Global and Asia-Pacific Trends in OTC
IMS Health Asia Pacific
AGENDA

• IMS Experience in Consumer Health
• Global – Asia Pacific Market Update
• Bringing OTC closer to the consumer
• ...
IMS - Unmatched in Scope & Scale, Dedicated to
Consumer Healthcare Industry

Global and Asia Pacific Trends in OTC
The Consumer

Health Space

OTC

• Specialized Nutrition
formulas for infants
and adults
NUT

Nutritionals

Over the
Count...
AGENDA

• IMS Experience in Consumer Health
• Global

- Asia Pacific OTC Market Update

• Bringing OTC closer to the consu...
DEFINITIONS
Rx - bound /

Semi - ethical OTC
Rx - Bound *

/ Self - Medication
Non Rx - Bound
(“total OTC”)
Semi ethical

...
THE BASIS for figures in this presentation
Annual sales to end Q3 2012
Sales calculated at manufacturer prices
Growths bas...
Region Definitions
• EMEA
• Western Europe
• Central & Eastern Europe (CEE)

• North America (US, Canada and Puerto Rico)
...
OTC continues the recent trend of outgrowing Pharma.
Year on Year Value Growth & OTC Share of Total Pharma
MAT Q3 2012

16...
OTC benefits from a number of growth drivers while Pharma
faces significant constraints.

Top Corps contribution to growth...
Growth variances within the different sub-regions
OTC Growth by Region: Long vs Short term
40
Global 3 Year Average Growth...
Emerging markets continue to drive global growth
Total OTC

23%

45%

Total

of Sales

49%

Share

12%

Emerging
Markets
S...
At country level, key developing markets lead the pack
OTC Growth by Market: Long vs Short term

Latest Year Growth (%)

4...
Of the key categories, VMS & Tonics posts the strongest
growth while CCR suffers a poor year.

OTC Growth by Category: Lon...
China aside, the region is characterised by a wide range of
OTC sales performances.
OTC Growth by Market: Long vs Short te...
Of the key categories Pain Relief post the strongest growth.
OTC Growth by Category: Long vs Short term

Latest Year Growt...
To grow, mature markets must innovate while emerging
countries enjoy increase in base sales
Elements of Growth by Region
B...
AGENDA

• IMS Experience in Consumer Health
• Global – Asia Pacific Market Update
• Bringing OTC closer to the consumer
• ...
Many of the key OTC growth drivers influence the trend
towards a stronger focus on the consumer
Top Corps contribution to ...
In Europe consumers continue to enjoy easier access to
OTC medicines ...small steps but in the same direction

NL: 1921
OT...
And consumer appreciation of convenience is shown by
relative growth of non-pharmacy channels
Channel Contribution to OTC ...
The more developed markets in the region tend to see
higher per capita spend.
OTC Expenditure per Capita ($)

- APAC exc J...
The consumers in AsiaPac are already moving in the
same direction in varying degrees of access
Highly commoditized OTC mar...
The advisory role of the pharmacist is key to influencing
brand choice
•Top 3 ailments suffered
•Cold/Flu
•Headache
•Tired...
AGENDA

• IMS Experience in Consumer Health
• Global – Asia Pacific Market Update
• Bringing OTC closer to the consumer
• ...
Future OTC growth will continue to come from the
emerging markets
Forecasted OTC Growth rate
5 yr CAGR 2011
- 2016
Global ...
As a result of the evolving
Excellence in Execution is key.
Consistent Message:
Building a strong brand identity in
a mult...
Highlights & Conclusions

OTC remains attractive as it continues to outpace Pharma
•And as a result the market becomes mor...
Thank You!

For more information on the content of this
presentation please contact:
Katherine Te
Sr. Manager

– Offering ...
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Global and Asia-Pacific Trends in OTC (3rd Annual OTC Pharma Asia Conference 2013)

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Global and Asia-Pacific Trends in OTC (3rd Annual OTC Pharma Asia Conference 2013)

