Contents Italy opens door to pharmacyc hains...In 2016 there were about 17,500 pharma-cies in...

Contents11 August 2017Issue Number 487

COMPANY NEWSRB narrows focus on Health 2France’s HRA grows 3with Compeed lineKKR set to snap up 5Nature’s Bounty CoBayer reveals US troubles 6WebMD sold off in US2.8bn deal 7J&J bullish on 10brand longevityInternational growth lifts Pfizer 11Domestic gains boost Taisho 12Stada commits to strategy 13

GENERAL NEWSEMA recalibrates to 14cope with UK’s exitCDU member slams 15homoeopathy useFrance lists restricted opiates 15

MARKETING NEWSSimilasan has eye 16on Czech RepublicRB tackles pollution with SiTi 17Glenmark prepares 18US nasal-spray file

REGULARSEvents – Our regular listing 19People – Boutelle appointed 23as Pharmavite CEO

RB tacklespollutionwith SiTipage 17

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Italy has opened the door for national phar-macy chains after repealing legislation that

banned corporate entities from owning phar-macies. It has also removed the cap on howmany pharmacies a single group may operate.

Previously, only a qualified pharmacist couldown a pharmacy in Italy and multiple owner-ship was only allowed through a companyowned by pharmacists. These companies wereonly permitted to own a maximum of four phar-macies and the managing director of the grouphad to own one of the pharmacies involved.Some municipal chains, operated by local author-ities, were the only exceptions.

Article 32 of the “Concorrenza” LegislativeDecree – a wide-ranging law designed to in-crease competition in a number of industries,not only pharmacy – allows for corporate entitiesto own pharmacies and lifts the limit on the num-ber of pharmacies a company can control.

However, to prevent a company monopo-lising the market, the new rules state that a single

entity cannot directly or indirectly own morethan 20% of pharmacies located within the sameregion or province.

Furthermore, while the law removes the re-quirement for the managing director of a chainto own a pharmacy, it does still require the headto be a qualified pharmacist.

Restrictions on opening hours have also beenlifted, allowing pharmacies to offer a round-the-clock service.

In 2016 there were about 17,500 pharma-cies in Italy, of which around 1,600 were inmunicipal chains operated by provincial andregional governments. While there are no inde-pendently-owned pharmacy chains, approxi-mately 20% of Italy’s independent pharmaciesare part of virtual pharmacy chains operated bythe country’s major wholesalers.

Around 18 years ago, certain multinationalpharmacy players attempted to circumnavigatethe rulesonpharmacyownership,withWalgreens

Continued on page 14

Italy opens door topharmacy chains

Merck KGaAmoves withpurposepage 23

GlaxoSmithKline (GSK) is to sell its Hor-licks and MaxiNutrition brands in the UK

as part of a wider effort to “improve the effi-ciency and competitiveness of its manufactur-ing network”.

While the company intended to retain Hor-licks in India and South-East Asia – marketswhich accounted for the “vast majority” of thebrand’s sales – GSK said it would sell the malt-ed drink operation in the UK and was “propos-

ing to close the associated manufacturing sitein Slough, UK”.

In addition, GSK said it planned to divestsports-nutrition line MaxiNutrition – which thefirm snapped up for £162 million (C181 mil-lion) in 2010 (OTC bulletin, 16 December 2010,page 1) – while also “exploring options to divestsome other smaller, non-core nutrition brands”.

At the time of the MaxiNutrition acquisition,Continued on page 23

GSK to offload UK brands

Resultsround-uppages 2-13

2 OTC bulletin 11 August 2017

OTC COMPANY NEWS

Reckitt Benckiser (RB) said it had taken“another step” towards its transformation

into a “global leader in consumer healthcareand hygiene” after agreeing to sell its Food busi-ness to McCormick & Company for US$4.2billion (C3.6 billion).

The deal – which follows a strategic reviewof RB’s “non-core” Food business launchedearlier this year (OTC bulletin, 7 April 2017,page 3) – gives McCormick the French’s, Frank’sRedHot and Cattlemen’s sauce brands.

Rakesh Kapoor, RB’s chief executive officer,said offloading Food represented the firm’s sec-ond “strategic transaction” of 2017, followingthe acquisition of infant-nutrition specialist MeadJohnson (OTC bulletin, 30 June 2017, page 7).

Combined, these two deals marked the lateststep in the company’s “strategic portfolio trans-formation” and had created a “very different”RB, Kapoor insisted.

“Over the past five years, we have made sig-nificant progress in our vision from being ahousehold cleaning company to a health andhygiene company,” he pointed out.

In 2012, when RB launched its ‘healthier livesand happier homes’ strategy – to intensify itsfocus on Health and Hygiene ‘power brands’and on emerging markets (OTC bulletin, 29 Feb-ruary 2012, page 1) – Health only accountedfor around 23% of the firm’s total sales.

Since that time, Kapoor noted that RB hadentered the vitamins, minerals and supplements(VMS) category with Schiff Nutrition (OTCbulletin, 18 December 2012, page 1), createda “consumer healthcare platform” in Latin Amer-ica through a deal with Bristol-Myers Squibb(OTC bulletin, 22 February 2013, page 1), andmost recently moved into infant and child nu-trition with Mead Johnson.

As a result of these investments Kapoorsaid Health accounted for around 50% of thefirm’s proforma turnover in 2016, includingMead Johnson’s sales.

“Going forward, our focus will be to make

Mead Johnson a success, while continuouslylooking at ways to strengthen our portfolio,”he explained. “We now have a comprehensivebrand portfolio that spans our vision of health-ier lives and happier homes.”

Kapoor made his comments as RB reportedsales at its Health unit – which now includesthe Infant Formula and Child Nutrition busi-ness – up by 20% to £1.8 billion (C2.0 billion)in the first half of 2017. At constant currencies,sales advanced by 6% (see Figure 1).

Acquiring last year Hypermarcas’ sexual-health business (OTC bulletin, 7 October 2016,page 4), plus 15 days of sales from Mead John-son, had driven up Health turnover in the firsthalf, RB explained.

Sales had also been lifted, the firm noted,by a “strong underlying performance” from anumber of its Health power brands, includingMucinex and Durex.

Mucinex had enjoyed a good six months,RB said, benefitting from higher incidencesof cold and flu. Durex had also exceeded ex-pectations, particularly in China and Russia,thanks to successful line extension launches,the company added.

On a more negative note, RB pointed outthat Health’s growth in the first half had beenheld back by weakness in the Scholl/Amopé fran-chise. A high comparative with the prior-yearperiod, when the firm had introduced its Wet &Dry Express Pedi line extension, had been toblame for the decline in sales, RB explained.

Health’s sales had also been hit, the com-

pany added, by the recent cyber attack on itsglobal computer network (OTC bulletin, 21July 2017, page 7). The attack – which disruptedRB’s manufacturing and distribution capabilities– had affected sales of a “number of Western Eu-ropean weighted brands”, the firm revealed.

Health accounted for 36% of RB’s total first-half sales, which advanced by 14% to £5.02 bil-lion.The remainder was generated by its Hygieneand Home categories, plus Portfolio Brands.

On a regional basis, overall group sales inEurope and North America (ENA) – which alsoincludes Australia/New Zealand, along withRussia and the Commonwealth of Independ-ent States (CIS) – improved by 9% to £3.19billion. Adjusted for currency effects, however,sales slipped back by 3% (see Figure 2).

Commenting on the regional performance,RB said while Russia and CIS had enjoyed a“good” six months, market conditions remained“challenging” in Europe. The problems in Eu-rope had been compounded by the cyber attackat the end of the period, RB added.

RB’s Developing Markets, or DvM, report-ing region – consisting of the Middle East, NorthAfrica and Turkey, Sub-Saharan Africa andLatin America, as well as North Asia and Southand South-East Asia – posted sales up by 17%to £1.70 billion, thanks to growth in Chinaand across the African continent. OTC

Mergers & Acquisitions/First-Half Results

RB narrows focus on HealthBusiness First-half sales

(£ millions)Change 2016/2017

£ CER*Proportionof total (%)

Hygiene 2,196 +14 +1 44

Health 1,797 +20 +6 36

Home 912 +9 -3 18

Portfolio Brands 112 -4 -15 2

Total RB 5,017 +14 +2 100* Constant exchange rates

Figure 1: RB’s sales in the first half of 2017 broken down by business (Source – RB)

Region First-half sales(£ millions)

Change 2016/2017£ CER*

Proportionof total (%)

Europe and North America** 3,189 +9 -3 64

Developing Markets*** 1,702 +17 +4 34

IFCN**** 126 – – 2

Total RB 5,017 +14 +2 100* Constant exchange rates** Europe and North America region also includes Australia/New Zealand,along with Russia and the Commonwealthof Independent States (CIS)*** Developing Markets region consists of the Middle East, North Africa and Turkey, Sub-Saharan Africa, and LatinAmerica, as well as North Asia and South and South-East Asia**** Infant Formula and Child Nutrition

Figure 2: RB’s sales in the first half of 2017 broken down by region (Source – RB)

SOPHARMA – the Bulgarian OTC andprescription medicines specialist – has acquiredfor an undisclosed sum a 75% stake in Bulgar-ian food supplements firm Aromania. The deal,Sopharma noted, would give the firm a much“wider presence” in Bulgaria’s food supple-ments market. Established in 2015, Aromaniagenerated sales of BGN1.3 million (C0.7 million)last year from a portfolio of more than 20 prod-ucts. The firm’s brands include the FemiBalancewomen’s health supplement and the Leuzeaherbal stress reliever. OTC

IN BRIEF

311 August 2017 OTC bulletin

COMPANY NEWS OTC

Mergers & Acquisitions

France’s HRA growswith Compeed line

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France’s HRA Pharma is to expand signifi-cantly its burgeoning consumer healthcare

operation by snapping up the global rights tothe Compeed skin-care line from Johnson &Johnson (J&J) for an undisclosed sum.

Thedeal–whichmarks thefirstmajor strategicmove by HRA’s recently-appointed chief execu-tive officer David Wright (OTC bulletin, 7 April2017, page 23) – is expected to close in the thirdquarter of 2017, subject to regulatory approvals.

Acquiring Compeed, HRA said, would dou-ble the size of its OTC business, “creating a ro-bust consumer healthcare company with a strongEuropean focus”.

The Compeed range included a “comprehen-sive portfolio of products”, the firm pointed out,for the relief and treatment of blisters, corns,calluses, cracked skin and cold sores. The brandis available in numerous markets including Aus-tralia, France, Germany, the UK and the US.

Commenting on the deal, Wright – formerlyhead of Boehringer Ingelheim’s global Con-sumer Health Care unit – described Compeed asa “well established” OTC brand that had “con-sistently delivered strong revenues and growth”.

“We are committed to further maximisingthe potential of this brand,” he noted, “by lever-aging our European commercial infrastructure,worldwide distribution network and strong brand-building capabilities.”

“This acquisition,” Wright added, “demon-strates HRA’s ability to execute our ambitious

growth strategy, in which we make selectiveacquisitions to expand our OTC portfolio anddeliver high-quality brands on a global scale.”

Over the next five years, HRA’s goal was tobecome “one of the fastest growing global con-sumer healthcare companies”, Wright insisted,offering consumers “accessible, value-addedself-care solutions”.

Established in 1996, HRA has historicallyfocused on women’s health, achieving a cen-tralised switch across the European Union (EU)in 2015 of its ulipristal acetate-based emergencycontraceptive EllaOne (OTC bulletin, 16 Janu-ary 2015, page 8).

Late last year, HRA announced its plan toswitch an oral contraceptive to OTC status forthe first time in the US in partnership with IbisReproductive Health (OTC bulletin, 13 Janu-ary 2017, page 4).

HRA said at the time it would work withIbis – a non-profit research organisation forreproductive health – to “conduct the researchneeded and submit an application to the USFood and Drug Administration (FDA) to makea birth-control pill available OTC”. OTC

The Compeed skin-care range

US-based wholesale and retail giant Wal-greens Boots Alliance (WBA) has secur-

ed a 10-year global agreement with Fareva forthe manufacture and supply of private-labelpharmaceuticals – including OTC medicines –and own-brand beauty products.

As part of the deal, contract manufacturerFareva will take ownership of BCM, WBA’sown manufacturing business, which operatesfactories in the UK, France and Germany. BCM,WBA noted, manufactured consumer healthcareand beauty products for internal supply and forthird-party brands, and also produced “special pre-scription medicines” for individual use in the UK.

“The proposed agreement will create a part-nership to provide WBA with a core multi-national manufacturing and development re-source, enabling the company to accelerate itsglobal product strategy,” the firm commented.

Based in France, Fareva operates in 11 coun-tries across the US and Europe, achieving aturnover of over C1.3 billion in 2016. Accord-ing to WBA, Fareva has “significant researchand development capabilities”.

WBA expects the deal to be completed by theend of the year, subject to European Works Coun-cil consultation and regulatory approval.

Formed in 2014 by a merger between US-based Walgreens and UK-based Alliance Boots(OTC bulletin, 16 January 2015, page 5), WBAreported sales up 13.4% to US$117 billion(C99.1 billion) in its financial year ended 31August 2016. OTC

Business Strategy

WBA joinswith Fareva


OTC COMPANY NEWS

GSK to prioritise PharmaBusiness Strategy/Second-Quarter Results

Pharmaceuticals not Consumer Healthcarewill be the primary focus for GlaxoSmith-

Kline’s (GSK’s) newly-appointed chief execu-tive officer, Emma Walmsley, for at least the nextthree years.

Outlining her key objectives for the 2017-2020 period, Walmsley – who replaced AndrewWitty on 1 April (OTC bulletin, 23 September2016, page 23) – revealed her number-onepriority would be turning around GSK’s falteringPharmaceuticals business. The move appearsto put to bed predictions by some analysts thatWalmsley would take GSK in a totally differ-ent direction because of her background inconsumer healthcare (OTC bulletin, 4 Novem-ber 2016, page 8).

“All three businesses need to perform, butthe priority for GSK is to improve in Pharma-ceuticals,” Walmsley stated.

