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

Global and Asia-Pacific Trends in OTC

IMS Health Asia Pacific

AGENDA

• IMS Experience in Consumer Health

• Global – Asia Pacific Market Update

• Bringing OTC closer to the consumer

• Highlights and conclusions

2

Client acknowledges and agrees that information provided in this document are confidential to IMS. Client shall not disclose or provide to any third party the whole or any part of the information contained in this document.

Global and Asia Pacific Trends in OTC

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


Consumer

Health

OTC Over the Counter

PAC

Patient Care

PEC

Personal Care

NUT Nutritionals

The Consumer Health Space


• Licensed/Unlicensed products • Pure OTC/Pharmacy only

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

• Beauty and hygiene products i.e. Emollients

• Specialized Nutrition formulas for infants and adults

http://ims-possibilities.com/?utm_source=slideshare&utm_medium=slides&utm_content=global+apac+otc&utm_campaign=smpassive


AGENDA


• Global - Asia Paci�c OTC Market Update



Client acknowledges and agrees that information provided in this document are con�dential to IMS. Client shall not disclose or provide to any third party the whole or any part of the information contained in this document.



DEFINITIONS Rx - bound / Semi - ethical OTC / Self - Medication

Non Rx - Bound (“total OTC”) Rx - Bound *

Self - Medication includes registered

and unregistered products

Bought with

Prescription

Bought without

Prescription

Self -Medication

* Prescription (Rx) necessary by law to receive product

Semi -ethical



THE BASIS for �gures in this presentation

� Annual sales to end Q3 2012

� Sales calculated at manufacturer prices

� Growths based on previous years to Q3

� Growths use latest exchange rate across all time periods � Local currency growth aggregated into Dollars

� Some qualifications � UK data does not include mass market � China data is China hospital, does not include retail � Companies include all OTCs from the corporation

� i.e. “Novartis” includes Hexal, Sandoz, LEK, etc



Region De�nitions

• EMEA • Western Europe • Central & Eastern Europe (CEE)

• North America (US, Canada and Puerto Rico) • Latin America • AsiaPac

• China • SE/N Asia • South Asia • Australasia • Japan



OTC continues the recent trend of outgrowing Pharma.

11.1

8.2

9.4

7.3

6.46.8

5.25.5

6.2

4.6

3.3

2.2

3.3

4.2

6.0

4.6

5.4

6.37.0 7.0 6.9

4.6

12.2%11.6%

11.1% 10.9% 10.7% 10.6% 10.7% 10.9% 10.9% 11.2% 11.3%

0%

2%

4%

6%

8%

10%

12%

14%

0

2

4

6

8

10

12

14

16

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Valu

e G

row

th (%

)

Year on Year Value Growth & OTC Share of Total PharmaMAT Q3 2012

Total Pharma Total OTC OTC Share of Total Pharma

Total Pharma = $949Total OTC = $107

Source: IMS OTC Global Analysis+ Estimates

*

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



Top Corps contribution to growth falling rapidly

Low number and quality output from R&D

Generics dominating large therapy areas

Demand constrained by payers

Key players building strong brand identities

Payers keen to promote self medication

Emerging markets have the critical mass to influence growth

Companies seek to exploit switch opportunities

Increasing access through new channels

PHARMA

OTC

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



Growth variances within the different sub-regions

Source: IMS OTC Global Analysis

GLOBAL W EUROPE

N AMERICA

JAPAN

CEE

LATIN AMERICA

CHINA

SE/N ASIA

SOUTH ASIA AUSTRALASIA

- 10

- 5

0

5

10

15

20

25

30

35

40

- 10 - 5 0 5 10 15 20 25 30 35

Late

st Y

ear G

row

th (%

)

