OTC15-08-14p1_OTC15/11/2005 p1&24 12/08/2014 18:23 Page 1
15 August 2014
COMPANY NEWS
2
Sanofi races ahead
2
of OTC competitors
3
Meda grabs Rottapharm
for SEK21.2bn
Omega outlines European ambitions 4
GSK has no plans to
6
spin off Consumer
Valeant faces US lawsuit
7
over alleged insider trading
RB sees opportunity
8
in medical devices
Procter & Gamble starts culling brands 9
GNC’s Retail plan in doubt
10
as CEO leaves
Negative currency effects
11
damage Bayer
Taisho looks to increase
12
demand for OTCs
Pfizer committed to
13
Consumer Healthcare
Celesio to soon see
14
McKesson benefits
GENERAL NEWS
15
MHRA calls for proposals to
put OTC drugs on black list
Russia considers
non-pharmacy sales
Asthma use worries lead
Singulair safety concerns
Body weight is no issue for
emergency contraceptives
15
MARKETING NEWS
19
Infirst to make global debut
with Dr Cocoa launch in US
Bayer bolsters Berocca
in US and UK
Australians can access
Merck’s Nasonex OTC
Prestige offers dairy defence
19
FEATURES
24
OTC market growth
remains fragile
24
16
17
18
20
21
21
REGULARS
Events – Our regular listing
23
People – Walgreens Boots Alliance 27
appoints leadership team
RB starts revolution with
£100mn R&D investment
A
new £100 million (CC126 million) UKbased consumer healthcare research
and development centre announced by Reckitt Benckiser (RB) will play a key role in
the company’s drive to “create a revolution”
in the sector, according to the firm’s chief
executive officer Rakesh Kapoor.
Kapoor told OTC bulletin that the Centre
of Scientific Excellence would give the fastmoving consumer-goods (FMCG) giant the
“right infrastructure, the right technical abilities
and most importantly the right people” to deliver the innovations in consumer healthcare
that would enable RB to be a “global leader in
this new health revolution”.
“We have world-class talent on this site and
they deserve a world-class facility,” he pointed
out, “and it will become a magnet for talent
from around the world.”
Based at the company’s existing site in Hull,
the new facility – set to open in 2018 – would
become the “global technical innovation hub”
for the firm’s consumer-health powerbrands,
such as Nurofen and Strepsils, Kapoor said.
“The centre will be working on developing
effective and innovative solutions for everyday ailments,” Kapoor revealed. “In particular,
it will lead ground-breaking research in pain
management and indigestion relief,” he explained, “as well as in how to use flavours to make
the mouth salivate and make on-the-go remedies more palatable, and in combining these
developments with active ingredients.”
The innovation that would come out of the
new facility would make a real difference to how
people managed their health, Kapoor claimed.
“People are living longer, the global population is increasing and our health services will
struggle to cope,” he added. “Self-care has to be
a critical part of the solution. But for self-care to
work, effective innovations are needed that provide effective remedies with great convenience,
supported by excellent consumer information.”
Noting that the new centre would represent
the largest investment in research and development in the company’s history, Kapoor claimed
that RB approached consumer healthcare in-
Reckitt Benckiser’s chief executive officer, Rakesh
Kapoor, said the Centre of Scientific Excellence would
help the firm to become “a global leader in this new
health revolution”
novation differently from traditional pharmaceutical companies.
“We look at product development through
the eyes of consumers, we mine the science
and we find new ways to provide relief overthe-counter,” he said. “This innovation makes
a very real difference to people’s health.”
“When we think about innovation, we don’t
think about molecules first,” Kapoor explained.
“Of course eventually we do think about molecules or products wouldn’t get made, but we
think first about how to educate and bring behavioural change.”
“Take hygiene for example,” Kapoor explained. “Hygiene is the basis for good health and
with our Dettol brand – a range which will also
benefit from the investment – we educate millions of mums around the world on how to keep
their children safe from illnesses and diseases
which are caused by bad hygiene practices.”
Hand-in-hand with RB’s attention to consumer education, Kapoor said, came a need to
keep healthcare practitioners up-to-date on the
best way to treat everyday ailments. This was
another area of focus for the firm.
However, innovation would only drive
change if it was widely available, Kapoor insisted, noting that he had asked for a “coalition
■ Continued on page 27
OTC15-08-14p2-14_Layout 1 12/08/2014 18:19 Page 2
OTC COMPANY NEWS
Second-Quarter Results
Sanofi races ahead of OTC competitors
S
anofi’s Consumer Healthcare business is
growing faster than all its competitors in
the segment, thanks to the switch of Nasacort
in the US and strong sales in emerging markets, according to the company’s chief executive officer Chris Viehbacher.
Speaking as the French firm posted Consumer Healthcare sales up by 20.2% to C816
million in the second quarter of 2014, Viehbacher said the business had become an “extremely important part” of Sanofi and had been
growing “incredibly well”.
Even excluding the transfer of products “previously reported in prescription pharmaceuticals” in the prior-year period, the division had
still outpaced the competition, Viehbacher noted,
with sales rising by 9.2% in the quarter.
Expanding on Consumer Healthcare’s place
within the Sanofi group, Viehbacher explained that it enabled brands to “live for decades”
and provided the “long-term revenues” that a
company like Sanofi needed to ensure the financial stability required to take research and development risks.
Furthermore, Consumer Healthcare kept the
company “in touch regularly with actual consumers”, he claimed, adding that it was important for Sanofi “never to forget the people
aspect of our business”.
Meanwhile, following the switch of NasaBusiness
Allegra
Doliprane
Essentiale
Enterogermina
Lactacyd
Dorflex
Nasacort
No Spa
Maalox
Other Consumer Healthcare brands
Consumer Healthcare
Diabetes
Genzyme
Generics
Oncology/Other Pharmaceutical
Pharmaceuticals
Region
Second-quarter
sales (CC millions)
Change (%)
CER*
Proportion
of sales (%)
Emerging Markets
US
Western Europe
Rest of World
434
177
161
44
+36.4
+23.2
±0.0
-25.0
53
22
20
5
Total Consumer Healthcare
816
+20.2
100
* CER is constant exchange rates
Figure 2: Sanofi’s Consumer Healthcare sales in the second quarter of 2014 by region (Source – Sanofi)
cort in the US (OTC bulletin, 25 October 2013,
page 1), the company was gearing up for the
potential switch of Eli Lilly’s erectile dysfunction drug Cialis (tadalafil), Viehbacher noted.
Having acquired the rights to switch the
product in Europe, Japan and the US (OTC
bulletin, 30 May 2014, page 1), Sanofi believed
there was an exciting opportunity to open up
a new OTC category, Viehbacher said, and to
drive further strong growth at its OTC franchise.
If a switch was given the go-ahead, Sanofi
anticipated marketing Cialis OTC after the “expiration of certain patents”, the firm noted.
Cialis has been approved as a prescription
medicine in more than 120 countries worldwide with a number of indications, including
erectile dysfunction and the signs and symptoms of benign prostatic hyperplasia.
Second-quarter
sales (CC millions)
Change (%)
CER*
Proportion
of sales (%)
94
70
55
36
32
27
26
25
23
428
816
1,788
643
466
3,107
6,820
+53.8
+4.4
+10.5
+31.0
+41.7
+55.0
–
+20.8
+4.3
+9.8
+20.2
+16.2
+29.1
+65.7
–
+7.2
1
>1
>1
>1
>1
>1
>1
>1
>1
5
10
22
8
6
38
84
Vaccines
718
-0.4
9
Animal Health
537
+6.2
7
8,075
+6.4
100
Total Sanofi
* CER is constant exchange rates
Figure 1: Sanofi’s sales in the second quarter of 2014 broken down by business (Source – Sanofi)
2
In 2013, Cialis generated worldwide sales of
US$2.16 billion (C1.62 billion) and since its
launch has generated turnover of more than
US$14 billion.
Turning to the company’s second-quarter
results, Sanofi said the 9.2% rise in Consumer
Healthcare turnover – excluding the transfer
of prescription products – had been due to the
successful Nasacort launch and a strong showing in Emerging Markets.
Nasacort (triamcinolone acetonide) had generated C21 million in US sales in the three
months, Sanofi noted. Total Nasacort sales were
C26 million, putting the brand into seventh place
in Sanofi’s roster of Consumer Healthcare
brands (see Figure 1).
Indicated to treat “seasonal and year-round
nasal allergies in adults and children two years
of age or older”, Nasacort offered the 60 million Americans who suffered from nasal allergies a new OTC treatment option, Sanofi said.
The fexofenadine-based brand Allegra was
the best-selling of Sanofi’s established brands
in the three months, with sales up by 53.8% to
C94 million at constant exchange rates.
Sanofi’s nine top-selling Consumer Healthcare brands had total sales of C388 million in
the second quarter, just under half of the division’s total.
On a regional basis, more than half – 53% –
of Consumer Healthcare’s sales were generated
in Emerging Markets, where turnover advanced by 36.4% in constant currencies to C434 million (see Figure 2).
In the US, sales of Nasacort helped to lift
turnover in the region by 23.2% to C177 million.
Sales in Western Europe remained flat at
C161 million, while turnover in the Rest of World
region slipped back by 25.0% to C44 million.
Consumer Healthcare accounted for 10%
of Sanofi’s total second-quarter sales, which increased by 6.4% at constant exchange rates
to C8.08 billion.
OTC
OTC bulletin 15 August 2014
OTC15-08-14p2-14_Layout 1 12/08/2014 18:19 Page 3
COMPANY NEWS OTC
Mergers & Acquisitions
Meda grabs Rottapharm for SEK21.2bn
M
eda is set to buy privately-owned Italian
firm Rottapharm in a deal worth SEK21.2
billion (C2.30 billion) to create what it claims
will be a “European speciality pharma leader”.
The Swedish firm said the deal – which is
worth around 4.6-times Rottapharm’s 2013 sales
of C500 million – boosted its consumer healthcare business with a range of “clinically-proven”
non-prescription brands. These had nearly no
generic competition and were sold primarily
through doctors and healthcare professionals.
Rottapharm’s non-prescription brands include
the Dona glucosamine range, Saugella femininehygiene line and ArmoLIPID nutraceutical.
Jörg-Thomas Dierks, Meda’s chief executive
officer, said the acquisition marked an “important step in creating a stronger, improved Meda”.
officer Heather Bresch told investors.
“The Abbott transaction certainly gives us
a beginning foothold on OTC,” Bresch stated.
“We have got real opportunities to look at some
of these brands that we are now acquiring, as
well as perhaps to add some products that would
be very strategic and would allow us to build
upon the Mylan equity through all channels.”
uary 2017. The deal – which is expected to
close in the fourth quarter of 2014 – would give
Rottapharm’s owners, the Rovati family, a 9%
stake in Meda.
Cost synergies from the deal were expected
to reach SEK900 million per year, Meda claimed, and would come into full effect in 2016.
Synergies would be driven by “efficiencies
in administration, sales and marketing, and research and development”, the firm said, with additional upsides outside of these areas from selling Meda products in new markets as well as
repatriating certain licences to Meda.
The deal comes just a few months after
Meda rejected a takeover approach from generics specialist Mylan (OTC bulletin, 9 May
2014, page 3).
Having already turned down Mylan’s initial
approach in April (OTC bulletin, 11 April 2014,
page 4), Meda rebuffed a second approach in
May, explaining that its decision had been based
on a “strong belief in the continued potential
of Meda as a standalone company and the assumption that a transaction cannot be completed
as it lacks sufficient support from Meda’s largest shareholder”.
Meda posted a 5% rise in sales of its OTC
products to SEK3.13 billion in 2013, as its key
brands entered new markets. OTC brands accounted for 24% of Meda’s 2013 sales, which
grew by 3% to SEK13.1 billion.
OTC
OTC
Rottapharm had a number of “highly-differentiated brands”, he pointed out, and held a
leading position in the doctor-recommended,
clinically-proven consumer healthcare space.
The combined business – with sales of approximately SEK18 billion – would have an
“improved balance” between prescription and
non-prescription products, Dierks claimed, and
benefit from increased investment opportunities.
Furthermore, the deal would expand Meda’s
reach in emerging markets, the company said,
thanks to Rottapharm’s established presence in
regions such as South-East Asia.
Meda has agreed to pay SEK15.3 billion in
cash for Rottapharm, along with 30 million
Meda shares valued at SEK3.3 billion and a
payment of SEK2.6 billion deferred until Jan-
Business Strategy/Second-Quarter Results
Mylan exploring opportunities in Europe
M
ylan intends to explore opportunities to
build up an OTC operation in Europe to
complement the US firm’s pending US$5.3
billion (C4.0 billion) purchase from Abbott of
a roster of more than 100 mature brands and
branded generics in developed markets.
“We think OTC is an interesting channel,
in some respects even outside the US more
than inside the US,” Mylan’s chief executive
15 August 2014
Number 427
Editor: Matt Stewart
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3
OTC15-08-14p2-14_Layout 1 12/08/2014 18:19 Page 4
OTC COMPANY NEWS
Business Strategy
Omega outlines European ambitions
O
mega Pharma is committed to becoming
the third-largest OTC player in Europe
within four years, according to chief operating
officer Christoph Staeuble.
Speaking exclusively to OTC bulletin, Staeuble revealed that the Belgium-based company’s
objective was to reach C2.0 billion in annual
sales by 2018. Omega had generated sales of
C1.2 billion in 2013, Staeuble pointed out, putting the firm in fifth place in the European OTC
market, one place behind Reckitt Benckiser.
“Our objective is to get to C2.0 billion, but
we have plans to take us to C3.0 billion,” Staeuble noted. “That is our ambition.”
Omega had spent the last four years building the company into an “efficient machine” that
could have a “transformational impact” on the
categories in which it operated, Staeuble said.
This strategy had involved bringing in new
talent, putting in place the right culture and
developing a “five-year master plan” for the
company’s brands, he explained. “The group
now has a machine in place that operates in 35
countries and in most cases can handle a business double or triple the size.”
The company’s investment had already begun
to pay off, Staeuble noted, with Omega now
among the top-four OTC firms in Belgium,
France, the Netherlands, Sweden and the UK.
Transformation of the UK business
Neil Lister, general manager of Omega
Pharma UK, had led a “transformation” of the
UK business, Staeuble said, which had seen
Omega move from thirteenth to the number-four
spot in the country’s OTC market in three years.
Christoph Staeuble, Omega Pharma’s chief operating
officer, said the firm had the “machinery in place to
commercialise new brands rapidly across the group”
4
Lister told OTC bulletin that putting the
right team in place, focusing on the pharmacist
and educating the consumer had helped to
propel Omega UK up the rankings and had left
the company well-positioned to “accelerate”
its growth momentum going forward.
Staeuble explained that the UK was one of
the first of Omega’s businesses to undergo this
structural and cultural transformation, with the
group planning to replicate this success in a
number of markets including Germany.
Omega had been working on the German
business for 12 months, Staeuble said, and was
committed to turning it into a top-10 OTC company in the country by 2017.
Expanding on how the group ran its 35
national businesses, Staeuble noted that Omega
made central choices concerning brands, categories and best approaches, but each country’s
general manager had the freedom to “push
the envelope locally”. Lessons learnt in one
country could then be applied across the whole
group, he explained.
“What sets us apart from most of our competitors,” Staeuble claimed, “is that our general
managers are entrepreneurs, running their country as if it were their own business.”
“We are a very flat organisation, we have
three people on the executive committee, we
have 25 general managers and we have our corporate staff, but that is pretty much it,” Staeuble
explained. “We don’t have a complex matrix of
support organisations or middle management
and that is part of the secret.”
A focus across the group on delivering organic growth over the past four years had helped
to lift Omega’s sales by 40% in the period to
C1.2 billion in 2013, Staeuble noted.
Omega had invested “amazing amounts of
time and money” into improving its innovation capability, Staeuble said. This investment
had created a “five-year funnel” of new product
development for each of Omega’s brands, and
included line extensions and next-generation
molecules or technologies.
Omega had also benefitted from gaining
GlaxoSmithKline’s (GSK’s) non-core OTC
brands in Europe for C470 million in cash in
2012, Staeuble pointed out (OTC bulletin, 16
March 2012, page 1). The basket of brands included Abtei vitamins, minerals and supplements; Lactacyd feminine hygiene products;
Nytol sleep aids; Solpadeine pain relievers; and
Zantac indigestion and heartburn medicines.
The acquired brands had been a “phenomenal
fit” with Omega’s existing portfolio, Staeuble
insisted, as the company had been able to “bolt
on” most of the assets to categories of products
it was already active in.
All of the assets acquired from GSK had
grown at double-digit rates, Staeuble said. Some
brands, including the German natural remedy product Granufink, had doubled in size.