For Consumer Healthcare and Vaccines,GSK’s goal would be to “realise further benefits”,she explained, from the increased scale of bothbusinesses following the firm’s three-part dealwith Novartis in 2015 (OTC bulletin, 6 March2015, page 1).

Walmsley has already made clear that the“first item on the agenda” for her regardingConsumer Healthcare is whether Novartis willchoose to exit its investment in the firms’ OTC

joint venture via a put-option from 2018 (OTCbulletin, 12 May 2017, page 5).

Reiterating this stance, Walmsley insistedthat snapping up Novartis’ stake in the businesswould “strengthen GSK’s proposition in con-sumer healthcare”.

Expanding on her plans for GSK, Walmsleysaid she would place a renewed focus on inno-vation at all three businesses, including Con-sumer Healthcare .

It was important that the firm continued toinvest in its product pipeline, she said, and in“advancing the next waves of innovation”.

For Consumer Healthcare, GSK would focuson producing “differentiated and much-neededbrands”, Walmsley said, that would “make ameaningful difference to consumers and achievegood returns for our shareholders”.

In addition to increased investments in in-

novation, Walmsley explained that she wouldinstigate a “new company-wide focus on thedelivery of sustainable, ethical and more com-petitive performance”.

“The company is making a number of choicesto prioritise the strongest assets and marketsin its portfolio,” she said, “and move capital andresources away from those that offer more limit-ed opportunities.”

Investments would be made to back “commer-cial execution in the US market”, Walmsley not-ed, and to implement a new operating model foremerging markets to “increase competitiveness”.

To make cost savings, GSK would look tomake changes to its manufacturing networkand offload non-core brands across the busi-ness. This process has already begun with thefirm announcing earlier this month its inten-tion to offload Horlicks and MaxiNutrition inthe UK (see front page).

Walmsley made her comments as GSK re-ported second-quarter sales at its ConsumerHealthcare business up by 10% to £1.85 billion(C2.04 billion), thanks entirely to positive currencyeffects. At constant currencies, sales were flat.

A strong performance from its ‘power brands’had been offset by a “weaker US allergy per-formance” and “softer consumption in key cat-egories”, particularly in its International markets,GSK noted. Sales had also been hit, the firmadded, by the disposal of its Nigerian drinksbusiness last year (OTC bulletin, 21 October2016, page 6).

“We are seeing a marked slowdown in con-sumer [healthcare] market growth and that’sclear in our own second-quarter numbers,” com-mented Walmsley.

“While growth has slowed, we still very muchbelieve we have a portfolio capable of respond-ing to this challenge,” she insisted, adding thatthe firm still expected to reach its 20% margintarget for the business of by 2020.

Expanding on the performance of ConsumerHealthcare’s individual categories, GSK report-ed Wellness sales up by 9% to £925 million(see Figure 1). Adjusted for currency effects,

Business Second-quartersales (£ millions)

Change (%)£ CER*

Wellness 925 +9 ±0

Oral health 605 +12 +3

Nutrition 165 +3 -8

Skin health 157 +8 -1

Total Consumer Healthcare 1,852 +10 ±0* Constant exchange rates

Figure 1: GSK Consumer Healthcare’s sales in the second quarter of 2017 by business unit (Source – GSK)

Region Second-quartersales (£ millions)

Change (%)£ CER*

International 843 +10 ±0

Europe 579 +16 +7

US 430 ±0 -8

Total Consumer Healthcare 1,852 10 ±0* Constant exchange rates

Figure 2: GSK Consumer Healthcare’s sales in the second quarter of 2017 by region (Source – GSK)

Second-quartersales (£ millions)

Change 2016/2017£ CER*

Proportionof total (%)

Core sales

Pharmaceuticals 4,357 +12 +3 60

Consumer Healthcare 1,852 +10 ±0 25

Vaccines 1,111 +16 +5 15

Total core sales 7,320 +12 +3 100Core operating profitPharmaceuticals 1,464 +8 -5 68

Consumer Healthcare 374 +42 +30 17

Vaccines 328 +38 +16 15

Total core operating profit** 2,166** +17 +3 100* Constant exchange rates** Excluding corporate and other unallocated costs of £83 million

Figure 3: GSK’s ‘core’ sales and operating profit in the second quarter of 2017.Core results excludeamortisation,goodwill, restructuring costs, legal charges and other items (Source – GSK)


COMPANY NEWS OTC

KKR set to snap upNature’s Bounty Co

Mergers & Acquisitionshowever, sales were flat in the period.Turnover had been hit, GSK noted, by a

“challenging quarter” for respiratory products,due to “heightened competitive pressure” for Flo-nase from private-labels and new market entrants.

On a more positive note, the firm said itspain-relief brands had “performed well” in thethree months, driven by Voltarol, which hadenjoyed “strong growth” across Europe, andin particular Germany.

Oral health turnover advanced by 12% – 3%at constant currencies – to £605 million, GSKreported, with Sensodyne recording “strong”results in Europe and International. Paradon-tax had also enjoyed a good quarter, the companysaid, thanks to line extensions and recommen-dations by dentists.

Meanwhile, turnover in the Nutrition catego-ry moved forward by 3% to £165 million. Ad-justed for currency effects, sales fell by 8%.

“Continued competitive pressures” for Hor-licks in India, in combination with “destock-ing” ahead of the implementation of the newGoods and Services Tax (GST) in the country,had been the primary reasons for the drop inturnover at constant currencies, GSK said.

This had been compounded, the firm added,by the sale of the Nigerian drinks business.

Skin health sales advanced by 8% to £157million, GSK reported. At constant currencies,however, turnover slipped back by 1%.

A “good overall performance in Europe”,had been held back, the firm said, by a “chal-lenging quarter” in the US for Lamisil.

Turning to the regional performance, posi-tive currency effects and a strong showingfrom pain-relief lines helped lift sales in Eu-rope by 16% – 7% at constant currencies – to£579 million (see Figure 2).

In the US, sales were flat at £430 million,GSK noted, due to the competitive pressure onFlonase and a difficult quarter for oral healthlines. Adjusted for currency effects, turnoverhad slipped back by 8%,

International sales had moved forward by10% to £843 million, GSK said, thanks to pos-itive currency effects. At constant currencies,sales were flat, the company noted, with gains fororal health brands offset by the problems in India.

Consumer Healthcare contributed 25% toGSK’s total second-quarter sales, which advanc-ed by 12% to £7.32 billion (see Figure 3) OTC

Private-equity company KKR is poised toacquire a controlling stake in natural prod-

ucts retailer and manufacturer The Nature’sBounty Co – formerly NBTY – for an undis-closed sum from The Carlyle Group.

Following the close of the deal – which isexpected by the end of the year, subject to regu-latory approval – KKR will be the majorityowner of Nature’s Bounty, while Carlyle willretain a “significant stake” in the US-based firm.

Carlyle’s decision to cut its stake in Nature’sBounty comes less than a month after the pri-vate-equity firm sold off its Holland & Barrettretail chain to LetterOne in a £1.77 billion(C1.98 billion) deal (OTC bulletin, 30 June2017, page 6).

Elliot Wagner, Carlyle’s managing director,said the firm’s investments in Nature’s Bountyhad “strengthened the branded portfolio” andcreated a “foundation for future growth”.

“We look forward to developing our part-nership with KKR,” Wagner added, “as we con-tinue to build Nature’s Bounty as a global leaderin wellness products.”

Describing Nature’s Bounty as a “uniqueconsumer healthcare and wellness platform”,KKR claimed the company had built an “out-standing reputation for developing distinctivebrands and high-quality products”.

“We are excited to partner with the manage-ment team to grow Nature’s Bounty’s globalfranchise,” KKR added.

Steve Cahillane, Nature’s Bounty’s presidentand chief executive officer, said the firm waslooking forward to working with KKR to “pursuethe significant growth opportunities ahead in adynamic and expanding global wellness industry”.

Nature’s Bounty markets its products undera broad portfolio of brands, including Puritan’sPride, Solgar, Pure Protein, Sundown Naturals,MET-Rx, Osteo Bi-Flex and Nature’s Bounty.

With the sale of Holland & Barrett, Nature’sBounty will now operate its business in twocore divisions: Consumer Products Group andPuritan’s Pride.

The Consumer Products Group houses thecompany’s North American retail operationsand wholesale unit, while the Puritan’s Pridedivision contains the e-commerce business.

Nature’s Bounty recently changed its namefrom NBTY to “better reflect” the company’s“commitment to global wellness” (OTC bul-letin, 25 November 2016, page 2). OTC

Nature’s Bounty’s Puritan’s Pride supplement line

Spanish OTC and generics specialist Cinfahas bolstered its presence in the global con-

sumer healthcare market by snapping up SakuraItalia for an undisclosed sum.

AcquiringSakura, Cinfa said, would “strength-en” its OTC portfolio with a range of “innovative”products covering numerous categories, such asdigestive health, skin care and respiratory.

Available in 24 markets across Europe,the Middle East and Africa, Sakura’s brandsinclude theAluneb nasal spray, Cicasilver wound-care line, and the Brefovil probiotic.

“This acquisition will not only bring profit-ability and stability to the company, it will allowus to embrace new product categories,” comment-ed Cinfa’s president Enrique Ordieres.

“The existing synergies with Sakura areobvious,” Ordieres insisted. “The high qualityof its products, coupled with its commitment toconstant innovation, make it the perfect ally.Together, we will work to continue to offer con-sumers differentiated products.”

Celestino Ricciardi, Sakura’s chief executiveofficer, said he was “delighted” to join up withCinfa. “I am certain that the synergies betweenthe two firms,” Ricciardi added, “will strengthenour competitiveness both in the Italian marketand internationally.”

Cinfa announced its deal with Sakura just10 days after expanding its portfolio with dietarysupplements specialist Natural Santé (OTCbulletin, 21 July 2017, page 8). OTC

Cinfa grows with Sakura ItaliaMergers & Acquisitions

GNC reported turnover down by 4.8% toUS$641 million (C543 million) in the secondquarter, as sales fell at its dominant US & Canadadivision. Sales at the US & Canada unit – includ-ing stores in both countries and e-commerce– declined by 4.8% to US$543 million. OTC

IN BRIEF


OTC COMPANY NEWS

“All hands on deck” are required at BayerConsumer Health to turn around its ail-

ing US operation, according to Bayer’s chiefexecutive officer Werner Baumann.

Speaking as the German firm reported itssecond-quarter results, Baumann said ConsumerHealth was facing a “persistently difficult situ-ation” in the US due to “multiple” factors.

Ongoing problems relating to its acquisitionof Merck & Co’s Consumer Care operation,intensifying competitive pressure, and a “rap-idly changing” retail environment were the rea-sons cited by Baumann for Bayer’s US troubles.As a result, second-quarter sales in ConsumerHealth’s NorthAmerica region declined by 5.7%– 7.8% adjusted for currency effects – to C661million (see Figure 1).

Total Consumer Health sales slipped backby 0.7% to C1.54 billion in the three months.Adjusted for currency and effects, ConsumerHealth’s turnover dropped by 2.2%.

Expanding on Bayer’s US troubles, Baumannsaid Consumer Health continued to be nega-tively impacted by the “eroding business” the

firm had acquired from Merck (OTC bulletin,10 October 2014, page 1).

Bayer revealed last year that it had experi-enced problems with the Merck acquisition asthe business was suffering from “chronic under-investment” (OTC bulletin, 7 October 2016,page 5). Merck had “underinvested” in key brandsin its Consumer Care portfolio – including theCoppertone sun-care line and Dr Scholl’s foot-care range – and had handed over a “weak” newproduct development pipeline, the companynoted at the time.

To turn the performance of the business

around, Bayer has invested heavily in innova-tion and marketing for Coppertone and DrScholl’s to “rebuild” the brands (OTC bulletin,6 May 2016, page 7).

While Coppertone had enjoyed a “strong”first quarter in the US, following these invest-ments, this “positive development” had stalledin the second quarter, Baumann noted, with thebrand’s performance failing to meet expectations.

Blaming the double-digit fall in Copper-tone’s US sales on “fairly bad weather”, Baumannsaid he hoped the sun would come out for theremainder of the summer.

Compounding the issues with Coppertone,some of Bayer’s biggest US brands had facedan increasingly harsh competitive environment,Baumann revealed.

Sales of Aleve had been hit by the relaunchof a competitor product, he noted, while salesof Claritin had suffered from “significantly in-tensifying competitive pressure”.

In the second quarter, Bayer had also feltthe effects of a changing US retail environment,Baumann said, citing the growing importanceof “value retailers” and the rise of e-commerce.

Insisting that Bayer needed to “reignite growth”across its US Consumer Health business, Bau-mann explained that the firm intended to “drivefurther promotional and trade investments forkey brands”.

Longer term, the company would look at “fur-ther market investment”, he said, “and strength-ening our retail partnership programmes”.

Bayer would continue to invest in its Con-sumer Health innovation pipeline, as well asexploring “new channel opportunities”, such ase-commerce, he noted.

“While we are disappointed with the per-formance in the US – and absolutely no sugar-coating here – we do see signs of improvement,”Baumann insisted.

