James Dudley Management

James Dudley Management

The Future for OTC Self-medication Pain Relief in Europe

“Big innovative consumer led brands and competitively priced generics meeting prescription demand and fuelling the market for wholesaler and retailer private label brands will gradually reshape the European market for non-prescription pain relief. While market growth is expected to remain at around 2% a year, it is gradually consolidating around these two core-marketing models which will fair better than anything in between”. So says a major new industry study James Dudley who is one of Europe’s leading consumer health marketing strategists.

The Dudley study, ‘The Future for Pain Relief in Self-medication in Europe’ explores the trends and drivers influencing the shape and structure of pain relief markets in France, Germany, Italy, Poland, Spain and the UK from 1999 to 2010. The study covers general analgesics, topical pain relief, systemic muscle and joint pain relief, migraine, period pain and teething and mouth pain.

The European pain relief market is not homogenous and while there are some common factors influencing its growth prospects, trends in individual countries largely reflect the impact of local issues. In France and Spain the non-prescription general analgesics market is largely driven by prescription business hence competition to proprietary brands from generics in the prescription sector in France and continued downward pricing pressure on prescription driven paracetamol analgesics in Spain. Furthermore, regulatory hurdles and disincentives to manufacturers have retarded the growth of topical pain relievers in Spain.

The German market is much more consumer focused with the major OTC analgesic brands driving the market. Yet, there are well over 300 brands in Germany with declining sales. The bottom 300 brands declined 35% in sales value between 1999 and 2004, while on average the leading 10 brands put on growth.

The Polish market is driven by keenly priced local brands, which over the years have displaced imported brands. While the market is largely consumer driven it, is entering a period of maturity after a decade of strong growth. Local economic issues brought about by government measures to prepare the Polish economy for accession to the European Union in 2004 have exacerbated the slowing of market growth across all categories including pain relief.

The British market is driven by large consumer brands. With a large GSL analgesic content supermarkets and impulse outlets such as newsagents and petrol stations from which around40% of British consumers claim to purchase their OTC needs. However, proprietary brands are challenged by private label brands in supermarkets and pharmacy chains. The largest private label sector is found in the general pain relief sub-category with volume shares of over 40% and value share representing over a quarter of sales.

While Poland and Italy are expected to show the strongest growth for pain relief products overall, Germany and France offer very weak growth prospects. The UK and Spain are both expected to show growth of around 2% a year to 2010.

Market growth for all sub-categories is expected to be lower between 2005 to 2010 than for the preceding 1999 to 2004 period.

The most attractive growth sub-categories are migraine, period pain and mouth pain. Even so, these are the smallest categories. Systemic muscle and joint pain relief is expected to show the least attractiveness with growth of less than 1% a year. This sub-category is coming under increasing competition from nutritional products from health food stores and drugstores. With little in the way of fresh innovation topical pain relief is also likely to show relatively flat growth of a little over 1% a year.

The largest category, general pain relief, will grow by less than 2% a year based on current trends.

While the smaller categories period pain, migraine relief and teething and mouth pain are likely to outperform general analgesics and topical pain relief they represent only 6% of market sales. Even so, several of the major consumer driven general analgesics brands have entered line extensions for period pain and migraine relief

83% of the non-prescription pain relief market is made up by brands showing declining sales, while 15% comprises of brands showing growth. Only 2% of market sales are made up from brands launched since 1999.

There appears to be limited scope for major new Rx to OTC switches although there are still reasonable opportunities for systemic naproxen and diclofenac based brands across the region.

Around 2% of the European market for non-prescription pain relief products is made up by brands launched since 1999. This said, Novartis’s topical diclofenac brand Voltaren was switched from prescription only between 1996 and 1999 resulting in sales rapidly approaching €100 million in Europe today. The brand’s main markets are Germany, France, Italy, Poland and to a lesser extent the UK.

Aleve, originally launched by Roche, was the first systemic naproxen based switch in Europe. The brand achieves around €12 million in Europe’s main markets. First launched in the Netherlands in 1997 and then gradually rolled out across Europe - Italy in1998, Belgium and Poland in 2000 and Austria and Germany in 2002.

Yet, main innovation drivers are likely to come from the major, general analgesic brands. Three main innovation strategies have been identified in the report i.e.

  •   Indication Segment Stretching

-          Strategies adopted by Boots H.I., Sanofi-Aventis, McNeil and Angelini, for example) show that major brands can sub-divide pain relief indication segments to capture the specific needs of consumers e.g. back and joint pain, period pain, migraine and pain and fever specific to children.

  • Category Stretching

The analgesic and anti-pyretic attributes of general pain relief brands lend to their extension into the cold and flu category. Combination formulations have made targeting this specific category relatively easy. Many of the major analgesic brands have a cold and flu version e.g. Dolirhume (Sanofi-Aventis), Nurofen Cold and Flu (Boots), Advil Cold and Flu (Wyeth) and Aspirin Complex (Bayer). ASA brands also appear in the heart protection category e.g. Bayer Aspirin.

