Fast Fact - Zuellig Pharma

Global OTC sales 2007-2011 (US$ million)
was the fastest-growing category (+14.5%), thanks
to a strong hay fever season, line extensions and
the switch of Boehringer Ingelheim’s Alesion 10.
The bright spot in the flat dermatologicals category
was vaginal yeast infection antifungals, boosted by
launches such as Sato’s Empecid L (clotrimazole)
and Kobayashi’s Feminina Candida (oxiconazole).
The switch of neticonazole hydrochloride cream in
late 2011 should enhance sales further.
OTC sales growth remained modest in
Australia (+3.4%), growing roughly in line with
volume for the third year running. Australia is still
predominantly driven by the pharmacy channel as
companies risk losing pharmacist support if brands
are moved to mass market retailers. Modest growth
of systemic analgesics was dampened by the May
2010 up-scheduling of codeine in combination with
other analgesics from pharmacy-only to pharmacistonly.
However, topical analgesics boomed as
consumers turned to natural formulations.
The cough, cold & allergy sector grew across the
board (+4.1%) with the exception of systemic cold
& flu, impacted by a weak cold season, private label
competition and a ban on pseudoephedrine brands
being advertised to consumers from June 2011.
Meanwhile, switch approval for oral famciclovir
should further boost cold sore treatments. Vitamins,
minerals & supplements benefited from strong
interest in vitamin D supplements and innovative
launches from long-line marketers such as Swisse
and Blackmores.
India’s OTC market grew by 11.4% in 2011,
though low prices and limited disposable income
mean that average consumer spend on OTCs
(US$1.66 per person) is small by international
standards. Growth of topical analgesics (+19.5%)
and antacids & antiflatulents (+18.2%) was strong as
both are highly consumerized categories benefiting
from innovative line extensions and advertising
2007
2008
2009
2010
2011
92.5
96.6 (+4.5%)
101.6 (+5.1%)
105.4 (+3.8%)
110.2 (+4.5%)
and promotion. Systemic cold & flu remedies grew,
despite a low incidence of colds, while advertising
and promotion for Otrivin (Novartis) and Nasivion
(Merck KGaA) assisted topical decongestants.
Steady growth continued in South Korea (+6.5%)
as some marketers placed increased focus on their
OTC brands. This was in expectation of a negative
impact on ethical portfolios caused by governmentenforced
price cuts on 6,506 reimbursable Rx and
prescribed OTC products from April 2012. Another
hot topic in 2011 was the mass market, with 48
brands down-scheduled to quasi-drug status. This
included Bacchus-F, a line extension of South
Korea’s No.1 OTC brand Bacchus-D (Dong-A).
Further expansion continues to be discussed in
2012 despite strong opposition from pharmacists.
Solid growth in Indonesia (+6.2%) reflected
strong performances in all categories due to price
rises, a boom in advertising via social media and
increasing disposable income among consumers in
urban areas. One weak spot was analgesics (+1.8%)
as systemics were held back by a lack of new
product development.
North America: Allegra switch softens
impact of recalls
OTC sales in North America increased by 2.6% as
growth in the US (accounting for 90% of regional
sales) reached 2.5% and Canada grew by 3.9%.
Another relatively slow year for US OTC
sales growth reflected modest upturns in most
categories, which came as a result of the lingering
effects of highly publicized recalls involving a
number of McNeil/Johnson & Johnson OTC
brands. In addition, the market as a whole lost out
as consumers traded down to private labels. For
example, in systemic analgesics, private labels grew
by 9% and now account for over 30% of category
sales by value.
Cough, cold & allergy was the strongest category,
with allergy remedies enlivened by the switch of
Allegra in March 2011. Systemic cold & flu sales fell
by 2.5% as recalls of Johnson & Johnson’s leading
entries, Tylenol and Sudafed, devastated the topline.
Antacids & antiflatulents declined as leading proton
pump inhibitors, including Prilosec OTC (Procter &
Gamble) and Prevacid (Novartis), suffered owing to
competition from private labels and new rivals such
as Zegerid OTC (MSD). Multivitamins produced
moderate growth as a result of the dynamism
of formats such as gummies, and specialized
formulations including eye care vitamins.
In Canada, sales of analgesics (+5.1%) were
boosted by a strong topicals category resulting from
the meteoric rise of Novartis’ Voltaren Emulgel
since it gained unscheduled status in April 2010.
Cough, cold & allergy was the best-performing
category as systemic cold & flu remedies benefited
from a more severe cold and flu season. The shining
light in dermatologicals was vaginal yeast infection
antifungals, boosted by the performance of newly
switched oral fluconazole brand Canesoral (Bayer).
Europe: Central & Eastern Europe markets grow
again as economic issues hinder West
European OTC sales increased by 2.8%, driven by
the emerging markets of Central & Eastern Europe
(+6.7%). In Western Europe, which accounts for
72% of the region’s US$31 billion OTC sales, growth
of 1.4% exceeded the flat performance of 2010.
However, tough economic conditions continued to
take their toll.
Germany – Europe’s No.1 OTC market – grew by
0.6%, an improvement on declines in previous years.
Falling sales of vitamins, minerals & supplements
and a flat performance by cough, cold & allergy
were offset slightly by growth for analgesics and
dermatologicals. Generics and branded generics
(retailing at significant discounts) are a major bar to
OTC growth, enjoying strong on-shelf presence and
pharmacist recommendations.
In France, a flat performance in 2011 was an
improvement on the downturn of 2010 (caused
primarily by cuts to the reimbursement rate).
Further cuts (from 35% to 30%) in May 2011
hit certain acne remedies, allergy remedies and
antifungals, and, in October 2011, the government
de-reimbursed 80 medicines deemed to have
“insufficient medical benefit”. These included
some mouthwashes, antiseptics, calcium products,
herbal joint health supplements and hemorrhoid
preparations.
In May 2011, cough remedies – already suffering
from the ban on mucolytics for use in children aged