Gottlieb calls for action on “CBD craze”

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In an opinion piece for the Washington Post entitled, “The CBD craze is getting out of hand. The FDA needs to act“, former FDA commissioner Scott Gottlieb described many of cannabidiol’s purported benefits, from cancer to depression treatment, as “fanciful” and said the FDA must act now to ensure “commercial interests don’t strip away any legitimate value the compound might have.”

Pointing to the potential risks of CBD use (i.e. damage to the liver at high doses), and the misperception that the 2018 US farm bill “legalised” CBD, Gottlieb suggests the best way forward is a legal pathway based on an “efficient regulatory process and sound science”. Recently, the FDA sent a warning letter to Curaleaf about “unsubstantiated” claims on its website and social media accounts linking CBD with cancer, Alzheimer’s, etc.

In response to Gottlieb’s opinion piece, Steve Mister, President & CEO of the Council for Responsible Nutrition (CRN), said his organisation aligned with the FDA on the need to establish a “clear and legal pathway forward”, but said that CBD’s status as a dietary supplement does not necessitate legislation, nor a “multiyear process requiring FDA to gather safety data on CBD”.

In an article for Whole Foods Magazine, Mister is quoted as saying that the “FDA has the authority to make cannabidiol a supplement under DSHEA [The Dietary Supplement Health and Education Act of 1994], even though it’s already been studied as a drug.” Mister envisages a future in which CBD can be sold as both a drug and a supplement, and that is certainly how Nicholas Hall also sees the market evolving in his newly published New Paradigms report.

CBD is one of the topics in our new report, Nicholas Hall’s New Paradigms for CHC 2019: Over the Horizon, personally written by Nicholas himself! Focusing on a wide range of major issues surrounding the CHC Market, including Innovation, Distribution, Digital Engagement, Competition and much more, this is an essential read for all players striving to compete in this evolving marketplace. In addition to this, you can upgrade your purchase to include a customised in-house presentation or webinar with Nicholas. To find out more or to place your order, please contact melissa.lee@NicholasHall.com.

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Tracker hits 20,000 innovations

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Our sister product OTC New Products Tracker has hit a significant milestone – 20,000 innovations added to a database that tracks consumer healthcare launch activity all the way back to the start of 2013, across 20 key markets. In this week’s blog, we look back at some of the highest-ranked innovations added to the archive over the past year.

A recent 4-star innovation is medical device Flow from Flow Neuroscience, a first of its kind home treatment on the European market. Positioned as a non-medicated alternative treatment for depression, the medical device comprises a brain stimulation headset and a therapy app. While stimulation is in use, the app acts as a virtual therapist that the user can interact with. Available in the UK since summer 2019, Flow retails for £399.

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Adjacent OTC categories have been fuelling the fire of consumer healthcare innovation in recent years, with medical cannabis / CBD and probiotics two of the most active categories in terms of launch activity. US marketer CBDfx is arguably the most pioneering innovator among the new wave of medical cannabis companies, launching several new delivery formats over the past two years, including vaping pens (January 2018), “chill shot” drinks for anxiety (March 2019), sublingual hemp strips (April 2019) and acne face masks (June 2019).

Like CBD, probiotics have also enjoyed high levels of innovation in terms of delivery formats and positioning. Two examples of probiotics targeting a new consumer healthcare niche include Elebiotic, a recent Recordati launch in Spain positioned to manage recurrent acute otitis media in infants, and Khan’s Morning, a probiotic launched in South Korea in early 2019 that is claimed to help break down the alcohol and acetaldehyde that causes hangovers.

Review 20,000+ launches and innovations with OTC New Products Tracker, the ultimate competitive intelligence tool! Products are graded with a star rating, from 1* (essentially “me too” and generics) up to 4* (1st Rx-to-OTC switches in a category, creation of a new OTC class or other major leaps in innovation). With a recently-released major update including eye-catching new graphics and powerful search filters that help you visualise and explore the vast archive according to your exact specifications, now is the perfect time to set up your free trial. For a demo or more information, please contact waisan.lee-gabell@NicholasHall.com.

AESGP and CHPA looking for way forward on CBD

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One of the Infinity Zones presented by Nicholas Hall at the 30th European CHC Conference in Vienna, medical cannabis has arguably the most potential to transform the consumer healthcare market. However, as Nicholas conceded, the science still has a long way to go and the regulatory path forward remains uncertain.

Nicholas sees the medical cannabis category eventually subdividing into five key segments: 1. Rx (already in existence), 2. Rx-to-OTC switches (expected after 2023), 3. VMS & topicals (2019 is a pivotal year for CBD in the US with CVS and Walgreens putting these supplements on sale), 4. CBD for beauty & food, and 5. Lifestyle Marijuana. 

