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

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
• 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

IMS - Unmatched in Scope & Scale, Dedicated to
Consumer Healthcare Industry


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


• Licensed/Unlicensed
products
• Pure OTC/Pharmacy
only

PAC
Patient Care

• Testing/medical
devices
• Wound care/contact
lens care

AGENDA

• Global

- Asia Pacific OTC Market Update




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


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


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


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

2006

Total OTC

2007

2008

2009

2010

2011

2012

OTC Share of Total Pharma

* - NB. Trend break due to change in estimation methodology

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

Increasing access through new
channels
Payers keen to promote self
medication

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

5

10

15

20

25

30

SE/N ASIA
3 Years Average Growth (%)

35

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

Share of Growth

Exc Japan

Latin America
CEEMEA
W Europe
N America

OTC

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


40


CHINA

Top 10 35
Markets
represent
72.2% of 30
Global OTC
sales 25
20

15

AUSTRALIA
10

BRAZIL

POLAND

FRANCE


RUSSIA

5

ITALY

0
- 10

-5

JAPAN

0

5

-5
- 10

10

15

20

25

30

GERMANY
USA



35

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

OTC Growth by Category: Long vs Short term


14


ALL OTHERS

12

10

8

VMS & TONICS
6


PAIN RELIEF
DIGESTIVE

SKIN

4

2

CCR
0
0

1

2


3

4

5

6

7

8


9

10

China aside, the region is characterised by a wide range of
OTC sales performances.
OTC Growth by Market: Long vs Short term


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


30

35

Of the key categories Pain Relief post the strongest growth.
OTC Growth by Category: Long vs Short term


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


10

15

20

25


30

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

18

91

80

CEE

41

16

15

Total Change

5

L America

119

APAC excl Japan

AGENDA



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


Increasing access through new
channels
Payers keen to promote self
medication

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


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

And consumer appreciation of convenience is shown by
relative growth of non-pharmacy channels
Channel Contribution to OTC & Growth
25


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


Italy
2

NL
3

Portugal
4

UK
5

Sweden
6

- New

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


2

8

-80%

Year on Year Change (%)

100

11%

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


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

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

AGENDA




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


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

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


environment,

Key Account
Management:
Clear role for each
brand within each
category.

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

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 (3rd Annual OTC Pharma Asia Conference 2013)

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