Consumer Health in Peru

CONSUMER HEALTH IN PERU

Euromonitor International

May 2015

C O N S U M E R H E A L T H I N P E R U P a s s p o r t I

© E u r o m o n i t o r I n t e r n a t i o n a l

LIST OF CONTENTS AND TABLES

Executive Summary ..................................................................................................................... 1

Major Advertising Campaigns Not Run During 2014 ................................................................ 1 National Production Is Declining ............................................................................................... 1 Pharmacist‟s Recommendation Is the Most Important Factor in Making Decision on OTC ...... 1 Sales by Units Are Still the Most Common Presentation in Tablets and Capsules ................... 1 Ethnic Products Are Gaining Space in Herbal/traditional .......................................................... 1

Key Trends and Developments .................................................................................................... 1

Major Advertising Campaigns Are Not Held During 2014 ......................................................... 2 National Production Is Declining ............................................................................................... 2 Pharmacist‟s Recommendation Is the Most Important Factor in Making Decision on OTC ...... 2

Market Indicators .......................................................................................................................... 3

Table 1 Consumer Expenditure on Health Goods and Medical Services: Value

2009-2014 .................................................................................................... 3 Table 2 Life Expectancy at Birth 2009-2014 ............................................................. 3

Market Data .................................................................................................................................. 3

Table 3 Sales of Consumer Health by Category: Value 2009-2014 .......................... 3 Table 4 Sales of Consumer Health by Category: % Value Growth 2009-2014 ......... 4 Table 5 NBO Company Shares of Consumer Health: % Value 2010-2014 ............... 4 Table 6 LBN Brand Shares of Consumer Health: % Value 2011-2014 ..................... 5 Table 7 Penetration of Private Label in Consumer Health by Category: %

Value 2009-2014 .......................................................................................... 6 Table 8 Distribution of Consumer Health by Format: % Value 2009-2014 ................ 6 Table 9 Distribution of Consumer Health by Format and Category: % Value

2014 ............................................................................................................. 7 Table 10 Forecast Sales of Consumer Health by Category: Value 2014-2019 ........... 9 Table 11 Forecast Sales of Consumer Health by Category: % Value Growth

2014-2019 .................................................................................................... 9

Appendix .................................................................................................................................... 10

OTC Registration and Classification ....................................................................................... 10 Vitamins and Dietary Supplements Registration and Classification ........................................ 10 Self-medication/self-care and Preventive Medicine ................................................................ 11 Switches ................................................................................................................................. 11

Summary 1 OTC: Switches 2011-2013 ......................................................................... 11

Definitions ................................................................................................................................... 12 Sources ...................................................................................................................................... 13

Summary 2 Research Sources ...................................................................................... 13

C O N S U M E R H E A L T H I N P E R U P a s s p o r t 1


CONSUMER HEALTH IN PERU

EXECUTIVE SUMMARY

Major Advertising Campaigns Not Run During 2014

In 2014, most companies decided to not run any advertising campaigns using mass media

such as television, radio or billboards, except only for some analgesics or cold and cough

medicines manufactured by large laboratories. The main reason for this was the reduction on

GDP growth that limited consumption capacity affecting all categories, where growth rates were

positive but not as expected as in the previous edition.

National Production Is Declining

The slowdown in demand and state regulations are the main factors affecting the drop in the

production of pharmaceutical products during 2014. However sales through retail channels

increased and imported products gained territory, but exports diminished due to stricter

regulations in foreign markets, and also sales to public entities decreased.

Pharmacist‟s Recommendation Is the Most Important Factor in Making Decision on OTC

Consumers usually visit a pharmacy due to necessity or illness symptoms and then ask the

clerk for recommendations; price is among the most important factors in making the decision

process. Some companies are taking advantage of this, training pharmacy personnel and also

posting banners or POP material to help clerks to explain product benefits to customers.

Sales by Units Are Still the Most Common Presentation in Tablets and Capsules

A large percentage of Peruvians work in the informal sector, receiving daily incomes and

making it difficult for them to acquire full treatment at once; preferring to buy the products that

they need day by day. This applied to OTC, vitamins and mineral supplements, as well as to

weight management. There are large packages with 100 pills in attractive colours displayed in

pharmacies and are delivered to customers by units, cutting the blisters.

Ethnic Products Are Gaining Space in Herbal/traditional

Peruvians each year are becoming more aware of the importance of using natural products,

following the world trend, and believing that changing one‟s lifestyle for a healthier one leads to

the need to buy supplements. National products like maca, cat's claw, artichoke and magnesium

are preferred over imported or combined products but it is common for these products to be sold

without health registration or proper conditions to assure safety, being sold in popular markets

or even by sorcerers or shamans. There are also recognised brands that meet all sanitary and

health conditions, being distributed in chemists/pharmacies.

