| KN24062 |
| KEY NOTE OTC PHARMACEUTICALS : August 2002 |
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This report covers: over the counter pharmaceuticals, pharmaceutical
manufacturers, complementary medicine, willingness to self medicate,
combination medicines and convenient use, abolition of resale price
maintenance, NHS plan , self-medication, pharmacy-only medicines, full-line
wholesalers, short-line wholesalers, specialist distributors, mail order,
direct distribution, allergies, allergy remedies, headache remedies,
analgesics, cold and flu remedies, cough mixtures, sore throat remedies,
indigestion, heartburn, stomach, remedies, mouthwashes, gargles,
hayfever,diarrhoea, laxaatives, salts, vitamins, supplements, ointments,
salves, rubs, rheumatism, liquid antiseptics,
Companies covered include: Crookes Healthcare, GlaxoSmithKline,
Johnson and Johnson, Novartis Consumer Health UK, Peter Black Healthcare,
Pfizer Group, Reckitt Benckiser, SSL International, Wyeth Comsumer Healthcare,
Roche, Thornton and Ross, Whitehall Laboratories,
EXECUTIVE SUMMARY
| The UK over-the-counter (OTC) pharmaceutical market is part of one of the most successful and dynamic market sectors in both the UK and the world. The industry is research driven, extremely competitive and with very high entry levels, mainly because of the time, risks and enormous costs of developing drugs and the extremely regulated nature of the marketplace. |
| In recent years, the Government has been actively encouraging self-medication, in an effort to control the enormous and growing costs of NHS prescription drugs, and pharmaceutical companies have been eager to extend the lifecycles of their products and maximise profits. In the previous 2 years (2000 and 2001), new OTC product launches have slowed slightly, but future prospects for market growth are good, since both the Government and the population generally appear to favour self-medication. In 2001, the abolition of resale price maintenance (RPM) resulted in some discounting of leading brands, mostly in supermarkets, but as yet, there have been no signs of the mass closures of small community pharmacies predicted by the industry. |
| The OTC pharmaceutical market is highly fragmented, consisting of a broad range of therapeutic categories for a range of different medical indications. Markets range from the new and emerging, to the comparatively mature. The largest single market sector is that of analgesics and pain relief, which constituted just 24.2 percent of the total OTC pharmaceutical market in 2001. A number of leading brands in this sector — most notably Nurofen — have been targeted for discounting following the abolition of RPM, and although market growth has slowed to a certain degree, it is still significant, mainly as a result of brand extensions, niche product development and user friendly formulations. The second-largest market sector is vitamins, minerals and supplements, which constituted 18.8 percent of the OTC market in 2001. Growth in this sector is minimal following safety concerns over a number of products. Anti-allergy products is one of the fastest-growing sectors in the marketplace, fuelled by an increase in the incidence of allergies in the population. The markets for skin treatments and anti-fungals have been buoyant, because of the introduction of a number of new products with their accompanying publicity campaigns. |
| The long-term prospects for the market are promising, since the Government plans to expand the range of indications available for treatment on the OTC market. If the NHS drugs bill is to be contained, more products that treat medical disorders affecting older age groups, or significant proportions of the population, must become available over the counter, such as cholesterol-lowering drugs. In future, regulations streamlining the process of declassification to OTC status and harmonisation of EU regulations should both speed up and reduce the costs of launching an OTC product. The abolition of RPM and growing competition should ensure that consumers will obtain increasing value for money. |
