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© 2019. All rights reserved. IQVIA ® is a registered trademark of IQVIA Inc. in the United States, the European Union, and various other countries. October 2019 OTC Growth in Europe: - Market trends and evolution - How the market will develop Andy Tisman Senior Director & Global Lead, Consumer Health Strategy & Thought Leadership

Igniting Growth in OTC Global OTC market trends and evolution growth in Europe (IQVIA).pdf · Value Share of OTC Growth < Market Growth > Market Source: IQVIATM OTC Global Insights

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Page 1: Igniting Growth in OTC Global OTC market trends and evolution growth in Europe (IQVIA).pdf · Value Share of OTC Growth < Market Growth > Market Source: IQVIATM OTC Global Insights

© 2019. All rights reserved. IQVIA® is a registered trademark of IQVIA Inc. in the United States, the European Union, and various other countries.

October 2019

OTC Growth in Europe:

- Market trends and evolution

- How the market will develop

Andy Tisman

Senior Director & Global Lead,

Consumer Health Strategy & Thought Leadership

Page 2: Igniting Growth in OTC Global OTC market trends and evolution growth in Europe (IQVIA).pdf · Value Share of OTC Growth < Market Growth > Market Source: IQVIATM OTC Global Insights

1

+ Global and Regional OTC Market Trends and Evolution

+ Growth Drivers in OTC: how the market will develop

• New Consumers

• Category Evolution

• Innovation in the OTC Market

• Distribution Developments

+ Conclusions

Table of Contents

Page 3: Igniting Growth in OTC Global OTC market trends and evolution growth in Europe (IQVIA).pdf · Value Share of OTC Growth < Market Growth > Market Source: IQVIATM OTC Global Insights

2

Innovation and

the Market NowGlobal OTC

Trends

Global and Europe

OTC Trends &

Dynamics

IQVIA - BACHI Symposium, Brussels - October 2019 - Copyright © 2019 IQVIA. All rights reserved

Page 4: Igniting Growth in OTC Global OTC market trends and evolution growth in Europe (IQVIA).pdf · Value Share of OTC Growth < Market Growth > Market Source: IQVIATM OTC Global Insights

3

The global OTC market witnesses a continuing slowdown, with growth touching lowest point in last 5 years

IQVIA - BACHI Symposium, Brussels - October 2019 - Copyright © 2019 IQVIA. All rights reserved

Note: Sales data for MAT Q2 2019

Source: IQVIA OTC audits plus estimates (Excluding Venezuela)

Year on Year Value Growth & OTC Market Size

MAT Q2 2019

89 96 100 104 108 112

7,79,5 8,3

3,2

4,15,6

4,5

7,0

4,8

4,3

3,92,8

2014 2015 2016 2017 2018 2019

Total OTC €bn Pharma Yr on Yr Growth OTC Yr on Yr Growth

Total Pharma = €1,021bn Total OTC Share = 10.4%

Page 5: Igniting Growth in OTC Global OTC market trends and evolution growth in Europe (IQVIA).pdf · Value Share of OTC Growth < Market Growth > Market Source: IQVIATM OTC Global Insights

4

Developing Markets continue to drive the majority of global growth, with the share increasing to 83% in the latest period

IQVIA - BACHI Symposium, Brussels - October 2019 - Copyright © 2019 IQVIA. All rights reserved

Region Share of

Global OTC Sales

Region Share of

Global OTC Growth

Share of Sales

51%

Share of

Growth

83%

Developing Markets

Developing MarketsNote: Sales data for MAT Q2 2019

Source: IQVIA OTC audits plus estimates (Excluding Venezuela)

21%

7%

19%

9%

16%

35%

7%14%

11%

26%

17%

9%2%

-2%

7% 2%

JAPAN

AUSTRALASIA

CHINA

Rest of APAC

LATIN AMERICA

CEEMEA

W EUROPE

N AMERICA

Page 6: Igniting Growth in OTC Global OTC market trends and evolution growth in Europe (IQVIA).pdf · Value Share of OTC Growth < Market Growth > Market Source: IQVIATM OTC Global Insights

5

Innovation remains key in the OTC market; price increase also drives growth, countering volume declines across most regions

IQVIA - BACHI Symposium, Brussels - October 2019 - Copyright © 2019 IQVIA. All rights reserved

