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LamisilAT slowdown reflects skin care problems
April 2002 ISSUE 139 LamisilAT slowdown reflects skin care problems 89 USA: OTC athlete’s foot/jock itch shares 2002 Lotrimin 21% Market Report Schering-Plough LamisilAT 19% • Novartis • Skin care (part one) Tinactin 18% Schering-Plough Desenex 9% • LamisilAT growth slows as market stays flat Novartis • • Private labels 10% • Topical wound care provides relief in Canada Others 23% Contents 83 Company Monitor: GlaxoSmithKline Despite the upheaval of its mega-merger at the close of 2000, GSK began life confidently and finished its first full year by reporting strong results 101 Regional Review: Asia Last year, China joined the WTO, signalling a new era of consumer healthcare. Meanwhile, in South Korea the market began to realign after SPD 107 Market Minutes: S-P moves for OTC Claritin Prilosec switch this year?; Roche plans divestiture; LecTec courts suitors; Altus Food is dissolved; Bayer plans sell off; Chattem scoops Selsun; AER news; Melagesic withdrawal; Maalox goes soft; New Bumps ’n Bruises; Cold-Eeze extension; Diachrome launched; plus Canadian news and top appointments Company Monitor Company Monitor GlaxoSmithKline: one year on, GSK is fitter, happier and more productive 2001 was a year of momentous upheaval, Key Facts change and integration for GlaxoSmithKline, and yet the group performed well in its first full GlaxoSmithKline year of trading. Net sales improved by 11% in 2001, excluding merger items, while trading profit Address: 980 Great West Road, stood at $8.7bn. Pharmaceuticals accounted for Brentford, Middlesex, TW8 9GS, UK more than 80% of corporate sales in 2001. The consumer healthcare division took the greatest Major business activities: prescription pharmaceuticals, OTC drugs, personal proportion of the remainder, with food products care products – including the sports energy drink, Lucozade, and Horlicks malt drink – contributing 3% of net sales. Employees: 107,500 Global net sales 2001*: $29.5bn The merger of SmithKline Beecham and Glaxo Global consumer health sales 2001**: Wellcome was finally confirmed on 27 December $4.7bn 2000 following a year of discussion. In order to North American OTC sales 2001†: satisfy anti-competitive concerns and complete $928mn the merger, SB and Glaxo were ordered by the Global OTC ranking 2001†: 3 US Federal Trade Commission (FTC) to make divestitures in six key product markets. In terms of North American OTC ranking 2001†: 4 OTC, the North American trademark rights for the Major OTC categories: analgesics, H2 antagonist, Zantac 75, were relinquished to the cough & cold remedies, GIs, VMS, skin care brand’s marketer, Pfizer Inc. GSK has retained the Rx rights to the Zantac name. Also divested were Related consumer activities: nutritional the Rx antiviral drugs, Denavir and Famvir, and drinks, oral care the antiemetic, Kytril. Leading North American OTC brands§: Tums, Tagamet HB, Gaviscon, Phazyme, Beano, Contac, BC powders, Goody’s, Perhaps surprisingly, however, the FTC decided to Nytol, Alluna, Sominex, Os-Cal, Oxy allow the merger to proceed without breaking up Balance, Nicorette, NicoDerm CQ GSK’s smoking cessation portfolio. SB brought the Other US consumer health brands§: dominant OTC smoking cessation aids, Nicorette Aquafresh, Sensodyne, Targon, Polident, and NicoDerm CQ, to the table and Glaxo the Poli-Grip, Balmex leading prescription brand, Zyban. * GSK pro forma results, 12 months to year end ** GSK pro forma consumer healthcare results, In an unrelated move, GSK gave away a majority 12 months to year end † According to calculations by OTC UPDATE and stake in its drug discovery arm, Affymax, in July provisional data from DB6 2002, 12 months to year end 2001. Glaxo Holdings had acquired the Californian § Including Block Drug acquisitions company for $533mn in 1995. Although GSK could Simplifyle 11 April 2002 83 GlaxoSmithKline have raised an estimated $400mn from the sale of Product Development the shares, Affymax – which continued to provide services to rival pharma companies – was deemed The company has sought to deflect shortcomings a non-core asset. GSK will continue to use in its own portfolio by undertaking in-licensing agreements. 10 new products were delivered Affymax technology, however. into clinical development via in-licensing in 2001. GSK has indicated that further such agreements Another merger? can be expected in future Within four months of its formation, GSK was Although the FDA continues to oppose the linked with a move for American Home Products Rx-to-OTC switch of antivirals, GSK could, in the long term, attempt a direct-to-OTC launch – now renamed Wyeth – and later for Bayer’s of Zovirax (found OTC elsewhere in the world) healthcare unit. GSK’s CEO, Jean-Pierre Garnier, has always been forthright in his conviction that Glaxo had touted the Rx influenza drug, Relenza, as a potential switch candidate. the pharmaceutical industry would continue However, long-running safety concerns may to consolidate. The move for AHP was not limit such a possibility unprecedented: SB had entered unsuccessful merger talks with AHP in 1997, while GSK’s Beconase allergy treatment and the migraine drug, Imitrex, have long term links with Bayer are also close – it was the OTC switch potential distributor of Baycol in the US, prior to the Rx cholesterol drug’s withdrawal. Therefore, although The nicotine lozenge, available in the UK, could provide a welcome boost to GSK’s OTC NRT GSK remained quiet as to its plans, the rumours line-up. The Rx smoking cessation drug, Zyban, were not a surprise to analysts. is unlikely to switch in the short term Any merger or acquisition would, however, have likely proved too much too soon for GSK, which GSK reports that Advair – which is known globally is still reorganising following its formation. as Seretide, and was launched in the US in mid- 2001 (see Market Minutes, June 2001, p179) – Deflecting pipeline criticisms had recorded sales of approaching $500mn by GSK is a world leader in the key Rx therapeutic the end of 2001. The FDA has recently approved areas of central nervous system, respiratory, Advair for the treatment of chronic obstructive metabolic & gastrointestinal and anti-infective pulmonary disease (COPD), and GSK plans to roll medicines. The early success of the Rx treatment out Advair for COPD in the second quarter of 2002. for asthma, Advair Diskus inhaler (fluticasone propionate + salmeterol inhalation powder), has Despite this, GSK’s product pipeline was further strengthened the company’s portfolio. shortened significantly in 2001 after the company dropped a number of drugs in the late stages of development. Investor fears were heightened GlaxoSmithKline: OTC sales by region 2001 (MSP) following the withdrawal of Lotronex, GSK’s drug for the treatment of irritable bowel syndrome (IBS). North America 45% • Touted as a potential blockbuster at its launch, Lotronex was voluntarily withdrawn at the close of Western Europe 22% • 2000 after the FDA publicised concerns over rising incidences of side-effects. GSK has responded to Asia 10% • the setback and pipeline criticisms by pursuing Rest of World 23% •• in-licensing agreements, the most recent of which heralded the acquisition of pre-clinical PPAR- Source: OTC UPDATE and provisional data from DB6 2002, Nicholas Hall & Company’s global OTC database gamma modulators from Bayer’s osteoporosis research programme. 84 April 2002 Simplifyle 11 Company Monitor Consumer healthcare GlaxoSmithKline: SB’s $1.24bn acquisition of Block Drug, the Leading US OTC brands 2001 (MSP) consumer products company – announced before Sales the completion of its own merger with Glaxo – was Brand Category $mn finalised in January 2001. Estimates suggest that Nicorette Smoking cessation 218 Block Drug has added around $900mn to global Tums Antacids 172 consumer health revenue, pushing the corporate Aquafresh Toothpastes 166 total to $4.7bn in 2001. NicoDerm CQ Smoking cessation 111 Sensodyne Toothpastes 58 GSK is now the third-ranking OTC player globally, Citrucel Laxatives 51 Ecotrin Systemic analgesics 39 standing behind Johnson & Johnson and Wyeth, Source: OTC UPDATE and provisional data from DB6 and ahead of Pfizer Inc and Bayer. In the US, 2002 (DB6 excludes toothpastes) GSK vies with Pfizer Inc to claim third place in the OTC standings, beneath J&J and Wyeth. Cold, flu & sinus remedies However, in contrast to its closest competitors, GSK GSK’s sole presence in the $1.5bn OTC cold, realises less than half of its global OTC turnover in flu & sinus remedies market is Contac. The recall North America. Western Europe and Asia Pacific of PPA-based Contac 12-hour Cold Capsules, are key markets for GSK, each accounting for following the FDA-requested withdrawal of around one-fifth of corporate OTC turnover, phenylpropanolamine (PPA) in November 2000, according to provisional data from DB6 2002, has sent the previously steady performer into Nicholas Hall & Company’s global OTC database. decline. Sales are estimated to have fallen GSK also maintains a good presence in Latin by 14% to $27mn in 2001. The availability America and Central & Eastern Europe. of alternative pseudoephedrine presentations staved off heavier declines for the brand. Such a broad geographical spread gives GSK a significant advantage over many other leading Gastrointestinals OTC marketers, making it the least likely to Gastrointestinals are an area of strength for GSK, succumb to regional industry recession. accounting for greater than one-third of the turnover generated by its consumer healthcare business. Analgesics Tums is the leader of the company’s US GIs Block Drug has provided GSK with a small, portfolio taking sales of over $170mn in 2001. but significant, presence in the $2.6bn US OTC Although turnover was eroded in 2001 by both systemic analgesics category. GSK is the leading branded and private label H2 antagonists, Tums provider of powdered analgesics, fielding the (calcium carbonate) has clung on to its leadership former Block Drug brands, BC and Goody’s. of the antacids/antigas category. The brand will BC registered growth of 7% in 2001, pushing face a new rival this year, following the launch brand sales up to $23mn, while Goody’s of Novartis’ Maalox Soft Chews (see Market provided a further $20mn. Minutes, pp109-110). However, heavy losses for the brand’s nearest competitor, J&J•Merck’s Meanwhile, Ecotrin is claimed to be the aspirin famotidine-based Pepcid AC – which lost market brand most recommended by cardiologists. exclusivity in the second quarter of 2001 – are Despite such recommendations, turnover forecast for 2002. This, coupled with Tums’ own dipped to $39mn in 2001. Panadol, though broad distribution outside the mass market and a a significant player globally, is a minor entry new line extension, Tums Cool Relief, should enable in the US. the GSK brand to retain the number one spot. Simplifyle 11 April 2002 85 GlaxoSmithKline The future is not so bright, however, for stablemate Zyban (bupropion), and SB’s OTC nicotine Tagamet HB. Turnover has fallen dramatically in replacement therapies, Nicorette and NicoDerm the past four years; the brand has been reduced CQ. Although this combination attracted the to a minor competitor since the loss of cimetidine attention of regulators, the FTC decided not patent exclusivity in 1998. With generic equivalents to require the divestiture of any of the brands, to Pepcid AC and Zantac 75 winning a greater handing newly-formed GSK a virtual monopoly share of category dollars, Tagamet HB’s decline in both markets. However, private label seems set to continue. Gaviscon antacid also fared competition made a deep cut into turnover poorly in 2001, while sales of Phazyme (another registered by its OTC portfolio