Amazon deal was announced on Thursday 28th June. The two companies are now locked in an intense global rivalry, with Walmart coming out on top in India after acquiring a 77% stake in Flipkart in May 2018. Such huge M&A investments will advance e-commerce’s share of the pharmaceuticals market in key markets like India and the US, with the potential to revolutionise the consumer healthcare sector too.

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PillPack is currently a small operation, expected to post revenue of US$100mn this year, but Amazon’s existing customer base and shipping infrastructure could allow it to quickly scale up. Brick & mortar pharmacy chains are already seeing the consequences of the deal; as the news broke, shares in Rite Aid fell 11%, Walgreens Boots Alliance 9.9% and CVS Health 6.1%, a collective US$11bn in market value.

Though consumers in many markets remain hugely reliant on pharmacist advice when making OTC purchases, there’s no doubt that price is a very sensitive area that makes traditional brick & mortar retailers vulnerable in this evolving retail landscape. Certain OTC categories where there is a strong wellness or personal care element, such as VMS and dermatologicals, are most likely to see a significant rise in e-commerce sales.

E-commerce, as well as OTC adjacencies and digital health, are three of the hot topic areas that OTC DASHBOARD will be focusing on this year, in its weekly briefings, infographics and blogs. For a free trial of the service, please contact hannah.burke@nicholashall.com

Asia OTC investment in Middle East & Africa

In last week’s blog, we looked at rising Chinese investment in Africa, specifically in the area of pharmaceuticals, and this week our focus is on Indian & SE Asian OTC marketers expanding their operations across the Middle East & Africa. Here we summarise some of the key developments that form this growing trend over the past 6-9 months.

In July 2017, it was reported that a number of Indian pharma companies, including Dr Reddy’s and Lupin, were planing to expand operations in Africa. While Lupin is focused on opportunities in South Africa, following the establishment of a new regulatory authority (SAPHRA) in the country in mid-2017, Dr Reddy’s is targeting an expanded presence in French-speaking countries in Africa, which are markets where Indian generic companies have traditionally been underrepresented.

OTC development by Indian marketers in Africa will not be limited to generics, however. In summer 2017, Emami announced that it is evaluating setting up manufacturing units in international markets to meet growing demand for its brands. The marketer also revealed that it is expanding into Nigeria and Ghana via product launches.

More recently, in January 2018, Strides Arcolab agreed – via its wholly-owned subsidiary Strides Shasun – to acquire a 55% stake in South African-based Trinity Pharma for R55mn (US$4.5mn). Strides Shasun MD, Shashank Sinha, said: “This … provides further impetus to our ‘In Africa for Africa’ strategy as it fast tracks Strides’ presence in the lucrative and high entry barrier market of South Africa. With this acquisition, we are now present in East, West and South Africa, covering all the key markets in Sub-Saharan Africa.”

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Strides Arcolab’s wide presence in Africa

As for Southeast Asian marketers, Indonesian OTC company Dexa Medica launched a brand called Stimuno in Nigeria in November 2017. Formulated with Phyllanthus niruri extract 50mg, Stimuno is a herbal & natural immune stimulant available in packs of 10 capsules. Dexa Medica is already one of Nigeria’s Top 5 OTC marketers, thanks to the success of its systemic analgesic brand Boska, and the company decided to leverage this brand equity by launching Stimuno at an event in Lagos called Pain-Free Day. Boska Brand Executive, Tunde Ojedokun, said that Stimuno is recommended for everyone, both healthy and unhealthy, for the total maintenance of the body system.

In February 2018, Indonesian drugmaker Kalbe Farma announced it is eyeing expansion across the Middle East, as well as Sri Lanka. Following a positive response to test-marketing of its packaged coconut water in the Middle East, Kalbe is now considering launching a range of nutritional products across the region. With local sales still sluggish, Kalbe’s new President Director Vidjongtius is focusing on new markets to broaden the company’s reach beyond Southeast Asia. 