Elements of Growth – 3 Year Cumulative Growth %

WESTERN EUROPE NORTH AMERICAGLOBAL (exc Ven)

Base Volume Change

Price Change

New Products

Line Extensions

Total Change

Base Volume Change

Price Change

New Products

Line Extensions

Total Change

CEE LATIN AMERICA

exc Venezuela

APAC

excl Japan

Develo

ped

Develo

pin

g

-3

6

4

5

12

-7

3

6

6

8

0,1

4

1

1

6

-7

17

7

7

22

2

3

6

6

17

-3

8

5

8

17

Source: IQVIA Elements of Growth Analysis

Page 7: Igniting Growth in OTC Global OTC market trends and evolution growth in Europe (IQVIA).pdf · Value Share of OTC Growth < Market Growth > Market Source: IQVIATM OTC Global Insights

6

0,5%

2,6%

-1,9%

2,5%

1,1%

4,6%

-2,0%

3,5%

0,7%

1,3%

GSK/Pfizer JV becomes the leading global OTC player; among the Top 10, only Sanofi, P&G and Novartis exceeded market growth

IQVIA - BACHI Symposium, Brussels - October 2019 - Copyright © 2019 IQVIA. All rights reserved

Top 10

corporations

account for

29.0% of OTC

market

>0%

<0%

=0%

Change in

Market Share

Value Share of OTC Growth < Market Growth > Market

Source: IQVIATM OTC Global Insights

Global

Growth 2.5%

CCR remained as

largest category for

P&G; Digestive was a

key growth contributor

CCR was the largest and

key growth contributing

category for Novartis

Top 10 Corporations

Value Share & Latest Year Growth (%)

Top 10 share of OTC mkt

reduced slightly from 29.4% in

2018 to 29.0% in 2019

Bayer impacted by

intense competition in

North America and supply

disruptions in Europe

7,0%

4,7%

4,3%

3,9%

2,3%

2,1%

1,6%

1,3%

1,0%

0,9%

GSK/PFIZER JV

SANOFI

BAYER

J&J

RB

P&G

TAISHO+UPSA

NOVARTIS

TAKEDA

TEVA

-0.1%

0.0%

-0.2%

0.0%

0.0%

0.0%

-0.1%

0.0%

0.0%

0.0%

Sanofi’s growth was

mainly driven by

Digestive and Pain

Relief; Enterogermina

(+15%) was fastest

growing product among

Sanofi’s top 10

Page 8: Igniting Growth in OTC Global OTC market trends and evolution growth in Europe (IQVIA).pdf · Value Share of OTC Growth < Market Growth > Market Source: IQVIATM OTC Global Insights

7

Market impacted by weak performance in CCR & Pain relief, but the remaining three main categories show more positive results

IQVIA - BACHI Symposium, Brussels - October 2019 - Copyright © 2019 IQVIA. All rights reserved

Global OTC – Key Categories

Value Share (%)Value Growth (%)

Pain Relief had a slight (-

0.4%) volume decrease

mainly due to volume

decline in General

Systemic Pain Relief

products

Probiotics and Antacids

have been key growth

drivers in Digestives

Source: IQVIATM OTC Global Insights

CCR had a -2.1%

decrease in units, due to

volume decline in most of

the main segments except

Asthma & anti-allergicsCCR22,7%

VMS & Tonics18,4%

Pain Relief15,9%

Digestive14,7%

Skin9,0%

Others19,4%

2,5%

1,8%

2,9%

1,8%

3,8%

2,7%

2,4%

GlobalOTC

CCR

VMS &Tonics

PainRelief

Digestive

Skin

Others

Page 9: Igniting Growth in OTC Global OTC market trends and evolution growth in Europe (IQVIA).pdf · Value Share of OTC Growth < Market Growth > Market Source: IQVIATM OTC Global Insights

8

Calming/Sleeping/Mood performance can be attributed to growth in the USA and LatAm

Calming/Sleeping/Mood, Eye Care and Anti-haemorrhoids were key drivers of value growth for the minor OTC categories

IQVIA - BACHI Symposium, Brussels - October 2019 - Copyright © 2019 IQVIA. All rights reserved

Source: IQVIATM OTC Global Insights

Global OTC – Minor Categories

Value Share (%)Value Growth (%)