KEY TRENDS AND DEVELOPMENTS



Major Advertising Campaigns Are Not Held During 2014

During 2014, rapid growth in diverse consumer health categories stopped as a consequence

of GDP‟s small increase, considered by the Peruvian population as stagnation, and also

because the middle class is not expanding any more. In 2014, growth in OTC and other

categories was lower than in previous years. While the overall size remained small; most

companies decided not to invest in massive advertising campaigns. Advertising and strong

discount policy remained common for pharmacy chains, which continued to position themselves

against small and traditional pharmacies.

Instead, pharmaceuticals and other producers conducted promotional campaigns based on

information from pharmacists or clerks, since their recommendation to customers are important.

These campaigns also included POP material distribution as banners or flyers. The

strengthening of the distribution network was also consistent in recent years reaching more

consumers.

Outlook

GDP growth for 2015 is expected to be 3.5%, after incrementing around 3% in 2014. Although

it is one of the fastest growing countries in Latin America, within Peru this rate is considered low,

as it is compared with the higher rates up to 6% which were obtained for over 10 years. At the

same time, consumers have more options to choose from when they enter the pharmacy;

therefore promotional campaigns will continue to focus on information at point-of-sale and not

on large advertising which is very expensive. For these reasons, total consumer health is

expected to increment below 7% in 2015.

National Production Is Declining

During 2014, Peruvian production of medicines, both OTC and Rx, decreased by 5.7%, while

use of installed capacity was only 33%, showing the large infrastructure existing in the country.

There are different reasons to explain this decrease; the diminishment in national hospital

purchases, followed by larger imports with value incrementing by 18% through 2014, although

imported products tend to have higher prices than national ones.

Pharmacists National Association (ADIFAN) claimed to the government during past years for

import policies that allowed imported medicines or other health products to enter the national

market without paying tariffs; while other countries in the region (Latin America) carry high costs

for imports, limiting Peruvian exports. Therefore at the same time, the national market faced

small demand in growth, while more imported products reached the drugstores and exports

have strong barriers; directly affecting national production.

Outlook

National production is expected to remain the same or decrease at low rates during the

forecast period. Local regulations do not include taxes and tariffs for imported medicines, so

many consumers or even drugstore chains will continue to prefer imported products over

national ones, since import products can provide larger margins or are associated to higher

quality.

Pharmacist‟s Recommendation Is the Most Important Factor in Making Decision on OTC

Self-medication is a common practice in Peru, where low and middle-income consumers do

not consult a doctor or go to a hospital until they have first tried unsuccessfully to treat their

conditions themselves. When Peruvians have symptoms of any disease, the first thing they do is

go to the nearest pharmacy or the one their trust and consult a pharmacist. Usually they are



called “Doctor” and provide advice, selling recommended drugs. It is important to mention that

consumers usually look for fast solutions and do not have the patience to complete treatments

or they do not have the money to buy it, acquiring the pills or tablets on a day-to-day basis.

With the presence of large pharmacy chains, the practice of consulting pharmacists did not

diminish, when even clerks felt encouraged to give their views and recommendations. The

traditional concept of pharmacy is changing in Peru, being substituted for large retail chains. By

2013, Peru had around 22,000 pharmacies while in 1998 there were 11,314, where over 60%

belonged to chains such as Inka Farma, Boticas Salud, Boticas Arcangel and Medifarma.

Outlook

The Peruvian government held campaigns to avoid self-medication as well as promoting the

shopping in recognised pharmacies to avoid illegal or fraudulent products. However, in the next

years no changes are expected for this trend, since access to health centres is very limited for

those low and middle-income consumers, especially for those who work in informal sectors

which accounts for over 60%.

MARKET INDICATORS

Table 1 Consumer Expenditure on Health Goods and Medical Services: Value 2009-2014

PEN million 2009 2010 2011 2012 2013 2014 Pharmaceuticals, 10,853.9 12,999.5 14,610.8 16,489.2 18,281.3 20,149.5 medical appliances/ equipment Outpatient services 7,114.2 8,288.9 9,072.8 9,985.6 10,817.0 11,663.9 Hospital services 1,781.3 2,107.3 2,341.0 2,613.5 2,868.9 3,132.9 Total 19,749.4 23,395.7 26,024.7 29,088.3 31,967.2 34,946.3

Source: Euromonitor International from official statistics, trade associations, trade interviews

Table 2 Life Expectancy at Birth 2009-2014

years 2009 2010 2011 2012 2013 2014 Males 71.0 71.3 71.6 71.9 72.2 72.5 Females 76.4 76.7 77.0 77.3 77.6 77.9

