CONSUMER HEALTHCARE – NOT YET IT ISN’T
Innovate or die. This was the message from many expert speakers at the 26th Annual Nicholas Hall OTC Insights Conference in Paris last week. It’s the third year we’ve attended, and although the conference theme was ‘Over The Crossroads’ (following on from Innovation in 2014), it felt like much of the industry hasn’t quite reached the crossroads.
The OTC market is most certainly healthy – outperforming economic growth and the Rx market – but it’s not thriving. The inimitable Nicholas Hall presented his 2014 Industry Scorecard which showed the industry is essentially treading water, when you account for inflation.
OTC market context
It’s not that things haven’t been busy. M&A activity is fizzing: think Bayer/Merck and GSK/Novartis. There’s been exciting switches of prescription drugs to OTC. HRA Pharma’s ellaOne® was the fourth ever drug to make a centralised European switch – winning the Nicholas Hall Most Innovative European New Product of the Year Award in the process. In New Zealand, Douglas Pharmaceutical’s erectile dysfunction drug Sildenafil made a world-first switch to OTC as Silvasta, bagging the Most Innovative Global OTC Marketing Campaign Award. There were also some great pieces of work shown in the entries for the Most Innovative Global OTC Marketing Campaign: the worthy winner being Bristol Myers Squibb’s advert for Fervex. But in terms of product offer, we didn’t see anything that truly fired the imagination. Pretty much pills in blisters and ointments in tubes.
Health care is facing paradigm shifts from all directions. Globally an increasingly sedentary population is associated with chronic non‐communicable lifestyle diseases. In developed economies, people are ageing with accompanying multiple co-morbid conditions. This means increased pressure on healthcare budgets and governments are looking to share the burden by shifting costs onto consumers via increased self-care. everythingHEALTH’s Mary Alice Lawless reflected on the impact of Obamacare which takes the first few thousand dollars spend on healthcare directly from the consumer’s own pocket – guaranteed to focus people’s minds on what and how to consume!
Adjacent businesses are also presenting beguiling options in prevention and self-care. We flagged nutritional foods like probiotic chocolate in our Open Eye 24 and FMCG giant Nestlé is now investing heavily in the advanced food nutrition sector. Health self-care technology from iHealth and behemoths Google and Apple are also enabling ever more impatient, multi-tasking consumers the opportunity to holistically manage their own wellbeing on the go.
What does it all mean for OTC brand and portfolio management?
All of this means one thing: the consumer must be put at the heart of the OTC industry’s activities if it wants to remain central to people’s health and wellbeing. Understanding consumers and their needs, and then developing product and brand offers to suit them is an absolute necessity – not just a nice thing to do. Spotting a condition and developing a potion to suit it is just not enough.
Some OTC companies are absolutely recognising this. Neil Lister of Omega Pharma and Alexandra Schneider of Celesio both talked about how their businesses are leveraging one of the industry’s strengths: a deep connection to pharmacists/pharmacies and consumers’ ongoing trust in them.
Shunning traditional market research options, Omega bought a thriving, historic pharmacy in London to test how it can work better to deliver on pharmacist and consumer needs from product design to layout. Celesio deploys the European Pharmacy Network, a branded platform which takes the pressure off front line services in pharmacies by offering innovative in-store technologies like skin analysers and interactive tablets, and sophisticated added value patient services (pain tests, automatic digital prescriptions, support programmes and mini clinic drop-ins). It also offers pharmacists expert training for the most common pain and skin relief categories.
These are most definitely steps over the crossroads, but OTC as a whole has a long way to travel before it’s there. It’s second nature for us here in the studio to go deep whilst working with our clients: understanding consumers and their motivations, understanding the wider market, and then designing beautiful brand architecture, identities and packaging that really works.
Hopefully by next year’s conference we’ll see lots of new OTC products that do the same too.