| KN24064 |
| KEY NOTE OTC Pharmaceuticals : May 2004 |
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This report covers:pharmacy-Only medicines, general sales list medicines, analgesics (pain relievers0, cough, cold, sore throat treatments, skincare treatments, gastro-intestinal, products, other OTC porducts,delisting, changes in delisting procedures, abolition of resale price maintenance, prescription charges, wholesalers, mail-orders, internet services, current issues, major trends, etc.
Companies covered include: Bayer, Crookes Healthcare, GlaxoSmithKline, Johnson & Johnson, Novartis Consumer Health UK, Pfizer, Reckitt Benckiser, Wyeth Consumer Healthcare, Boots,
| Executive Summary 1 |
| 1. Market Definition 8 |
| REPORT COVERAGE 8 |
| Pharmacy-Only Medicines 8 |
| General Sales List Medicines 8 |
| MARKET SECTORS 8 |
| Analgesics (Pain Relievers) 9 |
| Cough/Cold/Sore Throat Treatments 9 |
| Skincare Treatments 9 |
| Gastro-Intestinal Products 9 |
| Others 10 |
| MARKET TRENDS 10 |
| Consumer Expenditure 10 |
| Table 1: Weekly Household Expenditure on Healthcare |
| and Other Products and Services (£), 2001/2002 10 |
| Government Policy 11 |
| Healthcare Issues 12 |
| ECONOMIC TRENDS 12 |
| Population 12 |
| Table 2: UK Resident Population Estimates by Sex |
| (000), Mid-Years 1999-2003 12 |
| Unemployment 13 |
| Table 3: Actual Number of Unemployed |
| Persons in the UK (million), 1999-2003 13 |
| Household Disposable Income 13 |
| Table 4: Average Annual UK Household Disposable Income |
| (£), 1998-2002 14 |
| MARKET POSITION 14 |
| The UK 14 |
| Table 5: Expenditure on NHS Pharmaceuticals |
| and as a Percentage of Total NHS Expenditure |
| (£m at msp and %), 1998-2002 15 |
| Overseas 15 |
| Table 6: Average Annual Expenditure Per Person on |
| Pharmaceuticals in the US, Japan and Europe |
| by Country (£), 2002 16 |
| Table 7: Expenditure on Pharmaceuticals as a Proportion |
| of GDP in the US, Japan and Europe by Country (%), 2002 17 |
| 2. Market Size 18 |
| THE TOTAL MARKET 18 |
| Table 8: The Total UK Market for OTC Pharmaceuticals |
| by Sector by Value at Current Prices (£m at rsp), 1999-2003 18 |
| BY MARKET SECTOR 19 |
| Analgesics 19 |
| Table 9: The UK OTC Analgesics Sector by Value |
| at Current Prices (£m at rsp and %), 1999-2003 20 |
| Cough/Cold/Sore Throat Treatments 20 |
| Table 10: The UK OTC Cough/Cold/Sore Throat Treatments Sector by Value at Current Prices (£m at rsp and %), 1999-2003 21 |
| Skincare Treatments 21 |
| Table 11: The UK OTC Skincare Treatments Sector by Value |
| at Current Prices (£m at rsp and %), 1999-2003 22 |
| Gastro-Intestinal Products 23 |
| Table 12: The UK OTC Gastro-Intestinal Products Sector |
| by Value at Current Prices (£m at rsp and %), 1999-2003 23 |
| Other OTC Products 24 |
| Table 13: The UK Other OTC Products Sector by Value |
| at Current Prices (£m at rsp and %), 1999-2003 24 |
| OVERSEAS TRADE 25 |
| Table 14: UK Overseas Trade in Pharmaceuticals (£m), 2002 25 |
| 3. Industry Background 26 |
| RECENT HISTORY 26 |
| Delisting 26 |
| Changes in Delisting Procedures 27 |
| Abolition of Resale Price Maintenance 27 |
| Advertising Restrictions Lifted 28 |
| Royal Pharmaceutical Society of Great Britain Code of Ethics 28 |
| Prescription Charges 28 |
| Government Reforms to Pharmacy Regulations 29 |
| INDUSTRY SYNOPSIS 29 |
| Table 15: Average Financial Results for Manufacturers of |
| Pharmaceutical Preparations (£000, % and £), 2004 30 |
| NUMBER OF COMPANIES 30 |
| Table 16: Number of UK VAT-Based Enterprises Engaged |
| in the Manufacture of Pharmaceutical Preparations |
| by Turnover Sizeband, 2003 31 |
| EMPLOYMENT 31 |
| REGIONAL VARIATIONS IN THE MARKETPLACE 31 |
| DISTRIBUTION 32 |
| Retail Chemists 32 |
| Table 17: Community Pharmacies in Great Britain by Type (number and %), May 2003 32 |
| Wholesalers 33 |