  1. 1. Global and Asia-Pacific Trends in OTC IMS Health Asia Pacific
  2. 2. AGENDA • IMS Experience in Consumer Health • Global – Asia Pacific Market Update • Bringing OTC closer to the consumer • Highlights and conclusions Client acknowledges and agrees that information provided in this document are confidential to IMS. Client shall not disclose or provide to any third party the whole or any part of the information contained in this document. Global and Asia Pacific Trends in OTC 2
  3. 3. IMS - Unmatched in Scope & Scale, Dedicated to Consumer Healthcare Industry Global and Asia Pacific Trends in OTC
  4. 4. The Consumer Health Space OTC • Specialized Nutrition formulas for infants and adults NUT Nutritionals Over the Counter Consumer Health PEC Personal Care • Beauty and hygiene products i.e. Emollients Global and Asia Pacific Trends in OTC • Licensed/Unlicensed products • Pure OTC/Pharmacy only PAC Patient Care • Testing/medical devices • Wound care/contact lens care
  5. 5. AGENDA • IMS Experience in Consumer Health • Global - Asia Pacific OTC Market Update • Bringing OTC closer to the consumer • Highlights and conclusions Client acknowledges and agrees that information provided in this document are confidential to IMS. Client shall not disclose or provide to any third party the whole or any part of the information contained in this document. Global and Asia Pacific Trends in OTC
  6. 6. DEFINITIONS Rx - bound / Semi - ethical OTC Rx - Bound * / Self - Medication Non Rx - Bound (“total OTC”) Semi ethical * Prescription (Rx) necessary by law to receive product Bought with Prescription Self Medication Bought without Prescription Self - Medication includes registered and unregistered products Global and Asia Pacific Trends in OTC
  7. 7. THE BASIS for figures in this presentation Annual sales to end Q3 2012 Sales calculated at manufacturer prices Growths based on previous years to Q3 Growths use latest exchange rate across all time periods Local currency growth aggregated into Dollars Some qualifications UK data does not include mass market China data is China hospital, does not include retail Companies include all OTCs from the corporation i.e. “Novartis” includes Hexal, Sandoz, LEK, etc Global and Asia Pacific Trends in OTC
  8. 8. Region Definitions • EMEA • Western Europe • Central & Eastern Europe (CEE) • North America (US, Canada and Puerto Rico) • Latin America • AsiaPac • China • SE/N Asia • South Asia • Australasia • Japan Global and Asia Pacific Trends in OTC
  9. 9. OTC continues the recent trend of outgrowing Pharma. Year on Year Value Growth & OTC Share of Total Pharma MAT Q3 2012 16 14 12.2% 11.6% 11.1% 12 10.9% 10.7% 10.6% 10.7% 10.9% 10.9% 11.2% 11.3% 11.1 12% 10% 10 Value Growth (%) 14% Total Pharma = $949 Total OTC = $107 9.4 8% 8.2 8 7.3 6.0 6 6.3 5.4 5.2 6.9 6% 6.2 5.5 4.6 4.2 4 7.0 7.0 6.8 6.4 4.6 4.6 3.3 * 4% 3.3 2.2 2% 2 0% 0 2002 2003 2004 2005 Total Pharma Source: IMS OTC Global Analysis+ Estimates Global and Asia Pacific Trends in OTC 2006 Total OTC 2007 2008 2009 2010 2011 2012 OTC Share of Total Pharma * - NB. Trend break due to change in estimation methodology
  10. 10. OTC benefits from a number of growth drivers while Pharma faces significant constraints. Top Corps contribution to growth falling rapidly Low number and quality output from R&D Generics dominating large therapy areas Demand constrained by payers PHARMA OTC Emerging markets have the critical mass to influence growth Companies seek to exploit switch opportunities Key players building strong brand identities Global and Asia Pacific Trends in OTC Increasing access through new channels Payers keen to promote self medication
  11. 11. Growth variances within the different sub-regions OTC Growth by Region: Long vs Short term 40 Global 3 Year Average Growth 5.4% 35 CHINA Latest Year Growth (%) 30 25 20 15 LATIN AMERICA SOUTH ASIA AUSTRALASIA 10 CEE W EUROPE5 JAPAN - 10 Global Latest Year Growth 5.6% GLOBAL 0 -5 0 -5 N AMERICA - 10 Source: IMS OTC Global Analysis Global and Asia Pacific Trends in OTC 5 10 15 20 25 30 SE/N ASIA 3 Years Average Growth (%) 35
  12. 12. Emerging markets continue to drive global growth Total OTC 23% 45% Total of Sales 49% Share 12% Emerging Markets Share Total OTC of Growth 100% Japan 11% 15% APAC 30% 21% 29% 18% 10% -13% -1% Share of Sales Source: IMS OTC Global Analysis + Estimates Global and Asia Pacific Trends in OTC Share of Growth Exc Japan Latin America CEEMEA W Europe N America OTC
