Jeffries London Healthcare Conference

Nicholas Hall’s Touchpoints: On 19th November, it was my great pleasure to moderate the CHC panel at the Jefferies conference. My distinguished panellists were two experienced CHC war horses: Roger Scarlett-Smith, Executive VP UK & USA, Stada, and President UK at Thornton & Ross, part of the Stada group, and formerly a very senior manager at GSK; and Pat Smallcombe, Chairman of Karo Consumer Healthcare and a former Pfizer and J&J top executive. Here follows a summary: 

  • Separation of J&J’s Consumer Health business presents a great opportunity for a company of that size. The CH unit has focused on increasing profitability & market attractiveness and has gone from underperforming from a P&L perspective to growing sales and shares. The agility, cadence & skill sets required for CH, which needs to act more locally, are different to more global, science-led Pharmaceutical and Medical Devices units. The question is if the separation, which will take several years, will detract from the focus on the market 
  • Ongoing impact of Covid varies by category, but the industry is at a crossroads. The huge increase in sales of vitamin D3 & immunity boosters is holding. Half-year data show treatment products are growing very strongly for the first time in many years, particularly in N America, although it is too early to say if this is the beginning of a longer-term trend. Meanwhile, Covid has accelerated trends that were already happening such as sustainability and a preference for trusted brands; the influence of HCPs has increased relative to influencers. In Health & Beauty, the fastest growing sub-category as an idea is vegan endorsement
  • Disproportionate surge in e-Commerce has been driven by the pandemic and is now running at around 12% of the CHC market; DB6 estimates this will double in the next 10 years. Any company that does not have an e-Commerce position will be in trouble in the long-term. Amazon is particularly popular in Germany, UK & USA, although several companies are aiming for a brand.com approach. However, increasing traffic to those sites and setting up an operation like Amazon is extremely expensive. It remains to be seen though if consumers return to physical stores if they do not have to shop online. In a related issue, there has been little evidence of price comparisons in different markets; this is probably more of a trade issue
  • Personalised healthcare has big opportunities, but we are still at the front end. Consumers are sceptical about who owns the healthcare data; they are more trustful of HCPs than tech or pharma companies. At this stage, it is hard to see the return on investments and there are plenty of other areas for growth 
  • M&A moving forwards is an area of interest as recent deals have been positive, with encouraging multiples and stable businesses. The healthcare technology area is also interesting. There is a rich appetite around consolidation. There will be more spin offs, with MNCs offering underutilised assets, such as Nizoral & Compeed, which, with increased A+P, have huge salient equity with consumers. Whether M&A is replacing R&D and NPD is a good question; there must be the right combination of internally-generated innovation vs externally-generated innovation
  • Biggest white space in the CHC market may be a cultural white space where you can execute with reliability, high quality and good customer service, while retaining an entrepreneurial localisation spirit. Getting closer to the consumer and being more relevant using digitalisation is also key, as is being more focused at the right time, with the right product, in the right way

This summary doesn’t do full justice to the wisdom and erudition of the panellists, with a small amount of support by myself. If you would like to hear the whole 45-minute session, please click on the link here.