MAT Q3 2017: Trends to look out for in 2018

OTCINACTION

Intense work is underway to complete the Q3 2017 update early next week, which will provide OTC DASHBOARD subscribers with the latest trend info and analysis on the performance of the global OTC market. In the meantime, taking a closer look at the latest news and data does reveal a few trends that are likely to characterise the OTC space in 2018, not least:

The growing power of the Emerging Markets

A coming shake-up of the global Top 10 OTC marketers

As this week’s infographic demonstrates, Turkey was one of the leading contributors to OTC growth in the MAT Q3 2017 period. Over recent years, both Turkey and South Africa have emerged as global Top 20 OTC markets, powered by high growth (though the trend in South Africa did show signs of slowing in Q3 2017). In No.21 spot, Algeria looks poised to enter the Top 20 in the very near future, thanks to continued high growth (+10% MAT Q3 2017). To keep up with the latest trends in the Middle East & Africa, OTC DASHBOARD remains your best port of call.

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Top 3 Middle East & Africa markets, according to MAT Q2 2017 data

As for the leading OTC marketers, the big news in 2017 was Pfizer’s October announcement that it would be starting a bidding war for its consumer healthcare division, with RB, J&J and GSK all widely cited as possible suitors. However, there were at least two other major developments in 2017 that could cause a shake-up of the global Top 10 in the coming years – in October 2017, Novartis announced that plans to spin off its Alcon eye care business, following a strategic review, would be delayed until H1 2019 at the earliest, while in the same month the FT reported that Merck KGaA was pressing ahead with the sale of its consumer healthcare unit.

Nestle has been cited as a potential suitor for Merck KGaA’s OTC business and will be one of the companies to watch next year. Last week, Nestle agreed to acquire Canadian-based Atrium Innovations from investors led by Permira Funds for US$2.3bn cash. Atrium will become part of Nestle Health Science upon closing, which is expected in Q1 2018. Atrium’s largest brands are Florida-based Garden of Life, which manufactures certified organic, non-GMO supplements sold in health food stores and online in the US, and the Pure Encapsulations line of hypoallergenic, research-based dietary supplements sold in the US via healthcare practitioners, online and in pharmacies in several European markets. The portfolio also includes specialty brands such as Wobenzym, an oral enzyme combination containing proteolytic enzymes + bioflavonoid for osteoarthritis pain. 

If Nestle were to also acquire the Merck KGaA OTC business next year, and continue on its path of strong M&A growth, it could soon break into the global OTC Top 10. In addition, Merck KGaA would not only be a good fit with Nestle’s strategy of expanding in the field of high-quality vitamins, minerals & supplements, but would also give the company a strong foothold in the Emerging Markets, where Merck KGaA currently generates around half of its global Consumer turnover.

OTCs in Action Episode 21: Medicine men and OTC marketers

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“Medicine men key to halting Ebola spread in Guinea”

A fascinating Reuters article published last week says: “In a land where witchcraft is sought after more than science for curing illness, medicine men in Guinea say the Ebola epidemic would be over by now if they had been properly included in the outbreak response.”

It seems that an educational campaign using mass media did not reach villages with limited electricity and broadcast signals. Jean Marie Dangou, head of the World Health Organisation in Guinea, observed “For about one year the main communication strategy was built around media, mainly radio and TV, but it wasn’t successful. The country is still dealing with tough and repetitive resistance.”

Karamoko Ibrahima Fofana, president of an association of traditional healers, guérisseurs, told Reuters: “Guérisseurs are often the first port of call for the sick. We could have spread information on how to protect against Ebola or told people with symptoms to seek help in the treatment centers.” Fofana explained that the guérisseurs in his association are now keen to do so, having been trained by UN staff.

One can only wonder if OTC marketers had led the campaign, whether the approach to reach patients may have been different – suppose health education campaigns were put through the rigours of an Rx-to-OTC switch, for example, where consumers of every reading level must be able to comprehend and appropriately act on instructions on product labels, especially when to seek medical assistance. If these villagers were our potential customers, would we not have been in those villages to assess their needs and communication resources? Would we have respected the influence of the guérisseurs, as we do the pharmacist?

Source: Reuters