| Mail-Order and Internet Services 33 |
| HOW ROBUST IS THE MARKET? 33 |
| LEGISLATION 34 |
| The Selected List 34 |
| Licensing Regulations 34 |
| Advertising Regulations 35 |
| European Agency for the Evaluation of Medicinal Products 36 |
| KEY TRADE ASSOCIATIONS 36 |
| Association of the British Pharmaceutical Industry 36 |
| Association of the European Self-Medication Industry 36 |
| National Pharmaceutical Association 36 |
| Proprietary Association of Great Britain 37 |
| Royal Pharmaceutical Society of Great Britain 37 |
| 4. Competitor Analysis 38 |
| THE MARKETPLACE 38 |
| MARKET LEADERS 38 |
| Bayer PLC 38 |
| Company Structure 38 |
| Current and Future Developments 39 |
| Financial Results 39 |
| Crookes Healthcare Ltd 39 |
| Company Structure 39 |
| Current and Future Devlopments 39 |
| Financial Results 40 |
| GlaxoSmithKline PLC 40 |
| Company Structure 40 |
| Current and Future Developments 40 |
| Financial Results 41 |
| Johnson & Johnson Ltd 41 |
| Company Structure 41 |
| Current and Future Developments 41 |
| Financial Results 41 |
| Novartis Consumer Health UK Ltd 41 |
| Company Structure 41 |
| Current and Future Developments 42 |
| Financial Results 42 |
| Pfizer Ltd 42 |
| Company Structure 42 |
| Current and Future Developments 43 |
| Financial Results 43 |
| Reckitt Benckiser PLC 43 |
| Company Structure 43 |
| Current and Future Developments 43 |
| Financial Results 43 |
| Wyeth Consumer Healthcare 44 |
| Company Structure 44 |
| Current and Future Developments 44 |
| Financial Results 44 |
| OUTSIDE SUPPLIERS 44 |
| Table 18: UK Expenditure on Pharmaceutical Research |
| and Development (£m and %), 1998-2002 45 |
| MARKETING ACTIVITY 45 |
| Main Media Advertising 45 |
| Table 19: Main Media Advertising Expenditure |
| on OTC Pharmaceuticals by Product Sector (£000), |
| Years Ending September 2002 and 2003 46 |
| Table 20: Main Media Advertising Expenditure |
| on Pharmaceuticals by Type of Product by Brand |
| (£000), Year Ending September 2003 47 |
| 5. Strengths, Weaknesses, Opportunities and Threats 52 |
| STRENGTHS 52 |
| WEAKNESSES 53 |
| OPPORTUNITIES 53 |
| THREATS 54 |
| 6. Buying Behaviour 55 |
| INTRODUCTION 55 |
| MEDICAL CONDITIONS 55 |
| Table 21: Incidence of Common Medical Conditions |
| in the Previous 12 Months (% of adults), March 2003 56 |
| OTC PRODUCT USAGE 57 |
| Table 22: Consumer Usage of OTC Pharmaceuticals by Type |
| During the Previous 12 Months (% of adults), March 2003 57 |
| PURCHASING OF OTC PHARMACEUTICALS BY TYPE |
| OF OUTLET 58 |
| Table 23: Consumer Purchase of OTC Pharmaceuticals |
| by Type of Outlet (% of adults), 2003 58 |
| 7. Current Issues 59 |
| NEW ADVERTISING GUIDANCE 59 |
| REPORT ON ASPIRIN-INDUCED ASTHMA 59 |
| OTC PHARMACEUTICAL ABUSE 59 |
| CORPORATE ACTIVITY 60 |
| Roche Sells Vitamins and Fine Chemicals Business 60 |
| Interest Shown in Roche Consumer Healthcare Business 60 |
| Peter Black Direct Marketing Acquired 60 |
| LEGISLATIVE CHANGES 60 |
| Proposal to Delist Statins to OTC Status 60 |
| ADVERTISING AND PROMOTION 61 |
| 8. The Global Market 62 |
| LEADING GLOBAL MARKETS 62 |
| Table 24: Balance of Trade in Pharmaceuticals |
| by Country (£m), 2002 62 |
| LEADING GLOBAL PLAYERS 63 |
| Table 25: Top Ten Leading Players in the Global Pharmaceuticals Market by Sales and Global Market Share |
| (£m and %), 2001 63 |
| MAJOR TRENDS 64 |
| The Internet 64 |
| Per Capita Spending on Pharmaceuticals 64 |
| Table 26: Annual Per Capita Expenditure on Pharmaceuticals |
| by Country (£), 2002 65 |
| Expenditure on Pharmaceuticals as a Proportion of GDP 65 |
| THE FUTURE 65 |
| 9. Forecasts 67 |
| INTRODUCTION 67 |
| Attitudes Towards Healthcare 67 |
| The Ageing Population 67 |
| Reclassification of Pharmaceuticals 67 |
| FORECASTS 2004 TO 2008 67 |
| Table 27: The Forecast Total UK Market for OTC |
| Pharmaceuticals by Value at Current Prices |