Eye Care4,2%

Urinary & Reproductive

3,5%

Circulatory2,9%

Calming/Sleeping/Mood2,0%

Herbal & Homeopathics

1,9%

Habit1,4%

Anti-haemorrhoids0,8%

Weight Loss0,6%

Ear Care0,3%

Other OTC1,9%

4,6%

0,1%

-0,3%

7,2%

0,7%

1,6%

4,6%

-6,2%

5,2%

5,0%

Eye Care

Urinary & Reproductive

Circulatory

Calming/Sleeping/Mood

Herbal & Homeopathics

Habit

Anti-haemorrhoids

Weight Loss

Ear Care

Other OTC

Global Growth 2.5%

Page 10: Igniting Growth in OTC Global OTC market trends and evolution growth in Europe (IQVIA).pdf · Value Share of OTC Growth < Market Growth > Market Source: IQVIATM OTC Global Insights

9

N AMERICA

W EUROPE

CHINA

CEE

JAPAN

LATIN AMERICA

SOUTH ASIA

SE ASIA

AUSTRALASIA

MIDDLE EAST

NORTH ASIA

AFRICA

-6

-4

-2

0

2

4

6

8

10

12

-2 0 2 4 6 8 10 12

Global Latest Year Growth 2.5%

Global 3 Year Average Growth 3.8%

OTC Global Growth by Sub-Region: Long vs Short term

At regional level, most sub-regions slow down apart from some developing sub-regions: LatAm, South Asia

IQVIA - BACHI Symposium, Brussels - October 2019 - Copyright © 2019 IQVIA. All rights reserved Region in decline in latest year

South Asia strong

performance due to

India, whose sales

account for >75% of

the region sales and

grew in double-digits

Introduction of Tiered Care System is

one of the reasons for S-T sales loss;

Reverse switches in Skin Treatment

also impacted sales negativelyMilder flu season impacted CCR sales while regulatory

changes in China have impacted Australia

Source: IQVIATM OTC Global Insights

Page 11: Igniting Growth in OTC Global OTC market trends and evolution growth in Europe (IQVIA).pdf · Value Share of OTC Growth < Market Growth > Market Source: IQVIATM OTC Global Insights

10

GERMANY

ITALY SPAIN

BELGIUM

FRANCE

UK

PORTUGAL

AUSTRIA

NETHERLANDS

SWEDEN

IRELAND

DENMARK

NORWAY

LUXEMBOURG

SWITZERLAND

-4

-2

0

2

4

6

8

-2 -1 0 1 2 3 4 5 6 7 8

WE Latest Year Growth 1.4%

WE 3 Year Average Growth 2.5%

OTC Western Europe Growth by Country: Long vs Short term

In Europe, WE experienced a slowdown in Q2, mainly due to declining sales in UK and France, and a slowdown in Germany

IQVIA - BACHI Symposium, Brussels - October 2019 - Copyright © 2019 IQVIA. All rights reservedCountry in decline in latest year

Germany slowdown was

majorly due to the CCR

category

UK suffered sales decline in

Pain, Skin, VMS & Tonics

and CCR

France lost sales in all

categories except Skin

Source: IQVIATM OTC Global Insights

GREECE3YR AV 7%

1YR 12%

FINLAND3YR AV 9%

1YR 3%

Page 12: Igniting Growth in OTC Global OTC market trends and evolution growth in Europe (IQVIA).pdf · Value Share of OTC Growth < Market Growth > Market Source: IQVIATM OTC Global Insights

11

RUSSIA

POLAND

HUNGARY

CZECH REPUBLIC

BULGARIA

SLOVAK REPUBLIC

SERBIA

KAZAKHSTAN

LITHUANIA

CROATIALATVIA

SLOVENIA

-6

-4

-2

0

2

4

6

8

10

12

14

16

18

20

0 2 4 6 8 10 12 14

CEE Latest Year Growth 5.1%

CEE 3 Year Average Growth 6.8%

OTC CEE Growth by Country: Long vs Short term

CEE also experiences slowdown mainly driven by decline in Russia, while Romania and Turkey remain strong

IQVIA - BACHI Symposium, Brussels - October 2019 - Copyright © 2019 IQVIA. All rights reserved

