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A Global View of the Expanding Over-the Counter Market
A Global View of the Expanding Over-the Counter Market
A Global View of the Expanding Over-the Counter Market
A Global View of the Expanding Over-the Counter Market
A Global View of the Expanding Over-the Counter Market
A Global View of the Expanding Over-the Counter Market
A Global View of the Expanding Over-the Counter Market
A Global View of the Expanding Over-the Counter Market
A Global View of the Expanding Over-the Counter Market
A Global View of the Expanding Over-the Counter Market
A Global View of the Expanding Over-the Counter Market
A Global View of the Expanding Over-the Counter Market
A Global View of the Expanding Over-the Counter Market
A Global View of the Expanding Over-the Counter Market
A Global View of the Expanding Over-the Counter Market
A Global View of the Expanding Over-the Counter Market
A Global View of the Expanding Over-the Counter Market
A Global View of the Expanding Over-the Counter Market
A Global View of the Expanding Over-the Counter Market
A Global View of the Expanding Over-the Counter Market
A Global View of the Expanding Over-the Counter Market
A Global View of the Expanding Over-the Counter Market
A Global View of the Expanding Over-the Counter Market
A Global View of the Expanding Over-the Counter Market
A Global View of the Expanding Over-the Counter Market
A Global View of the Expanding Over-the Counter Market
A Global View of the Expanding Over-the Counter Market
A Global View of the Expanding Over-the Counter Market
A Global View of the Expanding Over-the Counter Market
A Global View of the Expanding Over-the Counter Market
A Global View of the Expanding Over-the Counter Market
A Global View of the Expanding Over-the Counter Market
A Global View of the Expanding Over-the Counter Market
A Global View of the Expanding Over-the Counter Market
A Global View of the Expanding Over-the Counter Market
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A Global View of the Expanding Over-the Counter Market

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The drivers behind the growth of the global over-the-counter market are examined, including strategies to harness that growth. Also includes country profiles of the over-the-counter markets in China, …

The drivers behind the growth of the global over-the-counter market are examined, including strategies to harness that growth. Also includes country profiles of the over-the-counter markets in China, the Philippines, and Australia.

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  • .
  • This market sector has some strong performers within its ranks! There is significant upside for those who manage this channel effectively, eg, Galderma, Novogen with niche brands and strong commercial performance relative to peers
  • .
  • Transcript

    • 1. A global view of the expanding OTC market Richard Lawrance – IMS Consumer Health
    • 2. Agenda <ul><li>World OTC Context </li></ul><ul><li>Review of Asia Pacific </li></ul><ul><ul><li>Country snapshots: China, Philippines, Australia </li></ul></ul><ul><li>Future Prospects for OTC in asia Pacific </li></ul>OTC Pharma Asia 2011
    • 3. Agenda <ul><li>World OTC Context </li></ul><ul><li>Review of Asia Pacific </li></ul><ul><ul><li>Country snapshots: China, Philippines, Australia </li></ul></ul><ul><li>Future Prospects for OTC in Asia Pacific </li></ul>OTC Pharma Asia 2011
    • 4. OTC Pharma Asia 2011 The global OTC market is now worth US$102bn, and continues the recent trend of outgrowing Pharma. Source: IMS Audits plus estimates Total Pharma = $878bn Total OTC = $102bn
