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14 August 2015

COMPANY NEWS 2 Pfizer abandons its plan to Celesiosecures deal to 2 expand LloydsPharmacy Ciplatoreceive OTCinvestment 2 take Lipitor OTC in the US Teva snaps up Actavisand 3 abandons pursuit of Mylan Nestléopens up innovationhub 3 fizer has abandoned its attempt to switch PLipitor from prescription to OTCstatus Bayersells Biovital line 4 in Poland to Egis in the US. Despite the setback, the firm told OTC bulletin that it “continuedtoevaluate” RB lookingtobuild 5 global VMSpresence anumber of other products forpotential Hypermarcas’Pharma sales 6 switch opportunities. increaseatsingle-digitrate APhase 3“actual use” trial intended to sim- Perrigocontinues marchintoEurope 7 ulate the OTCuse of Lipitor (atorvastatin cal- cium) 10 mg –completed in December 2014 – GSKpromises 8 Consumer Healthcare value had failed to meet its primary objectives, Pfizer said, of “demonstrating patient compliance with BoehringerIngelheimposts 9 strong riseinOTC turnover the direction to check their low-density lipo- protein cholesterol (LDL-C) leveland, after Taisho posts solid home performance 10 checking their LDL-C level, takeappropriate European expansion is 11 Ian Read, Pfizer’s chief executive officer,said action based on their test results”. not apriorityfor Prestige despite the failureofthe Lipitor switch, the firm’s “Based on dialogue with the US Food & Consumer Healthcarebusiness remained a“very Sport-ph growswithThe ProteinWorks 12 valuable and growing asset” Drug Administration (FDA) and analysis of this Keybrands boostsales at Sanofi OTC 13 data, the programme wasterminated,”the com- sider making another attempt. GENERAL NEWS 14 pany explained. “I think theyare done,”LaMattina insisted. Aspokesperson for Pfizer revealed that the “I don’tthink anything came out of the trial to CrossVetpharm’s 14 firm planned to “meet with the FDAtodiscuss suggest that if things were set up alittle differ- Coliefclaim rejected these results and wind down the programme ently it would work out well.” Health Canada reviewsnaloxone 14 as soon as practical”. “Pfizer ran the trial that the FDAwanted,” PAGB says time is now for self-care 15 Speaking as Pfizer announced the results he pointed out. “The companyasked the agency AESGPworriesabout 16 of the Lipitor trial –and reported its second- what it needed to do to get Lipitor OTCap- med devices impact quarter results –chief executive officer Ian provedand Pfizer set out to try and do it, but Franceexpands ‘free access’ list 17 Read said that despite the failure of the switch it didn’twork out.” Consumer Healthcareremained a“very valu- Commenting on the FDA’sattitude toward MARKETING NEWS 18 able and growing asset”. switch, LaMattina claimed that the agencywas “Consumer Healthcare is atremendousbusi- “worried about giving easier access to anysort Elevitfertilitysupplement 18 ness, with atremendousstore of value,”hein- of drug, particularly one for achronic condition”. makes debut in Germany sisted, “and we will continue to invest in it.” “I think the FDAfeels more comfortable Dioralyte gets £1mn campaign 18 Noting that Pfizer continued to evaluate with control overthese sort of drugs,”hesaid. GSKset to add plasters 19 other products for switch, Read refused to be In addition,LaMattina noted that the agency to Voltarol lineinthe UK drawnwhen pressed by analysts on where the might have been “a little more reluctant” to Blend structure and flexibility 20 firm’snextswitch might come from. approve the switch due to recent safety con- to go global “I don’twant to get into that because it’s cerns that have emerged around certain well- FEATURES 24 confidential and releasing that information helps established OTCmedicines. our competitors,”heexplained. “The FDAisvery worried at the moment Fight for executive talent 24 “I think you can look at our portfolio and about OTCpain medicines,”hepointed out, not- heating up makeassumptions on your ownastowhich ing “the agencykeeps issuing warnings around products are more likely to be switched or not.” cardiovascular risks associated with non-ster- REGULARS Speaking to OTC bulletin about the failed oidal anti-inflammatorydrugs (NSAIDs)”. switch, John LaMattina, senior partner at Pure- Last month, the FDA“strengthened” an Events – Our regularlisting 23 Tech Ventures –and president of research and existing label warning for non-aspirin NSAIDs People – Taylor to replaceLafley 28 development at Pfizer from 2004 to 2008 –said better to highlight that the products can in- as P&Gchief executive it wasunlikely that the companywould con- ■ Continued on page 12 OTC14-08-15p2-13_Layout 1 11/08/2015 16:07 Page 2

OTC COMPANY NEWS

Mergers&Acquisitions/First-QuarterResults BusinessStrategy Celesiosecures deal to Cipla to receive expand LloydsPharmacy OTC investment ipla has secured financial backing for its elesio is set to expand the reach of Lloyds- ness we have grown overthe last 20 years.” Cnewly-formed consumer healthcare sub- CPharmacyinthe UK, after agreeing to ac- LloydsPharmacyisthe UK’ssecond-biggest sidiary from private-equity companyFidelity quire the pharmacybusiness of supermarket retail pharmacychain –behind Boots UK – Growth Partners. chain Sainsbury’sfor £125 million (C177 mil- operating more than 1,500 stores across the Askedabout the details of Fidelity’sinvest- lion). The deal is expected to close by the end country.Itforms part of the German-based ment, aspokesperson for the nearly US$2.0 of February 2016. company’sConsumer Solutions division, which billion- (C1.8 billion-) turnoverIndian generics Under the terms of the agreement, Celesio posted sales up by 20.5% in its first quarter firm told OTC bulletin that Cipla would not said it would rebrand and operate all 277 of ended 30 June 2015. reveal “anyfigures” as the deal was“subject to Sainsbury’sexisting in-store pharmacies and its Consumer Solutions’ turnoverhad advanced final regulatory approvals”. four hospital-based outlets under the Lloyds- to C1.0 billion, the firm said, thanks to a“strong Commenting on the agreement,Samina Pharmacybanner.Inaddition, Sainsbury’swill performance” in Italy,Norway and the UK. Vaziralli, an executive director of Cipla, claim- receivecommercial annual rent payments from Celesio did not give Consumer Solutions’ ed that partnering with a“long-term strategic LloydsPharmacyfor each location. sales for each individual market. and financial investor likeFidelity” would help Marc Owen, chairman of Celesio’smanage- Consumer Solutions’ earnings before inter- the companyto“create abest-in-class consumer mentboard, said the deal represented an “im- est and tax (EBIT) had increased by 28.8%, healthcarebusiness”. portant milestone” for the firm as it “continued Celesio noted, drivenprimarily by the sales Raj Dugar,Fidelity’ssenior managing direc- to invest in LloydsPharmacy”. growth in Italy, Norway and the UK. tor, said the firm was“very excited” to work “Our collaboration with Sainsbury’swill The Consumer Solutions division accounted with Cipla to enter the “nascent butrapidly helptoimprove the health and wellness of our for 19% of Celesio’stotal sales in the period, growing” Indian consumer healthcaremarket. mutual customers,”Owen added. which advanced by 7.0% to C5.3 billion. “This is aunique opportunity for us to part- Noting that pharmacyservices were “incred- Celesio’sdominant PharmacySolutions ner with Cipla to build arobust platform that ibly popular with Sainsbury’scustomers”, the wholesale business posted a4.1% rise in sales delivers differentiated, high-quality products retailer’schief executive,MikeCoupe, said the to C4.3 billion in the three months. EBIT at the to the Indian consumer,” Dugar insisted. companywas “delighted to be teaming up with PharmacySolutions unit improvedby2.3% “Using our combined knowledge and re- LloydsPharmacy” to develop its offer. to C68 million. sources,”hecontinued, “we intend to provide “Working together with aspecialistoperator Celesio is nowoperating as part of Mc- OTCproducts that will bring significant bene- likeLloydsPharmacywill enable us to grow Kesson and is housed in the US wholesaler’s fits to the consumer.” and extend our pharmacyservices to custom- Distribution Solutions division, led by group Fidelity’sinvestment came less than two ers,” Coupe explained, “whilst realising value president Paul Julian. weeks after Cipla announced it wastospin-off for shareholders today from the pharmacybusi- OTC its consumer healthcare business into awholly- owned subsidiary, totakeadvantage of the “shift towards wellness and self-care” (OTC bulletin, 24July 2015, page 2). The transfer is set to be completed during the third quarter of 2015. Cipla claimed at the time that the move would allowthe companytodevelop consumer healthcareasa“strong, customer-focused busi- ness with operational independence”. By operating independently, the consumer healthcarebusiness would also be in abetter position to “develop expertise” in the fast-mov- ing consumer goods (FMCG) segment, Cipla pointed out. Cipla’sOTC portfolio currently consists of one product –smoking-cessation treatment Nicotexnicotine gum –which the company launched last year into the Indian market. Aswitch from Cipla’sprescription medi- cines business, Nicotexhad already generated sales of INR350 million (C5.10 million) since its launch, the firm said. OTC

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COMPANY NEWS OTC

BusinessStrategy Mergers&Acquisitions Nestlé opensup Teva snaps up Actavisand innovation hub abandons pursuit of Mylan estlé Skin Health has opened an “innova- Ntion hub” in Shanghai, in amove the firm eva will acquire Allergan’sActavis generics ternational OTCcommercialunit –excluding claims will help it to develop products to meet Tbusiness for US$40.5 billion (C36.9 billion), OTCeye-care products –and some established Chinese consumers’ “growing skin-care needs”. following adefinitive agreement signed between international brands”. The transaction would The newly-opened Skin Health Investiga- thetwo firms. At the same time, the Israeli com- “accelerate Allergan’sevolution into abranded tion, Education and Longevity Development pany has abandoned its pursuit of Mylan. The growth pharma leader” and “enable asharpened (SHIELD) centre had been built to “foster deal for Actavis –comprising US$33.75 billion focus on expanding and enhancing our global breakthroughs and collaboration in skin health in cash and US$6.75 billion in Teva shares – branded pharmaceutical business”, the firm said. through medical investigation and education”, “best positions Teva to succeed in today’sin- Teva insisted that the deal would reinforce the firm noted, and would establish China as dustry landscape”, the Israeli firm insisted. its OTCbusiness. The firm’shead of Global an “anchor in Nestlé Skin Health’sglobal in- The transaction creates acompanywith “pro- Generic Medicines, Siggi Olafsson –who join- novation network”. forma revenues of around US$26 billion and ed Teva from Actavis ayear ago following the Commenting on the move,Humberto An- combined earnings before interest, tax, depreci- latter’sUS$25 billion acquisition of Forest – tunes, Nestlé Skin Health’schief executive offi- ation and amortisation (EBITDA) of approx- said Teva would hold talks with Procter & cer, said that the SHIELD centre would “serve imately US$9.5 billion anticipated in 2016”, Gamble (P&G) to decide howbest to handle as aplatform for collaboration and innovation”. with about US$11 billion of these sales coming the marketing of Actavis’ OTCportfolio. “Wewill engage with scientists and health- outside the US. Having been unanimously ap- Olafsson said Teva wascurrently “very pleas- care professionals,”Antunes explained, “to cre- provedbyAllerganand Teva’s boards, the deal ed” with the progress of its OTCjoint venture ateanenvironment where medicines and tech- is expected to close in the first quarter of 2016. with P&G and remained committed to the OTC nologies can be combined with bio-informatics Teva expects synergies and tax savings of business, citing an “aligned perspective”with to develop preventative, diagnostic treatment around US$1.4 billion annually within three its partner. strategies to advance the next generation of years of closing the transaction, “by eliminat- “This strategic acquisition brings together skin-health regimens.” ingduplication and inefficiencies on aglobal twoleading generics businesses with comple- Nestlé Skin Health wasestablished as a scale and capturing economies of scale”. mentary strengths, brands and cultures,”Teva wholly-owned subsidiary of the Swiss food Allergannoted that the deal included the insisted. “The resulting world-class product anddrinks giant in June last year, after the firm firm’s “legacy Actavis global generics business, portfolio will be complemented by asignificant- acquired from L’Oréal the 50% stakeinGal- including the US and international generics com- ly expanded and more efficient global footprint,” dermaitdid not own(OTC bulletin, 21Feb- mercial units, third-party supplier Medis, global the firm stated, with “a commercial presence ruary 2014, page 1). generics manufacturing operations, the global across 100 markets”. OTC generics researchand development unit, the in- OTC

14 August 2015 Number 447 Individual subscriptions Te rms &Conditions: An annual subscription comprises: These can be viewedinfull at Editor: Matt Stewart www.OTC-bulletin.com/subscribe. Editor-in-Chief: Aidan Fry ■ 20 OTC bulletin newsletters; ■ AND at least 45 weekly news@OTCbulletin No partofthis publication maybe copied, reproduced, Production Editor: Jenna Meredith stored in aretrieval system, distributed or transmitted by electronic newsflashes containing the week’s Assistant Editors: To mGallen, Marie McEvoy anymeans, including electronic,mechanical, photocopying top news stories (currentlydelivered by email). Contributing Editor: David Wallace or recording, without the prior written permission of the publisher,orunder the terms and conditions of Advertising Controller: Debi Minal Choice of formats aGlobal Site Licence or of alicence issued by the Director of Subscriptions:ValDavis The 20 OTC bulletin newsletters are available: Copyright Licensing Agency (CLA) in London, UK, or Group Sales Manager: Rob Coulson ■ EITHER as the digital OTC bulletin-i for rights bodies in other countries that have reciprocal Awards Manager: Natalie Cornwell online access by desktop,and tablet and agreements with the CLA. Managing Director: Mike Rice smartphone.Mobile devices can have Apple or Neither maythis publication be exported, distributed Android operating systems. or circulated by anymeans without the prior written Editorial enquiries: OTC bulletin, ■ OR in traditional hard-copyprint format, permission of the publisher. 4Poplar Road, Dorridge,Solihull, delivered by airmail. While due care has been taken to ensure the accuracy West Midlands B93 8DB, UK. of information contained in this publication, the Website: www.OTC-bulletin.com Corporate and multiple subscriptions publisher makes no claim that it is free of errorand Te l: +44 (0)1564 777550 Global Site Licences are available to companies. disclaims anyliability whatsoeverfor anydecisions or Fax: +44 (0)1564 777524 These provide in-house electronic access for actions taken as aresult of its contents. Email: [email protected] staff to OTC bulletin and news@OTCbulletin. ©OTC Publications Ltd. All rights reserved. ® Please ask foraquotation. OTC bulletin is registered as atrademark in Advertising enquiries: the European Community. Discounted multiple subscriptions are available to As above,[email protected] ISSN 1742-0784. OTC bulletin-i at the same location. SUBSCRIPTIONS Companyregistered in England No 2765878. Subscription rates are published at Subscription enquiries: Printed by Warwick Printing CompanyLimited, www.OTC-bulletin.com/subscribe. Contact [email protected] Leamington Spa CV31 1QD,UK.