Russia MAT 06/2019

decline due to sales

decrease in 4 out of 5

top categories except

Digestive

Source: IQVIATM OTC Global Insights

Turkey driven by value

growth due to LC

devaluation. Potential

for growth to slow, if

consumer spending

impacted

TURKEY3YR AV 23%

1YR 28%

UKRAINE3YR AV 20%

1YR 13%

ROMANIA3YR AV 17%

1YR 23%

Page 13: Igniting Growth in OTC Global OTC market trends and evolution growth in Europe (IQVIA).pdf · Value Share of OTC Growth < Market Growth > Market Source: IQVIATM OTC Global Insights

12

Consumer spend increased across most markets with growth % in CEE ahead of WE growth due to price rises

IQVIA - BACHI Symposium, Brussels - October 2019 - Copyright © 2019 IQVIA. All rights reserved

Source: IQVIATM OTC Global Insights

85

165

130

116 109

102 101

9379

71 68

57 5550 48 45

3833

42

90 88 88

7571 71

64 6358 56

5248 46

2418 17

1%

-1%

3% 0% 3% 1% 3%

-2%

3%

-1%

11% 12%

3% 2% 1% 3%

-1%

-3%5% 4% 7%

11%7%

3%8%

5%0%

5% 5%

23%

-3%

10% 14% 15%

27%

Ye

ar

on

Ye

ar

Ch

an

ge (

%)

EU

RO

S

OTC Expenditure per Capita (€) - Europe Countries

Volume in Romania

increased by +15%

Page 14: Igniting Growth in OTC Global OTC market trends and evolution growth in Europe (IQVIA).pdf · Value Share of OTC Growth < Market Growth > Market Source: IQVIATM OTC Global Insights

13

Source: IQVIATM OTC Global Insights

CCR experienced volume

decline in some of the

leading segments especially

decongestants, C&F, sore

throat, expectorants and

cough relievers

Most categories in Europe except Skin suffered slowdown in Q2 2019 compared to Q2 2018

Europe OTC – Key Categories

Value Share (%)

Value Growth (%)

IQVIA - BACHI Symposium, Brussels - October 2019 - Copyright © 2019 IQVIA. All rights reserved

Pain Relief suffered a volume

decline in all key segments –

general systemic, muscular,

joint care and others

CCR21,2%

Pain Relief16,0%

Digestive15,1%

VMS & Tonics14,4%

Skin8,7%

Others24,5%

2,7%

2,2%

1,8%

4,5%

2,6%

3,2%

2,5%

Europe OTC

CCR

Pain Relief

Digestive

VMS & Tonics

Skin

Others

Digestive growth mainly

driven by probiotics, anti-

diarrhoeals and antacids

Page 15: Igniting Growth in OTC Global OTC market trends and evolution growth in Europe (IQVIA).pdf · Value Share of OTC Growth < Market Growth > Market Source: IQVIATM OTC Global Insights

14

Source: IQVIATM OTC Global Insights

Although 3 out of top 5 minor categories exceeded market growth, most minor categories were behind their growth in 2018

Europe OTC – Minor Categories

Value Share (%)Value Growth (%)

IQVIA - BACHI Symposium, Brussels - October 2019 - Copyright © 2019 IQVIA. All rights reserved

Among its top 10

countries,

Circulatory suffered

sales declines in

Russia, Italy, France

and Belgium

0,4%

5,0%

3,1%

3,7%

1,0%

2,5%

-7,9%

4,5%

6,3%

3,9%

Circulatory

Eye Care

Urinary & Reproductive

Calming/Sleeping/Mood

Herbal & Homeopathics

Habit

Weight Loss

Anti-haemorrhoids

Ear Care

Others

Europe Growth 2.7%

Circulatory5,1%

Eye Care4,6%

Urinary & Reproductive

4,4%

Calming/Sleeping/Mood2,8%

Herbal & Homeopathics

1,4%

Habit1,4%

Weight Loss0,9%

Anti-haemorrhoids0,9%

Ear Care0,4%

Others2,6%

Page 16: Igniting Growth in OTC Global OTC market trends and evolution growth in Europe (IQVIA).pdf · Value Share of OTC Growth < Market Growth > Market Source: IQVIATM OTC Global Insights

15

2,4%

1,3%

-3,4%

1,1%

4,1%

1,6%

1,8%

-0,1%

2,2%

0,4%

Source: IQVIATM OTC Global Insights

RB’s sales growth was

mainly driven by CCR

and Pain Relief products.