in 2001. Block Drug brand) fell below $21mn. Nicorette was line-extended with a new orange GSK’s bulk-forming laxative, Citrucel, narrowed flavour presentation in November 2000. However, Metamucil’s lead of the laxatives category with this was not enough to halt an 18% fall in sales growth of 11% in 2001. Although it registered in 2001. The brand’s 46% share of the $476mn turnover of a little above $50mn, Citrucel remains OTC category was substantial, but markedly lower some distance behind P&G’s category leader. than that claimed in previous years. GSK also fields Nature’s Remedy in this category. Despite remaining the best-selling patch brand, Sales of the minor natural bulk former dropped NicoDerm CQ nonetheless registered a heavy to less than $3mn in 2001. fall in turnover in 2001. GSK sliced the A+P support given to the brand and sales dropped Beano completes the company’s GIs line-up. to $111mn in the past year. Recent indications The natural food enzyme heads other products suggest that both Nicorette and NicoDerm CQ positioned to ease the digestion of beans and failed to arrest declines in the latter half of cruciferous foodstuffs. the year. For more information on the OTC gastrointestinals The successful launch in late 2001 of a nicotine market, please see last month’s Market Report lozenge line extension to NicoDerm CQ in the UK (pp61-69). (where the brand is known as NiQuitin CQ) could herald a similar introduction in the US. Results of a Skin care large clinical trial suggested that the lozenge could Launched direct-to-OTC in October 2000, Abreva triple a smoker’s chance of quitting, and is more is the first antiviral cold sore treatment approved effective than any other current delivery form. for OTC usage in the US. The brand made Watson has a nicotine lozenge under development an impressive entry into the lip care market, in the US. registering sales of $5mn after just three months and before full distribution had been reached. Oral care Abreva’s first full year on the market will be Although line-extended with gum and lozenge assessed in detail in the second part of our Skin presentations in 2000, third-ranking toothpaste Care Market Report, which will be published in brand, Aquafresh, failed to keep pace with the next month’s issue. The performances of GSK’s powerful Colgate franchise (Colgate-Palmolive) acne brand, Oxy, and Tegrin medicated shampoo in 2001. Innovative toothpaste line extensions will also be reviewed next month. have been the telling factor in Colgate’s continued dominance of the $1.7bn category. The recent Smoking cessation announcement of a new combination product from The formation of GSK brought together Glaxo’s Procter & Gamble’s second-ranking Crest – Crest leading prescription smoking cessation aid, Whitening Plus Scope toothpaste (see Market 86 April 2002 Simplifyle 11 Company Monitor multivitamin brand for seniors, continued to record Canada: OTC Review steep declines in 2001. GSK also fields the cod liver oil brand, Scott’s Emulsion, as well as the GSK: Leading Canadian OTC brands 2001 (MSP) second-placed iron supplement, Feosol. Sales GSK entered the burgeoning market for Brand Category US$mn women’s health supplements in March 2001 Sensodyne Toothpastes 9.3 with Remifemin Menopause. Developed and Aquafresh Toothpastes 8.6 Tums Antacids 7.7 marketed internationally by Schaper & Brümmer Gaviscon Antacids 6.3 of Germany, Remifemin contains an exclusive Oxy Acne remedies 4.6 extract of black cohosh that boasts a strong 40-year Source: OTC UPDATE safety record in Germany. The new launch raised the stakes in a previously low profile category Sensodyne has benefited from increased and total US sales of the herb leapt up by 51% A+P under GSK. Together, Sensodyne and to $24mn in 2001. In order to capitalise on the Aquafresh took a 21% share of the $92mn toothpastes category in 2001 increasing popularity of targeted herbals, GSK GSK dominates the $56mn antacids/antigas has promised to widen the distribution of category, fielding the two leading brands Remifemin in 2002. Second-ranking acne remedy, Oxy, was joined by Spectro-Gel after the Block Drug acquisition GSK’s herbals foray had begun in March 2000 with the launch of Alluna Sleep. Worth $7mn in the 12 The withdrawal of three presentations forced sales of Contac cold & flu remedy down to $4mn months to August 2001, Alluna’s high profile has brought a new competitive edge to the $90mn sleep aids category. However, sales of stablemates Minutes, March 2002, p82) – seems to emphasise Sominex and Nytol – under the Block Drug label – the necessity for an innovative toothpaste launch waned in the face of stronger competition. Vivarin from Aquafresh. The GSK brand accounted for accounted for a leading 44% share of the $29mn a reduced 10% share of category dollars in the stimulants category in the same period. 12 months to end 2001. In June 2001, GSK entered a licensing Under GSK, the former Block Drug brand, agreement with PacificHealth Labs for Satietrol, Sensodyne, has enjoyed a revival of fortunes. the natural appetite suppressant. Under the terms Increased A+P support pushed sales up by 8% of the deal, GSK assumed responsibility for the to above $65mn in the 12 months to June 2001. manufacturing, marketing and sales of the product. The acquisition of Block Drug also added the niche Satietrol is claimed to be the first OTC meal Targon Smoker’s Mouthwash and the powerful replacement to activate cholecystokinin (CCK), Polident and Poli-Grip denture cleansing and a protein that gives a feeling of satiety after eating. adhesive ranges to GSK’s oral care portfolio. GSK’s Debrox ranks second in the $30mn ear Other categories drops/treatment category, capturing a 20% share After posting good rates of growth in 2000, Os-Cal of turnover in the 12 months to April 2001. registered a disappointing performance in 2001, reflecting a downturn in the $360mn calcium Future prospects supplements category. Tums is positioned as a Further in-licensing agreements are likely in dual antacid/calcium supplement and, with the the near future as GSK looks to plug holes in Tums Calcium for Life line extension, bolsters its pipeline. In the medium term, a major merger GSK’s presence in the category. Geritol, the or acquisition would not be surprising, particularly Simplifyle 11 April 2002 87 GlaxoSmithKline given JP Garnier’s stance on industry consolidation. Directional Analysis In addition, the divestiture of its non-core foods business would allow GSK to focus solely on GlaxoSmithKline healthcare and pharmaceuticals like its competitors. Past As reported in last month’s Market Minutes (p81), Novartis has recently announced its intention Glaxo Wellcome was ethically oriented to divest its health & functional foods business while SB maintained focus on OTC throughout the 1990s within the next 12 months, while Bristol-Myers Squibb is also rationalising its corporate interests. After a failed merger in 1998, SB and Glaxo finally get together in 2000 In terms of OTC, opportunities remain to expand The addition of Block Drug reinforces some strong Block Drug brands further; Sensodyne OTC commitment has already shown the early benefits of GSK’s Present greater marketing power. The herbals sector may provide scope for further targeted launches, The newly-formed company performs although GSK will be mindful of a series of high strongly in first year with net sales up profile failures in this market, notably Novartis’ Pipeline disappointments prompt a Resource Wellness and Pfizer’s Quanterra. new strategy of in-licensing The weakening of the company’s OTC smoking Prospects cessation business, and a recent challenge by A major merger or acquisition would not Andrx to Zyban’s patent exclusivity, will also be be surprising. A revived drug pipeline of concern, even if GSK has the means to mount widens the scope for Rx-to-OTC switch a powerful defence. Market Report Market Report Skin care: wound care to rescue as other categories stumble again Market Review USA USA In the first of our two Skin Care Market Reports, OTC UPDATE examines VYI treatments, athlete’s Athlete’s foot/jock itch turnover drops, while foot/jock itch products, anti-itch remedies, topical LamisilAT cannibalises sales from rivals wound care and haemorrhoid preparations. VYI category remains in decline, as private Overall, turnover was relatively flat in the 12 labels again eat into brands months to end January 2002. Sales of anti-itch remedies failed to improve on those registered last Topical wound care and haemorrhoid year, while antifungal treatments registered dollar preparations bring some relief as sales rise, declines. However, these disappointing returns though those of anti-itch products are flat masked positive showings from the topical wound Canada care and haemorrhoid preparations categories. A strong mass market presence helps fuel Some data in this report has been restated to take growth of topical wound care products account of revised estimates of brand sales in Anti-itch, antifungal and haemorrhoid some categories. preparations register steady performances USA and Canada: VYI treatments Skin care categories 2000-2002 (MSP) This category’s decline continued in the 12 months US$mn 2000 2001 2002 to end January 2002 with dollar turnover dropping USA by 4%. Smaller branded players have become VYI treatments 206.2 199.8 192.4 increasingly marginalised, while private labels AF/JI treatments 253.8 254.4 252.5 Anti-itch remedies 246.6 254.8 255.8 have again increased share. In March 2001, Topical wound care 297.8 302.1 317.5 the FDA warned that vaginally administered Haemorrhoid preps 133.8 133.9 136.5 miconazole, the active ingredient in Monistat, TOTAL 1,138.2 1,145.0 1,154.7 could cause bleeding or bruising if used in Canada conjunction with warfarin, the Rx blood-thinning VYI treatments 12.2 12.6 12.6 AF/JI treatments 4.7 4.8 4.9 drug. The OTC industry responded promptly with Anti-itch remedies 4.2 4.4 4.5 labelling amendments. Sales of miconazole-based Topical wound care 12.1 13.5 14.0 VYI treatments do not seem to have been unduly Haemorrhoid preps 6.7 6.8 6.8 TOTAL 39.9 42.1 42.8 affected by the publication of the warning. Source: OTC UPDATE estimates, based on sales through all retail outlets, 12 months to end January The protracted decline of seven-day treatments showed no sign of abating in 2001. Three-day Simplifyle 5 April 2002 89 Skin Care applicators and a tube of topical cream. The USA: VYI treatment shares 2002 (MSP) FDA approved the line extension on the condition that the product’s labelling contained a warning Monistat 3 31% about the miconazole/warfarin interaction; similar Personal Products/J&J Monistat 7 16% warnings have since been added to other • • Personal Products/J&J presentations in the range. Monistat 3 now Monistat 1 14% Personal Products/J&J • features five presentations, including an Vagistat-1 9% established combination pack that contains Bristol-Myers Squibb • suppositories rather than cream applicators. Gyne-Lotrimin 3 6% • • Schering-Plough Others, inc PL 24% In common with other seven-day treatments, Source: OTC UPDATE estimates, based on sales Monistat 7 remained in decline in the 12 months through all outlets in the 12 months to January to end January 2002. Dollar turnover dropped by 10% to below $30mn. Monistat 1 was revitalised in treatments remain the most popular option 2001, reversing declines registered in 2000 to take by some distance; single-dose presentations $27mn. The brand was boosted by the Rx-to-OTC improved their share of dollars in the switch of Monistat Dual Pack, a combination pack reporting period. incorporating a miconazole nitrate 1,200mg softgel vaginal insert – not previously available OTC – Distribution trends and miconazole 2% cream. Original Monistat 1 Drugstores account for the greatest proportion is formulated with tioconazole 6.5%. of category dollars. Such outlets registered a Vagistat-1 shares Monistat 1’s active ingredient relatively flat performance to hold a 43% stake. – Bristol-Myers Squibb having licensed tioconazole Mass merchandise outlets continued to expand to J&J in 1998 – but did not match its positive and captured an improved 31% share of turnover. performance in the past year. Sales of the BMS Foodstores posted a disappointing performance brand fell by 5% in the reporting period. Perrigo’s and lost ground on drug and mass merchandise announcement in December 2001 that it intends outlets. Less than 3% of sales are made via to launch a generic equivalent to Vagistat-1 could other channels. prompt further declines in the coming year. The competitive environment Schering-Plough’s Gyne-Lotrimin also fared Johnson & Johnson’s Personal Products division poorly in the past year. Despite being the first VYI holds a formidable lead over other corporate treatment to switch to OTC, Gyne-Lotrimin has players. The company’s Monistat franchise been reduced to a relatively minor competitor. accounts for more than 60% of category turnover. The brand’s leading three-day presentation took Monistat’s single dose, three-day and seven-day less than a 6% category share after registering lines occupy the top three spots in the category. a 14% decline. J&J supports the franchise with category-leading adspend to maintain an advantage over brands Bayer encourages consumers to compare its VYI from Bristol-Myers Squibb, Schering-Plough treatment, Mycelex-3, to category-leading Monistat and Bayer. 