Developing “razor sharp claims” – such as
“one 15-minute treatment is all that it takes to
kill 100% of head lice” for its Lyclear brand
in the UK – and improving pharmacist training were two of the methods Omega had used
to grow the GSK brands, Staeuble revealed.
Asked if Omega had plans for further acquisitions, Staeuble said if opportunities like
the GSK deal came along, Omega would “gladly go after them”.
On the look-out for opportunities
Staeuble noted that the company was also on
the look-out for new concepts and technologies,
created by entrepreneurs or smaller enterprises,
that it could fund and bring to the market.
In line with this strategy, Omega had in
2012 acquired a small Belgian sports nutrition
brand named Etixx, Staeuble explained. Omega
planned to launch Etixx in nine markets in 2015
and anticipated annual sales of around C25 million in the first year.
“We will continue to do things like this,”
Staeuble insisted, “because we have the machinery in place to commercialise new brands rapidly across the group.”
Turning to the markets Omega wanted to
operate in, Staeuble said the company had resisted setting up subsidiaries outside of Europe.
However, the firm was currently exploring
the possibility of establishing “alliances” with
companies operating in countries like the US
and Japan, Staeuble revealed.
Omega had made a “conscious choice” a
number of years ago to focus purely on European markets, Staeuble noted. “Each of the
group’s European countries has a plan in the
next four years to at least double, but in many
cases to triple or quadruple, its scale. We feel
that focusing on these markets will yield bigger rewards than if we start to spread ourselves too thinly.”
Commenting on the specific plans for the
UK business, Lister explained that Omega was
aiming to become the third-largest OTC company in the country by 2017.
Omega had recently overtaken Bayer as the
fourth-largest OTC company in the UK, Lister
pointed out, reporting sales up by 19.5% to £127
OTC bulletin 15 August 2014
OTC15-08-14p2-14_Layout 1 12/08/2014 18:19 Page 5
COMPANY NEWS OTC
million in the 52 weeks ended 14 June 2014.
Noting that Omega UK occupied thirteenth
position in 2011, Lister said he “hoped and
expected” the growth recorded over the past
three years would continue and accelerate going
forward. Each year since 2011, Omega UK had
averaged like-for-like growth of 20%, he noted.
Omega’s existing portfolio of OTC brands
– including Buttercup cough syrups, Jungle
Formula insect repellents and TCP first-aid
products – had been boosted by GSK’s household names such as Hedex analgesics and Phillips’ Milk of Magnesia upset-stomach remedies.
But Lister played down the impact that the
GSK acquisition – which had given Omega
UK 10 brands – had made on the growth of
the business.
“I know the GSK deal made a lot of headlines when it happened,” Lister said, “but actually there has been a lot more to the success
of Omega than that.”
“If I look at the specific areas where we’ve
made a difference, the main element is in our
approach to self-care,” he explained.
Omega had “cracked the code of self-care”,
Lister claimed, and had established a model
for delivering it in a sustainable way.
Expanding on the changes to Omega’s approach in the UK, Lister said the company had
begun by investing in its regulatory affairs team.
Omega’s “regulatory army” was responsible
for generating health claims for brands and
putting together materials that the firm could
take to pharmacists and consumers, he noted.
Increased focus on pharmacy
Omega had also increased its focus on the
pharmacist and pharmacy, Lister revealed. “We
built the first in-house pharmacy field salesforce to focus on training rather than just selling,” he pointed out. This had been supported
by investments into brand and category training for pharmacists.
Noting that Omega had put the “first ever”
pharmacist on television in advertisements for
its Prevalin allergy brand (OTC bulletin, 12
April 2013, page 14), Lister insisted that the
company had “put the pharmacist first” in a
number of its activities.
Omega had also adapted its approach to
consumers, Lister pointed out. “The important
thing is our focus on educating consumers and
telling them more about the benefits of our
products,” he explained. “When you see our advertisements, you’ll see a big focus on education, a big focus on factual comments about our
brands and how consumers can use them.”
To get the message across to consumers,
Omega had increased its marketing spending,
Lister pointed out. The company had estimated
that so far in 2014, Omega had been the sec15 August 2014 OTC bulletin
ond-biggest spender among its OTC competitors on advertising in the UK.
By implementing this strategy over the past
three years, Omega had created a “blueprint”
for future growth, Lister said. This model could
be applied across the company’s existing categories to unlock the growth potential of its
brands, he added.
Omega had already applied this blueprint
to a number of the brands acquired from GSK
in 2011, Lister revealed. The brands that the
company had supported had grown by a “minimum of 10%”, Lister said, with sales of some
brands doubling.
Lister noted that Omega had been able to
add value to some of the GSK brands by coupling them with existing technologies in the company’s portfolio.
“We had for many years in the Omega
group a fantastic anti-snoring product called
Silence and we rebranded that as Nytol,” Lister explained. “We’ve turned that product from
nothing to £1.0 million (C1.3 million) in sales
within a year.”
Omega had also picked up Beconase hayfever nasal sprays from GSK, Lister pointed
out, and launched an antihistamine tablet variant under the BecoAllergy brand name. “We’ve
been able to leverage the scale of both of those
brands to create something that has grown the
category and grown the share of the brand,”
Lister noted.
Asked about how Omega planned to develop its UK brands going forward, Lister said
the company was focusing on opportunities
to grow its categories as a whole, rather than
individual brands.
Lister pointed out that there were still opportunities in “mature categories” that had “existed for many years and had been declining”
to which Omega could apply its approach. The
firm had proven that its model could introduce
innovative products in mature categories, Lister
said, pointing to the sleep-aid category with
Nytol and the allergy category with Beconase.
What was important, Lister said, was to
have brands with “disruptive” claims that challenged the status quo, and that consumers and
pharmacists could buy into.
Looking at untapped categories
Omega would also look at “untapped categories” in the UK such as weight management, sports nutrition and cholesterol, Lister
said. “We are experiencing phenomenal growth
in these categories that didn’t really exist 10
to 20 years ago,” he noted.
Weight management was the category of
products that presented Omega with the best
opportunity for growth, Lister said. The XLSMedical brand had grown from its launch in
Neil Lister, general manager of Omega Pharma UK,
said the company had “cracked the code of self-care”
2012 to be the number-one slimming tablet
in the UK, Lister explained.
“Globally, the UK is second only to the US
in the obesity rankings,” Lister pointed out, “so
I think that this brand has a long way to go.”
Lister noted that Omega had experienced
some difficulties in getting XLS-Medical to
market, as retailers were more interested in meal
replacements than slimming products.
“It has taken us a long time to unwind a lot
of the miscommunication over this category
that’s existed for many years,” commented
Lister, “as well as public perceptions about side
effects or ineffectiveness.”
XLS-Medical had been clinically proven
to work, Lister said, and higher sales figures
recorded by Omega in the French market indicated that the brand could grow to be up to
four-times larger in the UK.
Asked if Omega UK planned to develop
any new brands in the future, Lister said that
this was definitely out of the question. “I certainly don’t want to be creating new local brands
because history would show it’s a very inefficient way to be growing categories.”
“So I’m looking to the group to launch European and global brands which we will happily
take,” Lister explained. “I am also looking at
the technologies that exist in Omega’s global
portfolio to identify ones that can be launched under our 40 existing brands in the UK.”
Lister promised that Omega UK would continue to invest behind its brands to ensure continued growth going forward. “As we increase our
brand portfolio, we’ll invest more and spend
more money on advertising and training.”
Omega had already taken “significant strides”
towards becoming the third-largest OTC company in the UK by 2017, Lister said.
“We’ve done a lot of work over the last
three years putting the machinery together and
putting the team in place,” he noted. “This will
allow us to deliver our products to consumers
in a meaningful way going forward.”
OTC
5
OTC15-08-14p2-14_Layout 1 12/08/2014 18:19 Page 6
OTC COMPANY NEWS
Business Strategy/Second-Quarter Results
GSK has no plans to spin off Consumer
G
laxoSmithKline (GSK) has insisted that
it has no near-term plans to spin off its
Consumer Healthcare business, after the company’s chief executive officer, Andrew Witty,
hinted at the possibility.
Speaking to the Financial Times newspaper,
Witty said that the firm had the option to spin
off its Consumer Healthcare division if a time
came when it offered more value as a standalone company.
Responding to the comments, a spokesperson for GSK told OTC bulletin that “there are
no such plans to spin off the Consumer Healthcare business in the near term”.
However, the company’s recent deal to establish a consumer healthcare joint venture with
Novartis (OTC bulletin, 25 April 2014, page 1)
had strengthened the value of the business,
the spokesperson added, and delivered “enhanced options for the long-run”.
Witty’s remarks came a few months after
GSK announced that its Consumer Healthcare
business would assume 63.5% control of the
Consumer Healthcare joint venture with proforma 2013 sales of £6.5 billion (C7.9 billion).
The Consumer Healthcare joint venture is
one part of a three-part deal between GSK and
Novartis. This will also see the Swiss firm
Region
Second-quarter sales
(£ millions)
Business
Second-quarter sales
(£ millions)
Oral health
Wellness
Nutrition
Skin health
Consumer Healthcare
-10
-18
-7
-27
±0
-9
+7
-19
42
36
15
7
1,022
-14
-4
100
* CER is at constant exchange rates
Figure 1: GlaxoSmithKline Consumer Healthcare’s sales in the second quarter ended 30 June 2014 broken
down by business (Source – GlaxoSmithKline)
snap up GSK’s oncology business for up to
US$16.0 billion (C11.9 billion), including
US$1.5 billion contingent on a development
milestone. Meanwhile, Novartis will divest its
Vaccines business, excluding flu products, to
GSK for US$7.1 billion plus royalties, including US$1.8 billion in milestone payments.
GSK reported Consumer Healthcare sales
down by 14% to £1.02 billion in the second
quarter. At constant exchange rates, the fall was
a less dramatic 4% (see Figure 1).
The company blamed the decline on supply
issues which had hit sales of its smoking-cessation products and Alli weight-loss brand, as
well as the Bactroban skin-care line in China.
Simon Dingemans, GSK’s chief financial
Change 2013/2014 (%)
£
CER*
Proportion
of total (%)
536
-12
+3
52
Europe
291
-15
-10
28
US
195
-18
-11
19
1,022
-14
-4
100
* CER is at constant exchange rates
Figure 2: GlaxoSmithKline Consumer Healthcare’s turnover in the second quarter ended 30 June 2014 broken
down by region (Source – GlaxoSmithKline)
Second quarter
(£ millions)
Change 2013/2014 (%)
£
CER*
Proportion
of total (%)
Core sales
Pharmaceuticals and Vaccines
4,539
-12
-4
82
Consumer Healthcare
1,022
-14
-4
18
Total
5,561
-13
-4
100
Core operating profit
Pharmaceuticals and Vaccines
Consumer Healthcare
Total**
1,485
-21
-12
91
142
-29
-20
9
1,407
-25
-14
100
* CER is at constant exchange rates ** After corporate and other unallocated costs of £220 million
Figure 3: GlaxoSmithKline’s ‘core’ sales and operating profit in the second quarter of 2014. Core results
exclude amortisation, goodwill, restructuring costs, legal charges and other items (Source – GlaxoSmithKline)
6
Proportion
of total (%)
434
366
151
71
Rest of World
Total Consumer Healthcare
Change 2013/2014 (%)
£
CER*
officer, said that the supply issues had impacted all three of the firm’s key regions – Europe,
US and Rest of World – but remediation plans
had now been put in place and supply levels
had started to improve.
“Overall we expect the consumer business
to be broadly flat at the top line this year,”
Dingemans reported.
The supply issues that hit sales of smokingcessation products and Alli pushed Wellness
turnover down by 18% as reported – 9% at
constant exchange rates – to £366 million.
Wellness’ poor performance meant Oral
health maintained its position as the leading
Consumer Healthcare segment for the second
quarter running, despite sales falling by 10% as
reported and remaining flat at constant exchange
rates at £434 million. Sensodyne sales had risen
by 6% at constant exchange rates, GSK said,
offsetting a 19% decline in Aquafresh sales,
due in part to supply issues related to a move
to a new manufacturing site in the US.
Commenting on the company’s Oral health
franchise, Witty said that it remained “very
strong”, but now existed as almost two separate businesses.
Over the past few years, GSK’s priority in
Oral health had moved away from the base
Aquafresh brand – which operated in the general toothpaste market – and towards the premium sector, Witty noted, pointing out that
Sensodyne and Parodontax as well as dry mouth
and dentures brands, now accounted for 76%
of the firm’s sales in the category.
Skin health sales, down by 27%, or 19% at
constant exchange rates, to £71 million, had
been primarily affected by lower turnover of
Bactroban in China.
Sales of Horlicks rising by 5%, with particularly strong growth in India, and of Boost
growing by 11%, were behind the 7% constantcurrency improvement of the Nutrition segment
to £151 million. As reported, however, turnover fell back by 7%.
OTC bulletin 15 August 2014
OTC15-08-14p2-14_Layout 1 12/08/2014 18:19 Page 7
COMPANY NEWS OTC
Switches
Flonase OTC to
hit US in 2015
G
laxoSmithKline’s (GSK’s) Flonase Allergy Relief nasal spray will soon be available without a prescription in the US after the
Food and Drug Administration (FDA) approved
the prescription-to-OTC switch of the fluticasone propionate-based product.
Noting that fluticasone propionate was the
“number one prescribed allergy treatment ingredient”, GSK said that Flonase Allergy Relief
had been approved as an OTC treatment for the
“temporary relief of the symptoms of hayfever
or upper respiratory allergies”.
A once-a day treatment, the product was the
first OTC medicine indicated for all nasaland eye-related allergy symptoms, GSK pointed out, adding that the product was “full
prescription strength” and provided “24 hours
of non-drowsy relief”.
Flonase Allergy Relief would be launched
in stores in early 2015, the company noted.
Vidhu Bansal-Dev, vice-president of respiratory health research and development at
GSK Consumer Healthcare, said Flonase Allergy Relief provided allergy suffers with simple and effective OTC relief that would make
the difference between a “day lost to allergies
and a day enjoying their favourite activities”.
Flonase Allergy Relief will enter an already
crowded US OTC allergy market, which was
recently bolstered by the launch of Sanofi’s
Nasacort Allergy 24HR (triamcinolone acetonide) following the product’s switch in 2013
(OTC bulletin, 25 October 2013, page 1).
OTC
Constant-currency shortfalls in European
and US sales – of 10% and 11% respectively –
had reflected the supply issues, GSK said, highlighting the 3% growth in Rest of World markets (see Figure 2). As reported, turnover in
Europe slipped back by 15%, in the US by 18%
and in Rest of World by 12%.
Consumer Healthcare contributed 18% of
GSK’s core sales that declined by 13% – 4%
at constant exchange rates – to £5.56 billion in
the second quarter (see Figure 3). Core sales and
operating profit exclude amortisation, goodwill,
restructuring costs, legal charges and other items.
Less than 10% of GSK’s core operating
profit came from Consumer Healthcare after a
29% drop to £142 million. At constant currency
rates, Consumer Healthcare’s operating profit
declined by a fifth.
OTC
15 August 2014 OTC bulletin
Legal Cases/Second-Quarter Results
Valeant faces US lawsuit
over alleged insider trading
V
aleant Pharmaceuticals is facing a lawsuit
in the US brought by ophthalmics specialist Allergan that accuses the company of violating federal securities law.
The Canadian firm is involved in a protracted takeover move for Allergan that began in
April (OTC bulletin, 25 April 2014, page 5).
In June, Valeant took its bid hostile after
Allergan’s board rejected a revised takeover
offer (OTC bulletin, 27 June 2014, page 3).
The lawsuit filed in California alleges that
Valeant, along with hedge fund Pershing Square
and its principal William Ackman, “violated
federal securities law prohibiting insider trading, engaged in other fraudulent practices and
failed to disclose legally-required information”.
Allergan claims that between February and
April 2014, Pershing Square purchased Allergan stock and securities, which were then valued at over US$3.2 billion (C2.4 billion), from
shareholders “while fully aware of Valeant’s
non-public takeover intentions”.
This move, Allergan alleges, secured value
for Pershing Square and “deprived the selling
stockholders of value appreciation, worth approximately US$1.2 billion, upon Valeant’s initial takeover bid on 22 April 2014”.
In response to the lawsuit, Valeant said that
Allergan’s “true purpose” behind bringing litigation was to interfere with Allergan shareholders’ efforts to call a special meeting.
In July, Valeant called on Allergan shareholders to hold a meeting to “remove six of
the firm’s directors and appoint new directors”
who could “fully evaluate” Valeant’s offer.