RB’s largest product

Nurofen experienced high

single-digit growth

>0%

<0%

=0%

Change in

Market Share

Top 10

corporations

account for

33% of OTC

market

Only RB exceeded market growth among the top 10 corporations and only 2 corporations improved growth compared to last period

Bayer suffered sales

decline in CCR,

Digestives & in Pain

Relief. It was also

impacted by supply

disruptions in the region

IQVIA - BACHI Symposium, Brussels - October 2019 - Copyright © 2019 IQVIA. All rights reserved

Value Share of OTC Growth < Market Growth > Market

Europe

Growth 2.7%

Top 10 Corporations

Europe Value Share & Latest Year Growth (%)

6,4%

6,0%

4,0%

3,2%

2,7%

2,6%

2,3%

2,0%

1,9%

1,5%

GSK/PFIZER JV

SANOFI

BAYER

J&J

RB

TEVA

NOVARTIS

MYLAN

STADA

PERRIGO

0.0%

-0.1%

-0.3%

-0.1%

0.0%

0.0%

0.0%

-0.1%

0.0%

0.0%

GSK’s business was

behind market growth

which was key reason

behind the JV’s under

performance

Page 17: Igniting Growth in OTC Global OTC market trends and evolution growth in Europe (IQVIA).pdf · Value Share of OTC Growth < Market Growth > Market Source: IQVIATM OTC Global Insights

16

Global and Europe OTC – some key highlights

IQVIA - BACHI Symposium, Brussels - October 2019 - Copyright © 2019 IQVIA. All rights reserved

Digestives and VMS &

Tonics exceeded global

market average;

Digestives led in Europe

Romania and Turkey in

CEE and Greece and

Portugal in WE have highest

growths in Europe, driven by

increase in per capita expenditure

Latest

Period impacted by

slowdown in all

main categories and

volume declines in

CCR, VMS & Tonics

and Pain

P&G experienced highest growth in the latest MAT,

mainly driven by performance in Digestives

83% Global

growth comes from

Developing Regions

with 51% share of

sales

South Asia is the

fastest growing region while CEE

grows moderately and W Europe is slow growing

Source: IQVIATM OTC Global Insights

Page 18: Igniting Growth in OTC Global OTC market trends and evolution growth in Europe (IQVIA).pdf · Value Share of OTC Growth < Market Growth > Market Source: IQVIATM OTC Global Insights

17

+ Global and Regional OTC Market Trends and Evolution

+ Growth Drivers in OTC: how the market will develop

• New Consumers

• Category Evolution

• Innovation in the OTC Market

• Distribution Developments

+ Conclusions

Table of Contents

Page 19: Igniting Growth in OTC Global OTC market trends and evolution growth in Europe (IQVIA).pdf · Value Share of OTC Growth < Market Growth > Market Source: IQVIATM OTC Global Insights

18

New consumers – New

opportunities

IQVIA - BACHI Symposium, Brussels - October 2019 - Copyright © 2019 IQVIA. All rights reserved

Page 20: Igniting Growth in OTC Global OTC market trends and evolution growth in Europe (IQVIA).pdf · Value Share of OTC Growth < Market Growth > Market Source: IQVIATM OTC Global Insights

19

Consumers are evolving and want more than simple treatments

IQVIA - BACHI Symposium, Brussels - October 2019 - Copyright © 2019 IQVIA. All rights reserved

Source: IQVIATM OTC Trends Report

Changing

demographics

Government-Led

Health Campaigns

Empowered

Digital Consumer

Focus on Wellness

and Prevention

Page 21: Igniting Growth in OTC Global OTC market trends and evolution growth in Europe (IQVIA).pdf · Value Share of OTC Growth < Market Growth > Market Source: IQVIATM OTC Global Insights

20IQVIA CH Conclave, Sep 2018 #not to be circulated without IQVIA consent

With increasing health literacy and access to technology, consumers are becoming more “health-smart” and proactive towards self care…

IQVIA - BACHI Symposium, Brussels - October 2019 - Copyright © 2019 IQVIA. All rights reserved

