OTCs are in Action this month in Brazil, where J&J has purchased P&G’s Hipoglos nappy rash remedy, which enjoys sales of about $40mn. The purchase was a bit surprising given that, in 2014, J&J launched the leading US nappy rash brand, Desitin Creamy, in Brazil with a rash prevention positioning and a strong A+P campaign.
However, instead of steadily growing share organically with Desitin, the acquisition of a very well-known Latin American brand immediately elevates the baby care powerhouse to second place in the category in Brazil, behind Bayer’s fast-growing Bepanthen range. The two J&J brands will complement the company’s Johnson’s Baby creams, lotions, powders and cleansers.
Just as interesting is P&G’s divestiture of the well-known Hipoglos – owned by Andromaco and Grunenthal in other Latin American markets – which is a logical move given that it does not conform to P&G’s Megabrand strategy, owing to the fact it only competes in one market. That said, the major OTC company’s Brazilian portfolio is now limited to the Vicks Cough & Cold range and a small Metamucil laxative business.
To find out more about OTC in Brazil and other Latin American markets, please join us at our 2nd Latin American OTC Conference in Miami from 9-10 June 2016. Book by contacting jennifer.odonnell@NicholasHall.com or online
OTCs are in Action this week in parental thinking: “You don’t need a new iPhone … those shorts are too short … those heels are too high … too much make-up!” Sometimes it seems I say no to everything my teenage daughter wants … but acne products for my lovely girl’s complicated complexion – I’ll buy anything!
So, Galderma’s proposal to launch an OTC gel version of the acne-fighting ingredient, adapalene, caught my attention. The Nestlé-owned company will present its case for switching the ingredient from Rx to OTC at the 15th April meeting of the FDA’s Nonprescription Drugs Advisory Committee. It currently markets adapalene-based OTC, Differin, in Russia and Greece. According to Nicholas Hall’s DB6 global OTC sales database, the brand generated sales of $2mn in Russia in 2014, and $1mn in Greece.
In the US, Galderma’s Rx portfolio currently uses adapalene in Rx acne treatments Epiduo (0.1% and benzoyl peroxide 2.5%), Epiduo Forte (0.3% / 2.5%) and Differin – available in 0.1% and 0.3% strengths.
If anyone needs a touching reminder of those terrible teen troubles, join the 3mn viewers of Charlie McDonnell’s acne song (which sported a pop-up ad for Neutrogena skin care brand from J&J during my last visit to the site).
“It is a common experience that a problem difficult at night is resolved in the morning, after the committee of sleep has worked on it” John Steinbeck
With incidences of work-related stress picking up at an alarming rate around the globe, people constantly logging on and off the internet and electronic devices, and long-haul flights becoming longer and ever more frequent, so the quality of sleep from New York to London and Beijing has plummeted. While the Centers for Disease Control & Prevention put the number of US citizens suffering from sleep disorders anywhere between 50-70mn, around a third of Europeans are said to suffer from sleep problems, rising to well over a half of all those over 65. Luckily the vast majority of these can be treated easily and safely with self-medication – the Chinese OTC sleep aids category is filled with TCMs, the US led by medicated ingredient diphenhydramine, while European markets are particularly fond of natural remedies with valerian, hops and melatonin.
It could even be that a good old glass of milk might be enough for some people. Scientists at the Sahmyook University in South Korea have shown that milk produced by cows at night – as opposed to during the day – can have a sedative effect, with their study published in the Journal of Medicinal Food. The study suggested that ‘nocturnal milk’ contains plenty of sleep-promoting ingredients, including the amino acid tryptophan and melatonin.
Your friendly sleep promoter
‘Night Milk’ is already on sale in pharmacies and drugstores in Germany in the form of Nachtmilchkristalle, a brand and company set up by farmer Tony Gnann. The cows are milked at night for the extra melatonin release – up to 100 times more than regular milk according to the company – with the animals also receiving a special regime of UV and long-wave red lights during the winter when they can’t be kept outside. Sales of the freeze-dried milk crystals, which can be stirred into other liquids, have not yet been enough to really test the leading sleep aid brands in Germany, but the recent South Korean study could provide a significant boost, and global interest is spreading. “In the past year we have seen increasing demand from England and soon it will be available in China”, said Kai Oppal, co-owner of Nachtmilchkristalle.
So maybe one last glass of the white stuff isn’t such a bad idea? Goodnight!
This week, OTCs are in Action in Japan, where the government plans to reward self-medicating consumers with a tax deduction. Under current tax codes, Japanese consumers can deduct medical expenses over US$800 or so per year from taxable income, but OTC expenses are often not high enough to meet this threshold. A recently proposed tax incentive will require a minimum OTC expenditure of only about us$80 to qualify for the deduction – a benefit the government is hoping will nudge consumers with minor ailments away from expensive hospitals, and toward drugstores.