Valeant insisted that it was confident that
Allergan’s “desperate attempt” to delay the meeting by filing a lawsuit would not succeed.
Allergan filed its lawsuit two weeks after
Valeant revealed it had contacted financial market regulators in the US and Canada in response to “false and misleading statements”
regarding its business made by Allergan.
Explaining the reason for contacting the
Securities and Exchange Commission (SEC) in
the US, Valeant said Allergan had “falsely asserted” that its Bausch & Lomb eye-care business
was experiencing stagnant or declining sales.
Bausch & Lomb had performed “extremely
well”, Valeant noted, delivering 11% organic
growth over the 11 months the company had
owned the business. In May 2013, Valeant
agreed to pay private-equity firm Warburg Pincus US$8.7 billion for the global eye-health
specialist (OTC bulletin, 31 May 2013, page 1).
Valeant pointed out that it had also contacted Canada’s Autorité des marchés financiers
in response to “comments made by Allergan’s
management board about Valeant” at recent
investor meetings held in the country.
Allergan misled investors
Michael Pearson, Valeant’s chairman and
chief executive officer, said Allergan had attempted to “mislead investors and manipulate
the market for Valeant stock” in both Canada
and the US.
Valeant’s bid for Allergan, Pearson claimed, represented a “strategically compelling and
enormously value-creating opportunity for Allergan shareholders”.
Pearson’s comments came shortly before
Valeant reported second-quarter sales up by
86% to US$2.04 billion, driven by double-digit
gains in its Developed Markets and Emerging Markets regions.
The double-digit growth of Bausch & Lomb
had boosted sales in Developed Markets, which
had risen by 85% to US$1.48 billion, Valeant
said, as had turnover increases across its dermatology prescription brands and its consumer
and oral-health businesses.
Turnover had jumped by 90% to US$561
million in Emerging Markets, Valeant noted,
thanks to double-digit advances across SouthEast Asia, South Africa and the company’s
EMENA region, which covers Eastern Europe,
the Middle East and North Africa.
OTC
IN BRIEF
■ KRKA said turnover from its non-prescription products – including self-medication lines
and cosmetics – had declined by 9.1% to C58.8
million in the first half of 2014. The Slovenian
firm said gains in its West Europe region had
been offset by lower sales in its domestic market due to the weak cough and cold season.
Turnover in Slovenia had fallen by 19.4% to
C2.9 million, Krka reported.
OTC
7
OTC15-08-14p2-14_Layout 1 12/08/2014 18:19 Page 8
OTC COMPANY NEWS
First-Half Results
RB sees opportunity in medical devices
R
eckitt Benckiser (RB) will look to take advantage of the less heavily-regulated medical-device route to introduce innovative consumer healthcare products to the market, according to chief executive officer Rakesh Kapoor.
Speaking as RB announced its first-half results, Kapoor said that while the company would
continue to operate in the more tightly-regulated licensed OTC medicines space, it saw an
opportunity to introduce new products more
quickly in categories such as sexual health by
using medical-device regulations.
Explaining the advantages of the medicaldevice route, Kapoor said it allowed RB to
make health claims for a product while also
creating enough barriers to entry for the company’s competitors.
Asked if the firm was looking to avoid
heavily-regulated categories, Kapoor insisted
that the company was “just using regulation
appropriately” to introduce innovative products
faster to market.
Kapoor recently criticised the strict regulation of OTC medicines at the 50th Annual Meeting of the Association of the European SelfMedication Industry, the AESGP. He called for
OTC medicines to be authorised for non-prescription sale globally as soon as safety, efficacy
and appropriate use had been established (OTC
bulletin, 16 June 2014, page 1).
Conceding that it was true that the OTC industry needed regulation to “ensure that only
safe and effective products get into consumers’
daily lives”, he argued that the role of regulators
should be “to protect supply chains, not to limit
access or limit the market-place for consumers”.
“The goal should be to look for reasons to approve, not excuses to block,” Kapoor insisted.
Turning to the company’s first-half results,
Kapoor reported sales at RB’s Health division
up by 4% – 14% in constant currencies – to
£1.25 billion (C1.58 billion) during the first
Region
First-half sales
(£ millions)
Business
First-half sales
(£ millions)
Proportion
of total (%)
Hygiene
Health
Home
RB Pharmaceuticals
Portfolio Brands
Food
1,825
1,247
871
344
228
152
-8
+4
-11
-14
-14
-5
+3
+14
–
-8
-7
+3
39
27
19
7
5
3
Total Reckitt Benckiser
4,667
-7
+3
100
* CER is constant exchange rates
Figure 1: Reckitt Benckiser’s sales in the first half ended 30 June 2014 by business (Source – Reckitt Benckiser)
six months of 2014. Health accounted for 27%
of RB’s total first-half sales, which fell back
by 7% to £4.67 billion (see Figure 1).
“Broad-based growth” across RB’s Powerbrands – including Durex, Gaviscon, Mucinex
and Scholl – had been driven by brand innovation and the roll-out of existing products
into new markets, Kapoor said.
Scholl had delivered strong results, Kapoor
pointed out, with the launch of Scholl Velvet
Smooth Pedi “well received” across Europe. RB
was now preparing to introduce the product
into China and a number of emerging markets
in the second half of 2014, he added.
After the close of the period, RB announced
that it had agreed to sell its Scholl footwear
business to German private equity firm Aurelius
for an undisclosed sum. RB noted that it would
retain the rights to Scholl footcare.
Furthermore, Durex and Gaviscon had also
been stand-out performers during the six months,
Kapoor said, with both brands demonstrating
“strong underlying growth”.
In addition to the continued growth of RB’s
established brands, “good progress” had also
been made integrating the recent K-Y buy into
its US and Canadian businesses, Kapoor noted.
Announcing the acquisition in March, RB
Change 2013/2014 (%)
£
CER*
Proportion
of total (%)
Europe and North America
LAPAC**
RUMEA***
Other****
2,375
1,175
621
496
-3
-8
-12
–
+2
+9
+5
–
51
25
13
11
Total Reckitt Benckiser
4,667
-7
+3
100
* CER is constant exchange rates
** LAPAC region consists of Australia/New Zealand, Latin America, North Asia, and South and South-East Asia
*** RUMEA consists of Middle East, North Africa and Turkey, Russia and the CIS, and Sub-Saharan Africa
**** RB Pharmaceuticals and Food, which are not reported as part of any region
Figure 2: Reckitt Benckiser’s sales in the first half ended 30 June 2014 by region (Source – Reckitt Benckiser)
8
Change 2013/2014 (%)
£
CER*
said that the brand would sit beside its existing Durex line of condoms, lubricants and sex
aids to create a “unique portfolio of brands”
in the sexual well-being market (OTC bulletin,
17 March 2014, page 4).
On a regional basis, only Europe and North
America reported a rise in Health turnover.
Growth had been led by new product launches
under the Scholl and MegaRed brands across
a number of European markets, RB said. An
overall downturn in group turnover in the region
had been due to negative currency effects, the
company noted (see Figure 2).
In the LAPAC region – consisting of Australia/New Zealand, Latin America, North Asia
and South and South-East Asia – the “positive
benefits” of RB’s OTC collaboration with Bristol-Myers Squibb in Latin America (OTC bulletin, 22 February 2013, page 1), had been
offset by a slowdown in India and the “negative impact of currency movements”.
Health turnover in RB’s RUMEA region
– which covers the Middle-East, North Africa
and Turkey, Russia and the Commonwealth of
Independent States (CIS), and Sub-Saharan
Africa – had been hit by the “volatility” of a
number of markets due to the political situation in Eastern Europe.
Meanwhile, RB has announced plans to
pursue a “de-merger” of its Pharmaceuticals unit
over the next 12 months. Explaining the rationale
behind the move, RB said it felt the division
had the “potential to deliver significant longterm value creation as a stand-alone business”.
Spinning off RB Pharmaceuticals would
allow the company to focus on its core strategy
to be “a global leader in consumer health and
hygiene”, RB claimed. The firm announced
the strategic review of its Pharmaceuticals business in October last year (OTC bulletin, 8 November 2013, page 12).
OTC
OTC bulletin 15 August 2014
OTC15-08-14p2-14_Layout 1 12/08/2014 18:19 Page 9
COMPANY NEWS OTC
Business Strategy/Annual Results
Procter & Gamble starts culling brands
P
rocter & Gamble is to cut radically its portfolio of brands and focus on just 70 to 80 core
brands organised into a dozen business units,
according to chief executive officer AG Lafley.
Speaking as the consumer goods giant announced its annual results, Lafley said that the
70 to 80 core brands were “consumer preferred
and customer supported”. However, he did not
provide a list of which brands would stay with
the company.
A spokesperson for Procter & Gamble told
OTC bulletin that it was too early to say whether
the brand cull would impact on the company’s
wholly-owned US OTC unit or PGT Healthcare, the OTC joint venture it established with
Teva Pharmaceutical Industries in 2011 (OTC
bulletin, 16 November 2011, page 1).
Lafley noted that over the past three years
the 70 to 80 core brands had accounted for 90%
of the firm’s sales and over 95% of its profits.
“This new streamlined Procter & Gamble
will continue to grow faster and more sustainably, while creating more value,” Lafley claim-
15 August 2014 OTC bulletin
ed. “Importantly this will be a much simpler,
much less complex company of leading brands
that is easier to manage and operate.”
The firm planned to “harvest, partner-out, discontinue or divest” 90 to 100 brands, Lafley said,
noting that combined sales of these brands had
fallen by 3% per year over the past three years.
“As we rationalise business and brand portfolios, product lines and stock-keeping units,
Procter & Gamble’s brands and products will
be easier to shop,” Lafley insisted, “and more
productive and profitable for our customers,
partners and for the company.”
Lafley’s announcement came just a few
months after Procter & Gamble said it was
looking for acquisitions to expand its OTC operations (OTC bulletin, 9 May 2014, page 5).
Speaking in April, Jon Moeller, the firm’s
chief financial officer, revealed that the company
was considering adding to its OTC business and
was currently “looking for opportunities”.
Noting that PGT had enabled Procter &
Gamble to “accelerate significantly” the growth
of its OTC operations internationally, Moeller
said the company was seeking to expand into
new markets that offered “smart, value-creating opportunities”.
Meanwhile, Procter & Gamble noted that
sales at its Personal Health Care business –
which includes its OTC operations – had improved in the 12 months ended 30 June 2014.
The firm said the rise in turnover – including sales from PGT – had been driven by “innovation and market expansion” which had “more
than offset” a weak cough and cold season.
Sales at Procter & Gamble’s Health Care
unit – including its Oral Care, Pet Care and
Personal Health Care businesses – edged up
by 1% to US$7.80 billion (C5.82 billion).
Procter & Gamble said that better Oral Care
and Personal Health Care turnover had offset a
fall in Pet Care sales due to product recalls.
The Health Care unit accounted for 9.4%
of Procter & Gamble’s total annual sales, which
increased by 1% to US$83.1 billion.
OTC
9
OTC15-08-14p2-14_Layout 1 12/08/2014 18:19 Page 10
OTC COMPANY NEWS
Business Strategy/Second-Quarter Results
GNC’s Retail plan in doubt as CEO leaves
G
NC Holding’s turnaround plan for its US
Retail business has been cast into doubt
following the sudden departure of the company’s chief executive officer Joe Fortunato.
Michael Archbold – former head of US
clothing retailer Talbots and previously chief
operating officer of Vitamin Shoppe – has been
named as GNC’s new chief executive officer
with immediate effect.
The US-based nutritional supplements retailer made the announcement one week after
Fortunato had outlined a fresh strategy to “turn
the tide” for the company’s Retail business in
2014, based on “simplified pricing, more impactful marketing, and appealing to a broader
consumer base”.
Asked if GNC would still implement Fortunato’s turnaround plan, a spokesperson for the
firm did not rule out a change of direction.
Speaking before his sudden departure – as
GNC reported sales down by 0.2% to US$675
million (C504 million) in the second quarter –
Fortunato claimed that during 2014 the “broader market” for supplements had “softened”.
There had also been a “broad shift in shopping patterns” across the whole retail industry for supplements, he added, with consumers
making less frequent visits to stores.
To address the challenges facing its domestic Retail business, Fortunato said GNC would
launch a programme of “strategic initiatives”.
GNC’s product pricing in its retail stores
needed to become more straightforward, Fortunato insisted. The company planned to reduce bundled product promotions, he said, and
instead run event-driven promotions to draw
consumers into stores.
Noting that GNC’s core consumer base was
male, Fortunato said the company wanted to
use “tailored products” to attract more females.
Therefore, protein-based drinks, probiotics and
cosmetics aimed at women would be introduced, he revealed.
New marketing strategy
Going forward, GNC would utilise social
media better to increase brand awareness, Fortunato said. This formed part of a new marketing strategy that would increase brand awareness of GNC products among new consumers.
By pursuing this strategy, GNC would protect its brand, and position the company for
future success, Fortunato claimed. “We expect
to see progress on these fronts as the year
goes on and into 2015,” he added.
Turning to GNC’s second-quarter results,
Fortunato said the expansion of the company’s
e-commerce business – consisting of gnc.com,
luckyvitamin.com and discountsupplements.
co.uk – had helped to push up sales at the
Retail division by 0.6% to US$506 million.
Growth in the Retail segment had also been
supported by the performance of GNC’s newlyopened stores, Fortunato noted, with 149 outlets added in the past 12 months.
The Retail performance had been hampered
by an increased dependence on bundled promotions and a fall in store traffic, Fortunato said.
Meanwhile, GNC’s Franchise revenue had
declined by 0.4% to US$110 million, Fortunato
reported, due to “regulatory and geopolitical
factors” in a number of international markets.
A decrease was also reported at GNC’s
Manufacturing/Wholesale division, with sales
falling by 5.8% to US$59.6 million.
As of 30 June 2014, GNC was present in
more than 8,700 locations, of which over 6,500
– including 1,050 franchises and 2,232 Rite
Aid in-store units – were based in the US.
The company also had franchise operations
in some 50 countries.
OTC
Business Strategy/Second-Quarter Results
Herbalife to expand Chinese operation
H
erbalife has announced plans to expand
its manufacturing capabilities in China
to meet increased demand for its products in
the country.
Located in Nanjing, Jiangsu province, the
“state of the art facility” would ultimately produce up to 65% of Herbalife’s total product
requirements for China, the US-based directselling supplement company said.
The plant was expected to be open by the
end of 2015, Herbalife noted, with the company
investing US$40 million (C30 million) into the
facility’s development.
Explaining the rationale behind the move,
Richard Goudis, Herbalife’s chief operating officer, said the company was opening the plant in
response to “steady and sustainable growth
in China”.
“It is important that our infrastructure is robust enough to meet the demand we are seeing
now and expect to see in the future,” he added.
Herbalife already has a presence on the
ground in China, with a manufacturing facility
10
in Suzhou, Jiangsu province, and a botanical extraction plant in Changsha, Hunan province.
The firm revealed its plans for China shortly
after it reported a single-digit rise in secondquarter sales to US$1.31 billion, as turnover improved in five of its six global business regions.
Herbalife’s sales advanced by 7.1%, led by
growth in China and the Europe, Middle East
and Africa (EMEA) region.
China – Herbalife’s second-smallest market
in terms of sales – was the stand-out performer,
with turnover jumping by 44% to US$170
million (see Figure 1).
Meanwhile, Herbalife said it continued to
face an “unprecedented and unrelenting attack”
on its business from hedge fund Pershing Square.
In December 2012, Pershing Square claimed
that Herbalife was an illegal pyramid scheme
as it made more money from recruitment than
from selling products (OTC bulletin, 18 January 2013, page 5).
Pershing Square had continued to wage “a
campaign of misinformation” against Herbalife,
Region
Second-quarter Change
sales (US$ millions) (%)
Asia-Pacific
306
+2.4
North America
251
+1.2
EMEA*
227
+22
South and Central
America
203
-8.5
China
170
+44
Mexico
149
+2.1
1,306
+7.1
Total Herbalife
* Europe, Middle East and Africa
Figure 1: Herbalife’s sales in the second quarter of
2014 broken down by region (Source – Herbalife)
the company said. This had included presentations criticising Herbalife’s business model
and offering financial incentives to former employees to complain about their experiences,
the company claimed.
Despite the ongoing allegations, Herbalife
said it had the “utmost trust” in the integrity of
its business model. Pershing Square’s claims
would “crumble under serious and independent
scrutiny”, the firm insisted.
OTC
OTC bulletin 15 August 2014
OTC15-08-14p2-14_Layout 1 12/08/2014 18:19 Page 11
COMPANY NEWS OTC
Second-Quarter Results
Negative currency effects damage Bayer
N
egative currency and portfolio effects had
offset gains made by a number of Bayer
Consumer Care’s key brands, the German firm
said, as it posted a 1.9% fall in OTC sales in
the second quarter of 2014.