| (£m at rsp), 2004-2008 68 |
| FUTURE TRENDS 68 |
| Deregulation of the Pharmacy Market 68 |
| Internet and Mail-Order Distribution 68 |
| Boots to Expand in South East Asia 68 |
| Product Development 69 |
| A Vision for Pharmacy in the New NHS 69 |
| 10. Company Profiles 70 |
| Crookes Healthcare Ltd 71 |
| Glaxosmithkline Plc 73 |
| Johnson & Johnson Ltd 75 |
| Novartis Consumer Health Uk Ltd 77 |
| Pfizer Ltd 79 |
| Reckitt Benckiser Plc 81 |
| 11. Further Sources 83 |
| Associations 83 |
| Publications 84 |
| General Sources 84 |
| Government Sources 85 |
| Other Sources 86 |
| Bonnier Information Sources 86 |
This report examines the UK market for commercial radio, which is defined as any free-to-home radio service, broadcast terrestrially or non-terrestrially, that derives all or most of its revenue from the sale of advertising airtime. In 2003, UK revenues from commercial radio advertising, sponsorship and promotion reached £601m, which represents an increase of 6.8% on 2002 and 17.8% since 1999. In terms of revenue, the commercial radio market is segmented into three sectors: advertising on national radio stations, advertising on local radio stations, and sponsorship and promotion on both national and local stations.
National radio stations account for the largest share of total revenues but, since 2000, local radio has taken share from national stations. Sponsorship and promotion have also shown strong growth. Highly targeted audiences and strong brand-building capabilities have made the radio highly attractive to commercial organisations. In 2003, radio accounted for 6.8% of UK display advertising, compared with 5.5% in 1999. As the number of stations increases, each offering its own advertising and sponsorship opportunities, radio is proving to be a flexible medium for marketing investment.
Digital technology, in the shape of digital audio broadcasting (DAB), the Internet, and cable and satellite TV, is playing an increasing role in the market and has paved the way for new broadcast channels, fresh listening experiences and even additional revenue streams. While radio is essentially a very fragmented medium, it is becoming increasingly dominated by large groups such as GWR Group PLC, Capital Radio PLC, EMAP PLC and Chrysalis Group PLC. These are the only broadcasting groups commanding more than 10% of commercial radio listening hours. GWR Group is the clear market leader, being the largest national commercial radio broadcaster in terms of its share of listening.
Capital Radio is the second-largest group and is the largest local radio broadcaster. In terms of advertising revenue, GWR Group and Capital Radio are the largest players in the market and are of broadly equal size. Only one other company, Chrysalis Group, holds more than 10% of the market.
Consolidation has allowed the industry to build strong brands and raise programming quality. This has improved radio as an advertising medium, as numerous individual local stations have been replaced by national, regional or pan-local networks of stations, making it easier for advertisers to build campaigns that stretch across several local franchise areas.
Key Note forecasts strong growth in revenue from radio advertising between 2004 and 2008. The commercial radio market will increasingly be shaped by the growth of new digital means of listening, including DAB, the Internet and digital TV. Moreover, there will be growing competition in the market as the number of new services continues to grow and licence trading comes into force. As competition increases, the market will become steadily more fragmented, with the largest operators taking a growing share of revenues.
Text © 2004Key Note
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Last updated by Amanda Porteous June
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