As 2013 draws to close, Euromonitor International reviews relevant events that will set up the stage for the new 2014 year in health. Consumer health has boomed in recent years as key stakeholders (health organizations, industry players, retailers and consumer groups) intensified their investments in the empowerment of health via responsible self-medication, healthy lifestyles, and the affordability and accessibility of therapies.
Comparing 2013 vs. 2014 Projections
At the end of 2012 Euromonitor International had predicted the preliminary 2013 retail value of consumer health to be about US$203 billion. In our revised 2013 projections figures seem more enthusiastic when compared to our earlier assessments, showing a revised value of an estimated US$205.5 billion. A couple of interesting events influenced the revision of our preliminary figures for 2013. For example, a highly virulent cold and flu season and allergy counts during early 2013 bumped up the retail value of over-the-counter drugs (OTC) by 2% from one edition to the next. Similarly, an important expansion of fitness nutrition into mass channels along with a larger number of people purchasing meal replacement slimming products contributed to a 5% and 4% positive difference in retail value projections for sports nutrition and weight management. In contrast, the trendy category of vitamins and dietary supplements (VDS) actually saw its overall projections remain flat. Stricter regulatory activity on health claims and lowered sales of herbal/botanical remedies contributed to the flat expectation between the two editions.
CH2013 vs CH2014 Edition - Global Retail Value (RSP)
Source: Euromonitor International
Note: Year 2013 are estimates in both editions
But What Else Does Euromonitor See as Important Trends for Consumer Health in 2014?
- Consumer lifestyles continue to shift toward a hands-on approach to health as every year more people gain access to health information and resources that help them make better and smarter decisions about their health;
- A rapid ageing of the population is expected to hit many countries in the next 20 years. The 65+ years old population is expected to grow an impressive 34% from 2012 reaching 776 million by 2020. This trend will place additional pressure on governments and healthcare organizations to develop effective, safe and reliable self-care solutions;
- Alternatively, the urbanism effect will give room to new approaches to healing in low and middle-income countries via novel OTC switches, convenient packaging and fast-acting formulations to meet pressures from urban hectic lifestyles. As more people move to cities, their reliance on folk or rural medicine is set to decline;
- Consumer segmentation will expand further as it aims to address specific health needs or offer more customised options based on age, gender and lifestyle. A broader segmentation may enhance the relationship and engagement with consumers in order to boost product portfolios, brand loyalty and revenues for companies.
- Regulation remains a hot button for the industry as increased oversight on consumer health products, especially those related to health claims (vitamins, dietary supplements and weight management), therapeutic validity (herbal/traditional products), and pack size limits (OTC drugs) persists;
- Novel prescription (Rx) to OTC switches will target the reduction of healthcare costs, particularly for economies expecting significant increases in healthcare prices due to cuts in governmental budgets and rapid ageing populations. The pace of switch activity in 2014 may be at par with 2013 as regulatory agencies insist to take a conservative approach to new OTC drug therapies. The 2013 OTC switches of Esomeprazole (Nexium by AstraZeneca/Pfizer in the US and European Union), Ethyl icosapentate – EPA (Epadel T by Mochida Pharmaceutical Co Ltd/Taisho Pharmaceutical Co Ltd in Japan), Triamcinolone (Nasacort by Sanofi in the US and Norway), Mometasone (Nasonex by Merck & Co in Norway), oxybutynin (Oxytrol by Actavis/Merck & Co in the US), and Trimebutine maleate (Cerekinon S by Mitsubishi Tanabe Pharma Corp), for example, represent an excellent move by the industry and regulators in an effort to foster a simpler management of minor chronic or recurrent conditions to promote savings in healthcare costs;
- As such, public and private healthcare expenditure on OTC drugs, vitamins and dietary supplements is expected to show declining rates as the responsibility for the treatment of minor conditions moves out of hospitals and clinics to reside on retailing formats (pharmacists, walk-in clinics, etc.) and consumers.
- A growing awareness on preventable chronic diseases shows a positive effect in health outcomes as life expectancy continues to rise. Global life expectancy at birth is expected to increase from 70.8 in 2012 to 72.6 years in 2020. Yet, the current challenge for society is to increase the health span of people so as to foster a healthier senior population. Today more people seem to embrace healthy lifestyles based on preventative practices, regular medical check-ups and healthy dietary interventions, but more work needs to be done;
- Health literacy on OTC drugs still needs to improve in many parts of the world. Thankfully, the reach of the internet continues to expand through the launch of comprehensive websites and web apps allowing people to improve their health literacy on conditions, preventative medicine and healthy living. Mobile health is becoming a key driver of health via short-message services (SMS), wellness digital trackers and health monitors on-the-go;
- Yet, informed people are forming activist groups that fight for the protection consumer’s rights against corporate misinformation. Governments, companies and retailers are being held liable for inappropriate information on health claims, marketing practices, safety and efficacy of therapies, among other issues. This pressure will eventually set a more transparent framework of communication to bolster consumer trust.
- Regional consolidation moves to global markets as local and regional companies increase and expand their investments via mergers and acquisitions of companies in other countries or regions. In fact, regional companies are gaining a competitive edge as they benefit from the divestures of brands or localized production by large multinational companies seeking to trim financial pressures. Once regarded as not so important, regional companies such as Prestige Brands, Omega Pharma, Aspen Pharmacare, Genomma Lab, Hypermarcas, Menarini Group, Actavis (previous Watson), and Valeant Pharmaceuticals, among others, are putting their business savvy to work by becoming a more powerful voice in the competitive landscape of consumer health. On the other side of the competitive spectrum, some big multinational companies such as Pfizer Inc, Reckitt Benckiser Plc, and Sanofi are fighting back and expanding via strategic acquisitions of local and regional players/brands that may boost their local presence in the key regions of Asia Pacific, Africa and Latin America in years to come;
- As companies seek to improve their revenue projections, brand/product portfolio diversification takes new forms via licencing agreements for popular brands or novel OTC switches. Alternatively, outsourcing manufacturing to third parties is now turning a common practice in a bid to reduce manufacturing costs, or to meet local manufacturing requirements in places such as Africa and Eastern Europe.
Marketplace and Retailing
- Product innovation will remain an important driver of growth with novel formulations and delivery formats. Easy-to-swallow oral/systemic forms, improved flavours and highly targeted topical applications are positively transforming the manner people take their medicines, vitamins and dietary supplements.
- Consumer health options will continue to expand from traditional chemists and pharmacies to modern retailing formats of drugstores, grocery retailers, and the internet. Retailing diversification will receive a lift from an increasing number of retail and walk-in clinics and stand-alone wellness centres as they represent easier, more convenient and lesser expensive solutions for the treatment of minor conditions and preventative health.
- Consumer health remains a promising industry for investment and growth in 2014. The current challenge is to continue building on the notion that responsible self-care and self-medication practices can be achieved effectively to boost healthy prospects for all: The government (balanced budgets), the industry (improved revenues) and, most importantly, people (positive health outcomes).