James Dudley Management

James Dudley Management

Pharmacies Should Raise Their Game in Promoting OTC Consumer Healthcare – Says New 20 Country European Market Report

The average turnover of a pharmacy in Europe is approximately €944,000 in 2015. Yet this figure is down 9% since 2012. At the root of the decline in average turnover is the dependence pharmacies have on social funding. 73% of turnover on average across the countries studied is derived from prescription only medicines and other social health services. These are largely funded by statutory healthcare providers. As a consequence such products and services are generally price regulated and subject to price and margin controls. Furthermore there is a distinct trend for fund holders to drive down prices and fees right across the 20 countries in the Dudley Study.

So says a major new 20 Country study of Europe’s consumer healthcare market from James Dudley Management

The report, ‘OTC Distribution in Europe’ - the 2016 edition – the New Global Agenda, covers 20 countries in Europe: Austria, Belgium, Bulgaria, Czech Republic, Finland, Denmark, France, Germany, Hungary, Italy, Netherlands, Norway, Poland, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland and the United Kingdom.

Part of the solution to the downward trends in sales and profitability from price regulated prescription services would be for pharmacies to raise their game in promoting consumer healthcare and associated personal care ranges.

Pharmacies do sell a wide range of non-medicinal lines other than prescription medicines, which include nutritional and baby products, health related and premium personal care items, cosmetics, nursing aids, hygiene products and medical devices. Together these represent 16% of turnover of an average pharmacy in Europe. However, as attractive as many of these lines can be in terms of prices and margins the pharmacy has no monopoly and is subject to mass market competition. Thus picking out health related niches such as OTC medicines, skincare, dietary aids and incontinence care can provide an edge in premium priced segments.

Consumer purchases of OTC self-medication represent only 11% of sales turnover of the average pharmacy. This is despite the fact that the pharmacy is the natural channel for consumer healthcare. (figure 2)

Figure 1: Average % Share of Pharmacy Turnover by Category – 20 Country European Study

Average Percentage Share of Pharmacy Turnover by Category – 20 Country European Study

Source: James Dudley Management OTC Distribution in Europe - the 2016 edition

With the exception of three countries in the Dudley Study, licensed OTC medicines are neither price nor margin regulated. Therefore, subject to local competition, pharmacists are generally free to set their own prices. The exceptions are Belgium, Denmark and Austria. In Belgium non-prescription medicines are subject to controls. Pharmacy only non-prescription medicines are price controlled in Denmark, while GSL products are not. In Austria price changes have to be reported to Price Commission (Preiskommission) of the Federal Ministry of Health, Family and Youth.

“It is in the interests of both pharmacies and suppliers to further develop OTC self-medication in pharmacy in most European countries - especially those in Northern Europe”, says James Dudley author of OTC Distribution in Europe 2016 edition.

While there is competition from non-pharmacy channels and the Internet in a number of markets, 85% of the licensed consumer healthcare market in the 20 countries under study is delivered through pharmacies. Furthermore, there are categories within the non-prescription market which will remain exclusively in the pharmacy regardless of mass market competition.

Figure 2 shows the relative importance of consumer purchases of OTC medicines in turnover terms in the pharmacy sales mix for each country.

As the table below shows that the importance OTC medicines is relatively high for Austrian, Bulgarian, Polish, Hungarian, Czech and Swiss pharmacies. The self-medication sector share of pharmacy turnover exceeds the study’s average in a further four countries i.e. Finland, Belgium, Romania and Sweden.

Consumer purchases of OTC products have relatively low importance in those with below average OTC share i.e. the Netherlands, Norway, Denmark, United Kingdom, Italy and France.

Countries hovering around the average with OTC medicines taking 10% of pharmacy turnover are Spain, Slovenia, Slovakia and Germany.

Figure 2. Average % Share of Turnover taken by Consumer Purchases of OTC Self-medication per Pharmacy (excluding prescription business) Compared by Country - 20 Country European Study

Average Percentage Share of Turnover taken by Consumer Purchases of OTC Self-medication per Pharmacy (excluding prescription business) Compared by Country - 20 Country European Study

Source: James Dudley Management OTC Distribution in Europe - the 2016 edition

Information for Editors

Contact James Dudley author of the Report – Informationa@james-dudley.co.uk

Graphs and figures - May be reproduced as long as they are acknowledged

OTC Distribution in Europe – the 2016 edition - the New Global Agenda is a long running in-depth multi-country study that explores and tracks change. It identifies the driving factors coming into play which will influence the distribution channel environment for the consumer healthcare industry now and in the future. It provides knowledge, comprehensive statistics and analysis covering 20 European countries, together with insights into an increasingly complex market sector from a highly respected strategy consultant, James W Dudley.

The 2016 edition of OTC Distribution in Europe is the tenth edition of a project which first began 25 years ago.

The report explores the distribution channels for consumer healthcare in : Austria, Belgium, Bulgaria, Czech Republic, Denmark, Finland, France, Germany, Hungary, Italy, Netherlands, Norway, Poland, Romania, Slovak Republic, Slovenia, Spain, Sweden, Switzerland and the United Kingdom

Publication Date December 2015

Mechanics

OTC distribution in Europe - 20 country consultancy report - with over 590 pages and over 300 graphs, tables & figures

More information and Table of Contents can be found at www.james-dudley.co.uk

20 Länderbericht Europäische Studie über Vertriebskanäle für Verbrauchergesundheitsprodukte und OTC-Medikamente zur Selbstmedikation

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