Euro Monitor Consumer Health Forecast Revisit For 2010-2011

Consumer Health: Revisited © Euromonitor International
Forecast Revisit 2010-2011

Consumer Health
December 2010
1
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2
Introduction
2010 Global Trends Influencing Consumer Health
Global Update
Regional Update
Category Update
Retailing Trends
Consumers of the Future
Beyond 2010 Expectations
3
Introduction Consumer Health: Revisited © Euromonitor International
Scope
• This global brief provides an update on trends and forecast assumptions based on trends and events observed in
2010.
•
2009
Consumer Health
US$169 billion
Vitamins
Slimming
OTC Healthcare and Dietary Sports Nutrition
Products
US$86 billion Supplements US$5 billion
US$9 billion
US$68 billion
Disclaimer Learn More

Much of the information in this briefing is of a statistical To find out more about Euromonitor International's complete
nature and, while every attempt has been made to ensure range of business intelligence on industries, countries and
accuracy and reliability, Euromonitor International cannot be consumers please visit www.euromonitor.com or contact your
held responsible for omissions or errors local Euromonitor International office:
Figures in tables and analyses are calculated from London +44 (0)20 7251 8024
unrounded data and may not sum. Analyses found in the Chicago +1 312 922 1115
briefings may not totally reflect the companies’ opinions, Singapore +65 6429 0590
reader discretion is advised Shanghai +86 21 6372 6288
Vilnius +370 5 243 1577
4
Objectives and Parameters of Global Briefing

Objectives
• To provide an overview of the impact of 2010 events and trends over the forecast period.
• To offer an analysis on how these trends and events could potentially influence future global, regional and category
performance.
• To identify opportunities for growth and to find out about upcoming challenges.
• To outline preliminary 2011 expectations.
Parameters
• All values expressed in fixed exchange rates 2009 or 2010, except where y-o-y (year on year) are indicated.
• 2010 figures are based on part-year estimates.
• Historical data are expressed in current terms; otherwise constant where indicated.
• Inflationary effects are taken into account under current terms.
• Vitamins and Dietary Supplements is also referred as VDS
• Cough, Cold and Allergy (Hay Fever) Remedies are also referred as CCAs

5
Key Findings: Consumer Health Remains Resilient in 2010

Overall performance
 Emerging economies support growth for the industry, while North America, Western
shows disparities based Europe and Japan disappoint with relatively flat performance. Weak economic growth
on economic recovery in these regions continues to be reflected in lower expenditure in consumer health.
Regulation becomes
 Warnings, recalls and false health claims continue to dominate the regulatory

more active environment. Regulatory agencies emitted or revised new guidance, enforced good
manufacturing practices (GMPs) and increased their scrutiny on advertising.
OTC switches see more


OTC switches saw a handful of novel active ingredients introduced in the UK and

challenges than Japan. Some OTC drugs faced challenges with threats of behind-the-counter (BTC)
opportunities sales and reverse switches (OTC back to prescription).
Competitive expansion Instead of global mergers and acquisitions, companies followed a regional and local

focuses on regional and approach of expansion focused in emerging markets with large populations such as
local activity China, India and Indonesia.
Private label and generic

 Companies increased their investment in generic drugs manufacturing amid the
drugs gain strength increasing demand for such products. Private label sees improved packaging and
formulation, while generic drugs shift to the concept of branded generics.
Retailing expands to
 The deregulation of retailing channels allowing further sales of consumer health

more channels products was more evident in Asia Pacific and Europe. Internet retailing and direct
selling also gained notoriety as reliable sources of brand and product information.
Self-care and ageing

 Governments and health authorities crafted new public health policies aimed to

populations set public reduce the incidence and prevalence of chronic diseases, which place a high burden
health policies on healthcare costs. People are taking an active role in their health.
New technology in digital

 The internet reshapes the advertising world in surprising ways. It has become a
media captivates powerful tool for companies strapped for cash and wishing to reach a wide audience,
consumers not only in a local market, but also at a global level. More people do online searches
to find information on health, medicines and brands.
6
Introduction
Global Update
Regional Update
Category Update
Retailing Trends
7
2010 Global Trends Influencing Consumer Health Consumer Health: Revisited © Euromonitor International
Macroeconomic Factors Affecting Consumer Health in 2010

 
 Economy  Health Expenditure

 
• A flat economic performance persists in developed • Most governments slashed health expenditures given
countries, whereas emerging economies continue to the rising healthcare and medicine costs. Many OTC
grow and provide new sales opportunities deriving from drugs were de-listed from reimbursement and private
larger consumer bases. insurance plans, and their expense was transferred
• The post-recessionary environment pushes consumers directly to consumers.
to remain conscious of their purchases. They are • Public health policies are preparing to meet future
switching to low-priced options, private label and demands of ageing populations and chronic diseases
generic drugs in developed regions. expensive to treat, so they need to manage their
• finances and expenses more effectively.
•
8
Public Health and Regulation Initiatives

 Public Health Policies  Regulation
• Obesity rates continue to rise in many countries. Obesity • In 2010, regulatory activity became stricter when
is a major contributor to chronic diseases, including compared to 2009. The number of recalls and
diabetes. The International Federation of Diabetes warnings increased due to safety, efficacy and
estimates that 435 million people worldwide will have contamination issues. Products under stricter
diabetes in 2030, a 54% increase from 2010. The surveillance include analgesics, combination products,
search for a magic diet pill has stalled with very few dietary supplements (foodstuffs), slimming products,
prospects in the pipeline. OTC obesity drugs are only herbal/traditional products, and sports nutrition.
represented by one ingredient, orlistat (alli by • Several regulatory agencies are revising their guidance
GlaxoSmithKline). Many slimming products are sold as and good manufacturing practice (GMP) requirements
foodstuffs or dietary supplements, yet their efficacy is to improve products’ safety and people’s health.
unproven. • Cash-strapped healthcare systems promote a broader
• Ageing populations continue to place a high cost burden accessibility to non-prescription drugs through more
on healthcare. Public health education based on retailing channels, such as grocery and convenience
prevention became more evident in 2010. stores.
• •
9
The Influence of OTC Switches