3 Years Average Growth (%)

OTC Growth by Region: Long vs Short term

Global Latest Year Growth 5.6%

Global 3 Year Average Growth 5.4%



Source: IMS OTC Global Analysis + Estimates

Japan

APAC Exc Japan

Latin America

CEEMEA

W Europe

N America

Total OTC Total OTC

18%

-13%

21%

10%

15%

29%

11%

30%

23%45%

12%

-1%

Share of Sales Share of Growth

Emerging Markets

Total OTC

Share of Sales 49%

Share of Growth 100%

Emerging markets continue to drive global growth



USA

JAPAN

CHINA

RUSSIA

BRAZIL

GERMANY

FRANCE

ITALY

AUSTRALIA

POLAND

- 10

- 5

0

5

10

15

20

25

30

35

40

- 10 - 5 0 5 10 15 20 25 30 35

Late

st Y

ear G

row

th (%

)


OTC Growth by Market: Long vs Short term



Top 10 Markets

represent 72.2% of

Global OTC sales

At country level, key developing markets lead the pack




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


CCR

VMS & TONICS

PAIN RELIEF

DIGESTIVESKIN

ALL OTHERS

0

2

4

6

8

10

12

14

0 1 2 3 4 5 6 7 8 9 10

Late

st Y

ear G

row

th (%

)


OTC Growth by Category: Long vs Short term





CHINA

AUSTRALIA

INDIA

INDONESIA

SOUTH KOREA

PHILIPPINES

PAKISTAN

TAIWAN

MALAYSIA

NEW ZEALAND

HONG KONG

SINGAPORE

-20

-10

0

10

20

30

40

-20 -15 -10 -5 0 5 10 15 20 25 30 35

Late

st Y

ear G

row

th (%

)


OTC Growth by Market: Long vs Short term

APAC Latest Year Growth 18.1%

APAC 3 Year Average Growth 15.6%

China aside, the region is characterised by a wide range of OTC sales performances.




Of the key categories Pain Relief post the strongest growth.


ALL OTHERS

VMS & TONICS

CCR

DIGESTIVE

PAIN RELIEF

SKIN

0

5

10

15

20

25

30

35

0 5 10 15 20 25 30

Late

st Y

ear G

row

th (%

)


OTC Growth by Category: Long vs Short term

APAC Latest Year Growth 18.1%

APAC 3 Year Average Growth 15.6%



To grow, mature markets must innovate while emerging countries enjoy increase in base sales

Base Value Change

Price Change

New Products

Line Extensions

Total Change

Base Value Change

Price Change

New Products

Line Extensions

Total Change

Source: IMS OTC Global Analysis + Estimates

Elements of Growth by Region – 5 Year Cumulative Growth %

Global

38

7

19

12

-1

W Europe

5

6

12

4

-18

N America

10

-7

15

11

-10

CEE

80

15

27

36

2

L America

91

16

22

38

15

APAC excl Japan

119

18

41

5

54



AGENDA








Many of the key OTC growth drivers influence the trend towards a stronger focus on the consumer

Top Corps contribution to growth falling rapidly

Low number and quality output from R&D

Generics dominating large therapy areas

Demand constrained by payers

Key players building strong brand identities

Payers keen to promote self medication

Emerging markets have the critical mass to influence growth

Companies seek to exploit switch opportunities

Increasing access through new channels

PHARMA

OTC



In Europe consumers continue to enjoy easier access to OTC medicines ...small steps but in the same direction

1900s 1990s 2000 2001 2003 2005 2006 2007 2009 2011

NL: 1921 OTC products in drugstores

(supervised by a druggist)

UK: 1991 First pharmacy

opens in a supermarket

Germany: From 1999

Some Herbals /Supplements can be sold in drugstores,

supermarkets /discounters

Poland: From 2000 limited OTC products can

be sold in non-

pharmacy outlets

Portugal: August 2005

All OTC products can be

sold in non -pharmacy

outlets

Italy: September

2006 All OTC

Products can be sold in

Supermarket Corners

supervised by a pharmacist

Hungary: February 2007

Many OTC products can be

sold in non -pharmacy

outlets

Sweden: 2009

Selected OTC products can

be sold outside

pharmacy channel

July 2009

Norway: From 2003 33 actives

GSL including some NRT,

Pain and CCR. GSL

expanded in 2009.