3. However, despite its competitive price point, Mycelex-3 has been undermined by the The launch of a new Monistat 3 combination proliferation of cheaper private label three-day pack in the second quarter of 2001 cemented options. Turnover slumped by 35% in the reporting the brand’s position at the head of the category. period, falling to $8mn. The brand’s seven-day The combination pack consists of three cream presentation also lost ground on its competitors 90 April 2002 Simplifyle 5 Market Report 2002. Athlete’s foot treatments account for the USA: Athlete’s foot/jock itch distribution 2002 (MSP) greater proportion of turnover. 40 Distribution trends 30 % Mass merchandise outlets again increased share share 20 as drug and foodstores both failed to improve 10 on sales registered in 2000/01. Sales made via drugstores were flat to account for a 37% share 0 F D M O of category turnover. Foodstores bore the brunt Source: OTC UPDATE estimates; F=food; D=drug; M=mass of category losses, falling by 3% to take a reduced merchandise; O=other outlets, 12 months to end January 23% stake. Mass merchandise outlets captured a little under one-third of dollars. Other outlets and took just $2mn. Bayer discontinued Femstat 3 are stronger in this category than in any other in January 2001. Though the first three-day reviewed here and took a 10% slice of sales in treatment available OTC, Femstat 3 has suffered the 12 months to end January 2002. from limited consumer support in the face of stronger rivals. The competitive environment Novartis’ LamisilAT has further eroded Lotrimin’s Private labels again increased their share at lead of the athlete’s foot/jock itch category in the the expense of branded options. Turnover past year. Sales of the Schering-Plough brand improved by 5% in the reporting period. The dipped slightly, but remained above $53mn. introduction of a generic equivalent of Vagistat-1 Lotrimin’s lead over LamisilAT now stands at should bring further advances in the coming just $5mn. 12 months. Sales of Lotrimin’s sister brand, Tinactin, held Category prospects steady at $44mn, ensuring that Schering-Plough The launch of two new combination packs is likely maintained a healthy advantage over other to enhance Monistat’s position as the leading OTC corporate players. A+P for Lotrimin and Tinactin VYI treatment franchise. Private labels can be stresses points of difference between the two expected to erode further the share of smaller brands and LamisilAT. In contrast to LamisilAT, entries and hold back overall dollar growth. New Lotrimin is claimed to work on the whole foot, innovations from branded players in such a mature rather than just the toes; Tinactin, which is market are unlikely, but may prove necessary to restrict private label expansion. USA: Athlete’s foot/jock itch shares 2002 (MSP) The Rx-to-OTC switch of Pfizer Inc’s systemic antifungal, Diflucan, remains a possibility and would Lotrimin 21% Schering-Plough • provide a welcome boost to the OTC category. Lamisil AT 19% • Novartis Athlete’s foot/jock itch Tinactin 18% Schering-Plough • Desenex 9% The athlete’s foot/jock itch category failed to Novartis • • grow in the past year. While LamisilAT, which Private labels 10% • Others 23% switched to OTC in 1999, continued to cannibalise Source: OTC UPDATE estimates, based on sales sales from other options, its dollar growth slowed through all outlets in the 12 months to end January considerably in the 12 months to end January Simplifyle 5 April 2002 91 Skin Care Novartis relaunched Desenex in 1999 in an IRI: US OTC skin care facts 2002 (RSP) attempt to counter any adverse impact from LamisilAT’s Rx-to-OTC switch in the same year. Sales % change This was followed by the introduction in 2000 Category $mn 2001/02 of a line extension, Desenex Max (based on Foot care/athlete’s foot the same terbinafine formulation as LamisilAT), medication 236.6 -2 and subsequent repositioning of Desenex as Anti-itch treatments 283.1 +0 a brand complementary to LamisilAT. However, First aid ointments/ antiseptics 342.4 +5 these measures have failed to prevent a steady Haemorrhoidal cream/ loss of sales. This trend continued as turnover ointment/spray 71.1 -6 dropped by 8% to $21mn in the 12 months to end Haemorrhoidal remedies 71.2 +19 January 2002. Source: Information Resources Inc, based on retail sales in food, drug and mass merchandise outlets Micatin has been increasingly marginalised since (excluding Wal-Mart), 52 weeks to 27 January it was acquired by Pharmacia from J&J in 1997. The loss of sales to LamisilAT has compounded the tagged “Tough Actin’ Tinactin”, is said to brand’s woes. Turnover fell by 20% in the reporting provide more immediate relief than the Novartis period to account for less than a 3% share of brand. Yet, according to Competitive Media category dollars. Micatin also maintains a limited Reporting, LamisilAT boasts an adspend some presence in the jock itch segment. $8mn higher than that given to Lotrimin and Tinactin, raising the prospect that Schering- Sales of Alva-Amco’s Fungi Cure improved to Plough’s message is not reaching consumers. almost $5mn. Promoted as “The finger and toe fungi specialist”, Fungi Cure features a core liquid However, the recent announcement of FDA presentation as well as dual action gel and liquid approval for OTC Lotrimin Ultra could lend the core options. The brand also includes a nail mycosis brand fresh impetus and encourage a greater product, Fungi Clear. commitment to A+P. The launch of Lotrimin Ultra, which contains butenafine hydrochloride 1%, is Gold Bond Medicated Foot Powder mainly targets expected shortly. The new antifungal cream is those who have foot dermatitis. Some estimates permitted to carry indications for athlete’s foot, suggest that up to 68% of people who think they jock itch and ringworm (see Market Minutes, have athlete’s foot, and attempt to treat it with an February 2002, pp52-53). USA: LamisilAT continued to outpace the category, Anti-itch remedy shares 2002 (MSP) cannibalising sales from competitors. Novartis Cortizone•10 19% supports LamisilAT with an extensive media Pfizer campaign, and has maintained the brand’s high Benadryl 10% • Pfizer • profile association with the National Basketball Cortaid 9% • Association (NBA). In addition, the company Pharmacia feels that the brand name is strong enough to Vagisil 8% • begin to build it into a broader footcare range, Combe • Aveeno 7% • featuring deodorants, deodorisers and insoles. Johnson & Johnson • However, brand growth of 7%, though impressive Private labels 18% Others 29% in an otherwise stagnant category, constituted Source: OTC UPDATE estimates, based on sales a considerable slowdown from past rates through all outlets in the 12 months to end January of growth. 92 April 2002 Simplifyle 5 Market Report antifungal product, actually have dermatitis. USA: Gold Bond Medicated Foot Powder is therefore Anti-itch remedy distribution 2002 (MSP) indicated to stop common foot itch, absorb moisture and control odour. Turnover rose by 50 10% to reach $5mn in the 12 months to end 40 January 2002. 30 % share WF Young fields athlete’s foot presentations under 20 its Absorbine Jr brand. The tolnaftate-based 10 treatment also contains the herbs calendula, 0 echinacea and wormwood to provide cooling relief. F D M O The brand is a minor competitor in this category. Source: OTC UPDATE estimates; F=food; D=drug; M=mass merchandise; O=other outlets, 12 months to end January Novartis’ Cruex is the foremost brand positioned solely for the treatment of jock itch. Cruex had Distribution trends come under pressure from LamisilAT jock itch Drugstores remain the most popular choice of presentations, prompting sales to fall in recent outlet for consumers of anti-itch products. years. However, turnover stabilised before rising However, a flat performance in the past year let slightly to $5mn. category share slip down to 41%. Foodstores put in a marginally more positive performance to claim The growth of LamisilAT has restricted private label a 23% slice of turnover. Mass merchandise outlets dollar gains, but turnover improved by 3% in the outperformed both and accounted for more than reporting period. 30% of sales. Other outlets took a 5% share. Category prospects The competitive environment The rates of growth registered by LamisilAT are Pfizer Consumer Healthcare markets the leading slowing as the brand matures. However, LamisilAT anti-itch brand, Cortizone•10. After registering is still expected to cannibalise sales from its healthy growth in 2000, brand turnover stalled and competitors, rather than bringing new users to was flat at $50mn in the 12 months to end January the market. 