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COMPANY NEWS 3 GSK takes 9.9% stake in Dong-A 3 Sanofi-Aventis is set to Alliance Boots breaks 4 £1 billion profit mark Cold remedies drag down Taisho 6 buy Poland’s Nepentes Nycomed’s OTC sales rise 7 despite decline in Europe anofi-Aventis is set to acquire Nepentes and Marek Orlowski –have agreed to act as Acquisitions add £123 million 8 to SSL’s sales Sin a deal that values the Polish OTC com- consultants to Sanofi-Aventis for three years. pany at PLN420 million (C105 million). Under the terms of the agreement, Sanofi- Stada shuns Poland 10 due to high prices A joint statement issued by the two com- Aventis will pay PLN26.00 per share to the J&J’s Weldon asked to testify 11 panies said Nepentes and its controlling share- main shareholders and PLN28.00 per share to holders – who hold a combined stake of around any other minority shareholders. The public Entering Sweden hits 12 Celesio’s profits 63% in the Polish company – had agreed to sell tender will run until 10 August 2010. all their shares to Sanofi-Aventis and would not The deal is conditional on Sanofi-Aventis Pfizer mulls outsourcing 13 OTC product production accept any competing offers. gaining at least 90% of the outstanding shares The two companies noted Sanofi-Aventis of Nepentes, as well as approval by the Pol- GENERAL NEWS 14 would seek to buy all the outstanding shares in ish competition authority. Nepentes through a public tender offer. The Nepentes deal is the latest in a series Switzerland could pay for 14 Nepentes reported sales up by nearly a quar- of OTCacquisitions by Sanofi-Aventis, which complementary medicines ter to PLN135 million in 2009 from its port- helped push up sales by the French company’s Europe’s list of herbals 15 folio of pharmaceuticals and dermocosmetics, Consumer Health Care business by 44.8% – grows to seven including the Emolium and Iwostin brands. 42.5% at constant exchange rates – to C491 mil- German pharmacists favour 16 The majority of this figure was generated in lion in the first quarter of 2010 (OTC bullet- generic OTC manufacturers Poland, but Nepentes also has affiliates in Bul- in,14 May 2010, page 8). MARKETING NEWS 17 garia and Romania. Sanofi-Aventis says it is the “fifth-largest The founders of Nepentes – Lukasz Butruk consumer healthcare player in the world”. Mentholatum’s Regenovex 17 runs into trouble in the UK Scholl ‘Keeping Britain on its Feet’ 18 FDA warns Americans 19 FDA issues PPI Aspen Pharmacare about topical Benadryl Novartis adds three to Savlon 20 fracture warning makes bid for Sigma FEATURES 22 outh Africa’s Aspen Pharmacare has made he Food and Drug Administration (FDA) Sa non-binding takeover bid worth A$1.49 A tale of two companies 22 Tin the US has issued a Drug Safety Com- billion (C979 million) for Australia’s Sigma CEE growth masks mixed trends 26 munication on proton-pump inhibitors (PPIs), Pharmaceuticals. citing a possible increased risk of fractures of Sigma’s board said it was considering Asp- REGULARS the hip, wrist and spine with their use. en’s “non-binding, indicative and conditional Events – Our regular listing 21 As a result, the FDA said that the labelling proposal”for all of the company’s issued share People – Latest moves 30 for both prescription and OTC medicines con- capital at a price of A$0.60 per share. The deal ■ Continued on page 7 ■ Continued on page 7 OTC31-05-10p2-3FIN.qxd 27/5/10 06:14 Page 2 OTC31-05-10p2-3FIN.qxd 27/5/10 06:14 Page 3