    • 5. While Pharma growth experiences a number of constraints, OTC benefits from a range of growth drivers. OTC Pharma Asia 2011 Top Corps contribution to growth falling rapidly Low number and quality output from R&D Generics dominating large therapy areas Demand constrained by payers Key players building strong brand identities Payers keen to promote self medication Emerging markets have the critical mass to influence growth Companies seek to exploit switch opportunities Increasing access through new channels PHARMA OTC
    • 6. The developing regions of Asia Pacific, Latin America and Central & Eastern Europe drive World OTC growth. OTC Pharma Asia 2011 Global 3 Year Average Growth 6.8% Global Latest Year Growth 5.8% Source: IMS OTC Review Plus Q2 2010 Asia Pacific accounts for 17% of OTC sales but 32% of growth
    • 7. Base business continues to grow in the developing regions of CEE and Asia Pacific. OTC Pharma Asia 2011 Source: IMS Elements of Growth Q2 2005-2010 Base Value Change Price Change New Products Line Extensions Total Change Elements of Growth by Region Cumulative growth %
    • 8. Sanofi-aventis are the only top 10 corporation to exceed market growth rates. OTC Pharma Asia 2011 Source: IMS OTC Review Plus Q2 2010 Value Share Value Growth > Market Value Growth < Market Total OTC +5.8%
    • 9. Cough/Cold achieves the lowest growth of the key categories, after a poor season in 2009/10 OTC Pharma Asia 2011 Source: IMS OTC Review Plus Q2 2010 Global OTC – Key Categories Value Share (%) Value Growth (%)
    • 10. Agenda <ul><li>World OTC Context </li></ul><ul><li>Review of Asia Pacific </li></ul><ul><ul><li>Country snapshots: China, Philippines, Australia </li></ul></ul><ul><li>Future Prospects for OTC in Asia Pacific </li></ul>OTC Pharma Asia 2011
    • 11. China dominates the region, and drives much of the growth. OTC Pharma Asia 2011 Source: IMS OTC Review Plus Q2 2010. China: Hospital and Retail (22 Cities) panels combined
    • 12. Western MNCs have a significant presence in the region’s top 10, but none manage to match the region’s growth rate. OTC Pharma Asia 2011 Source: IMS OTC Review Plus Q2 2010 Value Share Value Growth > Market Value Growth < Market Total OTC +16.3%
    • 13. Traditional medicines remain popular and drive much of the region’s growth. OTC Pharma Asia 2011 Source: IMS OTC Review Plus Q2 2010 Asia Pacific OTC – Key Categories Value Share (%) Value Growth (%)
    • 14. China
    • 15. At a national level, the retail sector has become the dominant channel. Within retail, pharmacy chains are growing in importance. OTC Pharma Asia 2011 Retail OTC Market Breakdown by Channel Definitions: Chain is defended according to name, manager claim, TSKF list and registration information from SFDA Indep-big:>200m 2 Indep-med:100-200m 2 Indep-small:<100m 2 RMB million 51% 33% 11% 5% Source: IMS projection based on retail price for urban market Urban OTC Market $12 Bn Retail Market Hospital Market 72.5% 27.5%
    • 16. IMS now reports OTC performance across hospital and retail pharmacies. The Hospital sector enjoys slightly higher growth. OTC Pharma Asia 2011 +25% +28% +23% +18% OTC Sales by Channel $m Source: IMS CHPA & China Pharmatrend 22 Cities
    • 17. Again, we see top manufacturers failing to match market growth rates. OTC Pharma Asia 2011 Source: IMS Pharmatrend – 22 Cities Q2 2010 Value Share Value Growth > Market Value Growth < Market Total OTC +20%
    • 18. Chinese OTC is dominated by the same broad categories as Global OTC. OTC Pharma Asia 2011 Market Share of key category in OTC sector MAT Q2 2010 Source: IMS Pharmatrend – 22 Cities Q2 2010 Where a TCM is marketed for use with a specific illness its sales will be included in that category As ‘Western’ influences increase, high growth is expected in Nutritional and Lifestyle categories. GR % (10Q2 vs. 09Q2) 23.0% 26.0% 14.3% 13.0% 9.9% 9.6% 5.3% 83.2% 24.8% 197.7% 5.7% -9.6% 30.3% 123.9% 23.4% 26.7%
    • 19. Primary research gives valuable insight to the Chinese consumer behaviour and purchasing decisions. OTC Pharma Asia 2011 Source: IMS Consumer Health & Wellness Study 2010