2002. The brand receives high-profile A+P backing, while packaging stresses the product’s Encouraged by the success of LamisilAT, other rapid onset. In addition to the core cream companies may employ Rx-to-OTC switch in this presentation, Cortizone•10 also offers spray category. Potential switch candidates include and anal itch relief variants. Janssen’s econazole-based antifungal, Spectazole, and Ortho’s Sporanox, a nail Pfizer also fields second-ranked Benadryl allergy mycosis treatment. relief. The brand reversed declines registered in • 2000/01 as sales increased by 3% in the reporting Anti-itch remedies period. Caladryl calamine brand generates a further $5mn for Pfizer’s anti-itch portfolio. This category registered a flat performance in the reporting period as new, more innovative products Cortaid (Pharmacia) retained third place in the cannibalised the sales of existing options. OTC category despite a 4% fall in sales. The brand is UPDATE includes topical hydrocortisones, reported to receive a high level of recommendation calamines, topical antihistamines and vaginal from dermatologists and this is a feature of itch treatments in its category definition. advertising support. However, Cortaid has Simplifyle 5 April 2002 93 Skin Care strength of hydrocortisone available OTC with USA: ACNielsen: Topical wound care shares 2002 (MSP) Canadian home test aloe (RSP) natural colloidal oatmeal,factsand vitamin E, the new presentation’s unique formula will likely Neosporin Plus 16% provide a boost to turnover in 2002. Aveeno is Pfizer supported by professional detailing while FSIs Neosporin 11% Pfizer • • will run in national newspapers in 2002. Solarcaine 4% Schering-Plough • Betadine 3% • • J&J’s powerful Band-Aid wound care franchise Purdue Pharma Becton Dickinson 3% • has been successfully extended into the anti-itch Becton Dickinson Private labels 32% • category. The brand consists of one gel and two Others 31% spray presentations, one of which is formulated Source: OTC UPDATE estimates, based on sales through all outlets in the 12 months to end January with calamine and the second with the antihistamine, diphenhydramine. The anti-itch line-up benefits from association with its parent struggled to compete with cheaper private brand as well as from dedicated A+P support, labels and better supported competitors, such under the tagline, “The relief that you’ve been as Cortizone•10. itching for”. Sales leapt up by 30% in the past year to pass $6mn. Line-extended with three cleansing foam presentations, Combe’s Vagisil is the leading Private labels outgrew the category to claim female anti-itch treatment. The first product of its an improved 18% share of dollars. kind in the feminine hygiene segment, Vagisil Cleansing Foam was launched in April 2001 with Category prospects regular fresh, clean scent and hypoallergenic Little progress is expected from the anti-itch formulas. Vagisil registered growth of 7% in the category in the coming year. Band-Aid and Vagisil 12 months to end January 2002. have led the way in the past year, benefiting from innovative line extensions. Others could benefit The publication of a study in 2002 which from following this blueprint for success. highlighted the effectiveness of Vagisil and some other vaginal lubricants and preparations As people age, the level of blood circulating to the in fighting HIV could provide a boost to long-term skin decreases, increasing the need for anti-itch prospects. However, no clinical trials have yet products. This, coupled with an ageing population, been undertaken. Stablemate Gynecort should bring incremental growth in the long term. is an increasingly minor concern. USA: Another dip in sales for Combe’s general Topical wound care distribution 2002 (MSP) anti-itch brand, Lanacane, pushed brand turnover below $11mn. Advertising promotes 50 the brand’s unique germ-killing benefits, as 40 well as anti-itch properties. 30 % share Anti-itch presentations in the Aveeno skin care 20 range disappointed in the past year with sales 10 dipping to $17mn. However, J&J’s Personal 0 Products division has just line-extended the brand, F D M O launching Aveeno 1% Hydrocortisone Anti-Itch Source: OTC UPDATE estimates; F=food; D=drug; M=mass merchandise; O=other outlets, 12 months to end January Cream in March 2002. Combining the highest 94 April 2002 Simplifyle 5 Market Report Topical wound care Bayer’s Bactine and Campho-Phenique compete at the same level, ahead of entries from Quaker, A positive performance from the topical wound Playtex, Fruit of the Earth and Beiersdorf. care category was largely a result of a strong showing from the top-ranking brand, Pfizer’s Band-Aid Hurt-Free Antiseptic Wash, launched Neosporin Plus. OTC UPDATE includes topical in March 2001, is reported to have expanded J&J’s antiseptics, antibacterials and antibiotics in its presence in this category significantly . The brand category definition, but does not include plasters is available in a squeezable bottle, removing the or bandages. need to touch wounds with a cleaning material, such as a cotton swab. Band-Aid Hurt-Free Distribution trends Antiseptic Wash is targeted at parents with young children. Sales via all outlets improved in the 12 months to end January 2002. Drugstores retained a leading Other minor competitors include Humco, 42% share of category turnover. Foodstores Dermoplast (Medtech), Mederma (Merz) and registered growth of above 6% to capture a 27% an entry from Chattem under the Gold Bond stake. Mass merchandise outlets accounted for name. Private labels accounted for a little over 23% of sales. Other outlets took the remainder. 30% of category turnover in the reporting period, but failed to match category growth. The competitive environment Pfizer Consumer Healthcare is the dominant Category prospects marketer of topical wound care products. The New innovations that reduce the need to touch company accounted for approaching 30% of wounds, such as Band-Aid Hurt-Free Antiseptic category turnover in the past year. The Neosporin Wash, or reduce the sting, provide an interesting range heads Pfizer’s portfolio and the rest of the niche in this category. Such products could category. Core Neosporin ranks second with drive further growth in coming years and sales of $36mn, while Neosporin Plus (which should appeal to the category’s principal also contains the topical anaesthetic, lidocaine) target of families. tops the standings with $49mn. Pfizer also fields the mature topical antibiotic, Polysporin. Haemorrhoid preparations The second tier is closely contested by a For the fourth year in succession, the mature number of brands, although some are primarily haemorrhoid preparations category has posted distributed to hospitals. Schering-Plough leads a low rate of growth. Pads, wipes and gels have the chasing pack with Solarcaine and A&D. brought some branded growth, although private Sales of Solarcaine dipped by 2% to $11mn labels continue to generate a sizeable proportion in the 12 months to end January 2002. of category dollars. Purdue Pharma’s Betadine realises a large Distribution trends proportion of its turnover in hospitals and, without dedicated support, OTC sales of the Drugstores account for the lion’s share of sales brand fell below $8mn. of haemorrhoid preparations. Foodstores again outperformed the category to take a 24% share Becton Dickinson’s antiseptic brand also of turnover. Mass merchandise outlets also generates the majority of its sales in hospitals; registered healthy rates of growth and captured OTC turnover was flat in the reporting period 28% of category dollars. Sales made via other to account for a 3% share of the category. outlets stood for a 4% share. Simplifyle 5 April 2002 95 Skin Care Sales of Novartis’ Nupercainal grew by 5% in USA: Haemorrhoid preparation shares 2002 (MSP) the 12 months to end January 2002, reversing declines registered in the previous year. Preparation H 52% Turnover stood at $3mn. Wyeth • Tucks 11% • Tronolane (Ross/Abbott), which features a local Pfizer • anaesthetic to help relieve pain, continued its slow Anusol 10% Pfizer decline in the past year. Brand sales dropped • • by 7% to account for just $1.6mn. Private labels Private labels 20% posted a flat performance, largely as a result Others 7% of the improved showing from Preparation H. Source: OTC UPDATE estimates, based on sales through all outlets in the 12 months to end January Category prospects Preparation H has strengthened its lead at the The competitive environment head of the category with innovative and well supported line extensions. However, private labels Another strong performance consolidated Preparation H’s position as the leading haemorrhoid treatment. The brand’s most recent A+P Review line extensions, Preparation H Cooling Gel and Preparation H Medicated Wipes, have proved USA: Leading OTC skin care adspends 2001 particularly successful. Medicated Wipes were added to the range in October 2000, while Cooling Brand Company $mn Gel launched in 1999. Cooling Gel is to be supported by a new TV campaign fronted by LamisilAT Novartis 18.2 Don Zimmer, baseball coach with the New York Vagisil Combe 14.5 Yankees. The ads will coincide with the start Monistat Personal Products/J&J 10.5 of the new baseball season. Overall, brand Preparation H Wyeth 10.0 Lotrimin AF Schering-Plough 7.3 turnover improved by 9% in the past year to Tinactin Schering-Plough 2.8 rise above $70mn. Gold Bond Chattem 2.3 Pfizer Consumer Healthcare fields several Source: Competitive Media Reporting, 12 months to November brands in this category. Chief among them is Tucks, which registered a relatively flat performance in the 12 months to end January Key consumer 2002. However, the brand pushed further ahead campaigns of the year of stablemate, Anusol. Both the core Anusol brand Novartis again supported LamisilAT and hydrocortisone-based Anusol HC-1 posted with a market leading share of voice. poor performances in the reporting period. However, adspend was pared back by Combined sales fell to $13mn. 16% as the brand showed signs of reaching maturity Pfizer also markets Hemorid. An increasingly Monistat retained a leading adspend in minor concern, Hemorid sales dropped by over a the VYI category quarter to less than $2mn. The brand is likely to Combe supported Vagisil with a significantly continue to dwindle in the shadow of its more improved adspend. The launch of Vagisil illustrious counterparts and could be a candidate Cleansing Foam was also widely promoted for divestiture or discontinuation. 96 April 2002 Simplifyle 5 Market Report are still showing above category growth in terms of Canada: units and may erode branded sales in the coming VYI treatment shares 2002 (MSP) year. In the longer term, the ageing of the population should foster category gains. Monistat 54% McNeil/J&J • Canada Canesten 36% Bayer • GyneCure 8% • The Canadian OTC categories reviewed in the first Pfizer part of our Skin Care Market Report registered • Others, inc PL 2% only marginal growth of 2% in the 12 months to end January 2002. Dollar increases were driven Source: OTC UPDATE, based on sales via all retail outlets in the 12 months to end January by the topical wound care category, supported by solid performances from anti-itch treatments and athlete’s foot/jock itch products. of presentations. As discussed earlier (p89), miconazole has recently been the subject of a US VYI treatments FDA investigation following reports of a possible interaction between the antifungal drug and Sales of OTC VYI treatments were flat in the 12 prescription anticoagulants. Health Canada has months to end January 2002. The category posted asked manufacturers of miconazole to add a modest yearly increases following the introduction new warning to the product monograph and of single-dose Monistat by McNeil in 1999, but label, asking women who use anticoagulant now appears to have reached maturity. drugs to seek guidance from a doctor before use (see Market Minutes, October 2001, p300). Sales made via drugstores increased modestly in the past year to take a dominant 81% Bayer’s Canesten came under pressure from share. Retail sales through grocery and mass Monistat in the past year and as a result the merchandise outlets remained steady to capture clotrimazole-based brand recorded a 6% decrease 13% and 6% shares, respectively. in sales. Canesten’s category share fell to 36%. Bayer supports the brand with national TV ads. The competitive environment Third-ranked GyneCure (tioconazole), fielded The category is dominated by the top two brands by Pfizer Consumer Healthcare, the only other that together account for around 90% of turnover. notable brand, has steadily lost ground to the top Single-dose and three-day treatments remained two brands in recent years. Sales dipped by 8% popular in the reporting period, while six- and to stand at just $1mn in the reporting period. seven-day options have continued to decline. Private label treatments realise only a tiny share of turnover in this category. Category prospects The trend toward more convenient single-dose McNeil’s Monistat range posted a 5% increase in treatments is likely to continue. The long-awaited dollar sales in 2001 and has cemented its position Rx-to-OTC switch of Pfizer’s systemic treatment, as category leader. Brand