Reporting back from last week’s AESGP meeting in Geneva, our INSIGHT Europe Editor Sarah Carter said: “Touching on CBD, delegates were in agreement with the myriad benefits and the huge growth potential of the market, but less clear on where we stand in terms of regulations.” 

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Nicholas Hall wrote: Reading Sarah’s notes, I was interested to hear that Scott Melville made the comment, “Our industry knows how to take products from Rx to OTC, but not how to take something from illegal to legal.” Scott is President & CEO of the Consumer Healthcare Products Association in USA, and this idea was first raised in a leadership panel Scott asked me to moderate at the CHPA meeting in March, but it took me some weeks to really understand what was being said. Yes, we know how to make switches; unfortunately, there aren’t any! 2018 was the first year in living memory when new switches added nothing significant to CHC revenues in USA, the home of Switch.

On the other hand, CBD is being legitimised all over the world, including in about half of US states, and all the major drugstore chains have started pilot programmes to sell hemp and other CBD products where it is already legal. Medical cannabis is an express train that is gathering speed every day, with US$11bn of annual sales likely to be added to the global CHC market in the next decade. And that was last month’s forecast – I’m sure we would increase that number if we started afresh. Our industry dare not be left behind.

Medical cannabis 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 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.

10 Infinity Zones for future CHC growth

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Nicholas Hall’s New Paradigms for CHC report, due to be published later this year, outlines 10 Infinity Zones for future consumer healthcare growth, which were shared as an exclusive preview with delegates at our recent Vienna conference. Below we outline these Infinity Zones to OTC DASHBOARD subscribers, with a short description of each.

1. Prevention: A long-term theme in the CHC industry which is now taking root. Nicholas Hall presented a slide of the fastest-growing OTC subcategories by CAGR (2014-18), comparing those focused on prevention with those centred around treatment, and this showed that seven of the Top 10 most dynamic subcategories had a preventative focus.

2. Probiotics: One of these Top 10 fastest-growing subcategories was probiotics, an area of the global consumer healthcare market that has moved from adjacency into the mainstream. In the 2014-18 period, probiotics delivered more value growth (in €mn terms) than established subcategories like systemic analgesics and sore throat remedies.

3. Food Intolerance: Changing diets across the globe are causing a huge increase in food intolerance issues. Nicholas Hall is planning to provide an estimate of the size of this emerging category in his New Paradigms report, but for now he emphasised to delegates the opportunities that OTC marketers have here, notably in terms of cross-branding.

4. Natural & Organic: Like prevention, this is not a new trend in consumer healthcare, but instead one that is increasingly on the radar of major multinationals. A recent example here is J&J’s acquisition of the Zarbee’s Naturals line of OTC products.

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5. Cannabis: Nicholas Hall outlined the huge investment already being seen in this fast-growing market, especially in key countries like Australia, and outlined how the future CBD market could be split into five categories, including Rx, OTC medical cannabis via Rx-to-OTC switch, VMS & topicals, beauty & food and lifestyle marijuana.

6. Sexual Health: Nicholas Hall said that, while Bayer has made it clear that erectile dysfunction treatment Levitra will not switch, we’ve already seen the Rx-to-OTC reclassification of Viagra Connect in the UK market and it’s possible that Sanofi’s Cialis could soon follow once the company has navigated the necessary regulatory hurdles.

7. E-commerce: This year DB6 has introduced an “all channels” version of the dataset, showing that total OTC sales through all channels were worth US$174bn in 2018, of which store-based sales account for 78%, with direct sales (MLM) generating 14%. Internet & mail order currently accounts for 9% of the “all channel” universe, with sales dominated heavily by VMS supplements in China and USA. However, this channel has seen a CAGR of 20% since 2014 and will continue to increase dramatically in importance.

8. Pharmacy: Nicholas Hall also emphasised the continuing importance of bricks & mortar retailers to consumer healthcare, with Pharmacy Point-of-Care still the driving force behind recommendations and purchases of key OTC brands.

9. Big Data: The Big 5 tech companies are now dominating healthcare information, and while there are concerns about privacy, Apple CEO Tim Cook has stated that his company’s “greatest contribution to mankind” will be within the sphere of healthcare.

10. Emerging Markets: Nicholas Hall said that Emerging Markets now account for a 55% share of global OTC sales (in the retail channel). Recent figures from the IMF’s World Economic Outlook forecast that developing economies will continue to outpace advanced economies.

Take a look at what the future holds for the CHC industry in our upcoming Signature report, Nicholas Hall’s New Paradigms for CHC 2019: Over the Horizon, written by Nicholas himself. The report will take a look at major issues including innovation, future competition, emerging categories and markets and M&A. You also have the option to upgrade your purchase to include a customised in-house presentation or webinar with Nicholas. To find out more or to place your order, please contact melissa.lee@NicholasHall.com.

