OTC Distribution in Europe - the New 2005 Edition Embracing Change to 2009

TABLE OF CONTENTS

Forward to the 2005 Study of the Distribution of OTC Medicines in Europe 1

1. The European OTC Self-Medication Market 4

2. Efficiency of the European Market Place for OTC Medicines 7

3. Estimates of the Market Size for OTC Medicines of the 18 European Markets for the 2005 OTC Distribution Study 8

4. Share of Sales by Market 2004 - Total Pharmaceuticals, OTC Medicines and Semi-Ethical products in Europe 10

5. Major Categories of OTC Medicines in Europes Main Markets 11

6. European Self-medication - OTC Medicines Growth by Category 12

7. Non-prescription Pharmaceuticals and OTC Medicines Country Market Growth - Europe 2000 - 2004 13

8. Regulatory Controls on Distributing and Merchandising OTC Medicines in Europe 15

9. OTC Medicines in Europe - Evolving Distribution Channel Environments 16

10. Pharmacies in Europe 17

11. Growth of Retail Pharmacies in Europe 19

12. Regulatory Restraints on the Growth of Pharmacy Numbers in Europe 20

12.1 Restrictions on Pharmacy Numbers in Europe 20

13. The Role of the Retail Pharmacies in Europe 22

14. Economic Pressures on Pharmacies in Europe 22

14.1. Pressures from the Social Healthcare System 23

15. Self-medication - The Importance of OTC Medicines to Pharmacies in Europe 24

16. Promoting Self-medication in Europe - Restrictions on Merchandising of OTC Medicines in Pharmacies in Different European States 26

17. Retail Price Protection of OTC Medicines in Europe 28

18. Trends in the Ownership of Pharmacies in Europe 30

19. Small Retail Pharmacy Multiples in Europe 33

20. The Growth of Large Retail Pharmacy Chains in Europe 34

21. Growth of organised Groupings of Independent Pharmacies in Europe 35

21.1 The Difference between Voluntary Trading Organisations and Franchises - European Virtual Pharmacy Chains 38

22. Buyer Power and Branding of Pharmacy Retail Groups in Europe 38

23. Threats and Challenges from Internet Pharmacies in Europe 39

24. Supermarket Chains - A growing Force in Pharmacy Retailing 41

25. Self- Medication - Non-Pharmacy Distribution of OTC Medicines in Europe 42

25.1 Distribution of OTC Medicines through Drugstore Chains in Europe 42

25.2 Retailers of Herbal Products in Europe 44

25.3 Sales of OTC Medicines through Supermarkets in Europe 44

25.4 Druggists and Health Centres within Supermarkets in Europe 45

26. Marketing Formula Retail Chains in Europe 46

27. The Role of Private Label Brands in Retail Chains in Europe 47

27.1 Brands Marketed by Retail Groupings - as Part of the Marketing Formula (Retail Chains, Virtual Chains and Voluntary Trading Groups) 48

27.2 Brands Owned by or Exclusively Marketed through Specific Retail Chains 48

27.3 Brands Owned by Pharmacists Co-operatives 48

28. Consumer Sources of Information about their Health 49

Appendix to Chapter 1 - Accession of Poland, Hungary, Czech Republic, Slovakia, Slovenia and the Baltic States into the European Union in 2004 50

A 1.1 Evolving Business Environment for Non-prescription and OTC Medicines in the Main Accession States of the European Union 52

Chapter 2 Pharmaceutical Wholesaler Strategies Shaping the Supply Chain in Europe

1. Competitive Pressures Forcing Change in the European Pharmaceutical Supply Chain 1

2. The Continuing Processes of Consolidation in the European Pharmaceutical Wholesaling Industry 3

3. Major European Pharmaceutical Wholesalers Driving Industry Consolidation 4

3.1 Mergers, Acquisitions and Strategic Alliances within the Pharmaceutical Wholesaling Industry in Europe 5

3.2 Reasons for Mergers and Acquisitions in the European Pharmaceutical Wholesale Industry 7

4. Integrated Channel Managers Driving Change for Europes Pharmaceutical Wholesaling Industry 8

4.1 Vertical Integration and Competitor Strategies of Major European Pharmaceutical Wholesalers 9

4.2 Services offered by European Pharmaceutical Wholesalers 11

4.3 Manufacturing interests of European Pharmaceutical Wholesalers 12

4.4 Pre-Wholesaling a Growth Industry in the European Pharmaceutical Market 13

5. Pharmaceutical Wholesalers Forward Integration into Retailing in Europe - Celesio, Alliance UniChem, Phoenix, OPG, and Galenica 17