COMPANY NEWS OTC

Mergers & Acquisitions Mergers & Acquisitions/First-Quarter Results GSK takes a 9.9% stake Church & Dwight gets Simply Saline in South Korea’s Dong-A hurch & Dwight is set to acquire the Sim- Cply Saline brand of nasal saline solutions laxoSmithKline is set to pay £73.9 mil- erated by the co-promoted products. A new busi- in the US from Blairex Laboratories for an un- Glion (C87.0 million) for a 9.9% stake in ness unit will be created within Dong-A to man- disclosed sum. South Korea’s Dong-A Pharmaceutical. age the collaboration. Simply Saline had the potential to be even The purchase is part of a strategic alliance Asked whether GlaxoSmithKline intended bigger,said Church & Dwight, even though it that will see the two companies co-promote a to raise its stake in Dong-A, the spokesperson was already the number one nasal saline solu- range of products in South Korea. A spokes- declined to comment. tion brand in the US, with annual turnover of person for GlaxoSmithKline told OTC bullet- Described by GlaxoSmithKline as the “num- around US$20.0 million (C15.9 million). in they would initially co-promote prescription ber one pharmaceutical and OTC company in Church & Dwight added that the acquired pharmaceuticals but could work together on con- South Korea”, Dong-A generated sales of £414 brand would complement its existing Sterimar sumer healthcare products at a later date. million in 2009 from its range of prescription nasal saline solution brand in Europe and oth- The two companies will share profits gen- and OTC medicines, as well as energy drinks, er parts of the world. consumer products, active pharmaceutical in- Built on a line of saline-based “nasal mist” gredients and biologicals. products, the Simply Saline offering includes OTC bulletin GlaxoSmithKline noted that its own South Simply Saline Nasal Mist, Baby Simply Saline Korean business, which marketed consumer 31 May 2010 Number 343 healthcare brands as well as prescription phar- maceuticals, currently ranked number five in Editor & Publisher: Deborah Wilkes the country’s pharmaceutical market with sales Associate Editors: Aidan Fry of £225 million in 2009. Mike Rice Christophe Weber,GlaxoSmithKline’s sen- Senior Assistant Editor: Matt Stewart ior vice-president and regional director for Asia- Assistant Editors: Joanne Grew, Jenna Lawrence, Pacific, said Dong-A’s market-leading position Dave Wallace and expertise in Korea gave GlaxoSmithKline Advertising Controller: Debi Minal asignificant opportunity to expand its commer- cial footprint and build operational scale in the Marketing Manager: Val Davis fast-growing Asian market. Editorial, Subscription and Advertising Korea’s pharmaceutical market had “con- enquiries should be addressed to: OTC bulletin, The Simply Saline brand offers a range of “nasal mist” OTC Publications Ltd, 54 Creynolds Lane, Solihull, sistently enjoyed double-digit growth”, Glaxo- products in the US West Midlands B90 4ER, UK. SmithKline pointed out, adding that market re- Tel: +44 1564 777550. Fax: +44 1564 777524. searcher IMS had forecast the market would Nasal Mist, Simply Saline Nasal Mist Allergy E-mail: [email protected]. achieve a compound annual growth rate of ap- & Sinus Relief, Simply Saline Nasal Mist Cold Subscriptions proximately 10% through to 2012. Formula and Simply Saline Nasal Mist Cold Annual subscriptions to OTC bulletin in Europe are £595.00 for single copies and £345.00 for additional copies to the same ad- Won-Bae Kim, president of Dong-A, said Formula with Menthol. The Simply Saline Nas- dress, including delivery. Subscriptions to addresses outside Eur- the collaboration would improve his company’s al Moist Gel and Simply Saline Sinus Wash ope are subject to an additional charge of £30.00 to cover postage. Subscription enquiries in Korea should be directed to Pharma competitiveness in the “fast-changing domes- products complete the line up. Koreana Ltd, 14th Floor,KTB Network Building, 826-14 Yeoksam- tic and global pharmaceutical markets”. The US-based company said the deal should dong, Kangnam-gu, Seoul 135-080, Korea (Tel: +82 2 554 9591; Fax: +82 2 563 8289; E-mail: [email protected]). The deal would also enable Dong-A to ac- close in the second quarter of 2010. Advertising celerate its transformation into a “true global Meanwhile, Church & Dwight has reported Advertising rates and data are available on request from the ad- player”, he remarked, by taking advantage of sales up by 9.2% to US$635 million in its first dress above or at www.otc-bulletin.com. About OTC bulletin GlaxoSmithKline’s product pipeline and global quarter ended 2 April 2010. OTC bulletin is published 20 times a year by OTC Publications marketing and operational expertise. Personal Care sales in the US grew by 6.1% Limited: twice monthly in February,March, April, May,June, Sep- tember,October and November; and monthly in December,Jan- OTC to US$164 million, aided by higher sales of uary,July and August. A subscription to OTC bulletin includes Orajel oral analgesics and Trojan condoms. the weekly electronic newsflash, news@OTCbulletin,which is The rise in Personal Care sales – combined published around 45 times a year. OTC bulletin is printed by the IN BRIEF Warwick Printing Company Limited, Caswell Road, Leamington with a 6.8% increase in US Household Prod- Spa CV31 1QD, UK. ■ ABBOTT is set to acquire Piramal Health- ucts sales to US$303 million – lifted Church No part of this publication may be copied, reproduced, stored in a retrieval system or transmitted in any form without prior care’s Indian branded generics business in & Dwight’s Consumer Domestic turnover by permission from OTCPublications Ltd. a deal worth US$3.72 billion (C3.00 billion). 6.5% to US$467 million. ©OTC Publications Ltd. All rights reserved. Company registered in England No 2765878. Registered Office: India’s Piramal said it would retain its other International sales of Church & Dwight’s 54 Creynolds Lane, Solihull, West Midlands B90 4ER, UK. businesses, including its OTC operations. US- Consumer brands rose by 24.0% to US$103 OTC bulletin® is registered as a trademark in the European based Abbott claimed the deal would make it million over the period. Specialty Products sales Community. the number one pharmaceutical firm in India. grew by 8.6% to US$65.2 million. ISSN 1350–1097 www.OTC-bulletin.com OTC OTC