OTC DASHBOARD remains your best port of call for the latest consumer healthcare trends in the Middle East & Africa. In the coming months, we will be updating our reports on 11 countries across the region, including Nigeria and South Africa. 

Clever Campaign Connects Condoms With Indian Truck Drivers

India has the third-largest HIV epidemic in the world, with 2.1mn people estimated to be living with the disease.

OTC INSIGHT Asia-Pacific reported last week that, in India, around 2 million truck drivers are frequently engaging in unprotected sex with sex workers and only 11.4% of these workers said they had used a condom.

As a result, the level of STDs in this group has substantially increased and, combined with the general population prevalence of HIV, it is nearly five times higher than the national figure. Sexual health awareness is low among truck drivers. Efforts are being made to educate the population on the importance of sexual health.

Tata Motors, one of India’s largest truck manufacturers, decided to tackle the problem head-on but needed to find an approach that would engage with the target group. Tata Motors enlisted the help of creative agency Rediffusion Y&R and launched the “Use Dipper At Night” campaign in April 2016. Indian truckers have a strong cultural identity and “Use Dipper At Night” (reminding drivers to dip their headlights during nighttime) alongside other brightly painted slogans is often written on trucks.

The idea behind the campaign was to encourage truck drivers to practice safe sex by linking it to a phrase that resonates strongly with every member of the community. To this end, a new condom brand called Dipper was created and marketed exclusively to truck drivers.

HLL Lifecare, a government-owned corporation and India’s largest condom manufacturer, produces the condoms. The brand identity has been carefully thought out in order to reflect the trucking culture in packaging. Each wallet, which contains three condoms, is decorated with different truck art motifs and slogans, such as “Have a Safe Journey”, to make them more appealing to the target consumer.

GSK helps Indian runners breathe better

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Mist machines touting the logo of nasal decongestant, Otrivin, cleared the air of pollution for athletes in India this spring when GSK sponsored the Amity Gurgaon Half Marathon. The full length of the marathon track was sprayed by Otrivin cannons before the event and then, as testing indicated poor air quality during the race, the cannons were moved to those locations where the mist cleared the air of floating particles of pollution.

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Otrivin has always helped people to Breathe Better,” commented Saurabh Nandi, GSK Marketing Lead, Pain and Respiratory. “A marathon is extremely relevant for us to partner with, as runners need clean air to breathe as they run, and more so in a city like Gurgaon. This association is more than just a classical sponsorship; we want to help people enjoy their run more by providing cleaner air.”

“Our insight was simple; when we go for a run after heavy rain, the air feels so much cleaner. The question was – can we make it rain artificially in a specific location, during a time-restricted event? ” added Jan Teulingkx, Global Creative Director, Saatchi & Saatchi, Switzerland, which developed the campaign

To learn about other ways OTCs are helping fight the effects of air pollution and other respiratory conditions in Asia, click below to read the latest issue of Nicholas Hall’s OTC INSIGHT Asia-Pacific:

Nicholas Hall’s OTC INSIGHT Asia-Pacific

OTCs In Action: Innovative Ayurvedic Acid Relief On the Go

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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.”

MAT Q2 2015 update: Three key dynamic market shifts

Global OTC growth hit 5.7% in MAT June 2015 to total US$124bn, and our accompanying OTC Market Stats update revealed several major changes in the leaderboard. Find out how to delve deeper with the latest edition of OTC DASHBOARD’s user tutorial series, below. Meanwhile, our data team is currently beavering away on the upcoming MAT Q3 2015 update, which we expect to publish online next month – Regards, Owen Hartnett.

1. Perrigo is now a Top 20 OTC company

After purchasing European dynamo Omega Pharma earlier this year, Perrigo has entered the global Top 20 at the expense of Genomma. With this enhanced OTC focus, especially within Europe, Perrigo’s sales reached US$678mn in the reporting period (not including private label OTCs), and CEO Joe Papa believes the company is now better-placed to “capitalise on the many megatrends which bend in favour of consumer choice and cost control in healthcare”.