5.1 European Pharmacy Chains directly owned by Pharmaceutical Wholesalers - Celesio, Alliance UniChem, Phoenix, OPG (Orfe), Galenica 19

5.2 Virtual Pharmacy Chains in Europe 20

5.3 Channel Management Conflicts of Interest between Wholesaling and Retailing in Europe 21

6. Pharmacist Owned Wholesale Co-operatives in Europe 21

7. Conclusions - Trends Driving Change along the Consumer Healthcare Supply Chain in Europe 23

Chapter 3 Profiles of Companies Driving the European Pharmaceutical Supply Chain

Celesio 1

1. Summary of Celesios Business 1

1.1 Celesio - Sources of Business Growth 2000 - 2003 2

1.2 Celsios Pharmaceutical Wholesaling Market Share by Country 4

1.3 Celesio Pharmacy Retailing 4

1.4. Celesio - The Future 7

Alliance UniChem 9

2. Summary of Alliance UniChems Business 9

2.1. Alliance Unichem Pharmaceutical Wholesaling 10

2.2. Alliance Unichem Pharmaceutical Retailing 12

2.3. Pre-wholesaling Galenica and Alliance Unichem 13

2.4. Conclusions Alliance UniChem 13

Phoenix 15

3. Summary of Phoenix Business 15

3.1 Phoenix - Acquisition Tamro in the Nordic and Baltic Statesregion 16

3.2 Phoenix Pre-wholesaling in Europe 17

3.3 Phoenix in Pharmacy Retailing in Europe 17

3.4 Conclusions Phoenix 18

Galenica Holdings 19

4. Summary of Galenica Holdings Business 19

4.1. Galenica Business by Activity 19

4.2 Galexis the Distribution Division of Galenica 21

4.3 The Retail Divisions of Galenica 21

4.4 Galenica Pharmaceutical Divisions 22

4.5 Galenica - Pharmaceutical Pre-Wholesaling 23

4.6 Conclusions Galenica 23

OPG Netherlands 24

5. Summary of OPG Business 24

5.1 OPG Sources of Business 24

5.2 OPG Strategies 2004 25

5.3 Conclusions OPG Netherlands 27

Boots PLC 28

6. Summary 28

6.1 Boots Business Activities 29

6.2 Boots the Chemist 30

6.3 Boots the Chemist Strategy 31

6.4 Boots Retail International 31

6.5 The Future for The Boots Co. PLC as an International Retailer 32

Chapter 4 Internet Channels for Consumer Healthcare and Online Access to Pharmaceuticals in Europe

1.Development of Internet Pharmacies in Europe - 2004 Report 1

1.1 The Internet as a Change Agent in Pharmacy Retailing 2

1.2 Internet Applications to the Delivery of Primary Care Services in Europe 3

2. Internet and Intranet Connectors and Loops along the Supply Chain 5

3. Business to Business Internet Applications in Pharmaceutical Distribution in Europe 6

3.1 Alliance UniChem Internet Portal in Europe 6

3.2 Celesio - Internet based Solutions for Pharmacies in Europe 6

4. Business to Consumer (B2C) Internet Pharmacy Retailing Applications in Europe 7

4.1 Internet Pharmacy Retailing Models in Europe Compared 7

4.2 Pureplay Online Pharmacies in Europe 8

4.3 Hybrid Development of the Pure-play Online Pharmacy Model 9

4.4 The Emergence of Healthcare Portals linked to Clicks and Bricks Pharmacies in Europe 9

4.5 Self-Medication - Online Shopping Services by Major Retail Chains in Europe 10

5. Opportunities for Business to Consumer e-Commerce for Pharmaceutical Companies in Europe 11

6.Development of Internet Pharmacies in Europe 13

6.1 Internet Pharmacies in Denmark 13

6.2 Internet Pharmacies in France 13

6.3 Internet Pharmacies in Germany 13

6.4 Internet Pharmacies in Italy 14

6.5 Internet Pharmacies The Netherlands 14

6.6 Internet Pharmacies in Sweden 15

6.7 Internet Pharmacies in Switzerland 15

6.8 Consumers Access to Internet Pharmacies in the UK 16

7. Reasons why Consumers Fulfil Prescriptions and buy Healthcare and Medicinal Products on the Internet in the UK 17

7.1 Purchasing OTC Medicines through the Internet in the UK 17

8. Pharmacists Attitudes to Consumers Purchasing Online Medicines in Europe 18

9. Legitimacy of Internet Pharmacies for Medicines in Europe 18

9.1 0800DocMorris Legal Challenge to the Ban on Internet Pharmacies in Germany 19