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OTC COMPANY NEWS

Annual Results Alliance Boots breaks £1bn profit mark

ocusing on customer service and rebrand- last year had boosted sales of non-prescription Retail Health Lifestyle Fing its community pharmacies in the UK healthcare products. 13% 16% £0.80 billion boosted OTC sales at Alliance Boots in its year Meanwhile, Retail Health and the firm’s dis- £0.99 billion ended 31 March 2010, as the company over- pensing business benefited from Alliance Boots came a difficult retail environment and pres- rebranding its UK community pharmacies with sures on dispensing margins to report a trad- the ‘your local Boots pharmacy’ format. ing profit of over £1.00 billion (C1.16 billion) The £65 million rebranding of around 1,000 for the first time. Boots community pharmacy stores (OTC bul- The privately-held wholesaler and retailer letin,30 March 2007, page 1) had been com- reported a trading profit of £1.01 billion for the pleted at the end of 2009, Gourlay noted. year – a rise of 12.7% – from total sales which Stores that had been converted had seen Dispensing & increased by 9.6% to £22.5 billion. Alliance “substantial increases” in both retail sales and Beauty & Toiletries Related Income 34% 37% Boots is only the third UK-based retailer – after dispensing volumes, Gourlay noted, adding that £2.18 billion £2.35 billion supermarket chain Tesco and clothing firm higher sales of Boots own-brand products had Marks & Spencer – to achieve a profit of over been recorded in converted stores. Figure 1: Sales by Boots UK in the year ended 31 March 2010 – £6.32 billion – broken down by product £1.00 billion in a single year. Retail Health accounted for 13% of sales category (Source – Alliance Boots) Alliance Boots said that its sales of non-pre- by the firm’s Boots UK unit, which increased scription medicines and healthcare products by 2.6% to £6.32 billion (see Figure 1). rose by 0.3 percentage points to 10.2%, as UK in the UK – which are grouped under the Retail Dispensing and related income, which rep- trading profit grew by 7.8% to £677 million. Health banner within Boots UK – increased by resented 37% of Boots UK’s turnover, finished As of 31 March 2010, Alliance Boots was 5.6% to £798 million for the year. The gross ahead by 1.7% to £2.35 billion. Alliance Boots operating 2,473 Boots health and beauty stores margin from these sales had also improved, the noted that good dispensing volume growth and in the UK, of which 2,380 included a phar- company noted, thanks to a better product mix a strong rise in related income had been par- macy. During the year,10 new stores had been and more effective use of promotions. tially offset by a lower average revenue per pre- opened, the company said, while 46 had been Alex Gourlay,chief executive of Alliance scription mainly as a result of lower generic re- relocated. The company also had 671 Boots Boots’ Health & Beauty division, said the imbursement prices. Opticians stores. growth of Retail Health sales had been aided by In the Beauty & Toiletries category,turnover a focus on customer service, which had led to jumped by 6.1% to £2.18 billion, with sales of Continue to expand UK chain over 90% of the company’s UK pharmacy staff cosmetics, fragrances, accessories and toiletries Andy Hornby,chief executive officer of Al- accessing e-learning training programmes to all increasing year-on-year. liance Boots, said the company would continue help provide better advice to customers. Sales in Boots UK’s Lifestyle category,how- to expand its UK chain when opportunities This focus had contributed to the growth of ever,dropped back by 4.6% to £991 million. arose and prices were realistic. Boots’ share of the UK retail health market, Boots UK accounted for 95% of the com- He added that Alliance Boots’ target for store Gourlay insisted. pany’s UK Health & Beauty sales, which grew openings in its UK chain was approximately The impact of the swine flu outbreak in the by 4.7% to £6.64 billion (see Figure 2). The 10-20 outlets each year. summer and autumn of 2009 had also lifted Re- Boots Opticians chain contributed the remain- Away from its standalone Boots stores, the tail Health turnover, Gourlay noted, along with ing £320 million. Health & Beauty’s like-for- company recently rebranded 13 pharmacies new product development. He added that the re- like UK sales advanced by 2.4%. within Waitrose supermarkets in the UK as launch of Boots’ own-branded vitamin range The UK Health & Beauty trading margin Boots outlets. The company has also begun a trial where Boots health and beauty products are Country Annual sales Change Number sold in selected Waitrose locations and Waitrose (£ millions) (%) of stores food products are sold in selected Boots stores. Gourlay said that although the trial had only Health & Beauty – UK* 6,642 +4.7 3,144 been running for four weeks, the immediate Norway 373 +10.4 153 customer reaction had been “very encouraging”. Republic of Ireland 235 +7.8 55 He cautioned that it may be a year before the The Netherlands 174 +6.1 74 results of the trial became clear. However, if Thailand 68 +19.3 165 they were good, the scheme could be expand- Italy 25 +8.7 21 ed quite rapidly,he said. Russia 3-25.0 9 Outside of the UK, international Health & Health & Beauty – International 878 +9.2 477 Beauty sales improved by 9.2% to £878 mil- lion. At constant currencies, the increase was Total Health & Beauty 7,520 +5.2 3,621 a more modest 2.7%, while like-for-like sales * Including Boots Opticians slipped back by 0.3%.