Source: Euromonitor International from official statistics

MARKET DATA

Table 3 Sales of Consumer Health by Category: Value 2009-2014

PEN million 2009 2010 2011 2012 2013 2014 OTC 388.5 474.6 635.9 848.4 1,040.3 1,157.0 Sports Nutrition 24.7 33.7 47.5 61.1 80.7 82.8



Vitamins and Dietary 426.7 477.6 617.7 694.2 786.6 855.8 Supplements Weight Management 204.8 241.9 261.2 285.3 320.8 359.6 Herbal/Traditional 33.4 36.9 42.2 47.4 55.7 60.0 Products Allergy Care 14.2 15.0 17.3 20.2 24.2 25.7 Paediatric OTC Healthcare 44.8 61.3 90.6 127.8 165.7 185.7 Consumer Health 1,045.0 1,228.1 1,562.7 1,889.3 2,228.8 2,455.5

Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Note 1: Consumer Health total is the sum of OTC, Sports Nutrition, Vitamins and Dietary Supplements, Weight Management, and the subcategories of Herbal Medicinal Teas and Herbal Smoking Cessation Aids.

Note 2: Sum of categories is greater than the market size because allergy care is a duplicate of categories found in cough, cold and allergy remedies, dermatologicals and eye care; paediatric OTC healthcare is an aggregate of paediatric categories in OTC and vitamins and dietary supplements; and herbal/traditional products is an aggregate of herbal/traditional categories in OTC and vitamins and dietary supplements, except herbal/traditional medicinal teas and herbal/traditional smoking cessation aids.

Note 3: 2014 data is provisional and based on part-year estimates.

Table 4 Sales of Consumer Health by Category: % Value Growth 2009-2014

% current value growth 2013/14 2009-14 CAGR 2009/14 Total OTC 11.2 24.4 197.8 Sports Nutrition 2.6 27.3 234.9 Vitamins and Dietary Supplements 8.8 14.9 100.5 Weight Management 12.1 11.9 75.6 Herbal/Traditional Products 7.6 12.4 79.4 Allergy Care 6.1 12.6 80.9 Paediatric OTC Healthcare 12.1 32.9 314.6 Consumer Health 10.2 18.6 135.0





Table 5 NBO Company Shares of Consumer Health: % Value 2010-2014

% retail value rsp Company 2010 2011 2012 2013 2014 Herbalife Perú SRL 12.8 12.0 11.3 11.4 11.8 Bayer SA 8.3 9.0 9.2 9.6 9.5 Omnilife Perú SAC 11.3 10.4 9.7 9.2 9.1 Boehringer Ingelheim 5.7 5.9 5.7 5.7 5.9 Perú SAC Medifarma SA 4.0 4.4 4.9 5.1 5.4 GlaxoSmithKline Perú SA 2.8 3.1 3.8 3.7 3.8 Novartis Biosciences 3.5 3.3 3.3 3.1 3.0 Perú SA Johnson & Johnson del 1.4 1.7 2.1 2.3 2.5 Perú SA Kraft Foods Perú SA 4.0 3.3 2.7 2.5 2.4



PGT Healthcare - - 1.7 2.0 2.1 Laboratorios Wyeth SA 1.9 1.9 1.8 1.8 1.8 ABL Pharma Perú SAC 1.2 1.3 1.6 1.8 1.8 Droguería La Victoria SA 1.5 1.6 1.6 1.7 1.6 Sanimex SAC 1.1 1.4 1.4 1.5 1.3 Farmindustria SA 1.0 1.0 1.1 1.1 1.2 Pfizer SA 0.6 0.8 1.0 1.1 1.2 Arion International SRL 1.3 1.3 1.2 1.2 1.1 Unimed del Perú SA 1.2 1.2 1.1 1.0 0.9 Bristol-Myers Squibb 0.8 0.9 0.9 0.9 0.9 Perú SA Laboratorios Kaita del 1.3 1.1 1.0 0.9 0.8 Perú SAC Genfar Perú SA 1.0 0.9 0.9 0.9 0.8 Hesil 0.4 0.5 0.6 0.7 0.8 Corporación Medco SAC 0.8 0.8 0.8 0.8 0.7 Laboratorios Garden 0.4 0.5 0.6 0.6 0.6 House SA Merck Peruana SA 0.8 0.7 0.6 0.5 0.5 Hersil SA Laboratorios 0.1 0.2 0.3 0.4 0.4 Industriales Farmacéuticos Vitamins Nutri Sport SAC 0.3 0.3 0.4 0.4 0.4 Abbott Laboratorios SA 0.4 0.4 0.4 0.4 0.4 Laboratorios Bagó del 0.6 0.5 0.4 0.4 0.3 Perú SA Maver Peru SAC 0.2 0.2 0.3 0.3 0.3 Ivax Perú SA 0.9 0.9 - - - Procter & Gamble Perú SRL 0.7 0.5 - - - Generics 2.8 3.1 3.9 4.4 5.0 Private Label 0.7 0.8 1.0 1.1 1.2 Others 24.4 23.9 23.0 21.5 20.1 Total 100.0 100.0 100.0 100.0 100.0


