The global market for consumer medicines (over the counter medicines, OTC) is worth $111Bn in sales and continues to demonstrate strong growth potential, with growth over 5% in the latest year. Pharmerging countries are at the forefront of this robust growth, fuelled by higher out-of-pocket expenditure, favorable demographic trends and a growing and increasingly prosperous middle class. In these markets, distant from the corporate headquarters of multinational companies, OTC is growing faster than in mature markets, and consequently has a larger share of the total healthcare market.
This briefing paper offers a summary of the insights and key learnings from a recent IQVIA study conducted by the global Consumer Health (CH) team in collaboration with IQVIA local CH experts. It reviews CH market trends and dynamics, key stakeholder interactions, how companies have been able to succeed in these markets and what is likely to be required for success in the future. Webinars with the lead consultants will take place in late Q3/early Q4 2014. In Pharmerging countries, the OTC market has grown at nearly 15% CAGR over the past 2 years, and is now valued at 20% share of the total pharma market compared to only 9% in the leading mature markets.
Across all these countries, eight of the top ten companies in terms of value share of the OTC market are multinationals (MNCs). While this picture might suggest that MNCs have a dominant position in the OTC market and enjoy universal success, in fact they dominate the market because they operate globally and the reality is, of course, more nuanced than this.
- Pharmerging countries contribute to only 32% of the global sales of the top 10 OTC multinationals, lower than the 35% overall contribution of Pharmerging countries to global OTC sales, indicating that MNCs are underweight in Pharmerging countries
- What is more concerning is that these leading OTC players are also losing share in Pharmerging countries to more aggressive local competitors.
The position of MNC’s in Pharmerging countries is thus, under threat. Local players have numerous home advantages and in many cases are better positioned to anticipate and take advantage of changes in the economic, regulatory and political environment in contrast to U.S. or European-origin MNCs. However, with the right goto-market strategies, we at IQVIA believe that MNCs can compete on a better footing with locals in Pharmerging countries and potentially reverse their underweight performance trend.