Consumer Care reported turnover of C932
million in the three months, as only one out
of the division’s six best-selling brands – the
Bepanthen/Bepanthol skin-care range – reported an increase in sales.
However, excluding currency and portfolio
effects, Consumer Care’s sales improved by
4.2%, with four of the company’s best-sellers
– Aleve analgesics, Canesten antifungals and
Supradyn multivitamins, as well as Bepanthen/
Bepanthol – all posting gains.
Only sales of the division’s leading brand
Aspirin and the One-A-Day vitamin line failed
to deliver better constant-currency sales in the
quarter, Bayer noted, adding that Aspirin’s turnover had been impacted by a weak cough and
cold season in Europe.
As a result, worldwide Consumer Care sales
of Aspirin slipped back by 16.4% to C92 milBrand (business unit)
Contour (Medical Care)
Advantage (Animal Health)
Aspirin**
Bepanthen/Bepanthol
Aleve/naproxen
Ultravist (Medical Care)
Canesten
Gadovist (Medical Care)
Supradyn
One-A-Day
Top-10 total
Consumer Health total
Business
Second-quarter sales Change
(CC millions) 2013/2014 (%)
Pharmaceuticals
2,960
+4.6
656
+39.0
932
595
358
1,885
-1.9
-9.4
-1.1
-4.3
–
–
–
310
–
–
–
+20.6
Total Bayer HealthCare
4,845
+0.9
729
+32.5
Figure 3: Breakdown of Bayer HealthCare’s sales and earnings before interest and tax (EBIT) in the second
quarter of 2014 (Source – Bayer)
lion in the second quarter. Adjusted for currency
effects, the decline was 9.0%. Total Aspirin
sales – including Aspirin Cardio, which is part
of the Pharmaceuticals division – were 7.5%
lower at C209 million (see Figure 1).
Consumer Care’s best performer was Bepanthen/Bepanthol, whose sales improved by
16.7% – 22.4% adjusted for currency effects –
to C91 million. Turnover had been “considerably higher in all regions”, Bayer noted, but
especially in emerging markets.
Second-quarter sales
(CC millions)
165
140
92
91
83
76
66
57
38
43
Change 2013/2014 (%)
C
CER*
-16.2
-5.4
-16.4
+16.7
-2.4
-12.6
-5.7
+16.3
±0.0
-4.4
-13.9
-1.7
-9.0
+22.4
+4.5
-8.4
+0.9
+22.3
+7.8
-0.8
851
-6.2
-1.3
1,885
-4.3
+1.1
Figure 1: Sales of the top-10 best-selling brands in Bayer’s Consumer Health division in the second quarter of
2014. Brands are part of the Consumer Care business unit unless stated (Source – Bayer)
Region
Second-quarter sales
(EE millions)
Europe
726
Change 2013/2014 (%)
C
CER*
+0.8
+2.9
North America
589
-8.5
-3.3
Asia/Pacific
286
-5.0
+1.7
Latin America/Africa/Middle East
284
-6.6
+10.2
1,885
-4.3
+1.1
* CER is constant exchange rates
Figure 2: Breakdown of Bayer Consumer Health’s sales in the second quarter of 2014 by region (Source – Bayer)
15 August 2014 OTC bulletin
Change
2013/2014 (%)
Consumer Care
Medical Care
Animal Health
Consumer Health
* CER is constant exchange rates
** Total Aspirin sales – including Aspirin Cardio, which is part of the Pharmaceuticals division – were C209 million
Total Bayer Consumer Health
EBIT
(CC millions)
Supradyn had also performed well, Bayer
noted, with sales boosted by product launches.
This had advanced the brand’s turnover by 7.8%
to C38 million when adjusted for currency effects. As reported, Supradyn’s sales were flat.
Meanwhile, sales of the naproxen brand
Aleve dropped back by 2.4% – a rise of 4.5%
when adjusted for currency effects – to C83
million, while Canesten posted turnover down
by 5.7% to C66 million, or up by 0.9% excluding a 4.8% negative currency impact.
The Consumer Care business accounted
for 49% of second-quarter turnover at Bayer’s
Consumer Health division, which dropped back
by 4.3% to C1.89 billion. Sales edged up by
1.1% when adjusted for currency and portfolio effects.
Bayer’s top-10 Consumer Health brands
formed 45% of total divisional sales, the same
as in the prior-year period.
Europe remained Consumer Health’s biggest
region in terms of sales, with turnover improving by 0.8% – 2.9% adjusted for currency
effects – to C726 million (see Figure 2).
Turnover in the Asia/Pacific region shrank
by 5.0% to C286 million. When adjusted for
currency effects, sales moved forward by 1.7%.
However, turnover in the region is likely to
be boosted going forward following Bayer’s
recent acquisition of Dihon Pharmaceutical in
China for an undisclosed sum (OTC bulletin,
17 March 2014, page 1).
In North America, turnover slipped back by
8.5% – 3.3% adjusted for currency effects –
to C589 million.
Consumer Health’s second-quarter earnings
before interest and tax (EBIT) jumped by a
fifth to C310 million (see Figure 3).
The results were announced as Bayer prepared to complete its US$14.2 billion (C10.6
billion) deal for Merck & Co’s Consumer Care
unit (OTC bulletin, 9 May 2014, page 1).
OTC
11
OTC15-08-14p2-14_Layout 1 12/08/2014 18:19 Page 12
OTC COMPANY NEWS
First-Quarter Results
Taisho looks to increase demand for OTCs
J
apan’s Taisho Pharmaceutical said that it
was working to strengthen its sales and marketing activities and help drive demand for
OTC products in what it described as a sluggish domestic market.
Domestic turnover at the company’s SelfMedication division fell back by 4.6% to ¥34.0
billion (C247 million) in the company’s first
quarter ended 30 June 2014, as turnover in the
majority of product categories declined following tax-driven price rises.
To help drive demand, the Self-Medication
division was “increasing coordination between
marketing and sales activities”, Taisho pointed
out, “and working to enhance direct communication with consumers by expanding into new
distribution channels, such as mail-order”.
Furthermore, the company would continue
to respond to the growing consumer need to
“age healthily and beautifully” by developing
new products to tackle “lifestyle diseases”, such
as metabolic syndrome.
In April last year, Taisho successfully claimed Japan’s first prescription-to-OTC switch of
a medicine indicated to treat high cholesterol
with the launch of Epadel T (600mg ethyl icosapentate), and said it would continue to broaden its range of category 1 medicines – OTC
products deemed to hold the greatest degree
of risk – by identifying further switch candidates (OTC bulletin, 26 April 2013, page 1).
Later in 2013, Taisho explained that it intended to introduce further prescription-to-OTC
Business
Business
First-quarter sales Change
(¥ billions)
(%)
Change
(%)
-4.6
+6.2
+3.8
–
+5.6
+3.3
153.5
17.2
9.6
0.9
27.7
3.1
-0.2
+11.1
+7.1
–
+9.1
+23.2
Japan
International OTC drugs
International energy drinks
International other
International
Others
34.0
4.0
2.4
0.2
6.6
0.6
Total Self-Medication
41.2
-3.0
184.3
+1.4
Prescription operations
27.2
+5.6
114.7
+0.4
Total for Taisho
68.4
+0.3
299.0
+1.0
Figure 1: Taisho Pharmaceutical’s sales in the first quarter ended 30 June 2014. Forecasted sales are for the
year ending 31 March 2015 compared with actual sales in the previous year (Source – Taisho Pharmaceutical)
switch products in Japan in the coming years to
help revive the domestic OTC market and address growing concerns surrounding the country’s low birth rate and ageing population (OTC
bulletin, 11 October 2013, page 4).
Overall turnover at Taisho’s Self-Medication division fell back by 3.0% to ¥41.2 billion,
despite a 5.6% rise in international sales to
¥6.6 billion (see Figure 1). Other sales added
the remaining ¥0.6 billion to the total.
International sales of the division’s OTC
products grew by 6.2% to ¥4.0 billion, while
international turnover from energy drinks improved by 3.8% to ¥2.4 billion.
Earlier this year, Taisho expanded its international offering by acquiring the rights to the
Flanax OTC naproxen-based analgesic in the
First-quarter sales Change
(¥ billions)
(%)
Forecast sales
(¥ billions)
Change
(%)
Lipovitan D
Other Lipovitan
Total Lipovitan brand
Cold remedies (Pabron brand)
Hair treatments (RiUP brand)
Biofermin
Livita series
Gastrointestinal treatments
Analgesics (Naron brand)
Laxatives (Colac brand)
Zena brand
Cold remedies (Vicks brand)
Tokuhon
Other Self-Medication products
10.5
5.8
16.3
4.1
3.0
1.6
1.0
0.9
0.9
0.8
0.7
0.4
0.3
4.0
-4.3
-1.3
-3.3
-2.5
-8.1
+0.6
-14.7
-3.0
-8.3
-10.4
-6.6
-10.4
-33.4
–
43.2
23.7
66.8
26.0
14.2
6.8
4.8
4.2
4.1
3.6
3.2
3.4
1.4
15.0
-2.6
+2.2
±0.0
±0.0
-8.9
+2.1
+1.9
-2.4
-1.3
+1.1
-1.0
+6.4
+6.1
–
Total Domestic Self-Medication
34.0
-4.6
153.5
-0.2
Figure 2: Breakdown of Taisho Pharmaceutical’s Self-Medication sales in Japan in the three months ended 30
June 2014. Forecasted sales are for the year ending 31 March 2015 compared with actual sales in the financial
year ended 31 March 2014 (Source – Taisho Pharmaceutical)
12
Forecast sales
(¥ billions)
Philippines from Roche for an undisclosed sum
(OTC bulletin, 17 March 2014, page 4).
Commenting on the deal at the time, Taisho
pointed out that Flanax – which it described
as one of the leading brands in the local analgesics market – reinforced its position in a
category where it already offered the Tempra
range of anti-inflammatories.
Meanwhile, domestic sales of Taisho’s core
Lipovitan brand of tonics and nutrient drinks
slipped back by 3.3% to ¥16.3 billion during
the three months (see Figure 2).
Turnover from Lipovitan D fell by 4.3% to
¥10.5 billion, while sales of other Lipovitan
products dropped by 1.3% to ¥5.8 billion.
The decline in sales of other Lipovitan products had been driven by lower sales of both the
100ml variant and 50ml variant, Taisho noted,
although the firm expected turnover from both
sizes to improve in the remainder of the year.
Sales of Pabron cold remedies declined by
2.5% to ¥4.1 billion, as a poor performance from
mainstay general cold remedies offset a good
showing from nasal decongestants. Turnover
from the Vicks brand of cold remedies dropped
even faster, falling by 10.4% to ¥0.4 billion.
The RiUP minoxidil-based hair-regrowth
brand posted first-quarter sales down by 8.1%
to ¥3.0 billion, as demand slumped after consumers stocked up before a price rise took effect in April.
Meanwhile, sales of the Livita brand in
Japan’s “food for specified health use” category
dropped by 14.7% to ¥1.0 billion, while turnover from gastrointestinal treatments declined
by 3.0% to ¥0.9 billion.
The Naron brand of analgesics fell by 8.3%
to ¥0.9 billion, while the Colac range of laxatives posted sales down by 10.4% to ¥0.8 billion.
OTC
OTC bulletin 15 August 2014
OTC15-08-14p2-14_Layout 1 12/08/2014 18:19 Page 13
COMPANY NEWS OTC
Second-Quarter Results
Pfizer committed to Consumer Healthcare
“A
great store of value” exists in Pfizer’s
Consumer Healthcare unit, according to
chairman and chief executive officer Ian Read.
Asked by financial analysts if the recent
consolidation in the industry – that has seen
Bayer snap up Merck & Co’s Consumer Care
division (OTC bulletin, 9 May 2014, page 1),
and GlaxoSmithKline and Novartis announce
an OTC joint venture (OTC bulletin, 25 April
2014, page 1) – had prompted the US-based
company to review the future of its Consumer
Healthcare division, Read insisted that the OTC
medicines space was a business that Pfizer
“wanted to be in”.
Expanding on the value that existed in
Pfizer’s Consumer Healthcare unit, Read pointed out that the firm had an “active prescriptionto-non-prescription switch strategy”.
Pfizer was continuing to “evaluate a number
of prescription drugs for potential switch to
non-prescription status”, a spokesperson for the
company told OTC bulletin. Categories of
drugs that would have “the greatest positive
impact on people and healthcare systems” were
Pfizer’s priority, the spokesperson added.
This active switch strategy saw the company launch in the US on 27 May 2014 an OTC
version of AstraZeneca’s proton-pump inhibitor
(PPI) under the brand name Nexium 24HR
(OTC bulletin, 30 May 2014, page 1).
Indicated for the treatment of frequent heartburn, Nexium 24HR (20mg esomeprazole) had
been approved for OTC use by the US Food
and Drug Administration (FDA) in March.
Speaking at the time of the launch, Paul
Business
Second-quarter sales
(US$ millions)
Global Established Pharmaceutical
6,513
-6
51
3,547
-5
28
Global Vaccines
Consumer Healthcare
Global Oncology
Global Vaccines, Oncology and
Consumer Healthcare
1,097
912
570
2,579
+13
+14
+16
+14
9
7
4
20
134
–
1
12,773
-2
100
Other
Total Pfizer
Figure 1: Pfizer’s sales in the second quarter of 2014 broken down by business (Source – Pfizer)
gains”, rolling out new products and increased
marketing support behind the Vitafusion and
L’il Critters brands.
US Personal Care Products – which includes
First Response pregnancy tests and Trojan condoms, as well as Avid – accounted for 41% of
Church & Dwight’s Consumer unit’s domestic
sales, which rose by 0.7% to US$599 million.
The company’s US Household Products
business made up the remaining 59% of the
Consumer division’s domestic turnover. International Consumer sales advanced by 2.9% to
US$137 million. Total group sales improved
by 2.6% to US$808 million.
tus in the country (OTC bulletin, 25 July 2014,
page 12). If approved, Nexium Control would
be the first PPI available GSL in the UK, and
the first medicine effectively to be switched
directly from prescription-only to GSL status
without an intervening period of market availability restricted to pharmacy.
Meanwhile, Pfizer’s plan to switch the cholesterol-lowering drug Lipitor (atorvastatin calcium) from prescription-to-non-prescription
status in the US had continued to progress at
a “good pace”, a spokesperson for the company
told OTC bulletin in February (OTC bulletin,
7 February 2014, page 8).
A statin has never been granted OTC status
in the US before and it is now more than a
decade since Bristol-Myers Squibb and Merck
& Co attempted to switch Pravachol (pravastatin) and Mevacor (lovastatin) respectively
(OTC bulletin, 30 June 2000, page 16).
Read made his comments on Pfizer’s Consumer Healthcare business as the company reported second-quarter sales at the unit up by
14% to US$912 million (C681 million).
Pfizer said that the double-digit growth recorded by Consumer Healthcare in the three
months had been primarily due to the launch
of Nexium 24HR in late May.
Launching Nexium during the quarter helped
to drive up Consumer Healthcare’s US sales
by 33% to US$449 million.
In contrast to the growth recorded in the
US, international Consumer Healthcare turnover remained flat at US$463 million.
Consumer Healthcare accounted for 35%
of Pfizer’s Global Vaccines, Oncology and Consumer Healthcare unit’s sales, which increased
by 14% to US$2.58 billion (see Figure 1).
With Pfizer’s other two units losing ground,
total group sales fell by 2% to US$12.8 billion.
OTC
OTC
Sturman, president of Pfizer Consumer Healthcare, said the OTC availability of Nexium 24HR
in its domestic market marked the “first step”
in the company’s efforts to “build a strong
global position in digestive health”.
European launch of Nexium Control
Pfizer is preparing to launch Nexium OTC
in the European Union (EU) under the Nexium
Control name (see page 19). Authorised as a
non-prescription medicine in all 28 member
states last October – after becoming the EU’s
third centrally-switched medicine – Nexium
Control is for the short-term treatment in adults
of reflux symptoms (OTC bulletin, 11 October 2013, page 11).
In July, the UK’s Medicines and Healthcare products Regulatory Agency (MHRA)
issued a proposal to switch Nexium Control
from pharmacy to general-sale list (GSL) sta-
Church & Dwight gets boost from Avid
ncreased sales of Vitafusion vitamins helped
raise turnover at Church & Dwight’s US
Personal Care Products business by 1.3% to
US$244 million (C182 million) in the second
quarter of 2014.
