otc:- global, regional & local trends and key imperatives · otc:- global, regional & local...

OTC:- Global, Regional & Local Trends and Key Imperatives

Anthony Morton-Small, Senior Principal, IMS Health TSMIA – Bangkok May 2015

IMS Taiwan OTC Forum Presentation May 2015 2

AGENDA

• Global OTC Market Context

• APAC & Thailand OTC Insights

• OTC Key Imperatives


Global OTC is seeing a shift of focus towards health & wellness that has led to new transversal market segments.

Blurring the boundaries (or broadening the scope!) and attracting new competitors

Pharma-ceuticals

Nutrition Personal

Care

Nutraceuticals Cosmeceuticals

Nutricosmetics

Topically applied Vitamins, herbs, various oils, and botanical extracts typically added May not claim drug-like or therapeutic effects

Provides medical or health benefits, including the prevention and/or treatment of a disease Typically sold in the medicinal form of capsule, tablet, powder, solution Sometimes associated with functional foods

Ingestible. Containing ingredients such as botanical actives, enzymes, proteins, and vitamins. Marketed specifically as beauty aids

As OTC becomes increasingly attractive, industry players become more diverse.

Consumer packaged goods

• Payer and generic pressure driving diversification

• Rx to OTC asset leverage • Broader patient/consumer healthcare coverage

Pharma moving into consumer health

CPG moving into consumer health

Pure play consumer health

• Higher consumer health margin and prices

• Leverage consumer and trade marketing muscle

• Lower private label competition

• Leverage sales and marketing capabilities

• Economies of scale in supply chain

• Leverage consumer understanding

Pharma Consumer

Health FMCG/CPG

4 IMS Taiwan OTC Forum Presentation May 2015

Global


Global

At $110bn, OTC continues to show healthy growth while Pharma growth improves.

Source: IMS OTC audits plus estimates

8.8

7.16.5 6.6

5.2

5.95.4

4.9

3.32.7

8.2

4.3

6.2

4.5

6.2 6.0

8.0

6.47.0

4.6

6.5

5.0

10.2% 10.1% 9.9% 9.9% 9.9% 10.2% 10.3% 10.5% 10.6%11.0%

10.7%

0%

2%

4%

6%

8%

10%

12%

14%

16%

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Va

lue

Gro

wth

(%

)

Year on Year Value Growth & OTC Share of Total Pharma Data for MAT to Q3 2014

Pharma Growth (%) OTC Growth (%) OTC Share of Total Pharma (%)

Total Pharma = $ 1036 bn Total OTC = $ 110 bn

NB. Change in estimation methodology from 2014


Global

Source: IMS OTC Global Analysis

Within APAC, the sub-regions of South Asia and China show the strongest growth.

GLOBAL

W EUROPE

N AMERICA

CEE

L AMERICA

CHINA

JAPAN

SE/N ASIA

SOUTH ASIA

AUSTRALASIA

-5

-2

1

4

7

10

13

16

-5 0 5 10 15 20

La

test

Ye

ar G

ro

wth

(%

)

3 Years Average Growth (%)

OTC Growth by Region: Short vs Long term

Global Latest Year Growth 4.5%

Global 3 Year Average Growth 4.5%

IMS Taiwan OTC Forum Presentation May 2015

7

Global


Base Value Change

Price Change

New Products

Line Extensions

Total Change

Base Value Change

Price Change

New Products

Line Extensions

Total Change

LATIN AMERICA

40

6

19

11

4

-1

-9

13

13

-19

125

20

35

1

69

53

9

24

20

-1

102

14

25

39

23

APAC exc JAPAN CEE

NORTH AMERICA WESTERN EUROPE GLOBAL

Elements of Growth by Region – 5 Year Cumulative Growth %

8

5

13

5

-15

APAC benefits from Base Sales growth, whilst developed markets must innovate to find growth.


Global


Value Share Value Growth > Market Value Growth < Market

4.1%

3.9%

3.8%

3.7%

2.8%

2.4%

2.3%

2.2%

2.1%

1.6%

J&J

NOVARTIS

SANOFI

BAYER

PFIZER

PGT

GSK

RB

B.I.

TAKEDA

2.8%

6.6%

6.2%

1.7%

4.1%

-1.3%

-5.2%

5.1%

2.6%

7.1%

GLOBAL TOTAL OTC

+4.5%

Top 10 Corporations - Global OTC

Value Share & Latest Year Growth (%)

Novartis continues to see strong growth, while Sanofi, RB and Takeda grow ahead of the Global OTC Market.


