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Global and Asia-Pacific Trends in OTC
IMS Health Asia Pacific
AGENDA
• IMS Experience in Consumer Health
• Global – Asia Pacific Market Update
• Bringing OTC closer to the consumer
• Highlights and conclusions
2
Client acknowledges and agrees that information provided in this document are confidential to IMS. Client shall not disclose or provide to any third party the whole or any part of the information contained in this document.
Global and Asia Pacific Trends in OTC
IMS - Unmatched in Scope & Scale, Dedicated to Consumer Healthcare Industry
Global and Asia Pacific Trends in OTC
Consumer
Health
OTC Over the Counter
PAC
Patient Care
PEC
Personal Care
NUT Nutritionals
The Consumer Health Space
Global and Asia Pacific Trends in OTC
• Licensed/Unlicensed products • Pure OTC/Pharmacy only
• Testing/medical devices • Wound care/contact lens care
• Beauty and hygiene products i.e. Emollients
• Specialized Nutrition formulas for infants and adults
AGENDA
• IMS Experience in Consumer Health
• Global - Asia Paci�c OTC Market Update
• Bringing OTC closer to the consumer
• Highlights and conclusions
Client acknowledges and agrees that information provided in this document are con�dential to IMS. Client shall not disclose or provide to any third party the whole or any part of the information contained in this document.
Global and Asia Pacific Trends in OTC
DEFINITIONS Rx - bound / Semi - ethical OTC / Self - Medication
Non Rx - Bound (“total OTC”) Rx - Bound *
Self - Medication includes registered
and unregistered products
Bought with
Prescription
Bought without
Prescription
Self -Medication
* Prescription (Rx) necessary by law to receive product
Semi -ethical
Global and Asia Pacific Trends in OTC
THE BASIS for �gures in this presentation
� Annual sales to end Q3 2012
� Sales calculated at manufacturer prices
� Growths based on previous years to Q3
� Growths use latest exchange rate across all time periods � Local currency growth aggregated into Dollars
� Some qualifications � UK data does not include mass market � China data is China hospital, does not include retail � Companies include all OTCs from the corporation
� i.e. “Novartis” includes Hexal, Sandoz, LEK, etc
Global and Asia Pacific Trends in OTC
Region De�nitions
• EMEA • Western Europe • Central & Eastern Europe (CEE)
• North America (US, Canada and Puerto Rico) • Latin America • AsiaPac
• China • SE/N Asia • South Asia • Australasia • Japan
Global and Asia Pacific Trends in OTC
OTC continues the recent trend of outgrowing Pharma.
11.1
8.2
9.4
7.3
6.46.8
5.25.5
6.2
4.6
3.3
2.2
3.3
4.2
6.0
4.6
5.4
6.37.0 7.0 6.9
4.6
12.2%11.6%
11.1% 10.9% 10.7% 10.6% 10.7% 10.9% 10.9% 11.2% 11.3%
0%
2%
4%
6%
8%
10%
12%
14%
0
2
4
6
8
10
12
14
16
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Valu
e G
row
th (%
)
Year on Year Value Growth & OTC Share of Total PharmaMAT Q3 2012
Total Pharma Total OTC OTC Share of Total Pharma
Total Pharma = $949Total OTC = $107
Source: IMS OTC Global Analysis+ Estimates
*
* - NB. Trend break due to change in estimation methodology
Global and Asia Pacific Trends in OTC
Top Corps contribution to growth falling rapidly
Low number and quality output from R&D
Generics dominating large therapy areas
Demand constrained by payers
Key players building strong brand identities
Payers keen to promote self medication
Emerging markets have the critical mass to influence growth
Companies seek to exploit switch opportunities
Increasing access through new channels
PHARMA
OTC
OTC benefits from a number of growth drivers while Pharma faces significant constraints.
Global and Asia Pacific Trends in OTC
Growth variances within the different sub-regions
Source: IMS OTC Global Analysis
GLOBAL W EUROPE
N AMERICA
JAPAN
CEE
LATIN AMERICA
CHINA
SE/N ASIA
SOUTH ASIA AUSTRALASIA
- 10
- 5
0
5
10
15
20
25
30
35
40
- 10 - 5 0 5 10 15 20 25 30 35
Late
st Y
ear G
row
th (%
)
3 Years Average Growth (%)
OTC Growth by Region: Long vs Short term
Global Latest Year Growth 5.6%
Global 3 Year Average Growth 5.4%
Global and Asia Pacific Trends in OTC
Source: IMS OTC Global Analysis + Estimates
Japan
APAC Exc Japan
Latin America
CEEMEA
W Europe
N America
Total OTC Total OTC
18%
-13%
21%
10%
15%
29%
11%
30%
23%45%
12%
-1%
Share of Sales Share of Growth
Emerging Markets
Total OTC
Share of Sales 49%
Share of Growth 100%
Emerging markets continue to drive global growth
Global and Asia Pacific Trends in OTC
USA
JAPAN
CHINA
RUSSIA
BRAZIL
GERMANY
FRANCE
ITALY
AUSTRALIA
POLAND
- 10
- 5
0
5
10
15
20
25
30
35
40
- 10 - 5 0 5 10 15 20 25 30 35
Late
st Y
ear G
row
th (%
)
3 Years Average Growth (%)
OTC Growth by Market: Long vs Short term
Global Latest Year Growth 5.6%
Global 3 Year Average Growth 5.4%
Top 10 Markets
represent 72.2% of
Global OTC sales
At country level, key developing markets lead the pack
Source: IMS OTC Global Analysis
Global and Asia Pacific Trends in OTC
Of the key categories, VMS & Tonics posts the strongest growth while CCR suffers a poor year.