“It is also important to note that NatalieBartner, who joined in late 2015 [as president ofBayer Consumer Health North America], hasworked on changing the organisation, putting new

Second-Quarter Results

Bayer reveals US troubles

Business Second-quartersales (w millions)

Change2016/2017 (%)

EBIT*(w millions)

Change2016/2017 (%)

Pharmaceuticals 4,304 +4.9 1,102 +11.5

Covestro/Other 3,733 – – –

Crop Science 2,163 -14.1 117 -77.1

Consumer Health 1,542 -0.7 195 +2.6

Animal Health 450 +5.6 107 +15.1

Total Bayer 12,193 +3.0 2,151 +0.6* Earnings before interest and tax

Figure 3: Bayer’s sales and EBIT in the second quarter of 2017 by business (Source – Bayer)

Region Second-quartersales (w millions)

Change 2016/2017 (%)w CER*

North America 661 -5.7 -7.8

Europe/Middle East/Africa 503 +4.8 +2.7

Asia-Pacific 195 -3.0 -3.0

Latin America 183 +7.0 +8.8

Total Consumer Health 1,542 -0.7 -2.2* Constant exchange rates

Figure 1: Bayer Consumer Health’s sales in the second quarter of 2017 by region (Source – Bayer)

Brand Second-quartersales (w millions)

Change 2016/2017 (%)w CER*

Claritin 159 -10.7 -12.3

Aspirin 104 +2.0 +0.7

Aleve 101 -8.2 -10.5

Bepanthen/Bepanthol 100 +5.3 +4.9

Coppertone 80 -14.9 -16.7

Canesten 74 -1.3 +3.1

Dr Scholl’s 65 ±0.0 -3.2

One-A-Day 55 ±0.0 -3.2

Alka-Seltzer 44 -2.2 -4.8

Elevit 44 +10.0 +9.9

Total Top-10 826 -3.8 -4.9

Total Consumer Health 1,542 -0.7 -2.2* Constant exchange rates** Total Aspirin sales – including Aspirin Cardio,which is part of the Pharmaceuticals division – were w252 million

Figure 2: Bayer Consumer Health’s sales in the second quarter of 2017 by brand (Source – Bayer)


COMPANY NEWS OTC

people in place and upgrading the skill base.”Bayer “fully expected” the results of Bartner’s

changes to bear fruit, Baumann said, addingthat it was still “too early” to say that her effortshad failed to have an impact.

“We just need to give it more time, but clear-ly we do need to see the results,” Baumann said,“and we cannot wait forever to see a more sus-tained turnaround going forward.”

Turning to Consumer Health’s second-quarterperformance outside North America, Bayerreported sales in its Asia/Pacific region down by3.0% to C195 million. Bayer blamed the single-digit decline on a “substantial” decrease in Clar-itin sales in China.

On a more positive note, Bayer reported salesin Europe/Middle East/Africa up by 4.8% – 2.7%adjusted for currency effects – to C503 million.

Consumer Health had also performed wellin Latin America, Bayer noted, with sales upby 7.0% to C183 million. Adjusted for currencyeffects, turnover advanced at the slightly quick-er rate of 8.8%.

Elevit best performerOnly three of Bayer’s top-10 best-selling

Consumer Health brands reported sales increasesduring the second quarter, with Elevit the stand-out performer.

The fertility multivitamin posted turnoverup by 10.0% – 9.9% adjusted for currency ef-fects – to C44 million (see Figure 2). Bayerattributed the rise to “strong” demand across itsAsia-Pacific region, particularly in China.

Bepanthen/Bepanthol sales had advanced by5.3% – 4.9% at constant currencies – to C100million, the firm pointed out, thanks to higherdemand in both LatinAmerica andAsia-Pacific.

Aspirin was the only other Consumer Healthbrand to post an increase in sales in the per-iod, with turnover moving forward by 2.0%– 0.7% adjusted for currency effects – to C104million. Total Aspirin sales – including AspirinCardio, which is part of the Pharmaceuticalsdivision – were 4.9% higher at C252 million.

Claritin remained Bayer’s biggest-sellingConsumer Health brand in the quarter, despitesales falling by 10.7% – 12.3% adjusted for cur-rency effects – to C159 million.

The company’s US problems, coupled witha weaker performance in China, had been toblame for the brand’s double-digit slide inturnover, Bayer pointed out.

Consumer Health accounted for 13% ofBayer’s total second-quarter sales, which ad-vanced by 3% to C12.2 billion (see Figure 3).

Last month, the German firm revised downits sales and earnings forecasts for ConsumerHealth, following a “weaker than previouslyexpected” business performance (OTC bul-letin, 21 July 2017, page 4). OTC

WebMD sold offin US$2.8bn deal

Mergers & Acquisitions

US-based online health portal WebMD hasbeen grabbed by private-equity firm KKR

for around US$2.8 billion (C2.4 billion). Thetransaction is expected to close during the fourthquarter of 2017, subject to regulatory approval.

Under the terms of the deal, Internet Brands– a subsidiary of KKR – will acquire WebMDfor US$66.50 per share in cash. This price, KKRnoted, represented a premium of approximately30% on WebMD’s share price on 15 February,the day before the company announced it wasweighing up “potential strategic alternatives”,including the sale of the business (OTC bul-letin, 3 March 2017, page 3).

“After a thorough review of strategic alterna-tives, we are pleased to announce this transactionwith KKR, which provides our stockholders withimmediate and significant cash value and a sub-stantial premium,” commented WebMD’s chair-man Martin Wygod.

“Throughout this process, our board has con-ducted diligent analysis and thoughtful delib-erations,” Wygod insisted. “WebMD and itsfinancial advisors had a process that involvedoutreach to more than 100 strategic and financialparties, and we are confident that this transactionmaximises value for our stockholders.”

Commenting on the deal, Bob Brisco, Inter-net Brands’ chief executive officer, claimed

WebMD was the “market leader” in online health“with unparalleled reach to consumers andhealthcare professionals”.

“Since its founding, WebMD has establisheditself as a trusted resource for health informa-tion,” Brisco poined out. “We look forward to de-livering that resource to even more users, byleveraging our combined resources and presencein online healthcare to catalyse WebMD’s fu-ture growth.”

Established in 1996, WebMD claims to have75 million monthly unique users of its website.The company posted 2016 sales up by 11% toUS$705 million, thanks to an increase in ad-vertising and sponsorship revenue. The New-York based firm reported earnings before, interest,tax, depreciation and amortisation (EBITDA)up by 19% to US$231 million.

KKR’s Internet Brands owns a portfolio ofwebsites offering consumers health information,including ehealthforum.com, healthboards.com andfitday.com. The firm also offers website hostingservices for companies operating in the auto-motive, health, legal and travel industries. OTC

WebMD has been acquired by KKR

German herbal medicines specialist Bionor-ica is opening its first production facility

in Russia, reflecting the firm’s “enormous confi-dence” in the country’s growth potential. Pro-duction at the C40 million plant is expected tostart in June 2021.

By opening a plant in Russia – Bionorica’slargest international market – the firm said itaimed to expand production capacity, reduce de-livery times and save on customs and trans-port costs. The facility, located 500km south ofMoscow, in Voronezh, will include a warehouse,a laboratory and administration offices, includingpurchasing, planning and management sections.

“Through this C40 million investment inbuilding our own production facilities in Rus-sia we are reinforcing out commitment to thecountry and our enormous confidence in a pros-perous future,” Michael Popp, Bionorica’s

chief executive officer, commented.“We have already mastered a number of chal-

lenges in Russia and have always been a loyaland reliable partner to our patients, doctors, phar-macists and wholesalers,” he added.

Since moving into the Russian market a dec-ade ago, Bionorica claims to have become the“leading supplier of herbal medicines”, achiev-ing success with its Sinupret, Canephron, Mas-todynon and Tonsilgon products.

Earlier this year, Bionorica cited a “strong”performance in Russia, as well as Ukraine, as itposted 2016 sales up by 3% to C254 million(OTC bulletin, 7 April 2017, page 4). “We areproud of developments in Russia and Ukraine,despite very difficult times,” the firm said. “Wewere able to navigate successfully through theeconomic crisis thanks to a very moderate pric-ing strategy with a long-term focus.” OTC

Bionorica invests in RussiaBusiness Strategy


OTC COMPANY NEWS

Sanofi integrating BI at paceBusiness Strategy/Second-Quarter Results

Efforts are progressing at pace to integrateBoehringer Ingelheim Consumer Health

Care into Sanofi, according to the French firm’schief executive officer Olivier Brandicourt.

Speaking as the company reported its second-quarter results, Brandicourt said Sanofi wason track with its integration plan for the Boeh-ringer business, following completion of thedeal earlier this year (OTC bulletin, 13 January2017, page 1).

Sanofi expected to benefit directly from “morethan 95%” of Consumer Health Care’s salesby the end of the year, Brandicourt noted. OfConsumer Health Care’s 55 global markets, atotal of 42 countries had exited transitional dis-tribution service agreements before the end ofJuly, with the remaining 13 countries expectedto exit these agreements by April 2018.

Commenting on the integration, Alan Main,Sanofi’s executive vice president of ConsumerHealthcare, said once the process was complete,the company would work to “optimise” the com-bined portfolio and deliver cost synergies. Sanofiremained “committed”, Main said, to achieving

a 30% business operating income margin atConsumer Healthcare in 2018.

Meanwhile,SanofireportedConsumerHealth-care sales up by 42.5% at constant exchange ratesto C1.16 billion, thanks to the Boehringer deal.

At constant exchange rates and constant struc-ture – comparing sales in the second quarter of2017 including Consumer Health Care withsecond-quarter 2016 sales adjusted to includeConsumer Health Care – Consumer Healthcare’ssales had slipped back by 0.1%, the firm noted,mainly due to a weaker performance in Europe.

The addition of the Boehringer brands pushedup sales in Europe by 44.6% at constant ex-change rates to C308 million (see Figure 1).However, at constant structure and constant cur-rencies, sales actually declined by 7.8%. An ear-ly start to the cough and cold season – whichhad boosted first-quarter sales – was the reasoncited by Sanofi for the single-digit drop.

Sales in Emerging Markets were aided by the“start of recovery in Russia”, Sanofi pointedout, after a long period of economic instability.The Emerging Markets total advanced by 33.9%at constant exchange rates – 4.6% at constantstructure and constant currencies – toC401 million.

In the US, turnover improved by 24.0% atconstant currencies – 2.5% at constant structureandconstantcurrencies– toC293million.Launch-ing Xyzal Allergy 24HR (OTC bulletin, 7 April2017, page 18), plus the contribution from theBoehringer portfolio, had driven the double-digit rise, Sanofi noted.

In the Rest of World region, sales more thandoubled to C161 million. At constant structureand constant currencies, turnover had edged upby 0.6%, the firm said, with growth held backby lower sales in Japan.

Turning to Consumer Healthcare’s categoryperformance, the addition of Buscopan helpedto lift turnover in the Pain category by 36.4%at constant currencies to C297 million. At con-stant structure and constant currencies, Pain saleshad actually slipped back by 1.7%, Sanofi point-edout, reflecting a drop in demand for Doliprane.

Allergy, Cough and Cold turnover had grownby 42.6% at constant currencies to C255 mil-lion(seeFigure2),Sanofinoted, thankstoBoehring-er’s Mucosolvan.

Digestive sales had advanced by 84.9% atconstant currencies to C239 million, thanks tothe addition of Dulcolax and the performanceof Essentiale, the company explained, while Nu-tritionals sales had risen by 54.2% at constantcurrencies to C170 million, due to the additionof Pharmaton. OTC

Region Second-quartersales (Cmillions)

Change (%)CER*

ChangeCER/CS** (%)

Emerging Markets 401 +33.9 +4.6

Europe 308 +44.6 -7.8

US 293 +24.0 +2.5

Rest of World 161 >100 +0.6

Total Consumer Healthcare 1,163 +42.5 -0.1* Constant exchange rates** CER/CS compares sales in the second quarter of 2017 to sales in the second quarter of 2016 adjusted to includeturnover from Boehringer Consumer Health Care and sales from the terminated Sanofi Pasteur MSD joint venture

Figure 1: Sanofi’s Consumer Healthcare sales in the second quarter of 2017 by region (Source – Sanofi)

Business Second-quartersales (C millions)

ChangeCER*(%)

ChangeCER/CS** (%)

Doliprane 73 -3.9 -3.9

Buscopan 38 – –

Pain 297 +36.4 -1.7

Allegra 106 +6.2 +6.2

Mucosolvan 18 – –

Allergy,Cough and Cold 255 +42.6 -1.6

Dulcolax 56 – –

Enterogermina 42 -2.3 -2.3

Essentiale 40 +15.6 +15.6

Zantac 30 – –

Digestive 239 +84.9 +2.2

Pharmaton 31 – –

Nutritionals 170 +54.2 -1.2

Gold Bond 50 +4.3 +4.2

Other 202 +12.4 +2.6

Total Consumer Healthcare 1,163 +42.5 -0.1

General Medicines and Emerging Markets 3,659 -1.2 -1.3

Diabetes & Cardiovascular 1,386 -15.0 -15.0

Genzyme/Specialty Care 1,439 +14.3 +14.4

Total Pharmaceuticals 7,647 +3.2 -1.5

Vaccines 1,016 +26.2 +19.2

Total Sanofi 8,663 +5.5 +0.6* Constant exchange rates** CER/CS compares sales in the second quarter of 2017 to sales in the second quarter of 2016 adjusted to includeturnover from Boehringer Consumer Health Care and sales from the terminated Sanofi Pasteur MSD joint venture

Figure 2: Sanofi’s sales in the second quarter of 2017 broken down by business (Source – Sanofi)


COMPANY NEWS OTC

DocMorris’ parent company Zur Rose Grouphas opened Switzerland’s first “shop-in-

shop” pharmacy within a supermarket, much tothe anger of the Swiss pharmacy lobby.

Zur Rose has promised average online-stylediscounts of 12% – in line with its mail-orderbusiness – on prescriptions dispensed in thepharmacy, which is located in a Migros super-market in Bern. However, pharmacy associa-tion Pharma Suisse claims the supply-chain dis-ruptor is breaking Swiss competition law.

“Zur Rose’s announcement that it offers sig-nificantly lower prices raises many questions,particularly since the scope for further reductionsin margins is limited,” Fabian Vaucher, presidentof Pharma Suisse, commented to OTC bulletin.

“Savings in personnel costs as well as in infra-structure are extremely problematic in terms ofpatient safety,” he added. “The cross-subsidyplanned by the Migros collaboration would alsoclearly violate competition regulations.”

Walter Oberhänsli, Zur Rose’s chief execu-tive officer, told OTC bulletin that the Migrosshop-in-shop pharmacy simply had “a less cost-ly distribution structure compared with other‘bricks-and-mortar’ pharmacies”.