• In terms of the most popular categories, analgesics, cough, cold and allergy remedies, and digestive remedies will
see growth thanks to ageing populations, and to more OTC switches in developing countries. However, most novel
OTC switches are anticipated to take place in allergy remedies since seasonal rhinitis and asthma have become
global chronic health problems that need to be addressed through accessible medicines. NRT smoking cessation
aids might continue to build higher sales due to the continued effort of many countries to curb tobacco smoking,
along with a recent finding that leading anti-smoking prescription (Rx) drug, Champix/Chantix (Pfizer Inc) has been
linked to serious neurological side effects.
• On the opposite side, concerns about the abuse of analgesics, and cough and cold remedies will push further
regulation, yet it can represent a competitive opportunity for herbal/traditional products to fill in the gap with “safer”
options. The safety of some topical analgesics, ie diclofenac, ibuprofen, and ketoprofen, is being questioned as the
skin absorbs active ingredients in a different manner, potentially causing side effects. Laxatives remain controversial
as they can cause chronic constipation or induce abuse in young bulimic people. Regulatory agencies are keeping
a closer eye on the proper use of laxatives.
•
 
Categories with good prospects

 Categories with potential troubles ahead

 
• Proton pump inhibitors: omeprazole, • Cough and cold remedies: pseudoephedrine,

pantoprazole, lansoprazole dextrometorphan and codeine
• Allergy remedies systemic (fexofenadine) • Analgesics: systemic and topical diclofenac,
• Allergy eye care (ketotifen) other topical analgesics (NSAIDs dosing
• Systemic analgesics: non-steroidal anti- issues), and acetaminophen (liver damage)
inflammatory drugs (NSAIDs) • Laxatives
• OTC triptans, although still limited to a few
countries
• Emergency contraception
• NRT smoking cessation aids
•
10
2010 Global Trends That Reshape Projections
11
Introduction
Global Update
Regional Update
Category Update
Retailing Trends
12
Global Update Consumer Health: Revisited © Euromonitor International
Consumer Health Performance 2009 vs 2010-2011

• Growth may become more
optimistic in the 2010-2011
projection in spite of consumer
expenditure remaining weak in the
US, Japan and Western Europe.
Retail value growth will come from
populous countries such as
China, India, Indonesia, Brazil and
Turkey.
• Self-care initiatives remain strong.
People are being encouraged to
prevent chronic diseases and to
treat their minor ailments in a
timely manner. Access to
consumer health products
expanded in 2010 through more
OTC switches, retailing
deregulation, and lower prices.
• Consumers are firm on their newly-
discovered shopping behaviour of
low-priced private label and
generics as a result of the
recession. This represents a
challenge to standard brands.
Similarly, consumers are adopting
alternative treatments based on
herbal/traditional products, dietary
supplements and holistic
practices.
13
Global Competition in 2010

• 2009 was notable for its large global mergers and acquisitions (namely Merck & Co/Schering-Plough and Pfizer
Inc/Wyeth), whereas 2010 followed a regional and local approach. The trend towards organic growth in 2010 is a
reflection of the difficult economic times felt in 2008/2009. Challenging times are ahead for pharmaceutical
companies, especially as drug discovery pipelines continue to dry up. Companies shifted their strategies by
investing in emerging markets in Asia and Latin America, securing future revenue. New investments were
particularly strong in biotech, generic drugs, and consumer health operations.
• Johnson & Johnson Inc’s recall of several consumer brands significantly affected the retail value sales of the
company in 2010. This event caused Johnson & Johnson to lose an estimated one percentage point in its global
retail value share. The recall affected several countries, mainly the US. Competitors and generic manufacturers
benefited from the recall by filling in the gap at retailers’ shelves.
• Sanofi-Aventis consolidated its global presence through the acquisition of Chattem Inc (US), and the joint venture
with Minsheng Pharmaceutical Group (China) to promote sales of vitamins and dietary supplements.
• Novartis AG finalised the acquisition of eye care company, Alcon, after a long struggle with Alcon’s investors. The
company also signed a marketing and distribution agreement with Nycomed for brand Pantoloc Control
(pantoprazole) in 14 European countries.
•
14
Mergers and Acquisitions Turn Regional and Local

  
Boosting global presence

 Building a strong position
 Gaining strength in the local

through regional expansion within one region market

 Boehringer Ingelheim GmbH  Sanofi-Aventis acquired Nepentes, a  Hypermarcas in Brazil continued its
acquired the remaining stock of Polish company with strong sales expansion in March 2010 through
Japan’s SPPs Co, a large producer of OTC drugs, in May 2010. The the acquisition of local competitor
of OTC drugs, for more than transaction was valued at €105 Luper Indústria Farmacêutica in a
US$900 million in February 2010. million and was completed in July deal worth US$27 million. Luper
The full acquisition will provide 2010. Nepentes holds a strong currently sells analgesics,
Boehringer Ingelheim with a good position in the sale of medicated medicated skin care, cough and
grasp of the Japanese OTC market skin care and herbal/traditional cold remedies, digestive remedies,
that will help build the global OTC products in Poland, extending to and vitamins and dietary
portfolio for the company, and Hungary and Romania. supplements.
make use of novel technologies  Aspen Pharmacare Holdings Ltd  In the US, Prestige Brands Holdings
developed in Japan. based in South Africa, negotiated Inc acquired Blacksmith Brands
 Teva Pharmaceutical Industries Ltd an acquisition agreement with Holdings Inc in September 2010.
announced the acquisition of financially embattled Sigma The transaction was valued at
Ratiopharm Gruppe (part of Pharmaceutical Ltd, an important US$190 million and included the
Merckle Group), a leading generic manufacturer of prescription (Rx), child-specific brand, PediaCare,
drug producer in Europe based in OTC and generic drugs in medicated confectionery, Luden’s,
Germany. The transaction was Australia. The exclusive and formal and allergy remedy, NasalCrom.
valued at €3.6 billion and was negotiations began in August 2010 
approved by the European with a value set at US$900 million,
Commission in August 2010. excluding the retailing and
 wholesaling operations.