Page 22: Igniting Growth in OTC Global OTC market trends and evolution growth in Europe (IQVIA).pdf · Value Share of OTC Growth < Market Growth > Market Source: IQVIATM OTC Global Insights

21

* out of 45 IQVIATM OTC categories

Aspirational categories drive a third of market growth

IQVIA - BACHI Symposium, Brussels - October 2019 - Copyright © 2019 IQVIA. All rights reserved

Source: IQVIATM Global OTC Insights – MAT Q1 2019

Symptom Relief

Categories

Aspirational

Categories

26%

of OTCvalue sales

33%

of OTCvalue growth

1 in 3Categories by number*

6 in 10fastest growingcategories6%

6%

6%

6%

7%

8%

8%

9%

9%

10%

Decongestants

Eye Care

Oth Mineral Supps

Vitamin B

Calming & Sleeping/Mood Enhanc

Ear Care

Anti Diarrhoeals

Other VMS

Vitamin A&D

Probiotics For Dig Health

Fastest Growing Categories: 3 Year CAGR

Page 23: Igniting Growth in OTC Global OTC market trends and evolution growth in Europe (IQVIA).pdf · Value Share of OTC Growth < Market Growth > Market Source: IQVIATM OTC Global Insights

22

Aspirational category growth is 4x higher than traditional categories in Developed Markets

Aspirational categories recorded significantly higher growth vs symptom relief categories, especially in Developed Markets

IQVIA - BACHI Symposium, Brussels - October 2019 - Copyright © 2019 IQVIA. All rights reserved

Source: IQVIATM Global OTC Insights – MAT Q2 2019

2,3%

0,6%

4,5%

0,0%

Global

Developed Markets

Emerging Markets

Belgium

Symptom Relief v/s Aspirational Categories – Latest Year Growth (%)

2,9%

2,4%

4,3%

2,0%

Global

Developed Markets

Emerging Markets

Belgium

Note: Developed Markets does not include Japan

Symptom Relief

Categories

Aspirational

Categories

Page 24: Igniting Growth in OTC Global OTC market trends and evolution growth in Europe (IQVIA).pdf · Value Share of OTC Growth < Market Growth > Market Source: IQVIATM OTC Global Insights

23

Fastest growing companies have a bigger aspirational presence

IQVIA - BACHI Symposium, Brussels - October 2019 - Copyright © 2019 IQVIA. All rights reserved

Source: IQVIATM Global OTC Insights – MAT Q1 2019

Top 10 Companies 50 Fastest Growing Companies*Local/Regional Companies

AspirationalTraditional Symptom

Relief

Aspirational

Traditional Symptom

Relief

Aspirational

Traditional Symptom

Relief

* 50 fastest growing companies in the top 200 based on 3 year CAGR

Page 25: Igniting Growth in OTC Global OTC market trends and evolution growth in Europe (IQVIA).pdf · Value Share of OTC Growth < Market Growth > Market Source: IQVIATM OTC Global Insights

24

Innovation and

the Market Now

IQVIA - BACHI Symposium, Brussels - October 2019 - Copyright © 2019 IQVIA. All rights reserved

Page 26: Igniting Growth in OTC Global OTC market trends and evolution growth in Europe (IQVIA).pdf · Value Share of OTC Growth < Market Growth > Market Source: IQVIATM OTC Global Insights

25

Consumers are now more engaged and want solutions that work best for them

IQVIA - BACHI Symposium, Brussels - October 2019 - Copyright © 2019 IQVIA. All rights reserved

Consumers are no longer satisfied with just what

is made available to them

Options for consumers

are growing

The industry has been slow

to respond in terms of

innovating to modern

consumer needs… changing attitudes of new

generations and rise of the digital

communications technology mean

they can voice exactly what they

expect from a service or a product

… and they will swap to an

alternative if they believe it

will work better for them

How do you innovate for the new consumer?