Table 6 LBN Brand Shares of Consumer Health: % Value 2011-2014

% retail value rsp Brand Company 2011 2012 2013 2014 Omnilife Omnilife Perú SAC 9.7 8.8 8.2 8.2 Herbalife Herbalife Perú SRL 9.3 8.4 8.2 8.1 Pharmaton Boehringer Ingelheim 5.6 5.3 5.2 5.4 Perú SAC Herbalife Té Herbalife Perú SRL 2.7 2.8 3.2 3.7 Concentrado de Hierbas Panadol GlaxoSmithKline Perú SA 3.0 3.6 3.6 3.7 Redoxon Bayer SA 3.8 3.5 3.4 3.4 Dolomax Medifarma SA 1.3 1.6 1.8 2.1 Centrum Laboratorios Wyeth SA 1.9 1.8 1.8 1.8 Apronax Bayer SA 0.7 1.2 1.7 1.8 Doloflam Johnson & Johnson del 1.2 1.5 1.6 1.8 Perú SA Halls Kraft Foods Perú SA 2.1 1.7 1.6 1.6 GNC Droguería La Victoria SA 1.6 1.5 1.6 1.5 Voltaren Novartis Biosciences 1.4 1.3 1.2 1.1 Perú SA



Berocca Bayer SA 1.2 1.1 1.1 1.1 Supradyn Bayer SA 1.3 1.2 1.1 1.1 Hipoglós ABL Pharma Perú SAC 0.6 0.8 0.9 1.0 Omnilife Power Maker Omnilife Perú SAC 0.7 0.9 1.0 1.0 Mentholatum Medifarma SA 1.3 1.1 1.0 1.0 Clorets Kraft Foods Perú SA 1.2 1.0 0.9 0.9 Excedrin Novartis Biosciences 0.8 1.0 0.9 0.9 Perú SA Diclofenaco Genfar Perú SA 0.9 0.9 0.9 0.8 Doloral Hesil 0.5 0.6 0.7 0.8 Vitamin E PGT Healthcare - 0.8 0.8 0.7 Sal de Andrews Medifarma SA 0.5 0.6 0.6 0.6 Ciruelax Laboratorios Garden 0.5 0.6 0.6 0.6 House SA Kitadol 500mg PGT Healthcare - - 0.5 0.6 Gold Standard 100% Sanimex SAC 0.6 0.6 0.7 0.6 Whey Nistaglós ABL Pharma Perú SAC 0.4 0.5 0.5 0.6 Vitamin B Bristol-Myers Squibb 0.6 0.6 0.5 0.5 Perú SA Artren Merck Peruana SA 0.6 0.6 0.5 0.5 Vitamin E Ivax Perú SA 0.9 - - - Vick Procter & Gamble Perú SRL 0.5 - - - Generics 3.1 3.9 4.4 5.0 Private label Private Label 0.8 1.0 1.1 1.2 Others 38.5 39.2 38.0 36.3 Total 100.0 100.0 100.0 100.0


Table 7 Penetration of Private Label in Consumer Health by Category: % Value 2009-2014

% retail value rsp 2009 2010 2011 2012 2013 2014 Allergy Care 3.2 3.2 3.0 3.0 2.6 2.5 Consumer Health 0.6 0.7 0.8 1.0 1.1 1.2 OTC 1.7 1.8 1.9 2.2 2.4 2.5 Paediatric OTC Healthcare 0.4 0.3 0.2 0.2 0.2 0.1


Table 8 Distribution of Consumer Health by Format: % Value 2009-2014

% retail value rsp 2009 2010 2011 2012 2013 2014 Store-Based Retailing 70.6 70.8 73.0 75.2 76.3 76.2 - Grocery Retailers 4.4 4.4 4.6 4.8 5.0 5.0 -- Modern Grocery 4.4 4.4 4.6 4.8 5.0 5.0 Retailers --- Convenience Stores 0.0 0.0 0.0 0.0 0.0 0.0 --- Discounters 0.0 0.0 0.0 0.0 0.0 0.0 --- Forecourt Retailers 0.0 0.0 0.0 0.0 0.0 0.0 --- Hypermarkets 1.6 1.6 1.7 1.7 1.8 1.8 --- Supermarkets 2.8 2.8 2.9 3.1 3.2 3.2