  13. 13. At country level, key developing markets lead the pack OTC Growth by Market: Long vs Short term Latest Year Growth (%) 40 Global 3 Year Average Growth 5.4% CHINA Top 10 35 Markets represent 72.2% of 30 Global OTC sales 25 20 15 AUSTRALIA 10 BRAZIL POLAND FRANCE Global Latest Year Growth 5.6% RUSSIA 5 ITALY 0 - 10 -5 JAPAN 0 5 -5 - 10 10 15 20 25 30 GERMANY USA Source: IMS OTC Global Analysis Global and Asia Pacific Trends in OTC 3 Years Average Growth (%) 35
  14. 14. Of the key categories, VMS & Tonics posts the strongest growth while CCR suffers a poor year. OTC Growth by Category: Long vs Short term Latest Year Growth (%) 14 Global 3 Year Average Growth 5.4% ALL OTHERS 12 10 8 VMS & TONICS 6 Global Latest Year Growth 5.6% PAIN RELIEF DIGESTIVE SKIN 4 2 CCR 0 0 1 2 Source: IMS OTC Global Analysis Global and Asia Pacific Trends in OTC 3 4 5 6 7 8 3 Years Average Growth (%) 9 10
  15. 15. China aside, the region is characterised by a wide range of OTC sales performances. OTC Growth by Market: Long vs Short term Latest Year Growth (%) 40 CHINA APAC 3 Year Average Growth 15.6% 30 APAC Latest Year Growth 18.1% MALAYSIA 20 PAKISTAN INDONESIA 10 INDIA PHILIPPINES TAIWAN -20 -15 -10 -5 AUSTRALIA 0 -10 0 SINGAPORE 5 SOUTH KOREA 10 15 20 25 HONG KONG NEW ZEALAND -20 Source: IMS OTC Global Analysis Global and Asia Pacific Trends in OTC 3 Years Average Growth (%) 30 35
  16. 16. Of the key categories Pain Relief post the strongest growth. OTC Growth by Category: Long vs Short term Latest Year Growth (%) 35 APAC 3 Year Average Growth 15.6% ALL OTHERS 30 25 20 APAC Latest Year Growth 18.1% PAIN RELIEF 15 VMS & TONICS SKIN 10 DIGESTIVE CCR 5 0 0 5 Source: IMS OTC Global Analysis Global and Asia Pacific Trends in OTC 10 15 20 25 3 Years Average Growth (%) 30
  17. 17. To grow, mature markets must innovate while emerging countries enjoy increase in base sales Elements of Growth by Region Base Value Change 15 12 19 -7 6 7 Line Extensions 10 5 38 Total Change N America W Europe Global 54 15 2 Price Change 38 36 New Products Line Extensions 11 4 12 New Products Growth % -10 -18 -1 Price Change Base Value Change – 5 Year Cumulative 22 27 Source: IMS OTC Global Analysis + Estimates Global and Asia Pacific Trends in OTC 18 91 80 CEE 41 16 15 Total Change 5 L America 119 APAC excl Japan
  18. 18. AGENDA • IMS Experience in Consumer Health • Global – Asia Pacific Market Update • Bringing OTC closer to the consumer • Highlights and conclusions Client acknowledges and agrees that information provided in this document are confidential to IMS. Client shall not disclose or provide to any third party the whole or any part of the information contained in this document. Global and Asia Pacific Trends in OTC
  19. 19. Many of the key OTC growth drivers influence the trend towards a stronger focus on the consumer Top Corps contribution to growth falling rapidly Low number and quality output from R&D Generics dominating large therapy areas Demand constrained by payers PHARMA OTC Emerging markets have the critical mass to influence growth Companies seek to exploit switch opportunities Key players building strong brand identities Global and Asia Pacific Trends in OTC Increasing access through new channels Payers keen to promote self medication
  20. 20. In Europe consumers continue to enjoy easier access to OTC medicines ...small steps but in the same direction NL: 1921 OTC products in drugstores (supervised by a druggist) 1900s Germany: From 1999 Some Herbals /Supplements can be sold in drugstores, supermarkets /discounters 1990s UK: 1991 First pharmacy opens in a supermarket Denmark: 2001 NRT, Pain, CCR & GI included in GSL non pharmacy outlets 2000 Poland: From 2000 limited OTC products can be sold in nonpharmacy outlets Global and Asia Pacific Trends in OTC 2001 Portugal: August 2005 All OTC products can be sold in non pharmacy outlets 2003 Norway: From 2003 33 actives GSL including some NRT, Pain and CCR. GSL expanded in 2009. 2005 Hungary: February 2007 Many OTC products can be sold in non pharmacy outlets 2006 Italy: September 2006 All OTC Products can be sold in Supermarket Corners supervised by a pharmacist 2007 France: Self selection 2010 Selected OTC products available for self - selection in pharmacies 2009 Sweden: 2009 Selected OTC products can be sold outside pharmacy channel July 2009 2011 Denmark: 2011 2 year default GSL status for Rx/OTC switches