15
Introduction
Global Update
Regional Update
Category Update
Retailing Trends
16
Regional Update Consumer Health: Revisited © Euromonitor International
Cross-Regional Comparison Analysis in Consumer Health

• Australasia is the only developed region growing at a
healthy pace due to the weaker impact of the
2008/2009 global recession. Australia and New
Zealand are working to harmonise their OTC drugs
standards for improved future regulation between
the two countries.
• Asia Pacific continues to provide new opportunities in
China, South Korea and Vietnam. Japan, in spite of
its leadership in OTC innovation, shows flat
performance based on a very mature marketplace.
Indonesia and China opened its borders to foreign
investment, while India is revising its regulatory
process to protect patents and standardise drugs
under clear legal frameworks.
• Eastern Europe works on resolving infrastructure
challenges due to its high dependence on imports • North America experiences a significant shift towards private
and significant inflationary pressures pushing retail label and low-priced brands as consumers apportion their
prices up. Consumers trimmed their spending in declining income. Vitamins, dietary supplements and
consumer health and looked for generics and herbal/traditional products rise in popularity as people want
inexpensive herbal/traditional products. to prevent illness and to avoid paying more money for
• Latin America, except for Mexico, which was affected health insurance and medicines.
by a deep recession, brings new opportunities for • Western Europe faces a significant increase in the regulation
growth via new product development and a growing of vitamins and dietary supplements driven by the revisions
base of branded generic drugs. of health claim dossiers by the European Food Safety
• The Middle East and Africa are important targets for Authority (EFSA). Regional OTC switches are not relevant
investment and growth in consumer health, in 2010 as this involves a well-coordinated effort to achieve
especially given the minor presence of such success. A weakened economy drives consumers to
products in that region. increase their purchases of low-priced brands, private
label, and herbal/traditional remedies.
•
17
Asia Pacific Update

• The Chinese government announced that it would allow more foreign pharmaceutical companies to expand
operations in China. Moreover, it amended a patent regulation that clearly defines “patented pharmaceuticals” that
are subject to compulsory licensing. The State Food and Drug Administration (SFDA) is currently working on the
implementation of good manufacturing practices (GMPs), which will be standardised with the rest of the world.
These measures are aimed at reducing contamination issues affecting products and improving the image of China
as a serious player in the pharmaceutical industry. In addition, revised health food directives are to be implemented
to regulate the production, distribution and sales of dietary supplements.
• Dietary supplements expanded in India, especially multivitamins and protein supplements. Piramal Healthcare Ltd
purchased all intellectual property rights related to OTC emergency contraception brand, i-pill, from Cipla Ltd. Abbott
Laboratories then announced the acquisition of Piramal Healthcare Ltd in May 2010, valued close to US$4 billion.
OTC emergency contraception is one of the fastest growing categories in retail value in India.
• The pharmaceutical landscape in Indonesia experienced a boost through the joint venture established between
Singapore-based Invida Group and Indonesian company MUGI. Other companies such as Bayer AG are interested
in expanding their presence in Indonesia. Alternatively, expensive imports resulted in high prices in Pakistan.
• German company Boehringer Ingelheim acquired the outstanding shares of SSP Co, a major player in consumer
health in Japan. Boehringer Ingelheim sees an opportunity to expand as more retail channels were deregulated in
2009. Similarly, foreign companies are investing in generic drug manufacturers which are experiencing an important
growth in that country.
•
18
Australasia Update
• The Third Intergenerational Report (IGR3) released in 2010 states that health expenditure will represent an estimated
7% of total GDP by year 2050 in Australia. The Australian government is moving to set up health initiatives that
support prevention of chronic diseases.
• US-based Perrigo Co acquired Orion Laboratories to strengthen its portfolio of non-prescription private label products
in Australia.
• The Australian Self Medication Industry (ASMI) promoted the use of non-steroidal anti-inflammatory drugs (NSAIDs)
as a good and safe alternative for the treatment of minor pain. Alternatively, the Therapeutic Goods Administration
(TGA) continued its revision of herbal products for safety and efficacy, along draft guidelines for “Levels and Kinds
of Evidence for Listed Medicines with Indications and Claims for Weight Loss” established in 2009.
• In terms of OTC switches, the National Drugs and Poisons Schedule Committee (NDPSC) meeting in June 2010
rejected once again the petition for switching asthma drug, Montelukast, to Schedule 3 status for the treatment of
allergic rhinitis citing that the risk versus health benefit ratio was not met.
19
Eastern Europe Update