10. The Future for Internet Marketing of OTC Medicines in Europe 20

11. Appendix Chapter 4

Summary of the e-Commerce Directive - European Union 21

11.1 Restrictions on e-Commerce for Medicines in Europe 22

11.2 The Future Regulatory Environment for e-Commerce in Medicine 22

Chapter 5 OTC Distribution in Belgium

1.The Belgian Self-Medication Market 1

2. Share of the Belgian non-prescription Market by Category 1

3. Structure of the Belgian Self-medication Market 2

4. Professional or Semi-ethical Pharmaceutical Brands 3

5. Consumer OTC Self-medication Brands 3

6. Classification of Medicines in Belgium 3

7. Reimbursement of Non-prescription Medicines in Belgium 3

8. Price Controls on OTC Medicines in Belgium 4

9.T he Changing Business Environment for Non-prescription medicines in Belgium 5

10. Regulatory Environment for Pharmaceutical Distribution in Belgium 6

11.Leading OTC Medicine Companies in Belgium 6

12.Structure of Distribution Channels for Self-Medication in Belgium 8

13. The Retail Pharmacy Sector Belgium 9

14. Retail Pharmacy Types in Belgium 9

15. Pharmacy Co-operatives in Belgium 10

16. Pharmacy Co-operatives Strategies in Belgium 10

17. Celesio Pharmacy Retailing in Belgium 11

18. Independent Pharmacies in Belgium 11

19. Pharmacy Economics in Belgium 11

20. Trade Margins and VAT Manufacturer to Retail Pharmacy Price for Prescription and OTC Medicines in Belgium 12

21. Self-Medication - Pharmaceutical Wholesalers in Belgium 12

21. The Future for OTC Medicine Distribution in Belgium 13

Chapter 6 OTC Distribution in France

1. Introduction - The French OTC Medicines and Non-prescription Pharmaceuticals Market 1

2. Sales Split of the Total Non-prescription Bound Market in France 2

3. Sales Split of the Total OTC Market in France 3

4. Structure of the French Non-prescription and OTC Medicines Market 3

5. Non-prescription Pharmaceuticals - Leading Competitors in France 4

6. Medicine Classifications in the French Prescription Pharmaceutical and OTC Medicines Markets 6

6.1 Classification of Medicines 6

6.2 Legal Definition of Non-prescription Medicines in France 6

7. Advertising Regulations for Non-prescription and OTC Medicines in France 7

8. Use of Trademarks for Medicinal Products in France 7

9. OTC Medicines Linkages to the Prescription Pharmaceuticals Sector in France 8

9.1 French Pharmaceutical Distribution - Price Control and Reimbursement Systems 8

9.2 Price Control - Prescription Medicines in France 8

9.3 Reimbursement Bands 8

9.4 Scrutiny of the List of Pharmaceutical Products for Reimbursement 9

9.5 Generic Substitution Targets for French Pharmacies 11

10. Structure of Distribution for Self-Medication in France 12

10.1 Types of Non-prescription or OTC Medicine Brand in France 13

11. The Retail Pharmacy Channel in France 15

11.1 Pharmacy Density by Region in France 16

11.2 Structure of Retail Pharmacy Economics 16

11.3 Consumer Attitudes towards Pharmacists in France 17

11.4 Internet Pharmacies in France 17

12. Prices and Margins of Non-prescription and OTC Medicines in France 18

13. Non-Pharmacy Distribution in France of Consumer Healthcare Products in France 18

14. Pharmaceutical Wholesalers in France 20

Celesio 21

Alliance UniChem 21

15. France - The Future for OTC Medicines 21

Chapter 7 OTC Distribution in Germany

1. Introduction - The German Non-prescription and OTC medicines Market 1

1.1 Importance of Prescription Sales for Non-prescription-bound Medicines in Germany 2

1.2 Developments in Consumer use of OTC Self-medication in Germany 1999 - 2004 4

2. Sales Split by Category of the Total Non-prescription Bound Market in Germany 2003 and 2004 4

2.1 German Non-prescription Medicines Category Growth Rates by Sector 1999 - 2004 5

3. Non-prescription and OTC Medicines Leading Competitors - Germany Total % - Share 7

4. The Structure of the German Non-prescription Medicines Bound Market 7

4.1 Changing Structure of the German Non-prescription Medicines Market 1999 - 2004 9

5. The Regulatory Environment for OTC Medicines Germany 11

5.1 Self-Medication Definition in Germany 11

6. New Healthcare Reforms affecting the Non-prescription Medicines Sector in Germany 12

7. The Changing Regulatory Environment for the Distribution of Pharmaceutical Products in Germany 13

8. Prices and Margins of Non-prescription Pharmaceutical Products in Germany 14

9. Distribution Channels for OTC (non-prescription) Medicines in Germany 15

9.1. The Retail Pharmacy Sector in Germany 16

9.2 Pharmacy Turnover Analysis Germany 2003 17

9.3 Impact on the Economics on Pharmacy Retailing of the Act to Modernise the Statutory Health Insurance System in Germany 18

9.4 Development of Retail Pharmacy Chains in Germany 18

9.5 Internet and Mail Order Distribution Channels for OTC Medicines in Germany 20

9.6 Pharmacies face Competition from Internet Pharmacies in Germany 22

9.7 Self-medication - The Future for Internet and Mail Order Pharmacy Distribution in Germany 22

9.8 Self-medication - Attitudes of German Pharmacists to Competitive Pricing and Promotion in the Light of New health Reforms 23

10.Pharmaceutical Wholesalers Germany 24

10.1 Pharmaceutical Wholesalers Customer Strategies in Germany 25

10.2 Wholesalers Shrinking Share of the Pharmaceutical Value Chain in Germany 26

10.3 Pharmaceutical Wholesalers Services in Germany 26

10.4 Pharmaceutical Wholesaler Strategies in a Changing Business Environment in Germany 27

11. General Sale List (GSL) OTC Self-medication Medicines through Non-Pharmacy Channels in Germany 28

11.1 Drugstores in Germany 29

11.2 Independent Drugstores in Germany 29

11.3 Multiple Drugstore Retailers in Germany 29

11.4 Health food Shops in Germany 29

12. German Consumer and Self-medication Usage Attitudes and Sources of Information 30

13. Conclusions - Themes of Change Driving the Restructuring of the OTC Self-medication and non-prescription Market in Germany 31

13.1 The Impact of Continuing Vertical Integration of Pharmaceutical Wholesalers in Germany on the Suppliers of OTC Self-medication and Non-prescription Pharmaceutical Products. 32