“Pharma Suisse looks at what we are doingvery closely, but there is no legal perspectiveto shut this down or attack this pricing model,”Oberhänsli added.

Developing omnichannel strategyZur Rose’s collaboration with Migros follows

its opening of a ‘flagship’ bricks-and-mortarstore last year, also in the Swiss capital. Both out-lets are the first manifestations of the firm’somnichannel strategy of combining online withbricks-and-mortar pharmacy operations.

While Zur Rose has made great strides to-wards “digital disruption” of Europe’s pharmacychannel, particularly since it acquired Doc-Morris from Celesio in 2012, it has always hadto employ a different strategy in Switzerland,where OTC mail-order trade is banned.

About three-quarters of Zur Rose’s Swisssales of CHF470 million (C409 million) are madeto self-dispensing physicians, with the otherquarter coming from supplying patients direct-ly. This happens in cantons where physiciansare not allowed to dispense. As a consequence,about 90% of its sales – almost half of the Swissself-dispensing market – are prescription medi-cines, with the remainder OTC.

Patients and consumers can buy prescriptionand OTC medicines from the flagship store. Al-ternatively, they may pick up their online orders

themselves in ‘click-and-collect’ transactions.Oberhänsli conceded the flagship store got off

to a poor start, achieving disappointing sales.“We knew at the beginning that we had not

got the best location. However, we saw an oppor-tunity to open our first bricks-and-mortar phar-macy and learn how to do it,” Oberhänsli said.

Results were now looking better, he added.“Revenues are now improving, so we will notbe shutting down this store,” he insisted.

When asked how far Zur Rose plans to ex-pand into the bricks-and-mortar market in Switz-erland, Oberhänsli maintained that “no decisionshave been taken at this stage”. If the Migros initia-tive proved to be successful, he added, then ZurRose “would look at further cities in Switzerland”.

But the firm was not interested in competingwith Swiss retail chains like Galenica, whichoperates around 300 retail pharmacies. “ZurRose will not invest in a chain strategy,” insistedOberhänsli. Its intention is to open “severalbricks-and-mortar pharmacies, not hundreds”.

Oberhänsli said he could not understand the

logic of Switzerland’s recently-announced in-tention to deregulate OTC medicines, allowingmore of them to be sold in drugstores, but notto allow mail-order transactions.

Swiss medicines regulator, Swissmedic, an-nounced recently that the pharmacy-only categorywould be abolished in the next two years, effec-tivelywideningaccess toOTCmedicines inSwitz-erland (OTC bulletin, 28April 2017, page 13).

About 90% of OTC medicines in thepharmacy-only category are expected to beshifted to drugstore and pharmacy status, whilethe remaining 10% will be reverse-switchedto prescription control.

“This change of category will mean thatconsumers will be able to buy OTC products indrugstores but not through the mail-order chan-nel, which doesn’t make any sense. It is not con-vincing and is contrary to the general shift fromoffline to online purchasing,” Oberhänsli said.

Oberhänsli believes the Swiss authoritiesshould revisit the question of mail-order salesof OTC medicines in the near future. OTC

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OTC COMPANY NEWS

Johnson & Johnson (J&J) remains confidentin the longevity of its Consumer brands –

including its OTC lines – despite a changingcompetitive landscape driven by the growthof e-commerce, according to the company’schief executive officer Alex Gorsky.

Asked by analysts if the firm was concernedabout the “durability” of its Consumer portfolioin the face of new potential competitors suchas Amazon, Gorsky said J&J remained “verybullish long term” on its brands, which were“rooted in science”.

“I think a key differentiator for our OTCs,as well as our Beauty and Oral Care [Consumer]franchises, is the strong science that we havebehind all these different areas,” he insisted.“That of course helps translate into very strongbrand images.”

To survive in a changing competitive land-

scape, it would be “essential”, Gorsky said, toinvest in “great innovation”.

J&J was continuing to make “significant in-vestments” to grow its Consumer offering withinnovative products, he noted, highlighting thefirm’s acquisition last year of hair-care special-ist Vogue International (OTC bulletin, 17 June2016, page 3).

Excited about the future“When you look at the pace of Vogue’s in-

novation and [combine it with] our ability toglobalise that platform, we’re quite excited aboutthe future and expanding into other areas out-side of hair care,” Gorsky insisted.

Overall, he added, J&J’s Consumer businesscontinued to represent a “very solid opportunitygoing forward” for the company.

Gorsky made his comments as J&J reported

worldwide second-quarter sales at its Consumerbusiness up by 1.7% to US$3.48 billion (C2.95billion), as an operational rise of 2.3% was heldback by a 0.6% negative currency effect (seeFigure 1).

US Consumer sales advanced by 7.4% toUS$1.49 billion, while international turnoverdeclined by 2.2% to US$1.99 billion.

Excluding the impact of divestments andacquisitions, worldwide Consumer sales slippedback by 0.8%, as a 1.2% rise in US sales wasoffset by a 2.3% drop internationally.

Looking at Consumer’s individual businesses,the OTC unit reported a 2.1% operational risein worldwide turnover (see Figure 2), driven bysales of Tylenol analgesics.

However, this operational growth was hitby a 1.1% negative currency effect, meaning thatworldwide OTC sales as reported edged up by1.0% to US$1.01 billion.

In the US, OTC sales had grown by 6.7% toUS$432 million, J&J noted, thanks to higherdemand for bothTylenol and Zyrtec allergy lines.

J&J’s US Consumer business continues tooperate under a consent decree – which will stayin place until 2021 – following manufacturingissues at a number of its plants.

J&J bullish on brand longevityBusiness Strategy/Second-Quarter Results

Business Second-quarter sales(US$ millions)

Change2016/2017 (%)

Operationalchange (%)

Currencyeffect (%)

OTC – US 432 +6.7 +6.7 –

OTC – International 574 -2.9 -1.1 -1.8

Total OTC 1,006 +1.0 +2.1 -1.1

Beauty – US 649 +17.1 +17.1 –

Beauty – International 427 +1.2 +3.1 -1.9

Total Beauty 1,076 +10.2 +11.0 -0.8

Baby Care – US 113 -10.3 -10.3 –

Baby Care – International 381 -5.7 -5.3 -0.4

Total Baby Care 494 -6.8 -6.5 -0.3

Oral Care – US 150 -5.7 -5.7 –

Oral Care – International 244 ±0.0 +0.8 -0.8

Total Oral Care 394 -2.2 -1.7 -0.5

Women’s Health – US 3 -57.1 -57.1 –

Women’s Health – International 273 -1.1 -1.9 +0.8

Total Women’s Health 276 -2.5 -3.3 +0.8

Wound Care/Other – US 140 +5.3 +5.3 –

Wound Care/Other – International 92 -6.1 -4.8 -1.3

Total Wound Care/Other* 232 +0.4 +0.9 -0.5

Total Consumer 3,478 +1.7 +2.3 -0.6Consumer – US 1,487 +7.4 +7.4 –Consumer – International 1,991 -2.2 -1.1 -1.1* Now includes Nutritionals,which was previously grouped with OTC

Figure 2: Breakdown of sales by Johnson & Johnson’s Consumer division in the second quarter of 2017 (Source – Johnson & Johnson)

Business Second-quartersales (US$ millions)

Change2016/2017 (%)

Operationalchange (%)

Currencyeffect (%)

Pharmaceutical 8,635 -0.2 +1.0 +1.2

Medical Devices 6,726 +4.9 +5.9 -1.0

Consumer 3,478 +1.7 +2.3 -0.6

Total J&J 18,839 +1.9 +2.9 -1.0

Figure 1: Johnson & Johnson’s sales in the second quarter of 2017 (Source – Johnson & Johnson)


COMPANY NEWS OTC

International growthlifts Pfizer Consumer

Second-Quarter ResultsThe company was issued with the consentdecree for failing to comply with good manu-facturing practice (GMP) requirements at itsFortWashington facility in Pennsylvania, US, andits Las Piedras site in Puerto Rico.

A string of product recalls by J&J’s OTCbusiness during 2010 and 2011 prompted a gov-ernment investigation and the closure of the FortWashington facility.

Manufacturing problems at Fort Washing-ton led to the withdrawal of the bulk of J&J’sOTC portfolio in the US (OTC bulletin, 17 March2011, page 1).

“Softness in China”Outside the US, international OTC sales in

the three months fell back by 2.9% to US$574million. “Softness in China” was the reason givenby the firm for the single-digit slide in turnover.

Apart from the OTC unit, Beauty – formerlyknown as Skin Care – and Wound Care/Otherwere the only Consumer units to record im-proved sales in the second quarter.

Consumer’s Beauty business reported a 10.2%rise in sales to US$1.08 billion, driven by a 17.1%jump in US turnover.

J&J attributed the increase in US sales to theacquisitions last year of Vogue Internationaland skin-care company NeoStrata (OTC bul-letin, 6 May 2016, page 3).

International Beauty turnover had improvedby 1.2% to US$427 million, the firm noted, thanksto a “strong performance” from Neutrogena.

Meanwhile, Worldwide Wound Care/Othersales edged up by 0.4% to US$232 million. USsales had improved by 5.3%, J&J pointed out,thanks to inventory build for Band-Aid. “In-creased competition” had caused Internationalsales to fall by 6.1%, the firm noted.

By contrast to Beauty, OTC and Wound Care/Other, Baby Care posted worldwide turnoverdown by 6.8% to US$494 million.

Competitive pressure had caused US BabyCare sales to drop back by 10.3% and inter-national turnover to fall by 5.7%, J&J said.

Turning to Oral Care, the company report-ed a fall in worldwide turnover by 2.2% toUS$394 million, as flat international sales failedto offset a 5.7% decline in the US.

Women’s Health posted worldwide salesdown by 2.5% to US$$276 million. Offloadingthe Tucks range of haemorrhoid treatments toBlistex (OTC bulletin, 22 July 2016, page 8)hadcausedUSsales to slumpby57.1%toUS$3.0million, J&J said, while “softness in CentralEurope” had left international sales down by1.1% to US$273 million.

The Consumer division accounted for 18%of the group’s worldwide sales in the three-month period, which moved forward by 1.9%to US$18.8 billion. OTC

Better sales in its International segment helpedto push up Pfizer’s Consumer Healthcare

turnover by 1% to US$846 million (C716 mil-lion) in the second quarter of 2017.

International turnover had improved by 5% toUS$416 million, the US-based pharmaceuticalsgiant noted, thanks to growth in its DevelopedRest of World and Emerging Markets regions.

A spokesperson for the firm told OTC bul-letin that higher demand for Advil analgesicshad helped to push up sales by 9% to US$230million in Emerging Markets, which coversAfrica, Asia, Eastern and Central Europe, LatinAmerica, the Middle East and Turkey.

Turnover had improved by 12% to US$76million in Developed Rest of World – compris-ingAustralasia, Canada, Japan and South Korea– thanks to the performance of the Nexiumheartburn-relief brand, Pfizer added.

International’s growth in the second quarterhad been held back, it noted, by lower sales inits Developed Europe region.

Developed Europe – comprising WesternEurope, the Scandinavian countries and Fin-land – posted sales down by 6% to US$110million, due primarily to negative currency ef-fects. At constant currencies, turnover slippedback by 1%.

Meanwhile, turnover in the US had fallen by3% to US$430 million, the company said, dueto “core supplement category declines and thetiming of trade programmes”.

These issues had been compounded, Pfizeradded, by “slight declines” in its analgesics salesas a result of “competitive activity”.

Consumer Healthcare accounted for 6.6% ofPfizer’s total second-quarter sales, which slippedback by 2% to US$12.9 billion (see Figure 1).

Pfizer reported its second-quarter results aschief executive officer Ian Read reiterated hiscomments on the future of the Consumer Health-care business.

Askedbyanalysts ifhehadconsideredoffload-ing Consumer Healthcare, Read stated: “We’reinvesting in [the business], it’s a good sourceof US cash flow and we see stable growth.”

“But the Consumer business,” continued Read,“like any of our businesses, is subjected to period-ic reviews as to whether there would be morevalue created [if the business were] outside ofPfizer rather than in.”

Pfizer has continued to face questions aboutthe future of Consumer Healthcare ever sincethe firm failed with its attempt to switch Lipitorfrom prescription-to-OTC status in the US (OTCbulletin, 14 August 2015, page 1). OTC

Business Second-quarter sales(US$ millions)

Change2016/2017 (%)

Proportionof sales (%)

Internal medicine 2,412 +10 19

Vaccines 1,589 +44 12

Oncology 1,270 -7 10

Inflammation & Immunology 992 -1 8

Consumer Healthcare 846 +1 7

Rare Diseases 562 -8 4

Innovative Health 7,671 +8 59

Essential Health 5,226 -14 41

Total Pfizer 12,896 -2 100

Figure 1: Pfizer’s sales in the second quarter of 2017 broken down by business (Source – Pfizer)

KRKA reported sales from non-prescrip-tion products – including self-medication linesand cosmetics – up by 7.8% to C54.2 mil-lion in the opening six months of 2017. TheSlovenian company said gains in its domes-tic market and East Europe region had beenbehind the single-digit improvement. Bettersales of analgesics had helped to push up turn-

over in Slovenia by 7% to C4.5 million, Krkapointed out. Turning to East Europe, the com-pany said non-prescription sales in the regionhad jumped by 24%, thanks to growth in Rus-sia and Kazakhstan. Non-prescription productsaccounted for 8.3% of Krka’s total sales in thesix-month period, which advanced by 8.5%to C655 million. OTC

IN BRIEF


Domestic gains boost TaishoFirst-Quarter Results

OTC COMPANY NEWS

Domestic turnover at Taisho’s domesticSelf-Medication unit edged up by 1.1%

to ¥35.9 billion (C274 million) in the threemonths ended 30 June 2017, as sales of Pabroncold remedies and Biofermin gastrointestinaltreatments improved, the Japanese firm reported.

However, growth had been held back, Taishonoted, by “poor demand” for both energy drinksand analgesics.

Domestic sales of Pabron had advanced by7.9% to ¥4.6 billion in the first quarter, the com-pany pointed out, thanks to strong demand fornasal decongestants and cold remedies.