• The Strategy of Pharmaceutical Industry Development 2020 (Pharma 2020) was established by the Ministry of
Industry and Trade of the Russian Federation in October 2009 to support public health policy through the
development of the local pharmaceutical industry during a 10-year period, and to ultimately improve the health of
Russians (Health 2020). The programme aims to substitute the country’s high dependence on imports by increasing
domestic pharmaceutical production by 50%. At least 25% of this production should be generated by Russian
companies by year 2020. The Law on the Circulation of Medicines, effective September 2010, mandates a more
transparent and obligatory registration of medicines sold in Russia. It also regulates the pricing of essential
medicines under a new structure based on proper guidelines, price registration and monitoring, determination of
mark-ups, and foreign currency issues.
• Pharmacies in Slovakia were allowed to sell non-prescription medicines via the internet from December 2009. This
regulatory change supports wider accessibility of products and brands to consumers, especially in non-urban areas.
• The Czech Republic increased the value-added tax (VAT) on medicines from 9% to 10% in 2010 to achieve
budgetary savings, while reimbursement levels dropped more than 6%. Alternatively, Romania faced high
inflationary pressures on the price of medicines due to delay of reimbursements and expensive imports.
• Retailer Tesco plans to open its first in-store pharmacies at Tesco Extra stores in Poland, which will expand the sale
of consumer health products. Sanofi-Aventis acquired local company Nepentes to increase its market share.
• China-based companies, such as Fenchem Biotek Ltd, are opening manufacturing and distribution facilities in
Eastern Europe as governments seek to promote local production.
20
Latin America Update

• In early 2010, Brazil established a new law that regulates the sale of OTC drugs only through chemists/pharmacies.
Self-serve options are no longer permitted. The government is reissuing new approval requirements and good
manufacturing practices (GMPs) guidance for drugs. Important corporate activity is also seen in Brazil through
mergers and acquisitions of local companies by large global (Pfizer Inc and Valeant Pharmaceuticals) and Brazilian
(Hypermarcas) players.
• The Mexican government signed a decree in August 2010 allowing fast-track approval for OTC drugs already
approved in the US and Canada. This action will make Mexico one of the top 10 countries with the largest number
of OTC ingredients approved in the world.
• Along with the National Accord for Nutritional Health Against Overweight and Obesity, the Mexican government
created the National Council for the Prevention and Control of Non-Transmissible Chronic Diseases, and instigated
the government agency of National Council of Sports to promote the programme “Activate yourself, live better” to
promote sports and physical education in the country.
• Argentina banned the sale of OTC drugs in grocery retailers and kiosks. Medicines can only be sold through
chemists/pharmacies. Yet, this event did not deter GlaxoSmithKline Plc from acquiring Laboratorios Phoenix SACyF
('Phoenix') in June 2010 to develop sales in the booming Argentinean market.
•
21
Middle East and Africa Update

• Some of the highest rates of obesity and diabetes are already present in the Middle East. Sedentary lifestyles caused
by the wealth deriving from the oil industry is being blamed as a major cause of obesity by nutritional experts. Adults
and children are indulging themselves with foods and becoming less physically active. This health crisis is pushing
governments to craft new public health policies based on prevention, treatment and self-care.
• Overall, there is a movement by certain African countries such as Uganda and Nigeria to attract investment for local
production of pharmaceuticals to stop their dependence on expensive imports. India- and China-based companies
are already seizing the opportunity via the establishment of manufacturing plants in the African continent. Moreover,
West African Health Ministers (WAHO) seeks to formalise the research studies of traditional medicine to be
incorporated into conventional medicine.
• Counterfeit products remain an important concern in this region. Popular non-prescription drugs by GlaxoSmithKline
were seized in African countries, while Sanofi-Aventis began working with the Egyptian government to stop the
problem through coordinated efforts.
Merck & Co and Adcock Ingram set up a new business alliance to mutually promote and distribute their brands in
South Africa. Merck & Co sees good opportunities for growth in South Africa and neighbouring countries. Teaming
up with an important local player, Adcock Ingram, will provide added presence and value sales in this region.
22
North America Update

• The weak performance and high unemployment rate in the US pushed more consumers to buy private label over
standard branded products, thus creating a higher competitive burden in the marketplace.
• In the US, consumer health product purchases will not be reimbursed from health savings accounts beginning
January 2011. Only “prescribed OTC drugs” will be an exception. The move has upset both consumers, who now
have to spend more money on their OTC drugs, and the retailing industry, which has to set up new systems to track
“prescribed OTC drugs”. In addition, new dietary guidelines published in 2010 state that most people can get
enough nutrients from foods and beverages rather than dietary supplements. This action could potentially cause a
diminished optimistic outlook for sales of vitamins and dietary supplements.
• The US Food and Drug Administration (FDA) did not impose limitations on OTC dextromethorphan sales due to an
apparent rise in abuse rates, yet the industry compromised to work on enhanced education campaigns to curb
abuse. OTC pseudoephedrine became even more regulated with stricter penalties if used for illegal drug purposes.
Alternatively, good manufacturing practices (GMPs) are now mandatory for all manufacturers.
• Johnson & Johnson Inc’s performance in child-specific products, analgesics, allergy remedies, decongestants, and
antacids was highly affected by the recall of many its OTC drugs in 2010. Competitors, private label and generic
drugs filled this lucrative gap with substitute options and gained important shares in some of these categories.
• Health Canada pushed for more adverse event reporting for OTC drugs. It also approved the monograph for
conjugated linoleic acid (CLA) and chromium picolinate in dietary supplements. Natural Health Products (NHPs),
waiting to receive a sales licence after submitting an application, can obtain an exemption if companies want to sell
their products before receiving the actual licence. Safety criteria must be met before the exemption is granted.
23
Western Europe Update

