Highlights from OTC DASHBOARD’s Q2 update

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The latest quarterly report on the global OTC market is now available on the OTC DASHBOARD website, including data & trends on the market’s performance at a global, regional and Top 20 country level in the year to end-June 2019. Here we highlight some of the key topline trends from this Q2 update, selecting one major global development from each of our company, category and brand watch sections.

Company Watch

M&A activity completed in 2019 has seen a reshuffle in the rankings of the top global OTC marketers; most notably, GSK is now by far the No.1 consumer healthcare marketer globally, following the closure of its OTC merger with Pfizer in August 2019, giving it a 6.8% share. This consolidation has led to the emergence of new competitors, most notably By-Health, which has broken into the global Top 20 and now claims 15th spot.

While decelerating growth in Emerging Markets, especially China, has been a key macroeconomic trend affecting the wider economy and the consumer healthcare industry, one company that has bucked the trend with accelerating growth (+31%) is By-Health. China accounts for over 90% of By-Health’s OTC portfolio turnover, with Australia accounting for the remainder. In China, the company fields brands including dynamic longline range By-Health and glucosamine supplement Keylid, backed by an intensive A+P strategy.

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Category Watch

Analysing the performance of the major OTC categories at a global level, gastrointestinals enjoyed the fastest growth in the MAT Q2 2019 period, with sales up 4.9%. Antinauseants (+15.9%) performed especially well, recorded a strong performance in Asia-Pacific, the largest regional market for GIs, owing to increasing levels of travel and changing diets.

Antidiarrhoeals, antispasmodics & IBS remedies and liver & bile remedies were the other best-performing categories, powered by new product innovation, as explored more fully in our Q2 update. One cloud on the horizon for GIs are the global concerns and recalls affecting antacids containing ranitidine, after some medicines were recently found to contain a nitrosamine impurity called N-nitrosodimethylamine (NDMA) at low levels — see our previous blog for more details.

Brand Watch

Two OTC brands have global sales of over US$1bn — Vicks (P&G) and Tylenol (J&J) — and both continue to outperform the global OTC market. No.1 Vicks produced above-average growth of 5.7%, despite difficult conditions in the global cough, cold & allergy market.

A strong return to growth in North America for Vicks was at the heart of this upturn, allied with continued strong growth in Latin America, helping to offset the moderate continued decline in Europe. A major factor driving faster growth in North America for Vicks is the sedative & sleep aid range Vicks ZzzQuil, which was boosted by the US launch of a new Pure Zzzs line in 2018. This range has been extended further with Pure Zzzs Kidz in Q3 2018 and several beauty and de-stress gummy supplements in 2019.

Whether you are in the office or on the go, you can access reliable CHC data and trends from OTC DASHBOARD, accessible on tablet, smartphone and desktop, and covering 63 markets across the world. Contact Hannah.Burke@NicholasHall.com to find out how you can benefit from OTC DASHBOARD by setting up a free trial today!

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France clamps down on OTC painkillers

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First came a public consultation launched by French medicines agency, ANSM, in August 2018 on how to increase consumer awareness of the risks of paracetamol misuse or overdose. Then followed the decision in July 2019 that, within 9 months, all paracetamol-based medicines must carry a prominent warning on packaging, to inform consumers about risks associated with paracetamol overdose, particularly hepatotoxicity. Paracetamol is the most commonly prescribed and used medicine in France, and the change affects more than 200 medicines.

Now, the ANSM has decided that, to reinforce the advisory role of the pharmacist and guarantee safe use of medicines containing paracetamol, ibuprofen and / or aspirin (in particular to avoid the risk of overdose), such products should be removed from the OTC self-selection list from January 2020 and kept behind the counter in pharmacies. ANSM has launched a consultation period with marketers, who have one month to comment.

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According to our estimates, the decision (if implemented) could affect around 90 SKUs on the French market. This includes the trio of leading paracetamol-based brands – Doliprane, Dafalgan and Efferalgan – as well as the top OTC ibuprofen-based (Nurofen, Advil) and aspirin-based (Aspirine Upsa) analgesics. Various OTC generics from the likes of Biogaran, Sandoz and Mylan, as well as systemic cold & flu remedies (Fervex, HumexLib) and topical analgesics, could also be affected.

The true effect that this decision could have on sales of OTC systemic analgesics remains to be seen, but it would clearly not be welcome news for marketers active in a category that remains in persistent decline, in part because of another regulatory decision (reverse-switch of codeine in July 2017). Leading brands such as Doliprane (Sanofi) and Efferalgan (formerly BMS, now Taisho) are available in both semi-ethical (reimbursed) and pure OTC versions, the latter often backed by TV ads, and it’s these latter SKUs which marketers have invested in over recent years that are most at risk.