Sales of Biofermin products improved by17.6% to ¥2.4 billion, while turnover from Co-lac laxatives increased by 8.7% to ¥0.9 billion.

By contrast, domestic sales of Taisho’s coreLipovitan brand declined by 6.3% to ¥14.6billion during the three months (see Figure 1).

Turnover from Lipovitan D dropped by 6.6%to ¥9.5 billion, while sales of other Lipovitanproducts fell back by 5.7% to ¥5.1 billion.

Taisho’s third best-selling brand, the RiUPminoxidil hair-regrowth line, posted turnoverdown by 1.9% to ¥3.7 billion.

Sales of Livita food products declined by 4.5%to ¥0.9 billion, while turnover from Naron an-algesics slipped back by 14.6% to ¥0.7 billion.

Earlier this year, Japan’s largest OTC playersaid that it was crucial for the firm to “furtherstrengthen” its domestic business in the faceof “intensified” competition (OTC bulletin, 26May 2017, page 4).

Enhancing consumer communications, de-veloping new products, and introducing innova-

tive line extensions to key ranges would helpTaisho to drive growth in Japan, the firm noted.

Expanding into new channelsFollowing the release of its first-quarter re-

sults, Taisho reiterated that it was “focusingon enhancing direct communication with con-sumers by expanding into new channels, suchas mail order”.

In addition, the company would respond tothe heightened “health consciousness” of con-sumers by “stepping up product developmentto create new products that satisfy consumers’needs and generate new demand”, Taisho said.

Meanwhile, overall turnover at Taisho’s Self-Medication division advanced by 4.2% to ¥44.8billion in the three months, driven by the in-crease in domestic sales and a 21.2% rise in in-ternational turnover to ¥8.3 billion (see Figure

2). Other sales generated ¥0.6 billion.International sales of the division’s OTC

drugs improved by 20.6% to ¥5.1 billion, whileinternational turnover from energy drinks movedahead by 12.5% to ¥2.8 billion. Other salesgenerated ¥0.4 billon.

Taisho noted that during the three monthsthe firm had continued to “actively develop”its international business, particularly in Asia.

Commenting earlier this year on its plansto grow the business further, Taisho said itwould work to “strengthen” its product devel-opment capabilities and invest to strengthennewly-acquired brands.

Furthermore, the company would strive to ex-pand further the footprint of the internationalbusiness across South-East Asia, it commented,and into other regions where it identified “highgrowth potential”. OTC

Business First-quarter sales(¥ billions)

Change(%)

Forecast sales(¥ billions)

Change(%)

Japan 35.9 +1.1 149.3 -0.3

International OTC drugs 5.1 +20.6 18.3 +6.6

International energy drinks 2.8 +12.5 9.9 +5.6

International other 0.4 – 1.3 –

International 8.3 +21.2 29.5 +7.2

Others 0.6 -4.5 2.5 -9.1

Total Self-Medication 44.8 +4.2 181.3 +0.7

Prescription operations 23.7 -10.3 97.7 -2.1

Total Taisho 68.5 -1.3 279.0 -0.3

Figure 2: Taisho Pharmaceutical’s sales in the first quarter ended 30 June 2017. Forecasted sales arefor the year ending 31 March 2018 compared with actual sales in the year ended 31 March 2017(Source – Taisho Pharmaceutical)

Business First-quartersales (¥ billions)

Change(%)

Forecast sales(¥ billions)

Change(%)

Lipovitan D 9.5 -6.6 36.1 -3.1

Other Lipovitan 5.1 -5.7 20.7 -2.5

Total Lipovitan 14.6 -6.3 56.8 -2.9

Cold remedies (Pabron brand) 4.6 +7.9 26.9 +2.2

Hair treatments (RiUP brand) 3.7 -1.9 15.9 -1.0

Biofermin 2.4 +17.6 7.9 -10.6

Livita series 0.9 -4.5 3.6 -5.6

Gastrointestinal treatments 0.9 +1.7 3.9 -2.3

Laxatives (Colac brand) 0.9 +8.7 3.3 +0.3

Analgesics (Naron brand) 0.7 -14.6 3.5 +4.1

Cold remedies (Vicks brand) 0.5 -7.9 4.2 +15.0

Other Self-Medication products 0.6 -4.5 2.5 -9.1

Total Domestic Self-Medication 35.9 +1.1 149.3 -0.3

Figure 1: Breakdown of Taisho Pharmaceutical’s Self-Medication sales in Japan in the first quarterended 30 June 2017. Forecasted sales are for the year ending 31 March 2018 compared with actualsales in the financial year ended 31 March 2017 (Source – Taisho Pharmaceutical)

IN BRIEFGENOMMA LAB – the Mexican con-sumer healthcare and personal-care firm – re-ported OTC sales down by 3.7% to MXN1.24billion (C58.5 million) in the second quarter, asturnover declined in its domestic market and theUS. Sales in Mexico slipped back by 12.0%,and US turnover dropped by 16.6%. WhileGenomma did not comment on its domesticperformance, the firm said the decline in USsales had primarily been due to a “strategic de-cision” to conclude an exclusive agreement withone of the country’s largest pharmacy retailers. Bycutting ties with the unnamed firm, Genommasaid it hoped to expand its distribution to oth-er US retailers. OTC sales accounted for 43%of Genomma’s total turnover, which increasedby 2.5% to MXN2.84 billion. The Personal Careunit generated the remainder. OTC


Stada Arzneimittel will continue with its long-term strategy, irrespective of the outcome

of Bain Capital and Cinven’s latest takeoverbid, according to Stada’s recently-appointedinterim chief executive officer Engelbert CosterTjeenk Willink.

Speaking as the company announced its half-year results, Willink – who replaced MatthiasWiedenfels after the latter’s resignation “forpersonal reasons” last month (OTC bulletin,21 July 2017, page 23) – said he was certain Bainand Cinven were committed to implementingStada’s strategy should the deal go ahead.

“We are 100% of the opinion that the wayBain and Cinven want to go with the develop-ment of Stada is exactly the same as the waywe want to go,” he explained.

Expand global reach“Together, they aim to expand our position

as a global pharmaceutical company, and tosignificantly drive forward Stada’s growth andprofitability,” he pointed out.

While he was “hopeful” that the offer wouldsucceed, Willink said that if it were to fail, Stadawould “simply continue as before”, and imple-ment its long-term strategy, which includesits ‘Stada Plus’ improvement programme in-troduced last year.

Stada’s executive and supervisory boardsrecently recommended that the firm’s share-holders should accept Bain and Cinven’s latestbid of C66.25 per share, commenting that theoffer reflected Stada’s “growth potential” (OTCbulletin, 21 July 2017, page 1).

Shareholders have until 16 August 2017 tomake their decision. The previous offer of C66.00

per share – valuing Stada at C5.32 billion –fell short of the requisite 67.5% minimum ac-ceptance threshold. This threshold has now beenlowered to 63%.

Meanwhile, asked by analysts to clarify com-ments made in a recent interview with Ger-man newspaper Handelsblatt – in which heclaimed that Stada currently found itself in a“perfect storm” – Willink said the ongoinguncertainty was “naturally complicated”. Hepointed out that leading Stada at a time of such“insecurity” was a “great challenge”.

“We are trying very hard to make it clear tothe shareholders why we are doing what we aredoing, why [the takeover] is the best way,”Willinkadded. “We must have everyone in this together.This is the task that has been given to me.”

Meanwhile, Stada reported turnover fromBranded Products up by 15% to C469 millionin the opening six months of 2017, as salesimproved in three of its five biggest markets.

In Russia, sales of Branded Products movedahead by 80% to C108 million (see Figure 1).“Increased volume effects” had driven the sub-stantial rise in sales, Stada noted. Turnoverhad also been boosted by a “very positive cur-rency effect” related to the Russian rouble.

Sales of Branded Products contributed 67%to group turnover in Russia, which moved for-ward by 46% to C160 million.

Turning to Italy, Stada reported BrandedProducts’ sales up by 1% to C22 million in thesix months. Stada attributed the increase to a“reorganisation of sales structures”.

Branded Products accounted for a fifth ofgroup sales in Italy, which advanced by 5%to C106 million.

InVietnam, Branded Products’sales improvedby 10% to C19 million. A “stable currency effectof the Vietnamese dong” was the reason citedby Stada for the double-digit increase.

Branded products accounted for 36% ofgroup sales in Vietnam, which grew by 9.2%to C55 million in the first half.

On a more negative note, turnover fromBranded Products in Stada’s home market ofGermany fell back by 9% to C91 million.

Stada reported that this was down to a “con-scious decision to reduce seasonal annual orders”,which in the previous year had been made dur-ing the first half, and also to the upcoming re-launch of sun-care brand Ladival in 2018.

Branded Products accounted for 39% of totalturnover for Germany, which slipped back by5.3% to C237 million.

Sales in the UK were also down in the firsthalf, falling by 2% to C83 million. Stada attribut-ed this decline to a weak cough and cold seasonin the first six months of 2017, as well as nega-tive currency effects resulting from Brexit.

Stada did not give a figure for its total salesin the UK.

Branded Products contributed 41% to Stada’stotal first-half sales, which improved by 10%to C1.14 billion (see Figure 2). The company’sGenerics segment made up the remainder. OTC

Stada commits to strategyBusiness Strategy/First-Half Results

COMPANY NEWS OTC

Figure 1: Sales of Stada’s Branded Productsdivision in the first half of 2017 broken down bycountry (Source – Stada)

Otherse146mn+18%

UKe82mn-2%

Germanye91mn-9%

Russiae108mn+80%

Italye22mn+1%

Vietname19mn+10%

Business First-half sales(€ millions)

Change(%)

Operating profit(€ millions)

Change(%)

Generics 674 +8 105 +17

Branded Products 469 +15 71 +3

Group/Other – – -40 –

Total Stada 1,143 +10 136 +2

Figure 2: Stada’s sales and operating profit in the first half of 2017 (Source – Stada)

CHURCH&DWIGHT reported turn-over at its US Personal Care Products busi-ness down by 1.7% to US$267 million (C226million) in the second quarter of 2017, due tolower sales of Trojan condoms and lubricantsand First Response pregnancy tests. On a more

positive note, the company said sales of Bat-iste shampoo had advanced in the period. USPersonal Care Products generated 39% of thefirm’s Consumer division’s domestic sales, whichedged up by 1.3% to US$678 million. The com-pany’s US Household Products business made

up the remaining 61% of the Consumer divi-sion’s domestic turnover. International Consumersales improved by 6.4% to US$145 million,while Specialty Products turnover rose by 4.9%to US$74.7 million. Total group sales movedforward by 2.3% to US$898 million. OTC

IN BRIEF


EMA recalibrates tocope with UK’s exit

Regulatory Affairs

OTC GENERAL NEWS

Three distinct categories of activity havebeen identified by the European Medicines

Agency (EMA) as part of efforts to developa “business continuity plan to deal with theuncertainty and workload implications linkedto the UK’s withdrawal from the EuropeanUnion (EU) and the agency’s relocation”.

“Preparing for the move, managing the nec-essary changes, and addressing challenges suchas possible losses in skilled and experiencedstaff, in a proactive and efficient way, requiresconsiderable internal resources,” said the EMA’sdeputy executive director, Noël Wathion, who ishead of the agency’s ‘Brexit taskforce’. “Withthe business continuity plan we aim to ensure thatthe assessment of medicines is not disrupted andthat patients in Europe continue to have accessto high-quality, safe and effective medicines.”

Tasks and activities carried out by the regu-lator have been categorised and prioritised “ac-cording to their impact on public health andthe agency’s ability to function”.

Since May, the EMA has started to scaleback elements of ‘category 3’, including suspend-ing a number of activities. These include develop-ing the European Medicines Web Portal tool toprovide online information on medicines; con-tributing to the e-submission project; developinga ‘transparency roadmap’ for future EMA activi-ties; and participating in benchmarking medi-cines regulatory activities in the EU as of 2018.

Additionally, the EMA has reduced “thenumber of audits as well as some corporate gov-ernance and support activities”; the participationof EMA staff in external meetings and confer-ences; and organising EMA meetings and work-shops. The EMA expects to “free up 43 staffby the end of 2017, who are focusing on the prep-arations for the UK’s withdrawal from the EUand the EMA’s relocation”.

While ‘category 3’ activities “can be put on

hold for some time to free up or channel resourcesinto core activities”, the agency says, “mid-to-longterm” the EMA will need to analyse when this will“start to seriously undermine” the agency’s work.

In ‘category 2’, higher-priority activities –such as proactively publishing clinical data andcontributing to initiatives such as the fightagainst antimicrobial resistance – will be “main-tained for as long as possible, workload andstaffing situation permitting”.

Finally, the “highest priority activities” of‘category 1’ that directly relate to medicinesassessment and safety monitoring – as well asmaintaining the European regulatory infrastruc-ture, such as EU inspections – are “absolutelycrucial to uphold”.Any disruption to these activi-ties, the agency warns, would “almost imme-diately have a detrimental effect on the healthand wellbeing of citizens in Europe and wouldalso jeopardise production and distribution ofmedicines in the EU”.

Further iterations of the business continuityplan will also take into account “various scenariosfor staff losses and how these may affect the de-livery of category 1 and 2 activities”, the EMAstates. “Unexpected higher, faster or more perma-nent loss of staff as a consequence of the agency’srelocation may lead to a situation in which theEMA’s operations can no longer be maintained.”

The EMA’s announcement comes as a finallist of offers to host the EMA has been pub-lished by the European Council. The 19 for-mal offers includeAmsterdam, the Netherlands;Athens, Greece; Barcelona, Spain; Bonn, Ger-many; Bratislava, Slovakia; and Brussels, Bel-gium.Also in contention are Bucharest, Romania;Copenhagen, Denmark; Dublin, Ireland; Helsinki,Finland; Lille, France; and Malta. Roundingout the list are Milan, Italy; Porto, Portugal; Sofia,Bulgaria; Stockholm, Sweden; Vienna, Austria;Warsaw, Poland; and Zagreb, Croatia. OTC

Continued from front page

Boots Alliance (WBA), Celesio and Phoenixall acquiring stakes from local authorities inmunicipal pharmacy chains. However, since2000, these types of deals have ceased.