turnover approached Diflucan, would revitalise the VYI category and $7mn in the 12 months to end January 2002. The drive innovation. miconazole-based brand has registered healthy yearly increases since the successful launch of Meanwhile, in such a highly consolidated category, Monistat 1. The range now covers one-, three- growth is likely to be generated by new launches and seven-day treatment options in a variety and line extensions from the existing marketers. Simplifyle 5 April 2002 97 Skin Care Athlete’s foot/jock itch dipped slightly in the 12 months to end January 2002 to account for 28% of turnover. The Sales of topical antifungals positioned for the tolnaftate-based brand is available in cream, treatment of athlete’s foot and jock itch registered powder, liquid and aerosol presentations. a slight upturn during the past year. Category growth has been driven by sales of athlete’s S-P also fields a range of athlete’s foot treatments foot treatments, which comprise the bulk of under the Dr Scholl’s brand. Dr Scholl’s consists the category. The jock itch segment failed to of tolnaftate presentations alongside a popular capitalise on recent strong performances and butenafine 1% cream. Dr Scholl’s retained fourth turnover remained flat in the 12 months to end place following a year of static sales. January 2002. Bayer’s Canesten retained second place and eroded Tinactin’s lead. The brand registered a 3% In the athlete’s foot segment, drugstore turnover increase in dollar sales to account for 24% of increased marginally to account for 74% of category turnover. turnover. Grocery stores experienced the largest increase capturing over a 17% share. Mass McNeil’s Micatin was the category’s strongest merchandisers and other outlets accounted for the performer in the past year, posting healthy dollar remainder. Meanwhile, sales of jock itch remedies increases of 7%. The miconazole-based brand remained concentrated in drugstores, which has continued to challenge the category leaders posted modest gains in the reporting period to through strong consumer advertising and take a 78% share of the segment. promotional campaigns. The brand targets active young users. The competitive environment The brand rankings remained unchanged as Novartis fields Desenex, which retained fifth category growth slowed. There has been little place ahead of Pfizer’s Trosyd following an movement among the leading brands since the unremarkable year. radical realignment caused by the Rx-to-OTC switch of major brands such as Canesten and Category prospects Micatin in the mid-90s. The expected Rx-to-OTC switch of Novartis’ Lamisil (terbinafine) has yet to materialise Schering-Plough’s veteran brand, Tinactin, in Canada. Should it launch OTC, Lamisil maintained category leadership. However, sales would re-invigorate the category and might benefit existing brands through increased Canada: category awareness. Athlete’s foot/jock itch shares 2002 (MSP) Tinactin 28% Anti-itch remedies Schering-Plough • Canesten 24% • The Canadian anti-itch category is confined by Bayer Micatin 19% regulatory controls on hydrocortisone treatments, McNeil/J&J • which are restricted to 0.5% strength formulations Dr Scholl’s 12% Schering-Plough • • and behind-the-counter (BTC) sale. The category Desenex 10% • again only managed to register incremental growth Novartis Others, inc PL 7% of 3% in the 12 months to end January 2002. Drugstores captured around three-quarters of Source: OTC UPDATE, based on sales via all retail category turnover. However, marketers report that outlets in the 12 months to end January such outlets are rapidly losing ground to mass 98 April 2002 Simplifyle 5 Market Report merchandisers, which are estimated to have ACNielsen: registered double-digit growth in the past year. Canadian skin care facts 2001 (RSP) Sales % change The competitive environment Category C$mn 2000/01 Combe’s Lanacane has consolidated its category Vaginal antifungals 27.0 -1 lead with a strong performance in the 12 months Athlete’s foot 4.7 +7 to end January 2002. The benzocaine-based brand Men’s antifungals 5.6 -2 posted a 5% increase in dollar sales to capture a Topical wound care 49.9 +4 Haemorrhoid preps 15.2 -1 leading 28% category share. Lanacane has been repackaged recently and is consistently supported Source: ACNielsen, based on retail sales in drug and grocery stores, 12 months to 29 December by extensive, seasonal TV and print advertising. This success seems likely to continue, as in February 2002 Combe launched new Extra- Category prospects Strength Lanacane, containing benzocaine Marketers do not expect the current restrictive 20% compared to the normal strength of 5%. regulatory situation to change in the near future. Despite this, companies such as Combe and Combe has also suggested the possibility of Chattem have driven sales through product relaunching Lanacort, the hydrocortisone-based innovation and consistent, seasonal consumer brand that was withdrawn in 1998 owing to poor advertising, targeting a wide age range of sales. However, the potential for growth in the consumers. hydrocortisone segment is inhibited by current BTC classification, a factor which would likely Private labels have traditionally formed only restrict the impact of any relaunch. a negligible section of the anti-itch category. However, following the continued expansion Turnover registered by Chattem’s Gold Bond range of Wal-Mart in Canada, store brands such as of anti-itch products increased by 2% in 2001. Wal-Mart’s Equate may provide increased The brand retained second place and captured competition in future. a 13% category share. The range – which includes regular and extra-strength body powders, Topical wound care medicated creams and lotions – was line-extended by the introduction of a medicated foot powder in This category includes topical antibacterials, April 2001. The new launch was supported by antibiotics and antiseptics and has grown steadily dedicated TV and radio ads that targeted a young during the past two years. Dollar sales increased and athletic male audience, using the familiar by 3% in the 12 months to end January 2002. tagline: “It’s more than a powder. It’s medicated.” Drugstore sales remained flat to account for over The leading hydrocortisone anti-itch treatment, 70% of turnover. Grocery stores showed a modest Cortate (Schering-Plough), achieved only a slight increase. The mass merchandise channel increase in sales to raise its share of the category registered impressive double-digit growth, driven to 12%. Cortate dominates its small segment and by the expansion of Wal-Mart to take over 12% competes against minor brands, such as McNeil’s of category turnover. Cortef and Taro’s Cortoderm. The competitive environment Pfizer Consumer Healthcare fields the two minor Pfizer’s topical antibiotic, Polysporin, continued to brands containing diphenhydramine, Benadryl build on its formidable category lead and posted a and Caladryl. Both are restricted to BTC sale. 10% increase in sales during 2001, taking its Simplifyle 5 April 2002 99 Skin Care Canada: Haemorrhoid preparation The competitive environment shares 2002 (MSP) Preparation H (Wyeth Consumer Health, previously known as Whitehall-Robins) remains the clear Preparation H 57% Wyeth • category leader, taking approaching 60% of sales. Its wide range of suppositories, ointments, creams Anusol 30% • Pfizer and gels, coupled with the fact that the brand is the Tucks 10% • only haemorrhoid preparation to be supported with • Pfizer year-round nationwide consumer advertising, has • ensured its dominance of the category. Others, inc PL 3% Source: OTC UPDATE, based on sales via all retail The only competition of note is provided by Anusol outlets in the 12 months to end January and Tucks, both marketed by Pfizer Consumer Healthcare. Anusol’s category share dipped category share above 50%. The brand’s slightly to 30% in 2001. Sales of Tucks, the leading stablemate, Lidosporin, was discontinued brand in the pads segment, remained flat and took in autumn 2001. almost 10% of category turnover. Bayer fields two minor entries, Bactine antiseptic Category prospects and Ozonol antibiotic. Each posted small This category is expected to grow incrementally, increases for category shares of 11% and 9%, owing to the ageing population. Marketers have respectively. Mentholatum’s Mecca ointment noted, however, that improved diet and exercise takes a small proportion of sales. The company’s regimes may reduce the incidence of haemorrhoids. anaesthetic, Medi-Quick, was discontinued in 2000. The remainder of the category is contested Market Forecast by a host of small brands and private labels. USA Category prospects Monistat’s position at the head of the VYI Although the rates of growth registered in this category is likely to be enhanced, although category slowed in the past year, continued private labels will erode overall dollar sales investment in product development can be Driven by new product innovations, the expected. Moreover, the expanding presence of topical wound care category looks good this category in grocery and mass merchandise for further gains outlets should fuel future gains. This also raises LamisilAT’s expansion is likely to slow the possibility of significant private label growth. in the coming year, but will continue to outpace other brands Haemorrhoid preparations Category turnover was flat in the 12 months to Canada end January 2002 with little movement in any The Rx-to-OTC switch of Diflucan would of the distribution channels. boost VYI treatments. However, major new topical entries are not expected Drugstores remained the clear favourite with consumers, capturing 77% of turnover, while food Topical wound care growth likely sales dipped slightly to account for just under a The aggressive expansion of Wal-Mart 19% share. Mass merchandisers and other outlets could increase store brand share captured the remainder. 100 April 2002 Simplifyle 5 Regional Review Regional Review Asia Pacific: region outperforms the West as Korea and China modernise OTC UPDATE’s sister publication, Far East sales of OTC-registered brands. This growth has Focus, recently held its 4th conference in Bangkok been stimulated by the implementation of drug on 7-8 February 2002. Here, with their help, we classification regulations introduced in January review the trends and developments in Asia Pacific 2000, which have led to the expansion of the retail during the past year. pharmacy channel. Having joined the World Trade Organisation (WTO) last year, China can expect to Several markets within the region posted excellent experience difficult regulation-driven change to its sales growth in 2001, building on the recovery healthcare markets over the next few years, but from the major economic setbacks caused by the these are changes which should be of benefit in Asian currency crisis of 1997-8. Overall, the Asia the long term and will facilitate greater international Pacific OTC market – including Japan and participation in the emerging OTC market. Australasia – registered growth of 4.5% in the 2001, according to Far East Focus and provisional South Korea began to realign its OTC market data from DB6 2002, the latest edition of Nicholas after fundamental regulatory change in 2000, Hall & Company’s global OTC database. By and turnover reached $1bn following growth of 6%. comparison the North American markets remained India’s OTC market closed in on $1bn after growth essentially static. Within this Asia Pacific regional of 7%, consistent with last year’s performance. figure, individual markets experienced widely Indonesia recorded the region’s most notable varying results. performance, surging ahead with growth of 18%. Australia, another developed market, managed to Market overview post respectable growth of 