14 August 2015 OTC bulletin 3 OTC14-08-15p2-13_Layout 1 11/08/2015 16:07 Page 4

OTC COMPANY NEWS

Mergers&Acquisitions/Second-QuarterResults Bayersells Biovitalline in Poland to Egis

ayer is set to offload its Biovital line of Business Second-quarter sales Change EBIT Change Bvitamins for adults and children in Poland (C millions) 2014/2015 (%) (C millions) 2014/2015 (%) to Hungary’sEgis Pharmaceuticals for an un- disclosed sum. Pharmaceuticals 3,492 10.7 706 +7.6 The deal includes twoproducts for adults Consumer Care1,590 +70.6 –– aged 50 or overtosupport heart health and the Animal Health 428 +19.6 –– nervous system, along with the Kinder Biovital Medical Care398 +9.0 –– children’svariant, which is available in four dif- Consumer Health 2,416 +46.0 362 +33.6 ferent formats, includingbear-shaped gummies. Total Bayer HealthCare5,908 +28.0 1,068 +15.2 Egis said acquiring the brand would make it a“major player” in Poland’snon-prescrip- Figure1:Breakdown of Bayer HealthCare’s sales and earnings beforeinterest and tax (EBIT) in the second tion market, adding to the firm’sstrong positions quarter of 2015 (Source –Bayer) in its domestic market and in Russia. Loratadine-based Claritin is nowBayer’s Merck brands and the local OTCfirm Dihon Meanwhile, Bayer announced a70.6% rise biggest-selling OTCbrand, accounting for 11% Pharmaceutical –which the companysnapped in sales at its Consumer Care business to C1.59 of Consumer Care’ssecond-quarter sales, while up last year (OTC bulletin, 17March 2014, billion in the second quarter of 2015, as the theCoppertone sun-care line is nowthe com- page 1) –had held back organic Consumer Care German firm continued to feel the impact of ac- pany’sfourth-largest consumer range, sitting sales in the country,Bayer admitted. quiring Merck &Co’sConsumer Care busi- just behind the Aleve and Aspirin analgesics However, Consumer Care’sChinese oper- ness late last year (OTC bulletin, 10October brands (see Figure 2). ation had reached asignificant milestone in the 2014, page 1). Geographically,adrop in Consumer Care’s quarter, the companyrevealed, with sales rising Brands gained through the Merck buy–in- organic US sales had been offset by abetter to C100 million for the first time. cluding Claritin, Coppertone, Dr Scholl’sand performance in Europe and Latin America/ The Consumer Care business accounted for MiraLAX –had contributed C528 million to Africa/Middle East, Bayer noted. 66% of turnoveratBayer’sConsumer Health the result, the companynoted. Meanwhile, in China, integrating both the division in the second quarter, which advanced by 46.0% to C2.42 billion. Sales movedforward Brand (business unit) Second-quarter sales Change 2014/2015 (%) at the slower rate of 4.0% when adjusted for (C millions) C CER* currencyand portfolio effects. Advantage (Animal Health) 169 +20.7 +3.9 Consumer Care is set to play an even bigger Claritin 167 ––role in the Consumer Health division, after Bayer announced in June that it wasselling its Aleve/naproxen 120 +44.6 +19.9 Diabetes Care business –which is part of the Aspirin** 101 +9.8 +0.2 Medical Care unit, along with the company’s Coppertone 99 ––radiology products –toPanasonic Healthcare Bepanthen/Bepanthol88-3.3 +6.9 Holdingsfor C1.02 billion (OTC bulletin, 26 Ultravist (Medical Care) 84 +10.5 +2.9 June 2015, page 1). Dr Scholl’s78–– Bayer’stop-10 Consumer Health brands Gadovist (Medical Care) 71 +24.6 +12.1 formed 43% of divisionalsales, up by 6% from Canesten 65 -1.5 +4.6 the prior-year period. North America overtook Europe in the three Top-10 total 1,042 +72.2 +53.5 months to become Consumer Health’sbiggest Consumer Health total 2,416 +46.0 +4.0 regioninterms of sales, reflecting the addition *CER is constant exchange rates of the Merck brands. ** Total Aspirin sales –including Aspirin Cardio, which is part of the Pharmaceuticals division –were C228 million Turnoverinthe region more than doubled Figure2:Sales of the top-10 best-selling brands in Bayer’s Consumer Health division in the seond quarter of –arise of 85.4% adjusted for currencyeffects – 2015. Brands arepartofthe Consumer Carebusiness unit unless stated (Source –Bayer) to C1.08 billion (see Figure 3). Sales in Europe improvedatasingle-digit Region Second-quarter sales Change 2014/2015 (%) (E millions) C CER* rate, with turnoverupby4.5% to C625 million. When adjusted for currencyeffects, turnover North America 1,082 >100 +85.4 in the region grewby4.8%. Europe 625 +4.5 +4.8 The Merck brands had also contributed to Asia-Pacific 384 +40.7 +27.5 “robust growth” in the division’semerging mar- Latin America/Africa/Middle East 325 +20.8 +23.8 kets, Bayer noted, with turnoverinthe Asia- Consumer Health total 2,416 +46.0 +4.0 Pacific region up by 40.7% to C384 million, and salesinthe Latin America/Africa/Middle East *CER is constant exchange rates region ahead by 20.8% to C325 million. Figure3:Breakdown of Bayer Consumer Health’s sales in the second quarter of 2015 by region (Source –Bayer) OTC

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COMPANY NEWS OTC

BusinessStrategy/First-HalfResults RB lookingtobuild global VMS presence

eckitt Benckiser (RB) is focused on be- Business First-halfsales Change 2014/2015 (%) Proportion Rcoming the first “meaningfulbranded play- (£ millions) £CER* of total (%) er” in the global vitamins, minerals and supple- ments (VMS) market, according to the firm’s Hygiene 1,834 ±0 +3 42 chief executive officer Rakesh Kapoor. Health 1,370 +10 +15 32 Speaking as the companyannounced its re- Home 833 -4 ±0 19 sults for the opening six months of 2015, Ka- Portfolio Brands/Food 319 -16 -14 7 poor said if RB wasable to establish the first Total Reckitt Benckiser 4,356 +1 +4 100 truly global VMS brands ahead of its competi- tors, the prize would be “huge”. *CER is constant exchange rates “There is no meaningful branded player in Figure1:Reckitt Benckiser’s sales in the first half of 2015 by business (Source –Reckitt Benckiser) theVMS market,”Kapoor insisted, “and this is ahuge market.” letin, 17January 2014, page 15). of the company’stotal sales, while the firm’s “Imagine the prize for cracking this market, Meanwhile, RB posted sales up by 1% to Hygiene operation generated 42%, and its Home versus the effort required,”hesaid. £4.36 billion (C6.19 billion) in the opening six category 19%. The remainder came from the Creating global VMS brands would take months of 2015. Excluding negative currency company’sPortfolio Brands and Food products. time, Kapoor admitted, butRBwas committed effects, turnovergrewby4%. On aregional basis, overall group sales in to making it happen. Sales in the firm’sHealth category advanced Europe and North America (ENA) –which also “Our ambition to create aglobal VMS busi- by 10% –15% at constant exchange rates –to includes Australia/NewZealand, along with nesshas not diminished and remains strong,” £1.37 billion (see Figure 1). Russia and the Commonwealth of Independent Kapoor said. “Weremain very focused on the “Broad-based growth” across its Health States (CIS) –fell back by 2% to £2.79 billion long-term opportunity here.” ‘power brands’ –including Durex, Gaviscon and due to negative currencyeffects (see Figure 2). RB first entered the VMS market in 2012 Scholl/Amopé –had driventhe increase in sales Commenting on the regional performance, when it acquired SchiffNutrition International at the unit, RB said. RB said ENAhad been boosted by astrong for US$1.4 billion (C1.09 billion) (OTC bul- Scholl/Amopé had produced an “outstand- showing from certain healthcare brands, includ- letin, 18December 2012, page 1). The deal ing performance”, RB pointed out, with the suc- ing Airborne, Move Free and Scholl/Amopé. added the Airborne, Digestive Advantage, Mega- cessful launch of Scholl Velvet Smooth Express RB’sDeveloping Markets, or DvM, report- Redand Move Free supplements to the firm’s Pedi in anumber of markets around the world ing region –consisting of the Middle East, Health portfolio. and the introduction of GelActivinsoles. North Africa and Turkey,Sub-Saharan Africa, Noting that RB wasstill in the “early stages” Furthermore, Durexand Gaviscon had also andLatin America, as well as North Asia and of developing the Schiffportfolio, Kapoor said been stand-out performers during the six months, South and South-East Asia –posted sales up the companyneeded to “keep at it”. the companynoted. Durexhad been boosted by 5% to £1.40 billion. “Wehavefour great VMS brands, butwe by sales of the RealFeel condom line extension, OTC need to continue to learn about the market and RB explained, while Gaviscon had enjoyed the to makesteady progress,”heexplained. benefits of increasedmarketing support. As part of this strategy,Kapoor revealed that Growth in the Health category had been IN BRIEF RB intended to roll out its Airborne immunity- tempered by Mucinex, RB said, with rising sales ■ CHURCH &DWIGHT reported turnover support supplements into a“number of Euro- of the brand’scough, cold and sinus products at its US Personal CareProducts unit up by pean markets” during the second half of 2015. offset by lower sales of the MucinexAllergy 1.5% to US$247 million (C226 million) in the The planned roll-out of Airborne into Europe line, which had benefitted in the first six months second quarter of 2015, thanks to higher sales follows the launch of MegaRed heart-health of the prior year from launch stocking. of Trojan condoms. Noting that the Trojan supplements in the region last year (OTC bul- RB’sHealth business accounted for 32% condom range had enjoyed a“solid quarter”, the firm revealed that it planned to develop Region First-half sales Change 2014/2015 (%) Proportion the brand further with araft of “major new (£ millions) £CER* of total (%) product launches”. US Personal Care Products Europe and North America** 2,791 -2 +3 64 accounted for 39% of Church &Dwight’s Developing Markets*** 1,397 +5 +6 32 Consumer division’sdomestic sales, which ad- Food**** 168 +11 +3 4 vanced by 6.6% to US$638 million. The firm’s US Household Products business made up the Total Reckitt Benckiser 4,356 +1 +4 100 remaining 61% of the Consumer division’s *CER is constant exchange rates domestic turnover. International Consumer sales ** Europe and North America region also includes Australia/NewZealand, along with Russia and the Commonwealth of slipped back by 4.2% to US$131 million. With Independent States (CIS) *** Developing Markets region consists of the Middle East, North Africa and Turkey,Sub-Saharan Africa, and Latin Specialty Products turnoverimproving by 7.0% America, as well as North Asia and South and South-East Asia to US$77.9 million, total group sales grewby **** Food is not reported as part of anyregion 4.8% to US$847 million. Figure2:Reckitt Benckiser’s sales in the first half of 2015 by region (Source –Reckitt Benckiser) OTC

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OTC COMPANY NEWS

Second-QuarterResults Second-QuarterResults Hypermarcas’ Pharma sales Meda preparing increase at single-digit rate for next big deal eda has “mostly completed” the process ypermarcas reported sales at its Pharma and radio in the second quarter for brands such Mof integrating Rottapharm into its busi- Hdivision up by 7.7% in the second quarter as the Coristina Danalgesic and the Engoval- ness and is nowgearing up for asimilar “trans- of 2015, drivenbyincreased demand for its port- lergy treatment. formational”acquisition, according to the firm’s folio of OTCbrands and prescriptiongenerics. In addition to these campaigns, Hypermar- chief executive officer Jörg-Thomas Dierks. The Brazilian firm noted that turnoveratits cas noted that it had expanded its use of “digital Speaking as the Swedish companyannounc- dominant Pharma unit –which comprises the channels” in the three months, with marketing ed its second-quarter results, Dierks said with Dorsay Monange OTCbusiness, together with support for its Benegrip cold and flu line on only a“fewsteps” remaining to complete the its prescription interests –had risen to BRL696 social-media sites Facebook and YouTube. integration of Italy’sRottapharm –which the million (C184 million) in the three months. The Pharma division accounted for 55% of firm snapped up for SEK21.2billion (C2.30 Driving the performance had been intensive Hypermarcas’ total second-quarter sales, which billion) last year (OTC bulletin, 15August marketing support of the company’sOTC advanced by 10.8% to BRL1.26 billion. 2014, page 3) –Meda wasnow focused on brands, Hypermarcas pointed out, along with The Consumer division –which comprises “building amergers and acquisitions pipeline the expansion of its generics portfolio. all the firm’sbeauty and personal-care brands – for the next step forward”. Commenting on the marketing activity be- generated the remaining 45%, with sales up by Dierks revealed in May that Meda had re- hind its OTClines, the firm said that more than 15.0% to BRL560 million. viewed anumber of opportunitiestogrowits 20 advertising campaigns had run on television OTC OTCand prescription businesses as part of its strategy to secure a“major” acquisition in 2016 (OTC bulletin, 22May 2015, page 13). Meanwhile, Meda reported OTCsales of SEK1.83 billion in the second quarter, upfrom SEK890 million in the prior-year period, thanks to the addition of Rottapharm.

Boost from Rottapharm Acquiring Rottapharm had boosted Meda’s Make sure your colleagues are OTCbusiness with arange of clinically-proven, non-prescription brands, the firm noted. as well informed as you Rottapharm had contributed almost half of Meda’sOTC turnoverinthe period, the com- Make sure your fellow directors and executives get the latest panypointed out, mainly through sales of the consumer healthcare news and exclusive insights from OTC bulletin. Dona glucosamine range and Saugella femi- Empower them to make informed decisions and take decisive actions nine-hygiene line. to keep your business ahead of its competitors. Make sure your Meda highlighted that OTCturnoverinthe three months had been held back by lower company has a Corporate Subscription. sales of its CB12 oral-care range. Noting that sales of CB12 had fallen by 4% Business benefits to SEK86 million, Meda said the brand had “not entirely liveduptoexpectations” in the period. OTC bulletin is available However, Meda explained it washopeful electronically worldwide to all Executives in the that sales of CB12 would soon pick up, as a company executives world’sleading OTC companies are already newglobal marketing campaign for the range Keeps your business up-to-date benefitting from a with industry news and wasnow well underway (OTC bulletin,1May corporate subscription exclusive insights 2015, page 17). to OTC bulletin. A fully-searchable archive offers OTCsales accounted for 36% of Meda’s in-house research facilities total turnoverinthe second quarter, which ad- Flexible formats –desktop, vanced by 48% to SEK5.15 billion. The re- mobile and print options available mainder wasgenerated by prescription and “other” sales. Flexible access –online or via ContactVal Davis, The double-digit increase in sales helped company intranet Subscriptions Director, Meda to post an operating profit of SEK932 Modest cost –available for a at [email protected] million, up from SEK426 million in the prior- fraction of the price of multiple, or telephone +44 (0) 1564 777 550 individual subscriptions year period. OTC

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COMPANY NEWS OTC

Mergers&Acquisitions/Second-QuarterResults Perrigo continues its march into Europe

errigo’smarch into the European OTCmar- Business Second-quarter Change Operating income Change Pketcontinues, with the store-brand specialist sales (US$ millions) (%) (US$ millions) (%) set to acquire Germany’sNaturwohl Pharma and its Yokebe meal-replacement dietary sup- Consumer Healthcare746 -3 160 +18 plement brand for an undisclosed sum. Branded Consumer Healthcare401 –77– Described by Perrigo as Germany’ssecond- Prescription Pharmaceuticals 278 +10 138 +13 largest dietary supplement brand by market Specialty Sciences/Other 107 –62– share, Yokebe is expected to generate sales of Total Perrigo 1,532 +34 437 +35 around C30 million in 2015. Joseph Papa, Perrigo’schairman, president Figure1:Perrigo’s sales and operating income in the three months ended 27 June 2015 (Source –Perrigo) and chief executive officer, said the deal –to- launched an omeprazole-based store-brand com- Sales at Consumer Healthcare had fallen gether with the basket of OTCbrands it was petitor to Prilosec, the newly-approvedformu- to US$746 million, Brown noted, despite exist- set to acquire from GlaxoSmithKline (GSK) lation wasthe first exact generic version of the ing products –primarily in the smoking-ces- and Novartis (OTC bulletin, 12June 2015, national brand, and as such had been granted sation category –adding US$16 million to the page 1) –would build upon the European OTC 180-day market exclusivity. quarterly total and newproducts contributing platform the companygained when it snapped The twoapprovals were part of aUS$1 afurther US$77 million. up Omega Pharma earlier this year (OTC bul- billion pipeline of newproducts which Papa Expanding on the reasons behind the lower letin, 17April 2015, page 3). said the companyhoped to bring to market over sales, Perrigo said that it had lost US$61 mil- “With Omega’s pan-Europeandistribution the next three years. lion from discontinued products, while sales of network, strong brand-building capabilities and Turning to the firm’sresults for the three certain existing products –mainly antacids, exceptional management team, Perrigo is uni- months ended 27 June 2015, chief financial animal health and VMS lines –had dropped by quely positioned to maximise the potential of officer,Judy Brown, said that sales at the newly- US$52 million. Negative currencyeffects had these brands to capture an even greater share formed Branded Consumer Healthcare division wiped another US$12 million offthe total. of the US$30 billion (C27 billion) European –which consists of the Omega business –had Turning to the major US OTCand vitamins, OTCmarket,”Papa claimed. reached US$401 million in the period. minerals and supplements (VMS) markets, Papa The deal is expected to close by the end of This had been driven, Brown said, by an pointed out that IRI data for the 52 weeks end- the current quarter. 11% jump in sales of Omega’s top-20 brands ed 28 June 2015 showed that store-brand smok- Meanwhile, Perrigo has also expanded its on aconstant-currencybasis and the launch of ing-cessation products had filled the hole left reach in the US OTCmarket after receiving anumber of products, including the Bronchostop by supply issues which kept GSK’sNicorette approvalfrom the US Food and Drug Admin- herbal cough range and the Max Strength addi- Mini lozenges brand offretailer’sshelves (see istration (FDA) for store-brand equivalents to tion to the XLS-Medical weight-loss brand. Figure 2). Procter &Gamble’s(P&G’s) Prilosec OTC Discontinuing products, coupled with pres- Store-brand smoking-cessation products had (omeprazole magnesium) and Pfizer’sAdvil sureinthe vitamins sector and negative currency advanced by 12.5% in the period, Papa noted, Fast Relief (ibuprofen sodium). effects, had led to a3%drop in store-brand while national brands had seen turnoverdrop Papa said that while Perrigo had already Consumer Healthcareturnover(see Figure 1). back by 11.2%. Perrigo’sBranded Consumer Healthcare and Store brands Nationalbrands Total for category 20 Consumer Healthcare divisions accounted for +12.2% +12.5% threequarters of the company’stotal second- +9.7% quarter sales, which movedforward by 34% to +8.6% +7.9% +8.3% US$1.53 billion. +6.6% 10 +5.6% +5.4% +5.8% OTC +3.4% +2.4% +2.7% +2.9% +1.5% IN BRIEF th (%) 0 ow +0.7% +4.0% +2.5% +3.4% ■ ASCENDIS HEALTH –the South African -1.1% -1.9% pharmaceutical firm –has entered the Spanish -2.8% Sales gr pharmaceutical market by taking a49% stake