A spokesperson for pan-European wholesalerand retailer Celesio told OTC bulletin that thecompany would watch “very closely the devel-opment of the new regulations”.

The German firm was the “only retail andfranchise provider with a comprehensive andwell-established European pharmacy concept”,he added, noting that the company operated 186LloydsPharmacia pharmacies in Italy – afterthe firm acquired stakes in chains of municipalpharmacies in Lombardy and Tuscany in 1999 –along with 28 franchise pharmacies.

“Celesio will support independent pharmaciesin Italy through these challenging times, whatevertheir decision,” the spokesperson said, “and helpthem to take advantage of the new landscape.”

The passage of the new law has drawn anangry response from Italy’s two pharmacists’associations Federfarma and the FederazioneOrdini Farmacisti Italiani (FOFI).

Federfarma said that the 20% ownershiplimit was “insufficient” to prevent chains fromdominating the market, while the pharmacists andstaff that worked in chain pharmacies would nolonger be focused only on the health of the com-munity but would merely be employees whowere “subordinate” to the commercial targetsof a company.

Echoing Federfarma’s stance, FOFI claimedthat the passage of the law was “very negative”for the Italian pharmacy market and for patientsas commercial considerations would come be-fore the health of the consumer.

FOFI also claimed that despite the regionalownership restrictions, it would be possible forjust five companies to dominate the entire Ital-ian pharmacy market, which would lessen com-petition rather than increase it. OTC

Italy opensdoor to chains

Regulatory Affairs

MEDSAFE – New Zealand’s medicines regu-latory agency – is seeking comments on proposedchanges to warnings on non-steroidal anti-in-flammatory drugs (NSAIDs). The consultationcomes after the agency’s MedicinesAdverse Re-actions Committee recommended updating thewarning labels due to the risk of miscarriagein pregnant women taking NSAIDs. OTC

IN BRIEFRB – Reckitt Benckiser – has settled a classaction lawsuit in Australia related to its Nuro-fen Specific Pain product range. The firm hasagreed to pay A$3.5 million (C2.3 million) pluslegal costs to settle the claim that the firm hadmisled consumers who had purchased the prod-ucts between 2011 and 2015. RB has already beenfined A$6 million by Australia’s High Court

for misleading consumers by claiming each of thefour products in the range had been formulat-ed to tackle a specific type of pain, despite themall containing 342mg ibuprofen lysine (OTCbulletin, 28 April 2017, page 16). The fine hadbeen increased from A$1.7 million followingan appeal last May by the Australian Compe-tition and Consumer Commission. OTC

IN BRIEF


CDU member slamshomoeopathy use

Regulatory Affairs

GENERAL NEWS OTC

Sales of homoeopathic remedies should notbe restricted to pharmacies in Germany,

according to Mechthild Heil, a member of theBundestag representing the Christian Demo-cratic Party (CDU), and a leading consumerprotection commissioner.

“For most of these remedies, there is no evi-dence of efficacy, no clinical trials, only registra-tion,” Heil insisted. “Their exclusive sale in phar-macies makes it look like they are scientifically-recognised alternatives to orthodox medicines.”

But in the lead up to this year’s federal elec-tions, German industry and homoeopathy practi-tioners have reacted strongly to her claims, say-ing that removing homoeopathy’s exclusivity inpharmacy would weaken rather than strength-en consumer protection.

“Homoeopathic medicines are usually phar-macy-only – and rightly so,” maintained the Ger-man medicines manufacturers’association, theBAH. “Pharmacy-only status ensures the cor-rect use of homoeopathic medicines within theframework of a pharmacist’s medical advice,which is important for patient safety.”

Cornelia Bajic, chair of the German associa-tion of homoeopathic physicians, the DZVhÄ,agreed. “The abolition of the pharmacy obliga-tion would not strengthen consumer safety, butrather significantly weaken it.”

Expert advice from pharmacists was import-ant as most homoeopathic medicines were soldwithout a prescription, she added. Noting that65% of Germans would like to use more ho-moeopathic remedies, Bajic labelled the callto remove such products from pharmacy-only

status as “grossly negligent”.Homoeopathic medicines account for a tenth

of the German OTC market through pharma-cies, including self-medication and prescribednon-prescription categories. This segment grewby 4.3% to C622 million in 2016, according toBAH data.

The majority of these sales were of phar-macy-only homoeopathic medicines. Despitehaving been taken out of the reimbursementsystem along with most other OTC drugs in2004 (OTC bulletin, 31 March 2004, page 7),sales of prescribed non-prescription homoeo-pathic medicines through pharmacies still ac-counted for over C100 million last year.

“Homoeopathic medicines have been usedwithout problems for decades,” added pharma-ceutical industry association, the BPI.

Two-thirds of consumers recently surveyedby the BPI about their attitudes to homoeo-pathy thought that homoeopathic medicinesshould be supported by the government, withover 80% wanting them to be reimbursed bythe statutory health insurance system (OTC bul-letin, 30 June 2017, page 12).

Almost 5,000 homoeopathic medicines havebeen registered in Germany to date. In principle,all drugs intended to alleviate or prevent a dis-ease are limited to pharmacies.

The decision as to whether the pharmacy-only restriction on most homoeopathic medi-cines should be relaxed falls on the German Fed-eral Ministry of Health. The German Bundestagis currently in recess over the summer, but fed-eral elections will take place in September. OTC

Specific drugs containing opioid derivativesthat were recently placed on France’s list

of prescription-only medicines have been speltout by local medicines agency ANSM.

Following the announcement by French healthminister Agnès Buzyn that opioid derivativesincluding codeine would be reverse-switchedfrom OTC status with immediate effect (OTCbulletin, 21 July 2017, page 1), the country haspublished a bulletin in its Journal Officiel re-stricting to prescription-only status codeine,ethylmorphine, dextromethorphan and noscapine.

According toANSM’s list, OTC brands affect-

ed by the reverse-switch include Clarix, Cod-oliprane, Dafalgan, Doliprane, Drill, Humex,Tussidane and Vicks.

The restrictions were put in place to tacklethe abuse of opioid medicines, and put an endto what the French government called “addictiveand potentially deadly practices”.

In particular, the government noted whenannouncing the move that the use of a so-called“Purple Drank” cocktail – comprising codeine,antihistamines and soda – had been steadily risingamong teenagers and had led to two deathsalready this year. OTC

Regulatory Affairs

France lists restricted opiates

The National Health Service (NHS) in Eng-land is set to consider whether it should stop

routinely paying for over 3,000 OTC medicinesfor a number of minor health conditions.

In its consultation document ‘Items whichshould not be routinely prescribed in primarycare’, the NHS outlines 18 prescription-onlydrugs it believes should no longer be routinelyprescribed and also says that in the comingmonths it will review 3,200 OTC products thatcould also be subject to prescribing restrictions.

Review common OTC productsNoting that the NHS spends around £645

million (C719 million) a year on prescribingOTC medicines for minor ailments, the docu-ment says the health service will review a numberof common OTC products, including analgesics,antipyretics, antifungal creams, cough and coldremedies and laxatives.

At this stage, the NHS is seeking generalviews on the prescribing of OTC medicines, thedocument says, and any “evidence that will in-form its future programme of work”.

The NHS England and NHS Clinical Com-missioners joint clinical working group will “con-sider items available to buy OTC in the com-ing months”, the document states, “and whereappropriate will develop detailed guidance forfurther consultation”.

Commenting on the launch of the consult-ation, John Smith, chief executive of the Propri-etary Association of Great Britain (PAGB), saidthat it was important that the NHS used its“limited resources in the most effective way giventhe current financial pressures and increasingdemands on the service”.

Offer better information“The consultation document identifies 3,200

products that are being regularly prescribed butcould be purchased OTC, often at a much lowercost to both the individual and NHS,” Smithpointed out. However, “simply restricting health-care professionals’ability to prescribe”, withoutoffering people better information on how to self-care, he warned, could heap more pressure ondoctors to prescribe something else instead.

To support better use of OTC medicines andhelp educate people on how to self-care, PAGBhad been calling for the introduction of “recom-mendation prescription” pads for doctors andother healthcare professionals, Smith pointedout, to provide better guidance on how to self-treatsafely with OTC medicines. OTC

NHS reviewsprescriptions

Regulatory Affairs


Product Launches

Similasan has eyeon Czech Republic

OTC MARKETING NEWS

Swiss heritage, natural ingredients and clearindications will all help Similasan’s range

of eye-care products cut through the noise ofthe highly competitive Czech market, accordingto the homoeopathy specialist.

The Swiss firm has partnered with Czechophthalmic specialist Dr Očko to launch threespecific eye-care products – Tired, Itchy and RedEyes – in pharmacies across the Czech Republic.

Petra Peroutková, Dr Očko’s executive direc-tor, said that for an eye-care brand to succeed inthe Czech market a “clear differential” was key.

“There are more than 50 eye-care brandsalready on the market,” she pointed out, “whileanother challenge comes from own-label prod-ucts which are positioned as lower price-pointalternatives to premium brands.”

To stand out in such a noisy market, Dr Očkowas highlighting to pharmacists that the Simila-san range featured natural ingredients whichwere “hugely appealing to consumers” in theCzech Republic, Peroutková claimed, along withthe brand’s Swiss heritage, which was also a“big draw”.

However, it was the clear indications foreach product which would really help the brandcut through in such a competitive market, sheinsisted, claiming that the clearly-labelled prod-ucts would make it easier for consumers tonavigate the crowded eye-care category and getthe right product for their problem.

An “omnichannel launch campaign” to pro-mote the three products had already begun,Peroutková said, highlighting each of the threespecific indications.

To lead the consumer campaign, Dr Očko had

signed up Czech actor Otakar Brousek, Perout-ková revealed, to provide the voiceover for on-line promotional videos.

Furthermore, a consumer-facing Similasanwebsite had been developed, she added, whileadvertisements had been placed on mass mediawebsites and social media channels.

Meanwhile, the trade campaign was focus-ing on educating healthcare professionals aboutthe brand and the benefits of the three products,Peroutková said, pointing out that the brandhad already secured distribution in a numberof the country’s biggest pharmacy chains.

“Initial feedback from the first wave oflaunch activity has been very positive,” Perout-ková claimed, “and we are looking forward tothe next phase in our 12-step plan to Similasanand help it go from strength to strength.”OTC

Similasan has partnered with Dr Ocko to launchthree eye-care products in the Czech Republic

An“easy-to-apply”glide-on gel is the latest editionto Mentholatum’s Deep Freeze range in the UK.Developed to meet“growing consumer demand

for drug-free, soothing and fast acting”pain relief,Deep Freeze Pain Relief Glide-on Gel, the firmclaimed,was a“dual action product offering painrelief with cooling therapy”.The Glide-on Gel joins the existing Deep Freeze

range,consisting of the Deep Freeze Pain ReliefCold Gel,Deep Freeze Pain Relief Cold Patchand Deep Freeze Pain Relief Cold Spray.Kaye Mackay, senior brand manager for Deep

Freeze, said the product brought“real innovationto the cold therapy sector” thanks to itscombination of effectiveness and ease-of-use.“Deep Freeze Pain Relief Glide-on Gel can be

used anywhere and as often as required to deliverfast-acting relief for sharp-shooting back, legand foot pain,as well as muscle and joint pain,”Mackay pointed out,“while the neat and sturdypack fits easily into a handbag or kit bag.”The product would be supported by a national

trade and consumer campaign,Mackay revealed,to raise awareness of the “cool new kid on thepain-relief block”and how and when to use it.Utilising print and digital channels, there would

be“year round digital and social-media support”for the product, she added,backed by“vigorousconsumer and trade public-relations activity”.Furthermore, consumer print advertisements

would appear in national wellbeing and lifestyleweeklies and monthly titles until the end ofSeptember,Mackay said.Deep Freeze Pain Relief Glide-on Gel has a

recommended retail price of £4.99 (€5.50). OTC

UK consumers will soon be able to benefitfrom the“antibacterial properties of silver”as Glenmark prepares to launch its AlfaSilverwound-care spray in the country.Recently launched in the Czech Republic,

AlfaSilver contained 3% ionic silver and absorbentzeolite minerals, the Indian firm pointed out, tocreate a“breathable barrier to protect the skinand provide the right environment to supportthe body’s own healing process”.The“unique spray-on method”, the company

claimed,meant AlfaSilver could be appliedwithout the user having to touch the wound,keeping it clean and protected from infection.Suitable for all ages and those with sensitive

skin or latex allergies,AlfaSilver would beavailable in UK pharmacies in the near future,Glenmark said,with a recommended retailprice of £9.90 (€10.91). OTC

Japan’s Hisamitsu had appointed market ex-pansion services provider DKSH to launch

its Salonpas pain-relief patches and Decodeco-cool cooling gel sheets in China.

Matsuki Eishi, general manager of Hisamit-su in China, said the firm was “delighted” to beintroducing its key brands in China with thehelp of DKSH.

“We trust DKSH’s in-depth expertise andability to find new growth opportunities,” headded, “thanks to its well-established nation-wide infrastructure in China and well-trained

local staff, as well as an in-depth knowledgeof the Chinese healthcare market.”

DKSH has already helped launch Hisamit-su’s brands in Hong Kong, Singapore, Taiwanand Thailand through a relationship that datesback to 2001.

Teresa Chen, DKSH’s regional vice presidentof healthcare in Greater China, said the firm’s“proven track record” with Hisamitsu wouldtranslate into “wider and easier access to itsportfolio in China, so that more consumers willbenefit from its healthcare products”. OTC

DKSH to take Salonpas to China


“An end-to-end solution” to help consum-ers tackle the problems of urban pollu-

tion is how Reckitt Bencksier (RB) is positioningits new SiTi brand of healthcare products to pro-tect people from the dangers of poor air quality.