Chapter 8 OTC Distribution in Italy

1. Introduction - The Italian OTC Medicines Market 1

2. Sales Split of Total Non-prescription Bound Market in Italy 2

3. Non-prescription and OTC Medicines Category Growth - Italy 3

4. Non-prescription and OTC Medicines Leading Competitors in the Italian Market 3

5. Medicine Classification and the Structure of the Italian OTC Market 4

6. Price Controls - Non-prescription and OTC Medicines in Italy 6

7. The Regulatory Environment for Pharmaceutical Distribution Italy 6

7.1 Self-service Merchandising of OTC Medicines in Italy 6

7.2 Multiple Ownership of Pharmacies in Italy 7

7.3 Internet, Distance Selling and Teleshopping of OTC Medicines in Italy 7

7.4 Regulations Covering Wholesaling of Pharmaceuticals in Italy 7

7.5 Prices and Margins of Pharmaceuticals in Italy 7

8. Structure of Distribution Channels for OTC Self-Medication in Italy 8

9. Retail Pharmacies in Italy 9

9.1 Pharmacy Density by Region in Italy 10

9.2 Retail Pharmacy Chains in Italy 12

9.3 Structure of Italian Pharmacy Economics 12

9.4 Italian Pharmacists Attitudes to Self-Medication 13

10.Pharmaceutical Wholesalers Italy 14

10.1 Comifar Group Italy 15

10.2 Alleanza Salute Italia (Alliance UniChem) 15

11.Internet Pharmacies in Italy 16

12.The Future for OTC Distribution in Italy 18

Chapter 9 OTC Distribution in The Netherlands

1. Introduction - The Dutch OTC Market 1

2. Key Categories in the Dutch OTC Self-medication Market 2

3. Dutch Consumer Healthcare Category Growth Rates 2000 - 2003 2

4. Self-medication - Leading Competitors in The Netherlands 2

5. Classification of Medicines in The Netherlands 3

6. The Prescription Sector in the Netherlands 4

7. Regulations to Abolish Price Fixing of OTC Medicines in The Netherlands 5

8. Structure of Distribution for Self-Medication in The Netherlands 5

9. Drugstores Retailing OTC (non-prescription) Medicines in The Netherlands 7

10. Self-selection and Point of Purchase Merchandising of OTC Medicines in Dutch Drugstores 8

11. Self-medication - Private Label OTC (non-prescription) Medicines Sales through Drugstores in The Netherlands 9

12. OTC (non-prescription) Medicines Sales through Grocery Outlets in the Netherlands 10

13. Pharmacies - The Netherlands 10

14. Self-medication - Internet Pharmacies in The Netherlands 11

15. DocMorris international On-line Pharmacy Provider 11

16. OTC (non-prescription) Medicines Channel Influences on Consumer Sources of Purchase and Choice of Brand for Self-medication in The Netherlands 12