TABLE OF CONTENTS
| Executive Summary 1 |
| 1. Market Definition 9 |
| REPORT COVERAGE 9 |
| MARKET SECTORS 9 |
| MARKET TRENDS 10 |
| Deregulation of the Marketplace 10 |
| Willingness to Self-Medicate 10 |
| Pharmaceutical Manufacturers 10 |
| Complementary Medicine 11 |
| Combination Medicines and Convenient Use 11 |
| The Abolition of Resale Price Maintenance 11 |
| The NHS Plan and Self-Medication 11 |
| Pharmacy-only (P) Medicines 11 |
| MARKET POSITION 12 |
| The UK 12 |
| 2. Market Size 13 |
| THE TOTAL MARKET 13 |
| Table 1: The UK OTC Pharmaceuticals Market by Value at Current Prices (£m at rsp),1998-2001 13 |
| MARKET SECTORS 13 |
| Table 2: The UK OTC Pharmaceuticals Market by Sector by Value (£m at rsp), 1998-2001 14 |
| 3. Industry Background 16 |
| RECENT HISTORY 16 |
| Resale Prices Act 16 |
| Number of Companies 17 |
| Table 3: Number of VAT-Based Enterprises Engaged in the Manufacture of Basic Pharmaceuticals and Pharmaceutical Preparations by Turnover Sizeband (£000), 2001 17 |
| Employment 18 |
| Table 4: Number of VAT-Based Local Units Engaged in the Manufacture of Basic Pharmaceuticals and Pharmaceutical Preparations by Employment Sizeband (number of employees), 2001 18 |
| REGIONAL VARIATIONS IN THE MARKETPLACE 18 |
| DISTRIBUTION 19 |
| Full-Line Wholesalers 19 |
| Short-Line Wholesalers 19 |
| Specialist Distributors 19 |
| Mail Order and Direct Distribution 20 |
| HOW ROBUST IS THE MARKET? 20 |
| LEGISLATION 20 |
| Key TRADE ASSOCIATIONS 22 |
| The Association of the British Pharmaceutical Industry 22 |
| The Association of the European Self-Medication Industry 22 |
| The National Pharmaceutical Association 22 |
| The Proprietary Association of Great Britain 22 |
| Royal Pharmaceutical Society of Great Britain 23 |
| 4. Competitor Analysis 24 |
| THE MARKETPLACE 24 |
| MARKET LEADERS 25 |
| Crookes Healthcare Ltd 25 |
| Company Structure 25 |
| Current and Future Developments 25 |
| Financial Results 25 |
| GlaxoSmithKline PLC 26 |
| Company Structure 26 |
| Current Developments 27 |
| Financial Results 27 |
| Johnson & Johnson Ltd 27 |
| Company Structure 27 |
| Current and Future Developments 28 |
| Financial Results 28 |
| Novartis Consumer Health UK Ltd 28 |
| Company Structure 28 |
| Current and Future Developments 28 |
| Financial Results 29 |
| Peter Black Healthcare Ltd 29 |
| Company Structure 29 |
| Current and Future Developments 29 |
| Financial Results 29 |
| Pfizer Group Ltd 30 |
| Company Structure 30 |
| Current and Future Developments 30 |
| Financial Results 31 |
| Reckitt Benckiser PLC 31 |
| Company Structure 31 |
| Current and Future Developments 31 |
| Financial Results 31 |
| SSL International PLC 32 |
| Company Structure 32 |
| Current and Future Developments 32 |
| Financial Results 32 |
| Wyeth Consumer Healthcare 33 |
| Company Structure 33 |
| Current and Future Developments 33 |
| Financial Results 33 |
| OTHER COMPANIES 33 |
| OUTSIDE SUPPLIERS 34 |
| Table 5: UK Pharmaceutical Expenditure on Research and Development by Company (£m), 2000/2000 35 |
| ADVERTISING AND PROMOTION 36 |
| Table 6: Main Media Advertising Expenditure on Pharmaceuticals (£000), Years Ending December 2000 and 2001 37 |
| 5. Strengths, Weaknesses, Opportunities and Threats 40 |
| STRENGTHS 40 |
| WEAKNESSES 41 |
| OPPORTUNITIES 41 |
| THREATS 42 |
| 6. Buying Behaviour 43 |
| POPULATION PROFILE 43 |
| Table 7: Total UK Population by Age (million and percent), 1951-2026 43 |
| Medical Conditions 44 |
| Table 8: Incidence of Common Medical Conditions ( percent), 2001 44 |
| Coughs 45 |