Figure 2: Sales by Alliance Boots’ Health & Beauty division in the year ended 31 March 2010 and the number of International trading profit jumped by 17.8% stores at 31 March 2010, broken down by country (Source – Alliance Boots) – 9.4% at constant currencies – to £53 million,

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COMPANY NEWS OTC

pushing up the trading margin by 0.4 percent- Business Annual sales Change age points to 6.0%. (£ millions) (%) As of 31 March 2010, Health & Beauty’s international portfolio consisted of 477 stores Pharmaceutical Wholesale 12,424 +10.3 in six countries, along with 43 franchise stores Health & Beauty 7,520 +5.2 across Bahrain, Kuwait, Qatar,Saudi Arabia Contract Manufacturing & Corporate Costs 252 – and the United Arab Emirates (UAE). Intra Group -1,474 – Norway remained Health & Beauty’s biggest Total Group 18,722 +8.9 market outside of the UK, with sales growing Associates & Joint Ventures 3,791 +13.2 by 10.4% to £373 million. In constant curren- Total Alliance Boots 22,513 +9.6 cies, the growth was 4.7%. Converting existing Norwegian pharmacies Figure 3: Sales by Alliance Boots in the year ended 31 March 2010 by business (Source – Alliance Boots) to the new ‘Boots apotek’ format – which fea- tures a higher proportion of Boots-branded Asked about expansion into new countries, ability had been why the company had not made beauty and toiletry products than unconverted Stefano Pessina, executive chairman of Alliance a substantial bid for any of the state-owned stores – had helped offset a fall in dispensing Boots, said the company remained open-mind- Apoteket pharmacies that the Swedish govern- income and lift like-for-like sales by 1.3%, ed about the issue, but added that it would need ment had put up for sale last year (OTC bul- Alliance Boots said. to find a partner that was “on the same page” letin,29 May 2009, page 1). as Alliance Boots for a deal to be done. Total sales at Alliance Boots’ Health & Norwegian rebranding finished this year Commenting on the market for pharmacies Beauty retail division rose by 5.2% to £7.52 bil- Over 100 of the company’s 153 Norwegian in Europe, Pessina said he was not sure that now lion over the 12 months (see Figure 3). At con- pharmacies had been converted to the ‘Boots was the “best time to invest in pharmacy”. stant currencies, this represented an improve- apotek’ format as of 31 March, Alliance Boots It was a “difficult period for pharmacists”, ment of 4.5%. Boots said like-for-like sales had noted, with the rebranding process expected Pessina admitted. However, sellers were still finished ahead by 2.1%. to be completed by the end of this year. “thinking of the good times when they could Trading profit by the division as a whole The fragile state of the local economy had ask foolish prices”, he added, and this had rose by 8.5% – 8.0% on a constant currency impacted on retail sales in Ireland, Alliance made buying pharmacies “really difficult”. basis – to £730 million, with a trading margin Boots said, but this had been more than offset Alliance Boots is considering entering the improved by 0.3 percentage points to 9.7%. by “excellent” dispensing growth, as turnover newly-liberalised Swedish pharmacy market, increased by 7.8% – 1.1% on a constant-cur- having signed a letter of intent to establish a Wholesaling delivers double-digit profit rise rency basis – to £235 million. However, on a joint venture with the Swedish Association of