    • 20. There are fundamental shifts in the China marketplace for OTC manufacturers. OTC Pharma Asia 2011 Partnership & Consolidation New Marketing Practice Increase Distribution <ul><li>Acquiring sales channel and manufacturing facilities </li></ul><ul><li>Consolidation opportunity for quick portfolio restructuring </li></ul><ul><ul><li>Adjacent Categories </li></ul></ul><ul><ul><li>TCM Brands </li></ul></ul><ul><ul><li>The role of trade promotion becoming more important </li></ul></ul><ul><ul><li>Strict monitor of in market promotion authorities </li></ul></ul><ul><ul><li>More Rx -> OTC Switches </li></ul></ul><ul><ul><li>Increased competition as a result of a broader Health & Wellness spectrum </li></ul></ul><ul><li>Government to push for increased role for community hospitals </li></ul><ul><li>Growth of chain retail </li></ul><ul><ul><li>Key Account Management </li></ul></ul><ul><ul><li>Private Label competition </li></ul></ul>Optimize Strategic Partnering New Pricing & Market Access Need for New Promotion Model
    • 21. Philippines
    • 22. The Philippines also suffer a slowdown in growth, but still performs favourably in comparison to an Rx market decline of 4.2% OTC Pharma Asia 2011 Value Sales ($m) Unit Sales (m) Source: IMS OTC Review Plus, MAT Q2 2010 3 Yr CAGR 5.1% 3 Yr CAGR 3.3% Total OTC Sales & Growth 6.6% 8.0% 0.7% 2.2% 5.4% 2.4%
    • 23. United Labs dominate the market at nearly 5 times the size of their nearest competitor. OTC Pharma Asia 2011 Source: IMS OTC Review Plus, MAT Q2 2010 1 Yr Growth 28.1% 3 Yr Growth 33.0%
    • 24. Vitamins, Minerals and Supplements play a particularly important role in the Philippines. OTC Pharma Asia 2011 Source: IMS OTC Review Plus, MAT Q2 2010 Philippines OTC – Key Categories Value Share (%) Value Growth (%)
    • 25. MNCs need to build scale in the face of low growth and a dominant local player. OTC Pharma Asia 2011 Giving consumers something new Building Brand Equity Penetrating the market <ul><li>Need to compete with UL’s dominance and extensive distribution network. </li></ul><ul><li>Acquiring sales channel facilities </li></ul><ul><ul><li>Local partnership options </li></ul></ul><ul><li>Building market presence </li></ul><ul><ul><li>Existing brands in other markets </li></ul></ul><ul><ul><li>Acquisition </li></ul></ul><ul><ul><li>Traditional OTC categories are very competitive </li></ul></ul><ul><ul><ul><li>Must innovate to succeed e.g. Kalbe energy drink sachets </li></ul></ul></ul><ul><ul><li>New promotional mechanics to engage with consumer </li></ul></ul><ul><li>Filipinos are brand aware and reputation is key </li></ul><ul><li>Focus on “Right Price” </li></ul><ul><li>Heavy Media spend required to compete with UL </li></ul><ul><li>Create a balance between promotional strategy and brand position </li></ul>Optimize Strategic Partnering New Pricing & Promotions Need for Innovative Approach
    • 26. Australia
    • 27. Growth is slowing slightly in Australia, but value consistently outperforms volume sales. OTC Pharma Asia 2011 Value Sales ($m) Unit Sales (m) Source: IMS OTC Review Plus, MAT Q2 2010 3 Yr CAGR 10.8% 3 Yr CAGR 6.5% Total OTC Sales & Growth 15.8% 11.0% 5.8% 10.2% 7.4% 2.0%
    • 28. The key players are characterised by a slowdown in growth. OTC is a focus for both traditional pharma and consumer health companies. OTC Pharma Asia 2011 Source: IMS OTC Review Plus, MAT Q2 2010
    • 29. A more balanced picture in terms of category importance. VMS drive strong growth. OTC Pharma Asia 2011 Source: IMS OTC Review Plus, MAT Q2 2010 Australia OTC – Key Categories Value Share (%) Value Growth (%)