-10 -6.4% in Spain’s Farmalider for an undisclosed sum. Although primarily agenerics business, Farma- lider also had a“growing portfolio of inno- -11.2% vative OTCproducts”, the companypointed -20 out, which offered Ascendis’ consumer brands Analgesics Cough, cold, Diabetes Gastrointestinal Infant Smoking VMS* Total allergy, sinus formula cessation OTC division an additional route to market in Europe *VMS is vitamins, minerals and supplements and matched its strategy of investing in the high-

Figure2:Retail sales growth of major categories in the US OTC medicines and vitamins, minerals and margin OTCspace. supplements (VMS) markets in the 52 weeks ended 28 June 2015 (Source –Perrigo/IRI) OTC

14 August 2015 OTC bulletin 7 OTC14-08-15p2-13_Layout 1 12/08/2015 09:12 Page 8

OTC COMPANY NEWS

Second-QuarterResults GSK promises ConsumerHealthcarevalue

he true value of GlaxoSmithKline’s(GSK’s) Business Second-quarter sales Change Proportion Tfreshly-expanded Consumer Healthcare unit (£ millions) 2014/2015 (%)* of total (%) will become visible as the synergy benefits start to appear and the previous supply problems are Wellness 740 >100 49 puttobed, according to chief executive officer Oral health 462 +11 31 AndrewWitty. Nutrition 165 +7 11 Afull three months of sales from the prod- Skin health 142 >100 9 ucts gained through its OTCjoint venture with Novartis, combined with the continued strong Consumer Healthcare1,509 +51 100 growth of Flonase Allergy Relief (fluticasone) *Change is at constant exchange rates in the US, had led to astrong double-digit rise in second-quarter sales, Witty noted. With the Figure1:GlaxoSmithKline Consumer Healthcare’s sales in the second quarter of 2015 broken down by individual business unit (Source –GlaxoSmithKline) business set to benefit from some encouraging “tailwinds” in the remainder of the year,those February and backed by an innovative digital- Furthermore, as the integration of the two sales gains would be translated into better mar- media-focused campaign (OTC bulletin, 13 businesses had only just commenced, anysyn- gins and higher operating profits. February 2015, page 1). ergy benefits had yet to be felt, he added, al- As reported at constant exchange rates, the The Novartis brands also lifted Consumer though the process wasahead of schedule. division’ssecond-quarter sales improvedby51% Healthcare’soperating profits by 41% at con- “You are essentially looking at the inherited to £1.51 billion (C2.14 billion), primarily driven stant exchange rates to £108 million. depressed margin, which came in from Novar- by afull quarter of sales from the Novartis Con- However, Consumer Healthcare’soperating tis,”Witty said. “That is issue number one.” sumer Health business and the start of the joint profit margin only stood at around 7%, wayoff Secondly,“apoint and ahalf” had been wiped venture between the twocompanies (OTC bul- the 20% margin goal set by GSK. offConsumer Healthcare’smargin by a“tax- letin,25April 2014, page 1). Explaining the shortfall, Witty pointed out catch up settlement” in China, Witty noted, and Proforma constant-currencygrowth was6%, that the margin on the acquired Novartis port- third, wasthe success of Flonase in the US. GSK noted, reflecting the strong performance folio was“significantly below” that of GSK “Wehad avery,very strong launch of Flo- of Flonase in the US, which waslaunched in Consumer Healthcare’s. nase in the US,”Witty explained, “and we have continued to invest in advertising and promo- Region Second-quarter sales Change 2014/2015 (%)* Proportion tion behind that brand.” (£ millions) £Proforma of total (%) “Weare spendingmore on advertising and International 679 +27 -2 45 promotion in the OTCspace than somebody Europe 470 +90 +7 31 likeReckitt Benckiser (RB),”herevealed, “be- US 360 +66 +28 24 cause we have got Flonase, which is atremen- dous opportunity for us to build sustained switch Total Consumer Healthcare1,509 +51 +6 100 volumes; we have got Voltaren, ahuge product *Change is at constant exchange rates which we can continue to roll out around the Figure2:GlaxoSmithKline Consumer Healthcare’s turnover in the second quarter of 2015 by region. Proforma world; and finally,wehaveanoral-care brand sales include Novartis Consumer Health in the prior-year and 2015 period (Source –GlaxoSmithKline) in Sensodyne which has posted sales up by 18% for the quarter.” Second quarter Change 2014/2015 (%)* Proportion (£ millions) £Proforma of total (%) These margin pressures would ease overthe course of the year,Witty claimed, and Consum- Sales er Healthcare would start to benefit from “good Pharmaceuticals 3,540 -6 +2 60 tailwinds”, thanks to supply issues on certain Consumer Healthcare 1,509 +51 +6 26 brands having been rectified and the synergies Vaccines 814 +11 -5 14 from the Novartis deal starting to show. Total** 5,863 +7 +2 100 “I would anticipatethat margins will streng- then quite materially as we progress through Coreoperating profit the next couple of quarters,”Witty pointed out. Pharmaceuticals 1,116 -1 +11 80 “Weare on track to hit our medium-term out- Vaccines 177 -32 -10 13 look of amargin of at least 20%.” Consumer Healthcare 108 +41 –7Meanwhile, reported turnoveratConsumer Total*** 1,349 +3 +14 100 Healthcare’sWellness category –which con- tains the bulk of the division’sOTC medicines – *Change is at constant exchange rates ** Excluding corporate and other unallocated turnoverof£25 million more than doubledatconstant exchange rates *** Excluding corporate and other unallocated costs of £52 million to £740 million with the addition of the Nov-

Figure3:GlaxoSmithKline’s ‘core’ sales and operating profit in the second quarter of 2015. Coreresults artis brands (see Figure 1). exclude amortisation, goodwill, restructuring costs, legal charges and other items (Source –GlaxoSmithKline) Sales had also been boosted by the perform-

8 OTC bulletin 14 August 2015 OTC14-08-15p2-13_Layout 1 11/08/2015 16:07 Page 9

COMPANY NEWS OTC

Second-QuarterResults First-HalfResults Vitamin Shoppe Boehringer Ingelheim posts posts small rise strongrise in OTC turnover itamin Shoppe reported turnoverupby V5.3% to US$322 million (C295 million) oehringer Ingelheim said sales at its Con- Mucosolvan cough and cold products, and in the second-quarter of 2015, as sales were Bsumer Health Care business in the open- Pharmaton multivitamins –all generating sales boosted by the company’sacquisition of con- ing six months of 2015 had improvedby8% “significantly” over C100 million. tract manufacturer Nutri-Force Nutrition. when adjusted for currencyeffects, thanks to Speaking to OTC bulletin ayear ago, Joa- Snapping up Nutri-Force in June last year astrong cough and cold season. chim Hasenmaier, head of Boehringer Consumer for around US$85 million (OTC bulletin, 16 Consumer Health Care’sturnoverjumped to Health Care, said that the firm had been “explor- June 2014, page 6) had lifted Vitamin Shoppe’s C782 million in the first half of the year, the ing external growth opportunities”and further contract manufacturing turnovertoUS$24.7 privately-owned German firm pointed out, ac- “recognising the interesting growth perspectives million in the three months, the US-based nat- counting for atenth of its total group sales, and sustainability of Consumer Health Care as- ural products retailer said, up from US$5.01 which had edged up by 2% when adjusted for sets” (OTC bulletin, 30May 2014, page 24). million in the prior-year period. currencyeffects to C7.4 billion. Hasenmaier insisted that the US, China and Based in Florida, US, Nutri-Force manu- The rise in sales follows a2014 in which selected emerging markets remained the com- factures private-label vitamins and supplements Consumer Health Care’sturnoverhad been hit pany’s“priority markets” for its OTCproducts. as well as its Betancourt and Nutri-Force brands. by negative currencyeffects. These had offset “Wewill continue to explore external growth Meanwhile, turnoverfrom the firm’sretail “positive organic growth” (OTC bulletin,1May opportunities, short- and long-term, based on stores also improvedinthe quarter, growing by 2015, page 7). their strategic fitand value creation for Boeh- 3.2% to US$278 million. By contrast, sales at Annual sales improvedby2.0% when ad- ringer,” Hasenmaier said, “and we do not limit thedirect-selling business declined in the period, justed for negative currencyeffects, with Con- ourselves in terms of size as long as atrans- falling by 6.5% to US$30.3 million. Elimina- sumer Health Care’sbest-selling global brands action helps us to achieve strategic objectives tions reduced total sales by US$10.9 million. –Buscopan anti-spasmodics, Dulcolax laxatives, and creates value for Boehringer.” OTC OTC

ance of Excedrin and Flonase in the US, GSK pointed out, as well as that of Voltaren, which posted proforma sales up by 18%. Aparticu- larly strong showing in Germanyhad been thanks to anew advertising campaign. Nicorette Mini Lozenges and the weight- loss drug Alli had continued to recoverfrom supply issues, the companyadded, while the Tums antacid brand had also overcome its first- quarter supply interruptions. Oral health turnover–which wasnot im- pacted by the joint venture –improvedby11% as reported to £462 million, with Sensodyne performing well in all regions. Horlicks reported afour-year market share high in India in the second quarter,GSK reveal- ed, helping drive up turnoverinthe Nutrition category by 7% to £165 million. Skin health sales more than doubled to £142 million –despite some stocking issues in Europe –thanks to the Novartis brands. Flonase bumped proforma constant-currency sales in the US up by 28% to £360 million – 66% as reported –while turnoverinEurope movedahead by 7% on aproforma basis and 90%asreported to £470 million (see Figure 2). Internationalproforma sales slipped back by 2% to £679 million, arise of 27% as reported. Consumer Healthcare contributed 26% to group sales of £5.89 billion (see Figure 3). OTC

14 August 2015 OTC bulletin 9 OTC14-08-15p2-13_Layout 1 11/08/2015 16:07 Page 10

OTC COMPANY NEWS

TaFirst-QuarishoterResults postssolid home performance

apan’sTaisho Pharmaceutical said that sales Business First-quarter sales Change Forecast sales Change Jin its troubled domestic market had been (¥ billions) (%) (¥ billions) (%) “solid” in its first quarter ended 30 June 2015, despite lower sales in some categories. Japan 35.1 +3.3 148.1 +1.7 Domestic turnoveratTaisho’sSelf-Medi- International OTCdrugs 4.9 +24.0 19.3 +9.9 cation unit had risen by 3.3% to ¥35.1 billion International energy drinks 2.5 +5.4 9.7 +2.9 (C258 million), the firm said, as good perform- International other 0.3 –0.9 – ances from the RiUP hair-regrowth brand and International 7.7 +17.1 29.9 +7.0 Vicks cold remedies offset lower sales of energy Others 0.7 +25.0 2.5 -8.8 drinks, nasal decongestants and other products. Total Self-Medication43.6 +5.9 180.5 +2.4 In June, the country’slargest OTCplayer Prescription operations 25.6 -5.8 114.5 +0.3 said that it wascrucial for the companyto bolster its existing brands and increase demand Total forTaisho 69.2 +1.2 295.0 +1.5 in its home market (OTC bulletin, 12June Figure1:Taisho Pharmaceutical’s sales in the first quarter ended 30 June 2015. Forecasted sales arefor the 2015, page 5). year ending 31 March 2016 compared with actual sales in the previous year (Source –Taisho Pharmaceutical) Furthermore, the companyhad to “pave the wayfor future growth” by nurturing newbrands tion –such metabolic syndrome –and step up thePhilippines for an undisclosed sum (OTC andimproving howitcommunicatedwith con- product development in line with consumer bulletin, 17March 2014, page 4). sumers, Taisho explained. needs (OTC bulletin, 24October 2014, page 6). International sales of the division’sOTC Following the release of its first-quarter re- Taisho has previously said it would explore products grewby24.0% to ¥4.9 billion, while sults, the firm reiterated that the Self-Medi- thefeasibility of arange of prescription-to-OTC international turnoverfrom energy drinks im- cation division was“increasing coordination switches to bolster the Japanese market. provedby5.4% to ¥2.5 billion. between sales and marketing activities” and Taisho’spresident and chief executive offi- “working to enhance direct communication with Increase in domestic turnover cer,Akira Uehara, said in 2014 that the firm consumers by expanding into newdistribution Overall turnoveratTaisho’sSelf-Medica- planned to “vigorously develop” its interna- channels, such as mail-order”. tion division movedforward by 5.9% to ¥43.6 tional business and wanted it to account for a In addition, the companywould continue to billion in the first quarter, drivenbythe increase significant proportion of the Self-Medication respond to the “heightened health conscious- in domestic sales and a17.1% improvement division’sturnoverinthe near future. ness” of consumers by developing newproducts in international turnoverto¥7.7 billion (see Meanwhile, domestic sales of Taisho’score that met their needs. Figure 1). Lipovitan brand of tonics and nutrient drinks In October last year,Taisho said that the Last year,Taisho expanded its international slipped back by 2.5% to ¥15.9 billion during group would develop products in areas to which offering by acquiring from Roche the rights to the three months (see Figure 2). consumers were paying more and more atten- the Flanax OTCnaproxen-based analgesic in Turnoverfrom Lipovitan Dfell by 2.7% to ¥10.2 billion, while sales of other Lipovitan Business First-quarter sales Change Forecast sales Change products dropped by 2.3% to ¥5.7 billion. (¥ billions) (%) (¥ billions) (%) The decline in sales of other Lipovitan prod- ucts had been due to lower sales of the 100ml Lipovitan D10.2 -2.7 38.9 -2.7 variant, Taisho said, which had offset an 11.2% Other Lipovitan 5.7 -2.3 22.5 +1.8 jump in sales of the smaller 50ml product. Total Lipovitan brand 15.9 -2.5 61.4 -1.1 Sales of Pabron cold remedies edged up Cold remedies (Pabron brand) 4.1 +0.9 25.0 -0.7 by 0.9% to ¥4.1 billion, as asolid perform- Hair treatments (RiUP brand) 3.6 +20.6 15.0 +0.4 ance from mainstay general cold remedies off- Biofermin1.8 +11.7 7.0 +4.2 setapoor showing from nasal decongestants. Livita series 1.0 +4.8 4.2 +4.5 Turnoverfrom the Vicks brand jumped by Gastrointestinal treatments 0.9 -8.8 4.1 -0.5 30.7% to ¥0.5 billion. Analgesics(Naron brand) 0.9 -6.6 3.7 -0.8 The RiUP hair-regrowth line sawfirst-quar- Laxatives(Colac brand) 0.8 +0.9 3.3 +0.3 tersales move forward by overafifth to ¥3.6 Zena brand 0.6 -9.7 2.9 -1.2 billion, as the brand rebounded from apoor Cold remedies(Vicks brand) 0.5 +30.7 3.5 +0.4 prior-year period which had been impacted by Tokuhon 0.3 -5.3 1.1 +6.4 atax-drivenprice increase. Meanwhile, sales of the Livita brand in Other Self-Medication products 4.7 –16.9 – Japan’sFoods for Specified Health Use cate- Total Domestic Self-Medication 35.1 +3.3 148.1 +1.7 gory advanced by 4.8% to ¥1.0 billion, while turnoverfrom gastrointestinal treatments fell Figure2:Breakdown of Taisho Pharmaceutical’s Self-Medication sales in Japan in the first quarter ended 30 June 2015. Forecasted sales arefor the year ending 31 March 2016 compared with actual sales in the financial by 8.8% to ¥0.9 billion. year ended 31 March 2015 (Source –Taisho Pharmaceutical) OTC