Launching in China and India over the nextfew months, the SiTi range will fit within RB’sHealth business but will also carry the DettolHygiene brand logo. It will initially consist ofa mask, nose filters and a sensor that connectsto a smartphone, detects air pollution levels andsends warnings to users.

Global health issueRakesh Kapoor, RB’s chief executive officer,

said that air pollution, especially in urban areas,was a “pressing health issue on a global scale”.

“It’s not just in China or India,” he explained,“it is an issue in many countries, including ma-jor western urban centres such as London, UK.”

However, while air pollution had a majorimpact on consumer health, the sector had notyet been able to tackle it properly, Kapoorclaimed, as pollution levels varied greatly andthere were differences in air quality both in-doors and outdoors.

“Inside a room or a car, the air quality couldbe very different to what it is outside,” he ex-plained, “and currently the market is dominatedby outdoor air pollution solutions which aremainly limited to masks.”

“We created SiTi to protect consumersagainst out-of-home air pollution,” he said, “andto give the brand credibility with consumerswe have partnered it with Dettol.”

Explaining the rationale behind the threelaunch products, Kapoor explained that as pollu-tion levels varied by location and were not al-ways visible, it was crucial to allow consumers to

be able to monitor their own personal spacesor the quality of the air when they were outdoors,even on clear days.

This insight, he said, had led to the develop-ment of the SiTi sensor, which connected to smart-phones and consistently monitored the air wher-ever a person was.

If the air quality entered the “yellow or redzone”, the sensor sent an alert via the smartphoneto tell the user to take action, he noted.

To enable people to protect themselves whenthey received a warning, Kapoor continued,RB had developed two air filtering products,a mask and nose filters.

While masks had been the staple product forpeople wanting to protect themselves fromair pollution, the SiTi mask was “no ordinarymask”, Kapoor claimed. It was “the most sophis-ticated and high-quality mask on the market”.

Furthermore, as people usually wore themasks for a substantial period of time, concernswere growing about inhaling carbon dioxideexpelled by the body, Kapoor pointed out. Totackle this issue, he revealed, the SiTi maskfeatured a microfilter to scrub out the carbon di-oxide that users produced, making it safe foradults and children to wear for long periods.

Wearing a mask, however, was not alwayspractical, Kapoor pointed out, which was wherethe SiTi nose filters came into play.

Discreet fitThe nose filters fitted discreetly into users’

nostrils and filtered out dangerous particles,he explained, adding that they were perfect foruse during a morning run or a time when a maskwasn’t suitable.

Both the mask and the nose filters, Kapoorpointed out, had been designed to filter out

fine particle matter that was 2.5µm in diam-eter or smaller – known as PM2.5 – producedfrom all types of combustion, including motorvehicles, power plants, residential wood burn-ing, forest fires, agricultural burning, and someindustrial processes.

The mask filtered out 98% of PM2.5, Kapoornoted, while the nose filters filtered out 80% ofdangerous particles.

Turning to how RB would promote the SiTirange, Kapoor said that the marketing campaignwould reflect the innovation in the products.

“This is an end-to-end solution for con-sumers,” Kapoor insisted, “and therefore we arelaunching it in a very different way throughdigital channels and e-commerce.”

While Kapoor did not elaborate on the mar-keting plans for the SiTi brand beyond a strap-line of “Life over Pollution”, he revealed thatas the brand gained traction, RB would start toadd further elements to the SiTi “ecosystem”.

“We are all excited to play a role in a verymajor health issue that effects us all everyday andeverywhere worldwide,” Kapoor insisted.OTC

RB tackles pollution with SiTiProduct Launches

MARKETING NEWS OTC

Rakesh Kapoor

RB wants consumers to choose life over pollution The SiTi range features a mask and nose filters

Personalised data drives personalised solutions


Glenmark preparesUS nasal-spray file

Product Launches

OTC MARKETING NEWS

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Glenmark plans early next year to submita hybrid 505(b)(2) submission in the US

for a combination mometasone/olopatadinenasal spray, which has the potential to becomean OTC switch candidate.

The Indian firm said the US Food and DrugAdministration (FDA) had confirmed that datafrom a Phase III study – which saw 1,176 adultsand adolescents aged 12 years or older treatedtwice-daily for 14 days with either Glenmark’sGSP 301 candidate, mometasone, olopatadineor a placebo – was sufficient to support a regu-latory submission.

Combination steroidThe GSP 301 fixed-dose combination of a

steroid and an antihistamine for treating seasonalallergic rhinitis in adults and children will markGlenmark’s first new drug application (NDA)filing in the US.

Chairman and managing director Glenn Sal-danha said the drug had an annual sales poten-

tial of US$80-US$100 million (C68-C85 million)as a prescription remedy, but this would be muchlarger once switched to OTC status.

Commenting on the timeline for GSP 301,Saldanha said the product would most likelybe launched in 2018 as a prescription productthrough a contract sales force or a partner.

“Eventually, however, this product will goOTC,” he insisted. “There is a lot of interestfrom major OTC players to in-license the prod-uct earlier on so they can influence the strategyon the prescription side and ensure it is a suc-cess when it goes non-prescription.”

The product had the potential to be a big OTCsuccess, he added, as it was superior to existingOTC sprays based solely on a single steroid.

Currently, there was only one product avail-able in the US that combined a steroid and antihis-tamine in a single spray, he pointed out, referenc-ing the Dymista spray marketed by Mylan’sMeda, which combined the antihistamine azelas-tine with the corticosteroid fluticasone. OTC

“We train our hearts and our muscles.We lookafter our skin and our loved ones. But whatare we doing for our memory?” is the questionasked by a new German marketing campaignfor Hexal’s Gingium ginkgo biloba supplement.Targeting older people that like to stay fit and

active,but currently do not take anything to helpmaintain their memory, the campaign is led by atelevision advertisement featuring an older ladyexercising and looking after her granddaughter.But she cannot remember her computerpassword and turns to Gingium to help.A voiceover adds:“We train our hearts and our

muscles.We look after our skin and our lovedones. But what are we doing for our memory?”“Act early with Gingium,” the voiceover

advises,adding that the product helps withblood flow, strengthens the nervous system andimproves memory and concentration.Diminished mental performance was a heavy

emotional burden that older people tended justto bear,Hexal said,and the television campaignwould remind people that there were effectivenatural solutions available.In addition to the television campaign,Gingium

was being supported with online,print and trade-press advertising,Hexal said,adding that thecampaign would run for the next few months. OTC


EVENTS OTC

5-6 SeptemberVitafoods AsiaSingaporeA two-day exhibition and conference.Contact: Informa UK.Tel: +20 3377 3616.Email: [email protected]: vitafoodsasia.com.

13 SeptemberFood Supplements WorkshopLondon, UKThe regulatory environment and nutrition andhealth claims will be discussed at this one-dayworkshop run by the Proprietary Associationof Great Britain (PAGB).Contact: PAGB.Tel: +44 20 7242 8331.Email: [email protected]: pagb.co.uk/events-training/.

13-14 SeptemberMeet the ManufacturerNew Jersey, USDr Reddy’s, Johnson & Johnson and Perrigowill speak at this one-day event, hosted bythe Consumer Healthcare Products Associa-tion (CHPA).Contact: CHPA.Tel: +1 202 429 9260.Email: [email protected]: chpa.org/mtm/.

28 September3rd EuropeanConsumer Healthcare ForumMunich,Germany‘Successfully managing consumer healthcarein view of changing sales channels, online andoffline’will be the theme of this on-day forum.Contact: Simon Kucher & Partners.Tel: +49 89 544793 10.Email: [email protected]: simon-kucher.com/en/events/consumerhealthforum.

2-3 OctoberPharmaceutical RegulatoryAffairs in AfricaLondon, UKCountries to be covered at this two-day meet-ing include Ghana, Kenya, Malawi, Mozam-

bique, Nigeria, South Africa and Tanzania.Contact: Management Forum.Tel: +44 20 7749 4730.Email: [email protected]: management-forum.co.uk.

2-4 OctoberTOPRA Annual SymposiumLondon, UKA three-day event run by The Organisation forProfessionals in RegulatoryAffairs (TOPRA).Contact: TOPRA.Tel: +44 20 7510 2560.Email: [email protected]: toprasymposium.org.

5 OctoberPharmacovigilanceLondon, UKThis one-day course will look at pharma-covigilance and regulatory requirements.Contact: Management Forum.Tel: +44 20 7749 4730.Email: [email protected]: management-forum.co.uk.

17-19 OctoberWSMI General AssemblySydney,Australia‘The Economics of Self Care’ is the theme ofthe World Self-Medication Industry’s (WSMI’s)three-day conference.Contact: Arinex.Tel: +61 2 9265 0700.Email: [email protected]: wsmiga2017.com.

18-21 OctoberCRN’s Annual Symposium for theDietary Supplement IndustryArizona, USA four-day event organised by the US Councilfor Responsible Nutrition (CRN).Contact: CRN.Tel: +1 202 204 7674.

Email: [email protected]: crnusa.org/2017events.

24 OctoberGlobal Generics &Biosimilars AwardsFrankfurt,GermanyThese awards recognise ‘best practice’ in theglobal generics and biosimilars industries.Organised by Generics bulletin, they rewardbusiness development initiatives, clever licens-ing deals and smart legal manoeuvres.Contact: Generics bulletin.Tel: +44 1564 777550.Email: [email protected]: generics-bulletin.com.

13-14 NovemberThe Future of PharmacyFrankfurt,Germany‘Pharmacy of the future – shoppertrends, dev-elopment potentials, learnings’ and ‘whenAmazon becomes pharmacy’ will be amongsessions at this two-day conference.Contact: Inspirato.Tel: +49 151 624 179 41.Email: [email protected]: inspirato-zukunft-apotheke.de.

21-22 NovemberDIA Middle-EastRegulatory ConferenceKuwait City, KuwaitA two-day event organised by the Drug In-formation Association (DIA) .Contact: DIA.Tel: +41 61 255 51 51.Email: [email protected]: diaglobal.org.

27-28 NovemberEuroPLX 65London, UKThis two-day meeting will provide a forumfor business development decision makersfor discussing and negotiating collaborativeagreements in licensing, marketing, and dis-tribution of patented medicines, generics, bio-similars, OTC products, medical devices andfood supplements.Contact: RauCon.Tel: +49 6221 426 2960.Email: [email protected]: europlx.com.

SEPTEMBER

NOVEMBER

OCTOBER

29-30 NovemberCeuta Healthcare International ConferenceLisbon, Portugal

‘Creating sustainable growth and increasing brand equity for manufacturers and retailers’is the theme of this two-day conference, which will bring together manufacturers, retailers,brand owners, global outsource solutions providers and key opinion leaders in the health andbeauty industries to explore global growth opportunities.Contact: Ceuta Healthcare. Tel: +44 1202 780 558.Email: [email protected]. Website: ceutaalliance.com/2017_conference-lisbon.html.

10-11 OctoberAESGP ConferenceBrussels, BelgiumRegulatory challenges for consumer health products will be the focus of this two-day meet-ing, which is organised by the Association of the European Self-Medication Industry, theAESGP. The conference will provide an update on political and regulatory developments inthis sector with a focus on substance based medical devices, herbal medicinal products andbotanical supplements.Contact: AESGP. Tel: +32 273 55130.Email: [email protected]. Website: aesgp.eu/events/brussels2017.


OTC BUSINESS STRATEGY

Merck moves with purpose

Helping people live100 healthy years might

seem a lofty goal,but Merck KGaA ConsumerHealth’s Uta Kemmerich-Keiltells Matt Stewart that thefirm’s ambitious plans willalso enable them to win in

the marketplace.

“The right purpose and en-suring people know whywe do what we do, leadsto a highly motivated and

engaged workforce,” according toUta Kemmerich-Keil, head of MerckKGaA’s global Consumer Health busi-ness. “It also gives you a competitiveedge in the marketplace, as consum-ers can see you are willing to contri-bute to their communities.”

“Giving back and gaining a reputation forcontributing to society gives Merck ConsumerHealth’s brands a positive halo,” Kemmerich-Keil argued. “It is becoming more and moreimportant for companies and brands to havecredibility and it is linked to how they engagein society.”

Merck’s purpose was laid clear last year,

when Kemmerich-Keil announced that the Con-sumer Health business was committed to help-ing “prepare society for a new era of humansliving for 100 healthy years” (OTC bulletin,30 June 2016, page 20).

The first step towards achieving this goal wasto establish the ‘We100’ movement designedto engage consumers of all ages to ensure thatthey lived healthy lives right the way up to the100 year mark.

In partnership with the Economist Intelli-gence Unit (EIU), Merck produced a report onwhat women really wanted when it came totaking care of their own wellbeing and help-ing them live healthier lives. In May, Merckagain teamed up with the EIU, to look at whatcould be done to set children on the right pathtowards living for a century and being as healthyas possible for as long as possible.

These initiatives were not marketing toolsfor the firm, Kemmerich-Keil insisted. “Giventhe knowledge at our disposal as a healthcarecompany, we can change society’s perceptionabout healthy ageing,” she pointed out, “and thisis the foundation of the We100 movement.”

But the programme was not just about en-gaging consumers, she pointed out, but alsoabout getting the Merck workforce on board and

connecting on the ground with the people thecompany served.

Pilot projects were currently underway, Kem-merich-Keil said, highlighting a project in SouthAfrica that was designed to engage school child-ren from poor backgrounds and help themlive healthier lives.

Explaining more about the programme, Kem-merich-Keil said that the firm’s Consumer Healthteam in the country had partnered with a schoolto provide children with a plan of action to lead ahealthier life. The scheme involved members ofthe Merck team spending time with the child-ren and setting challenges that would keep themhealthy and make them think about getting theirhouseholds to embrace healthier living.

“My team in South Africa is not very big,”Kemmerich-Keil pointed out, “but they havebeen putting together a wonderful programme.The success of the scheme will hopefully allowus to convince local and national governmentto take the programme and widen its reach.”