Meanwhile, the company’s Pharmaceutical like-for-like basis, the lower retail sales hit Pharmacists, Sveriges Farmacevtförbund (OTC Wholesale division had delivered double-digit home, with turnover declining by 3.9%. bulletin,10 February 2010, page 3). trading profit growth, Alliance Boots said, de- The decline in like-for-like revenue and Under the terms of the deal, the joint venture spite facing difficult market conditions. This had lower gross margins were blamed for a drop in would allow independent pharmacies in Swe- been thanks to a combination of organic growth, profitability at Alliance Boots’ Irish stores. den to operate as franchise stores under the the initial benefits of a restructuring plan insti- Ireland’s poor economic climate does have Boots brand name. gated a year ago, and the full-year impact of an upside for the company, with Alliance Boots However, Pessina said it did not intend to acquisitions made during 2008/2009. claiming the current environment would allow invest a lot of money in the country as Swedish Pharmaceutical Wholesale’s turnover grew it to “secure attractive store locations on com- pharmacies were not particularly profitable. by 10.3%, or 5.6% at constant currencies,to petitive leases”. Pessina explained that this lack of profit- £12.4 billion (see Figure 4). Like-for-like turn- In the Netherlands, turnover improved by over increased by 3.7%. 6.1% to £174 million, but constant-currency Country Annual sales Change Alliance Boots estimated that the wholesale sales declined by 0.6% and like-for-like sales (£ millions) (%) markets in which it operated had grown by 4% fell by 0.2%. Profits had increased, Alliance France 4,780 +5.8 – up from 3.5% a year earlier – thanks to Boots said, due to the adverse effect of gov- higher volume and price growth in Russia. UK 2,544 +10.1 ernment measures on profits in the prior year. The trading profit from wholesaling jumped Spain 1,358 +8.0 Following promising results from the initial by 17.2% – 13.3% on a constant-currency basis test of a new ‘Boots apotheek’ pharmacy con- Italy 1,162 +8.1 – to £252 million, pushing up the trading mar- cept – which offered a broader range of prod- The Netherlands 822 -2.8 gin by 0.1 percentage points to 2.0%. Like-for- ucts than most Dutch pharmacies, including Russia 657 +40.1 like trading profit – adjusted for acquisitions Boots-branded health and beauty products – Czech Republic 442 +11.3 and disposals – increased by 9.0%, reflecting the trial had been expanded to five stores, Al- Germany343 +130.2 good profit growth in all markets except for liance Boots said. A decision on whether to Norway 334 +21.0 France, Germany and the Netherlands. roll-out the concept in more Dutch stores will Other 43 +2.4 The division-wide restructuring programme, be taken in the next few months. launched last year with the aim of reducing Intra-segment -61 – A net 15 stores were added to Alliance operating costs by £55 million per year by 2011/ Boots’ portfolio in Thailand during the year,as Total Wholesale 12,424 +10.3 2012, was now almost complete, Alliance Boots turnover grew by nearly a fifth to £68 million. said, noting efficiency gains of just over £30 Figure 4: Sales by Alliance Boots’ Pharmaceutical On a constant-currency basis, the rise was 9.3%, Wholesale division in the year ended 31 March 2010, million had been achieved in 2009/2010. while like-for-like revenue was up by 5.1%. broken down by country (Source – Alliance Boots) OTC