Source: IMS OTC Global Analysis
CCR
VMS & TONICS
PAIN RELIEF
DIGESTIVESKIN
ALL OTHERS
0
2
4
6
8
10
12
14
0 1 2 3 4 5 6 7 8 9 10
Late
st Y
ear G
row
th (%
)
3 Years Average Growth (%)
OTC Growth by Category: Long vs Short term
Global Latest Year Growth 5.6%
Global 3 Year Average Growth 5.4%
Global and Asia Pacific Trends in OTC
CHINA
AUSTRALIA
INDIA
INDONESIA
SOUTH KOREA
PHILIPPINES
PAKISTAN
TAIWAN
MALAYSIA
NEW ZEALAND
HONG KONG
SINGAPORE
-20
-10
0
10
20
30
40
-20 -15 -10 -5 0 5 10 15 20 25 30 35
Late
st Y
ear G
row
th (%
)
3 Years Average Growth (%)
OTC Growth by Market: Long vs Short term
APAC Latest Year Growth 18.1%
APAC 3 Year Average Growth 15.6%
China aside, the region is characterised by a wide range of OTC sales performances.
Source: IMS OTC Global Analysis
Global and Asia Pacific Trends in OTC
Of the key categories Pain Relief post the strongest growth.
Source: IMS OTC Global Analysis
ALL OTHERS
VMS & TONICS
CCR
DIGESTIVE
PAIN RELIEF
SKIN
0
5
10
15
20
25
30
35
0 5 10 15 20 25 30
Late
st Y
ear G
row
th (%
)
3 Years Average Growth (%)
OTC Growth by Category: Long vs Short term
APAC Latest Year Growth 18.1%
APAC 3 Year Average Growth 15.6%
Global and Asia Pacific Trends in OTC
To grow, mature markets must innovate while emerging countries enjoy increase in base sales
Base Value Change
Price Change
New Products
Line Extensions
Total Change
Base Value Change
Price Change
New Products
Line Extensions
Total Change
Source: IMS OTC Global Analysis + Estimates
Elements of Growth by Region – 5 Year Cumulative Growth %
Global
38
7
19
12
-1
W Europe
5
6
12
4
-18
N America
10
-7
15
11
-10
CEE
80
15
27
36
2
L America
91
16
22
38
15
APAC excl Japan
119
18
41
5
54
Global and Asia Pacific Trends in OTC
AGENDA
• IMS Experience in Consumer Health
• Global – Asia Pacific Market Update
• Bringing OTC closer to the consumer
• Highlights and conclusions
Client acknowledges and agrees that information provided in this document are con�dential to IMS. Client shall not disclose or provide to any third party the whole or any part of the information contained in this document.
Global and Asia Pacific Trends in OTC
Many of the key OTC growth drivers influence the trend towards a stronger focus on the consumer
Top Corps contribution to growth falling rapidly
Low number and quality output from R&D
Generics dominating large therapy areas
Demand constrained by payers
Key players building strong brand identities
Payers keen to promote self medication
Emerging markets have the critical mass to influence growth
Companies seek to exploit switch opportunities
Increasing access through new channels
PHARMA
OTC
Global and Asia Pacific Trends in OTC
In Europe consumers continue to enjoy easier access to OTC medicines ...small steps but in the same direction
1900s 1990s 2000 2001 2003 2005 2006 2007 2009 2011
NL: 1921 OTC products in drugstores
(supervised by a druggist)
UK: 1991 First pharmacy
opens in a supermarket
Germany: From 1999
Some Herbals /Supplements can be sold in drugstores,
supermarkets /discounters
Poland: From 2000 limited OTC products can
be sold in non-
pharmacy outlets
Portugal: August 2005
All OTC products can be
sold in non -pharmacy
outlets
Italy: September
2006 All OTC
Products can be sold in
Supermarket Corners
supervised by a pharmacist
Hungary: February 2007
Many OTC products can be
sold in non -pharmacy
outlets
Sweden: 2009
Selected OTC products can
be sold outside
pharmacy channel
July 2009
Norway: From 2003 33 actives
GSL including some NRT,
Pain and CCR. GSL
expanded in 2009.
