James Dudley Management

James Dudley Management

The Future for Self-medication Skincare in Europe

“The European market for non-prescription and OTC self-medication skincare medication is undergoing a major period of transition from prescription based demand to consumer driven demand and most major companies in this market recognize this.

While prescription dependent dermatological brands, particularly in Germany, are adjusting to new healthcare reforms, consumers are driving demand in the UK, Spain, Poland and Italy.

There is also a good track record of product development through Rx to OTC switches, inward licensing and innovative line extension strategies by many of the major manufacturers. So while prescription demand will continue to decline there are considerable opportunities to drive consumer demand ”, so says a new report ‘Skincare in Self-medication in Europe the 2005 edition’ from one of Europe’s leading consumer healthcare marketing strategists James Dudley.

The report covers Europe’s six main OTC markets France, Germany, Italy, Poland, Spain and the UK.

Figure 1: %Share of the European Non-prescription Skincare Market by country


Source: James Dudley Management Skincare in Self-medication in Europe the 2006 edition – 2006

The largest market is Germany with 29% share of sales out of the six markets under study, followed by the UK with 26% and France with 21%. Italy has 14% and Spain and Poland with 6% and 4% respectively.

The European non-prescription and OTC self-medication skincare market has grown by around 14% since 1999. Difficulties in the prescription sector for non-prescription bound skincare medication have contributed to a market slow down and will deprive it of strong growth over the next five years. This said, consumer demand has driven growth in some segments of the market, especially for non-prescription treatments for skin infections, products for sunburn, bites and stings and treatments for dry skin in most European markets except France.

The European non-prescription skincare market is made up of five main dermatological therapeutic groups providing medication and treatments for conditions that meet consumers’ needs for OTC self-medication and prescription medicines for GPs and dermatologists.

The largest therapeutic group in Europe is first aid consisting of topical anti-septic products and wound healing agents. The next largest group is for treatments for skin infection and this includes topical products for fungal infections of the skin, viral infections such as cold sores, warts and veruccas and bacterial related conditions such as acne. In third place are treatments for dry skin and these include emollients and skin protectors.

In fourth place, are products for skin injury caused by sunburn, bites and stings. This group is made up of anti-histamines and other anti-pruritics or counter-irritants such as camphor or calamine.

The smallest group is for products for inflammatory and itching dermatoses and used in self-medication for eczema, dermatitis and psoriasis. This group largely consists of hydrocortisone based topical steroids available without a prescription and is a heavily consumer driven market category. This category has grown out prescription to OTC switches. 

Figure 2: %Share of the European Non-prescription Skincare Market by Therapeutic Category


Source: James Dudley Management Skincare in Self-medication in Europe the 2006 edition – 2006


The European market for non-prescription and OTC skincare is made up of large brands. Many of these were formerly prescription driven brands that have been switched into the consumer driven self-medication market.  Among such brands are Zovirax (GlaxoSmithKline), Canesten (Bayer) and Fenistil (Novartis). Furthermore, many are umbrella brands grouped around either dermatological or allergy platforms.

Figure 3: Top Ten Non-prescription and OTC Self-medication Skincare Bands in Europe

Brand

Company

Category

Zovirax

GlaxoSmithKLine

Anti-viral

Benpanthen

Bayer

Wound Healing

Betadine

Viatris

Antiseptic

Pevaryl

J&J

Anti-fungal

E 45 Cream

Boots

Emollient

Canesten

Bayer

Anti-fungal

Oilatum

Stiefel

Emollient

Dettol

Reckitt Benckiser

Antiseptic

Fenistil

Novartis

Antihistamine

Dexeryl

Pierre Farbre

Emollient

Source: James Dudley Management Skincare in Self-medication in Europe the 2006 edition – 2006

While, there are some 2,000 lines of non-prescription skincare products in Europe’s main markets, just 52 account for 80% of sales.

Figure 4: Non-prescription and OTC European Skincare  - Number of Lines representing 80% of Market Sales

Country

Number of Brands

Europe Total

52

France

41

Germany

130

Italy

25

Poland

17

Spain

18

UK

39

Source: James Dudley Management Skincare in Self-medication in Europe the 2006 edition – 2006

Taking the six main European non-prescription and OTC self-medication skincare markets, France, Germany, Italy, Poland, Spain and the UK, as a whole around 55% of sales are made from brands that are either new or are showing low to high growth.