Rapid regulatory change will be one of the themes at Nicholas Hall’s upcoming OTC.NewDirections Executive ConferenceTaking place in London on 14 November, the meeting will ultimately focus on the latest CHC Innovations and Technologies, with presentations from RB, Mundipharma, J&J and many more experts from CHC and beyond. To book your place or find out more, please contact jennifer.odonnell@NicholasHall.com without delay.

Ranitidine under regulatory spotlight

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Two weeks ago, the FDA put out a statement saying it had learned that some ranitidine medicines were found to contain a nitrosamine impurity called N-nitrosodimethylamine (NDMA) at low levels, which it classifies as a probable human carcinogen. In response, the FDA is conducting an ongoing investigation, working with international regulators and industry partners to determine the source of this impurity. Though the FDA made clear it is not calling for individuals to stop taking ranitidine, its advice to people taking OTC ranitidine was to consider using other OTC medicines approved for their condition.

Last week, the FDA alerted healthcare professionals and patients to a voluntary recall of OTC ranitidine tablets (75mg and 150mg) labelled by Walgreens, Walmart and Rite-Aid, and manufactured by Apotex. Sandoz (Novartis) also said it would no longer be distributing generic versions of ranitidine. This was followed by an announcement over the weekend that US retailer CVS is pulling the No.1 ranitidine-based OTC brand, Zantac (Sanofi), from its shelves over the possible links to cancer. CVS’ own generic ranitidine-based OTC products will also not be carried in the stores moving forward.

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Heartburn remedy Zantac is comfortably the No.1 ranitidine-based OTC brand, with global sales of around US$160mn (the vast majority of which are generated in North America). Chattem (Sanofi) markets Zantac in the USA in 75mg and 150mg OTC versions, while Aspen markets the brand in Australia and Perrigo is the UK marketer. In August 2018, Chattem extended its Zantac 150 line-up with two larger, value size 90-count SKUs, boosting sales significantly.

In a statement published in USA Today, Sanofi spokeswoman Ashleigh Koss said the company has no plans to halt shipments in the US market, adding: “The FDA reported that the levels of NDMA in ranitidine in preliminary tests barely exceed amounts found in common foods. We are working closely with the FDA and are conducting our own robust investigations to ensure we continue to meet the highest quality safety and quality standards.”

Take an in-depth exploration of the Lower GIs market in Nicholas Hall’s Lower GIs: Trends & Opportunities in Laxatives, Antidiarrhoeals, Probiotics, Antispasmodics & IBS remedies report. This key title includes dedicated case studies, NPD, innovative line extensions, coverage of 10 major markets, sales data and forecasts, plus much more! To find out more or to order your copy today, please contact melissa.lee@NicholasHall.com.

Global OTC market still subdued in Q2

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New figures from Nicholas Hall’s OTC sales database DB6 reveal that, in MAT Q2 2019 (the 12 months to end-June 2019), the global OTC market remained subdued, recording an increase of just 3.6% to total US$137.9bn in turnover. North America generated growth of 2.6%, with USA (+2.7%) improving slightly compared to MAT Q1; however, the market continues to be held back by a lack of switch activity. Canada performed poorly with sales up by just 2.1%.

In Europe (+2.1%), the OTC market also remained sluggish, with most key markets posting low single-digit growth, while Russia (-0.6%), France (-1.4%) and Switzerland recorded declines. Germany (+0.1%), Italy (+2.6%) and the UK (+1.1%) all managed modest increases. Poland was the one bright spot with a rise of 7.9%, driven by high levels of NPD and Rx-to-OTC switch activity. Looking at the Middle East & Africa, Turkey (+15.8%) remained the fastest-growing of the Top 20 markets, driven by high inflation.

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As for Asia-Pacific, growth decelerated to 4.2%, with slowdowns recorded in China (+5.3%), India (+7.5%) and Australia (+1.6%), while sales in Japan (+0.9%) remained flat. Both China and India were impeded by a comparatively low-key cough & cold season and weakening economies. Latin America (+8.3%) continued to be the best performing region, with the two largest OTC markets Brazil (+7.7%) and Mexico (+9.3%) showing resilience in the face of a challenging macroeconomic landscape.

Vitamins, minerals & supplements still generate the largest share (30%) of the global OTC market by major category, but growth slowed in Q2 to 3.7%. Key categories like probiotics and multivitamins reported slowdowns in Q2 2019, especially in the USA, which is struggling this year to replicate the strong performance of its dietary supplements market in 2018.

