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Executive Summary

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TABLE OF CONTENTS

Executive Summary

Market Definition

INTRODUCTION

PRODUCT AND SECTOR DEFINITIONS

MARKET SECTORS

MARKET POSITION

MARKET TRENDS

Table 1: UK Average Weekly Household Expenditure on Healthcare Products and Services (£ per week), 1995/1996

Table 2: Pharmaceutical Services: Number of Prescriptions Dispensed, Average Gross Cost per Prescription and percentage of Prescriptions Chargeable

(million, £ and percent), 1984/1985-1994/1995

Market Size

TOTAL MARKET SIZE

OTC PRODUCT SECTORS

Table 3: Market Size of OTC Pharmaceutical Products in the UK Pharmacy and Grocery Sectors (£m at rsp), 1992-1996

Table 4: Market Size of OTC Pharmaceutical Products by Sector in the UK Pharmacy and Grocery Sectors (£m at rsp), 1994 and 1995

Table 5: Segmentation of OTC Pharmaceutical Products by Sector in the UK Pharmacy and Grocery Sectors by Value ( percent), 1995

Industry Background

RECENT HISTORY

LEGISLATION

ADVERTISING REGULATIONS

EUROPEAN MEDICINES EVALUATION AGENCY

INDUSTRY CONCENTRATION

DISTRIBUTION

TRADE ASSOCIATIONS

Table 6: Medicines Delisted to P Status from POM Status, 1983-1996

Table 7: Retail Distribution of OTC Pharmaceutical Products by Value ( percent), 1996

Brands

ANALGESICS AND TOPICAL PAIN RELIEF

COUGH, COLD AND SORE THROAT REMEDIES/DECONGESTANTS

DERMATOLOGICAL SKINCARE/SCALP CARE

DIGESTION REMEDIES/ANTI-ULCERANTS

MISCELLANEOUS

ADVERTISING AND PROMOTION

Table 8: Leading Brands in the Adult Oral Analgesics Sector ( percent), 1996

Table 9: Leading Analgesic Brands, 1996

Table 10: Leading Brands in the Cough, Cold and Sore Throat Sectors, 1996

Table 11: Leading Brands in the Skincare/Scalp Care Sector, 1996

Table 12: Leading Brands in the Digestion Remedies/ Anti-Ulcerants Sector, 1996

Table 13: Miscellaneous Brands, 1996

Table 14: OTC Pharmaceutical Products Receiving the Highest Levels of Main Media Advertising Expenditure (£000), Year to September 1996

Competitor Analysis

THE MARKETPLACE

MARKET LEADERS

ADVERTISING AND PROMOTION

Table 15: Boots' Financial Results by Division (£m), 12 Months to April 1994-1996

Table 16: Main Media Advertising Expenditure on Pharmaceuticals by Product Sector (£m), Years to September 1995 and 1996

Strengths, Weaknesses, Opportunities and Threats (SWOT)

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

Buying Behaviour

CONSUMER PENETRATION

Table 17: Penetration Levels of Headache Remedies and Analgesics by Age and Social Grade ( percent of adults using), 1996

Table 18: Penetration Levels of Cold and Flu Remedies by Age and Social Grade ( percent of adults using), 1996

Table 19: Penetration Levels of Cough Mixtures by Age and Social Grade ( percent of adults using), 1996

Table 20: Penetration Levels of Throat Lozenges and Pastilles by Age and Social Grade ( percent of adults using), 1996

Table 21: Penetration Levels of Hay Fever Remedies by Age and Social Grade ( percent of adults using), 1996

Table 22: Penetration Levels of Indigestion and Stomach Remedies by Age and Social Grade ( percent of adults using), 1996

Table 23: Penetration Levels of Laxatives and Salts by Age and Social Grade ( percent of adults using), 1996

Table 24: Penetration Levels of Diarrhoea Remedies by Age and Social Grade ( percent of adults using), 1996