  • Channel Stretching

A less obvious strategy is to provide specific line extensions to match channel requirements. For example, Boots H.I. line extension Nuroflex in France was introduced to replace prescription business for Nurofen from GPs when the company decided to consumerise the brand in 1996. Boots’ strategy was to maintain reimbursed prescription business with Nuroflex, while exploiting the Nurofen brand property as a consumer brand. In the UK, Boots developed a range of small pack sizes to meet regulatory and merchandising criteria of grocery and impulse outlet chains when ibuprofen became GSL. In the meantime Boots launched Nurofen Plus (ibuprofen and codeine) as a pharmacy exclusive brand.

Table 1

Examples of Line Extension Strategies – Europe’s Major General Analgesic Brands

Brand

Indication Segment Stretching

Channel Stretching

Category Stretching

Nurofen (Boots H.I.)

Children specific (B, G, UK)

Back and Joint Pain specific Topical (B, UK)

Migraine (UK)

 

Nuroflex (GPs France)

Nurofen Plus (Pharmacy exclusive UK)

Small packs for grocery and impulse outlets (UK)

Nurofen Cold and Flu (F, I,S, UK)

Doliprane (Sanofi-Aventis)

Children

Doli-tabs (Pharmacy advisory)

DoliRhume (Cold and Flu F)

Dolormin (J&J Merck)

Dysmenorrhoea specific (G)

 

 

Aspirin (Bayer)

 

 

Aspirin Complex (Cold and Flu I, S)

 

Moment (Angelini)

Dysmenorrhoea specific (I)

Momendol - Back and Joint Pain specific (I)

 

 

B Belgium, F France, G Germany, I Italy, S Spain.

Source: James Dudley ‘The Future for Pain Relief in Self-medication in Europe 2005 edition’

Major international consumer brands as Bayer’s Aspirin and Boots’ Nurofen as well leading local analgesics including Anadin (Wyeth UK), Thomapyrin (Boehringer Germany), Moment (Angelini Italy) and Apap (US Pharmacia Poland) are heavily promoted brands purely targeting consumer demand. This they do by innovating new forms and stretching categories. In the UK many such brands are also stretching channels to include mass-market grocery and impulse outlets.

Yet, there is a mass of brands, though primarily offered to consumers, that rely almost entirely on pharmacy recommendation and hence are heavily discounted. These brands rely on an independent owner managed distribution channel system to thrive. Two factors are beginning to unfold a major threat to such brands. First, consolidation of wholesalers both in national markets and across the European region as a whole means that such brands are under threat from range rationalization.

Second, pharmacies are increasingly grouping into real or virtual retail chains and hence buying is becoming more centralized. While demand for pharmacy recommended lines continues, this converts to private label offerings and hence to a rationalization of suppliers.

In broad terms three new business model scenarios are unfolding. These reflect the changing business environment The three scenarios are based on a framework showing target audience focus and brand differentiation. The figure 1 below illustrates this.

Products with low differentiation from low cost producers will supercede proprietary brands targeting doctors (France, Spain and UK) as generics or as private label brands for wholesalers and retail chains

While brands in the transitional scenario i.e. shifting focus from prescription to consumer demand is in many ways an actuality in Germany, Poland and the UK, it has yet to emerge in France or Spain basically because the largest pain relief sub-category, general pain relievers, is reimbursed in both countries.

The third scenario involves a rationalization of the number of consumer brands and much greater focus on consumer needs and their fulfillment. While this evolving scenario is already under way and to some extent this reflects the position of the market in the UK for general analgesics today, it will be consolidation of wholesalers and the growth of retail pharmacy chains in the rest of Europe that will accelerate it.

Graph 1: Total Non-Prescription Bound Sales of the Non-prescription Pain Relief Market – Growth Attractiveness by Country Market to 2010

(% Growth)

Source: James Dudley ‘The Future for Pain Relief in Self-medication in Europe 2005 edition’

Graph 2: Total Non-Prescription Bound Sales of the Non-prescription Pain Relief Market – Growth Attractiveness by Sub-category to 2010 (% Growth)


Source: James Dudley ‘The Future for Pain Relief in Self-medication in Europe 2005 edition’

Graph 3: Total Non-Prescription Bound Sales - % Split by Major Category (Value) 2004/5

 Source: James Dudley ‘The Future for Pain Relief in Self-medication in Europe 2005 edition’

Graph 4: Total Non-Prescription Bound Sales of the Non-prescription Pain Relief Market – Growth Analysis 2010

Source: James Dudley ‘The Future for Pain Relief in Self-medication in Europe 2005 edition’

Figure 1: New Business Model Scenarios for Non-prescription and OTC Medicines in Europe

Source: James Dudley ‘The Future for Pain Relief in Self-medication in Europe 2005 edition’

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Information

‘The Future for Pain Relief in Self-medication in Europe -The 2005 edition’

Price ₤1,495

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