6%, despite a downturn Japan accounted for close to half of total OTC Asia Pacific: turnover – in dollar terms – in Asia Pacific in 2001, Major OTC markets 2001 (MSP) but this proportion is diminishing year after year as the Japanese market remains static while other Sales % growth Per capita countries continue to develop apace. Japan also Country ($mn) 2000/01* spend ($) reflected a lower share of regional OTC sales after Japan 6,382 +1 50.25 substantial devaluation of the Japanese yen (¥) China 2,214 +11 1.74 South Korea 1,004 +6 21.36 against the US dollar last year. The startling growth India 953 +7 0.94 of Taisho’s RiUP minoxidil hair loss treatment, Australia 657 +6 34.58 following its OTC debut at the start of July 1999, Indonesia 389 +18 1.83 Taiwan 366 +0 16.64 stalled quickly. However, Pharmacia’s Nicorette Philippines 256 +4 3.37 nicotine replacement patch debuted direct-to-OTC Thailand 254 +5 4.03 in 2001 and has generated rapid sales growth. Malaysia 167 +8 7.59 *Growth calculated in local currency Meanwhile, China posted OTC market growth of Source: Far East Focus and provisional data from DB6 2002; includes Rx+OTC sales of semi-ethical brands 11% to pass $2.2bn in 2001 – including hospital Simplifyle 12 April 2002 101 Asia Pacific hoped, by the cost-conscious government and Asia Pacific: Economic growth trends 1998-2002 marketers alike, that SPD will begin to stimulate long-term OTC growth after the reverse switch of % GDP change products such as non-sedating antihistamines and Country 1998 1999 2000 2001* 2002† H2 antagonists had shrunk the market in 2000. Australia +4.5 +4.4 +4.2 +3.1 +3.5 However, this growth process cannot truly begin China +7.8 +7.1 +7.9 +7.4 +7.2 until the Korean FDA finally publishes its definitive India +6.8 +6.5 +5.8 +5.6 +6.2 new Rx/OTC drug classifications list – which was Indonesia -13.1 +0.8 +4.8 +3.4 +3.8 Japan -2.5 +0.2 +1.5 -0.1 +0.1 originally due for publication early last year. In the Malaysia -7.4 -5.4 +8.5 +0.8 +3.5 current, post-SPD environment, OTCs may only Philippines -0.6 +3.3 +3.9 +3.4 +4.2 be sold legally in pharmacies in South Korea, South Korea -6.7 +10.9 +8.8 +2.7 +4.1 with hospitals and clinics no longer licensed to Taiwan +5.4 +6.0 +5.9 -0.3 +2.6 Thailand -10.8 +4.2 +4.3 +1.2 +2.1 dispense medicines to consumers or outpatients. The mass market is as yet non-existent, except for *Expected, †forecast Source: World Bank and government statistics certain low dose vitamin, mineral and herbal products registered as health aids. in sales in the dietary supplements market. Once consumers learn to self-medicate, rather The country continues to be fairly liberal in than relying on their doctor, it is believed that deregulating products with a good safety profile, the OTC market will post good rates of growth. and drugs that benefited from reclassification Deregulation of certain products, most notably in Australia’s multi-layered regulatory system in tonic drinks – a major moneyspinner in Asia – and 2001 included ranitidine H2 antagonists and simple analgesics, may also create a mass market loperamide antidiarrhoeals. within the next couple of years. Among other Asian countries, Malaysia enjoyed an Meanwhile, the cash-strapped national health 8% increase, better than growth in 2000. Thailand insurance scheme in Taiwan has led the posted 5% OTC sales growth, almost matching Government to begin dereimbursing OTC- the previous year and taking sales back to levels registered drugs, which should gradually lead to similar to those prior to the currency crisis. Growth greater self-medication. The Thai government has in the Philippines slowed to just 4%, as consumers followed almost the opposite course in its efforts to reacted to an anticipated recession. Taiwan’s provide wider and cheaper healthcare coverage for OTC market was static, hampered by economic its citizens. The primary driver of this has been the instability and reimbursement of Rx sales of so-called 30 Baht policy, which has so far rolled OTC-registered medicines. out as a trial in several Thai provinces, whereby all citizens are entitled to visit a doctor and get Regulatory developments any necessary prescription for a flat fee of 30 Baht South Korea’s separation of prescribing and (around 67¢). Since this is less than the cost of dispensing (SPD) duties in August 2000 radically many OTC medicines, it has seriously dented realigned the market and has caused considerable the OTC market in areas where the policy is turmoil throughout the past 18 months as doctors currently in operation. were prevented from dispensing medicines to outpatients in an effort to curb profiteering through China’s entry to the WTO has led to a raft of new over-prescribing. SPD has led to strikes and measures – these include the requirement that demonstrations by various stakeholders, including manufacturers abide by international GMP doctors, pharmacists and wholesalers. However, guidelines by 2004 – and the Government is the market now seems to be settling down and it is relaxing restrictions on foreign firms operating in 102 April 2002 Simplifyle 12 Regional Review the country. Intellectual property rights will gain Asia Pacific: greater protection as China modernises its OTC sales by category 2001 (MSP) regulations, and import tariffs on pharmaceuticals are set to be reduced. Also, the State Drug VMS* 35% Administration recently published guidance on Rx- to-OTC switch, stating that only Rx drugs that had Cough, cold & allergy 20% • • already completed marketing and manufacturing Gastrointestinals 13% • approval, and were available OTC in other major Analgesics 12% • markets, would be considered for switch. Dermatologicals 9% • • In Australia, there were few major changes, Others 10% • although several ingredients or pack sizes were *Includes OTC-registered and quasi-drug tonic drinks derestricted to allow wider OTC sale. A task force Source: DB6, Nicholas Hall & Company’s global OTC is in ongoing discussions with officials from New database, 12 months to June Zealand over trans-Tasman harmonisation of pharmaceutical regulations. In India, a failure to GSK’s Fenbid is the leading brand, ahead of move ahead with TRIPS intellectual property Bufferin, while in Indonesia two local brands legislation has led firms such as GSK to announce dominate, Paramax (Konimex) and Bodrex (Bode/ that they will no longer launch new products there. Tempo). Unilab holds the leading portfolio in the Analgesics Philippines, spearheaded by Alaxan and Biogesic. Across Asia, GSK’s Panadol is a leading presence Topical analgesics are a popular choice in Asia, in the systemic analgesics category, worth around where such therapies have a long tradition of use. $70mn in mid-2001. However, Panadol suffered a Indeed, in countries such as India, Japan, Taiwan, major setback in Australia in 2000 when product South Korea and Malaysia, topical presentations tampering and extortion led to the brand’s actually substantially outsell systemic treatments. temporary withdrawal and subsequent move to Hisamitsu’s Salonpas is the leading topical brand behind-the-counter (BTC) sale. As a result, the in Asia, primarily from its base in Japan, but the brand lost ground to ibuprofen-based Nurofen brand is also the category leader in Taiwan and is (Boots) and its main rival, Herron Paracetamol available in Malaysia. Tiger Balm (Haw Par), which (Herron), which has benefited from advertising has rolled out in the US over the past couple of highlighting the company’s Australian background years, has its origins in traditional Chinese and that the product is identical to Panadol. In medicine (TCM) and enjoys a wide geographic India, GSK fields its local acquisition, Crocin, spread across Asia. However, sales growth has rather than investing heavily to establish Panadol. been held back in the past few years as newer Meanwhile, Bufferin (Bristol-Myers Squibb) has active ingredients, such as diclofenac and generated growth and is now in a position to ketoprofen, have switched in several countries. challenge Panadol’s claim to be the region’s Indeed, sales of Novartis’ Voltaren Emulgel powerhouse brand – it achieved leading sales – which remains Rx in the US – have tripled in the of $54mn in Japan alone in 2001. past five years as the brand has rolled out OTC across Asia. Other notable regional players include McNeil’s Tylenol has a mid-tier presence across Rohto’s Mentholatum and Ketotop (Merck CHC). the region and debuted in Japan in 2000. Thus far, the brand has struggled to achieve strong sales in a market where brand loyalty is particularly strong Cough, cold & allergy and combination therapies are popular. In South While S-P is only just now seeking to switch Korea, Sam Jin’s Geworin leads Tylenol. In China, Claritin in the US (see Market Minutes, p107), the Simplifyle 12 April 2002 103 Asia Pacific International) compete in the sore throat segment. Asia Pacific: Top five OTC brands 2000* (MSP) In many countries, these brands are sold in small, low-priced SKUs that are affordable to most Rank Brand Category Marketer low-income consumers. 1 Bacchus-F Tonic drinks Dong-A The US FDA’s ban on phenylpropanolamine (PPA) 2 Panadol Analgesics GSK led to a number of other regulatory agencies 3 Contac Cold & flu GSK worldwide banning the ingredient. This had a 4 Vicks Cough & cold P&G marked impact in China, where Contac (GSK) 5 999 Analgesics Nanfang was among the brands forced to be withdrawn *Excluding sales made in Japan and tonic drinks where they for reformulation, as well as in Thailand, the are registered as foods Philippines and Indonesia. In Taiwan and South Source: DB6 Korea, PPA was not a common ingredient and so the impact was limited, while Australia and Japan non-sedating antihistamine has been available rode out the scandal because PPA was already OTC for some years in several Asian Pacific restricted to very low doses in both countries. markets. Known as Claratyne in Australia, the brand has expanded sales rapidly since its Gastrointestinals deregulation to self-select status from BTC sale in Traditional remedies – such as TCM in China, September 1999. The brand is also a big success ayurveda in India, jamu in Indonesia and kanpo in in China, where it ranks second behind Xian- Japan – are a major presence in the Asian OTC Janssen/J&J’s Hismanal. However, Claritin and GIs market. The use of these products continues all other non-sedating antihistamines, except to hold back the growth of clinically-proven cetirizine products such as Zyrtec (marketed by medicines, but there is increasing demand for UCB Korea), were reverse switched to Rx in South Western drugs. The exchange of medicinal Korea following SPD. This has allowed Zyrtec to knowledge goes both ways, however, as Western strengthen its position as the top OTC brand there. markets – such as the US – begin to experiment with Asian remedies. For example, probiotic The Vicks range (P&G) has a broad presence antidiarrhoeals like Boehringer Ingelheim’s across Asia, but particularly so in India where it Probiata are now gaining ground fast in the US, ranks easily as the leading Western-style cough & positioned to compete against McNeil’s Imodium cold brand. Vicks and other Western brands in this and loperamide generics. But probiotics have been category face heavy competition from traditional popular in Japan for years. medicines, and in several places Vicks VapoRub has been repositioned as a traditional style cure-all H2 antagonists are widely available OTC in Asia, to take advantage of this factor. In India, ayurvedic but several such products were reclassified as Rx traditional remedies are increasingly being in South Korea following SPD. Prior to that, proton packaged to compete alongside allopathic Western pump inhibitors, such as Losec (AstraZeneca) brands, with Kopran’s Smyle range being a prime – currently applying for OTC switch in the US, example. The Vicks range has even penetrated the where it is known as Prilosec – were also Japanese market, occupying a second-tier position available off-prescription. TCM liquid digestive aids behind domestic franchises such as Pabron like Gas Whalmyungsu-Q (Dong Wha) and plain (Taisho) and Lulu (Sankyo). Vicks lozenges and antacids like Gelfos (Bo Ryung) have profited from Halls (Pfizer Consumer Healthcare) vie for regional the reverse switches. leadership of the medicated confectionery category, while brands such as Fisherman’s Meanwhile, H2s finally seem to be gaining success Friend (Lofthouse) and Strepsils (Boots Healthcare in Japan. When these products first launched in 104 April 2002 Simplifyle 12 Regional Review 1996, poor communication of their benefits Japan: hampered the segment, but H2 antagonists led by Top five OTC brands 2000 (MSP) Yamanouchi’s Gaster 10 (famotidine) generated 14% sales growth in 2001. Nevertheless, H2s form Rank Brand Category Marketer only 8% of the Japanese OTC antacids market. 