10 OTC bulletin 14 August 2015 OTC14-08-15p2-13_Layout 1 11/08/2015 16:07 Page 11

COMPANY NEWS OTC

Mergers&Acquisitions BusinessStrategy/First-QuarterResults Mylan to look European expansion is beyond Perrigo not apriority for Prestige ylan is evaluating several takeovertargets Mas alternativesincase it is unable to con- xpanding its OTCbusiness into Europe is US$100 million brand. It would be gaining the summate atransaction for Perrigo, chief execu- Enotapriority for Prestige Brands, according Monistat yeast-infection treatment, he noted, tive officer Heather Bresch has told investors. the firm’schief executive officer Ron Lombardi. as part of afeminine-care portfolio with annual On 28 August, Mylan will seek support Speaking as the US companyannounced sales of around US$130 million. from its shareholders to present an offer direct- the results of its first quarter ended 30 June Prestige’sstrategy to boost sales of Monistat ly to Perrigo’sshareholders. It nowneeds only 2015, Lombardi said Prestige’sprimary focus wasnow underway,Lombardi explained. This 50% of Perrigo’sshareholderstoagree to the wasadding to its OTCoperations in Australia involved encouraging healthcare professionals deal to secure its financial backing, thanks to and North America, where it already had asig- to recommend the product to patients. agreements with its bankers. nificant presence. “Developing arelationship with keyhealth- “WelikePerrigo, butwedonot have to “Our mergers and acquisitions priority starts care providers is an important part of rebuild- have Perrigo,”Bresch stated. “Wehavebeen with North America,”Lombardi explained, “and ing the Monistat brand,”Lombardi insisted. actively looking at manytargets out there. We then it’sfollowed by Australia.” “In July,” he noted, “we started our doctor believe that there are manydifferent ways to get “Wehavescaled OTCbusinesses in both of detailing and other professionaltraining pro- to the scale and size needed for us to continue those markets that we can add to,”henoted. grammes that focus on reinforcing the benefits to be aleading consolidator in this industry.” of Monistat overprescription alternatives.” Among potential deals, she identified three: Europe adistant third During the three months, Prestige’sNorth newdosage forms and technologies in the US; “Europe would be adistant third, behind American OTCsales had also been boosted by acceleration in the OTCarena; and bolt-on Australia and North America, in terms of regions increased investments behind anumber of its transactions in Europe capitalising on the ex- that we would look to makeacquisitions in,” more established brands, Lombardi reported. panded platform offered by having acquired Lombardi insisted. Prestige had lifted sales of its Clear Eyes Abbott’sbranded generics business. Commenting on Prestige’sstrategy for merg- eye-drops brand by implementing amarketing However, Joseph Papa, Perrigo’schairman, ersand acquisitions, Lombardi said the firm campaign targeting older women, Lombardi ex- president and chief executive officer, has insist- “continued to monitor major companydivesti- plained, and by signing up actress and singer ed that Mylan would certainlynot find an “easy ture announcements” for potential opportuni- Vanessa Williams as a“celebrity spokesperson” path” to presenting ahostile tender offer. ties to expand. for the range. Maintaining that Mylan’scash-and-shares Prestige revealed last year that it “regularly” Furthermore, adigital and television market- offer undervalued the company, Papa outlined reviewed the portfolios of its competitorsand ing campaign recently launched for its Goody’s to shareholders three keyobjections. had identified “clear acquisition opportunities” pain-relief brand had been successful in “driv- “Combining with Mylan would dilute the (OTC bulletin, 12September 2014, page 1). ing up” sales, he said. strength of our durable consumer business,”Papa The companyclaimed at the time that on- Meanwhile, Lombardi reported International insisted. Secondly, hesaid, anydeal would “re- going consolidation in the OTCindustry would OTCsales up by 3.5% to US$14.2 million for sult in asignificant price/earnings multiple con- create a“significant pool” of acquisition oppor- the three months. traction”. And thirdly,atransaction would “ex- tunities of which Prestige could takeadvantage. pose Perrigo” to greater dependence on Mylan’s Lombardi pointed out that Prestige continu- Hydralyte lifts sales EpiPen (epinephrine) blockbuster brand that ed to build financial capacity for acquisitions, Acquiring the oral-rehydration brand Hydra- wasfacing generic competition in the US. noting that the firm would remain “aggressive” lyte in Australia and NewZealand last year Meanwhile, Mylan said that the acquired when it came to pursuing opportunities. (OTC bulletin, 25April 2014, page 3) had help- Abbott business had contributed US$402 mil- Meanwhile, Lombardi reported Prestige’s ed to advance International OTCsales at alow lion(C367 million) to group turnoverthat had North American OTCturnoverupby40.9% to single-digit rate, Lombardi noted. increased by 29% –orbyUS$534 million – US$156 million (C143 million). Turnoverhad also been boosted by the to US$2.37 billion in the second quarter. Strong performances from ‘core’ brands and strong performance of Australia’sCare, Lom- Generics sales in North America –where the company’sacquisition of Insight Pharma- bardi added, which Prestige snapped up in 2013 the firm has just got US clearance to launch ceuticals had been behind the increase in turn- to expand its reach in the Asia-Pacific region generic Nexium (esomeprazole) –rose by 27% over, Lombardi noted. (OTC bulletin, 26July 2013, page 3). to US$937 million, while sales of US$251 Prestige had claimed it would create a“lead- OTCsales accounted for 88% of Prestige’s million from the Abbott portfolio helped Gen- ing platform in feminine care” in North Am- total first-quarter turnover, which rose by 31.9% erics turnoverinEurope to growby44% to erica after agreeing to pay US$750 million for to US$192 million. The remainder wasgener- US$571 million. Mylan’sRest of the World US-based Insight last year (OTC bulletin, 9 ated by its Household Cleaning unit, which post- region advanced by 38% to US$547 million, May 2014, page 9). ed turnoverupby3.4% to US$22.3 million. with the Abbott unit adding US$110 million. Describing Insight as Prestige’s“largest The double-digit rise in sales helped Pres- Specialty and other revenue added the re- transaction yet”, former chief executive officer, tige to post operating income up by 46% to maining US$317 million. MatthewMannelly, said at the time that buy- US$62.5 million. OTC ing Insight would give the companyits first OTC

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OTC COMPANY NEWS

Mergers&Acquisitions/BusinessStrategy Sport-ph grows withThe Protein Works

nvestment vehicle Sport-ph has expanded its acquisition in the ‘bricks and mortar’ sector, To tackle this, Sport-ph would invest in edu- Ireach in the sports nutrition sector by snap- TPW givesusafoothold in the rapidly-growing cating both consumers and retailers about the ping up manufacturer and online retailer The online marketfor sports nutrition products.” benefits of sports nutrition products, not just as Protein Works (TPW) for an undisclosed sum. Furthermore, TPW had astrong innovation partofaworkout or training regime, butaspart Seb Mullin, chief executive officer of the pipeline –which wasaimed at normalising of ahealthylifestyle. private-equity-backed Sport-ph, told OTC bul- the use of protein through products such as pro- “Recommendation and educationisstill crit- letin that UK-based TPW complemented the tein truffles –that would enable Sport-ph to icaltogrowing the market,”Mullin insisted, PhD Nutrition sports performance business it expand the TPW brand into a“multi-channel “but there is no doubt that the market has cross- had gained last year. environment”, encompassing both online and ed into the mainstream, aided by the move to- “TPW, together with PhD, enables us to ac- offline retail,Mullin claimed. wards protein being added to everyday foods. celerate out vision,”Mullin said, “whilst allow- While useful for expanding the category, itis ingthe individual businesses to preservetheir Consumers need educating on benefits not an area Sport-ph is interested in.” entrepreneurial passion.” While Mullin pointed out that it wasnow Looking ahead, Mullin said that Sport-ph “Sport-ph’sambition is to acquire companies “less of abattle” to get sports nutrition products wasplanning to growthe TPW and PhD brands that can better capture the consumer opportu- into retail stores, he admitted that manycon- internationally and wasseeking acquisition op- nities in the sports nutrition area,”Mullin ex- sumers still did not understand the sector and portunitieswhich would give the business a plained, “and while PhD gave us acornerstone were “scared” of using the products. ready-made platform in newmarkets.

OTC

Switches/Second-QuarterResults sawConsumer Healthcare’sturnoverinthe country drop by 6% to US$423 million. Pfizerscraps plan to take Lipitor OTC Pfizer’sInternational Consumer Healthcare turnoveralso declined in the quarter, slipping ■ Continued from front page letin, 30June 2000, page 16). back by 10% to US$417 million due to neg- -crease the risk of heart attack or stroke(OTC After Lipitor, the most obvious candidate ative currencyeffects. bulletin, 24July 2015, page 10). in Pfizer’sportfolio for aprescription-to-OTC Despite the overall drop in International turn- LaMattina claimed that despite the failure switch is its blockbuster erectile-dysfunction over, Pfizer revealed that Consumer Health- of the trial, Pfizer had definitely made the drug Viagra. care’ssales in emerging markets had advanced right decision to attempt to switch Lipitor, even Pfizer has already tried and failed to switch by 11%, excluding negative currencyeffects, though the project would have cost the firm Viagra’sactive ingredient sildenafil through drivenbystrong performances in both China “around US$25 million (C23 million)”. Europe’scentralised procedure (OTC bulletin, and Venezuela. “From Pfizer’sperspective, aninvestment of 28 November 2008, page 1). Consumer Healthcareaccounted for 27% US$25 million would have generated areally Meanwhile, Pfizer reported second-quarter of Pfizer’sGlobal Vaccines, Oncology and Con- good return, if it had worked out,”hesaid. sales at its Consumer Healthcare unit down by sumer Healthcare unit’ssales, which increased “The attempt washigh-risk on the chance 8% to US$840 million. by 21% to US$3.13 billion (see Figure 1). With of success,”LaMattina pointed out, “but it was The firm blamed the single-digit drop pri- both Pfizer’sGlobal Established Pharmaceuti- arelatively small investment for what could marily on the “non-recurrence of initial retailer caland its Global Innovative Pharmaceutical have been amajor pay-off.” stocking associatedwith the launch of Nexium units losing ground, the firm’stotal group sales “Pfizer are pretty bullish about their Con- 24HR in the US in the prior-year quarter”. slipped back by 7% to US$11.9 billion. sumer Healthcare business right now, and hav- Lower sales of Nexium 24HR in the US OTC ingLipitor OTCaspart of it would have been areal boon,”heclaimed. Business Second-quarter sales Change Proportion Meanwhile, the firm refused to be drawn (US$ millions) 2014/2015(%)ofsales (%) on whether it would in the future attempt another Global Established Pharmaceutical 5,090 -22 43 prescription-to-OTC switch of Lipitor –one of Global Innovative Pharmaceutical 3,497 -1 30 the biggest-selling drugs of all time –inthe US. Global Vaccines 1,580 +44 13 Pfizer announced in 2011 its intention to switch Lipitor from prescription-only to OTC Consumer Healthcare840 -8 7 status “at some point” (OTC bulletin, 16Nov- Global Oncology 713 +25 6 ember 2011, page 7). Global Vaccines, Oncology and 3,133 +21 26 Astatin has neverbeen granted OTCstatus Consumer Healthcare in the US, and it is over15years since Bristol- Other 133 ±0 1 Myers Squibb and Merck &Cofailed in their Total Pfizer 11,853 -7 100 attempts to switch Pravachol (pravastatin) and Mevacor (lovastatin) respectively (OTC bul- Figure1:Pfizer’s sales in the second quarter of 2015 broken down by business (Source –Pfizer)

12 OTC bulletin 14 August 2015 OTC14-08-15p2-13_Layout 1 11/08/2015 16:07 Page 13

COMPANY NEWS OTC

Second-QuarterResults Key brands boost sales at SanofiOTC

anofireported second-quarter sales at its Region Second-quarter Change (%) Proportion SConsumer Healthcareunit up by 1.3% at sales (C millions) CER* of sales (%) constant exchange rates to C890 million, thanks to the growth of keybrands. Emerging Markets 432 -2.1 49 The fexofenadine-based brand Allegra re- US 237 +7.9 27 mained the best-selling of Sanofi’sConsumer Western Europe 161 -0.6 18 Healthcare brands in the three months (see Fig- Rest of World 60 +14.6 6 ure 1), while Lactacyd and Magne B6 were also Total Consumer Healthcare890 +1.3 100

singled out by the French firm as important *CER is constant exchange rates contributors to the Consumer Healthcare rise. Adding the Allegra GelCaps line extension Figure2:Sanofi’s Consumer Healthcaresales in the second quarter of 2015 broken down by region (Source –Sanofi) to the Allegra range in the US earlier in the year said, thanks to “continued product innovation”. of the product in October 2013 (OTC bulletin, had drivenupthe brand’stotal sales by 6.4% Despite better performances from anumber 25 October 2013, page 1). to C116 million, Sanofiexplained. of keybrands, growth of Consumer Healthcare Following the switch of Nasacort in the US, While Allegra remained Consumer Health- in the second quarter had been held back by thecompanywas nowgearing up for the poten- care’sbiggest product, the Magne B6 dietary Nasacort (triamcinolone acetonide), Sanofinoted. tial switch of Eli Lilly’serectile-dysfunction supplement posted the biggest gains, with sales Sales of Nasacort had stalled at C32 million, drug Cialis (tadalafil), the firm noted. of the brand up by 22.2% to C21 million. the firm pointed out, as the launch of Glaxo- Aspokesperson for Sanofitold OTC bul- Noting that Magne B6 was“growing stead- SmithKline’s(GSK’s) Flonase Allergy Relief letin that switching Cialis remained a“high- ily in all countries”, Sanofisaid the brand had nasal spray in the US market hit turnover. priority project” for the firm, butadded that performed “especially”well in Poland, thanks GSK launched Flonase (fluticasone) earlier more specific information on the switch would to the success of anew marketing campaign in thisyear, backed by aheavyweight digital mar- not be disclosed at this time. support of the Magne B6 Sleep line extension. keting campaign supported by traditional tele- Sanofiacquired from Lilly in May last year The Lactacyd feminine hygiene range also vision and print advertising (OTC bulletin, 13 therights to switch and market the OTCprod- enjoyed double-digit growth in the three months, February 2015, page 1). uct in Europe, Japan and the US (OTC bulletin, with sales of the brand advancing by 12.5% to While Flonase had held back sales in the 30 May 2014, page 1). C42 million. second-quarter,Sanofiinsisted that Nasacort Meanwhile, on aregional basis, just under Lactacyd had “continued to growinkey Latin Allergy 24HR had been asuccess in the US half of Consumer Healthcare’ssales were gen- American markets, especially Venezuela”, Sanofi market, after the prescription-to-OTC switch erated in Emerging Markets, where turnover slipped back by 2.1% in constant currencies Business Second-quarter sales Change (%) Proportion to C432 million (see Figure 2). (C millions) CER* of sales (%) “Lower sales in Russia due to softer de- Allegra116 +6.4 1 mand, following price increasesimplemented Doliprane 70 ±0.0 1 to partially offset ruble depreciation” had been Essentiale 45 -18.2 >1 behind the decline in turnoverinthe region, Lactacyd 42 +12.5 >1 Sanofiexplained. Enterogermina 36 -5.6 >1 Higher sales of Allegra in the US had help- Nasacort 32 ±0.0 >1 ed to lift turnoverinthe region, Sanofinoted, Maalox 26 +13.0 >1 by 7.9% to C237 million. No Spa 22 -4.0 >1 Sales in Western Europe slipped back by Magne B6 21 +22.2 >1 0.6% to C161 million, while turnoverinthe Rest Dorflex20-18.5 >1 of World region advanced by 14.6% to C60 Other Consumer Healthcarebrands 460 +2.9 5 million in the three months. Consumer Healthcare 890 +1.3 9 Consumer Healthcareaccounted for 9% of Diabetes 1,988 -3.8 21 Sanofi’stotal second quarter sales, which ad- vanced by 4.9% to C9.38 billion. Genzyme 907 +26.6 10 Following the close of the period, Sanofian- Generics 520 +9.2 6 nounced that it wasset to transfer Consumer Oncology/Other Pharmaceutical 3,495 –37 Healthcare into anewly-created global busi- Pharmaceuticals 7,800 +3.7 83 ness unit on 1January (OTC bulletin, 24July Vaccines 887 +8.6 10 2015, page 2). Animal Health 691 +14.2 7 The General Medicines and Emerging Mar- Total Sanofi9,378 +4.9 100 kets global business unit will house Consumer Healthcare, alongside the company’sEstablish- *CER is constant exchange rates ed Products and Generics operations. Figure1:Sanofi’s sales in the second quarter of 2015 broken down by business (Source –Sanofi) OTC