    • 30. Does Australia provide an indication of the shape of OTC in Asia Pacific in years to come? OTC Pharma Asia 2011 Liberal Legislative Environment Mature Market Characteristics Multiple Stakeholder Relationships <ul><li>Strong growth restricted to niche categories and emerging channels </li></ul><ul><ul><li>Where to invest? </li></ul></ul><ul><li>Build or Buy? </li></ul><ul><ul><li>Consider the whole Health & Wellness spectrum </li></ul></ul><ul><ul><li>Acquisition targets may be large or small </li></ul></ul><ul><ul><li>Build strong brands </li></ul></ul><ul><ul><ul><li>Continuous innovation </li></ul></ul></ul><ul><ul><ul><li>Multimedia advertising & trade promotions </li></ul></ul></ul><ul><ul><li>Harness switch potential </li></ul></ul><ul><ul><ul><li>Chronic & Lifestyle indications </li></ul></ul></ul><ul><li>A multi-channel environment requires a multi-tiered strategy </li></ul><ul><ul><li>Pharmacy targeting </li></ul></ul><ul><ul><li>The role of the HCP </li></ul></ul><ul><ul><li>Key Account Management </li></ul></ul><ul><ul><li>Wholesaler consolidation </li></ul></ul><ul><ul><li>Online Pharmacies </li></ul></ul>Picking the Right Opportunities Excellence in Execution Innovation & Brand Strategy
    • 31. Agenda <ul><li>World OTC Context </li></ul><ul><li>Review of Asia Pacific </li></ul><ul><ul><li>Country snapshots: China, Philippines, Australia </li></ul></ul><ul><li>Future Prospects for OTC in Asia Pacific </li></ul>OTC Pharma Asia 2011
    • 32. Key takeaways from today’s session... OTC Pharma Asia 2011 <ul><li>OTC is set to outpace Pharma growth even in the Asia Pacific region </li></ul><ul><li>Asia Pacific can not be regarded as a homogenous region – markets vary in structure and consumer perception </li></ul><ul><li>Increasing presence of international corporations, products, retailing and consumer attitudes to healthcare in many countries – but not to the detriment of Asian market characteristics (eg hospital distribution, traditional medicines) </li></ul><ul><li>Change will come to all markets sooner or later </li></ul><ul><li>To capitalise on this opportunity, pharma companies must consider the OTC/CH business as a standalone entity rather than an extension of Rx strategy </li></ul><ul><li>Strategies must be based around the consumer </li></ul>
    • 33. Excellence in pharmacy is the key to success in OTC – combining skills from pharma and FMCG to delight the consumer OTC Pharma Asia 2011 Pharma perspective Innovation through R&D Maximising commercial partnerships with wholesalers Differentiated Customer calls: Individual message for each store with suitable frequency Recommendation: How important is the pharmacist’s role and how to optimise within the marketing mix FMCG perspective Consistent Message: Building a strong brand identity in a multi-media and multi-channel environment Consumer engagement: Effective communication throughout the marketing mix Innovation through building brands: Consumer-led innovation Key Account Management: Clear role for each brand within each category within each retailer. Consumer perspective
    • 34. The OTC market presents opportunities that require different orientation from traditional pharma OTC Pharma Asia 2011 Act fast Window of opportunity to invest and gain competitive advantage still exists in APAC Differentiate Differentiation needs to be in the mind of the consumer. Proactive focus on Rx to OTC switch and brand extensions Tailor Execute Excellence in execution requires investment in research, data and analytics Understand Every market is very different and requires detailed understanding of model, stakeholders, consumers and success factors Portfolio choices need to be aligned to the consumer mindset and tailored to each retail channel (pharmacy, drugstore, hospital, supermarket)
    • 35. Thank you! <ul><li>Questions? Comments? </li></ul><ul><ul><li>Fill out the form at the bottom of this slide, or </li></ul></ul><ul><ul><li>Visit www.imshealth.com or email [email_address] . </li></ul></ul>

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