Denmark: 2001
NRT, Pain, CCR & GI
included in GSL non -
pharmacy outlets
France: Self selection
2010 Selected OTC
products available for
self - selection in pharmacies
Denmark: 2011
2 year default GSL status for
Rx/OTC switches
Global and Asia Pacific Trends in OTC
Pharmacy
Mass Market
Mail Order
Mass Market
Pharmacy
Drugstore
Pharmacy
Supermarket
Mass Market
Pharmacy
Pharmacy
Mass Market
Mass Market - New
Pharmacy
- 20
- 15
- 10
- 5
0
5
10
15
20
25
0 1 2 3 4 5 6
Late
st Y
ear G
row
th (%
)
Channel Contribution to OTC & Growth
Germany Italy NL Portugal UK Sweden
Size of Bubble represents
channel share of country sales
And consumer appreciation of convenience is shown by relative growth of non-pharmacy channels
Pharmacy
Mass Market
Global and Asia Pacific Trends in OTC
The more developed markets in the region tend to see higher per capita spend.
Source: IMS OTC Global Analysis
127
4036
23 22
13 10 10 9 82 2
8
8%
-12%
-2% -4% -4%-1%
32%
11% 11%
3%
11%14%
19%
-80%
-60%
-40%
-20%
0%
20%
40%
0
20
40
60
80
100
120
140
Year
on
Year
Cha
nge
(%)
DO
LLA
RS
OTC Expenditure per Capita ($) - APAC exc Japan Countries
Source: OTC Global Analysis at public prices
Global and Asia Pacific Trends in OTC
The consumers in AsiaPac are already moving in the same direction in varying degrees of access
Retail channels drive growth even in hospital dominated markets
Highly commoditized OTC markets continue to growth
Entry into new channels/categories are seen to rejuvenate pharmacy driven markets
Global and Asia Pacific Trends in OTC
The advisory role of the pharmacist is key to influencing brand choice
•Doctor/Staff recommendation and Word of Mouth are key •>60% shoppers are willing to ask a pharmacist for advice
•Higher Income & well educated more likely to visit Drugstores •50% visit in evening. Elderly tend to visit in morning
•70% don’t have specific brand plan •Young male, low income less likely to have plan •Pain Relief shoppers less likely to have brand plan
•Top 3 ailments suffered •Cold/Flu •Headache •Tiredness
Shopper Profile
Shopping Plan
Purchase Triggers
Drug store Visits
Source: Shopper Insights Study, IMS China
Global and Asia Pacific Trends in OTC
AGENDA
• IMS Experience in Consumer Health
• Global – Asia Pacific Market Update
• Bringing OTC closer to the consumer
• Highlights and conclusions
Client acknowledges and agrees that information provided in this document are con�dential to IMS. Client shall not disclose or provide to any third party the whole or any part of the information contained in this document.
Global and Asia Pacific Trends in OTC
Future OTC growth will continue to come from the emerging markets
Forecasted OTC Growth rate 5 yr CAGR 2011 - 2016
8.3
0.4
4.2
2.1
17.1
15.4
8.0
0
2
4
6
8
10
12
14
16
18
20
Global Japan Europe N America Latin Am SE Asia Others
Fore
cast
An
nu
al G
row
th R
ate
(%
)
Source: IMS OTC Global Analysis
� Global OTC will continue to post healthy growth, driven largely by emerging markets.
� CEE markets will still drive European growth … although at a slower pace � West Europe +1.6% � CEE +8.8%
� In the Americas, North America is likely to remain stable over the next five years while Latam fuels future growth.
� APAC, dominated by China, will also continue to return strong growth over the medium term.
Global and Asia Pacific Trends in OTC
As a result of the evolving channel environment, Excellence in Execution is key.
Pharmacist
HCPs
Mass Market
Wholesalers
Consumers
Key Account Management:
Clear role for each brand within each
category.
Di erentiated Customer calls:
Individual message for each store with suitable
frequency
Consistent Message: Building a strong brand identity in
a multi-media environment
Recommendation: How important is the HCP role and how to optimise within the
marketing mix
Global and Asia Pacific Trends in OTC
OTC remains attractive as it continues to outpace Pharma
•And as a result the market becomes more competitive
Within Europe the picture is less promising, but the main long-term geographic growth opportunities remain in CEE
The Americas remains a contrast between the developed Northern markets and the emerging Southern markets, dominated by US and Brazil respectively
APAC markets will be crucial battlegrounds of the future.
•MNC’s must find a way to successfully unlock the potential. •Local manufacturers will need to defend their position
Highlights & Conclusions
Global and Asia Pacific Trends in OTC
For more information on the content of this presentation please contact:
Katherine Te Sr. Manager – O�ering Management
Consumer Health – Asia Pacific
Email : kte@ph.imshealth.com
Phone Number: + 63 (2) 588-5408
Thank You!
Global and Asia Pacific Trends in OTC
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