14 August 2015 OTC bulletin 13 OTC14-08-15p14-17_Layout 1 11/08/2015 17:33 Page 2

OTC GENERAL NEWS

Regulatory Af fairs Cross Vetpharm’s Coliefclaim rejected

ross Vetpharm Group cannot claim that its as well as an application relating to the role of tion of the immune system”. CColief colic-relief product reduces gastro- vitamin Dinthe normal function of the immune Meanwhile, following its earlier rejection intestinal discomfort in infants and young child- system in the same age group. of BASF and Stepan Lipid Nutrition’sArticle ren, the European Food Safety Authority (EFSA) Pointing out that it had previously assessed 13 (5) application for aclaim relating to its mix- has ruled in its latest opinions. claims on both niacin and biotin and their contri- ture of conjugated linoleic acid (CLA) isomers Responding to an application made through butions to normal energy-yielding metabolism in and areduction in body fatmass –marketed the UK competent authority,EFSA’s panel on thegeneral population with favourable outcomes, under the trade names Clarinol and Tonalin Dietetic Products, Nutrition and Allergies, the the NDAruled that the claimed effects for both (OTC bulletin,2February 2015, page 10) –the NDA, pointed out that the firm had provided applied to all ages, and that cause and effect re- NDAruled that the additional scientific com- insufficient evidence to establish acause and lationships had therefore been established. ments submitted by the twocompanies had not effect relationship between the food –ß-gal- The NDAgaveasimilar opinion for vitamin altered its previous decision. actosidase from kluyveromyces lactis –and re- D, noting that previous claims relating to acon- The panel has also set dietary reference duced crying time, indicating a“reduction of tribution to the normal function of the immune values for magnesium and phosphorous, follow- gastrointestinal discomfort”. system in the general population –and children ing public consultations. Cross Vetpharm had initially wanted to claim aged from three to 18 years –had received Noting that average requirements (ARs) and that Colief “reduces the lactose load of the in- favourable outcomes, and that the role of vita- Population Reference Intakes (PRIs) could not fant’sfeed and improvesthe consequences of minDinthe claimed effect applied to all ages. be derivedfor magnesium in adults, infants and lactose maldigestion in colickyinfants unable children, the panel has set adequate intakes to effectively digest all the lactose in their feed”, Rejected proposed wording (AIs) at 350mg/day for men and 300mg/day butsimplified this after consultation with EFSA. However, despite the positive outcomes, the forwomen, including those who are pregnant The firm’sapplication wasone of four re- NDArejected the wording proposed by Special- and lactating. ceived by EFSA that had been made under Arti- ised Nutrition Europe in all three applications. Forinfants aged sevento11months, the AI cle 14 of the health claims regulation 1924/2006 Forniacin, the panel turned down the pro- is 80mg/day,while it is 170mg/day for child- and related to children’sdevelopment and health. posed wording “plays an important role in the ren aged from one to three years and 230mg/ However, the other three –all made by Spe- energy metabolism of food” and instead ruled day between the ages of three and 10 years. cialised Nutrition Europe (formerly IDACE) – that “contributes to normal energy-yielding met- In children aged 10 to 18 years, an AI for were more successful. abolism” better reflected the scientific evidence. magnesium has been set at 300mg/day for boys Applying through the French competent This wording wasalso applied to biotin. and 250mg/day for girls. authority,the organisation had made aclaim re- In its applicationregarding vitamin D, Spe- Forphosphorous, AIs have been set at lating to niacin and the contribution to normal cialised Nutrition Europe’sproposed effect was 160mg/day for infants aged sevento11months energy-yielding metabolism in infants and child- “contributes to the normal function of the nat- and between 250mg and 640mg/day for child- ren up to three years of age. ural defences”. This waschanged by the NDA ren. It has been fixedat550mg/day for adults, It had also made the same claim for biotin, to “vitamin Dcontributes to the normal func- including pregnant and lactating women. OTC

Regulatory Af fairs absence of ahealth professional”. If the benefits of expanding access to nal- Health Canada reviews naloxone status oxone appeared initiallytooutweigh the poten- tial risks, Health Canada said it would then ealth Canada –Canada’smedicines reg- of access similar to epi-pens and insulin”, launch apublic consultation on its website. Hulator –has started “exploring” the pos- Health Canada noted. The full process would be expected to takeup sibility of allowing non-prescription access to While changes to an ingredient’sstatus were to 18 months, it added. the opioid-overdose treatment naloxone. normally instigated by manufacturers, the reg- The potential to switch naloxone to OTC Announcing arisk assessment of the ingred- ulator pointed out that it could “initiate are- status in the US has also recently been raised ient, the regulator said it wasconcerned about viewatany time” if there was“ademonstrated at arecent public discussion held by the coun- the increasing number of overdoses and deaths health and safety need”. try’s Food and Drug Administration (FDA). in the country related to opioid use. As the first step in its risk assessment, Commenting on the discussion, the US Con- Several provinces had recently requested Health Canada has asked the provinces and sumer Healthcare Products Association (CHPA) thatnaloxone be available without aprescrip- territories requesting the switch to “gather and told OTC bulletin that while it wasunable tion to “facilitate broader access”, Health Can- share evidence in their possession”about the to provide an opinion on the “scientific merits ada added, and that the regulator “consider use of naloxone. of anyparticular switch”, switching medi- whether aswitch in status could be made safely Pointing out that the ingredient had been cines from prescription to OTCstatus “when and help reduce the unnecessary deaths caused “used safely in Canadian hospitals for more the FDA’srigorous scientific criteria” were by overdose”. than 40 years”, the regulator added that the met was“aprovenway to increase access to Removing naloxone from the list of pre- assessment would include an examination of OTCmedicines”. scription-only ingredients would “allowalevel the risks of use of naloxone “in the initial OTC

14 OTC bulletin 14 August 2015 OTC14-08-15p14-17_Layout 1 11/08/2015 17:33 Page 3

GENERAL NEWS OTC PATrade AssoGBciations says time is now for self-care

he time has come for all stakeholders in the ment and use its considerable resources and TUK OTCindustry to step up, put people reach to promote self-care to the public. at the heart of the self-care agenda and secure Nearly one in five people were still visiting the future of the country’spublic health ser- adoctor or the hospital for conditions that they vices, according to John Smith, the newchief could treat themselves, Darracott said, “and we executive of the Proprietary Association of need to reach those people and ensure that when Great Britain (PAGB). theyvisit their general practitioner (GP), or have “In the last 20 years not much has really contact with anyhealthcare professional, that changed,”Smith admitted to OTC bulletin.“We the message is delivered about howtheycould have seen self-care mentioned more, butre- have self-treated the problem”. search still shows people are not engaging.” “There are some positive signs that govern- “I think our member companies are ready ment is coming on board in amore serious way,” The new chief executive of the ProprietaryAssociation of Great Britain (PAGB), John Smith (pictured left), and want to see change,”heinsisted, “and key Darracott pointed out, “with things likethe new and Helen Darracott (pictured right), the new deputy stakeholders need to get on board and push the national flu vaccination service that pharmacy chief executive of the PAGB, said the industrybody same message that we are, because if attitudes will be delivering.” would work over the next three years to push a consistent self-caremessage don’tchange soon, the UK National Health “For me, that is avote of confidence in phar- Service (NHS) will fall apart.” macy,”she argued. “That says to me govern- thatcould help consumers choose safe and ef- The challenge for PAGB, Smith said, was ment believesthat pharmacyhas alot more to fective products. to bring these stakeholders together and make offer and is prepared to invest.” “Wehavebeen working on it for awhile them, and most crucially the UK government, “Wealso have to learn from that type of now,”Darracott explained, “and initial indica- see the real value of making self-care apriority. service delivery [of flu vaccinations],”Darra- tions are that people definitely do find it easier Smith –former business leader for UK, Ire- cott explained, “and let’shope it goes fantastic- to choose and buythe most suitable product for land and the Netherlands at Pfizer Consumer ally well, because Ithink that will showthe them if the information on the front of pack Healthcare –took overasPAGBchief executive public the value of pharmacy.” is simplified, and if the back of the pack calls in July (OTC bulletin,26June 2015, page 27). “Once the public gets into their mind that out the critical information.” He will lead the UK trade association with pharmacycan do the things that theyused to go “Atthe moment, we are undertaking some Helen Darracott as his deputy chief executive. to the doctor for,itwill help build this environ- quantitative research to see howthis works in While noting that PAGB would followapath ment where people question whether theyneed practice,”she explained, “and we hope this new of evolution rather than revolution under his to go the doctor for self-treatable conditions.” information will persuade regulators to takethis leadership, Smith argued that the association more consumer-centred approach, including –which will be 100 years old in 2019 –could Evidence of how self-carecreates value providing the information in amore meaning- afford to be more ambitious. It wasthen incumbent on PAGB and its fulway.” The association’sfocus in the three years members to support these initiativesand use “This means not having unhelpful warnings ahead of its centenary would be on putting them as evidence of howself-care could create like: ‘If symptoms persist, consult your doc- people at the heart of its mission and ensuring value for government, Smith said. tor’,”she added. that the British public were receiving a“con- “If we could see anational campaign com- “Assoon as we have the results, we want to stant, single message on self-care” from the ingout of the NHS on self-care, on visiting the go to the Medicines and Healthcare products UK government down. pharmacy,”Smith noted, “we as atrade associ- Regulatory Agency(MHRA) and talk about Athree-yearstrategy would be put in place, ation and all our members would buyinto that.” those findings,”Darracott said, “and we will Smith revealed, that would enable PAGB to Driving change would only be possible if also publish them in apeer-reviewed journal.” reach its goal, with clear areas of focus, while PAGB raised its profile with those keystake- “A big win for us would be if we could per- at the same time maintaining and adding to the holders, Smith claimed. suade the agencytoaccept robust consumer raft of services it provided to its members. “Wewant to be seen as the place to go to research in regulatory decision-making,”Darra- Part of the strategy would be built on the idea access the consumer healthcare industry,” Darra- cott pointed out. of making PAGB the central hub for all stake- cott said, “and we will be looking ahead, prepar- “Currently,wehaveaone-size fits-all regu- holders –industry,pharmacyand other health- ing for issues we see on the horizon and help- latory approach which has been focused on care professionals, and government –when it ing shape them to benefit our members and, meeting the needs of healthcare professionals came to driving the self-care message, Smith said. again, ensure aconsistent message.” and regulators,”she explained. “If you are in “Currently,weliveinaworld where there However, creating this consistent message theprescription sector that is exactly what you are so manygroups going offindifferent direc- on self-caremay be disrupted somewhat by the need. But for OTCs, priority should be given tions,”hepointed out. “Weneed to knowthe demands of regulators, especially when it comes to the needs of consumers.” rightpeople to bring to the table and makethe to the messages receivedbyconsumers from With the result of the quantitative research system work for us.” the packaging of self-care products. due later in the year,Darracott said that PAGB Only then, Smith said, could PAGB take Apriority project for PAGB wasputting hoped the findings would help convince MHRA the message up the ladder to government, get together evidence, Smith and Darracott said, on a“different wayoflooking at the regulations”. government to buyfully into the self-caremove- that would support simplified on-pack language OTC

14 August 2015 OTC bulletin 15 OTC14-08-15p14-17_Layout 1 11/08/2015 17:33 Page 4

OTC GENERAL NEWS

Regulatory Af fairs AESGPworries about med devices impact

nimpact assessment needs to be perform- on the innovation and competitiveness of EU Despite the European Parliament voting last Aed to ensure that the proposed medical- manufacturers, butalso result in potential losses year to remove the rule (OTC bulletin,25April device legislation will not negatively impact in terms of jobs and growth.” 2014, page 13), the Council has proposed new the self-care medical devices sector in Europe, Companies in the sector will also face sig- language so that Rule 21 would cover“all de- according to the Association of the European nificant additional costs, the association claims, vices that are introduced into the human body Self-Medication Industry,the AESGP. including the “increased cost of anew contract via abody orifice or applied on skin”, amove In its recently-released position paper –on with the notified body,and those expenses re- that the AESGP claims will mean numerous fresh proposals for the medical-device legis- lated to amore complexclinical evaluation –in- self-care medical devices unnecessarily falling lation put forward by the European Council of cluding additional clinical studies –that would under the definition. European Union (EU) health ministers in June have to be performed and not based on published The AESGP is suggesting removing the pro- (OTC bulletin,24July 2015, page 1) –the asso- literature evidence as is currently an option”. posal that Rule 21 place medical devices in ciation argues that the newlanguage suggested class III if theyare “intendedtobeintroduced by the Council will have “far-reaching conse- Ensureproportionate regulation into the gastrointestinal tract and they, or their quences beyond afew medical devices”. “In that regard, AESGP believesthat an im- products of metabolism, are systemically ab- This is especially true, the AESGP says, pact assessment should be performedsoasto sorbed by the human body” (see Figure 1). when taking into consideration the “broaden- ensure that provisions remain well-designed, Furthermore, the association is proposing ing of provisions relatedtosubstance-based proportionate and fitfor purpose to the self-care more precise language to ensure that products medical devices to ‘all devices composed of medical device sector,” the association says, “and which contain low-risk ingredientsand are ad- substances that are introduced into the human particularly to the micro-, small- or medium- ministered in the oral cavity as farasthe pharynx body via abody orifice or applied on skin’”. sizedenterpriseswhich makeup80% of medi- are placed in class I. “Should the provisions remain as currently cal-devices manufacturersinEurope.” The position paper also addresses the asso- proposed by the European Commission and the The position paper also includes “compro- ciation’sconcerns about proposals requiring EU member states, developing and producing mise” proposals from the AESGP on three key substance-based medical devices to comply self-care medical devices will become too ex- points, most notably on the controversial Rule with pharmaceutical legislation, as well as the pensive for manufacturers, particularly those of 21 in AnnexVII, which under the Councilpro- length of the transition period to implement small- and medium-sized capacity,” the AESGP posals will place all self-care medical devices the newlegislation. warns. “This will not only bear consequences in the highest risk category –class III. OTC

1. Commission’s proposal –26September 2012 2. European Parliament amendments –2April 2014 6.9 Rule 21 Amendment 306 Devices that are composed of substances or combination of Devices that are composed of substances or combination of substances intended to be ingested, inhaled or administered substances intended to be ingested, inhaled or administered rectally or vaginally and that are absorbed by or dispersed in rectallyorvaginally and that are absorbed by or dispersed in the human body are in class III. the human body are in class III. 3. Council’stext –19June 2015 4. AESGP compromise proposal –31July 2015 6.9 Rule 21 6.9 Rule 21 Devices that are composed of substances or combinations Devices that are composed of substances or combinations of of substances that are intended to be ingested, inhaled substances that are intended to be ingested, inhaled or administered or administered rectally or vaginally introduced into the rectally or vaginally introduced into the human body via abody human body via abody orifice, or applied on the skin orifice, injected forlocal effect or applied on skin and that are and that are absorbed by or locally dispersed in the absorbed by or locally dispersed in the human body are: human body are: –inclass III if they,ortheir products of metabolism, aresystemically –inclass III if they,ortheir products of metabolism, areabsorbed by the human body in order to achieve the intended purpose, systemically absorbed by the human body in order to achieve the intended purpose, – in class III if they are intended to be introduced into the gastrointestinal tract and they,ortheir products of metabolism, –inclass III if they areintended to be introduced into the are systemically absorbed by the human body, gastrointestinal tract and they,ortheir products of metabolism, aresystemically absorbed by the human body,–in class IIb in all other cases, except if they areapplied on skin or mucous membrane, or are placed on or in the teeth, in which –inclass IIb in all other cases, except if they areapplied on case they areinclass IIa and except if they are applied on skin or skin, in which case they areinclass IIa. administered in the oral cavity as far as the pharynx and are exclusively composed of substances generally considered as low-risk in whichcase they are in class I.