• The European Food Safety Authority’s (EFSA) opinions on the dossiers of vitamins and dietary supplements is
reshaping the competitive landscape. Companies cannot make specific health claims if those have not been
approved by EFSA. Positive opinions are only awarded to ingredients and products with proven scientific evidence.
• The EU is in discussions to possibly change the law on botanicals through improved guidance and standardisation.
Alternatively, the Traditional Herbal Medicinal Products Directive (THMPD) will take full effect in 2011. Herbal
medicines will require full licensing before selling them to consumers. The EU is also in talks with India about a
possible Free Trade Agreement that may greatly influence the dynamics of the pharmaceutical industry. India could
become an important supplier of generic drugs to Europe, while European firms could gain better access to the
Indian market.
• In April 2010, the European Medicines Agency recommended the withdrawal of medicated skin care products
containing bufexamac due to health risks. It also agreed to publicly release adverse event data for all drugs.
• A weak economic outlook in Western Europe made many companies reduce their sales forecasts. Consumers
continue to watch their expenses, especially since several non-prescription drugs have been delisted from
reimbursement schemes.
• Europe has become the leading region in Electronic Health Records (EHR) technology, anticipated to help provide
better healthcare and chronic disease intervention to the elderly.
24
Introduction
Global Update
Regional Update
Category Update
Retailing Trends
25
Category Update Consumer Health: Revisited © Euromonitor International
Vitamins and Dietary Supplements Update

• There was important global progress in good manufacturing practice (GMP) initiatives, yet problems of contamination
and toxic ingredients remained important issues to be addressed by regulatory agencies and the industry. China,
Russia and Brazil expect full enforcement within the next couple of years.
• The line distinguishing vitamins and dietary supplements from functional foods and beverages continued to blur. The
US Food and Drug Administration (FDA) published a draft guidance to help companies find the distinction to later
market their products appropriately. The European Food Safety Authority (EFSA) continued to publish favourable
and unfavourable opinions on health claims attributed to vitamins and dietary supplements.
• Thoughts of getting sick or preventing disease continue to convince a larger consumer base to take a more proactive
approach to their health. On the one hand, they do not want to pay more for medicines. On the other, recent
warnings, recalls and the influence of alternative medicine, through the internet and social media, have made people
more sceptical of standard OTC drugs. Consequently, they are embracing vitamins and dietary supplements as a
“safer” alternative. Dietary supplements are subject to less regulatory oversight resulting in a more profitable option
for many companies, which tend to charge high prices for such products.
•
26
Cough, Cold and Allergy (Hay Fever) Remedies Update

• The H1N1 flu outbreak did not materialise as a significant health threat. Surprisingly, the 2009/2010 influenza season
was milder than in previous years. As a result, retail value sales of cough and cold remedies were not as strong as
expected. A normal flu season is expected for the 2010/2011 season, with a close watch on a new possible
emerging strain of the dangerous H5N1 virus that affected Asia in 2006.
• Product contamination and increased doubts about the quality and safety of drugs caused more cough and cold
herbal/traditional and homeopathic products to increase their presence on pharmacy shelves. Many of these
products are now targeted at children, especially under six years old, amid regulatory restrictions imposed on
standard OTC drugs in many countries during the 2007-2009 period.
• Antihistamines/allergy remedies remained an important generator of retail sales due to wider availability of OTC
options, and changing weather patterns contributing to extended allergy seasons.
• Stricter regulation of pseudoephedrine took place through reverse switches and bans across the world.
• Combination products underwent more scrutiny, especially when combined with analgesics they can lead to
unintentional overdose.
• Retail value sales are growing fast in the Middle East and Africa, represented by strong brands of combination
products and antihistamines/allergy remedies.
•
27
Herbal/Traditional Products Update

• A natural approach to healing induces companies to introduce herbal/traditional products that complement their
standard lines. Moreover, old traditional brands have been revived as “safer” alternatives to newer products.
• Potential adverse events are an important concern for regulatory authorities. Health Canada supports a report on the
monitoring of adverse events related to herbal medicinal products (HMP). The Therapeutic Goods Administration
(TGA) in Australia implemented a Herbal Safety Review, while the Medicines and Healthcare Products Regulatory
Agency (MHRA) in the UK published new guidelines for the advertising of herbal medicines in late 2009.
• Retailers created more shelf space for herbal/traditional products. Their image and packaging have improved to
match those of branded options. Several major players, Johnson & Johnson Inc, The Procter & Gamble Co, and
Boehringer Ingelheim, among others, are introducing more herbal products to their portfolios.
• Expensive or limited access to standard OTC drugs in some countries of Latin America and the Middle East
increased the demand for herbal/traditional products.
• Traditional Chinese Medicine (TCM) and Ayurveda gained popularity in Western Europe, North America and Africa.
Governments are issuing and protecting patents for local traditional remedies amid trade issues related to
globalisation.
•
28
Analgesics Update
• Recalls of Tylenol (Johnson & Johnson Inc) in several markets affected global retail value sales, with the largest
impact in the US.
• Acetaminophen saw more warnings about potential liver damage due to overdose or abuse, while aspirin remained
an aid in preventing heart attacks. Novel developments include the launch of an on-the-go “emergency aspirin” pack
containing a dose of aspirin for people who are at risk of a heart attack.
• Diclofenac’s safety was questioned due to cardiovascular risks, while the European Medicines Agency (EMA) reverse
switched topical ketoprofen due to risks of serious photo-allergic reactions.
• The demand for topical analgesic patches increased as they are perceived as a “safer” alternative to systemic
options. GlaxoSmithKline partnered with Futura Medical to exclusively market TPR100, an OTC topical analgesic
using transdermal gel delivery technology (DermaSys). Recalls of Tylenol prompted Johnson & Johnson Inc to
launch Precise, a new topical analgesic.
• Innovation brought new delivery mechanisms such as quick-dissolve, fast-acting and single-dosing formulations.
Combining analgesics with a sleeping aid became a trend, but only a handful of products have been approved.
• Complementary Alternative Medicine (CAM) to treat chronic pain took sales away from standard analgesics.
•
29
Digestive Remedies Update