17. OTC Retail Prices - The Netherlands 13

18. Pharmaceutical Wholesalers in The Netherlands 13

19. Wholesaler Private Label OTC (non-prescription) Medicine Brands in The Netherlands 15

20. The Future for OTC Distribution in The Netherlands 15

Chapter 10 OTC Distribution in Spain

1. Introduction - The Spanish OTC Medicines Market 1

2. Sales Split of the Total Non-prescription Bound Medicines Market in Spain 2

3. OTC Medicines Category Growth - Spain 3

4. Leading Non-prescription Pharmaceutical Company Competitors in the Spanish Market 4

5. Structure of the Spanish Non-prescription and OTC Medicines Market 5

6. The Regulatory Environment for Non-prescription and OTC Medicines in Spain 6

6.1 Classification of Medicines in Spain 6

6.2 Registration of Non-prescription and OTC Medicines in Spain 7

6.3 Definition of Self-Medication in Spain 8

7. Issues affecting the Prescription Sector for Products classified as Non-prescription Medicines in Spain 8

7.1 Reimbursement of Medicinal Products not requiring a Prescription in Spain 8

7.2 Pricing and Price Controls ofNon-prescription and OTC Medicines in Spain 9

8. Advertising of OTC Medicines in Spain 9

8.1 Regulation of Trade Names for Non-prescription and OTC Medicines in Spain 10

9. The Changing Business Environment for Non-prescription and OTC Medicines in Spain 10

9.1 Reclassification of Medicines in Spain 10

10. The Regulatory Environment for Pharmaceutical Distribution in Spain 11

11. Structure of Distribution for Self-Medication in Spain 12

12. Growth of Pharmacies in Spain 12

13. Regulatory Controls on the Number of Pharmacies in Spain 12

14. Pharmacy Density by Region in Spain 13

15. Spanish Pharmacy Economics 14

15.1 Pricing and Margins 15

16. Consumer Attitudes to Self-Medication 15

17.Pharmaceutical Wholesalers in Spain 16

17.1 Leading Pharmaceutical Wholesalers in Spain - Market Shares and Strategies 18

17.2 Cofares 18

17.3 SA Farmac?utica Aragonesia (SAFA) 19

18. The Future of OTC Distribution in Spain 20

Chapter 11 OTC Distribution in the UK

1. Introduction - The UK OTC Medicines Market 1

1.1 The Impact of the Abolition of Resale Price Maintenance on OTC Sales in the UK 2001 - 2004 2

2. Sales Split of Total Non-prescription Bound Market by Category in the UK 3

3. Leading Competitors in the Non-prescription Medicines Market UK 4

4. Structure of the Market Demand Non-prescription and OTC Medicines in the UK 5

5. The Regulatory Environment for Non-prescription and OTC Medicines in the UK 6

5.1 Classifications of Medicines in the UK 6

5.2 Legal Definition of Self-Medication in the UK 6

6. Structure of Distribution Channel Systems for Non-prescription Pharmaceuticals in the UK 7

7. Consumer Source of Purchase and Share of UK OTC Medicines Market by Outlet Type 8

8. The Retail Pharmacy Sector in the UK 9

9. Pharmacy Density in the UK 10

10. Ownership of Pharmacies in the UK 11

10.1 Independent Pharmacies in the UK 12

10.2 Virtual Chains of Pharmacies (Pharmacy Symbol Groups) in the UK 12

10.3 Leading Pharmacy Chains in the UK 13

11. Internet as a Consumer Channel for Pharmaceuticals in the UK 15

12. Pharmaceutical Wholesaling in the UK 16