Figure1:Compromise proposal of the Association of the European Self-Medication Industry, the AESGP,to various earlier attempts to classify medical devices introduced into the human body (Source –AESGP)

16 OTC bulletin 14 August 2015 OTC14-08-15p14-17_Layout 1 12/08/2015 09:15 Page 5

GENERAL NEWS OTC

Regulatory Af fairs France expands ‘free access’ list

rance’slist of non-prescription medicines Fthat are available for self-selection in phar- macies has been expanded by 18, the country’s Official Journal has confirmed, following adeci- sion by local medicines agency, ANSM. Included among the products nowlisted under the ‘free access’ scheme –launched seven years ago (OTC bulletin,31July 2008, page 17) –are Abufene 400mg beta-alaninetablets in packs of 30, as well as Biogaran’saciclovir 5% cream in a2gpresentation.Alopexy min- oxidil 5% solution has also been made avail- able for self-selection in three 60ml units, while Asproflash acetylsalicylic acid 500mg tablets have been added in packs of 20. Sugar-free Berocca in double-packs of 30 tablets have also been added to the free-access list, along with Biogaran’scystine/vitamin B6 500mg/50mg tablets in 60- and 120-count packs and the firm’sdexpanthenol 5% pommade in 30g and 100g presentations. Meanwhile, the three newpresentations of Efferalgan granules recently launched by UPSA (OTC bulletin, 26 June 2015, page 14) have also been listed. Flustimexoral solution in packs of eight For more than 25 years, we sachets are nowavailable for self-selection, as well as packs of 24 Hexalyse chewable tablets, have acted on behalf of our Biogaran’shexetidine 0.1% mouthwash in clients as advisors, doers and 200ml and 400ml bottles, and loratadine 10mg tablets in packs of seven. Mycohydralin cream a source of ideas for medicinal in a20g tube and as 200mg vaginal tablets in and health products: packs of three have also been listed as free- access medicines, along with 16-count packs of Regulatory Affairs orange-flavoured sugar-free Strefen flurbipro- fen 8.75mg lozenges. Medical Affairs Homoeopathic remedy Famenpax has also been listed in packs of 40 orodispersible tablets. Clinical Affairs OTC Business Development IN BRIEF Quality Management ■ CHURCH &DWIGHT CANADA is vol- untarily recalling all lots of its L’il Critters Vitamin D3 supplement, after the product was found to contain almost four-times the level of vitamin Dindicated on the product label, and to We rock provide more than the daily tolerable upper in- takeofthe ingredient for children aged up to eight years. It is also recalling its Vitafusion Calcium Adult Gummy Vitamins product, whichwas found to contain levels of vitamin Dthat were greater than those indicated on the product label. Diapharm GmbH & Co. KG · Muenster · London · Vienna · Shanghai · +44 203 178 2790 · www.diapharm.com OTC

14 August 2015 OTC bulletin 17 OTC14-08-15p18-22_Layout 1 11/08/2015 18:04 Page 2

OTC MARKETING NEWS

MarketingCampaigns ProductLaunches Dioralyte gets Elevit fertility supplement £1m campaign makes debut in Germany anofiConsumer Healthcareisspending £1.0 Smillion (C1.4 million) overthe keysummer ayer’sElevit fertility multivitamin supple- period on its first newUKtelevision campaign Bment brand has made its debut in Germany in three years to support its Dioralyte rehydra- as Elevit Gynvital. tion-therapypowders. Pointing out that the German Nutrition Soci- Scheduled to run until the end of August, ety,the DGE, recommended supplementation the campaign comprised two“quirky” 20-sec- of at least 400µg of folic acid aday –aswell ond advertisements, Sanofipointed out, with as 100-150µg of iodine and at least 200mg doco- the aim of reminding consumers in a“unique sahexaenoic acid (DHA) –for pregnant and and humorous way” that Dioralyte hydrated breastfeeding women, Bayer claimed the phar- Elevit Gynvital has been created to address the “faster and more effectively than water alone macy-exclusive supplement had been formu- “increased nutrient needs” of German women who arepregnant, lactating or planning to conceive when taken at the first symptoms of diarrhoea lated to address the “increased nutrient needs” and sickness”. of these consumers, as well as those who were However, while Gynvital Gravida also pro- One commercial focuses on an adult couple, planning to conceive. vided 400µg folic acid, the Elevit option offered and the other on amother and son. After the Each Elevit Gynvital soft capsule combined “a more complete formulation”, Bayer claimed. female is shown in each advertisement trying un- 200µg folic acid and 226µg Metafolin–the Thecompanyrecommends that consumers successfully to rehydrate whoeverisill by water- patented folate ingredient owned by Merck takeElevit Gynvital up to amonth before try- ing them likeaplant, avoiceoversuggests trying KGaA –tomeet the DGE’srequirements, Bayer ing to conceive. noted, as well as 150µg iodine and 200mg DHA. Marketing and communication activities for It also provided 14mg iron, 10mg zinc, 60µg the product –which is available in packs of 30 selenium and 57mg magnesium, the firm added, and60capsules –would mainly be targeted at which wasnot offered in competing products healthcareprofessionals, Bayer noted, as they such as Merck’sFemibion and Steripharm’s were the “key reference point for consumers”. Folio, Folio Forte and Folio Forte +D3 lines. Anew website, elevit.info,has also been Elevit Gynvital –which is also formulated created to support the German launch, with the with vitamin D, eicosapentaenoic acid (EPA) and message that Elevit Gynvital provides “compre- “other minerals, trace elements and vitamins” – hensive care for the miracle of life”. further strengthened Bayer’sprenatal multivita- While Elevit Gynvital wasspecific to Ger- The 20-second spots show afemale watering the ill individual like aplant in an attempt to rehydrate them mins offering in Germany, the firm noted, which many,Bayer pointed out, the Elevit brand was also comprises the Gynvital Gravida product. available globally in over60markets. Dioralyte instead, pointing out that it is “the OTC UK’snumber-one selling rehydration treatment”. Thesick party is then givenaglass of water ProductLaunches and asachet of Dioralyte, before the creatives end with the patients looking happier. RB unveilsnew products and launch plans Pointing out that the latest advertisements would air across national mainstream television eckitt Benckiser (RB) will extend its Muci- Meanwhile, Kapoor said aDirect throat channels such as ITV1, Channel 4and Channel Rnex, Scholl and Strefenbrands in the sec- spray –containing 8.75mg flurbiprofen and 5during “primetime” shows such as Big Brother ond half of this year and roll out its Airborne claimed to provide relief for up to six hours – and XFactor,Sanoficlaimed the campaign was supplements across Europe, according to the would be added to its Strefen sore-throat brand expected to reach about 10.2 million people. firm’schief executive officer Rakesh Kapoor. in 13 markets initially,and in others once it The campaign also marked the first time that Speaking as the companyrevealed its first- receivedregulatory clearance. all three Dioralyte flavours –blackcurrant, halfresults (see page 5), Kapoor said its Muci- Outlining its plans for Airborne, Kapoor citrus and natural –had featured in television nexcough, cold and flu brand in the US would said RB would launch the brand in “a number advertising for the brand, the firm noted. be strengthened by the introduction of liquid- of European markets”, with awider roll out Digital activity would support the television gelcapsules that provided “fast-acting relief” planned thereafter.Airborne’sblend of vitamins, spots, Sanofipointed out. This would include from the “most bothersome” symptoms and minerals and herbs was“unique to the world video-on-demand advertising until the end of unleash the “maximum strength” of ingredi- outside of the US”, he claimed. August, as well as display advertisements on ents such as acetaminophen –paracetamol – Turning to Scholl, Kapoor revealed that the YouTube, which would target “mothers,trav- and dextromethorphan. firm had broughtforward the launch of its Vel- ellers and young professionals”. Thecapsules would be available as aSinus vetSmooth Electronic Nail Care system by a Apublic-relations campaign would continue Maxoption for severe congestionrelief, Kapoor year to offer consumers “a complete profession- throughout the year,the firm added. noted, and in twoFast Max variants, including al pedicure in the comfort of their ownhome”. OTC acombination ‘day and night’ pack. OTC

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MARKETING NEWS OTC

ProductLaunches GSK set to addplasters to Voltarol line in the UK

he UK will be the next European market to Tseethe launch of medicatedplasters under GlaxoSmithKline (GSK) Consumer Healthcare’s Sanofi is assisting Spanish consumers further in their fight against head lice by adding aleave-in conditioning Voltarol diclofenac-based analgesics brand. spray to its Neositrín brand. Scheduled for launch on 1September,the Containing 1% activdiol (octane 1,2-diol), the mango pharmacy-only (P) Voltarol Medicated Plasters and orange-scented Neositrín Protect spray should be used at least twice aweek to kill any lice beforean –which are already available in France, Italy infestation could be established, the firmpointed out. andPortugal –contain 140mg diclofenacsodi- Claiming that the C30.5 million Spanish OTC um per plaster and are claimed by the firm to head-lice market was dominated by treatment products, Sanofi said the launch of Neositrín Protect be a“topical innovation” offering a“three-way would “provide the necessarystrength” for it to combination of efficacy, anti-inflammatory act- Voltarol Medicated Plasters arealready available in France, Italy and Portugal become the leading player in the category. ion and comfort”. A20-second television advertisement would air from September until October 2015 to supportthe Each “thin, flexible and odourless” plaster 6March 2015, page 1). Under the terms of launch of Neositrín Protect, Sanofi noted, in time for released the active ingredient over12hours, the deal, GSK controls a63.5% share of the children returning to school. GSKclaimed, and provided pain relief that was combined business. This would be backed further by online communication and point-of-sale materials. up to two-times more powerful than that pro- To support the launch of Voltarol Medicated Neositrín Protect is also available in the UK as vided by non-medicated “placebo” patches. Plasters, GSK said it would run an online video Stada’s Hedrin Protect &Go, which was launched in Aplaster should be applied to the affected campaign from October until December across 2013 (OTC bulletin,23August 2013, page 23). Sanofi has sold Hedrin products under its Neositrín area once in the morning and again in the even- channels such as YouTube, as well as on life- head-lice brand –which also comprises adimethicone- ing,the firm directed, noting that as the prod- style websites such as the UK page of msn.com. based treatment lotion and spray gel, as well as a uctdid not contain anyheating properties, it Pharmacies would be provided with point- shampoo and ‘Neositrín &Go’ mousse –since 2007. OTC would be suitable for consumers who wanted of-sale materials and a“comprehensive”train- to use it overnight. ing programme,the firm added, while television However, Voltarol Medicated Plasters should advertising would begin in 2016. not be used in conjunction with anyother non- The Voltarol brand in the UK currently in- steroidal anti-inflammatorydrugs (NSAIDs), cludes aThermal Patch medical device, along GSK stressed. with the Emulgel Pand 12-Hour Emulgel P GSKmarkets Voltarol as part of its consumer 2.32% Gel variants –both Pproducts –and a healthcarejoint venture with Novartis, which general-sale list (GSL) Pain-eze gel. All three wasestablished earlier this year (OTC bulletin, medicines contain diclofenac diethylammonium. OTC

ProductLaunches Pfizer Consumer Healthcarehas bolstered its Caltrate calcium-supplement brand in the US with its first Boehringer extends Antistaxinto Australia product to supportjoint health. Claiming that 54 million US adults aged 50 years and over –amounting to morethan 50% of the US oehringer Ingelheim has launched Antis- the first quarter of 2016 –featured an elephant adult population –wereaffected by osteoporosis and Btax in Australia as it seeks to gain aslice wrapping itself around awoman’sleg and mak- low bone mass, the firmsaid Caltrate Bone &Joint Health had been developed in response to a“consumer of the country’sA$5.5 million (C3.4 million) ing it difficult for her to walk, Boehringer said. preference for amorecomplete formula to support leg-health market. Noting that Antistax wasalready available bone and joint health”, and offered the convenience Available exclusively in pharmacies, the Anti- in 26 markets –including various European of taking one tablet versus multiple supplements. The “three-in-one, triple-action” product was stax supplement –containing 360mg vitis vini- countries and South Africa –the firm claimed formulated with UC-II collagen –anatural collagen fera leaf (red vine leaf) extract per tablet –is that this advertisement had provenpopular in source also found in products such as NBTY’s recently- saidtohelp promote healthyleg circulation and other markets, along with the tagline: “listen launched Osteo Bi-Flex Ease mini-tabs (OTC bulletin, 26 June 2015, page 17) –tosupporthealthy cartilage reduce lower legswelling, as well as to relieve to your legs”. and promote joint flexibility,Pfizer pointed out. heavy,tired, aching legs and manage the symp- The marketing support in Australia will also It also contained 600mg calcium and 1,000IU toms of varicose veins. include online activity,aswell as in-store point- vitamin D3 to “nourish strong and healthy bones”, as well as 45mg vitamin Cand minerals to support Women aged between 35 and 55 years would of-sale materials and training for pharmacists. collagen production. be the target market for the tablets, the com- Boehringer said it would spend “just under Launch activity for Caltrate Bone &Joint Health pany noted, which would be supported by tele- A$1.0 million” to promote Antistax in 2015, –available exclusivelyatWalgreens in the US and Puerto Rico –included public relations and digital vision advertising in the run-up to the Aus- “with aggressive sales targets and growth to promotion, Pfizer noted, along with in-storematerials. tralian summer. match this spend”. OTC The creative –which would be repeated in OTC