Church & Dwight added Vitafusion, along
with the L’il Critters vitamin brand, to its Personal Care unit when it acquired vitamins, minerals and supplements (VMS) business Avid
Health in October 2012 (OTC bulletin, 14 September 2012, page 1).
James Craigie, Church & Dwight’s chairman and chief executive officer, said the “continued growth” of Avid during the three months
had been driven by “significant distribution
15 August 2014 OTC bulletin
Proportion
of sales (%)
Global Innovative Pharmaceutical
Second-Quarter Results
I
Change
2013/2014 (%)
13
OTC15-08-14p2-14_Layout 1 12/08/2014 18:19 Page 14
OTC COMPANY NEWS
First-Half Results
Celesio to soon see McKesson benefits
C
elesio will soon start to benefit from its
takeover by US pharmaceutical wholesaler
McKesson as a new “coordination team” begins to identify the areas for potential synergies,
according to the pan-European wholesaler and
retailer’s new chairman of the management
board Marc Owen.
The company had already begun integrating
itself into the Distribution Solutions division of
McKesson, Owen said, after McKesson in February acquired over 75% of Celesio’s shares
following a protracted takeover process (OTC
bulletin, 7 February 2014, page 1).
Now the takeover was virtually complete,
the “company itself, its partners, customers and
employees” would all start to benefit from the
“added value generated by sharing procurement
activities, expanding the product range and
opening up new sales channels”, Owen insisted.
“Future development will hinge on how
quickly the international platform can be set
up,” he warned, “so the coordination team will
therefore be tasked with identifying areas of
potential, laying the groundwork and then effecting a gradual alignment with McKesson’s organisation structure.”
The combined McKesson/Celesio entity will
have annual sales in excess of US$150 billion
(C110 billion), approximately 81,500 employees
worldwide and operations in 20 countries.
Owen took over as chairman of Celesio’s
management board on 16 July, after McKesson
made sweeping changes to the management
team (OTC bulletin, 30 May 2014, page 27).
Formerly president of McKesson Specialty
Health, Owen was drafted in to replace Dr
Marion Helmes as head of Celesio. Helmes
– who had held the joint positions of speaker
of the management board and chief financial
officer – had now left the firm.
Another McKesson executive, Alain Vach-
Business
First-half sales
Change
(CC millions) 2013/2014 (%)
9,150
1,781
–
+1.1
+6.0
–
162.7
137.8
-65.4
-9.7
+8.8
–
Total Celesio
10,931
+1.8
235.1
-12.1
Figure 1: Celesio’s sales and earnings before interest, tax, depreciation and amortisation (EBITDA) in the first
half of 2014, broken down by business (Source – Celesio)
raw materials and components in order to produce over 7,500 stock-keeping units.
“Aggressively managing these purchases
helps ensure timely production and customer
delivery,” Gay insisted.
Gay’s comments came as Nutraceutical posted sales up by 9.5% to US$55.6 million (C41.5
million) in its third quarter ended 30 June 2014.
best practice at its existing pharmacies, and completely new developments (OTC bulletin, 18
December 2012, page 1).
The aim of the concept, Celesio said, was to
develop a “competitive pan-European pharmacy
network” that unified the company’s own pharmacies and its partner pharmacies to “offer
comprehensive patient services”.
In the UK, the Lloydspharmacy chain –
which accounts for the bulk of Consumer Solutions’ turnover – had performed well in the six
months, Celesio pointed out, with an increase in
revenues from services to hospitals and the provision of homecare. Improved sales of generic
drugs had also offset government price cuts.
Across the rest of Europe, sales at the company’s Norwegian pharmacy chain – its second
biggest after the UK – had advanced significantly in local currencies, Celesio noted, as better sales of OTC products, especially allergy
medicines, and higher revenues from services
countered the poor cold and flu season.
In Italy, the firm had seen a “pleasing increase” in sales of OTC products, Celesio said,
thanks to implementing the European Pharmacy Network concept. This had completely
offset the impact of lower prescription sales
caused by government cut backs, it added.
Celesio’s “expansive strategy” for its Swedish pharmacy continued to be driven forward, the
firm pointed out, but although higher sales and
better cost management had improved margins,
earnings still remained lower than expected.
Consumer Solutions’ earnings before interest,
tax, depreciation and amortisation (EBITDA)
had “surged” by 8.8% to C138 million in the six
months, Celesio noted. Adjusted for special
effects, EBITDA moved forward by 9.8%.
The Consumer Solutions division accounted
for 16% of Celesio’s sales in the quarter, which
crept up by 1.8% to C10.9 billion. EBITDA
slipped back by 12.1% to C235 million.
Celesio’s dominant Pharmacy Solutions
wholesale division posted a 1.1% rise in sales
to C9.15 billion in the period.
OTC
OTC
on, has now taken over Helmes’ role of chief
financial officer.
First-half sales at the Celesio’s Consumer
Solutions division increased by 6.0% to C1.78
billion in the period (see Figure 1), as the company continued to roll out its European Pharmacy Network concept.
In March, Helmes revealed that the pilot
phase of the European pharmacy concept under
the ‘Lloyds’ banner had “proved a success” and
would be expanded further in 2014 (OTC bulletin, 28 March 2014, page 5).
Rolling out pharmacy concept
The firm has now started rolling out the key
elements of the concept in the rest of its 2,175
pharmacies, and has also started to invite partner
pharmacies in France and Germany to adopt
the concept in line with national regulations.
Focused on offering “new and comprehensive advisory and other healthcare services”,
the concept – which had already been introduced to over 100 stores – had helped “strengthen the role” of pharmacists as both “competent
healthcare advisors” and as service providers
for national healthcare systems, the firm said.
Launched in late 2012, the new Europe-wide
Lloyds concept featured “innovative service
formats, high-quality products and the latest
technologies”, the company explained, and had
been based on “comprehensive” market studies,
Nutraceutical focuses on material costs
utraceutical International will manage
aggressively its raw material costs and
inventory levels to lower its overheads in the
future, according to chairman and chief executive officer Bill Gay.
Noting that the US-based nutritional supplements firm’s financial success was “heavily impacted by raw material and packaging costs”,
Gay pointed out that it sourced over 4,000
14
Change
2013/2014 (%)
Pharmacy Solutions
Consumer Solutions
Other
Business Strategy/Third-Quarter Results
N
EBITDA
(CC millions)
OTC bulletin 15 August 2014
OTC15-08-14p15-18_Layout 1 12/08/2014 19:02 Page 2
GENERAL NEWS OTC
International Self-Care Day
Regulatory Affairs
Industry pushes MHRA calls for proposals to
self-care habit put OTC drugs on black list
“T
T
here has never been a more urgent need
to focus the world’s attention on the
importance of better self-care”, according to
Erica Mann, chair of the World Self-Medication Industry (WSMI) and president of Bayer
Consumer Care.
Speaking at an event to celebrate International Self-Care Day on 24 July 2014 in Washington, US, Mann said that the day served as
an “opportunity to highlight the importance of
making self-care a lifelong habit”.
“Empowering consumers and patients to
become active shapers of their health and wellbeing,” Mann insisted, “is the single most effective, common-sense way to improve health, reduce healthcare costs and relieve the growing burden on health professionals.”
Sponsored by the Consumer Healthcare
Products Association (CHPA) and the WSMI,
the event was the first in the US to celebrate
International Self-Care Day and served to highlight to US policymakers the value of selfcare and the role of non-prescription products
as self-care tools.
As part of the celebrations, the CHPA announced that the US Senate had passed a resolution to designate 24 July as International
Self-Care Day.
The 24 July – or 24/7 – had been chosen
to remind people that self-care can be practised 24 hours a day, seven days a week.
Dr Gerald Dziekan, WSMI director-general, said the senate resolution was an “important step” in recognising the value of self-care.
“The benefits of self-care are well documented,” Dziekan pointed out, “but we’ve only
begun to harness its enormous potential to improve individual health and make healthcare
more sustainable.”
“Even incremental adoption of a few simple
measures can have a dramatic, even life-saving
impact,” he added.
Commenting on the success of this year’s
Self-Care Day, the CHPA said that in the US
it had gained wide-ranging media coverage,
through use of print, social and digital media,
as well as outreach activities to generate grassroots support for the day.
Furthermore, more than 55,000 people had
emailed the US Congress through the CHPA’s
online platform, the association noted, calling
for OTC medicines to be reimbursable through
insurance plans.
OTC
15 August 2014 OTC bulletin
he UK’s Medicines and Healthcare products Regulatory Agency (MHRA) is one of
the agencies seeking proposals for which nonprescription medicines should be added to a
‘black’ list of OTC products intended to carry
the safety features introduced by the European
Union’s (EU’s) Falsified Medicines Directive.
Under the terms of Directive, which entered
into force in January 2013, non-prescription
medicines listed as having been “assessed to be
at risk of falsification” and featured on the black
list will have to bear the required safety features, including a unique identifier.
Five selection criteria for black list
The list will be compiled by the European
Commission based on five criteria:
■ price and sales volume of the product;
■ number and frequency of past incidents of
falsification;
■ specific characteristics of the product;
■ severity of conditions treated by the product;
■ other potential risks to public health.
The European Commission has asked all
member states to submit their proposals for the
list by 3 October 2014.
Member states have also been asked to submit proposals for which prescription medicines
should be placed on a ‘white’ list of medicines
that should not have to carry the safety features.
The Directive also provides for member
states to notify the Commission when they believe a non-prescription medicine is at risk of
falsification based on the five criteria.
The Association of the European Self-Medication Industry, the AESGP, said it understood
that the European Commission would require
all five criteria to be fulfilled for a non-prescription medicine to be included on the list.
Updating its position on how to compile
the black list, the AESGP said it believed that
the Commission should populate the proposed
list only with “specific marketing authorisations/products”.
Noting that currently there were primarily
two possibilities for populating the black list
– by marketing authorisation (product) or by
active substance, which meant by the International Non-Proprietary Name (INN), possibly along with the pharmaceutical form and
the strength – the AESGP claimed that by setting the active substance as the main criterion,
significant risks would arise.
“Products could be included in the black
list without presenting a documented incident
of falsification,” the AESGP pointed out.
“Furthermore, such a provision could lead
to a mismatch between the existing risks and
the establishment of tools that effectively address such challenges,” it added, “while it will
generate significant costs not contributing to
the objective of the legislation to establish proportionate measures.”
The association also said that entries on the
black list should only be based on incidents of
falsification that have taken place within the
legal supply chain.
It would not be reasonable, it noted, to consider incidences outside the legal supply chain
– such as through an internet-based pharmacy
outside the EU – when defining possible entries
on the black list.
Inclusion on the black list should also not
be based on just one single or a few falsification
incidents, particularly in the case of a substance-based approach, the AESGP added.
The AESGP also called for measures introduced by the Directive not to be implemented
before 2020.
“Significant investments need to be undertaken concerning the adjustment of production
lines to the new requirements,” the AESGP
pointed out, “while previous experiences with
verification systems at national level showed
considerable problems and delays due to the
number and the complexity of the interventions needed, as well as the number of stakeholders involved in the implementation of the
new provisions.”
Companies need to be ready and able
Consideration needed to be given to the
capacity and to the readiness of all stakeholders involved in the introduction of the new provisions, the association said.
Therefore, deadlines for the application of
the measures introduced by the Directive should
not be “unnecessarily tight” and should take
into account the “capacity of industry and
national authorities to respond to such modifications”, it argued.
“Based on the feedback received from our
members, it would be reasonable to have an
implementation not before the year 2020,”
the AESGP said.
OTC
15
OTC15-08-14p15-18_Layout 1 13/08/2014 09:10 Page 3
OTC GENERAL NEWS
Regulatory Affairs
Russia considers non-pharmacy sales
M
any OTC drugs could soon be sold in
Russia’s grocery stores and supermarkets.
A draft list of OTC drugs for non-pharmacy
sale has been drawn up by the Ministry of Health
at the request of first deputy prime minister,
Igor Shuvalov. However, the Pharmacy Guild
of independent community pharmacies and the
Russian Pharmaceutical Association representing pharmacy chains have both objected strongly to the proposal, which is likely be considered by the government this autumn.
The draft list – based upon several criteria
including low health-risk for consumers and
minimum standards for product storage – contains seven categories of products: antihistamines, antiseptics, antivirals, cough and cold
preparations, iron preparations, medicinal charcoal and nasal preparations. No specific active
ingredients are mentioned.
Last year’s biggest-selling OTC category
in Russian pharmacies – cough and cold preparations (OTC bulletin, 16 June 2014, page 8)
– is listed in the form of external ointments,
lozenges and nasal inhalers. Antihistamines are
present as topical gels, ointments and emulsions for external use, while seawater nasal
sprays are also included.
Antiseptics for treating sore throats are listed
in all their various forms, including aerosol solutions, lozenges and topical sprays (see Figure 1).
Serious concerns have been raised, however, by Russia’s pharmacists. Elena Nevolina,
executive director of the Pharmacy Guild, believes such a move outside pharmacy could
Antihistamines
Topical emulsions,
gels and ointments
Antiseptics for
sore throats
Aerosols and sprays
for topical use
Buccal tablets
Drops for oral and
topical use
Lozenges
Pastilles
Solutions for
topical use
Antivirals
Creams and ointments
for external use
Cough and cold
preparations
External ointments
Lozenges
Nasal inhalers
Iron preparations
Capsules
Chewable lozenges
Film-coated tablets
Solutions for oral use
Syrups
Tablets
Medicinal charcoal
Capsules
Granules
Powder and paste
for oral use
Powder for
suspension tablets
Nasal preparations
based on seawater
and sodium chloride
Nasal aerosols,
drops and sprays
Figure 1: Russia’s draft list of OTC drugs for non-pharmacy sale is based on the anatomical and therapeutic
chemical (ATC) classification system (Source – Russian Pharmacy Guild)
lead to an uncontrolled flow of counterfeit
medicines, endangering public health.
Political decision will hurt pharmacy
Meanwhile, Alexander Apazov, chairman of
the Russian Pharmaceutical Association, insisted: “This political decision will hit pharmacy
very badly.” At a meeting of the association,
called to discuss ways of preventing the change,
he stressed that pharmacy chains needed to
define a clear “line of defence” that would convince society and the government that change
was unnecessary.
Meanwhile, Victor Evtukhov, deputy head
of the Ministry of Industry and Trade, commented that making a limited number of medicines available outside pharmacy would benefit both large and smaller retailers, and that
expanding distribution channels would encourage new business development.
Non-prescription medicines may currently
be sold outside pharmacies in Russia, but such
sales are limited to licensed ‘pharmacy kiosks’.
Sales of OTC products through Russian pharmacies increased by 9% to RUB9.2 billion
(C19 million) at retail prices in 2013, as higher
prices drove up consumer spending (OTC bulletin, 16 June 2014, page 8).
OTC
IN BRIEF
Regulatory Affairs
■ BARMER-GEK health insurance fund said
that more than four-fifths of homoeopathy users
in Germany report improved physical and mental well-being, according to a survey of almost
7,000 people that it insured. According to the
survey – conducted in conjunction with the
Bertelsmann Foundation – 87% of homoeopathy users believe such remedies can succeed
where conventional medicine has failed. Almost
half of those questioned cited ‘general complaints’ as a reason for visiting a homoeopathy
practitioner, with chronic and acute complaints
cited by 43% and 32% respectively. Similarly,
around half of the participants said homeopaths offered relief that patients had not found
elsewhere and devoted more time to patients
than other doctors.
OTC
16
FDA looks at antiseptics and sunscreens
T
he US Food and Drug Administration
(FDA) has announced a series of meetings
to discuss the standards used to demonstrate
that OTC antiseptics used in healthcare settings
are safe and effective, as well as the scope of
safety testing required for sunscreen ingredients marketed as OTC medicines.
On 3 September, the agency’s Nonprescription Drugs Advisory Committee (NDAC) will
discuss OTC antiseptics, with a focus on active
ingredients marketed as OTC products and used
for a variety of functions in professional healthcare settings.
These functions, the FDA noted, included such uses as: healthcare personal hand
washes and rubs; surgical hand scrubs; and
patient and pre-injection skin preparations.
Meanwhile, on 4 and 5 September, NDAC
will tackle the need for various types of safety
data, including clinical and non-clinical data,
for sunscreens used chronically in individuals
over the age of 6 months to help prevent
skin cancer and skin ageing.
The meeting comes three years after the
FDA tightened its controls on sunscreen products. The tighter restrictions mean that only
sunscreens with a Sun Protection Factor (SPF)
value of 15 or higher can claim to reduce the
risk of skin cancer and early skin ageing; while
claims the products are “waterproof”, “sweatproof” or “sunblock” are banned.