1 Lipovitan Tonic drinks Taisho 2 Alinamin VMS Takeda Antidiarrhoeals are an emerging category in 3 Pabron CCA Taisho many countries, where motility inhibitors such as 4 Yunker VMS Sato 5 Tiovita VMS Otsuka Imodium (Janssen/J&J) and Lomotil (Pharmacia) are widely available alongside carbon-based Source: DB6 brands like Ultracarbon (Merck CHC). Several governments in the region have also promoted the itself as a growing force in the region. In Japan, benefits of electrolyte oral rehydration therapies, where the dietary supplements market remains which has slowed sales of true antidiarrhoeal dominated by domestic players, such as Kowa and drugs. The laxatives market remains quite Takeda, calcium supplements in particular face undeveloped in most Asian countries. Changing heavy pressure from fortified foods and drink. dietary patterns, influenced by the Westernisation of many cultures, is expected to spur growth of In Australia, where the market is highly developed the GIs market. and very similar to those of Europe or North America, most VMS categories have taken a VMS substantial downturn in the past 18 months, partly reflecting the imposition of general sales tax (GST) OTC-registered and quasi-drug tonic drinks on dietary supplements, as well as the increasing form a hugely lucrative market across Asia, with maturity of the sector and adverse media reports powerhouse brands such as Lipovitan (Taisho), about several herbs, such as St John’s wort. Yunker (Sato) and Bacchus-F (Dong-A) pulling in hundreds of millions of dollars each year. Dermatologicals Generally positioned for daily consumption to combat fatigue and provide essential nutrition, Many categories in this therapeutic sector remain tonic drinks form a $2bn market in Japan alone, ethically-oriented in a number of key Asian where the category is segmented into 50ml mini- countries – including China, India, Taiwan and drinks and 100ml bottled nutritive drinks (BNDs). Thailand. Such categories include haemorrhoid Since the introduction of a mass market quasi-drug preparations, hair loss remedies, cold sore classification in Japan in 1999, tonics have treatments and topical antibiotics. Other categories benefited hugely in terms of sales growth. In South have restricted distribution or advertising. Even Korea, it is widely predicted that tonic drinks will those brands that are available OTC often realise soon be deregulated to permit mass market sales. a substantial proportion of turnover through hospitals or doctors’ prescriptions. Japan and Competing alongside a huge market for Australia are fairly liberal markets, with Taisho’s unpackaged traditional medicines, a number of RiUP minoxidil hair loss treatment massively leading Western dietary supplement brands have expanding its category when it debuted OTC in established a strong presence in Asia – such as 1999. However, perhaps because of the lower Blackmores of Australia, Centrum (Wyeth), efficacy of the 1% formulation – compared with Pharmaton (BI) and One-A-Day (Bayer). These Pharmacia’s Rogaine 2% and 5% versions fielded compete against a raft of local generics. Calcium in the US – the category has been in decline since supplements are particularly popular in China and peaking in mid-2000 and has now dropped below Korea, where diets are commonly low in this the $100mn mark. In Australia, Regaine switched crucial mineral. Wyeth’s Caltrate has established in 1998 – although it leads a category worth less Simplifyle 12 April 2002 105 Asia Pacific than $2mn – while aciclovir topical antiviral cold Asia Pacific: sore treatments are also sold OTC. Top five OTC companies 2000* (MSP) Regionally, Clearasil is the number one acne Rank Company % share treatment, although the brand’s formulation and positioning as a drug or cosmetic varies from 1 GlaxoSmithKline (UK) 5.8 market to market. Its acquisition by Boots has 2 Johnson & Johnson (US) 2.9 helped to improve sales, and it is expected that 3 Pfizer Inc (US) 2.4 4 Dong-A (S Korea) 2.2 Clearasil will also be rolled out in new markets 5 Wyeth (US) 1.4 where it had not been available previously. Reckitt Total sales = $7.6bn Benckiser’s Dettol is a prominent antiseptic brand *Total includes E & SE Asia, Australasia, Indian found throughout the region, and in many places sub-continent but excludes Japan it faces competition from local multi-purpose oils. Source: DB6 With the hot and humid climate prevalent across retail chain, Seiyu, over the next five years giving much of Asia, there is a large market for antifungal it access to Japan after expansion elsewhere in and anti-itch treatments. Bayer’s Canesten and Asia. This may provide multinationals with a route Janssen/J&J’s Daktarin are regional leaders and, via which to introduce OTC brands into Japan. although they remain Rx-bound in some countries, also achieve sales UTC. In Japan, Taisho’s Several Japanese firms are major players in the Dermarin and Takeda’s Scorba are the leading regional and global OTC rankings, but achieve the brands in the $161mn OTC antifungals category. vast bulk of turnover in their domestic market. Of Nizoral (Janssen/J&J) is a leading scalp treatment, these, Taisho ranks first, but owes its position to and also offers athlete’s foot presentations in some huge sales of Lipovitan tonic drink. Takeda, ranked markets. A global leader, P&G’s Head & Shoulders number two in Japan, is currently acting as local also ranks as a top dandruff shampoo in Asia. marketer for McNeil/J&J’s Tylenol. SSP was taken over by BI in a hostile bid that secured a majority Corporate developments shareholding unrivalled by other multinationals in GlaxoSmithKline is the biggest OTC marketer in Japan; but Roche has since acquired a dominant Asia Pacific, excluding Japan. When they merged stake in Chugai. A proposed mega-merger at the close of 2000, both Glaxo Wellcome and between Taisho and Tanabe fell through recently SmithKline Beecham contributed major Asian after failing to agree on a strategic direction. Still, brands to the combined portfolio. Pfizer Inc also the discussions showed that perhaps Japanese holds a sizeable presence, thanks primarily to a corporations are finally preparing to open up and strong cough & cold portfolio led by the Halls use their potential internationally. franchise. J&J fields a number of strong brands, United Laboratories (or Unilab) of the Philippines including Nizoral and Daktarin, while Tylenol is is a substantial player regionally, and is one of also expanding. With the acquisition of Clearasil the few Asian firms with a solid base outside its and the expansion of Nurofen and Strepsils, domestic market. In Australia, FH Faulding was Boots Healthcare International is fast rising up the acquired by its compatriot, Mayne, for $1.2bn in rankings. However, Boots Retail International has 2001, while Sigma sold off its New Zealand scaled back plans for pharmacy expansion into operations to Zuellig, the leading distributor of Asia and has closed its Japanese stores. The firm drugs across Asia Pacific. will instead target a series of store implants within existing drugstores in the region. Meanwhile, the US retail giant, Wal-Mart, has announced an agreement to purchase up to 66.7% of Japanese 106 April 2002 Simplifyle 12 Market Minutes Market Minutes S-P finally files application to switch Claritin to OTC Schering-Plough has filed supplemental new drug to the company’s prospects that it regained the applications with the FDA to switch all indications initiative in this saga. The latest announcement and market all formulations of Claritin (loratadine) has come at almost the very last moment non-sedating antihistamine to OTC status; – the brand loses its patent protection in mid- loratadine is indicated for the treatment of perennial December 2002 – and S-P will want to squeeze and seasonal allergic rhinitis. The FDA’s Non- out the brand’s remaining Rx sales prior to generic prescription Drugs Advisory Committee will also competition. The company recently moved consider whether loratadine may carry an to block bids by Wyeth and McNeil to market additional indication for chronic idiopathic urticaria direct-to-OTC generic forms of loratadine in an OTC setting. The applications have been (Market Minutes, March 2002, pp79-80). assigned a standard review by the FDA, with The rapid market acceptance of the company’s a targeted action date of 28 November 2002. new Rx third-generation antihistamine, Clarinex (desloratadine), has also contributed to the In May 2001, the FDA advisory committees decision to submit the switch application recommended that the FDA force Claritin and two for Claritin. The move should allow the company other prescription non-sedating antihistamines, to establish brand leadership in both the US Allegra (Aventis) and Zyrtec (Pfizer Inc) to switch Rx and OTC allergy remedies categories. to OTC status (see Market Minutes, June 2001, pp171-178). The switch of Claritin is sure to shake The switch of Claritin could force Pfizer and up the $355mn US OTC allergy remedies category Aventis to follow suit with Zyrtec and Allegra. (see Market Report, October 2001, pp279-280). Both companies have reported a downturn in share value since the submission of the switch Claritin accounts for one-third of S-P’s total application was announced by S-P; OTC Claritin corporate turnover and it was therefore crucial could cut sharply into sales of Rx competitors. Prilosec switch this year? cleared with regulators in the current negotiations. It is believed that Prilosec may switch initially only Procter & Gamble’s CFO, Clayton Daley, has with heartburn indications. When Prilosec finally hinted that the FDA may approve the Rx-to-OTC makes the switch to OTC in the US, it will join switch of AstraZeneca’s proton pump inhibitor (PPI), a market crowded with high-efficacy antacids and Prilosec (omeprazole), before the end of 2002. H2 antagonists. Prilosec’s main advantage is that If approved, P&G will market an OTC version of it offers 24-hour coverage. However, this will bring Prilosec under an agreement with AstraZeneca. it into direct competition with J&J•Merck’s fast- Both companies have eagerly awaited Prilosec’s growing Pepcid Complete, a dual antacid/H2 line switch since the first application for OTC status extension to its leading H2 brand. The $1.1bn OTC was rejected by the FDA in October 2000 owing to antacids/antigas category was featured in last concerns over the use of the drug without a doctor’s month’s Market Report (pp61-64). supervision (see Market Minutes, Nov/Dec 2000, p337). Daley identified labelling and dosage issues, Meanwhile, AstraZeneca has found it increasingly not safety concerns, as the last hurdle to be difficult to convince US and