Global


Skincare includes Foot care Others is dominated by TCM, Eye Care, Habit & Anti-Varicose

Global OTC – Key Categories Value Share (%)

Value Growth (%)

CCR

22.3%

VMS & TONICS

18.3%

PAIN RELIEF

15.6%

DIGESTIVE

14.5%

SKINCARE

9.2%

OTHERS

20.0%

4.5%

2.0%

4.3%

6.2%

6.6%

5.1%

4.5%

TOTAL

MARKET

CCR

VMS &

TONICS

PAIN

RELIEF

DIGESTIVE

SKINCARE

OTHERS

Digestive, Pain Relief and Skin Care exceed market growth.


AGENDA


• APAC & Thailand OTC Insights

• Key Imperatives



APAC

121

4539

28

25

1512

9 92 2

7

3%

-1%

3%

-2%

10%

11%

-6%

5%

3%

12%

8%

6%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

0

20

40

60

80

100

120

140

Ye

ar o

n Y

ea

r C

ha

ng

e (

%)

DO

LLA

RS

OTC EXPENDITURE per Capita ($) - APAC exc Japan & China Countries

The more developed markets, show the potential for growth in expenditure elsewhere in the region.

1. CHINA

2. JAPAN

3. INDIA

4. AUSTRALIA

5. SOUTH KOREA 6. INDONESIA

7. PHILIPPINES

8. PAKISTAN

9. MALAYSIA

10. TAIWAN

11. NEW ZEALAND

12. HONG KONG13. SINGAPORE

-10

-5

0

5

10

15

20

-10 -5 0 5 10 15 20

La

test

Ye

ar G

ro

wth

(%

)

3 Years Average Growth (%)

APAC Growth by Country: Long vs Short term

APAC Latest Year Growth 5.1%

APAC 3 Year Average Growth 4.3%



APAC

China becomes bigger than Japan for the first time.

Average prices are rising in China, India and ASEAN but flat or declining elsewhere



APAC


APAC

APAC – Key Categories Value Share (%)

Value Growth (%)

Pain Relief fastest growing category, growing at 14% in China.

VMS & Tonics

25.7%

CCR

21.3%

All Others

18.8%

Pain Relief

12.5%

Digestive

12.2%

Skin

9.5%

5.1%

4.0%

5.4%

4.1%

8.8%

5.2%

5.0%

Total OTC

VMS & Tonics

CCR

All Others

Pain Relief

Digestive

Skin


APAC

APAC OTC – Minor Categories Value Share (%)

Value Growth (%)

Other OTC growing just behind the market, with most minor categories performing behind Total OTC.

Eye Care

3.6%

Anti-

haemorrhoids0.7%

Habit

0.6%

Anti-varicose

0.4%

Antifungals

(Gyn)0.3%

Weight Loss

0.2%

Ear Care

0.1%

Other OTC

13.0%

5.1%

2.5%

2.5%

1.8%

14.5%

-3.9%

-3.5%

8.6%

4.7%

Total OTC

Eye Care

Anti-

haemorrhoids

Habit

Anti-varicose

Antifungals (Gyn)

Weight Loss

Ear Care

Other OTC

Across APAC, 5 of the Top10 corporations are MNCs and only Takeda grows faster than the market


APAC


4.5%

2.3%

2.2%

2.1%

1.9%

1.8%

1.7%

1.6%

1.4%

1.3%

TAISHO

DAIICHI SANKYO

TAKEDA

GSK

B.I.

J&J

PFIZER

ROHTO CORP

SATO SEIYAKU

SANOFI

0.6%

0.5%

8.0%

-4.5%

0.6%

1.8%

4.0%

-0.4%

-0.3%

-0.1%

Top 10 Corporations - OTC APAC


Total OTC 5.1%

Among the western MNCs, RB has the highest growth rate amongst the top players



APAC

2.1%

1.9%

1.8%

1.7%

1.3%

1.3%

1.2%

0.9%

0.8%

0.6%

4. GSK

5. B.I.

6. J&J

7. PFIZER

10. SANOFI

13. BAYER

14. NOVARTIS

18. ABBOTT

22. RB

27. MERCK & CO

-4.5%

0.6%

1.8%

4.0%

-0.1%

6.7%

14.1%

6.7%

16.2%

7.8%

Top 10 MNC's - OTC APAC


Total OTC 5.1%


AGENDA


• APAC OTC Insights

• Key Imperatives

OTC players are achieving success by: growing the base, focusing on innovation & optimising their Go To Market