• Strong weather events (hurricanes, floods, earthquakes) experienced in 2010 caused an increase in sales of basic
digestive remedies such as diarrhoeal remedies.
• Competition became stronger in indigestion and heartburn remedies as proton pump inhibitors became a longer-term
alternative to antacids for many consumers. However, private label and generics are taking sales away from brands,
while other companies are using novel promotional strategies to fend off competition.
• New warnings on the long-term use of proton pump inhibitors and the risk of some bone fractures became public in
2010 through a statement by the US Food and Drug Administration (FDA) in May 2010. Merck & Co invested in the
ambitious launch of novel Zegerid OTC (omeprazole/sodium bicarbonate), yet its formulation could not be protected
by a valid patent, and generic variants are expected to enter the market soon.
• The post-recession period in developed countries and the expansion of consumer foodservice in Asia and Latin
America favour sales of fast food high in fat and salt. As consumers increase their consumption of unhealthy fast
food, the use of indigestion and heartburn remedies is anticipated to rise.
• Ageing populations will continue to help sales of indigestion and heartburn remedies. More OTC options are being
made available in the Middle East, Africa and Latin America.
•
30
Weight Management Update

• The high expectations for alli (GlaxoSmithKline) did not materialise in 2010. A high price and inconvenient side effects
contributed to its disappointing performance in Europe. Herbalife, in contrast, expanded its Nutrition Clubs concept,
mainly in Asia, which boosted sales of slimming meal plans.
• Thousands of brands are marketed under the slimming products of weight loss supplements, meal replacement
slimming, slimming teas, and other similar products.
• Health authorities and law enforcement organisations became more active in stopping illegal sales by recalling or
seizing misleading products. Many products have also been found to be tainted with prescription drug sibutramine
or contaminated with toxic ingredients.
• People want to lose weight quickly and effectively. They are willing to explore new diets and products promising
ultimately misleading results. In the search for the magic pill, people fall prey to the advertising and promotion of
questionable slimming products.
• Most innovation is seen in supplements promoting satiety. Other emerging technologies include cellulose-based
hydro gels that expand in the stomach and promote satiety.
• Eastern Europe is the region with the fastest growth in retail value sales as more products became available and the
local industry developed, reducing expensive imports.
•
31
Sports Nutrition Update

• The shortage of whey protein has resulted in increased prices of sports nutrition around the world. The larger demand
for whey protein used in packaged foods and slimming products affected the supply dedicated to sports nutrition.
• In a strategic shift, the largest companies are moving toward “gentler” and “nutritional” products (EAS and GNC
brands) targeted at women and the elderly. Yet, most growth is seen through the purchases of teenagers and young
adults, who seek to excel in sports or develop impressive muscular bodies.
• New public health policies created awareness about the benefits of becoming physically active. As a result, some
sports nutrition products may see a boost in sales, especially if they are positioned for fitness enthusiasts who are
not serious athletes.
• Contamination of sports nutrition with toxic metals, anabolic steroids and pharmaceuticals is a major concern for the
industry. There are hundreds of questionable sellers of sports nutrition found on the internet, direct selling and the
black market. Consequently, respected companies are working with top sports organisations, sports teams, anti-
doping agencies, and research centres to guarantee the safety and efficacy of their products sold to serious
athletes.
• Ready-to-drink (RTD) variants are becoming popular, yet shakes and protein bars account for the largest portion of
retail sales mainly due to their lower price.
•
32
Introduction
Global Update
Regional Update
Category Update
Retailing Trends
33
Retailing Trends Consumer Health: Revisited © Euromonitor International
Retail Sales Via the Internet Gain Strength

• Internet retailing continues to grow at the fastest rates as more people around the world have access to computers
and mobile devices, yet this channel only represented 5% of retail value sales in 2010. The US is the most
innovative country in terms of internet retailing. Several web-based companies such as drugstore.com,
amazon.com, soap.com and others lure consumers with free shipping and special discounts. Furthermore,
companies are setting up internet stores for their products, independent from retailers.
• Many drugstores and pharmacies are extending their reach by setting up internet sales capabilities. Indeed, many
have created loyalty programmes to retain consumers.
• Direct selling has benefited from expansion into Asia Pacific and Latin America, where personal contact and trust
building are important generators of sales.
• Healthcare specialist retailers selling vitamins and dietary supplements have posted important gains as they offer a
wider selection of brands and products to cater to different segments of consumers. Even non-conventional
channels, such as warehouse clubs and gyms, have increased their sales of vitamins, dietary supplements,
slimming products and sports nutrition.
34
Retailing Trends Consumer Health: Revisited © Euromonitor International
Private Label and Generics Remain a Strong Trend

• Private label is being transformed from a “commodity” to a complex brand. Formulation, packaging and image of
private label is now more sophisticated, especially in the vitamins and dietary supplements category.
• The low prices of private label are the main driver of sales. People are paying attention to the price and content of the
product.
• Brand perception affects the selection of a brand versus a private label/generic product. Some consumers still do not
trust private label/generic products, as they think their quality and efficacy are lower or questionable. In contrast,
savvy consumers find such products an astute purchase as they pay less for a product almost identical to the
branded option.
• Purchase priorities have shifted from brand loyalty to money-saving in a post-recessionary environment in North
America and Western Europe. Established traditional brands have lost out to private label brands and generics,
mainly due to value-added benefits.
• Consumers became savvy shoppers during the recession, and are aware of the savings that private label and
generics represent for their spending. The question is how many of these consumers will go back to purchasing
branded products? What incentives can companies provide consumers so they start purchasing brands again?
• Private label products are moving towards a premium level

as the economy begins to improve. They are presenting
novel formulations and delivery mechanisms that are
outpacing the innovation of some standard brands.
• The big pharmaceuticals companies – Sanofi-Aventis,
GlaxoSmithKline and Pfizer – are investing in the
generics field in Asia Pacific, Latin America, Africa and
Eastern Europe. GlaxoSmithKline acquired a stake in
Aspen Pharma (South Africa) and signed a marketing
and distribution agreement with Dr Reddy’s Laboratories
(India). Pfizer signed an agreement with Aurobindo
(India) through its division Greenstone LLC, although it
will be focused on prescription (Rx) generics.
35
Introduction
Global Update
Regional Update
Category Update
Retailing Trends
36
Consumers of the Future Consumer Health: Revisited © Euromonitor International
The Effects of OTC Education and Ageing Consumers