… but no industry is protected

from disruptive innovation

Page 27: Igniting Growth in OTC Global OTC market trends and evolution growth in Europe (IQVIA).pdf · Value Share of OTC Growth < Market Growth > Market Source: IQVIATM OTC Global Insights

26

Innovation approaches must keep up with what consumers want

IQVIA - BACHI Symposium, Brussels - October 2019 - Copyright © 2019 IQVIA. All rights reserved

New connections – exciting innovations – new growth opportunities

Page 28: Igniting Growth in OTC Global OTC market trends and evolution growth in Europe (IQVIA).pdf · Value Share of OTC Growth < Market Growth > Market Source: IQVIATM OTC Global Insights

27

Expand the scope of innovation to meet evolving consumer expectations

IQVIA - BACHI Symposium, Brussels - October 2019 - Copyright © 2019 IQVIA. All rights reserved

Consumer

Centricity

• Products and services that deliver significant new benefits & claims

• Validated through scientific evidence based on consumer-centric

approaches

• Advanced Rx-to-OTC switches

Holistic Health &

Wellness concepts

• Integrate validated tools to support consumers on their health &

wellness journey

• Develop a higher level of personalization

Digital Health tools will be a key driver in developing

new consumer-centric scientific evidence and in

expanding the product eco-system

Engage with the consumer to generate the evidence needed to bring forward new claims, indications and products to OTC

Page 29: Igniting Growth in OTC Global OTC market trends and evolution growth in Europe (IQVIA).pdf · Value Share of OTC Growth < Market Growth > Market Source: IQVIATM OTC Global Insights

28

While extension of OTC distribution channels addresses consumer lifestyles and meets demands for convenience

IQVIA - BACHI Symposium, Brussels - October 2019 - Copyright © 2019 IQVIA. All rights reserved

Traditional apothecary

independent pharmacy

e-pharmacyMom & Pop stores,

Convenience outletsSuper/Hyper-markets

Modern pharmacy,

Drugstores

Pharmacy chains

“Virtual” chains, symbol

groups

Page 30: Igniting Growth in OTC Global OTC market trends and evolution growth in Europe (IQVIA).pdf · Value Share of OTC Growth < Market Growth > Market Source: IQVIATM OTC Global Insights

29

E-commerce pharmacy becomes more important within the overall pharmacy market and is growing more quickly

POLAND

197

47

50Chain Pharmacy

Independent Pharmacy

Internet Pharmacy

4X

Value of Transaction (PLN)

12

3

3

4X

Internet Pharmacy

Independent Pharmacy

Chain Pharmacy

Packages Number

7

2

2

3.5X

Internet Pharmacy

Independent Pharmacy

Chain Pharmacy

SKU Number

✓ The average value of transaction in

internet pharmacy is approx. 4X

traditional pharmacy

✓ Internet pharmacy more than

doubled its market share in 3 years

✓ In Germany, the evolution of internet

pharmacy is slower as the sector is

more mature …but still grows 8X the

rate of street pharmacy

CZECH REPUBLIC

98.2% 97.7%

Internet Pharmacy Street Pharmacy

Market Share - Value

GERMANY

12.8%

14.3%

12.6%

87.2%

2015

2016

85.7%

87.4%

16

2

4

Internet Pharmacy

Street Pharmacy

Total Market

Y-o-Y growth (%)Market Share

IQVIA - BACHI Symposium, Brussels - October 2019 - Copyright © 2019 IQVIA. All rights reserved

2,7% 3,5%5,9%

7,3%

20172015 2016 2018

2017

Page 31: Igniting Growth in OTC Global OTC market trends and evolution growth in Europe (IQVIA).pdf · Value Share of OTC Growth < Market Growth > Market Source: IQVIATM OTC Global Insights

30

...reflecting a different product portfolio compared to traditional “brick & mortar” pharmacies

IQVIA - BACHI Symposium, Brussels - October 2019 - Copyright © 2019 IQVIA. All rights reserved

13.0%

28.0%

11.0%

7.0% 11.0%

OTC PEC PAC NUT

Internet 54.0%

Street 72% 4.0%

PEC & NUT hold ~2X share in internet pharmacies

compared to traditional pharmacies

11.0%

25.0%

11.0%

5.0% 15.0%

OTC PEC PAC NUT

Internet 55.0%

Street 75.0% 3.0%

OTC share is reduced and PAC share reduces by half or

more in internet pharmacies

22.0%

40.0%

18.0%

8.0% 9.0%

OTC PEC PAC NUT

Internet 43.0%

Street 56.0% 4.0%

11.0%

16.0%

23.0%

5.0%

OTC NUTPEC PAC

Internet 77.0% 2.0%

Street 64.0% 2.0%

POLAND

CZECH REPUBLIC

GERMANY

ITALY

Page 32: Igniting Growth in OTC Global OTC market trends and evolution growth in Europe (IQVIA).pdf · Value Share of OTC Growth < Market Growth > Market Source: IQVIATM OTC Global Insights