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OTC COMPANY NEWS

Annual Results Cold remedies drag down sales at Taisho

apan’s Taisho Pharmaceutical blamed a steep Business Annual sales Change Forecast sales Change Jdecline in sales of cold remedies in the sec- (¥ billions) (%) (¥ billions) (%) ond half of the year and the “sluggish” perfor- mance of more potent OTC products for a 2.6% Livita brand 3.1 +19.6 3.5 +12.9 decline in its OTC sales to ¥144 billion (C1.26 Overseas drinks 5.7 -3.8 6.2 +8.8 Others1.6 ––– billion) in the 12 months ended 31 March 2010. Foods for specified health use 10.4 +5.2 11.3 +8.2 The company said there had been a “signif- OTC products 144.3 -2.6 151.3 +4.8 icant drop” in the market for cold remedies in Others 4.1 +36.7 4.6 +12.5 the final six months of its financial year,in con- Total Self-Medication 158.9 -1.4 167.2 +5.3 trast to the first half, when sales had grown strongly due to an outbreak of H1N1 swine flu Prescription operations 99.6 +4.8 94.8 -4.8 (OTC bulletin,16 November 2009, page 11). Total for Taisho 258.4 +0.9 262.0 +1.2 Compounding the fall in sales of cold and flu products had been the weak market for what are Figure 1: Taisho Pharmaceutical’s sales in the year ended 31 March 2010. Forecasted sales are for the year ending 31 March 2011 compared with actual sales in the previous 12 months (Source – Taisho Pharmaceutical) termed ‘category 1 products’–OTC medicines, such as switch products, deemed to hold the Business Annual salesChange Forecast sales Change highest degree of adverse-event risk. (¥ billions) (%) (¥ billions) (%) As a result of the lower OTC sales, turnover Lipovitan D49.4 -6.3 50.0 +1.2 by Taisho’s Self-Medication division declined Other Lipovitan 21.4 -2.9 21.8 +1.9 by 1.4% to ¥159 billion for the year (see Fig- Total Lipovitan brand 70.8 -5.3 71.8 +1.4 ure 1). However, the division’s operating income Zena brand 3.5 -10.5 3.6 +2.9 increased by 4.2% to ¥30.5 billion. Other drinks 1.4 ––– Looking ahead, Taisho said its Self-Medi- Total tonics and nutrient drinks 75.7 -5.3 –– cation business faced difficult market conditions Cold remedies (Pabron brand) 24.9 -1.7 25.0 +0.4 due to the “sluggish” Japanese economy – Hair treatments (RiUP brand) 12.7 +11.9 13.5 +6.3 which had been hit by a decline in consumer Analgesics (Naron brand) 4.4 +0.1 4.7 +6.8 spending due to the worsening employment environment – as well as an increase in com- Gastrointestinal treatments 4.3 -2.0 4.3 ±0.0 petition and the ongoing impact of changes to Laxatives (Colac brand) 3.9 +0.1 4.0 +2.7 the rules governing OTC medicine distribution. Cold remedies (Vicks brand) 2.9 +2.2 2.9 ±0.0 In June last year,Japan reclassified OTC Other OTC products 15.5 ––– drugs into three categories according to the Total OTC products 144.3 -2.6 151.3 +4.8 degree of risk attached to their active ingredi- ent, which in turn impacted on how and where Figure 2: Breakdown of Taisho Pharmaceutical’s OTC sales in the year ended 31 March 2010. they could be sold. Forecasted sales are for the year ending 31 March 2011 compared with actual sales in the previous To combat these difficulties, Taisho said it 12 months (Source – Taisho Pharmaceutical) planned to broaden its range of category 1 drugs vitan D product had slipped back, resulting in Annual sales Change by switching more ingredients from prescrip- the overall turnover decline. (¥ billions) (%) tion-only to OTC status, as well as “aggressive- Sales of all Taisho’s tonic and nutrient drinks ly” developing new product categories, such as dropped by 7.0% through drug channels and Food channels 38.5 -3.6 treatments for metabolic conditions. In-store by 3.6% through food channels (see Figure 3). Drug channels 37.1 -7.0 promotion would also be strengthened, Taisho Although category 1 OTC drugs had gen- Total 75.7 -5.3 added, to highlight the value of its products erally struggled during the year,the RiUP X5 and drive sales. minoxidil product for hair regrowth – launch- Figure 3: Breakdown by distribution channel of Taisho Pharmaceutical’s sales of tonics and nutrient With these measures in place, Self-Medi- ed in March last year (OTC bulletin,17 March drinks in Japan in the year ended 31 March 2010 cation’s sales were expected to increase by 5.3% 2009, page 17) – had helped drive up turnover (Source – Taisho Pharmaceutical) to ¥167 billion in the year ending 31 March of the RiUP brand by 11.9% to ¥12.7 billion. 2011, Taisho said. Sales of Naron analgesics – boosted by a lion, driven by a double-digit rise in sales of A 5.3% fall in sales of the company’s core new Naron Ace R product – and Colac laxatives the Livita brand. Lipovitan brand of energy and tonic drinks to both edged up by 0.1% to ¥4.4 billion and ¥3.9 During the year,Taisho expanded its Self- ¥70.8 billion (see Figure 2) reflected the impact billion respectively. Meanwhile, the new top- Medication division’s presence outside of Japan of the tough economic environment, more com- ical analgesic Diclotect – available as a tape, by paying US$310 million (C250 million) for petition and unfavourable weather conditions gel or lotion containing diclofenac – was meet- Bristol-Myers Squibb’s OTC assets in the Asia- in the key summer period. ing its sales targets. Pacific region, excluding China and Japan (OTC Although sales of some Lipovitan products In the ‘foods for specified health use’ cat- bulletin,30 September 2009, page 1). had increased, Taisho noted, the leading Lipo- egory,sales increased by 5.2% to ¥10.4 bil- OTC

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COMPANY NEWS OTC

Mergers & Acquisitions First-Quarter Results Aspen Pharmacare Nycomed’s OTC sales rise bids to buy Sigma