| Table 9: Proportion of Respondents Suffering From Coughs by Sex, Age, Social Grade and Region ( percent of total), 2001 46 |
| Sore Throats 47 |
| Table 10: Proportion of Respondents Suffering From Sore Throats by Sex, Age, Social Grade and Region ( percent of total), 2001 47 |
| Colds 48 |
| Table 11: Proportion of Respondents Suffering From Colds by Sex, Age, Social Grade and Region ( percent of total), 2001 49 |
| Flu 50 |
| Table 12: Proportion of Respondents Suffering From Flu by Sex, Age, Social Grade and Region ( percent of total), 2001 50 |
| Chapped or Cracked Lips 51 |
| Table 13: Proportion of Respondents Suffering From Chapped or Cracked Lips by Sex, Age, Social Grade and Region ( percent of total), 2001 52 |
| Diarrhoea 53 |
| Table 14: Proportion of Respondents Suffering From Diarrhoea by Sex, Age, Social Grade and Region ( percent of total), 2001 53 |
| Headaches 54 |
| Table 15: Proportion of Respondents Suffering From Headaches by Sex, Age Social Grade and Region ( percent of total), 2001 55 |
| Migraine 56 |
| Table 16: Proportion of Respondents Suffering From Migraine by Sex, Age, Social Grade and Region ( percent of total), 2001 56 |
| Hayfever 57 |
| Table 17: Proportion of Respondents Suffering From Hayfever by Sex, Age, Social Grade and Region ( percent of total), 2001 58 |
| Sinus Disorders 59 |
| Table 18: Proportion of Respondents Suffering From Sinus Disorders by Sex, Age, Social Grade and Region ( percent of total), 2001 59 |
| Catarrh 60 |
| Table 19: Proportion of Respondents Suffering From Catarrh by Sex, Age, Social Grade and Region ( percent of total), 2001 61 |
| Stuffy Nose 62 |
| Table 20: Proportion of Respondents Suffering From A Stuffy Nose by Sex, Age, Social Grade and Region ( percent of total), 2001 63 |
| Indigestion 64 |
| Table 21: Proportion of Respondents Suffering From Indigestion by Sex, Age, Social Grade and Region ( percent of Total), 2001 64 |
| Insomnia 65 |
| Table 22: Proportion of Respondents Suffering From Insomnia by Sex, Age, Social Grade and Region ( percent of total), 2001 66 |
| Asthma 67 |
| Table 23: Proportion of Respondents Suffering From Asthma by Sex, Age, Social Grade and Region ( percent of total) 2001 67 |
| Arthritis 68 |
| Table 24: Proportion of Respondents Suffering From Arthritis by Sex, Age, Social Grade and Region ( percent of total), 2001 69 |
| Rheumatism 70 |
| Table 25: Proportion of Respondents Suffering From Rheumatism by Sex, Age, Social Grade and Region ( percent of total), 2001 70 |
| Piles 71 |
| Table 26: Proportion of Respondents Suffering From Piles by Sex, Age, Social Grade and Region ( percent of total), 2001 72 |
| Athlete's Foot 73 |
| Table 27: Proportion of Respondents Suffering From Athlete's Foot by Sex, Age, Social Grade and Region ( percent of total), 2001 73 |
| Cystitis 74 |
| Table 28: Proportion of Respondents Suffering From Cystitis by Sex, Age, Social Grade and Region ( percent of total), 2001 75 |
| Thrush 76 |
| Table 29: Proportion of Respondents Suffering From Thrush by Sex, Age, Social Grade and Region ( percent of total), 2001 76 |
| Bad Back 77 |
| Table 30: Proportion of Respondents Suffering From Bad Back by Sex, Age, Social Grade and Region ( percent of total), 2001 78 |
| Usage of otc products 79 |
| Table 31: Consumer Purchase of Pharmaceutical Products by Type of Outlet ( percent of adults), 2001 79 |
| MODE OF USE 79 |
| Table 32: Consumer Usage of OTC Pharmaceuticals by Sector During the Past 12 Months ( percent of adults), 2001 80 |
| Headache Remedies and Analgesics 80 |
| Table 33: Consumer Usage of Headache Remedies and Analgesics in the Past 12 Months by Frequency and Brand ( percent of adults), 2001 81 |
| Cold and Flu Remedies 81 |
| Table 34: Consumer Usage of Cold and Flu Remedies in the Past 12 Months by Frequency and Brand ( percent of adults), 2001 82 |
