OTC Healthcare in Australia

Abstract

Why buy this report

• Get insight into trends in market performance
• Pinpoint growth sectors and identify factors driving change
• Identify market and brand leaders and understand the competitive environment

Product coverage

Adult mouthcare; Allergy care; Analgesics; Calming and sleeping products; Child-specific OTC healthcare; Cough; cold and allergy (hay fever) remedies; Digestive remedies; Ear care; Emergency contraception; Eye care; Medicated skin care; NRT Smoking cessation aids; OTC obesity; OTC statins; OTC triptans; Vitamins and dietary supplements; Wound treatments

Executive summary

Slow but favourable growth

In 2006, OTC healthcare sales in Australia continued to grow steadily, despite some cough, cold and allergy remedies switching from S2 to S3 classification. The key factors that led to growth in sales were the rising obesity numbers, the increase in the number of babies, the growing ageing population, increasingly stressful lifestyles leading to self-medication for prevention purposes and the weather as an unforeseeable factor. In addition, with the increase in advertising campaigns, such as the use of media and the internet to educate the public, and the stricter regulatory regime against exaggerating claims for products, consumers are now aware of the products that are suitable and offered with more choices as well as tools to help self-medicate.

Vitamins and dietary supplements still the biggest OTC healthcare sector

Vitamins and dietary supplements continued to account for the biggest share in OTC healthcare sales over the review period. Vitamins and dietary supplements grew in 2006, helped by another strong performances by glucosamine. Over the forecast period, vitamins and dietary supplements sales will continue to increase based on key factors such as prevention being better then cure. More people want to remain healthy and one of the options for doing this is to take natural healthcare products.

Symbion Health Ltd the leader in OTC healthcare

In 2006, Symbion Health Ltd was the leading player in OTC healthcare in Australia, following closely by Pfizer ESP Pty Ltd and Blackmores Ltd. Symbion Health Ltd was established after the demerger of Mayne Group Ltd in 2005. The split involved the global pharmaceutical business (Mayne Pharma) and the domestic healthcare business (Mayne Diagnostic Services, Mayne Pharmacy and Mayne Consumer Products). Blackmores Ltd trailed Symbion Health Ltd in OTC healthcare in vitamins and dietary supplements, which make up a large portion of OTC healthcare sales. No single companies had emerged to monopolise OTC healthcare, despite the trend of mergers and acquisitions that is ongoing among several big pharmaceutical companies, such as Pfizer' s sale of its OTC medication division to Johnson & Johnson in the global pharmaceutical business.

Private label affecting OTC healthcare sales

Private label is gaining value sales in the majority of the OTC healthcare sectors, particularly in analgesics, cough, cold and allergy remedies, digestive remedies, medicated skin care and vitamins and dietary supplements. The strong increase could be due to the major expansion by pharmaceutical companies in retail. Another factor contributing to the increase could be that consumers are switching to private label owing to the fact that private label offers value for money, providing the same effective treatment, but at a lower price. Private label has a negative impact on smaller companies, affecting values sales of these smaller companies.

Steady but not spectacular forecast period performance expected

Over the forecast period sales of OTC healthcare products will continue to experience flat growth. The main activities undertaken by manufacturers in OTC healthcare will focus on advertising to generate sales as well as to educate the public about products and brands. More new innovative products will emerge in the future. Players that are currently in OTC healthcare could look into potential growth areas within the market while players from other areas might enter OTC healthcare, making for a more competitive environment moving forward. Generics will expand in the next few years as more patented medicines expire. Price competition will remain in the limelight as the competitive environment heats up.