■ Continued from front page despite decline in Europe would also see Aspen assume Sigma’s debts of A$785 million. ycomed’s total OTC sales moved forward Gastrointestinal businesses respectively – slip- However, Sigma advised shareholders to Nby 4.7% to C103 million in the first quar- ped back by 1.0% to C87.3 million. In local cur- take no action at this stage, and that further an- ter of 2010. In local currencies, however, this rencies, the fall was a more dramatic 8.8%. nouncements would be made in due course. represented a decline of 1.6%. The company said sales of its OTC calcium The South African firm’s approach comes Strong sales outside of Europe had driven products had been strong in Russia and the CIS, shortly after Sigma – which has interests in the growth, the Swiss company noted, although while the company had launched OTC panto- OTC products, generic pharmaceuticals, phar- this advance had been offset by a 12.7% fall in prazole products in 14 countries to date. macy retailing and drug wholesaling – report- European turnover during the period. Novartis Consumer Health has just intro- ed a net loss of A$389 million for the year end- European sales had been hit by pharmacies duced Nycomed’s Pantoloc Control OTC panto- ed 31 January 2010. Sigma reported the net loss destocking flu products acquired at the end of prazole product in the UK, as part of the co- after cutting goodwill valuations by A$424 mil- 2009 in anticipation of a flu pandemic, Nyco- marketing agreement signed between the two lion. Sales increased by 4.5% to A$3.22 billion med said. This had then been compounded by companies in February (OTC bulletin,14 May (OTC bulletin,16 April 2010, page 2). a “relatively mild” cough and cold season in 2010, page 22). Aspen’s existing Australian subsidiary gen- some European markets. Novartis Consumer Health will launch the erates annual sales of around A$180 million Meanwhile, total OTC turnover had risen by product in 14 European countries during 2010, from an Ethicals division and an OTC/Grocery 9.2% in Latin America, Nycomed said, while using the Pantoloc Control brand name – one division, which currently markets the Andrews sales in Russia and the Commonwealth of In- of the five names Nycomed can use in Europe Tums indigestion and Bio-Oil skincare prod- dependent States (CIS) had grown by 16.4%. along with Pantozol Control, Pantecta Control, ucts, as well as the Murine eye drops range and The fastest OTC sales growth was reported in Somac Control and Controloc Control. Tixylix cough and cold brands. the Asia-Pacific, Africa and Middle East re- OTC sales – excluding OTC calcium and In the wake of the poor financial perform- gion, where sales increased by 50.2%. OTC pantoprazole – accounted for 11.2% of ance, Sigma is looking for a new chief execu- Nycomed’s OTC sales excluding calcium Nycomed’s total group sales, which declined tive officer and chief financial officer. OTC and pantoprazole OTC – which are re- by 7.6% as reported and 8.9% in local curren- The company said chief financial officer ported as part of its Specialty Products and cies to C776 million. Mark Smith had resigned “to pursue other in- OTC terests” on 13 May,less than one month after chief executive officer Elmo de Alwis handed Regulatory Affairs First-Quarter Results in his resignation after 33 years at the comp- any (OTC bulletin,30 April 2010, page 23). FDA warns on PPIs Podravka sees However, while Smith has already left his post, de Alwis will remain in place until a suc- ■ Continued from front page cessor is recruited. -taining PPIs would be changed to reflect the OTC sales drop Sigma said KPMG partner Mark Watson new safety information. would take over as chief financial officer until Procter & Gamble’s Prilosec OTC and Merck roatia’s Podravka said a drop in consum- a replacement for Smith was found. & Co’s Zegerid OTC heartburn medicines – C er demand caused by the economic crisis The company will also have a new chair- both of which are based on the PPI omeprazole had led to a 26% decline in sales of its domes- man from 21 June, when Brian Jamieson re- – will be affected by the labelling change, as tic OTC products in the first quarter of 2010. places John Stocker,who is retiring from the will Novartis Consumer Health’s lansoprazole- Consumer spending power in Croatia had company’s board of directors. Jamieson was based Prevacid 24HR. been weakened by the economic crisis, Podrav- appointed to Sigma’s board of directors in Dec- The FDA said it had taken action following ka said, which had led people to stop buying ember 2005. a review of seven epidemiology studies, six of what they viewed as “unnecessary drugs”. Sigma’s cuts to its goodwill valuations in- which had reported an increased risk of frac- The fall in sales of OTC products – com- cluded a reduction of A$49.1 million for its tures of the hip, wrist, and spine with PPI use. bined with a 7% drop in sales of domestic pre- Herron range of OTC products following a The greatest risk seemed to be associated with scription-only drugs – pushed turnover at the poor performance in the grocery channel. An- high doses or long-term use of PPIs. company’s Pharmaceuticals division down by other A$375 million came from the A$819 mil- However, it was “not clear at this time” if the 5% to CrK156 million (C21.5 million). lion goodwill valuation placed on the Arrow use of PPIs was the cause of the increased risk Podravka’s performance in Croatia offset the generics business Sigma bought in 2005. of fractures seen in some studies, the agency 5% gain the Pharmaceuticals division made in Excluding the goodwill impairment charges pointed out. Most of the studies had evaluated international markets, which was driven by a of A$424 million, Sigma said its annual und- individuals 50 years of age or older,the FDA 22% growth in sales of prescription-only drugs. erlying net profit had decreased by 15.5% to noted, and the increased risk of fracture was Pharmaceuticals’ earnings before interest A$67.7 million. seen mainly in this age group. and tax (EBIT) grew by 2% to CrK13.9 million. OTC OTC OTC