• Educational programmes about self-care have become comprehensive to
inform people about products, proper use of the drugs, and treatment of
conditions. However, accidental overdose and abuse remain important
challenges.
• Information about drugs is the basis of consumer evaluation of OTC
medications. Packaging and labelling must include the proper language to
help consumers understand the purpose and use of the drug. Manufacturers
usually place special emphasis on the tagline as it is the first sentence that
consumers read on the label or packaging.
• Although improvements have been made in the language used on labels and
packs, there are some lingering technical or medical terms that can confuse
people. The Food and Drug Administration (FDA) in the US published
“Guidance for Industry: Label Comprehension Studies for Non-Prescription
Drug Products” in May 2010 to improve label understanding from a
“consumer” point of view, and not from a “technical medical” opinion.
Comprehension studies should include a representative population sample to
properly assess the reading and comprehension skills of “real life”
consumers. People from the industry, who are familiar with pharmacology
terms, tend to dismiss the fact that the general public might not fully
understand some technical words, such as “antipyretic”.
•
Safety Issues for Consumers

 Failure to read the label or packaging carefully.
 Intentionally exceeding doses, and believing them to cause faster relief.
 Skipping doses leading to “later” overdose to make up for the missing dose.
 Womentend to pay more attention to information on labelling and packaging than men.
37
Consumers of the Future Consumer Health: Revisited © Euromonitor International
Obesity Implications in Future Health

• The world is becoming more rotund as a larger number of• Dosing has become a major concern for the industry,
people across the world are diagnosed as obese (Body which opens the door to the speculation that future OTC
Mass Index (BMI) of over 30kg/sq m). As a result, the switches should include a form of customised dosing
prevalence of chronic conditions such as diabetes and mechanism, to appropriately address the effects of
cardiovascular disease is also increasing. Governments weight and height on people.
have rushed to develop public health campaigns to • Child-specific OTC drugs are also under scrutiny due to
address the problem. The main themes of these recent concerns about unintentional overdoses.
educational efforts include healthy eating and active Eventually, this concern could move to the adult
lifestyles. population. In addition, the fact that clinical studies are
• Despite these efforts, people are still becoming being moved away from the target localised population
overweight or obese, which poses a dilemma for the to low-cost countries such as India, Russia, and Mexico,
OTC drug industry. Doses are determined by average may cast doubts on the future efficacy of a drug. Diet,
height and weight for the specific population. However, weather, and historic health records can also skew the
with bigger people increasing in number and skewing results for other populations.
the average to the heavier side, dosing might not be as
effective. Manufacturers need to resolve the dilemma of
how a 55kg, 1.65m woman can be taking the same
dose as a 100kg, 1.65m woman. Label instructions may
need to include weight and height guidelines.
• In a hospital or clinic setting, health practitioners account
for weight and height when dosing. But at the pharmacy
or retail shelves, this guidance might not be available to
people, who rely only on the instructions printed in the
packaging or leaflet. As a result, the effects of an OTC
drug on obese people might not be as effective as on
their thinner counterparts. Conversely, an OTC drug
taken by a petite or small person, out of the average
range dosing, could potentially cause an overdose.
38
Introduction
Global Update
Regional Update
Category Update
Retailing Trends
39
Beyond 2010 Expectations Consumer Health: Revisited © Euromonitor International
Preliminary Expectations for 2010/2011
40
Beyond 2010 Expectations Consumer Health: Revisited © Euromonitor International
2010/2011 Prospects by Categories

Winners
 Vitamins, dietary supplements, The search for novel dietary supplements is never ending. The industry

herbal/traditional of dietary supplements is concerned about regulatory initiatives that

could affect future sales. Scientific evidence about health claims,
compliance with general manufacturing practices, and stricter rules on
advertising and promotion are reshaping this category.
 Cough, cold and allergy Changes in the weather, the urban environment, air pollution, and busy
remedies, analgesics lifestyles influence the rising prevalence of allergic rhinitis in many parts
of the world. Companies are aware of the financial benefits of providing
effective and safe pain relief. Analgesics evolve as ageing and active
lifestyles increase the causes of pain.
Losers
Mature categories, such as eye care and wound care are not anticipated
 Eye care, wound care to increase significantly in the next five years. Eye care will see most
growth through eye health supplements, whereas wound care will
continue to face tough competition from private label and low-priced
brands. Most wound care innovation will concentrate on prescription
films.
Although growing in importance, their small relative sizes will not have

Adult mouth care, ear care


an important impact on future consumer health sales. Most consumption
will derive from elderly populations as their oral health deteriorates, and
ear wax and tinnitus problems increase with age.
41
Definitions of the Report Consumer Health: Revisited © Euromonitor International
Definitions (1)
Consumer Health
• This is the aggregation of analgesics, cough, cold and allergy remedies, digestive remedies, medicated skin care,
vitamins and dietary supplements, NRT smoking cessation aids, eye care, ear care, adult mouth care, calming and
sleeping aids, wound treatments, OTC statins, OTC triptans, OTC obesity, emergency contraception, sports
nutrition and slimming products.

Adult Mouth Care

• Anti-mouth ulcer products, treatment of canker sores. Includes oral analgesics, namely painkillers specifically for the
alleviation of pain in the mouth (not all analgesics that are taken orally). Excludes standard mouthwashes except
OTC products such as Corsodyl (to treat gingivitis, maintain oral hygiene and treat oral thrush/mouth ulcers).