What it had also done, Kemmerich-Keilclaimed, was enthuse the Merck team. Theyhad worked on the programme out-of-work hours,and brought back the energy and insightsgathered to their daytime jobs and were pro-ducing very good results.We100 aims to help people live 100 healthy years


BUSINESS STRATEGY OTC

It was this positive side effect of Merck’sWe100 mission that had Kemmerich-Keil con-vinced that putting a purpose at the heart ofMerck Consumer Health’s business would en-able the company to succeed in the long term.

The approach seems to be paying off. Inthe opening six months of 2017, Merck Con-sumer Health reported organic sales 4.6% higherat C450 million, with growth reported acrossall regions – Americas and Southern Europe,Asia, Central and Eastern Europe, Middle Eastand Africa (CEEMEA) – and the firm’s painfranchise, along with Neurobion and Nasivin,the standout performers.

Over the six months, the company continuedto expand its geographic reach, as the Nasivinbrand was launched in Greece and Femibionentered the Iranian market. In the company’shome market, the Femibion Phase 0 line ex-tension was launched, along with the KyttaWärmes Balsam variation.

While the company had an established pres-ence in key Western markets, Kemmerich-Keilpointed out that around 60% of Merck’s salesnow came from emerging markets.

This expansion in rapidly-developing mar-kets has been driven primarily by Kemmerich-Keil’s decision to trawl Merck’s prescriptionmedicines business and find products that havea reached a point in their lifecycles where theywould benefit from the Consumer Health busi-ness’ consumerisation skills.

Following the successful moves of the Dolo-Neurobion and Neurobion brands in Latin Amer-ica and Asia into the consumer unit in 2014(OTC bulletin, 17 March 2014, page 1), MerckConsumer Health has been fleshing out its port-folio – primarily in emerging markets – withsimilar brands.

In 2016 alone, the firm expanded its LatinAmerican portfolio by transferring across fromMerck’s Biopharma business the Anemidox/Confer and Hepabionta brands (OTC bulletin,5 February 2016, page 15). Meanwhile, in Asia,the company took a big step forward in Indiaby taking the Evion vitamin E product, Livogeniron and folic-acid supplement and Polybion

vitamin D brand into its consumer basket (OTCbulletin, 27 May 2016, page 11).

The transfer of the three brands in India hadadded over C40 million in annual sales to Con-sumer Health in the country, Kemmerich-Keilnoted, and had sparked a restructuring of howthe Merck group operated there.

“India is an interesting and difficult mar-ket,” Kemmerich-Keil admitted. “It is huge geo-graphically and population-wise and you arecompeting in a low-priced market against biglocal players with large sales forces.”

“However, I really believe it is one of themarkets of the future,” she stated, “with the OTCsector growing by 9% last year.”

“Indian society is becoming more self-aware.Consumerisation is a concept to which they areopen and with that comes the confidence to taketheir health into their own hands,” Kemmerich-Keil said. “We are already seeing that with thecountry’s evolving middle class, who now see tak-ing care of their health as something importantand they are willing to spend money to do so.”

“These market dynamics give us an envi-ronment ripe with opportunities for growth,”she added.

Consumer Health already had a strong pres-ence in the Indian supplements market, Kem-merich-Keil explained, with brands such asNeurobion and Seven Seas, but the firm neededto build on these foundations truly to make animpact on the market.

“We found in the Biopharma business a port-folio of supplements – Evion, Livogen and

Polybion – that had only ever been marketedto healthcare professionals. We felt, however,they would benefit from our ability to marketthem to consumers,” she continued.

This triggered a reshaping of Merck’s entireIndian business, Kemmerich-Keil pointed out,noting that the brands generated C45 million insales and came with established salesforces andmarketing teams.

Consumer Health was now the largest partof Merck’s Indian Healthcare business, Kem-merich-Keil revealed, and the business had takenover the running of the company’s productionfacilities in the country, along with the associ-ated supply-chain activities.

While simplifying the operational structurein India would bring synergies, Kemmerich-Keil insisted that it was also Consumer Health’sability to take the three brands directly to con-sumers where the true value lay.

“Consumer Health now represents 70% – C80million – of Merck’s Healthcare sales in India,”she pointed out, “and we are planning howbest to exploit the growing consumer culturein the country.”

While Indian consumers shared many traitswith consumers around the world, it was stillimportant for Merck to understand the localdifferences, Kemmerich-Keil insisted.

“Take Nasivin for example. We had an in-sight generated in South Africa that men suffer-ed more than women when they had a cold,”she explained. “We built a massively successfulcampaign around that in South Africa and thentook that campaign to Germany and Poland,where it tested incredibly well.”

“Then we took it to India,” she laughed, “andit did not test well at all.”

Aspirations around health might be the sameglobally, but the message and even the portfoliomight have to be different to succeed, Kem-merich-Keil pointed out. “Anaemia is an issue inIndia, so iron products are much more impor-tant; vitamin B is also more important because ofmalnutrition issues, so we have to be consciousof addressing emerging market concerns.”

Yet, there was still a demand for Westernbrands, she insisted, noting that the company

Adding Evion, Livogen and Polybion in India increased Consumer Health’s sales by e45 million

In the first half of 2017,Merck added the KyttaWärme Balsam and Femibion Phase 0 products in Germany


OTC BUSINESS STRATEGY

was planning to launch its Seven Seas Perfect7 brand in India to address the demand fromolder middle-class Indian women who want totake better care of themselves “inside and out”.

“The middle classes of India and other em-erging markets like the caché of establishedWestern brands” Kemmerich-Keil noted. “Brandssuch as Seven Seas are seen as being of betterquality and as having the latest innovations.”

There were still hurdles to overcome whenit came to truly cracking the Indian market,Kemmerich-Keil said, citing the unpredicta-bility of the country’s regulatory environment.

“The regulatory system is not incrediblystable,” she pointed out, “but I think it is gettingbetter and they are moving towards a morepredictable environment.”

Layers of bureaucracy were slowly beingremoved, she explained, which was simplifyingprocesses, but there was still work to be donebefore the regulatory systems reached the levelsof Europe or the US.

“However, we are used this type of environ-ment as 60% of our portfolio is in emergingmarkets,” she insisted. “We engage with regu-lators in these markets as sometimes they do

not understand the impact hasty regulatorychanges can have on consumers, which is some-thing we can show them.”

While transferring products over from Merck’sBiopharma business had given Consumer Healtha bigger footprint globally, Kemmerich-Keilsaid that currently she was not seeing any moreopportunities within the firm’s sister businessthat would benefit from a consumer approach.

However, there were still opportunities withthe brands that had been transferred, she re-vealed. Taking Neurobion as an example, Kem-merich-Keil said that in some markets the prod-uct was still prescription-only or had productsin the range that still required a prescription.

What Consumer Health was starting to donow was explore whether switching these prod-ucts to OTC status would be worthwhile.

Commenting on external switch opportuni-ties, Kemmerich-Keil said the company wasalways looking “into the market to see if any-thing makes sense”.

“A switch is a major undertaking though,so you need to be sure,” she pointed out, “but wewould of course look to take on something.”

“A key aspect of any potential external

switch is whether it supports active ageing,”Kemmerich-Keil explained. “I would not lookinto opportunities that might make economicsense but would not meet our purpose.”

This same philosophy was applied to acqui-sition opportunities, she noted. “I look intoacquisitions that are in adjacent areas. What isimportant to me at the moment is other tech-nologies that can help us to help consumersin the future.”

“I want start-ups and entrepreneurial com-panies that can work with our portfolio to re-ally offer consumers something extra,” Kemmer-ich-Keil insisted.

“It can be, for example, diagnostics to mon-itor vitamin levels or technical solutions forbetter absorption.”

“We have fixed the base business, we arestable and growing nicely,” she stated, “let’splant the seeds for moonshots of tomorrow.”

One technological advancement Merck wasalready working on was big data, Kemmerich-Keil pointed out. “We are working as a companywith software and services firm Palantir on anumber of defined ‘lighthouse projects’ to seehow powerful this combination of our dataand their analytical tools could be.”

These projects reached across the business,she explained, taking in supply chain activityand forecasting, among other things.

“Consumers now collect lots of data,” shecontinued, “but the question is are they willing toshare data in return for good advice that willhelp to improve and maintain health”.

“It is an area we are exploring,” Kemmerich-Keil said, “and it will take a multi-partnershipeffort to answer this question.”

Technology was also impacting how Merck’sbrands were being bought, Kemmerich-Keiladmitted, pointing out that the classic pharmacydistribution model was already changing witha “section of the population seeing e-commerceas the most attractive way of shopping”.

“That is a fact and e-commerce alreadyexists. Brands that we have with a privacy as-pect see more online sales then offline now,”she revealed.

“However, I don’t think that the pharmacymodel is a dying model,” Kemmerich-Keil in-sisted. “While there are those that go online andknow exactly what they want, there is still a bigproportion of people that want advice and Ibelieve that this will grow.”

When asked why she believed this, Kem-merich-Keil said it was likely that general prac-titioner coverage in Europe would decreasemassively over the coming years.

“If pharmacy understands that, they can pickup the slack. They have a massive opportunityto play a major role in the future of healthcare,”she insisted. OTC

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Boutelle appointedas Pharmavite CEO

Manufacturers

PEOPLE OTC

Continued from front page

GSK said it had gained a “strong presence inthe fast-developing protein-based sports-nutri-tion market” with a company that generated salesof approximately £36 million in the year endedApril 2010.

In 2016, combined UK sales of Horlicks andMaxiNutrition were around £30 million.

Plans to divest Horlicks and MaxiNutrition arepart of a wider review of GSK’s UK manufac-turing operations, which will see the companyundertake a “strategic review” of its cephalo-sporins antibiotics business and invest to ex-pand respiratory and HIV medicines manufac-turing sites.

The UK manufacturing review is the first ma-jor strategic move by GSK’s recently-appoint-ed chief executive officer Emma Walmsley.

Walmsley – formerly head of GSK Consum-er Healthcare – took over the reins of the UK-based pharmaceuticals giant from Andrew Wittyon 1 April this year (OTC bulletin, 23 Sep-tember 2016, page 23). OTC

Business Strategy

GSK to offloadits UK brands

US vitamins, minerals and supplements(VMS) manufacturer Pharmavite has ap-

pointed Jeff Boutelle as chief executive officer.Boutelle – who was previously chief execu-

tive officer of Beech-Nut Nutrition – has tak-en over from Noriko Tojo, who will remainchair of Pharmavite’s board and chief execu-tive officer of Otsuka Medical Devices, a sub-sidiary of Pharmavite’s parent company Ot-suka Pharmaceutical.

Commenting on his new role, Boutelle – whohad previously worked for Abbott, Nestlé andProcter & Gamble (P&G) – said that Pharmavitehad the “rare combination of leading products,talented people and momentum in the market”.

Industry evolving rapidly“Now more than ever the dietary supple-

ment industry is evolving at a rapid pace,” heclaimed, “and I look forward to the many op-portunities ahead to continue to expand andlead this category as Pharmavite’s chief execu-tive officer.”

Noting that Boutelle had worked on a num-ber of leading consumer healthcare brands,including Pediasure, Pedialyte and Similac, Phar-

mavite said that Boutelle’s business experienceand leadership were “fully aligned with the com-pany’s mission, vision and culture”.

“Equally important to his business back-ground,” Pharmavite said, “is that Boutelle is aprogressive, people-focused leader who caresdeeply about employees and their ongoinggrowth and development, and he has success-fully led organisations through periods of changeand transformation.”

Pharmavite produces a range of VMS prod-ucts primarily under its Nature Made name. OTC

Weleda makes leadership changesManufacturers

Weleda is to shake up its management struc-ture after chief executive officer Ralph

Heinisch announced that he would be leavingthe German natural products firm on 31 August.

In doing away with the “classic” chief ex-ecutive officer role, the company would be betterpositioned for its next phase of growth, Weledaclaimed, pointing out that it would move to a

more collaborative leadership structure onceHeinisch had left.

Explaining the new structure, Weleda saidthat as of 1 September the company’s manage-ment team would consist of a yet to be appointedinterim chief operating officer and chief re-search and development officer, along with AldoAmmendola as head of manufacturing researchand development.

They will be joined by Michael Brenneras chief financial officer and Andreas Sommeras chief commercial officer.

Commenting on Heinisch’s departure, PaulMackay, chairman of Weleda’s board, said thatover a seven-year tenure, Heinisch had turnedthe company around and put it on a stable finan-cial footing.

Heinisch had also repaired the company’srelationships with healthcare professionals andpolitical bodies, Mackay added, while also re-positioning the Weleda brand to make it morevisible to consumers. OTC

Purdue namesLandau in US

Manufacturers

Purdue Pharma has named Dr Craig Lan-dau – head of the firm’s Canadian busi-

ness – as president and chief executive officerof the company’s US operations.

Landau – who will retain responsibility forCanada – has replaced Mark Timney, who hasleft the firm “to pursue other opportunities”.

Commenting on Landau’s appointment, Pur-due said that since joining the company in1999 he had held a number of senior positionsat the US business before he was appointedpresident and chief executive officer of PurduePharma Canada in 2013.

Over the past three years, Landau had turnedthe Canadian organisation into a more diver-sified and stable business, Purdue said, and hadcompleted a number of strategic transactions to re-shape operations.

Earlier this year, Purdue appointed CarrieChomiak as head of the firm’s US OTC prod-uct franchise, which includes the Betadine anti-septics, Colace stool softener, Slow-Mag mag-nesium chloride supplements and Senokot lax-ative product lines (OTC bulletin, 28 April2017, page 23). OTC

Jeff Boutelle

Ralph Heinisch

Bulletin Publishing Group, OTC Publications Ltd, 4 Poplar Road, Dorridge, Solihull B93 8DB, UK. (Tel: +44 (0)1564 777550; Fax: +44 (0)1564 777524). Registered in England No. 2765878. VAT GB 608 0432 69

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Contents Italy opens door to pharmacyc hains...In 2016 there were about 17,500 pharma-cies in...

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Transcript of Contents Italy opens door to pharmacyc hains...In 2016 there were about 17,500 pharma-cies in...