New regulations rocking the boat in Switzerland?

NicholasHallCo-AprilWhile 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.

OTCs In Action Episode 9: Traditional Medicine minister appointed as MNC manufacturing multiplies

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OTCs are in Action in India. Indian prime minister and enthusiastic yoga practitioner, Narendra Modi, has appointed Shripad Yesso Naik to be the first minister of the Yoga & Traditional Medicines division of the Health Ministry. According to the Wall Street Journal India, this department has been concentrating on herbal and traditional remedies for 25 years, and will be supported with a 2015 budget of $144mn. Traditional medicines are used by 70-80% of the Indian population, and the Government’s focus on improving quality standards and expanding manufacturing will impact not only the domestic market, but exports as well.

Nicholas Hall & Company’s DB6 global database forecasts that the market for OTC medicines in India will grow by about 158% over the next 10 years to US$5.7bn, with a 10% CAGR. Currently, the OTC market remains ill-defined, with OTC basically a default status for products not classified as Rx, complicated by widespread sales of Rx drugs under the counter without a prescription. This is likely to change over the coming years, as health professionals, most recently the Indian Medical Association, support the creation of an OTC list in line with global standards.

Not surprisingly, multinational companies are garnering for position in India. In the past year, Nicholas Hall & Company’s OTC.Newsflash has reported the following:

– This month, J&J completed the acquisition of fruit-based electrolyte drink ORS-L from Jagdale Industries for US$122mn. The company also recently announced it was building a new $66mn manufacturing facility for personal hygiene and skin products in Telangana

– In September, Abbott opened a new plant in Gujarat, which will manufacture nutritional products specifically for the local market. The US-based MNC invested US$73mn in the facility, its third in India

– Earlier this year, GSK increased its stake in its pharmaceuticals subsidiary in India from 50.7% to 75% in a $1bn deal, following a voluntary Open Offer

This week OTCs in Action thanks Nicola Jay, editor of Nicholas Hall & Company’s OTC INSIGHT Asia-Pacific, for her expertise on the OTC market in India.