OTCs in Action Episode 15: E-Commerce excitement in China

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Online purchases of OTCs in China are in action, according to James Fan, CEO, JOWIN China Group and Nicholas Hall’s Network Partner.

In 2014, Alibaba issued the world’s largest IPO (raising funds of US$25bn), increased its investment in its pharma dispensing e-business and aggressively developed 
its online healthcare shopping arm. It also supported many cloud-based health projects and encouraged traditional distributors to develop their online businesses.

“Double-digit growth of OTCs online and a rise of 20% among big brand nutritionals and cosmeceuticals proves that Chinese consumers are convinced by e-healthcare product providers. Tmall – operated by Alibaba – reported the Top 3 brands purchased on its site last year were Dong-e E-Jiao (Dong-e E-Jiao Group), Caltrate-D (Pfizer) and Fupai E-Jiao (Shandong Fujiao), which grew on average by more than 30% vs 2013. All three products have numerous line extensions that meet a range of daily healthcare needs. Regulations are set to allow the online prescription market to open up, too. Meanwhile, we believe the next digital healthcare hotspot in China will be at-home devices that can be used alongside online and mobile technology.

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

OTC in Action Episode 2: Seducing voters with OTC oral contraceptives?

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OTCs are in action for political gain, with US Republican Senate candidates in four states proposing the oral contraceptives should be switched from Rx-to-OTC to expand access for consumers, whilst diverting free Rx OCs for consumers from mandated health insurance coverage, according to a Wall Street Journal article published on the 10th of September.

Under the Democrat-supported Affordable Care Act, Rx oral contraceptives are a preventive health service and, as such, are covered with no out-of-pocket cost to women. Many opponents of the ACA, including Republicans and health insurers, oppose this benefit. Of course, this opposition does not play well with some voters, including women who are eligible for the OC benefits. By calling for OCs to be switched to OTC, candidates are hoping to appease voters with more convenient access, while gratifying insurance companies by taking the Rx OCs off their benefits list.

Not so fast, though, says the American Congress of Obstetricians & Gynecologists. The candidates’ use of the respected medical group’s past endorsement of OTC OCs to justify the switch may backfire. Dr John C Jennings, President of the ACOG, rebuked the candidates, commenting: “We feel strongly … that OTC access to contraceptives should be part of a broader dialogue about improving women’s healthcare, preventing unintended pregnancies and increasing use of contraception, including long-acting reversible contraception (LARC). Over-the-counter access should not be used as a political tool by candidates or by elected officials.”

Ultimately, it’s a risk-benefit decision to be made by the FDA based on scientific and consumer studies, and there appears to be no such application on the docket. However, we at Nicholas Hall & Company believe OCs will switch eventually. Last spring, OTC INSIGHT Asia Pacific reported that the progressive Medicines Classification Committee in New Zealand, which often serves as a bellwether for Rx-to-OTC switches, said the proposed switch of several OCs to pharmacy-only classification “could work” if the applicant, Green Cross Health, included more collaboration with GPs in its proposal.