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OTC MARKETING NEWS

DigitalMarketing Blend structureand flexibility to go global

neffective global digital and social-media guidelines, as well as the knowledge gleaned Astrategy needs to blend structure with flex- from previous campaigns and activity,Brady ibility,according to Peter Brady,chief executive said, to create a“digital and social-media strat- officer of UK-based social-media marketing egyguidance” document. agencyOrbital Media. “What this document does is provide the Speaking exclusively to OTC bulletin,Brady framework for the markets, and the information explained that when creating such astrategy,a for them to develop their ownsocial-media balance needed to be struck between maintain- strategy within that, tailored to their ownre- ing elements of consistencyacross all markets, quirements,”heexplained. while also giving each region “wiggle room” “It’svery important that that strategy doc- adapt digital and social-media activity to most ument provides avery clear route map for the successfully to 3reach its target audience. brand and for us when we’re advising and man- “I think from the outset you really want to aging that activity as an agency,”hemaintained, ensure that you’re not taking atop-down, com- “and alsofor the people on the ground who are mand-and-control approach and not be very ex- actually delivering it.” Orbital Media’s chief executive officer,Peter Brady, plicit in terms of what the regional markets “From aglobal social-media strategy pers- believes an effective global social-media strategy need to deliverfor aparticular product,”he pective,you want to ensure that there’scon- needs to provide astructuretoguide marketeers, explained. “It’smore about putting the right sistencyinterms of the brand and the wayit’s while allowing them the flexibility to accommodate differences in each market structure in place to allowthose markets to delivered and presented to the public across be creative and deliveractivity that fits and is international market boundaries,”Brady noted. work in terms of setting the structureinplace.” tailored to them and their cultural particular- “I don’tthink it really presents aprofession- “Certainly it helps avoid some of the pit- ities and differences.” al or coherent story about the brand if you’ve fallsabrand might encounter,” he maintained, This approach has led to Orbital Media being got one market presenting the product in one “likeregional markets delivering the wrong askedtoadvise on global digital strategy for a wayand another in adifferent way,”heargued. sort of social-mediacampaign for that area, or range of OTCproducts. “You need to develop that consistent face and on the wrong platform where consumers aren’t To build asuccessful strategy,a“toolkit” consistent messaging that complies with regu- ‘hanging out’, or by breaking the local medici- needed to be created, Brady pointed out, that lations both locally and globally.” nal regulationsfor social media.” allowed each market to “get ahandle” on the In addition to information gathered from pre- Orbital Media has previously created social- overall requirementsfor acompanyorbrand. vious campaigns, the overall documentmight media campaigns for awide range of brands Before this toolkit wasevencreated, how- also offer applications, technologies and plat- such as Nelsons’ Rescue Remedy and Allergan’s ever,“avariety of preparatory work” needed to forms that had been used in other markets and Imigran, Infacol and Sudocrem. What it had be done in each market, he noted. could be adapted for use elsewhere, Brady learnt, Brady said, wasthat innovating in the pointed out. channel waskey. Provide bespoke local strategy document “It wouldn’tbeacase of us saying: ‘You The most effective activity wasthat which As part of the overall strategy process, each have to deliverthis particular campaign this brokenew ground and could “add value” to local market would be requested to produce its way’,”henoted. “It may be that we say,‘you the user,hemaintained, such as ‘gamification’ own“bespokedigital and social-media strategy have the option of these campaigns, butyou can applications that could help convey through document”, Brady pointed out. This would in- actually tailor them according to those cultural game play abrand message or further educate clude keyinformation relevant to the particular and sales requirements that you may have for consumers on howaproduct worked. market, he added, such as alocal competitor an- that particular market’.” “I’m abig believerininnovating and being alysis, as well as local customs, rules and reg- “Wemight also include information on how different because there’ssomuch digital noise ulations that might affect marketing, local tar- successful acampaign wasinterms of certain on the web and within social media,”headded. get market demographics, and the quantity of elements, such as whether it wassuccessful in “I think activities likephoto contests and active users on social media. terms of reach and engagement, butnot so quizzes are so commonly deployed by brands Marketeers would also be asked to highlight successful in terms of community growth,”he thattheywork well from aday-to-day engage- on what platformsusers were most active and added. “It’suseful for each of the markets to ment perspective,” he claimed, “but in terms outline the goals for the brand in that particular be able to determine what elementsmight be of actually trying to broaden your appeal, reach region, he added, such as the preferred timings most appropriate for them at that moment in and engagement levels, coming up with some- of campaigns. time; for instance, whether they’re looking to thing different and being more innovative is a Requiring an element of the strategy to be launch into amarket or boost an existing prod- more productive approach.” completed by the regional market itself was uct that’sbeen on the market for some time.” These day-to-day activities, although com- also away of ensuring the guidelines didn’t Creating aglobal digital and social-media monly used, were often deployed incorrectly, “over-dictate”, Brady noted. strategy was“quite alengthy, drawn-out pro- posing serious problems for the brands concern- Once the preparatory work wasdone, the cess” that could takeanything between six weeks ed, Brady noted. region-specific information gathered by each to three months, Brady noted. “But it pays – “Operating competitions that require public market should then blend with more general you’ve then broken the back of most of the hard voting on user submissions can be horrendous

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MARKETING NEWS OTC

in terms of repercussions,”hepointed out, “be- it in adifferent way, he claimed. selves in manyinstances, so Ithink YouTube cause what tends to happen is that users submit This wasalso why“precise project planning” has amuch bigger future ahead of it.” their entry –for instance, it could be aphoto and prior local-market researchwas so impor- Orbital Media had innovated offthe back competition –and alot of people might un- tant, Brady noted, as it “really allows you to of this trend for video, Brady said, by creating scrupulously secure votes through avariety of identify where and who you want to target and last year what it claimed was“the world’sfirst ways, such as using artificial phantom accounts then predict anyissues”. virtual colic clinic”. This wasfor Allergan’sIn- through Facebook, and use those to inflate However, the planning, guidelines and tool- facol brand via Orbital Media’sbespokevideo votes for their entry.” kitwould be futile if there wasnoway to moni- question-and-answer web-platform VirtTuri “That tends to breed discontent among tor howorwhen these resources were being (OTC bulletin,17March 2014, page 16). others who might have taken part and felt that used by marketing teams, what impact they “Then you’ve got things likePeriscope, the competition might have been skewed or in- were having, or if theywere even being used which is anew service that allows you to live- appropriately managed,”hecontinued, “and at all, Brady pointed out. stream activity,” he pointed out. “I think people that is something that you would obviously want “Once you’ve developed your strategy,you are still working out howbest to use that, but to avoid for the future and to advise about in need to be able to sit down and provide work- it’sareally interesting social network that is your guidelines.” shops and coherent training for brand managers going to add adifferent dimension to the way When creating digital and social-media con- and others to ensure that theyunderstand the people do things.” tent, another major pitfall to avoid would be not toolkit and howitshould be used and deliver- “Snapchat –aphoto messaging app where pic- to acknowledge and accommodate howpre- ed,”heexplained. tures disappear after atime limit –also has alot cious aconsumer’stime was, Brady noted. “It’salso hugely important to have areport- of users migrating overtoit,”headded. “You also “With videos and applications, we try to ing process in place so you can accurately have Pinterest, which has been around for awhile keep them fairly succinct and to the point,” benchmark and track performance overtime for butisvery popular with certain markets. And he explained, “because people usually want better delivery of social media in those markets; there are other platforms in places likeinChina to complete their interaction fairly quickly, it’spointless if you can’tactually track or such as Weibu–akin to Twitter –and equivalents and those bite-size bits of information tend to understand what’sbeen delivered 12 months which are big in their particular markets.” work very well.” after you’ve put that strategy in place, so you Instagram wasanother platform that had Noting that the useage of smartphones and need to do this from the outset.” “shown huge growth in the past couple of mobile devices wasever-increasing, Brady years”, Brady noted, and wasnow “massively pointed out that it was“crucial” that digital and Keep guidelines updated popular internationally”. social-media content could be accessed easily It wasalso imperative to keep the guide- However, good quality “value-adding con- through such technology. lines constantly up to date with prevailing tech- tent” likeblog posts should not be ignored eith- “This is the real difficulty in delivering social nologies and opinions on social media, Brady er,heinsisted. media generally –whether that’sbuilding appli- pointed out, as well as newguidelines as to how “Blogs were one of the first social-media cations or content, websites, whateverthat might content should be delivered on social networks platform technologies.People tend to forget be,” he noted. “You need to ensure that the way and newlegal requirements. about them, butIstill think they’re incredibly you deliveritiscompatible across avariety of “Digital and social media changes on adaily important if you want your pages to rank in operating systems and platformsand be sure basis,”heobserved. “If you’re not abreast of search-engine results,”heexplained. “Blogs that everything functions as it should do.” that, and if you’re not adapting and not provid- give you that added depth of information that “With manyclients we’re working with, up ingcoherent advice about howtoreact to those other social-network pages sometimeslack.” to 75-80% of their consumers are using mobile changes, then the guidance becomes redundant Traditional digital advertising, such as web- devices to access websites and applications now, very quickly.” sitebanners and digital imagery,still served a so Ithink that if you don’thavethat compat- While Facebook and Twitter were still pop- purpose, he added, butsocial media offered “the ibility,you’re really losing out on alarge prop- ular platforms, Brady noted, there were others ability to connect and have adialogue with users ortion of the market,”heinsisted. –both newand established–that could pot- overaperiod of time” and allowed the “engage- Achieving this compatibility would increase entially be worked further into strategies. ment and peer network referral that standard the chances of aconsumer having a“positive This wasespecially important, he maintain- digital advertising nowadays maybe doesn’t”. digital experience”, he pointed out, which could ed, as Facebook wasmaking it harder “to organ- With social-media rules subject to change, then lead to them spreading brand messages ically reach the users and the community that having different ways of contacting and engag- to their social-media contacts –orwhat Brady you’re building”, because the social-media giant called “peer network referral”. wanted to “curate through its algorithms” what Peer network referral was“invaluable”, wasmost relevant to users. Brady noted, and wasone of the main advan- “I think Facebook is still very relevant, but tagesofrunning digital and social-media cam- there is alot of activity that is being dispersed paigns, along with the ability to have adialogue across other platforms that don’tnecessarily with consumers and build acommunity. have those issues,”headded. “You can consider it adigital version of YouTube, for example, wasnow “often re- offline word of mouth,”heexplained. “This can garded as the second-largest search engine in act as apowerful form of recommendation, a the world”, he claimed. highly-trusted opinion that heavily impacts con- “There are more and more people using sumers’ future purchasing decisions.” video for all kinds of things rather than nec- Orbital Media has created social-media campaignsfor Receiving a“virtual endorsement” got peo- essarily reading lots of text,”hemaintained. brands including Nelsons’ Rescue Remedy and ple thinking about the brand and considering “They’re actually using video to educate them- Allergan’s Infacol,Imigran and Sudocrem

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ing users –“not to have all your eggs in one of places, whether it be Google, newspapers, basket” –was “definitely auseful part of any magazines or social media.” strategy”, Brady pointed out. Brady believedthis integrated multimedia Building on this point, Brady added that approach wasafactor in the success of Sudo- despite digital and social media’s“cut-through” crem’sUK“Forall of life’slittle dramas” OTC and “resonance” with consumers, it wasgen- Marketing Award-winning campaign in 2013 erally most effective when integrated into a (OTC bulletin,28 June 2013, page 15). larger overarching marketing campaign,incor- As part of the campaign, Orbital Media porating avariety of mediums such as the more created avirtual treasure hunt ‘gamification’ app traditional avenues of print and television. This for the brand, which Allerganhas owned since allowed consumers to form what he called an acquiring Forest Laboratorieslast year (OTC “accrued view” of the product or brand. bulletin,25July 2014, page 3). “You need to be hitting people in different The virtual treasure hunt operated four vir- channels,”heexplained. “Consumers tend to tual maps –aforest, beach, playground and build opinions from avariety of sources, and lake–each hosting 10,000 spaces that could all these other media activities can add value by be ‘dug’ by an entrant in the hope of finding reaching those other channels that theymight oneof5,000 prizes. It had been so successful be frequenting.” thatithad had to be restarted after four weeks, “Weknowthat there’salarge number of Brady pointed out. consumers on social media, so that is really “Wehad had agreat television advertise- where alot of brands need to be if theycan,” ment to work with and align with, and there he continued. “But then we also knowthat cer- wasalot of activity and discussion on Twitter tainstrands of consumers are still using these in relation to the creative that spilled overinto The virtual treasurehunt ‘gamification’ app for other media.” some of the work we were doing to promote Sudocrem was so successful that it needed to be restarted after four weeks Having apresence and aconsistent message thevirtual treasure hunt,”hepointed out. “We across avariety of channels assured consumers had online video versions of the advertisement because we had that close collaboration with that the brand wasreputable, Brady maintained. running on Facebook and other channels, and different media,”heconcluded. “Social media “It reminds them that it is relevant to them. it wasreally avery closely coordinated, inte- wasavery important part of that, butitwasn’t Consistencyalso confirms in their minds that grated campaign.” the only factor.” aproduct is for them if theysee it in avariety “I think that’swhy it worked so well really, OTC

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22 OTC bulletin 14 August 2015 OTC14-08-15p23Events_Layout 1 11/08/2015 17:36 Page 2

EVENTS OTC

Email: [email protected]. OCTOBER 14-15 October Website: topra.org. ■ AESGP Conference 5-6October Brussels,Belgium AFAMELA/WSMI 13 October ■ Global Generics & This two-day conference, subtitled ‘Substance-based medical devices: An Conference ■ Biosimilars Awards 2015 important part of self-care’, is being organised by the Association of Mexico City,Mexico the European Self-Medication Industry,the AESGP. ‘Advancing self-careand respon- Madrid,Spain These Awards will recognise the There will be sessions on: ‘Medical devices: An important part of sible self-medication for ahealth- self-care’; and ‘Substance-based medical devices: Howtoestablish long- ierfuture’ is the theme of this two- achievements of the global gen- erics and biosimilars industries. term sustainability’. day conference, run by the Mexi- Speakers will include: Mairead McGuinness of the European Parlia- can non-prescription association, Organised by Generics bulletin, theywill reward business develop- ment; Carlo Pettinelli of the European Commission; John Wilkinson of AFAMELA and the World Self- the UK’sMedicines and Healthcare products Regulatory Agency(MHRA); Medication Industry (WSMI). ment initiatives, cleverlicensing deals and smart legalmanoeuvres. and Judith NevesofPortugal’sInfarmed. Contact:AFAMELA. Contact:AESGP. Tel: +52 55 5286 5297. Contact: Generics bulletin. Tel: +44 1564 777 550. Tel: +32 2735 51 30. Fax: +32 2735 52 22. Email: [email protected]. Email: [email protected]. Website: aesgp.eu/events/Brussels2015/. Website: afamela.org/index.php/afamela- Fax: +44 1564 777 524. wsmi-conference. Email: natalie.cornwell@generics- bulletin.com. ble Nutrition (CRN). Tel: +61 26260 4022. 5-6October Website: generics-bulletin.com/ Contact:CRN. Fax: +61 26260 4122. ■ Pharmaceutical generics-biosimilars-awards. Tel: +1 202 204 7700. Email: [email protected]. RegulatoryAffairs Fax: +1 202 204 7701. Website: cmaustralia.org.au. 18-19 October in Africa Email: [email protected]. ■ Pharmaceutical Website: crnusa.org. NOVEMBER London, UK RegulatoryAffairs Countries to be covered at this 1-2November in the Middle East 22 October two-day meeting include Algeria, Basics of Pharmaceutical ■ Natural Products Dubai,UAE ■ Kenya, Morocco and South Africa. RegulatoryAffairs Scandinavia Contact:Management Forum. Middle Eastern countries will be London, UK Malmö, Sweden Tel: +44 1483 730071. discussed at this two-day seminar. Atwo-day trade showfor natural Contact:Management Forum. The Organisation for Professionals Email: [email protected]. in Regulatory Affairs (TOPRA) products, health foods, natural Website: management-forum.co.uk. Tel: +44 1483 730071. beauty and organic products. Email: [email protected]. will run this three-day meeting. 8October Contact:TOPRA. Contact:Diversified Business Website: management-forum.co.uk. CommunicationsUK. ■ Marketing Authorisation Tel: +44 20 7510 2560. Tel: +441273 645 110. in Japan 20-22 October Email: [email protected]. Fax: +441273 645 169. Frankfurt, Germany ■ Marketing Authorisation Website: topra.org. in Asia Email: [email protected]. Clinical development, marketing 26-28 October Website: naturalproductsscandinavia.com. authorisation and pricing will be Frankfurt, Germany ■ Vitafoods Russia &CIS China, Indonesia, Korea and Sing- 11 November covered at this one-day meeting. Moscow,Russia apore are amongst countries to be Contact:Forum Institut für Management. Athree-day event covering diet- ■ ASMI Annual covered at this three-day event. Tel: +49 6221 500 696. ary supplements, food supplements Conference 2015 Contact:Forum Institut für Management. Fax: +49 6221 500 555. and functional food and drinks. Sydney,Australia Tel: +49 6221 500 696. Email: [email protected]. Contact:Adam Smith Conferences. Aone-day conference organised Fax: +49 6221 500 555. Website: forum-institut.com. Tel: +44 20 7017 7444. by the AustralianSelf-Medication Email: [email protected]. Industry (ASMI). 12-14 October Fax: +44 20 7017 7447. Website: forum-institut.de. Contact:ASMI. ■ 12th TOPRA Email: kristinag@adamsmith 21-24 October conferences.com. Tel: +61 29922 5111. Annual Symposium Fax: +61 29959 3693. Berlin,Germany ■ CRN’s Annual Symposium Website: vitafoodsrussia.com. for the Dietary Email: [email protected]. Athree-day event run by The Org- 27 October Website: asmi.com.au/events/. anisation for Professionals in Reg- Supplement Industry ■ Food Supplements 23-24 November ulatory Affairs (TOPRA). California, US Brussels,Belgium Contact:TOPRA. Afour-day conference organised Aone-day workshop subtitled: ■ EuroPLX 59 Tel: +44 20 7510 2560. by the US Council for Responsi- “Trading more effectively through- Athens,Greece out the European Union (EU).” This two-day meeting will pro- 3-5November Contact:EHPM. vide aforum for business devel- opment decision makers for dis- ■ 10th Ceuta International Tel: +322721 64 95. Alliance conference Email: [email protected]. cussing and negotiating collabor- ative agreements in licensing, mar- Istanbul,Turkey Website: ehpm.org. keting, and distribution of patented Delivering asolution to your international market management support 29 October medicines, generics, biosimilars, or expansion plans. This unique event brings together leading health OTCproducts, medical devices and beauty,OTC and diagnostic manufacturers, keyindustry opinion ■ CMA Annual Conference Sydney,Australia and food supplements. leaders, retailers and outsource solution distributors from over100 global “The next big thing” is the theme Contact:RauCon. markets giving delegates an opportunity to meet like-minded people. of this one-day meeting run by Tel: +49 6221 426 2960. Contact:Ceuta Healthcare. Complementary Medicines Aus- Fax: +49 6222 9807 77. Tel: +44 1202 449 709. Email: [email protected]. tralia (CMA). Email: [email protected]. Website: ceutahealthcare.com. Contact:CMA. 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14 August 2015 OTC bulletin 23 OTC14-08-15p24-27_Layout 1 11/08/2015 18:24 Page 2