CBD rollout gathers pace

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2019 looks to be the “breakout year” for US cannabidiol-based products. Changing legislation – hemp’s removal from the Controlled Substances Act in December 2018 – along with growing retailer support, marketer innovation and high consumer demand have combined to make CBD the hottest property in the consumer healthcare market. CVS Pharmacy has announced plans to sell topical CBD products such as creams, sprays, roll-ons and salves in 800 selected stores across eight US states, including Alabama, California, Colorado, Illinois, Indiana, Kentucky, Maryland and Tennessee.

More recently, Walgreens announced it was following suit, with plans to sell CBD creams, sprays and patches in almost 1,500 stores across nine states – Oregon, Colorado, New Mexico, Kentucky, Tennessee, Vermont, South Carolina, Illinois and Indiana. “This is in line with our efforts to provide a wider range of accessible health & wellbeing products and services to best meet the needs and preferences of our customers”, said a Walgreens spokesman. Between CVS and Walgreens, CBD-infused topical products will be sold in at least 12 US states, including five where both retailers will be active – see our map below.

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Regulatory uncertainty is still an issue though, with the FDA insisting that marketers should not add CBD to food or sell it as a dietary supplement. The American Herbal Products Association has adopted a new Guidance Policy for dietary supplement and food products that contain hemp and hemp-derived cannabidiols to help ensure the industry complies with existing regulations. The policy was developed to encourage industry to be mindful of the federal regulations that apply to these product categories, notwithstanding the FDA’s ongoing review of the status of CBD and potential pathways for its lawful addition to food and dietary supplements.

This uncertainty isn’t completely holding back the market, however, with SPINS data showing that CBD functional ingredient sales in the US natural channel grew to US$40.4mn in the 52 weeks ending 4th November 2018, up from just US$1.2mn two years previously. Given that CBD is now moving out of the natural channel into mainstream retail, the potential for CBD is huge, with the Brightfield Group estimating the US market could be worth US$22bn by 2022.

Review 18,000+ new launches and innovations, including the latest medical cannabis developments, with OTC New Products Tracker, the ultimate competitive intelligence tool! Products are given a star rating, with “me too” items ranked 1*; launches / line extensions in a new category / adjacency 2*; major launches / line extensions with strong new benefits / positioning 3*, and 1st Rx-to-OTC switches in a category, creation of a new OTC class or other major leaps in innovation 4*. With a recently-released major update including eye-catching new graphics and powerful search filters that help you visualise and explore the vast archive according to your exact specifications, now is the perfect time to set up your free trial. For a demo or more information, contact waisan.lee-gabell@NicholasHall.com.

CHPA Report & Conference

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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.

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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.

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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.

Medical cannabis diversification

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In terms of number of innovations by OTC subcategory, medical cannabis moved into the Top 20 in 2018 according to OTC New Products Tracker, with 86 new product developments. Europe and North America have been driving the trend in terms of high-quality innovations, from Swiss Cannabis Gum in Switzerland to PharmaCare’s Naturopathica lozenges in the UK and Foria Basics Suppositories in the USA.

As well as an ever-growing diversity of delivery formats, another characteristic of the emerging medical cannabis category is the increasing width of positioning. This is exemplified by a new range of hemp-based hair & body care products launched by HempMeds. Distributed by Naturewell in the US market, the personal care line is composed of 4 products – shampoo, conditioner, body wash and body lotion – all formulated with CBD oil (derived from hemp) and natural extracts such as argan and goji berry (shampoo), argan and green tea (conditioner), peppermint and liquorice root (body wash) and jojoba oil and almond oil (body lotion). 

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Available now to buy online, this new range was just recently showcased at the Natural Products Expo West in California, where HempMeds President Todd Morrow said that design and development of the line was “focused on consideration of women in particular”.

According to a recent report by Eaze, the number of US women buying cannabis products almost doubled in 2018, up 92%, and women now make up 38% of all US cannabis consumers. This report shows that not only is the medical cannabis product mix diversifying in terms of format and positioning, but the consumer base is also widening too, with more women and older people now entering the market.

Review 17,000+ new launches and innovations with OTC New Products Tracker, the ultimate competitive intelligence tool! Products are given a star rating, with “me too” items ranked 1*; launches / line extensions in a new category / adjacency 2*; major launches / line extensions with strong new benefits / positioning 3*, and 1st Rx-to-OTC switches in a category, creation of a new OTC class or other major leaps in innovation 4*. With a recently-released major update including eye-catching new graphics and powerful search filters that help you visualise and explore the vast archive according to your exact specifications, now is the perfect time to set up your free trial. For a demo or more information, contact waisan.lee-gabell@NicholasHall.com.