-- Traditional Grocery 0.0 0.0 0.0 0.0 0.0 0.0 Retailers --- Food/drink/tobacco 0.0 0.0 0.0 0.0 0.0 0.0 specialists --- Independent Small 0.0 0.0 0.0 0.0 0.0 0.0 Grocers --- Other Grocery 0.0 0.0 0.0 0.0 0.0 0.0 Retailers ---- Healthfood shops 0.0 0.0 0.0 0.0 0.0 0.0 ---- Other Other 0.0 0.0 0.0 0.0 0.0 0.0 Grocery Retailers - Mixed Retailers 0.0 0.0 0.0 0.0 0.0 0.0 -- Department Stores 0.0 0.0 0.0 0.0 0.0 0.0 -- Mass Merchandisers 0.0 0.0 0.0 0.0 0.0 0.0 -- Variety Stores 0.0 0.0 0.0 0.0 0.0 0.0 -- Warehouse Clubs 0.0 0.0 0.0 0.0 0.0 0.0 - Non-Grocery Retailers 66.2 66.3 68.3 70.4 71.3 71.2 -- Health and Beauty 65.0 64.9 66.8 68.8 69.5 69.5 Specialist Retailers --- Beauty Specialist 0.0 0.0 0.0 0.0 0.0 0.0 Retailers --- Chemists/Pharmacies 9.5 9.0 9.0 9.3 9.3 9.3 --- Optical Goods Stores 0.0 0.0 0.0 0.0 0.0 0.0 --- Parapharmacies/ 51.1 51.6 53.4 55.3 56.0 56.0 Drugstores --- Other Healthcare 4.4 4.3 4.3 4.2 4.1 4.2 Specialist Retailers -- Other Consumer 1.2 1.4 1.5 1.6 1.8 1.7 Health Non-Grocery Retailers Non-Store Retailing 29.4 29.2 27.0 24.8 23.7 23.8 - Vending 0.0 0.0 0.0 0.0 0.0 0.0 - Homeshopping 2.2 2.2 2.3 2.2 2.2 2.2 - Internet Retailing 0.0 0.0 0.0 0.0 0.0 0.0 - Direct Selling 27.2 27.1 24.8 22.6 21.5 21.5 Total 100.0 100.0 100.0 100.0 100.0 100.0


Table 9 Distribution of Consumer Health by Format and Category: % Value 2014

% retail value rsp OTC SN VDS WM HTP AC Store-Based Retailing 99.3 99.9 69.1 13.6 95.4 99.4 - Grocery Retailers 7.1 1.6 4.4 0.7 11.0 7.6 -- Modern Grocery 7.1 1.6 4.4 0.7 11.0 7.6 Retailers --- Convenience Stores 0.0 0.0 0.0 0.0 0.0 0.0 --- Discounters 0.0 0.0 0.0 0.0 0.0 0.0 --- Forecourt Retailers 0.0 0.0 0.0 0.0 0.0 0.0 --- Hypermarkets 2.3 0.0 2.1 0.0 6.4 3.0 --- Supermarkets 4.9 1.6 2.3 0.7 4.6 4.6 -- Traditional Grocery 0.0 0.0 0.0 0.0 0.0 0.0 Retailers --- Food/drink/tobacco 0.0 0.0 0.0 0.0 0.0 0.0 specialists --- Independent Small 0.0 0.0 0.0 0.0 0.0 0.0 Grocers