Table 25: Penetration Levels of Rubs and Rheumatism Remedies by Age and Social Grade ( percent of adults using), 1996

Outside Suppliers to the Industry

INTRODUCTION

GEHE AG

UNICHEM PLC

BATTLE FOR OWNERSHIP OF LLOYDS CHEMISTS PLC

THE BOOTS COMPANY PLC

Current Issues

ASDA'S FIGHT AGAINST RESALE PRICE MAINTENANCE (RPM) CONTINUES

COMMUNITY NURSES RECOMMEND OTC PRODUCTS

MARKS & SPENCER CONSIDERS LAUNCHING INTO VITAMINS AND SUPPLEMENTS MARKET

OVERDOSING OF PARACETAMOL

PHARMACISTS SUPPORT CONSUMER ADVERTISING

STAFFORD-MILLER LAUNCHES ANTI-HAEMORRHOID

FOLIC ACID ADVICE FROM PHARMACISTS

Forecasts

THE FUTURE OF THE RESALE PRICE MAINTENANCE (RPM) AGREEMENT

OWN-LABEL DEVELOPMENT

ROLE OF OTC PRODUCTS IN THE PHARMACEUTICAL INDUSTRY

THE EUROPEAN MARKET

MARKET INFLUENCES

FORECASTS 1997 TO 2000

Table 26: Forecast Market Size of OTC Pharmaceutical Products (£m at rsp), 1997-2000

Market Growth

Figure 1: Total Market Size of the UK OTC Pharmaceutical Industry (£m at rsp), 1991-2000

Company Profiles

INTRODUCTION

DEFINITIONS

FURTHER INFORMATION

Company Financials

Further Sources

ASSOCIATIONS

PERIODICALS

DIRECTORIES

GENERAL SOURCES

HBI UK INFORMATION SOURCES

GOVERNMENT PUBLICATIONS

OTHER SOURCES

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EXECUTIVE SUMMARY

The `over-the-counter' (OTC) pharmaceuticals market has enjoyed steady growth over the last decade, with sales being fuelled by a wider range of pharmaceutical products being deemed suitable for retail sale. The market was valued at £1.24bn in 1995, and is estimated at £1.29bn in 1996.

The market is comprised of a wide range of product sectors, the largest of which is comprised of analgesics (pain relievers). This sector was valued at £205.8m in 1995. Gynaecological products achieved the highest level of growth in 1995, with sales boosted by the introduction of new products onto the OTC market. The smoking cessation products sector experienced the sharpest decline in sales of some 20 percent -- this sector has, to some extent, been a victim of its own earlier success, with its target market gradually declining.

In addition to the process of delisting, whereby `prescription-only' pharmaceuticals are switched to OTC status, there has been a gradual relaxation in the range of pharmaceuticals now available for sale in outlets, other than pharmacies. This trend has contributed towards the increased involvement of grocery multiples and drugstores in the retail distribution of OTC products. Boots The Chemists remains dominant as the leading single retailer in the OTC market.

In terms of product formulation, there has been a trend towards higher-strength products -- this is evidenced by the growing share taken by ibuprofen-based products in the analgesics market.

Following a period of intense corporate activity in the mid-1990s, in terms of mergers and takeovers, the major event in 1996 was the battle for ownership of Lloyds Chemists PLC. Overall, in terms of OTC pharmaceutical manufacturing, the market continues to be led by the Anglo-American company, SmithKline Beecham.

OTC pharmaceuticals remain as the last products subject to a legally enforced price-fixing system. However, this issue has been referred to the restrictive practices court following an investigation by the Office of Fair Trading (OFT), which recommended the resale price maintenance (RPM) agreement should be abolished. While the outcome of this issue cannot be predicted, Key Note forecasts continued steady growth in the OTC market of some 4 percent to 5 percent by value. The continuing trend toward self-medication is predicted to fuel sales, while greater polarisation of the market can be expected.

Text © 1997 Key Note

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