OTC
OTC bulletin 15 August 2014
OTC15-08-14p15-18_Layout 1 12/08/2014 19:02 Page 4
GENERAL NEWS OTC
Regulatory Affairs
EFSA rejects
Clasado claim
C
lasado’s appeal to the European Food
Safety Authority (EFSA) relating to its
Bimuno GOS food constituent, which is claimed to reduce gastrointestinal discomfort, has
again received an unfavourable opinion from
the authority’s Panel on Dietetic Products, Nutrition and Allergies (NDA).
Noting that all but one of the studies provided by the firm – via the Maltese competent
authority – had been submitted in previous unsuccessful applications for the same claim (OTC
bulletin, 23 August 2013, page 18), the NDA
said no further (scientific) substantiation had
been supplied for a cause-and-effect relationship between Bimuno and the claimed effect.
Lack of substantiation was also the reason
why a further three applications made under
Article 13.5 of the health claims Regulation
1924/2006 were rejected by the EFSA Panel.
All had included requests for the protection
of proprietary data.
Natural Alternative International had provided 11 human intervention studies in its
application through the UK’s competent authority. Despite this, its claim relating to the
consumption of beta-alanine leading to an increase in physical performance during shortduration, high-intensity exercise was turned
down. The proposed consumers were healthy
adults aged between 19 and 71 years.
Meanwhile, DSM Nutritional Products and
Kemin Foods – applying through the French
competent authority – had also been unable to
establish a cause-and-effect relationship, the
EFSA Panel pointed out, between a combination of lutein and zeaxanthin, and improved
vision under bright light conditions in the
“general healthy population”.
The Panel also rejected Swedish company
DoubleGood’s claim relating to the effect of
a combination of L-threonine, L-valine, L-leucine, L-isoleucine, L-lysine and chromium
picolinate on the reduction of post-prandial
glycaemic responses in adults.
OTC
IN BRIEF
■ REGENECA – a division of VivaCeuticals –
has issued a voluntary recall of certain lots of its
RegenESlim appetite control dietary supplement in the US. The recall was issued after
the stimulant DMAA was found in the product.
OTC
15 August 2014 OTC bulletin
Switches
Asthma use worries lead
Singulair safety concerns
O
ff-label use of Merck & Co’s OTC version of Singulair (montelukast) by asthma
patients may lead to adverse outcomes, according to members of the US Food and Drug Administration’s (FDA’s) Non-prescription Drugs
Advisory Committee, who recently voted to reject a partial switch of Singulair to OTC status.
At its meeting in May – the minutes of
which have only recently been made public –
the committee said Singulair’s safety as an
OTC medicine for the relief of allergy symptoms, “considering potential off-label use”,
had not been adequately demonstrated (OTC
bulletin, 9 May 2014, page 1).
It voted 11-4 against the switch of 10mg
montelukast film-coated tablets under the brand
name Singulair Allergy for adults aged 18 years
and older for the temporary relief of hayfever
and other upper respiratory allergy symptoms,
namely nasal congestion, runny nose, itchy
watery eyes, sneezing, and itching of the nose.
While prescription Singulair was indicated
to treat asthma, off-label use for the condition
was of concern in the OTC setting, some committee members argued, because patients would
“not be able to adequately self-assess the severity of their asthma condition”. Asthma patients
could also potentially “under- or over-treat”
their condition, the members added.
Some committee members also claimed that
there would be “significant” unapproved use
of OTC Singulair in the paediatric population.
These members expressed concern that children
could be given a full 10mg adult dose, or that
parents could attempt to “split tablets” to obtain the 5mg dose indicated for children in the
prescription setting.
In addition to reviewing off-label use, the
committee also addressed the potential for Singulair Allergy to cause neuropsychiatric events.
The committee noted that there was a “low
frequency” of a broad set of neuropsychiatric
events associated with montelukast but that
these risks needed to be “addressed sufficiently
in the OTC labelling prior to a switch”. Merck
should conduct a “prospective placebo controlled trial”, the committee recommended, to
assess neuropsychiatric events.
The body also voted 11-4 that the risk/benefit profile of montelukast was not supportive
of OTC use in adults for the nasal indication
proposed by Merck.
While safety issues and the risk/benefit
profile with off-label use for asthma in the OTC
population were the committee’s main concerns,
the body also noted that the complexity of the
OTC label could make it difficult for the average adult to understand.
OTC
Regulatory Affairs
ASMI seeks complementary progress
“C
omplementary medicines regulation [in
Australia] needs to be rigorous but consistent with risk, as well as timely and balanced,
if the industry is to build consumer confidence,”
according to the Australian Self-Medication
Industry’s (ASMI’s) regulatory and scientific
affairs director Steve Scarff.
Noting that Australian regulators had mechanisms in place to ensure claims made about
complementary medicines were “accurate, balanced and not misleading”, Scarff argued that
there was “room for improvement”. The regulatory process needed to be transparent so
consumers could have confidence in the health
claims made for individual products, he added.
Scarff made his comments in response to
an article published in The Australian that called on pharmacists not to sell complementary
medicines as they were not proven medicines.
The article referenced a 2010 study that
had shown up to 90% of complementary medicines reviewed by the country’s Therapeutic
Goods Administration (TGA) to be “non-compliant”. It also noted that only 31% of complementary medicines randomly tested between
September 2012 and December 2013 had not
breached regulatory requirements.
Scarff said building consumer trust in complementary medicines required manufacturers
to be able to substantiate claims for individual products.
Consumers needed to have access to evidence-based information about complementary
medicines, Scarff said, and called on the government to invest in research.
OTC
17
OTC15-08-14p15-18_Layout 1 12/08/2014 19:02 Page 5
OTC GENERAL NEWS
Regulatory Affairs
Regulatory Affairs
EFSA says no to Body weight is no issue for
InQpharm claim emergency contraceptives
I
E
nQpharm Europe cannot claim that a standardised aqueous extract of white kidney
bean (phaseolus vulgaris L.) – the active ingredient known as PhaseLite in Omega Pharma’s XLS-Medical Carb Blocker – can reduce
body weight, the European Food Safety Authority (EFSA) has stated.
Responding to an application via the UK’s
competent authority, EFSA’s Panel on Dietetic
Products, Nutrition and Allergies (NDA) said
the firm had not provided sufficient evidence
to establish a cause-and-effect relationship between food consumption and the outcome.
The claimed effect was “helps to reduce
body weight”, while the proposed target population was “the general population that wants
to lose or manage their weight”.
InQpharm claimed that the extract – which
is also marketed under the brand names Glucosanol, Glycolite, Phase 2 and Starchlite –
could achieve the claimed effect in three ways.
These were: reducing the digestion of starch
and therefore the absorption of dietary glycaemic complex carbohydrates by the body; delaying gastric emptying; and reducing feelings of hunger.
InQpharm had also requested that the proprietary data behind its Article 13.5 “new function” health claim – based on newly-developed
scientific evidence – should be protected under
the provisions of the health claims Regulation 1924/2006.
Although the NDA acknowledged that one
human intervention study out of the four supplied had shown a reduction in body weight
when the extract was consumed for 12 weeks,
it pointed out that the study had been “at risk
of bias” through “unblinding”.
Furthermore, a supporting study had suffered from “methodological limitations”, the
EFSA Panel noted, and “no evidence was provided for a mechanism by which the standardised aqueous extract from white kidney bean
could exert the claimed effect”.
OTC
IN BRIEF
■ PUBLIC CITIZEN – a US-based consumer
group – has petitioned the Food and Drug Administration (FDA) to revise the proposed labelling for OTC benzocaine oral health products and remove the infant teething indication.
OTC
18
mergency contraceptives containing levonorgestrel or ulipristal acetate are effective
in all women regardless of body weight, according to Europe’s Committee for Medicinal Products for Human Use (CHMP).
Following a review of the efficacy of emergency contraceptives in overweight women, the
CHMP concluded that the products could “continue to be used in women of all weights as the
benefits are considered to outweigh the risks”.
In February, the CHMP said it would review
emergency contraceptives containing levonorgestrel and ulipristal acetate. This was in response
to the release of “new data suggesting that a
high body weight could impair the effectiveness” of such products (OTC bulletin, 7 February 2014, page 14).
The emergency contraceptives under review
were the levonorgestrel-based Norlevo, Levodonna and Levonelle, as well as Ellaone, which
contains ulipristal acetate.
The review was triggered by the Swedish
medicines regulatory agency under Article 31
of European Union Directive 2001/83/EC.
Explaining its decision, the CHMP said the
available evidence to suggest that the effectiveness of emergency contraceptives was reduced
with increased body weight was “too limited
and not robust enough”.
Noting that for ulipristal acetate there existed some data from clinical trials to suggest a
possible trend for a reduced effectiveness in
overweight women, the CHMP concluded that
this data was “too limited and insufficiently precise to draw definite conclusions”. This was also
the case for levonorgestrel, the CHMP added.
The product information for emergency contraceptives should be updated to include the results of these studies, the CHMP said.
Pointing out that Norlevo manufacturer HRA
Pharma had already altered the product’s patient
information leaflet to advise against its use by
overweight women, the CHMP recommended
that these statements should be deleted.
HRA Pharma altered the leaflet for Norlevo in November 2013 to include the statement: “In clinical trials contraceptive efficacy
was reduced in women weighing 75kg or more,
and levonorgestrel was not effective in women
who weighed more than 80kg.”
In response to HRA’s move, France’s medicines agency, ANSM, advised women weighing
over 80kg to “seek another method of emergency contraception” (OTC bulletin, 13 December 2013, page 11).
The CHMP recommendation will now be
sent to the European Commission, which will
take a legally-binding decision throughout the
European Union’s 28 member states.
Earlier this year, Health Canada ruled that
emergency contraceptives available OTC in the
country must carry a warning advising against
their use by overweight women (OTC bulletin,
11 April 2014, page 13).
Health Canada said the label and packaging
leaflet of levonorgestrel-based emergency contraceptives should be updated to warn consumers
that the products were “less effective in women
weighing 165-176 pounds (75-80kg) and not effective in women weighing over 176 pounds”.
The leaflet would also advise women weighing over 165 pounds to “ask a healthcare professional for advice on alternative methods of
emergency contraception”, the agency added.
Meanwhile, Australia’s Therapeutic Goods
Administration (TGA) and New Zealand’s regulator Medsafe are currently reviewing the
efficacy of emergency contraceptives in women
weighing more than 70kg (OTC bulletin, 17
March 2014, page 10).
OTC
Regulatory Affairs
EFSA decides niacin DRVs for infants
I
nfants aged between seven and 11 months
have the same niacin requirements as adults,
the European Food Safety Authority (EFSA) has
decided. This is also true of children and adolescents, as well as pregnant and lactating women.
Following a request from the European
Commission to determine Dietary Reference
Values (DRVs) for niacin, EFSA concluded
that the average requirement of 5.5mg niacin
equivalent (NE) per 1,000 kcal and Population
Reference Intake of 6.6mg NE per 1,000 kcal
– which have been in place since 1993 – “also
applied to these age and life-stage groups”.
OTC
OTC bulletin 15 August 2014
OTC15-08-14p19-21_Layout 1 12/08/2014 18:28 Page 2
MARKETING NEWS OTC
Product Launches
Product Launches
German Nexium Infirst to make global debut
sets zero target with Dr Cocoa launch in US
P
I
fizer Consumer Healthcare is promising
“a large-scale, attention-grabbing television
campaign” to accompany the launch of its Nexium Control heartburn remedy in Germany.
As the central message of the campaign for
the 20mg esomeprazole tablets, Pfizer has chosen “1 Tablette am Tag, 24 Stunden Schutz,
Ziel: Null Sodbrennen”. This translates as “One
tablet during the day, 24-hour protection, Goal:
Zero heartburn”.
A Pfizer spokesperson told OTC bulletin
that the German commercials for the pharmacyonly medicine would be adapted from a panEuropean template. She declined to comment
on the duration or budget of the campaign.
Intended targets for the 24-hour protection
message are frequent heartburn sufferers, namely those who experience the condition more
than twice per week.
The same messages appear on launch trade-
OTC Nexium’s German launch will be supported by a
“large-scale, attention-grabbing television campaign”
press advertising, which also highlights the
television campaign and features the headline
“Die Nr.1 der Säureblocker jetzt rezeptfrei”,
or “The number-one acid blocker is now available without a prescription”.
According to the trade advertising, Nexium
Control offers “better acid control compared
to other proton-pump inhibitors”, delivering
70% more acid blockers to the proton pump.
“The launch of Nexium Control will be accompanied by an attention-grabbing, integrated
campaign that, through a 360-degree communication strategy, combines television spots
with both print and online advertising,” the
spokesperson stated.
Pfizer – which is also rolling out the brand
in France, Italy and the UK following a panEuropean centralised switch procedure (OTC
bulletin, 26 July 2013, page 1) – has given
the German version recommended retail prices
of C7.59 for a pack of seven enteric-coated tablets, and C11.97 for a pack of 14.
OTC
15 August 2014 OTC bulletin
nfirst Healthcare’s Dr Cocoa chocolate-flavoured cough-remedy brand is set to make its
global debut at the beginning of September.
Three liquids are to be launched onto the US
paediatric cough/cold remedy market that is said
to be worth in excess of US$350 million (C262
million) at retail.
Designed for children aged between four and
13 years, the range of patent-protected cough
liquids comprises Long-Acting Cough Relief,
Daytime Cough and Cold Relief and Night
Time Cough and Cold Relief variants. These
contain ingredients such as dextromethorphan,
phenylephrine and diphenhydramine.
Noting that many parents struggled to get
their children to take medicine as directed, the
UK-based company pointed out that the product line was formulated with 10% real cocoa
to improve dosing compliance.
Packaging for the cough liquids features the
Dr Cocoa owl character, which is said by Infirst to depict a family doctor speaking to children and parents in a “knowledgeable and credible way”, and will appear across all marketing for the range.
The launch will be supported by a multimedia campaign, with the message that Dr
Cocoa provides “relief with a smile”.
“A suite of social-media platforms was in
development”, James Barickman, general manager of Infirst’s US arm, told OTC bulletin,
and would include the Dr Cocoa Facebook page.
The brand website was also being “expanded
and updated” with news of the roll out.
The Dr Cocoa line of three chocolate-flavoured cough
liquids is said to be formulated with 10% real cocoa
to improve dosing compliance in children
Infirst secured the rights to Dr Cocoa from
Pernix Therapeutics at the end of last year, after
the firm – which developed the products using
some of Infirst’s intellectual property – said
it did not have the “discretionary resources”
to “prudently and effectively” take the brand
into the US OTC marketplace (OTC bulletin,
13 December 2013, page 7).
Pointing out that Infirst was currently “exploring other markets”, Barickman said the company anticipated extending Dr Cocoa’s reach
beyond the US in 2016.
Speaking to OTC bulletin in December last
year, Manfred Scheske, Infirst’s chief executive officer, said that if the milestones laid out
were met, the firm also hoped to launch its own
cocoa-flavoured cough liquid in one European country in “late 2014”.
OTC
Advertising Campaigns
Omega Pharma’s Lyclear makes UK return
O
mega Pharma’s Lyclear head-lice treatment is returning to UK television screens
from 18 August to highlight the 100% effectiveness of the brand. The 30-second creative
aired earlier this year as part of the firm’s doubled annual investment in television advertising to £2.0 million (C1.5 million) (OTC bulletin, 28 March 2014, page 16).
Set to run until 21 September, the advertisement will emphasise how the ‘dual-action’ formula of the Lyclear Sensitive and Treatment
Spray products – which are both classed as medical devices – suffocate and dehydrate lice.
Thanks to Omega’s increased marketing
spend, the firm claimed Lyclear now held a
22.3% share of the UK head-lice market. This
was worth £25.3 million at retail according to
IRI, making it the second-biggest brand in the
market behind Thornton & Ross’ Hedrin.
The campaign would continue to be supported by public relations activity and pharmacytraining materials, Omega noted. Lyclear will
also continue its partnership with parenting website Netmums, sponsoring head-lice forums and
‘back-to-school’ pages.
OTC
19
OTC15-08-14p19-21_Layout 1 12/08/2014 18:28 Page 3
OTC MARKETING NEWS
Product Launches/Line Extensions
Bayer bolsters Berocca in US and UK
B
ayer is extending the reach of its Berocca
vitamin supplements with the nationwide
US roll-out of a formulation developed specifically for the gap in the local market between
energy products and multivitamins. The firm
has also launched a mango-flavoured addition
to its UK line of effervescent tablets.
Positioned as an energy-support product, the
US-specific formula contains guarana and caffeine in addition to the B-vitamins, magnesium
and zinc in the original effervescent tablets
that are currently available in around 70 other
markets. The recommended daily dose of one
US tablet is claimed to provide “about as much
caffeine as a cup of coffee”.