According to Nikkei Asian Review: “The health ministry expects more than 10mn households to qualify for the deduction. If the break changes patient behaviour, the resulting drop in government medical spending could outweigh the expected tens of billions of yen in lost tax revenue. Reining in social insurance expenditures is also crucial to achieving the government’s goal of a primary surplus by fiscal 2020.”
Nichols Hall’s DB6 database shows that the US$7bn Japanese OTC market has been ailing with sales declines for the past several years – encouraging people to put OTCs in Action for financial rewards will be therapeutic for consumers, manufacturers and government.
Recovery in US OTC analgesics typifies the trend in the wider global market
Sales of OTC analgesics in the US continued their recovery in the year to Q1 2015, with healthy growth of +4.6%. Tylenol (McNeil / J&J) was one of the fastest-growing brands of the past year, boasting +27% growth (adult, children and PM analgesics, MAT Q1 2015) as family-themed advertising campaigns helped reinforce the brand’s return to US retail stores, after manufacturing problems at McNeil’s Fort Washington plant. Stablemate Motrin is also performing well, making real gains in the paediatric niche. Meanwhile, new launch activity, such as Aleve PM (Bayer) and Excedrin Tension Headache (GSK), further boosted systemics. Sales of topicals also thrived, as brands like Salonpas (Hisamitsu) innovated in the form of jet sprays and gel patches, while several key brands, including No.1 Icy Hot (Chattem / Sanofi), have been extended with TENS devices since they were approved for OTC use in 2013.
And the global picture for analgesics is no less rosy. Q1 2015 saw sales advance at a faster pace (+6.0%) than the overall OTC market (+5.3%) globally. Below are just a handful of trends and developments from around the world helping to bolster growth:
- In Japan competition in the loxoprofen segment of systemic analgesics is increasing, with Lion launching Excedrin LOX in early 2015 and Daiichi Sankyo retaliating soon after with Loxonin S Plus
- Brazil’s topical analgesics benefited from the introduction of Dorflex Icy Hot (Sanofi) in 2014 and increased A+P support for Balsamo Bengue (EMS)
- In India increasing demand for brands targeting specific types of pain, namely headache and body pain, has opened up the topicals category to different delivery formats such as gels and sprays, in addition to the traditional balms
- Poland has seen a rise in the popularity of speciality products for the likes of migraine and joint / back pain, which carry a premium price, while there is also a trend towards larger “value packs”
To discover more about what’s driving growth (or holding it back) in the Global OTC Analgesics market, including in-depth coverage of the 14 leading countries, take advantage of generous pre-publication discounts on our upcoming report.
For more information, download the brochure or contact Nino Hunter.
While preliminary figures for DB6 show only modest growth for Switzerland in 2014, recent developments in the Alpine state make for more exciting reading.
In December, the Swiss Parliament’s Upper House voted in favour of allowing all non-prescription medicines to be sold in drugstores, merging the Class C (pharmacy-only OTCs) and Class D categories (pharmacy + drugstore OTCs). The vote was made on the condition that the new larger category will be reviewed in the near future, to see which medicines might either be moved to the current Class E free sale category (which includes supermarkets) or reverse-switched, hopefully the former. In the short term, the measure should help to boost both overall OTC growth through increased availability, as well as the fortunes of the little over 500 drugstores in Switzerland, whose number has dwindled a little over the past few years.
As part of the same bill, the Upper House also passed a proposal giving pharmacists the ability to dispense a select list of Rx medicines to consumers without a prescription, which will depend on the pharmacists having already dealt with the purchasing consumer on a previous occasion. Given time and a healthy dose of Swiss caution from pharmacists, these medicines may also find their way on to the self-medication bill.
Meanwhile, the Swiss National Bank’s decision to remove the Swiss Franc’s cap against the Euro in January was a real thorn in the side of Swiss retailers on the nation’s borders, with numerous German pharmacists reporting floods of Swiss consumers pouring into Konstanz to stock up on cheap(er) OTCs. Whether these international pharmacy-shopping trips will continue in the long term remains to be seen, but it may take drugstores starting a price war on their new OTC options to keep the Swiss at home.
Nicholas Hall’s Postcard from Istanbul: I’m here to scout venues for a May 2014 OTC Action Workshop (make a note in your diary!). We are also working with Turkish pharma association AIFD to lobby the Ministry of Health to set up a fully-functioning OTC sector and, along with Network Partner, Tulay Izbul, I’ll be feeling the pulse of the market on this trip.