Nicholas Hall’s Future Opportunities & Growth Drivers in VMS – A Strategic Review of Vitamins, Minerals & Supplements is now available! This all-new report analyses a range of VMS categories including multivitamins, probiotics, OTC tonic drinks, mineral supplements plus many others, alongside looking at the latest trends, brand studies and launch activity. Click here to purchase your copy or to take a look at the full table of contents! To find out more about this key report, or to order your copy, please contact Melissa.Lee@NicholasHall.com

What future for AI in healthcare?

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One of the chapters in Nicholas Hall’s recently published New Paradigms report, entitled The Digital Revolution, provides some compelling examples of consumer healthcare companies and OTC brands that are thriving in the digital era. While key marketers like GSK were slow to invest in digital, the tide is now turning – in its 2018 annual report, GSK said it had “significantly” increased its advertising spend in online media because it is delivering a “far higher return” than traditional TV – despite continuing reservations from some companies like P&G about the way digital budgets are deployed.

One emerging technology that has an uncertain future in healthcare is artificial intelligence. Back in March, a report published by MMC Ventures (in partnership with Barclays) predicted that AI can “unlock a paradigm shift in healthcare”, particularly in diagnosis, drug discovery and monitoring. According to MMC’s research, health & wellbeing is a “focal point” for AI entrepreneurship – 21% of start-ups serve the sector, more than any other sector – and, over the next decade, “developers will have a greater impact on the future of healthcare than doctors”.

An example of innovation here is L’Oreal’s augmented reality and artificial intelligence entity, ModiFace, which has led to the launch of a consumer digital skin ageing diagnostic tool. Targeting women, its first application is Vichy SkinConsultAI – based on ModiFace’s AI-powered algorithm – launched in Canada in January 2019 and rolling out across the brand’s websites globally over the course of this year.

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However, security concerns continue to be the main stumbling block for AI. According to research published in Digital Health last month, public concern about accuracy, cybersecurity and the inability of AI-led chatbots to sympathise may be standing in the way of artificial intelligence’s successful introduction into healthcare.

A University of Westminster-led team surveyed 216 participants on a range of demographic and attitudinal variables including questions about acceptability and perceived effectiveness of AI in healthcare. The results identified three broad themes: “understanding of chatbots”, “AI hesitancy” and “motivations for health chatbots”. The team suggests that designers of AI-led chatbots need to employ user-centred and theory-based approaches to address patient concerns and to optimise user experience in order to achieve the best uptake and utilisation.

Embracing Tech and Digital Health are two of the key themes at our OTC.NewDirections Executive Conference, taking place in London on 14 November 2019! Nicholas Hall will be joined by experts from companies including Bayer, Mundipharma and J&J to review these issues, as well as others impacting our industry, including the status of Medical Cannabis in Europe, Growing Brands through Innovation and the ultimate theme of ensuring that you are Keeping Consumers in the Spotlight. To find out more, or to reserve your place, please contact jennifer.odonnell@NicholasHall.com without delay!

E-cigarettes under the spotlight in USA

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A few months ago, Nicholas Hall applauded the decision by US District Judge Paul Grimm (Maryland) to set a 10-month deadline (to 12th May 2020) for e-cigarette manufacturers to apply to the FDA and submit their products for public health review if they want to keep them on the market. The judge also imposed a one-year deadline for approval, as suggested by the FDA. Nicholas Hall said “there’s a chance that e-cigarettes will be regulated as drug products with all the opportunities and problems that brings” and predicted that “vaping could be a US$5bn OTC-registered industry by 2025, but at the moment that looks very unlikely.”

Since then, concerns in the USA about the safety of e-cigarettes have been growing. The Centers for Disease Control (CDC) recently indicated that, as of 6th September 2019, over 450 possible cases of lung illness associated with the use of e-cigarettes have been reported to CDC from 33 states and 1 US territory, while five deaths have been confirmed in California, Illinois, Indiana, Minnesota and Oregon.

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Map of reported US lung illness cases linked to e-cigarettes. Source: Office on Smoking & Health, National Center for Chronic Disease Prevention & Health Promotion

Meanwhile, the Federal Trade Commission is investigating Juul’s marketing practices and whether the company targeted minors, according to the WSJ. US House Energy & Commerce Chairman Frank Pallone recently wrote to Juul, which is 35% owned by tobacco group Altria, and the three other dominant players of the US e-cigarette market — Fontem Ventures, Japan Tobacco International and Reynolds American — requesting more information about their research into the public health impact of their products, their marketing practices and their role in e-cigarette use by adolescents. 