--- Other Grocery 0.0 0.0 0.0 0.0 0.0 0.0 Retailers ---- Healthfood shops 0.0 0.0 0.0 0.0 0.0 0.0 ---- Other Other 0.0 0.0 0.0 0.0 0.0 0.0 Grocery Retailers - Mixed Retailers 0.0 0.0 0.0 0.0 0.0 0.0 -- Department Stores 0.0 0.0 0.0 0.0 0.0 0.0 -- Mass Merchandisers 0.0 0.0 0.0 0.0 0.0 0.0 -- Variety Stores 0.0 0.0 0.0 0.0 0.0 0.0 -- Warehouse Clubs 0.0 0.0 0.0 0.0 0.0 0.0 - Non-Grocery Retailers 92.1 98.3 64.8 12.9 84.4 91.8 -- Health and Beauty 92.1 48.8 64.8 12.9 84.4 91.8 Specialist Retailers --- Beauty Specialist 0.0 0.0 0.0 0.0 0.0 0.0 Retailers --- Chemists/Pharmacies 13.1 2.4 8.7 0.4 11.4 15.9 --- Optical Goods Stores 0.1 0.0 0.0 0.0 1.0 0.0 --- Parapharmacies/ 77.7 39.5 49.0 6.7 69.6 75.1 Drugstores --- Other Healthcare 1.4 6.8 7.1 5.9 2.3 0.8 Specialist Retailers -- Other Consumer 0.0 49.5 0.0 0.0 0.0 0.0 Health Non-Grocery Retailers Non-Store Retailing 0.7 0.1 30.9 86.4 4.6 0.6 - Vending 0.0 0.0 0.0 0.0 0.0 0.0 - Homeshopping 0.7 0.1 5.4 0.0 1.3 0.6 - Internet Retailing 0.0 0.0 0.0 0.0 0.0 0.0 - Direct Selling 0.0 0.0 25.5 86.4 3.3 0.0 Total 100.0 100.0 100.0 100.0 100.0 100.0 POTC Store-Based Retailing 98.9 - Grocery Retailers 6.8 -- Modern Grocery 6.8 Retailers --- Convenience Stores 0.0 --- Discounters 0.0 --- Forecourt Retailers 0.0 --- Hypermarkets 1.8 --- Supermarkets 5.0 -- Traditional Grocery 0.0 Retailers --- Food/drink/tobacco 0.0 specialists --- Independent Small 0.0 Grocers --- Other Grocery 0.0 Retailers ---- Healthfood shops 0.0 ---- Other Other 0.0 Grocery Retailers - Mixed Retailers 0.0 -- Department Stores 0.0 -- Mass Merchandisers 0.0 -- Variety Stores 0.0 -- Warehouse Clubs 0.0 - Non-Grocery Retailers 92.2 -- Health and Beauty 92.2 Specialist Retailers



--- Beauty Specialist 0.0 Retailers --- Chemists/Pharmacies 14.2 --- Optical Goods Stores 0.0 --- Parapharmacies/ 76.5 Drugstores --- Other Healthcare 1.5 Specialist Retailers -- Other Consumer 0.0 Health Non-Grocery Retailers Non-Store Retailing 1.1 - Vending 0.0 - Homeshopping 0.7 - Internet Retailing 0.0 - Direct Selling 0.4 Total 100.0


Key: OTC = over the counter; SN = sports nutrition; VDS = vitamins and dietary supplements; WM = weight management; HTP = herbal/traditional products; AC = Allergy Care; POTC = paediatric OTC healthcare

Table 10 Forecast Sales of Consumer Health by Category: Value 2014-2019

PEN million 2014 2015 2016 2017 2018 2019 OTC 1,157.0 1,249.1 1,335.9 1,416.6 1,489.2 1,553.1 Sports Nutrition 82.8 85.7 88.9 92.1 95.5 98.8 Vitamins and Dietary 855.8 902.2 948.1 993.6 1,038.7 1,081.3 Supplements Weight Management 359.6 392.9 428.6 466.7 506.6 550.4 Herbal/Traditional 60.0 61.6 63.2 64.8 66.4 67.9 Products Allergy Care 25.7 27.3 28.7 30.1 31.3 32.6 Paediatric OTC Healthcare 185.7 201.4 216.2 229.6 241.8 252.9 Consumer Health 2,455.5 2,630.3 2,801.9 2,969.5 3,130.5 3,284.1

Source: Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources




Table 11 Forecast Sales of Consumer Health by Category: % Value Growth 2014-2019

% constant value growth 2014/2015 2014-19 CAGR 2014/19 TOTAL OTC 4.3 6.1 34.2 Sports Nutrition 3.5 3.6 19.3 Vitamins and Dietary Supplements 4.1 4.8 26.4 Weight Management 8.7 8.9 53.1 Herbal/Traditional Products 2.3 2.5 13.3 Allergy Care 4.0 4.9 26.9



Paediatric OTC Healthcare 4.6 6.4 36.2 Consumer Health 4.9 6.0 33.7

Source: Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources




APPENDIX

OTC Registration and Classification

Current government policies are set under the supervision of DIGEMID. This organisation

belongs to the Peruvian Ministry of Health and periodically publishes a list of all medications

considered as OTC. In addition, it also issues the Sanitary Registry for all drugs and

pharmaceuticals sold in Peru, but its efficiency and efficacy are often questioned as flexible

control policies make it easy to find poor quality products from some laboratories of doubtful

origin.

Peru is one of the markets where it is easier to register any medicine without real proof of its

health benefits. Since 1992, the Sanitary Registry process was reformed, establishing a 30-

day period for DIGEMID to answer to any registry application. If after the 30-day period no

answer is issued by DIGEMID, the laboratory/company can consider the Sanitary Registry as

having been approved. In 1997, this period was cut to seven days, and Sanitary Registries

are granted for a period of five years, Sanitary Registry‟s owners can apply for its renewal 60

working days before its expiry date

A sanitary registry can be withdrawn or suspended at any time if the technical specifications

of the product changes or are not fulfilled. In addition, any sanitary registry will be cancelled if

the World Health Organisation determines that a medical product is insecure or ineffective.