Berocca was being targeted at US consumers
aged between 25 and 49 years that lived a “full,
fast-paced life”, the company noted, with the
claim that it supported “mental sharpness and
physical energy”.
Bayer added that the tablets – available in
both orange and mixed-berry flavours – came
in two- and 10-count packs to fit with the target
audience’s busy lifestyle. The US version of
Berocca had previously been tested as an
orange variant in Duane Reade stores across
New York City.
To help launch the range nationwide, Bayer
has created a campaign in partnership with actor
and comedian Joel McHale, who plays a fictional brand ambassador called Brock Spedwell.
The 15- and 30-second television spots show
Spedwell – who also features in videos on the
brand’s YouTube channel – as a motivational
speaker inspiring people to try Berocca.
Bayer is supporting the launch further with
a refreshed brand website, buyberocca.com, as
well as updated Facebook and Twitter profiles.
There will also be a nationwide sampling tour
and public-relations activity.
Mango flavour to deliver £1mn in UK
Meanwhile, in the UK, the firm expects the
addition of the mango-flavoured effervescent
tablets to deliver over £1.0 million (C1.3 million)
at retail within the first year of launch.
Noting that mango-flavoured products were
“very much on-trend”, Bayer told OTC bul-
Comedian and actor Joel McHale plays a fictional
brand ambassador called Brock Spedwell in Berocca’s
television advertising
letin that the latest variant provided a specific
exotic fruit flavour for consumers in addition
to its existing tropical-fruit option.
Currently available at Boots, the tablets
would be widely available across the grocery,
pharmacy and convenience sector from September, the firm noted.
The mango variant will feature in the brand’s
most recent television sponsorship campaign
with Channel 5 (OTC bulletin, 16 June 2014,
page 14). It will also be promoted via Berocca’s
Facebook page and through in-store activity.
OTC
Advertising Complaints
NJOY spot did not imply e-cigarette benefit
A
Thornton & Ross’ Hedrin head-lice brand is looking to
remind UK parents that children are just as susceptible
to head-lice infestation when playing with their friends
as they are at school. It aims to do this through a
nationwide campaign in 125 indoor play centres.
Set to last for four weeks – ahead of the
‘back-to-school’ period – the campaign will include
wall posters encouraging consumers to “Defend your
family from head lice”. Discount leaflets offer parents
£1.50 (CC1.89) off the price of the Hedrin Protect &
Go leave-in conditioning spray launched last year
(OTC bulletin, 23 August 2013, page 23).
Through the leaflets, Thornton & Ross added,
parents would also be directed to enter their details on
the Hedrin website. This would give them the chance
to win a £1,000 ‘Dream Ticket’ voucher.
OTC
20
UK television advertisement for NJOY
electronic cigarettes – e-cigarettes – did
not misleadingly imply that smoking the product was healthier than smoking tobacco cigarettes, the UK’s Advertising Standards Authority (ASA) has ruled.
“Friends don’t let friends smoke” was the
message in the 30- and 60-second versions of
the advertisement, which was launched at the
beginning of the year as part of the US-based
firm’s US$50 million (C37 million) promotional spend outside of its domestic market
(OTC bulletin, 17 January 2014, page 15).
The spot showed two friends helping each
other in various situations such as moving house,
before one friend was shown giving the other
the NJOY product to stop them from smoking.
A voiceover stated: “For everything that friends
do for each other, return the favour. Give a
friend an NJOY King electronic cigarette.”
While the advertisement implied that the
product was preferable to smoking tobacco
cigarettes, the ASA noted, there might have
been a number of reasons why a friend might
suggest smoking e-cigarettes in place of tobacco products. Furthermore, no express health
claims related to the product had been made,
the watchdog added.
OTC
IN BRIEF
■ RB – Reckitt Benckiser – has entered into
a “multi-year, nine-figure global partnership”
with social networking site Facebook to “effectively reach consumers in their digital
lives”. The two firms will collaborate initially in Australia, Brazil, Canada, India, Italy,
the UK and the US to connect Facebook
users with brands such as Mucinex and Mega-
Red, with “rapid expansion of the relationship”
planned over the next three years. The partnership will also bring together employees from
the global sales, marketing and creative
teams of the two firms, which will hold joint
recruiting events at universities to find “the
best talent for both companies”.
OTC
OTC bulletin 15 August 2014
OTC15-08-14p19-21_Layout 1 13/08/2014 09:14 Page 4
MARKETING NEWS OTC
Product Launches
Prestige offers
dairy defence
P
restige Brands claims it is offering US consumers the first OTC option to relieve the
symptoms of lactose intolerance or sensitivity,
as well as trapped wind – ‘gas’ – with the addition of a Plus Dairy Defense product under its
Beano line of gastrointestinal remedies.
A national survey of women aged over 55
years conducted on behalf of the brand – which
also comprises the original Beano tablets, Beano
Meltaways and a Beano to Go travel pack – had
Beano Plus Dairy Defense is said to relieve both trapped
wind and symptoms of lactose intolerance or sensitivity
highlighted that 46% of respondents frequently
suffered from gas, pressure or bloating after
consuming dairy products, the US-based company pointed out.
Three-quarters had said they avoided “problem foods” such as vegetables, beans and whole
grains due to “digestive issues”, Prestige added.
As Beano Plus Dairy Defence contained two
natural food enzymes, the firm explained, the
raspberry-sorbet-flavoured chewable tablets
could break down both these problem foods
and the lactose found in dairy products. Consumers are advised to take one tablet before
meals that contain such ingredients.
The survey had also found that nearly twothirds of people would be willing to try a new
product that relieved both gas and lactose sensitivity, Prestige added.
Product Launches
Australians can access
Merck’s Nasonex OTC
A
ustralian consumers are now among some
of the first in the world to be able to buy
mometasone furoate OTC – in the same strength
as a prescription variant – for their allergic
rhinitis symptoms with the launch of Nasonex Allergy spray by Merck & Co’s Consumer Care business.
Containing 50µg per actuation, the spray
was switched by the Australian Therapeutic
Goods Administration (TGA) last October. It
now holds schedule 2 – pharmacy-only – status.
Mometasone furoate has been available as a
non-prescription medicine in Sweden since 2004.
It also gained OTC status in Finland in 2013.
Suitable for adults and children aged 12
years and over who suffer from limited allergic rhinitis, Nasonex Allergy is indicated for
relief from sneezing, congestion and itchy and
runny nose.
It is still available – as Nasonex – on prescription for allergic rhinitis in adults, adolescents and children aged between three and 11
years. The prescription variant is also indicated
for acute rhinosinusitis and nasal polyps in those
aged over 12 and 18 years respectively.
Merck said it aimed “significantly” to grow
the Australian OTC intranasal corticosteroid
market – claimed to be worth A$18.4 million
(C12.8 million) at retail – by launching the spray
in time for the spring/summer allergy season.
Noting that over 15% of Australians suffered
Nasonex Allergy was approved as schedule 2
(pharmacy-only) medicine by the TGA in October 2013
with the condition, Andrew Jenkin, regional
director for Merck Consumer Care Australia,
said the OTC availability of Nasonex Allergy
offered patients “easier access to an effective
and trusted therapeutic choice for relief of
their symptoms”.
This was consistent with the firm’s goal of
“working with pharmacy in supporting good
patient health outcomes through self-care”,
he added.
A television campaign will air in September
to support the launch, along with a public-relations campaign, point-of-sale materials and
pharmacy training. The firm said that additional product information could be found on
the new website, nasonexallergy.com.au.
OTC
■ ETIXX – the sports nutrition brand owned
by Omega Pharma – will become the official
sponsor of the Quick Step cycling team from
2015. Currently known as Omega Pharma
Quick Step, the team will be called Etixx
Quick Step until the 2017 season.
Busy people who suddenly notice that their pain has
gone feature in launch German television advertising for
Bayer’s next-generation Aspirin tablets, contain
500mg acetylsalicylic acid as microparticles (OTC
bulletin, 25 July 2014, page 16).
Running on major channels from early August, the
28-second commercial created by Düsseldorf agency
BBDO shows a businessman, a female train passenger
and a male office worker.
During a computer-generated cutaway, a voiceover
explains how the tablets’ “micro-active technology”
enables users to experience a noticeable reduction in
pain twice as quickly as people taking standard
Aspirin tablets. The advertisement ends with the
sign-off message “Not just quick, but twice as quick”.
Dutch firm YouMedical has entered into an exclusive
agreement with US-based Prestige Brands to launch
in the US and Canada its Wartie technology for the
treatment of warts and verrucas.
Under the terms of the deal – which is part of the
“international commercialisation” of Wartie – Prestige
has been granted the exclusive rights to market and
sell the technology under its Compound W brand, while
YouMedical – which also owns the Footner foot-care
line and the Nailner range for treating nail fungus –
will assume production and supply responsibility.
Suitable for those aged four years and above,
Wartie’s ‘precision tip’ is said only to freeze the wart,
leaving the surrounding healthy skin unharmed.
OTC
OTC
OTC
OTC
IN BRIEF
15 August 2014 OTC bulletin
21
Generics Awards Ad 4/8/14_Layout 1 04/08/2014 14:30 Page 1
OTC15-08-14p23Events_Layout 1 12/08/2014 18:01 Page 2
EVENTS OTC
SEPTEMBER
17-20 September
■
■
Expopharm 2014
Munich, Germany
A four-day international pharmaceutical trade fair and conference.
Contact: Expopharm.
Tel: +49 6196 928 830.
Fax: +49 6196 928 404.
Email: visitors@expopharm.de.
Website: www.expopharm.de.
22-23 September
■
China: Regulatory Affairs
for Pharmaceuticals
London, UK
Variations, registrations and renewals in China will be discussed at
this two-day meeting.
Contact: Informa UK.
Tel: +44 20 7017 7481.
Fax: +44 20 7017 7823.
Email: registration@pti-europe.co.uk.
Website: www.pti-europe.co.uk.
■
Vitafoods Africa
■
13-15 October
■
Dubai, UAE
Countries to be covered at this
two-day meeting will include Bahrain, Egypt, Iran, Iraq, Kuwait,
Lebanon, Libya, Qatar, Saudi Arabia, Syria, and Yemen.
Contact: Management Forum.
Tel: +44 1483 730071.
Fax: +44 1483 730008.
Email: registrations@managementforum.co.uk.
Website: www.management-forum.co.uk.
Global Generics &
Biosimilars Awards 2014
Paris, France
These new Awards will recognise
the achievements of the global generics and biosimilars industries.
Organised by Generics bulletin,
they will reward business development initiatives, clever licensing
deals and smart legal manoeuvres.
Contact: Generics bulletin.
Tel: +44 1564 777 550.
Fax: +44 1564 777 524.
Email: natalie.cornwell@genericsbulletin.com.
Website: www.generics-bulletin.com.
11th TOPRA
Annual Symposium
Brussels, Belgium
A three-day event run by The Organisation for Professionals in Regulatory Affairs (TOPRA).
Contact: TOPRA.
15 August 2014 OTC bulletin
Pharmaceutical
Regulatory Affairs
in the Middle East
Pharmaceutical
Labelling
Berlin, Germany
Speakers from Boehringer Ingelheim, GlaxoSmithKline, Meda,
Merck Sharpe & Dohme, the
Proprietary Association of Great
Britain (PAGB), Reckitt Benckiser
and Sanofi will attend this this
two-day seminar.
Contact: Informa UK.
Tel: +44 20 7017 7481.
Fax: +44 20 7017 7823.
Email: registrations@informa-ls.com.
Website: www.informa-ls.com/
pharmalabelling.
Natural Products
Scandinavia
28-29 October
5-8 November
■
OTC Pharma China
Shanghai, China
Topics to be discussed at this fourday conference will include marketing and branding strategies for
new launch products; prescriptionto-OTC switch strategies and opportunities; regulatory strategies
for herbal OTC products; a special
focus session on traditional Chinese
medicinal products; and expansion
strategies from Asia and beyond.
OTC bulletin subscribers can enjoy a 15% discount by quoting
P46252OB during registration.
Contact: IBC Asia.
Maximise Self-Care Potential:
Through Asia Regulatory Harmonisation
Phuket, Thailand
The 10th World-Self Medication Industry (WSMI) Asia-Pacific Regional
Conference will form part of this two-day event, which will include sessions
on: ‘Asia self-medication market trends, health policy and consumer practice’; ‘Value and potential of OTC’; ‘Communication, education and partnership in self-care’; ‘Regulatory challenges and opportunities in the OTC
industry’; and ‘Prescription-to-OTC switches and borderline products’.
Contact: WSMI. Tel: +33 450 284 728. Fax: +33 450 284 024.
Email: conference@tsmia.or.th. Website: www.tsmia.or.th/Phuket2014 /main.html.
CRN’s Annual
Symposium for the
Dietary Supplement
Industry
California, US
A four-day conference organised
by the US Council for Responsible Nutrition (CRN).
Contact: CRN.
Tel: +1 202 204 7700.
Fax: +1 202 204 7701.
Email: webmaster@crnusa.org.
Website: www.crnusa.org/2014events/.
13-14 November
■
9th International
Alliance Conference
Berlin, Germany
This two-day meeting will bring
together manufacturers, outsource
sales and marketing service providers (distributors) and industry opinion leaders in health and beauty.
Contact: Ceuta Healthcare.
Tel: +44 1202 449 709.
Email: lorian.pitman@ceuta
healthcare.com.
Website: www.ceutaalliance.com/
2014_conference_berlin.html.
28-31 October
■
21-22 October
■
NOVEMBER
28-29 October
■
Malmö, Sweden
A two-day trade show for natural
products, health foods, natural
beauty and organic products.
Contact: Diversified Business
Communications UK.
Tel: +44 1273 645 141.
Email: zoejc@divcom.co.uk.
Website: www.naturalproducts
scandinavia.com.
7 October
■
Brussels, Belgium
‘Herbal (medicinal) products, food supplements and self-care medical
devices: Paving the way towards a coherent system’ is the theme of this
two-day event run by the Association of the European Self-Medication
Industry, the AESGP.
There will be sessions on: ‘Finding the right balance for herbal (medicinal) products, food supplements and self-care medical devices’; ‘Ensuring the right assessment of food supplements and health claims’; and
‘Adjusting the medical device legislation to consumer needs’.
Speakers will include: Basil Mathioudakis and Paola Testori Coggi of
the European Commission; Werner Knöss of the Committee on Herbal
Medicinal Products (HMPC); and Ioanna Chinou of the European Medicines Agency (EMA).
Contact: AESGP. Tel: +32 2 735 51 30. Fax: +32 2 735 52 22.
Email: o.bua@aesgp.eu. Website: www.aesgp.eu/events/Brussels2014/.
26-27 October
1-3 October
Johannesburg, South Africa
This three-day event is claimed to
be the leading nutraceutical meeting for Africa’s functional food,
dietary supplements and complementary and alternative medicines
(CAMS) industries.
Contact: IIR.
Tel: +27 1 1771 7222.
Email: jlues@iir.co.za.
Website: www.iir.co.za/vitafoodsafrica.
AESGP Conference
Tel: +44 20 7510 2560.
Fax: +44 20 7537 2003.
Email: meetings@topra.org.
Website: www.topra.org.
OCTOBER
■
Tel: +65 6508 2401.
Email: register@ibcasia.com.sg.
Website: www.otcpharmachina.com.
7-8 October
17-18 November
■
EuroPLX 56
Nice, France
This two-day conference will provide a forum for business development decision makers for discussing and negotiating collaborative agreements in licensing, marketing, and distribution of patented
medicines, generics, biosimilars,
OTC products, medical devices
and food supplements.
Contact: RauCon.
Tel: +49 6222 9807 0.
Fax: +49 6222 9807 77.
Email: meetyou@europlx.com.
Website: www.europlx.com.
18 November
■
ASMI Annual Conference
Sydney, Australia
‘Self-Care: A brighter and healthier future’ is the theme of this
one-day conference organised by
the Australian Self-Mediation Industry (ASMI).
Contact: ASMI.
Tel: +61 2 9922 5111.
Fax: +61 2 9959 3693.
Email: claire@asmi.com.au.
Website: www.asmi.com.au/events/.
23
OTC15-08-14p24-27_Layout 1 12/08/2014 19:36 Page 2
OTC MARKET RESEARCH
OTC market growth remains fragile
While OTC sales in the UK grew in 2013, trends for some of the largest
product categories have demonstrated a need to guard against complacency
in what remains a delicately balanced market. Matt Stewart reports.
T
alk of an ageing and growing population may be fuelling confidence in
the future of the global OTC industry, but in the UK, population growth
has slowed somewhat and the after effects of
the global recession have changed consumer
behaviour. All of this has put the OTC market in a delicate position.