Meanwhile, Mylan’s proposed acquisition of Perrigo is gathering momentum, with the Federal Trade Commission this month providing the final regulatory clearance needed to close the deal. Perrigo continues to “strongly recommend that its shareholders not tender into Mylan’s inadequate offer”.

Quick tip: Click on any marketer in the Company Watch table to launch a pop-up containing a summary of performance with sales split by major OTC category. 

2. J&J is now the leading US OTC marketer

J&J overtook Bayer to reclaim the No.1 US OTC marketer spot in MAT Q2 2015. This was a result of double-digit growth for its US systemic analgesics portfolio, driven by Tylenol and Motrin in both the adult and paediatric segments. These key brands were recently expanded with Tylenol 8HR Arthritis and Motrin Liquid Gels respectively, as the marketer looks to use innovation as a basis to protect its leading position and fend off increasing competition from private labels.

OTC was also a key driving force in J&J’s latest financial results for Q3 2015, with this unit (as part of its Consumer division) posting a 6.3% upturn thanks to a strong performance in Emerging Markets, particularly Russia.

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Quick tip: Our company results tracking feature offers a provisional look at OTC performance ahead of each quarterly update. See the Charts & Graphs archive for a visual round-up of the leading global players.

3. India is now the No.10 OTC market globally

OTC sales in India grew by 9.8% in MAT Q2 2015, enabling it to leapfrog Canada and enter the global Top 10. The market continues to recover from the price caps introduced under the Drug Price Control Order 2013. Meanwhile, key domestic players such as Dabur are focusing on the urban pharmacy channel to obtain recommendations from pharmacists and expand product availability.

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Quick tip: The Market Overview page for all 62 countries provides a snapshot of economic performance, along with soft information to supplement our sales data.

OTC DASHBOARD is a subscription-only web service powered by Nicholas Hall’s DB6 Global OTC Database. To find out how we can help you to save time, work smarter and keep connected, get in touch with us today at: otcdashboard@NicholasHall.com

OTCs in Action Episode 41: Eyes on India

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Last week, OTC.Newsflash reported that Bal Pharma is dilating its portfolio with the launch of Eye Spa lubricating eye drops, zoning in on two OTC sweet spots: India and eye care. The Indian OTC market grew by 41% to $2.4bn from 2010 to 2014; Nicholas Hall’s DB6 Global OTC database projects growth of more than 50% over the next five years – and very optimistically, we could see a 10-year trend of 150% growth. The eye care category in India has just about doubled in the past five years to $41.4mn.

The growth of OTCs, especially lifestyle categories, are closely linked to higher income levels. For a Swedish bird’s eye view of the demographic trend that will drive this growth in India, visit statistician Hans Rosling’s Gapminder website for an entertaining historical perspective, and learn the date he predicts that income per person in India and China will match that of the US:

 

That said, in a 2009 interview in India’s Economic Times, Rosling qualifies his growth predictions:

“What I am most worried about is the reaction of the western world when they see India and China become bigger, what really worries me is a possible war. I also see new, subtle trade barriers emerge. For instance, they are calling products manufactured by India and China as contaminated, and are getting experts and researchers to prove that. These trade barriers are very subtle.”

OTCs in Action Episode 11: Stigma, statutes and OTCs stub out smoking

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Q: What’s the difference between the 1960s and the 2000s?

A: In the 2000s, a guy goes into a chemist shop and shouts, “Give me a box of condoms!” … and then whispers to the shop assistant, “Oh, and slip in a packet of cigarettes, too.”

Although smoking is stigmatised in many countries in the new millennium, tobacco use still kills approximately 6mn people each year, according to the World Health Organization. It is the leading global cause of preventable death and OTC smoking cessation products can help people quit. This week, OTCs in Action takes a look at recent government initiatives to extinguish smoking – and spotlights nicotine replacement therapy* sales trends in those countries.

Brazil’s National Anti-Smoking Law will take effect this month, prohibiting smoking in enclosed spaces; banning the promotion of tobacco products and requiring warnings to cover a significant part of cigarette packs. Nicholas Hall’s Global OTC Database DB6 reports mid-year sales of NRTs increased by 14% to US$20mn (MAT June 2014) in Brazil.