Patents are the responsibility of INDECOPI. Current intellectual property rights comprise

several Andean decisions and the National Peruvian legislation. They also consider FTA,

especially with USA and UE, since more laboratories with patent requests are from these

countries. Patents are extended for a 20 years period.

All packages have to include information on ingredients, manufacturers and importer or

distributor in Peru. When it is a medication, it needs to have a list of adverse effects in

Spanish with other relevant information inside the package.

Vitamins and Dietary Supplements Registration and Classification

All vitamins and dietary supplements must follow the same registry process established for

OTC products because in Peru, pharmaceutical products are divided into three groups: brand

drugs, generics and diet and sweetener products, which also contain vitamins and dietary

supplements and homeopathic or natural products.

However, registration of dairy and food products containing vitamins must be made through

the Directorate of Environmental Health (Dirección General de Salud Ambiental - DIGESA), a

division of the Ministry of Health (MINSA).



In Peru, vitamins are to be considered as drugs in the following cases: products containing

vitamin A in doses >10,000 IU/day, vitamin D in doses >800 IU/day, or products containing

manganese (Mn), phosphorous (P), chromium (Cr), selenium (Se), molybdenum (Mo) or zinc

(Zn) in doses exceeding NEANO1 and NMEAO2 maximum requirements. Also registered as

drugs are products containing amino acids, carbohydrates, lipids, vitamins or mineral

supplements. In all cases, rules are subject to current regulations concerning other OTC

products and pharmaceutical drugs.

Almost all vitamins and dietary supplements are presented in tablets and capsules, contained

in plastic jar packages, with labels including ingredients, doses, manufacturer and also

importer or distributor in case the product is manufactured in a foreign country.

Self-medication/self-care and Preventive Medicine

Self-medication is a very common practice in Peru, where people ask the pharmacists for

advice. This practice is even more common in provinces where budget restrictions do not

allow consumers to have access to medical care. Low and middle-income consumers, who

usually work in the informal sector, do not have access to health insurance, neither private nor

public. Therefore they turn to self-medication in order to reduce their total health care

expenditure and they rather take the advice of pharmacists, a friend or relatives. Furthermore,

some higher income consumers‟ trust self-medication too, because waiting for a doctor‟s

appointment can be time consuming, usually between two to three weeks. Most Peruvian

consumers do not perceive the risks involved in self-medication and generally self-prescribe

analgesics, cough, cold and allergy (hay fever) products as well as digestive medicines

without thinking better of it.

During 2014, there were no informative campaigns warning against self-medication or to raise

awareness of the possible harmful effects of doing so among the population. In the past

years, DIGEMID held educational campaigns throughout the country to avoid self-medication,

educating the low and middle-income population but with very low effects. This institution

gave warnings to society about the risk of self-medication through its web page but internet

access in Peru is still very limited. Main efforts are now addressed to check whether

pharmacies comply with the law and demand a doctor‟s prescription before selling an Rx

drug.

Switches

During 2014, there were no switches amongst prescription (Rx) to OTC or BTC (pharmacy) to

OTC switches, or reverse. However, in 2013 the main switch was in emergency contraception

pill, which before June 2013 was sold only with prescription. Since this date, it is available for

all women in almost every pharmacy. There are laboratories brands as well as generics, as

shown in the next table.

Summary 1 OTC: Switches 2011-2013

Brand name Manufacturer Ingredient/dosage Switch date

Levonorgestrel Teva Perú SA PGT Healthcare?

Levonorgestrel June 2013

Clanique Tecnofarma SA Levonorgestrel June 2013

Postinor-2 Farmage SAC Levonorgestrel June 2013

Tibex Farmindustria S.A. Levonorgestrel June 2013

Novanor Novax EIRL Levonorgestrel June 2013



Pregnor Eske Corp SAC Levonorgestrel June 2013

Glanix Infermed SAC Levonorgestrel June 2013

Source: Euromonitor International from official statistics, trade press (Gestión, El Comercio), trade interviews

DEFINITIONS Explanations of words and/or terminology used in this report are as follows:

Botica: A local drugstore specialising in the retailing of OTC products, nutritionals and

cosmetics and toiletries, similar to a pharmacy. However, a pharmacy must be owned by a

certified chemist/pharmacist. Based on Euromonitor International distribution channel

definitions, Boticas is classified under drugstores/parapharmacies since it is not necessarily

focused on selling prescription-bound medicines under the supervision of a pharmacist as its

core activity.