Conversely 45% of sales are from brands that are either showing marginal growth or are in decline. Indeed, 34% of sales are from brands with declining sales.

Figure 5: European Non-prescription and OTC Self-Medication Skincare Markets Growth Attractiveness to 1999 - 2004 based on % sales Growth


 Source: James Dudley Management Skincare in Self-medication in Europe the 2006 edition – 2006

Growth performance of the European skincare market has varied considerably between the six main European markets over the last five years.

In France and Germany the skincare market has been very reliant on prescription business and a high reliance on pharmacy distribution. Around 50% of sales In France are prescription based. In Germany this figure is slightly lower at 44%. Health reforms in these two markets have retarded growth. Indeed, in Germany the main product groups prescribed by dermatologists have all declined sharply since 1999.

By contrast market growth for skincare medication in the UK, Spain and Italy has been driven by consumer demand for self-medication, particularly for treatments for skin infections, such as athlete’s foot, warts and verrucas and acne.  Treatments for dry skin have also increased in sales.

Furthermore, an expanding non-pharmacy market especially in supermarkets has helped drive the UK demand for non-prescription and OTC skincare medication.

Poland has shown strong growth in most non-prescription categories and skincare has not been an exception. However, growth has been particularly strong for anti-fungal OTC medication and non-prescription treatments for dry skin.

Looking to the future, overall European growth of the non-prescription skincare medication market is likely to show lower growth in the next five years compared to the previous five years. The most attractive country markets are expected to be Poland and Spain, followed by the UK and Italy. France and Germany are forecast to experience very low growth, based on current trends.

Figure 6: European Non-prescription and OTC Self-Medication Skincare Markets – Country Growth Attractiveness to 2010 based on % Growth Expectations

 

Source: James Dudley Management Skincare in Self-medication in Europe the 2006 edition – 2006

The most attractive market growth categories for non-prescription dermatological products are expected to be wart and verruca treatments, within the skin infection treatments group, dry skin treatments and anti-histamines in the sunburn bites and stings group.

Anti-fungal and cold sore treatments are expected to begin to enter a period of maturity in Europe’s main markets over the next five years. This will be partly due to the growth of generics (clotrimazole and terbenafin) and private label brands as well as reduced prescribing in Germany.

The least attractive market categories include topical steroids and anti-pruritics based on current trends.

Figure 7: European Non-prescription and OTC Self-Medication Skincare Markets – Category Growth Attractiveness to 2010 based on % Growth Expectations


Source: James Dudley Management Skincare in Self-medication in Europe the 2006 edition – 2006

 

New skincare products launched into the European non-prescription and OTC self-medication market since 1999 account for about 11% of sales. Among the leading successful new OTC medicine brands are Novartis’ Europe-wide Rx to OTC switch of Lamisil AT (terbinafin) and GlaxoSmithKline’s Eumovate (clobetasone butyrate) in the UK.

Another major innovation has been the introduction of cryotherapy into the European non-prescription market for wart and verruca removers. Wartner (Omega) is one of the leading brands in this area.

Other innovations include Canesten Extra (Bayer) and Soventol HC (Rentschler).

Figure 8: European Non-prescription Skincare - Leading Successful New Launches since 1999

Leading New Lines

Company

Category

Lamisil

Novartis

Anti-fungal

Canesten Extra

Bayer

Anti-fungal

Soventol HC

Rentschler

Steroid

Eumovate

GlaxoSmithKline

Steroid

Wartner

Wartner

Wart Remover

Source: James Dudley Management Skincare in Self-medication in Europe the 2006 edition

In conclusion the European non-prescription skincare market is undergoing a period of adjustment in the face of declining prescription demand. While this will undermine growth in the short term for dermatological prescription brands, there are firm indications that the major players in the industry have the potential to improve sales trends through involving European consumers more actively and to develop products that increase their expectations.

The technology and product development capacity exists to achieve this. Building links with the cosmetic industry, exploiting inward licensing of novel solutions and exploring switch opportunities for a new product pipeline are more feasible in the non-prescription skincare sector than almost all other self-medication categories in Europe.

Building on core brands through innovative brand renewal and innovative line extensions that not only meet consumer expectations but that can be easily communicated is probably a way forward.

Information

‘Skincare in Self-medication in Europe the 2006 edition’
Published by James Dudley Management March 2006
For further information:
Phone James Dudley ++44(0)1562 747705
email information@james-dudley.co.uk

Return to Homepage