12.1 Conclusions Wholesaler Strategies in the UK 18

13. The Future for the Distribution of OTC Medicines in the UK 19

14. OTC Medicines Manufacturers Strategies in the UK 20

14.1 Key Account Management for OTC Medicine Manufacturers in the UK 20

14.2 Category Management Criteria for OTC Medicines Manufacturers in the UK 21

15. Conclusions of OTC Distribution in the UK Study 21

Chapter 12 OTC Distribution in Austria and Switzerland

Austria 1

1. Introduction - The Austrian OTC Medicines Market 1

2. Leading OTC (non-prescription) Medicines Companies in Austria 2

3. The Regulatory Environment for OTC (non-prescription) Medicines in Austria 2

3.1 Classification of Medicines in Austria 2

3.2 Registration of OTC Medicines in Austria 3

3.3 Regulations covering the Distribution of OTC Medicines in Austria 4

3.4 Regulations covering the Control of Pharmacies in Austria 4

3.5 Regulations covering Pricing of OTC (non-prescription) Medicines in Austria 5

3.6 Regulations covering the Advertising of OTC (non-prescription) Medicines in Austria 5

4. The Distribution Environment for OTC (non-prescription) Medicines in Austria 6

4.1 The Retail Pharmacy Environment for OTC (non-prescription) Medicines in Austria 6

4.2 Pharmacy Economics in Austria 6

5. Prices and Margins for OTC (non-prescription) Medicines in Austria 6

6. Pharmaceutical Wholesalers in Austria 6

6.1 Ownership of Pharmaceutical Wholesalers in Austria 7

7. The Future for OTC Distribution in Austria 7

Switzerland 9

8. Introduction - The Swiss OTC (non-prescription) Medicines Market 9

9. Sales Split of Key OTC Medicine Categories in Switzerland 9

10. The Regulatory Environment for OTC Medicines in Switzerland 10

10.1 Classification of Medicines in Switzerland 10

10.2 Pharmaceutical Product Classifications in Switzerland 11

10.3 Registration of OTC Medicines in Switzerland 12

10.4 Regulations covering the Distribution of OTC (non-prescription) Medicines in Switzerland 13

10.5 Regulations covering Pharmacy or Drugstore Ownership in Switzerland 13

10.6 Pricing of OTC Medicines in Switzerland 13

10.7 Regulations covering the Advertising of OTC (non-prescription) Medicines in Switzerland 13

10.8 Regulations covering the Use of Trademarks of OTC (non-prescription) Medicines in Switzerland 14

11. Healthcare Reforms in Switzerland and their Impact on the Swiss OTC Pharmaceuticals Industry 15

12. The Distribution Environment in Switzerland 16

12.1 OTC (non-prescription) Medicines in Retail Pharmacies in Switzerland 17

12.2 Sources of Pharmacy Turnover Switzerland 17

12.3 Self-medication on the Net - Swiss Pharmacies engaged in e-commerce 18

12.4 Distribution of OTC (non-prescription) Medicines through Drugstores in Switzerland 19

13. Prices and Margins of OTC Medicines in Switzerland 19

14. Swiss Pharmaceutical Wholesalers 19

15. The Future for OTC Distribution in Switzerland 21

Chapter 14 OTC Distribution in the Accession States - Northern, Central & Eastern Europe

Poland, Hungary, Czech Republic, Slovakia, Slovenia and the Baltic States

Introduction Market Opportunities for OTC Medicines in the Accession States in Northern, Central and Eastern Europe 1