Camu Camu: Berries from this Amazonian tree are prized for their high vitamin C content.

Denominación Común Internacional: DCI (International Common Denomination).

Hercampuri: A plant originally from the Peruvian Andes that has several medicinal uses. It is

recommended for detoxifying the body and regulating the metabolism and it serves as a

natural diuretic recommended to lose weight. In addition, it is also believed to protect the

cardiovascular system. Hercampuri is commonly sold in the form of pills in stores specialising

in natural products but some people drink it as a hot infusion after boiling

IU: International Units.

Kiwicha: A fast growing plant with purple, red or gold coloured leaves and flowers that grows

in the highlands of Peru, Ecuador and Bolivia. There are approximately 1,200 kiwicha

varieties in the Andes. The grains of kiwicha are used as cereal and the flour obtained from

the grains is used in the elaboration of tortillas. Kiwicha has respected nutritional value due to

its high content of proteins. In addition, it also contains other beneficial elements such as

vitamin B, vitamin E, calcium, zinc, iron and potassium.

Maca: A native plant from the Peruvian and Bolivian Andes. It is traditionally grown at high

altitudes, between 4,000 and 5,000 metres. It grows well in cold weather and without much

care. Maca is traditionally used as an anti-stress aid and is believed to be a natural energy

booster that increases physical, mental and sexual vigour. Although it is consumed after

cooking the roots, it is currently being industrialised in the form of dietary supplements.

Noni: Fruit of the great morinda tree that derives from Tahititi and the population of different

islands in the South Pacific. Noni grows both in the forest and on the beaches. Noni has

multiple dark seeds and has a yellow colour initially, turning green when it is near to ripening.

It is characterised by its intense smell and bitter taste. This fruit possesses many useful

properties for health. Traditionally, it is used to boost the immune system and is believed to

drive the regeneration of cells. Noni is also used as a painkiller. In Peru, it is consumed

blended with other fruit to mitigate its bitter taste. Noni is also processed in the form of pills

that are sold by most stores specialising in natural products.

Quinoa: A native Andean plant known for its edible seeds that are high in protein, amino acids

and fibre. Traditionally, quinoa grains are toasted in order to produce flour. They can also be

cooked, added to soup, used in cereal or pasta and fermented to obtain beer or chicha.

Quinoa flour is primarily produced and marketed in Peru and Bolivia and is often used as a

substitute for wheat flour. Nutritious children‟s foods are made throughout the Andean region

by mixing quinoa with corn, wheat, barley or potatoes.



Sacha Inchi: A native Amazonian plant that produces seed pods known as the „Inca Peanut‟

as it has been cultivated by indigenous cultures for hundreds of years. The oil from the seeds

contains one of the highest concentrations of omega-3 fatty acids yet discovered.

Sangre de grado: Amazon tree sap extract traditionally used to treat stomach ulcers.

Uña de gato: Cat‟s claw in English, a plant, the bark of which stimulates and reinforces the

body‟s defences. In addition, it has anti-inflammatory properties that help reduce the effects of

arthritis.

Yacón: A traditional tuber grown in the Peruvian Andes. Its main characteristic is that it

contains inulin – an indigestible sugar that, although it provides a sweet taste when mixed

with other food, does not contain lots of calories - unlike sugar and other sweeteners. It is a

product especially suitable for those that suffer from diabetes as well as those that require a

low calorie diet for health reasons. Yacón also constitutes an important source of minerals,

such as calcium, phosphorus, zinc and vitamin C. Yacón is commercialised as jam as well as

in the form of pills as dietary supplements and is usually sold in stores specialising in natural

products.

DIGEMID: General Directorate of Medicines, Supplies and Drugs

INDECOPI: National Institute for the Defence of Competition and the Protection of Intellectual

Property

MINSA: Ministry of Health

SOURCES Sources used during the research included the following:

Summary 2 Research Sources

Official Sources DIGEMID

Indecopi (Instituto Nacional de Defensa de la Propiedad Intelectual)

Ministerio de Salud de Perú

Sierra Exportadora

SUNAT

Trade Associations Adifan

Revista Packaging Latinoamericana

Trade Press Agencia Andina de Noticias

Business Magazine

Correo Newspaper

CPN radio

Dia 1 El comercio

Dia Uno

Diario El Comercio

Diario El Peruano

Diario Expreso

Diario Gestión

Diario La Primera



Diario La Republica

Diario Peru21

Diaro Correo

El Comercio

EPENSA

expreso

Gestión

La República

Maximize - El Comercio

Peru Retail

Peru21

Revista K@iros

Revista Semana Económica

Rpp noticias

Semana Economica

South American Business Information

Source: Euromonitor International

Documents

Consumer Health in Peru