Although overall retail value sales in the UK
OTC market had improved by 2.2% to £2.45
billion (C3.08 billion) in the 12 months ended
28 December 2013 (see Figure 1), “all the OTC
categories, along with the whole fast-moving
consumer-goods (FMCG) market have struggled”, according to Martin Wood, head of strategic insight – retail at market researcher IRI.
“We’ve seen volumes across food, health
and beauty decline over the past year or two,”
Wood pointed out, “basically because of people
cutting back.”
Population growth had not been quite as
strong as it had been previously, Wood noted,
primarily due to migration factors, with levels
of inward migration over the past few years not
as high as the levels seen in the previous decade.
This had been compounded by the recession,
Wood noted, which had had a lasting impact
on UK consumer behaviour.
While some people had not been affected
at all, others had dramatically cut their spending and had been happy to switch from the
major mainstream retailers to hard-discounters,
such as Aldi and Lidl.
“It’s not just about price,” Wood pointed out,
“the discounters have improved their product
range and quality, and opened many new stores.”
“Together with clever advertising and use
of social media,” he added, “the discounters
have increased penetration across all sectors
Category
Sales
Change
(£ millions)
(%)
Decongestants
227.6
+0.4
Medicated
confectionery
119.7
-2.6
Cough liquids
96.7
-5.9
Total cough, cold
and sore throat
444.0
-1.8
Figure 5: Breakdown of retail sales the UK OTC
cough, cold and sore throat market in the 12 months
ended 28 December 2013 (Source – IRI)
24
of society including among the better-off.”
Discounters and pound stores – which generally only offer a very limited range of OTC
medicines and account for only a very small part
of the OTC market – had taken sales away from
some of the UK’s biggest retailers, including
supermarket giants such as Tesco, Wood noted.
This rise in the popularity of discounters had
led to more sales of low-priced OTC products,
mainly store-brands, Wood said, and a decline in OTC sales through some of the “big
four” supermarkets.
With a change in consumer behaviour had
also come changes in the promotional mix,
Wood pointed out. With people not buying
the same quantities on multi-buys as previously,
retailers themselves had been “moving away
from multi-buys to price-led promotions”.
“These are general statements really on the
recession,” Wood admitted, “but they play out
across all categories, including OTC.”
Decline in volume sales
As Figure 2 shows, volume sales of OTC
products had fallen back by 0.9% to 942 million packs in 2013, reflecting the tougher market conditions and a high level of cold and
flu incidences in December 2012.
The delicate nature of the OTC market could
be summed up by what happened to the indigestion remedies segment in the gastrointestinal category over the past 12 months.
While overall sales of gastrointestinal products ticked up by 0.7% to £260 million – driven
by products for irritable bowel syndrome and
antidiarrhoeals – the category’s powerhouse
indigestion remedies segment declined by 0.5%
to £120 million (see Figure 3).
Wood said that while a variety of factors
were in play, the key was that the indigestion
remedies segment relied too heavily on one key
brand to drive market growth: Gaviscon.
“Reckitt Benckiser (RB) would consistently
bring out a variation of Gaviscon which would
bring something new to the market,” Wood said,
“and there is no doubt RB has not been doing
as much of that over the past few years.”
The prevailing trends in the UK around population growth and economic uncertainty, combined with the slowdown in innovation from
RB on Gaviscon, had led to stagnation in the
indigestion remedies segment, Wood explained.
Category
Sales
Change
(£ millions)
(%)
Adult oral analgesics
353.4
+1.1
Topical analgesics
82.9
+12.2
Paediatric analgesics
74.0
-3.1
Oral lesions & toothache 33.5
+1.4
Total pain relief
+2.1
543.9
Figure 4: Breakdown of the UK OTC pain-relief market in
the 12 months ended 28 December 2013 (Source – IRI)
Furthermore, this had also applied to the
UK OTC market as a whole, Wood insisted.
“Consistently over a period of years, RB
focused on a few key brands and made sure
it had a systematic approach to new product
development which kept the pipeline of innovation coming through every year for its big
brands,” he pointed out.
“However, RB seems to have run out of
steam when it comes to line extensions on its
big brands,” Wood claimed. “In addition, it has
had to absorb a number of SSL brands acquired
in 2010 (OTC bulletin, 30 July 2014, page 1)
– which involved tackling regulatory issues
and disposals – and the firm’s entry into the
UK vitamins market is yet to have any measurable impact.”
“All those things drain management time
and limit the opportunities to go and present
new things to retailers,” he added.
It needed to be recognised, Wood said, that
when RB launched a good new sub-brand or
variant it “materially” impacted on the total
market. As other firms had not done this to the
same extent, the whole market suffered”.
“My contention would be that a relative absence of growth from RB is one reason why the
total market has not been growing as much
as it was,” Wood pointed out, “and no one else
has been able to step up and fill the hole.”
Turning to the key product categories in
the market, pain relief remained the biggest contributor to the UK’s OTC market, with value
sales rising by 2.1% to £544 million in the 12
months (see Figure 4).
Topical analgesics was the standout variant
in the pain-relief category, with sales advancing
by 12.2% to £82.9 million.
Wood said that the topical analgesics sector
had for almost a decade “over performed” for
a whole variety of reasons.
“Sports heat rubs, such as Mentholatum’s
Deep Heat, have consistently performed well,”
Wood pointed out, “while the introduction of
heat patches was a big innovation in the marOTC bulletin 15 August 2014
OTC15-08-14p24-27_Layout 1 13/08/2014 09:11 Page 3
MARKET RESEARCH OTC
Fall in paediatric analgesics
By contrast to the topicals market, sales of
paediatric analgesics slipped back by 3.1% to
£74 million, a decline Wood blamed on a weaker cold and flu season than in 2012.
“Paediatric analgesics always correlates
more strongly with winter remedies compared
with adult analgesics, where sales improved by
1.1% to £353 million,” Wood explained. “This
is because colds and flu is the overwhelming reason for purchasing for children, whereas adults
buy painkillers more often for less seasonal
ailments, such as headaches and back pain.”
15 August 2014 OTC bulletin
Category
Sales
(£ millions)
Change
2012/2013 (%)
Proportion
of total (%)
543.9
444.0
415.4
352.2
259.6
135.5
107.6
59.0
57.9
42.5
32.5
+2.1
-1.8
+2.4
+1.8
+0.7
+4.2
+21.9
+0.3
+2.0
+7.5
+8.3
22
18
17
14
11
6
4
2
2
2
1
2,450.1
+2.2
100
Pain relief
Cough, cold and sore throat
Skin care
Vitamins and minerals
Gastrointestinal
Smoking cessation
Hayfever remedies
Weight management
Eye-care treatments
Sleep aids
Medicated mouthwashes/sprays
Total OTC
Figure 1: Retail sales in the UK OTC market in the 12 months ended 28 December 2013. Figures exclude sales in
Northern Ireland, and through health-food stores, mail-order/internet only vendors and discounters (Source – IRI)
OTC packs sold OTC
3,000
Volume sales (million packs)
ket. Although they have been around for a while
now, they have done well over the period.”
One of the biggest reasons, especially in the
past few years, had been the switch of Novartis’ diclofenac-based Voltarol brand, Wood said.
“We have seen Voltarol adding a lot of
value to the market as Novartis has launched
first pharmacy-only and then general-sale list
(GSL) products” Wood pointed out.
Voltarol products were now much more
widely available, he noted, and as all variants –
including Voltarol Pain-eze Emulgel, Voltarol
Emulgel-P and Voltarol Heat – carried quite
a high price tag, they contributed significantly
to value growth in the topicals category.
Novartis claim Voltarol is the biggestselling topical pain-relief brand in the UK and
– including its oral formulations – the secondbiggest selling pain-relief brand overall.
In 2013, the company bolstered its UK
Voltarol range by launching Voltarol 12 Hour
Emulgel-P and backed the whole range with
significant marketing activity including a £6.0
million television campaign.
Two million people had bought a topical
Voltarol product in 2013, Novartis said, noting
that half a million people had tried a Voltarol gel
product for the first time in the 12 months.
Furthermore, another big pain-relief brand
had entered the topicals space in 2013, Wood
pointed out, with RB rolling out a range of
topical variants under its best-selling Nurofen
brand name.
Launched early last year, RB’s four Nurofen topical products had been designed to meet
the “number-one consumer need” in the UK’s
topical products market – “speed of relief” –
according to the UK-based consumer goods
giant (OTC bulletin, 29 March 2014, page 13).
The launch of the topicals range was part
of a bigger shift in RB’s marketing for Nurofen. The company wants to turn its range of
pain relievers into a “brand people love” by
presenting a consistent brand image through
the “Lives bigger than pain” campaign, launched in February 2013 (OTC bulletin, 22 February 2013, page 17).
2,000
1,000
0
OTC packs dispensed
on prescription
Prescription-only packs
1,220
1,238
+1.5%
288
260
-9.6%
951
942
2012
2013
-0.9%
Figure 2: Annual volume sales in the UK pharmaceuticals market in 2012 and 2013 (Source – IRI/IMS)
In contrast to the pain category, the cough,
cold and sore throat category could not escape
the impact of a weak season. Wood pointed
out, however, that as the data only covered the
end of the 2012/2013 season and the start of
the 2013/2014 season, the comparison seasonto-season was hampered somewhat.
Sales in the category as a whole had dropped
by 1.8% to £444 million in the 12 months, Wood
said, but this was compared to a very strong
cough and cold season at the end of 2012.
“December 2012,” Wood explained, “was
a particularly spectacular month for cold and
flu sales, thanks to a peak in incidence of illness
combined with colder weather.”
In product category terms, decongestants
were the only major product type to post a rise
in sales and even then it was only a modest
0.4% jump to £228 million (see Figure 5). This
had been driven by the launch of Nurofen Cold
and Flu – which contains the decongestant
pseudoephedrine combined with ibuprofen –
and a strong performance from Johnson &
Johnson’s premium-priced Sudafed line.
The big fall in cough liquid sales had been
Category
Sales
Change
(£ millions) (%)
Indigestion remedies
119.5
-0.5
Antidiarrhoeals
49.5
+3.9
Laxatives
48.9
±0.0
Stomach upset remedies
17.1
-0.3
Infant gastro
9.3
-1.8
IBS* treatments
7.9
+10.9
Travel sickness
6.9
-1.0
259.6
+0.7
Total gastrointestinal
* Irritable Bowel Syndrome
Figure 3: Breakdown of retail sales in the UK OTC
gastrointestinal market in the 12 months ended 28
December 2013 (Source – IRI)
driven by retailers rationalising the range that
they carried, following a raft of new product
development, Wood noted.
This was especially true around the mucusrelief area, he said, adding that Johnson & Johnson’s Benylin brand and Stada’s Covonia range
had suffered particularly badly.
OTC
25
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worldwide immediate online access to authoritative
business development tools. Our information services –
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New Ideas Better Ways is a
new quarterly OTC Innovations review
from OTCToolbox, which will keep
you informed about news, views,
technological developments and
innovative products.
Edition 1 discusses the need for a
broad innovation strategy in the global
non-prescription market, explores views
on innovation at some of the leading
global OTC players, and looks at
approaches to early-stage innovation
in consumer healthcare.
J
BL US
IS T
H
ED
the past…
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PU
Analyse
NEW IDEAS
08/07/2014 15:02
OTC15-08-14p24-27_Layout 1 12/08/2014 19:36 Page 4
PEOPLE OTC
Manufacturers
Nelsons names
Hinton as CEO
U
K-based natural health products firm Nelsons has appointed David Hinton – formerly president of its US business, Nelson Bach
USA – as chief executive officer. He replaces
Najib Fayad, who has retired after just over
seven years at the helm.
As head of Nelson Bach USA – which also
covers Canada and Latin America – Hinton
had expanded distribution of the Rescue range
of stress-relief remedies and Nelsons H+Care
haemorrhoid cream into mainstream drug outlets, Nelsons pointed out.
He had also, Nelsons said, driven the launch
of the Pur-Absorb Iron liquid iron supplement
into mass-retail channels.
Robert Wilson, the company’s chairman,
said Hinton’s “experience and successes in the
US” made him the “right person to take Nelsons into the new era globally”.
Commenting on his new role, Hinton said
he was “looking forward” to making Nelsons
“more efficient, more innovative and ultimately bigger”.
OTC
Business Strategy
RB starts revolution
with R&D investment
■ Continued from front page
of stakeholders from other companies, regulators, key opinion leaders and patient groups”
to join forces.
This would create an environment where
people would be “empowered to take ownership of their own everyday health needs”, he
added, echoing his keynote speech at the recent
meeting of the Association of the European
Self-Medication Industry, the AESGP, where he
called for OTC medicines to be authorised for
non-prescription sale globally as soon as safety,
efficacy and appropriate use had been established (OTC bulletin, 16 June 2014, page 1).
“I don’t believe, with the growing and ageing
population, our healthcare systems will be able
to cope with the everyday needs of people,”
Kapoor pointed out, “and I think that a regulatory framework that allows people to take care
of their own ailments is going to be an important part of RB’s drive to create a revolution
in consumer health.”
OTC
15 August 2014 OTC bulletin
Wholesalers & Retailers
Walgreens Boots Alliance
appoints leadership team
G
regory Wasson, chief executive officer
of Walgreens, will lead the combined Walgreens/Alliance Boots business once the US
drugstore chain’s full takeover of the UK-based
wholesaler and retailer is completed. The deal
is expected to close in the first quarter of 2015,
subject to shareholder and regulatory approvals.
Wasson has been named president and chief
executive officer of the enlarged business, which
will be called Walgreens Boots Alliance and
be headquartered in Chicago, US.
Meanwhile, Stefano Pessina, currently executive chairman of Alliance Boots, will take on
the role of executive vice-chairman with responsibility for strategy as well as mergers and acquisitions. Pessina will also chair a new strategy
committee of the board of directors.
Walgreens will pay US$9.5 billion (C7.1 billion) to acquire the remaining 55% stake in
Alliance Boots it does not already own. The
company completed its initial investment in
Alliance Boots at the start of August 2012, paying US$6.7 billion in cash and shares for a
45% stake in the privately-owned firm (OTC
bulletin, 10 August 2012, page 8).
The combined company will also benefit
from the joint agreement between Walgreens,
Alliance Boots and US pharmaceutical wholesaler AmerisourceBergen, which was signed last
year (OTC bulletin, 29 March 2013, page 1).
Walgreens Boots Alliance, the two companies noted, would consist of four divisions:
Walgreen Co, the largest drugstore chain in
the US; Boots, the leading health and beauty
retailer in the UK and Ireland; Pharmaceutical Wholesale and International Retail, which
would include the Alliance Healthcare wholesaling business; and Global Brands, which would
cover Boots brands sold through third parties.
Ornella Barra, currently chief executive
officer of Alliance Boots’ wholesale business,
will take charge of the enlarged company’s
Global Wholesale and International Retail operations, while Alex Gourlay – who moved to
Walgreens from Alliance Boots last year (OTC
bulletin 23 August 2013, page 31) – has been
named president of Walgreens.
Another Alliance Boots executive, Ken
Murphy, managing director of Health & Beauty
International and Brands, will take on the role
of president of the Global Brands division, with
Simon Roberts, currently managing director of
Alliance Boots’ Health & Beauty business in the
Stefano Pessina (pictured left), and Gregory Wasson
(pictured right)
UK and Ireland, taking charge of the Boots unit.
Other senior appointments include Jeff Berkowitz, who will be president of Pharma and
global market access at the combined firm, having served as president of the Walgreens Boots
Alliance Development division since the partnership was established in 2012.
Tim McLevish, Walgreens’ chief financial
officer, will take on the same role in a global
capacity at Walgreens Boots Alliance.
Positive step for the industry
Commenting on the formation of Walgreens
Boots Alliance, Pessina said that the “expected
creation of the new enterprise” represented a
“very positive step for the future of the healthcare industry as a whole”.
Wasson explained that a three-year “next
chapter” plan for Walgreens Boots Alliance had
already been laid out, with the aim of maximising “the scope and scale of the new combined company”.
The plan would provide a “differentiated
retail experience” that would transform the retail model for health and wellness, while also
changing the way women shopped for beauty
products, the firms claimed.
Furthermore, it would see the combined
business develop an “integrated pharmacy and
healthcare” offering. This would “advance the
role of pharmacists and provide access to innovative services”, they noted, adding that it would
also “reinvent the pharmaceutical value chain and
deliver a seamless speciality pharmacy model”.
With the plan in place, the combined business was expected to generate sales of between
US$126 billion and US$130 billion in 2016,
Walgreens and Alliance Boots noted.
OTC
27
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