Poland 1

1. Introduction - The Polish OTC Market 1

2. Sales Split of Key OTC Medicine Categories in Poland 2

3. OTC Medicines Category Growth in Poland 1999 - 2003 3

Category - Growth Rates 1999 - 2003 Poland 3

4. Regional Split of the Polish Pharmaceutical Market 4

5. Leading Competitors in the Polish OTC Medicines Market 4

6. The Regulatory Environment for OTC Medicines in Poland 5

6.1 Classification of Medicines 5

6.2 Registration of OTC Medicines in Poland 6

7. Regulations Governing Marketing and Distribution Channels for OTC Medicines in Poland 7

7.1 Retail Channels for OTC Medicines in Poland 7

7.2 Controls on Pricing and Margins of OTC Medicines in Poland 7

7.3 Advertising and Promotion of OTC Medicines in Poland 8

8. Distribution Environment for OTC Medicines in Poland 8

8.1 The Retail Pharmacy Environment for Self-medication in Poland 9

8.2 Pharmaceutical Wholesalers in Poland 9

8.3 Role of Pharmaceutical Wholesalers in Poland 11

Hungary 13

9. Introduction - The Hungarian Self-Medication Market 13

9.1 Market for Registered Non-prescription OTC Medicines in Hungary 13

9.2. Sales Split of Key Categories of OTC Medicines in Hungary 14

9.3 Main Competitors Non-prescription Medicines in Hungary 14

10. Herbal Products in Hungary 15

10.1 Herbal Market - Split by Category in Hungary 16

11. The Regulatory Environment for OTC Medicines in Hungary 16

11.1 Directives 16

11.2 Medicines Classification in Hungary 16

11.3 Registration of OTC Medicines in Hungary 17

11.4 Regulations for Distribution of OTC Medicines in Hungary 17

11.5 Pricing of OTC Medicines in Hungary 18

11.6 Regulations on Advertising OTC Medicines in Hungary 19

11.7 Trade Margins / VAT on OTC Medicines in Hungary 20

11.8 Use of Trademarks for OTC Medicines in Hungary 20

12.0 The Distribution Environment for Self-Medication Hungary 20

12.1 Pharmaceutical Wholesalers in Hungary 20

12.2 Growth of Pharmacies in Hungary 21

12.3 Hungary - Classification of Pharmacies by Size, Location and Market Share 22

12.4 General Sales List for OTC Medicines in Hungary 22

Czech Republic 23

13. Introduction - The Czech Republic - OTC Medicines Market 23

14. Sales Split of Key Categories of OTC Medicines in the Czech Republic 23

15. The Regulatory Environment for OTC Medicines in the Czech Republic 24

15.1 Medicine Classifications in the Czech Republic 24

15.2 Registration of OTC Medicines in the Czech Republic 25

16. Regulations Governing Marketing and Distribution Channels for OTC Medicines in the Czech Republic 26

16.1 Permitted Retail Channels for OTC (non-prescription) Medicines in the Czech Republic 26

16.2 Pharmacy Ownership and Self-service Regulations for OTC Medicines in the Czech Republic 26

16.3 Pricing of OTC Medicines in the Czech Republic 27

16.4 Reference Pricing System for Reimbursed medicines in the Czech Republic 27

16.5 Regulations on Advertising OTC Medicines in the Czech Republic 28

16.6 Controls on Advertising of OTC Medicines in the Czech Republic 29

16.7 Patient Information Requirements for OTC Medicines in the Czech Republic 29

17. Trade Margins / VAT for OTC Medicines in The Czech Republic 30

19. Healthcare Reforms in the Czech Republic 30

20. The Distribution Environment for OTC (non-prescription medicines in the Czech Republic 31

20.1 Pharmaceutical Wholesalers in the Czech Republic 31

21. Pharmacies in the Czech Republic 32

21.1 Leading Pharmacy Chains in the Czech Republic 33

21.2 Internet Pharmacies and Distance Selling of Pharmaceuticals in the Czech Republic 33

Slovak Republic 34

22. Introduction - The Slovak Republic OTC Medicines Market 34

23. Sales Split of Key Categories of OTC Medicines in the Slovak Republic 34

24. The Regulatory Environment for OTC Medicines in the Slovak Republic 34

24.1 Directives 34

24.2 Medicinal Classifications in the Slovak Republic 34

24.3 Registration of OTC Medicines in the Slovak Republic 35

24.4 Regulations on the Distribution of OTC Medicines in the Slovak Republic 35

24.5 Pricing Regulations for OTC Medicines in the Slovak Republic 36

24.6 Reference Pricing System - Reimbursed Medicines in the Slovak Republic 36

24.7 Rules on Advertising OTC Medicines in the Slovak Republic 36

24.8 Advertising Controls on OTC Medicines in the Slovak Republic 37

24.9 Patient Information Requirements for OTC Medicines in Slovakia 37