UK authorities that, as Simplifyle 15 April 2002 107 Market Minutes an Rx drug, Prilosec – which is known globally as of poor sales. Despite the continued success Losec – should retain patent protection any longer. of the TheraPatch range, the company recently AstraZeneca has been accused of using a number reported a 40% fall in net sales in 2001. LecTec’s of delaying tactics to halt the entry of generic TheraPatch was featured in our Patches & Pads versions of the drug, which have been approved Brand Strategies article (Nov/Dec 2001, pp323-326). by the FDA (see Market Minutes, January 2002, p27); the company is currently pursuing a patent Altus Food dissolved infringement trial against Schwarz Pharma, Andrx, PepsiCo’s Quaker Foods division and Novartis Genpharm and Reddy-Cheminor. The basic have dissolved Altus Food, their functional foods US drug substance patent on Prilosec expired business joint-venture formed in February 2000. in October 2001, but the trial concerns an No decision has yet been made on the fate infringement of two omeprazole patents that of the two brand ranges that had been test claim protection until 2007. The trial is expected marketed by the company. These comprise the to conclude at the end of March. Take Heart brand of cholesterol-reducing products, Roche plans divestiture containing the patented ingredient Reducol, and Women’s Individual Nutrition, a line of cereals, Roche has announced plans to divest its bulk snack bars and smoothies fortified with calcium vitamins & fine chemicals division in an attempt to and other nutrients. Late last year, Forbes Medi- refocus as a fast-growing healthcare concern. The Tech reacquired licensing and distribution rights company reported a 57% drop in net income to products fortified with Reducol – developed by in 2001, after a poor year resulting from product Forbes – and has indicated it may actively pursue failures, restructuring charges and a record buyers for the Altus brands, as well as exploring fine for its involvement in a price-fixing cartel new contracts for Reducol (see Market Minutes, (OTC.newsflash, 23 November 2001). Although January 2002, p52). Novartis intends to divest its the company’s bulk vitamins business retained its entire functional foods division in order to focus global leadership, divisional sales grew by only 1% solely on its pharmaceuticals business (see last in local currency terms in 2001. This, coupled with month’s Market Minutes, p81). the recent problems and general downturn in the VMS market, has contributed to the decision to Bayer plans divestiture divest the operation. The divestiture could be achieved by a spin-off to shareholders. Bayer has announced plans to divest its household insecticides unit, which includes Autan repellent The proposed sale also raises questions about and Baygon insecticide in its portfolio. Production the future of Roche’s branded vitamins, including facilities and sales offices will be sold alongside Supradyn, Redoxon, Berocca and Sanatogen. the trademark rights, although the active Vitamins, minerals and dietary supplements ingredients business will remain. Bayer is accounted for close to 60% of Roche’s OTC turnover streamlining its business in order to focus in 2000, according to DB6 2001, Nicholas Hall & on human and animal healthcare. Company’s global OTC database. Roche is looking to its new alliance with Chugai of Japan, alongside Chattem buys Selsun Blue the continued development of its core pharma and diagnostic divisions, to drive future growth. Chattem has signed a definitive agreement with Abbott Laboratories to purchase Selsun Blue, LecTec takeover? a leading medicated dandruff shampoo, for $75mn plus inventories. Selsun Blue is available in the LecTec Corporation has declared itself to be US and in over 50 other countries. The acquisition a possible takeover candidate following a year includes worldwide rights (except India) to 108 April 2002 Simplifyle Simplifyle 15 ? Market Minutes manufacture, sell and market the Rx and OTC Smoking cessation aids formulations of the medicated shampoo, plus related intellectual property and manufacturing equipment. Addiction Therapies Inc (ATI) has developed a Selsun Blue has performed consistently well in the unique nicotine replacement therapy. The Straw is a single-use plastic straw containing beads of $227mn US medicated shampoos category and nicotine and can be used with any beverage. The held a 10% share of turnover in 2000. Selsun oral delivery system has presented positive results Blue’s performance in 2001 will be examined from Phase I & II clinical trials. The Straw delivers in next month’s Skin Care Market Report. the entire dose of nicotine in the first sip and may be used every time the patient craves a cigarette, up to 10 to 12 times a day over a 12-week course. Herbals AERs news Meanwhile, a natural smoking cessation aid has been introduced by Nicodrops, marketed under the In a letter to the FDA, Michael Maves, the former company name. The mint-flavoured lozenges Consumer Healthcare Products Association contain a mixture of several herbs purported to (CHPA) president and current American Medical relieve withdrawal symptoms, including St John’s Association (AMA) executive VP & CEO, has wort, valerian and ginseng. Nicodrops has been launched in the US and in Canada, where the repeated the AMA’s request to recall all products formula also contains lobelia. The lozenges retail in containing the maligned herb ephedra from the the US for around $19.99 for a 60-count pack. market. Ephedra has been the subject of a large number of adverse event reports (AERs) (Omni Nutraceuticals), have both previously (see Market Minutes, October 2001, pp298-299). been subject to FDA warning letters concerning Previously, the CHPA, under the leadership of the addition of a dietary supplement to a legally Maves, had attacked the FDA’s perceived reliance marketed drug. BF Ascher disagrees with the ruling on the frequency of AERs to determine the path but has discontinued sales and production of of regulatory restrictions placed upon certain dietary Melagesic PM in accordance with the FDA directive. supplements (Market Minutes, February 2002, p53). However, the company has called for the FDA to work alongside the industry to develop guidelines Meanwhile, a report submitted to the FDA in for dietary supplement/drug combination therapies. February 2002 by Donald Waller of the University of Illinois in Chicago has suggested that the use Maalox goes soft of kava kava alone may not cause hepatotoxicity. Waller opines that when used in conjunction with New Maalox Soft Chews are being marketed both other drugs, dietary supplements or alcohol, kava as an antacid and as a daily calcium supplement. kava may cause damage to the liver. Waller has A supplement facts panel will be included on continued to participate in an FDA investigation product packaging, alongside an indication for to examine AERs involving consumption of the the relief of occasional heartburn. Users are herb, including cases reported in Europe. recommended to take one softchew, three times a day, as a calcium supplement. Maalox Soft Melagesic PM withdrawal Chews are available in 30-count bottles in cherry and chocolate flavours, retailing at around $5.99. The FDA has ordered BF Ascher to withdraw The launch is the latest in a series of line extensions Melagesic PM, its dietary supplement/drug for the Maalox franchise, which discontinued combination. Melagesic PM contains the systemic its traditional tablet presentation in 1999. analgesic, acetaminophen, and melatonin, a natural ingredient that promotes sleep. The FDA ruled that These new dual-indication antacid chews are this combination has effectively created a new placed to compete directly with Tums (GSK), drug and is therefore subject to FDA approval. the leading OTC antacid in North America. Melagesic PM, alongside Inholtra Joint Pain Tums’ previously unique dual positioning as an Simplifyle 15 April 2002 109 Market Minutes imitation zinc lozenges. The company remains Canadian launches undeterred, however, and has continued to support Diagnostics marketer, TheraSense, has launched the brand with high profile media campaigns (Cough its FreeStyle blood glucose monitoring system Remedies Market Report, September 2001, p248). in Canada. The brand enters the $105mn Canadian blood glucose test kits market, which was last The new launch will be accompanied by an reviewed in our Home Diagnostic Tests Market intensive six-week radio ad campaign. Report (June 2001, pp162-163). The company has also signed an agreement to expand into France, Italy and Belgium. This follows the recent New Diachrome brand launch of FreeStyle in Japan through an agreement with Nipro Corporation, a leading Japanese medical Nutrition 21, a developer of chromium-based devices company. nutritional ingredients, has announced that its patented Diachrome formula has been featured Meanwhile, Alva-Amco has introduced a home diagnostic test kit, Thinz MetaboStix, which in a new line of branded supplements from NBTY. claims to be able to determine if diet and exercise Diachrome, which combines Chromax chromium programmes are working. The urine test strips picolinate with the vitamin biotin, has been shown detect the presence of acetoacetic acid, a ketone compound, which is produced only when the body to be beneficial to diabetics in the control of blood is breaking down large quantities of fat. The company sugar levels. The range is available through claims that the test will provide evidence that NBTY’s Vitamin World retail stores and its the weight loss plan is working even when the Puritan’s Pride direct mail catalogue. weighing scales do not. Thinz MetaboStix are available nationwide in boxes of 25 test strips and retail for around $15.99. LillyAnswers benefit card Eli Lilly has become the latest pharmaceutical antacid and calcium supplement had helped it company to introduce a patient assistance scheme to retain the number one spot in the $1.1bn US for low-income individuals enrolled in Medicare. antacids/antigas category. Maalox Soft Chews will The LillyAnswers card allows customers, who do increase competition and should bolster sales of not receive any financial support for prescription the Novartis brand. drugs, to pay a flat rate of just $12 for a 30-day New Bumps ’n Bruises supply of any Lilly product. Eli Lilly follows Pfizer, GSK and Novartis in the introduction of similar Hylands Inc, has line extended its range schemes (see Market Minutes, January 2002, p26 of children’s analgesics with Bumps ’n Bruises and Regulations, Nov/Dec 2001, p331). Ointment with Arnica. The topical analgesic is indicated to relieve bruising and inflammation Key appointments associated with minor injuries sustained by young children. The new presentation joins the established Dr Attila Molnar has been appointed president tablet formulation and will retail at around $6.99. of the Bayer Corporation and senior Bayer executive for the US, suceeding Helge Wehmeier. Cold-Eeze extension Ulf Wiinberg has been appointed to the position of Quigley has announced plans for a honey lemon president of Wyeth Consumer Healthcare division. flavour line extension to its Cold-Eeze brand of zinc-based homoeopathic lozenges. The new Former FDA director, Dr Lester M Crawford Jnr, presentation will be launched in the autumn of 2002, has been appointed to serve as the agency’s deputy in time for the next cold season. Cold-Eeze has commissioner. Crawford replaces Bernard A been in decline since 1999 after adverse publicity Schwetz, and will act as the senior official, pending was generated by the entry of poor quality, the instalment of a permanent full commissioner. 110 April 2002 Simplifyle Simplifyle 15 ?
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