China is considering raising cigarette prices and taxes and the State Council has issued a draft regulation to ban indoor smoking, limit outdoor smoking and end tobacco advertising. China has more than 300mn smokers and cigarettes are very inexpensive. OTC sales of NRTs increased by 8% to US$25mn.

France unveiled plans to require plain cigarette packaging, increase prices for tobacco and ban smoking in cars containing children. Although the Government more than doubled reimbursement rates for NRTs for those aged between 20 to 25, sales of OTC NRTs declined by 6% to US$82mn, owing to increased use of generics and rising use of e-cigarettes.

India announced that health warnings covering at least 85% of cigarette packs will be mandatory by April 2015. Sales of OTC smoking control products increased by 22% to US$12mn. The diminutive sales figure reflects that fact that most tobacco consumption in India is in the form of chewing tobacco and paan.

Russia’s ban on smoking in most public paces enacted in 2013 was extended to include transportation and leisure-oriented locations last summer. An estimated 40% of Russian adults smoked in 2011 and cigarette prices are among the cheapest in the world. Sales of OTC smoking control products were up by 38% to US$20mn in the mid-year results.

In the brilliant 2005 film, Thank You for Smoking, tobacco executive BR says: “We don’t sell Tic Tacs, we sell cigarettes. And they’re cool, available and *addictive*. The job is almost done for us.”

Maybe not so cool or available anymore.

For more info, Nicholas Hall’s OTC INSIGHT publications for Latin America, Europe, Asia-Pacific and North America have just published market reports on the smoking control trends in their regions. http://www.insight.nicholashall.com

*Does not include e-cigarettes

OTCs In Action Episode 9: Traditional Medicine minister appointed as MNC manufacturing multiplies

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OTCs are in Action in India. Indian prime minister and enthusiastic yoga practitioner, Narendra Modi, has appointed Shripad Yesso Naik to be the first minister of the Yoga & Traditional Medicines division of the Health Ministry. According to the Wall Street Journal India, this department has been concentrating on herbal and traditional remedies for 25 years, and will be supported with a 2015 budget of $144mn. Traditional medicines are used by 70-80% of the Indian population, and the Government’s focus on improving quality standards and expanding manufacturing will impact not only the domestic market, but exports as well.

Nicholas Hall & Company’s DB6 global database forecasts that the market for OTC medicines in India will grow by about 158% over the next 10 years to US$5.7bn, with a 10% CAGR. Currently, the OTC market remains ill-defined, with OTC basically a default status for products not classified as Rx, complicated by widespread sales of Rx drugs under the counter without a prescription. This is likely to change over the coming years, as health professionals, most recently the Indian Medical Association, support the creation of an OTC list in line with global standards.

Not surprisingly, multinational companies are garnering for position in India. In the past year, Nicholas Hall & Company’s OTC.Newsflash has reported the following:

– This month, J&J completed the acquisition of fruit-based electrolyte drink ORS-L from Jagdale Industries for US$122mn. The company also recently announced it was building a new $66mn manufacturing facility for personal hygiene and skin products in Telangana

– In September, Abbott opened a new plant in Gujarat, which will manufacture nutritional products specifically for the local market. The US-based MNC invested US$73mn in the facility, its third in India

– Earlier this year, GSK increased its stake in its pharmaceuticals subsidiary in India from 50.7% to 75% in a $1bn deal, following a voluntary Open Offer

This week OTCs in Action thanks Nicola Jay, editor of Nicholas Hall & Company’s OTC INSIGHT Asia-Pacific, for her expertise on the OTC market in India.

Hello and best wishes for 2014 from INSIGHT Asia-Pacific

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The start of a new year is the ideal time to reflect on events of the previous 12 months and consider what might happen in the year ahead. INSIGHT Asia-Pacific has done just that in the just-published January edition by asking industry experts to share their views on the major trends & developments and their likely impacts in core regional OTC markets.

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