Grow the Base Innovation Go To Market

• Emerging markets

• Population, wealth & affordability growth

• Consumer awareness/ needs/behaviors

• Product Enhancements

• Companion technology/ services

• Rx to OTC switch

• Commercial models

• Distribution channels

• Stock rotation & merchandising

Source: Shopper Insights Study, IMS China, Philippines

Understanding & influencing consumer awareness, intentions and behaviors is critical to capturing/growing the base

• 70% don’t have specific brand plan

How important are Doctors/Pharmacy Staff recommendation on consumer buying OTC products?

• >60% shoppers are willing to ask a pharmacist for advice

• 97% of consumers have a brand in mind before entering the store

• 97% of clerks do not offer alternative

• What did the consumers actually buy?

• Who is the buyer?

• Were there other unplanned purchases?


http://www.google.com.ph/url?sa=i&rct=j&q=&source=images&cd=&cad=rja&docid=_uQ9NHeImoEv2M&tbnid=VwMtcjm_mPTaOM:&ved=0CAUQjRw&url=http://blogs.ubc.ca/jasperzimmermann/2011/10/25/the-21st-century-brain-change-and-how-marketers-can-use-it/&ei=8SXDUdiWGYKgige2noCgCg&bvm=bv.48175248,d.aGc&psig=AFQjCNEf2c0Mw7Nxf5sN0PxOhOLaU9LGdA&ust=1371830036819148

• Regulatory compliance requirements

• Information overload and lack of integration with other data sources

• KPI framework for digital tracking

• Upfront investment for new technology

• Change management for teams not familiar with digital approaches

Digital trends of social media and apps present new opportunities and challenges for marketers

• Identifiable, pro-active customers

• New individual customer data at real-time

• New channels in a marketing mix

• Potential to create tailored interactions

• Potential to optimize ROI of marketing activities in more channels

• What is the best way to engage with empowered, digitally savvy customers?

• How can we take advantage of the new touch points with these consumers?

• How can we be present and distinctive and monetize digital channels?

Opportunities


Challenges

• How do we prevent information overload?

• How do we make sure that all data are effectively used by all teams?

• How do we ensure regulatory compliance in the digital space?

Switch has been an important source of new product innovation and a key driver of growth in OTC

The challenge remains to create new consumer categories via “innovative” switch, especially in Europe

• The path to switch is well established

• Strong focus on traditional OTC areas: Pain relief, Heartburn, Anti-allergy and Acid Relief

• Geo-expansion opportunities for major switched brands now limited

• EU Central Switch route has yet to be fully leveraged

8 of top 20 brands are switches, accounting for 6%

of OTC sales

W Europe

6 of top 10 brands are recent switches, accounting

for 9% of OTC sales


Go to market models are being redefined along consumer centric lines driven by the self pay/self treat nature of EMs


Intermediate

Influencer

Brand & Service

Intermediate are relevant external stakeholder with access to patients (i.e. physicians, pharmacists etc …)

Traditional Mindset Future Mindset

B2C

B2B

MCM (channels & messages)

Value prop.

Consumer Brand

Messages

Channels

Customers

Influencers

Patients

To win players are building capabilities in different directions according to corporate heritage & ethos


Manufacturing Quality Efficiency

Product Design Research driven Consumer Need

Packaging Function Design

Technology Devices Mobile Apps

Innovation Clinically Proven New occasions /consumers

Advertising & Promotion

Restricted Highly Targeted

Distribution Limited Access Multi-channel Experience

Consumer Understanding

Need based Sensorial/ Emotional

Science-led Marketing-led

OTC companies are approaching consumer directly and increasing communications through social media

Still main customer for pharma companies is doctor & pharmacist, but many companies are trying to communicate with consumers through online & other media



Your Partner in Consumer Health

Thank you!

Anthony Morton-Small Senior Principal, Consumer Health Email : [email protected] Phone : + 65-8328-3867

mailto:[email protected]

otc:- global, regional & local trends and key imperatives · otc:- global, regional & local...

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