  21. 21. And consumer appreciation of convenience is shown by relative growth of non-pharmacy channels Channel Contribution to OTC & Growth 25 Latest Year Growth (%) 20 Pharmacy Mass Market Mass Market Mail Order 15 Mass Market Pharmacy 10 Mass Market Drugstore Mass Market 5 Supermarket Pharmacy 0 Pharmacy -5 Pharmacy Pharmacy - 10 Size of Bubble represents channel share - 15 of country sales - 20 0 Pharmacy Mass Market Germany 1 Global and Asia Pacific Trends in OTC Italy 2 NL 3 Portugal 4 UK 5 Sweden 6 - New
  22. 22. The more developed markets in the region tend to see higher per capita spend. OTC Expenditure per Capita ($) - APAC exc Japan Countries 140 127 40% 32% 120 8% -2% DOLLARS 80 -4% -4% 11% 11% 14% 19% 3% -1% 0% -12% -20% 60 40 20% 40 -40% 36 23 20 22 13 -60% 10 10 9 8 2 0 Source: OTC Global Analysis at public prices Source: IMS OTC Global Analysis Global and Asia Pacific Trends in OTC 2 8 -80% Year on Year Change (%) 100 11%
  23. 23. The consumers in AsiaPac are already moving in the same direction in varying degrees of access Highly commoditized OTC markets continue to growth Retail channels drive growth even in hospital dominated markets Entry into new channels/categories are seen to rejuvenate pharmacy driven markets Global and Asia Pacific Trends in OTC
  24. 24. The advisory role of the pharmacist is key to influencing brand choice •Top 3 ailments suffered •Cold/Flu •Headache •Tiredness •70% don’t have specific brand plan •Young male, low income less likely to have plan •Pain Relief shoppers less likely to have brand plan Shopper Profile •Higher Income & well educated more likely to visit Drugstores •50% visit in evening. Elderly tend to visit in morning Source: Shopper Insights Study, IMS China Global and Asia Pacific Trends in OTC Shopping Plan Drug store Visits Purchase Triggers •Doctor/Staff recommendation and Word of Mouth are key •>60% shoppers are willing to ask a pharmacist for advice
  25. 25. AGENDA • IMS Experience in Consumer Health • Global – Asia Pacific Market Update • Bringing OTC closer to the consumer • Highlights and conclusions Client acknowledges and agrees that information provided in this document are confidential to IMS. Client shall not disclose or provide to any third party the whole or any part of the information contained in this document. Global and Asia Pacific Trends in OTC
  26. 26. Future OTC growth will continue to come from the emerging markets Forecasted OTC Growth rate 5 yr CAGR 2011 - 2016 Global OTC will continue to post healthy growth, driven largely by emerging markets. 20 18 15.4 16 Forecast Annual Growth Rate (%) CEE markets will still drive European growth … although at a slower pace 17.1 14 West Europe +1.6% 12 CEE +8.8% 10 8.3 8.0 8 6 4.2 4 APAC, dominated by China, will also continue to return strong growth over the medium term. 2.1 2 0.4 0 Global Japan Europe Source: IMS OTC Global Analysis Global and Asia Pacific Trends in OTC N America Latin Am In the Americas, North America is likely to remain stable over the next five years while Latam fuels future growth. SE Asia Others
  27. 27. As a result of the evolving Excellence in Execution is key. Consistent Message: Building a strong brand identity in a multi-media environment Di erentiated Customer calls: Individual message for each store with suitable frequency channel Consumers Wholesalers Pharmacist Mass Market HCPs Recommendation: How important is the HCP role and how to optimise within the marketing mix Global and Asia Pacific Trends in OTC environment, Key Account Management: Clear role for each brand within each category.
  28. 28. Highlights & Conclusions OTC remains attractive as it continues to outpace Pharma •And as a result the market becomes more competitive Within Europe the picture is less promising, but the main long-term geographic growth opportunities remain in CEE The Americas remains a contrast between the developed Northern markets and the emerging Southern markets, dominated by US and Brazil respectively APAC markets will be crucial battlegrounds of the future. •MNC’s must find a way to successfully unlock the potential. •Local manufacturers will need to defend their position Global and Asia Pacific Trends in OTC
  29. 29. Thank You! For more information on the content of this presentation please contact: Katherine Te Sr. Manager – Offering Management Consumer Health – Asia Pacific Email : kte@ph.imshealth.com Phone Number: + 63 (2) 588-5408 Global and Asia Pacific Trends in OTC
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