E-cigarettes are also under the regulatory spotlight at the US state level, with Michigan the first US state to ban flavoured nicotine vaping products. After Chief Medical Executive Dr Joneigh Khaldun found that youth vaping constitutes a public health emergency, Governor Gretchen Whitmer ordered the Michigan Department of Health & Human Services to issue emergency rules to ban the sale of flavoured nicotine vaping products in retail stores and online, and ban misleading marketing of vaping products, including use of terms like “clean”, “safe” and “healthy”. She also ordered the Michigan Department of Transportation to enforce an existing statute to prohibit advertising of vapour products on billboards.

American Heart Association CEO, Nancy Brown, commented: “Governor Whitmer has taken bold and appropriate action in response to the epidemic of youth e-cigarette use. In the absence of robust regulation by the FDA, we know shockingly little about the health impact of e-cigarettes being widely marketed to youth and adults. The recent outbreak of respiratory illnesses associated with e-cigarette use has only added to the uncertainty and increased the need for immediate action … We urge the FDA to move urgently to protect public health and exercise strict oversight over all e-cigarette products.”

Only two months to go until our OTC.NewDirections Executive Conference, taking place in London on 14 November 2019! Nicholas Hall will be joined by experts from companies including Bayer, Mundipharma and J&J to review key issues impacting our industry, including the status of Medical Cannabis in Europe, Embracing Tech, Growing Brands through Innovation alongside exploring the ultimate theme of ensuring that you are Keeping Consumers in the Spotlight. Save GB£100 when you book your seat before 13 September! To find out more, or to reserve your place, please contact jennifer.odonnell@NicholasHall.com without delay!

Lifestyle OTCs still the best hope for OTC switch revival

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2019 has been a slow year for Rx-to-OTC switch news, with activity dropping off markedly in the key US market in recent years, and Asia-Pacific (especially China, Japan and Indonesia) and Europe (Poland especially) the main source of developments. In this context, it was welcome news last week that Norway will become the second European market for OTC Viagra, after the Norwegian Medicines Agency approved the OTC sale of Viagra Reseptfri (Pfizer, sildenafil 50mg) erectile dysfunction treatment to men aged 18+ years, with this to be accompanied by pharmacist advice.

Pfizer plans to launch Viagra Reseptfri in pharmacies in early 2020, while Rx Viagra will remain available. The medicines agency recommends that men have a check-up with their doctor within six months of purchase so that any potential underlying conditions can be investigated. Viagra Reseptfri will be the first medicine available in Norway under the country’s new category of non-prescription medicine with guidance, and the Rx-to-OTC switch follows similar measures elsewhere in Europe. In Poland, sildenafil 25mg is available OTC from a number of domestic players, with initial launch from Adamed in May 2016, while Viagra Connect was launched in the UK in March 2018.

Of the 20 key markets covered by OTC New Products Tracker every month since the start of 2013, Poland has been the most active in terms of Rx-to-OTC switch activity, with 54 products reclassified to non-prescription status. A liberal switch environment has helped bring about a raft of Rx-to-OTC switches since 2014, including Europe’s first OTC erectile dysfunction brand and Poland’s first OTC systemic cold sore treatment.

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Despite some notable failures (such as urinary product Flomax Relief), so-called “lifestyle” drugs remain the primary source of switch activity, helping to extend the reach of the OTC market into new categories such as contraception, erectile dysfunction and cardiovascular disease. A key switch development in 2019 was the downscheduling in Japan of Taisho’s hyperlipidaemia treatment Epadel T (ethyl eicosapentaenoate) to Class I OTC, where sales are permitted in pharmacies (and online) after professional consultation. Downscheduling may have come just in the nick of time – sales data suggest Epadel T had failed to make any noticeable impact on the OTC market in its almost six years as an Instruction-Required Drug.

There also remains hope that Sanofi may one day market Eli Lilly’s erectile dysfunction treatment Cialis as an OTC medicine (it owns the rights to market Cialis OTC in the USA, UK, Canada and Australia), but is switch application has been stuck at the FDA a full five years since its submission. In July 2019, Sanofi also signed a deal with Roche for the exclusive OTC rights to Tamiflu (oseltamivir 75mg capsules, Genentech / Roche Group) for flu prevention and treatment in the USA. Under the terms of the agreement, Sanofi will be responsible for leading negotiations with the US FDA for the OTC switch and subsequent exclusive marketing, scientific engagement and distribution of Tamiflu OTC in the USA. Let’s hope for the sake of OTC growth that its negotiations go smoothly.

Clear your diary for Nicholas Hall’s 31st European Conference, which will be held in Athens on 28-30 April 2020, on the theme of Advancing in CHC: The Must-Dos and  Reasons Behind Them. To register your interest in this event, or for more information on sponsorship opportunities, please contact jennifer.odonnell@NicholasHall.com.