25. Trade Margins / VAT for OTC Medicines in Slovakia 37

26. Use of Trade Marks for OTC Medicines in Slovakia 38

27. The Distribution Environment - Slovak Republic 38

27.1 Pharmaceutical Wholesalers in Slovakia 38

27.2 Pharmacies in Slovakia 39

Slovenia 40

28. Introduction - The Slovenian OTC Market 40

29. Sales Split of Key Categories 40

30. The Regulatory Environment for OTC Medicines in Slovenia 41

30.1 Directives 41

30.2 Medicinal Classifications for OTC Medicines in Slovenia 41

30.3 Registration of OTC Medicines in Slovenia 41

30.4 Regulations on the Distribution of OTC Medicines in Slovenia 42

30.5 Pricing Controls on OTC Medicines in Slovenia 42

30.6 Rules on Advertising OTC Medicines in Slovenia 42

30.7 Patient Information Requirements for OTC Medicines in Slovenia 42

31. Trade Margins / VAT for OTC Medicines in Slovenia 43

32. Use of Trade Marks for OTC Medicines in Slovenia 43

33. The Distribution Environment - Slovenia 43

33.1 Pharmacies in Slovenia 43

33.2 Internet Pharmacies and Distance Selling of Pharmaceutical Products in Slovenia 43

In Brief - Distribution of OTC Medicines in the Baltic States - Estonia, Latvia and Lithuania 44

34. The OTC Medicine Market in Estonia - in Brief 44

34.1 Regulation of Medicines in Estonia 44

34.2 Reimbursement of OTC Medicines in Estonia 45

34.3 Pricing of Pharmaceuticals in Estonia 45

34.4 Distribution Channels for OTC Medicines in Estonia - Pharmaceutical Wholesalers and Pharmacies 45

35. The OTC Medicine Market in Latvia - in Brief 46

35.1 Regulation of OTC Medicines in Latvia 46

35.2 Reimbursement of OTC Medicines in Latvia 47

35.3 Pricing of Pharmaceuticals in Latvia 48

35.4 Distribution Channels for OTC Medicines in Latvia - Pharmaceutical Wholesalers and Pharmacies 48

36. Lithuania in Brief 49

36.1 Regulation of Medicines in Lithuania 49

36.2 Reimbursement of OTC Medicines in Lithuania 49

36.3Pricing of Pharmaceuticals in Lithuania 50

Chapter 15 Conclusions of the Report Embracing Change - OTC Distribution in Europe

1. Main Change Drivers in the Consumer Healthcare Supply Chain in Europe 1

1.1 Major Factors Driving Change in the European Market for Non-prescription and OTC Medicines 1

2. Implications of the Radical Reform of Reimbursement, Pharmacy Establishment and Maintenance of Retail Pricing for Non-prescription OTC Medicines in Germany in 2004 3

2.1 De-reimbursement of almost all medicines not requiring a doctors prescription for adult use in Germany 3

2.2 Abolition of resale price maintenance on non-prescription medicines in Germany 4

2.3 Partial deregulation of pharmacy ownership restrictions to permit a single pharmacist to own up to four pharmacies 4

2.4 Legitimisation of Internet pharmacies following a ruling from the European Court in Germany 5

3. The Implications of the rapid Growth of large Virtual Pharmacy Chains in Europe 5

4. Implications of the Concentration of Pharmaceutical Wholesalers Buying Power across European Borders and Vertical Integration into Retailing 7

5. Implications of the accession of Poland, Hungary, Czech Republic, Slovakia, Slovenia and the Baltic States into the European Union in 2004 8

5.1 Attractiveness of the Accession States for the Non-prescription and OTC Medicines Industry 9

6. Implications surrounding the Legitimisation of the Internet Pharmacy in the European Union 10

7. Implications of Deregulation of OTC distribution channels through general sale lists (GSL) of selective OTC medicines 11

8. The Implications of Mass-Market Operator Strategies in the European OTC Medicines Market 13

8.1 Mass Market Influences on Brand Market Shares of OTC Medicines in Europe 14

9. De-reimbursement of Medicines not requiring a Doctors Prescription in France 15

10. The Changing Consumer Healthcare Market - Estimating the Speed of Change by Exploring Regulatory Freedoms in Europes Main Markets for OTC Medicines 16

10.1 Main European States Ranked by Marketing Freedoms for OTC Medicines 17

10.2 Main European States Ranked by Pharmacy Regulatory Freedoms 17

10.3 Main European States OTC Medicines Markets Ranked by Total Regulatory Freedoms 18

11. The Key Challenges to OTC Medicines Manufacturers in Europe 19

11.1 Supplier Decisions in Response to Changes in Europe 20

12. Conclusions - Embracing Change in the European Consumer Healthcare Market 22