| Cough Mixture 83 |
| Table 35: Consumer Usage of Cough Mixtures in the Past 12 Months by Frequency and Brand ( percent of adults), 2001 83 |
| Sore Throat Remedies 83 |
| Table 36: Consumer Usage of Sore Throat Remedies in the Past 12 Months by Frequency and Brand ( percent of adults), 2001 84 |
| Indigestion, Heartburn and Stomach Remedies 84 |
| Table 37: Consumer Usage of Indigestion, Heartburn and Stomach Remedies in the Past 12 Months by Frequency and Brand ( percent of adults), 2001 85 |
| Mouthwashes and Gargles 85 |
| Table 38: Consumer Usage of Mouthwashes and Gargles in the Past 12 Months by Frequency and Brand ( percent of adults), 2001 86 |
| Hayfever Remedies 86 |
| Table 39: Consumer Usage of Hayfever Remedies in the Past 12 Months by Frequency and Brand ( percent of adults), 2001 87 |
| Diarrhoea Remedies 87 |
| Table 40: Consumer Usage of Diarrhoea Remedies, in the Past 12 Months ( percent of adults), 2001 88 |
| Laxatives and Salts 88 |
| Table 41: Consumer Usage of Laxatives and Salts in the Past 12 Months by Frequency and Brand ( percent of adults), 2001 89 |
| Vitamins and Supplements 89 |
| Table 42: Consumer Usage of Vitamins and Supplements in the Past 12 Months by Frequency and Brand ( percent of adults), 2001 90 |
| Ointments and Salves 90 |
| Table 43: Consumer Usage of Ointments and Salves in the Past 12 Months by Frequency and Brand ( percent of adults), 2001 91 |
| Rubs and Rheumatism Remedies 91 |
| Table 44: Consumer Usage of Rubs and Rheumatism Remedies in the Past 12 Months by Frequency and Brand ( percent of adults), 2001 92 |
| Liquid Antiseptics for Home Use 92 |
| Table 45: Consumer Usage of Liquid Antiseptics for Home Use in the Past 12 Months by Frequency and Brand ( percent of adults), 2001 93 |
| 7. Current Issues 94 |
| CORPORATE activity 94 |
| GlaxoSmithKline PLC 94 |
| Johnson & Johnson Ltd 94 |
| Roche 94 |
| William Ransom Ltd 94 |
| SSL International PLC 94 |
| Thornton & Ross 95 |
| General 95 |
| Display of Pharmacy-Only Medicines 95 |
| Pharmacy Practice Research Trust 95 |
| Pharmacy-Based OTC Product Trials 95 |
| Misuse of OTC Medicines 96 |
| Legislation 96 |
| Reclassification Process 96 |
| European Pharmaceutical Policy 97 |
| Abolition of Resale Price Maintenance 97 |
| Review of European Pharmaceutical Legislation 98 |
| Free Pharmacy-Only Medicines 98 |
| HEALTH 99 |
| Colds and Flu 99 |
| Allergies 99 |
| NEW PRODUCTS 99 |
| 8. The Global Market 101 |
| MARKET SIZE 101 |
| MAJOR TRENDS 101 |
| The Impact of Technological Advances 101 |
| Pressure on Health Services 101 |
| Mutual Recognition Procedure and the Single Market 101 |
| Increasing Globalisation 102 |
| Cost Benefits and Savings From New Technology 102 |
| The Future 102 |
| 9. Forecasts 103 |
| INTRODUCTION 103 |
| FORECASTS 2002 to 2006 103 |
| The Total Market 103 |
| Table 46: The Forecast UK OTC Pharmaceuticals Market by Value at Current Prices (£m at rsp), 2002-2006 103 |
| Market Sectors 104 |
| Table 47: The Forecast UK OTC Pharmaceuticals Market by Sector by Value (£m at rsp), 2002-2006 104 |
| FUTURE TRENDS 106 |
| Ageing Population 106 |
| Increasing Range of Indications 106 |
| Legislation 106 |
| Increased Public Awareness 106 |
| Price Sensitivity 106 |
| 10. Company Profiles 107 |
| Crookes Healthcare Ltd 108 |
| gLAXOsMITHkLINE plc 110 |
| Johnson & Johnson LTD 112 |
| Novartis Consumer Health Uk LTd 114 |
| Pfizer Group Ltd 116 |
| Reckitt Benckiser Plc 118 |
| Ssl International Plc 120 |
| Whitehall Laboratories Ltd 122 |
| 11. Further Sources 124 |
| Associations 124 |
| Publications 126 |
| Directories 127 |
| General Sources 127 |
| Bonnier Information Sources 128 |
| Government Publications 129 |
| Other Sources 130 |
Text © 2002 Key Note
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Last updated by Amanda Porteous February 2004