31

Amazon clearly has the scale to address the opportunity …but will need to address some specific challenges in healthcare

IQVIA - BACHI Symposium, Brussels - October 2019 - Copyright © 2019 IQVIA. All rights reserved

Penetration of big tech companies in healthcare will put Pharma and CH companies in an unfamiliar environment!

Alexa Diabetes

Challenge in

partnership

with Merck

Amazon

invested in

cancer-testing

startup Grail

A Move into

Online PharmacyIncreasing investment in both healthcare

and prescription drugs with the recent

acquisition of PillPack

A Move into

WholesalingAmazon forged key partnerships years

ago with some of the largest U.S.

distributors, like Cardinal Health to sell

medical supplies and equipment to clinics

and hospitals, and it is looking to build out

that business

A move into

health insurancePartnership with J.P. Morgan and

Berkshire Hathaway to work on the issue

of rising employee health-benefits costs

A move into

private labelsBasic Care, Amazon’s recently launched

exclusive line of Perrigo OTC health

products, is a possible challenge to

pharmacy retail chains

“Alexa, refill my Omeprazole”

Page 33: Igniting Growth in OTC Global OTC market trends and evolution growth in Europe (IQVIA).pdf · Value Share of OTC Growth < Market Growth > Market Source: IQVIATM OTC Global Insights

32

+ Global and Regional OTC Market Trends and Evolution

+ Growth Drivers in OTC: how the market will develop

• New Consumers

• Category evolution

• Innovation in the OTC market

• Distribution developments

+ Conclusions

Table of Contents

Page 34: Igniting Growth in OTC Global OTC market trends and evolution growth in Europe (IQVIA).pdf · Value Share of OTC Growth < Market Growth > Market Source: IQVIATM OTC Global Insights

33IQVIA CH Conclave, Sep 2018 #not to be circulated without IQVIA consent

Source: QuintilesIMS, Adforum

‘Creating more options for consumers’ will continue to be the major theme for self care industry and pharmacy

IQVIA - BACHI Symposium, Brussels - October 2019 - Copyright © 2019 IQVIA. All rights reserved

Page 35: Igniting Growth in OTC Global OTC market trends and evolution growth in Europe (IQVIA).pdf · Value Share of OTC Growth < Market Growth > Market Source: IQVIATM OTC Global Insights

34

How has the market changed?

Summary and Conclusions

After a period of growth, the OTC market slowing

• The market is facing a challenging time

• Emerging markets have driven growth and become very significant, but key markets are also slowing

Consumers and their expectations are changing

• New generations have different needs

• Greater focused on health and wellness

• Standard NPD/line extensions no longer enough

Consumer choice has increased

• Increasing move towards self-care

• Wider OTC accessibility, through multiple channels

• Impact of digital, fast-moving but CHC is behind

Industry and pharmacy need to think creatively

• Address changing market dynamics and the needs

of new consumer demographics

• Disruptive innovation will increase, especially digital

Increasingly digitalized, heath-literate consumers

• More holistic, consumer-centric solutions

• Growing share of aspirational healthcare categories

• Increased personalization via Digital Health

Addressing challenging opportunities?

• Aligning consumer-centricity and demand for “natural” with scientific validation to drive innovation and claims

• Changing roles of different channels, including e-commerce

• Enhancing value and differentiation

IQVIA - BACHI Symposium, Brussels - October 2019 - Copyright © 2019 IQVIA. All rights reserved

How will the market change further?

Page 36: Igniting Growth in OTC Global OTC market trends and evolution growth in Europe (IQVIA).pdf · Value Share of OTC Growth < Market Growth > Market Source: IQVIATM OTC Global Insights

35

Please contact us for more information

IQVIA - BACHI Symposium, Brussels - October 2019 - Copyright © 2019 IQVIA. All rights reserved

Andy Tisman

Global Lead, Consumer Health Strategy & Thought Leadership

[email protected]

+44 203 075 5295