OTC BUSINESS STRATEGY Fightfor executive talent heating up

Building ateam of executives with abroad range of experiences is vital for any consumer healthcarefirm looking to drivegrowth. However, in an increasingly competitiveenvironment, finding candidates with adiverse background is harder than ever.Tom Gallen reports.

iven the growth potential be looking for in prospective executives. of the consumer healthcare “Drawing on the best of the CPG and phar- marketand the expanding maceutical worlds” would be vital for the “new “Gconvergence of pharma- breed” of consumer healthcarefirms to secure heritage and consumer-packaged goods (CPG) future success in the global OTCmarket, Moh- players in the sector, the fight for talent within tashami explained. the space has neverbeen more fierce,”accord- Recruiting the right executives, Mohtashami ing to Nanaz Mohtashami, executive director at said, wasone wayfor firms to bring in know- consultancyfirm Russell Reynolds Associates. ledge from the other side of the divide. Speaking to OTC bulletin,Mohtashami ex- By changing hiring practicesand adjusting Nanaz Mohtashami, executive director at Russell plained that in this heightened competitive mar- theprofile of the candidates theywere looking Reynolds Associates, said firms could gain a ket, consumer healthcare firms were nowfacing for, companies could address areas of weak- “competitive advantage” by hiring executives with experience of both pharmaceutical and consumer acontinuous challenge to “recruitand retain ness, she argued. packaged-goods environments high-calibre leaders” with experience of both “It’sabout getting the perspective from the pharma and CPG environments. other side of the fence,”Mohtashami claimed. To help firms successfully to combine ex- The first companies that could “crack the “You don’tknowwhat you don’tknowuntil pertise from the CPG and pharma sectors, Moh- talent code” and build an executive team with someone tells you, because they’ve seen it dif- tashami proposes an “ideal formula” for the a“broad skill set bridging both sides of the ferently on the other side.” consumer healthcareexecutive “of the future” pharma-CPG divide”, she said, would achieve However, recruitment needed to go hand-in- (see Figure 1). aclear “competitive advantage”. hand with building internal capabilities to ad- These executiveswould hold a“diverse set Mohtashami is the lead author of areport dress anyproblems, Mohtashami insisted. of skills from both sides of the divide”, she said. entitled ‘Cracking the code: Changing dynam- “You’ve got to build capabilities internally, The formula combined the skills historical- ics andtalent needs in the consumer health as well as bringing newpeople in,”Mohtash- ly associated with pharmaceutical companies industry’, which explores howfirms can gain amiexplained. “If you address problems only –regulatory knowledge and product innovation – expertise in vital areas –such as researchand by bringing in newpeople, these recruits are with the marketing and supply-chain expertise development and the supply chain –byrecruit- not going to have as much impact because associated with CPG firms, Mohtashami noted. ingthe right executives. you won’tbechanging the foundations of how These four areas of expertise, Mohtashami Offering insights into the efforts already your firm goes to market.” explained, were built on three vital skills for made by some consumer healthcare players to “However,” she continued, “if you address anyconsumer healthcareexecutive:strategic change their hiring practices, the report –co- themonly by building internal capabilities, that’s mindset; collaboration and relationships; and authored by Russell Reynolds’ Neha Rajdev– avery long-term focused solution, so you’re not local knowledge. highlights the types of skills companies should going to have results immediately.” Noting that consumer healthcare businesses were gaining “greater autonomy”, Mohtashami INDUSTRYEXPERIENCE INDUSTRYEXPERIENCE saidexecutivesrequired astrategic mindset to PHARMA-HERITAGE CPG*-HERITAGE make “key regional strategic decisions” and to CONSUMER HEALTHCARE COMPANIES CONSUMER HEALTHCARE COMPANIES meet “increasingly aggressive targets”. CPG* and pharmaceutical CPG* and pharmaceutical industry experience Collaboration and building relationships had industry experience 5% emerged as a“core competency” for an exec- 54% Pharma-heritage experience only utive,Mohtashami noted, as theywere often 5% required to “maximise the benefits” of mergers andacquisitions, while working with avariety of stakeholders. Finally, anunderstanding of local markets and regulatory frameworks was“key”, she in- sisted, especially as firms movedincreasingly Pharma-heritage into emerging markets. experience only Utilising this “ideal formula”, companies 46% experience only *Consumer packaged goods 90% could benefit from the expertise held by exec- utivesacross the other side of the pharma-CPG Figure2:The industryexperience of executives at pharma-heritage consumer healthcarecompanies, along with the industryexperience of executives at CPG-heritage firms, based on research from 2014 divide, Mohtashami pointed out. (Source –Russell Reynolds Associates) By gaining knowledge of howsupply chains

24 OTC bulletin 14 August 2015 OTC14-08-15p24-27_Layout 1 11/08/2015 18:24 Page 3

BUSINESS STRATEGY OTC

operated in the CPG industry, pharma-heritage firms could spot opportunities to “cut produc- tionlead times and reduce obsolescence”, Moh- tashami argued. In addition, manufacturers, distributors, pharmacies and grocers could carry “significantly lower” inventories, she said. While on the other side, pharma-heritage ex- ecutiveswith knowledge of research and devel- opment in the consumer healthcare space would be useful to CPG-heritage firms, she insisted. Research and development in CPG-heritage companies wasstill “predominantly perceived as incremental” and was“relatively easy to repli- cate”, Mohtashami claimed. By implementing amore “science-based” approach, CPG-heritage firms would be able to develop “more sustainable product innovation strategies”, she explained. To date, it waspharma-heritage companies that had taken the lead in changing their hiring practicestobring in executiveswith experi- Figure1:Russell Reynolds Associates’ proposed “ideal formula” for the “consumer healthcareexecutive of the encesfrom both sides of the divide, Mohtash- future”, highlighting anumber of key capabilities (Source –Russell Reynolds Associates) ami claimed. Russell Reynolds’ researchreveals that 54% when it came to recruiting from across the “Wehaveput alot of focus overthe past of senior executiveswithin pharma-heritage divide, Mohtashami said it wasdue to consum- twoyears on strengthening those skill sets,”she companies have both CPG and pharmaceutical er healthcare being historically alower prior- revealed, “and we are certainly getting closer industry experience (see Figure 2). By contrast, ity for these companies. to that sweet spot.” only 5% of CPG-heritage consumer healthcare Despite the lower percentage of executives Mohtashami said that when firms were build- executiveshaveboth CPG and pharmaceutical in CPG-heritage firms that have crossed over, ing their executive teams, theyshould realistic- industry experience. anumber of interesting moveshavetaken place. ally aim for “around two-thirds” of individuals Mohtashami explained that by taking on ex- Last year,Nestlé turned to GregBehar –for- to have “seen across both sides of the fence”. ecutiveswith CPG experience, pharma-herit- merly president of Boehringer Ingelheim Phar- However, for companieslooking to hit this age firms were showing an appetite for change: maceuticals –tolead its Health Science unit. number, itwas very important to bring in the both howtheyoperated and better to compete Behar joined the Swiss food and drinks right people with the right experience, Moh- in aconsumer-focused environment. giant with overfiveyears experience at Boeh- tashami stressed. GlaxoSmithKline (GSK) turned to asenior ringer and more than sevenyears at Novartis. “If you go and hire aton of people at the executive with CPG experience in 2010, when In 2013, RB appointed Pfizer Consumer director levelfrom the other side of the fence it hired Emma Walmsleyfrom cosmetics com- Healthcare’ssenior director of prescription-to- that won’twork well,”Mohtashami explained, pany L’Oréal to lead its worldwide Consumer OTCswitch, Shivanthi Vannan, as head of mar- “because while theyhaveseen howthings are Healthcare business (OTC bulletin, 31March done differently, theyare too 2010, page 1). junior to be able to influence The UK-based firm said at the time that “The moreperspective acandidate brings, your organisation.” Walmsley’sexperience in fast-moving consumer the higher the likelihood they will fit in with “You need to makesure goods (FMCG) marketing had been an impor- the organisation and make an impact.” that those two-thirds with both tant reason behind her appointment. CPG and pharma experience Just overayear later,Sanofiwent down a are at the right levels of your similar route by appointing Vincent Warnery keting for its Health brands. organisation so that theycan actually bring –also of L’Oréal –tohead up its Consumer RB’sapproach to the recruitment of senior about change,”Mohtashami insisted. “Other- Healthcare business (OTC bulletin, 15April leaders wasrecently highlighted by the head wise the barriers will be too high.” 2011, page 23). of the firm’sresearch and development oper- In addition to seniority,Mohtashami noted The French firm again turned to an execu- ation, Sharon James (OTC bulletin,7Novem- thatitwas also crucial for firms to hire people tive with CPG experience in 2014, when it ber 2014, page 24). with the ability to adjust to anew, and often promoted Fabio Mazzottatotakecharge of its Speaking to OTC bulletin,James said that very different, working environment. Italian Consumer Healthcare operation (OTC overthe last fewyears, RB had been “significant- “The more perspective acandidate brings bulletin,7November 2014, page 27). ly strengthening” its skills in science areasby and the richer their experience,” she said, “the Prior to joining Sanofiin2013 as field sales “mainly recruiting from pharma companies”. higher the likelihood that theywill fitinwith director from personal-care companyKimberly- “You cannot lose your consumer focus, but the organisation and makeanimpact.” Clark, Mazzotta had held positions at Reckitt you also need to have that scientific, regulatory “The single most important challenge con- Benckiser (RB) and L’Oréal. and medical rigour that allows you to play in sumer healthcare companies face in finding the Asked whyCPG-heritage firms were be- this space, and that is the journeywehavebeen right talent from the other side of the fence is hind their pharmaceutical industry counterparts on,”James pointed out. finding someone who can adapt to the very dif-

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PEOPLE OTC

ferent culture,”Mohtashami insisted. Manufacturers “People who have grown up in the CPG space are more familiar with afast-paced, hard- nosed environment,”she explained, “while those Taylor toreplace Lafley from pharma organisations have experienc- ed amore conservative, cautious and bureau- cratic culture.” as P&G chief executive When bringing in executivesfrom across the CPG-pharma divide, firms needed to be “very, very careful”, Mohtashami stressed. rocter &Gamble’s(P&G’s) group president David Taylor “You need to assess all prospective can- Pof Global Beauty,Grooming and Health- didates at the individual leveltosee if cultur- care, David Taylor, isset to takeoverasthe ally theyare flexible enough to be able to company’schief executive officer on 1Nov- adapt,”she said. ember 2015. However, Mohtashami noted that it wasnot Taylor will succeed Alan Lafley, who is to just the candidate that needed to be flexible. take up the role of executive chairman. “Great care and cultural sensitivity” was Commenting on the move,Jim McNerney, needed from firms, she said, to help these ex- lead director of P&G’sboard, said it wasthe ecutivesintegrate into their newenvironment. right time to promote Taylor, after Lafleyhad “You need to have an extremely good on- completed his brief as chief executive to “lead boarding process,”Mohtashami argued, “so P&G’stransformation”. ations –improve at a“lowsingle digit” rate. that when the candidate says ‘that’snot how “The companyisnow organised into four A“strong cough and cold season” had driven my old companywould have done it’ you can industry-based sectors with afocused portfolio up turnover–which includes sales from PGT address their concerns and spot issues even be- of 10 categories and 65 brands that play to Healthcare, the OTCjoint venture P&G estab- fore theyhappen.” P&G’sstrengths,”McNerneyexplained. lished with Teva Pharmaceutical Industries in While consumer healthcare firms needed “Productivity results are strong and sustain- 2011(OTC bulletin, 16November 2011, page to look across the pharma-CPG divide when able,”McNerneypointed out, “and stronger 1) –but this rise had been tempered by lower searching for executive talent, Mohtashami ad- category business and product innovation plans sales of proton-pump inhibitor Prilosec OTC, mitted that in some instances companies would are in place.” P&G noted. be better offwidening their search to outside P&G announced Taylor’spromotion as it re- Sales at P&G’sHealth Care unit –including both industries. ported its financial results for the year ended 30 its Oral Care and Personal Health Care busi- To engage the increasingly “web-savvy” June 2015, that sawsales at its Personal Health nesses –declined by 1% to US$7.71 billion consumer, firms would need to bring in exec- Care business –which includes it OTCoper- (C7.02 billion). utiveswith experience of digital technologies, OTC Mohtashami noted, and theywere unlikely to be found within the industry. Manufacturers “When it comes to digital, the consumer healthcarespace is certainlynot cutting edge, Juda promoted to lead Genomma Lab and that is where you need to import talent from high-tech industries,”she explained. enomma Lab has promoted chief operat- it reported second-quarter turnoverupby2.6% However, firms needed to look in the right Gingofficer, Maximo Juda, tothe position to MXN2.97 billion (C167 million), thanks to places, Mohtashami insisted, and not just bring of chief executive officer with immediate effect. thegrowth of its International Pharma business. in anyone theycould from atechnology giant Juda replaces Rodrigo Herrera, who will International Pharma sales, which consist such as Google. continue to serveasthe Mexican firm’schair- solely of OTCbrands, had movedforward by “Someone from Google is going to think man and president of its operations committee. 62.8% to MXN640 million, Genomma said, very differently and is not going to work well Explaining the rationale behind the move, as aresult of “strong performances” in Chile, at aconsumer healthcare firm,”she said. Herrera said that by stepping down as chief ex- Colombia and the US. “But there are other examples of technol- ecutive, hewould have more time “to focus on International Personal Care sales advanced ogy-focused companies, such as Apple,”Moh- the strategy of the business” and to “add more by 26.9% to MXN1.15 billion in the three tashami noted, “that are probably closer to home value to Genomma”. months. This lifted Genomma’stotal Interna- and amore suitable place to begin asearch.” “Juda has demonstrated overthe past few tional turnoverby37.7% to MXN1.79 billion. In the future, the consumer healthcare in- years his ability to manage the business and his By contrast, turnoveratGenomma’sdomes- dustry’stop executiveswould need to come good knowledge of the firm’sbusiness model,” tic Pharma division –which includes generics from a“variety of backgrounds”, Mohtash- Herrera explained. and OTCproducts –had dropped by 35.0% to ami pointed out. “I am convinced that with this change Gen- MXN598 million, the firm noted, due to “weak- “The profile of leading consumer health- omma will continue to grow,”Herrera insisted, er consumption” of OTCproducts. care executives,”she noted, “is changing.” “and increase its profitability to become alead- Compounded further by a14.0% slump in ing global company.” domestic sales at the company’sPersonal Care ■ Foradvice on executive recruitment contact Nanaz Juda has been chief operating officer at Gen- unit to MXN586 million, total domestic turnover Mohtashami at [email protected]. omma since December 2014. slipped back by 26.0% to MXN1.18 billion. OTC Genomma announced Juda’spromotion as OTC

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