Denmark: 2001

NRT, Pain, CCR & GI

included in GSL non -

pharmacy outlets

France: Self selection

2010 Selected OTC

products available for

self - selection in pharmacies

Denmark: 2011

2 year default GSL status for

Rx/OTC switches



Pharmacy

Mass Market

Mail Order

Mass Market

Pharmacy

Drugstore

Pharmacy

Supermarket

Mass Market

Pharmacy

Pharmacy

Mass Market

Mass Market - New

Pharmacy

- 20

- 15

- 10

- 5

0

5

10

15

20

25

0 1 2 3 4 5 6

Late

st Y

ear G

row

th (%

)

Channel Contribution to OTC & Growth

Germany Italy NL Portugal UK Sweden

Size of Bubble represents

channel share of country sales

And consumer appreciation of convenience is shown by relative growth of non-pharmacy channels

Pharmacy

Mass Market



The more developed markets in the region tend to see higher per capita spend.


127

4036

23 22

13 10 10 9 82 2

8

8%

-12%

-2% -4% -4%-1%

32%

11% 11%

3%

11%14%

19%

-80%

-60%

-40%

-20%

0%

20%

40%

0

20

40

60

80

100

120

140

Year

on

Year

Cha

nge

(%)

DO

LLA

RS

OTC Expenditure per Capita ($) - APAC exc Japan Countries

Source: OTC Global Analysis at public prices



The consumers in AsiaPac are already moving in the same direction in varying degrees of access

Retail channels drive growth even in hospital dominated markets

Highly commoditized OTC markets continue to growth

Entry into new channels/categories are seen to rejuvenate pharmacy driven markets



The advisory role of the pharmacist is key to influencing brand choice

•Doctor/Staff recommendation and Word of Mouth are key •>60% shoppers are willing to ask a pharmacist for advice

•Higher Income & well educated more likely to visit Drugstores •50% visit in evening. Elderly tend to visit in morning

•70% don’t have specific brand plan •Young male, low income less likely to have plan •Pain Relief shoppers less likely to have brand plan

•Top 3 ailments suffered •Cold/Flu •Headache •Tiredness

Shopper Profile

Shopping Plan

Purchase Triggers

Drug store Visits

Source: Shopper Insights Study, IMS China



AGENDA








Future OTC growth will continue to come from the emerging markets

Forecasted OTC Growth rate 5 yr CAGR 2011 - 2016

8.3

0.4

4.2

2.1

17.1

15.4

8.0

0

2

4

6

8

10

12

14

16

18

20

Global Japan Europe N America Latin Am SE Asia Others

Fore

cast

An

nu

al G

row

th R

ate

(%

)


� Global OTC will continue to post healthy growth, driven largely by emerging markets.

� CEE markets will still drive European growth … although at a slower pace � West Europe +1.6% � CEE +8.8%

� In the Americas, North America is likely to remain stable over the next five years while Latam fuels future growth.

� APAC, dominated by China, will also continue to return strong growth over the medium term.



As a result of the evolving channel environment, Excellence in Execution is key.

Pharmacist

HCPs

Mass Market

Wholesalers

Consumers

Key Account Management:

Clear role for each brand within each

category.

Di erentiated Customer calls:

Individual message for each store with suitable

frequency

Consistent Message: Building a strong brand identity in

a multi-media environment

Recommendation: How important is the HCP role and how to optimise within the

marketing mix



OTC remains attractive as it continues to outpace Pharma

•And as a result the market becomes more competitive

Within Europe the picture is less promising, but the main long-term geographic growth opportunities remain in CEE

The Americas remains a contrast between the developed Northern markets and the emerging Southern markets, dominated by US and Brazil respectively

APAC markets will be crucial battlegrounds of the future.

•MNC’s must find a way to successfully unlock the potential. •Local manufacturers will need to defend their position

Highlights & Conclusions



For more information on the content of this presentation please contact:

Katherine Te Sr. Manager – O�ering Management

Consumer Health – Asia Pacific

Email : [email protected]

Phone Number: + 63 (2) 588-5408

Thank You!



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

Health & Medicine

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