Analgesics
• Analgesics covers pain-relief medications. Products which include a pain-relief ingredient in addition to another core
function (eg a sore throat remedy which includes paracetamol) are excluded from analgesics and instead are
included in the appropriate category (pharyngeal remedies, etc).

Calming and Sleeping

• Sedatives both analgesic and non-analgesic. Includes herbal sleeping remedies.

Cough, Cold and Allergy (Hay Fever) Remedies

• This is the aggregation of decongestants, cough remedies, pharyngeal preparations, medicated confectionery,
combination products, antihistamines and child-specific cough, cold and allergy remedies.

Digestive Remedies
• Includes all products designed and marketed to treat stomach and intestinal problems.

42
Definitions (2)
Ear Care
• Includes anti-inflammatory and anti-infective drops or ointments and preparations that soften ear wax.

Emergency Contraception
• Only included where available OTC. Emergency contraception is a method of preventing pregnancy after unprotected
sexual intercourse.

Eye Care
• Artificial tears, eye ointments and eye washes. Includes eye drops used to treat eye allergies. Excludes all products
related to contact lens care.

Herbal/Traditional Products
• Traditional remedies are products that have a long tradition of use, a long-established reputation, and are considered
alternative remedies to standard healthcare products. Ayurveda and Traditional Chinese Medicine (TCM) are
included. Homeopathic remedies are excluded. Only packaged products are included.

Medicated Skin Care

• Includes medicated products used to alleviate symptoms or treat skin or hair ailments.

NRT Smoking Cessation Aids

• Products such as gum, patches, inhalators and sprays used to aid smoking cessation. Excludes herbal cigarettes.
•
OTC Triptans
• Drugs used to treat migraines or cluster headaches. Active ingredients include sumatriptan and naratriptan. Excludes
analgesics positioned to treat migraines.
•
43
Definitions (3)
Weight Management
• Drugs and products used to treat obesity. It includes OTC obesity drug (orlistat) and slimming products, commercial
dietetic foods and supplements specially formulated and marketed as being suitable for individuals who want to lose
or control their weight. Slimming products is the aggregation of weight loss supplements, slimming teas, meal
replacement slimming products and other slimming products.

Sports Nutrition
• Included are sports supplements that contain one or more of the following ingredients: soy protein; whey protein;
creatine; L-carnitine; and amino acids. The products are sold in tablet, powder, bar, gel or RTD formats. These
products are targeted at serious athletes and gym-goers. Their principal purposes are to build muscle mass, to
improve physical endurance and to boost energy. Note: mainstream sports nutrition products such as sports drinks
(eg Gatorade), energy drinks (eg Red Bull), or energy bars (eg PowerBar) are not included here. Energy bars are
found in Packaged Food; Sports Nutrition contains bars with more than 20g of protein. The drinks are found in Non-
Alcoholic Drinks.

Vitamins and Dietary Supplements

• This is the aggregation of dietary supplements, child-specific vitamins and dietary supplements, tonics and bottled
nutritive drinks, and vitamins.

Wound Care
• Sticking plasters, bandages, gauze and surgical tape, and first aid kits.

Child-Specific Consumer Health

• Products only specifically designed and marketed for children's symptoms. Includes child-specific analgesics, child-
specific cough, cold and allergy remedies, child-specific digestive remedies, child-specific medicated skin care,
nappy (diaper) rash treatments, and child-specific vitamins and dietary supplements.
•
44
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Consumer Health: Revisited © Euromonitor International

Forecast Revisit 2010-2011

Disclaimer Learn More

2010 Global Trends Influencing Consumer Health

Consumers of the Future

Beyond 2010 Expectations

Disclaimer Learn More

Objectives and Parameters of Global Briefing

Key Findings: Consumer Health Remains Resilient in 2010

OTC switches see more

Private label and generic

Self-care and ageing

New technology in digital

2010 Global Trends Influencing Consumer Health

Consumers of the Future

Beyond 2010 Expectations

Macroeconomic Factors Affecting Consumer Health in 2010

 Economy  Health Expenditure

Public Health and Regulation Initiatives

The Influence of OTC Switches

Categories with good prospects

• Proton pump inhibitors: omeprazole, • Cough and cold remedies: pseudoephedrine,

2010 Global Trends That Reshape Projections

2010 Global Trends Influencing Consumer Health

Consumers of the Future

Beyond 2010 Expectations

Consumer Health Performance 2009 vs 2010-2011

Global Competition in 2010

Mergers and Acquisitions Turn Regional and Local

Boosting global presence

through regional expansion within one region market

2010 Global Trends Influencing Consumer Health

Consumers of the Future

Beyond 2010 Expectations

Cross-Regional Comparison Analysis in Consumer Health

Asia Pacific Update

Eastern Europe Update

Latin America Update

Middle East and Africa Update

North America Update

Western Europe Update

2010 Global Trends Influencing Consumer Health

Consumers of the Future

Beyond 2010 Expectations

Vitamins and Dietary Supplements Update

Cough, Cold and Allergy (Hay Fever) Remedies Update

Herbal/Traditional Products Update

Digestive Remedies Update

Weight Management Update

Sports Nutrition Update

2010 Global Trends Influencing Consumer Health

Consumers of the Future

Beyond 2010 Expectations

Retail Sales Via the Internet Gain Strength

Private Label and Generics Remain a Strong Trend

• Private label products are moving towards a premium level

2010 Global Trends Influencing Consumer Health

Consumers of the Future

Beyond 2010 Expectations

The Effects of OTC Education and Ageing Consumers

Safety Issues for Consumers

Obesity Implications in Future Health