31 May 2010 OTC bulletin 7 OTC31-05-10p8-9FIN.qxd 27/5/10 11:08 Page 2

OTC COMPANY NEWS

Annual Results Acquisitions add £123mn to SSL’s sales

cquiring a controlling stake in eastern Annual sales* Actual growth Adjusted growth** AEuropean condom distributors Beleggings- (£ millions) (%) (%) maatschappij Lemore BV (BLBV) and Gain- bridge added £123 million (C143 million) to Durex 294 +10.0 +4.8 SSL International’s sales during the year ended Scholl footcare168 +17.5 +4.6 31 March 2010. Scholl footwear 106 +13.6 +7.4 The UK-based firm said adding Russia’s Locally-owned brands 65 -14.1 -4.4 BLBV on 1 June 2009 and Gainbridge in the Branded consumer 632 +9.4 +4.1 Ukraine on 1 October 2009 had helped lift total Other consumer 47 -26.9 -22.3 group sales by 24.9% to £803 million. Operat- Total SSL 679 +5.7 +1.8 ing profit had advanced even quicker,growing * Excluding £123 million in sales from Beleggingsmaatschappij Lemore BV (BLBV) and Gainbridge Investments by 40.8% to £126 million, the company noted, ** Adjusted to constant exchange rates thanks primarily to the two acquisitions. As Figure 1 shows, SSL’s turnover through Figure 2: SSL’s sales – excluding BLBV and Gainbridge – in the year to 31 March 2010 (Source – SSL International) BLBV in Russia and the Commonwealth of the acquisition of the Polish condom brand Heel Repair Cream had now generated sales of Independent States (CIS) – excluding Ukraine Rosetex for £3.9 million on 11 May. Annual nearly £20 million since its global launch in – stood at £116 million for the 10-month period, sales of Rosetex were approximately £2.1 mil- 2008 and was regularly recommended by doc- driven by £49.6 million in sales from the Con- lion, the company noted. tors and footcare professionals around the globe. tex and Durex condom brands. In the Ukraine, Meanwhile, SSL said that its core Durex Scholl Footwear,meanwhile, reported turn- the Gainbridge business posted sales of £7.3 and Scholl global brands had driven up group over up by 7.4% at constant exchange rates to million for the six months, again led by the Con- sales – excluding BLBV and Gainbridge – £106 million, thanks to good performances in tex and Durex brands, which generated sales by 5.7% to £679 million for the 12 months. France, Germany and Italy. of £4.8 million in the country. On a currency-adjusted basis, the growth was Sales of SSL’s locally-owned brands – in- BLBV and Gainbridge contributed a com- a more modest 1.8%. cluding the company’s OTC offering in the UK bined operating profit of £29.3 million, SSL Turnover by SSL’s Durex brand increased – declined by 14.1% to £65 million. On an ad- noted,at an operating margin of 23.8%. by a tenth – 4.8% when adjusted for currency justed basis, the decline was less severe at 4.4%. SSL has built up its stake in BLBV – which effects – to £294 million (see Figure 2), driven SSL blamed the fall on pharmacy destock- distributes condoms and medical products – by strong growth in Austria, China, Germany, ing in Italy and the difficult UK market environ- over the past two years. Having taken a 50% the Middle East, Poland and Switzerland. ment. Successfully launching its head-lice treat- plus one share stake in BLBV in 2009 (OTC Durex condoms enjoyed “robust perfor- ment Full Marks in new territories – such as bulletin,17 April 2009, page 2), SSL lifted its mances” across all product types, SSL noted, Germany, where it had been launched under holding to 75.3% earlier this year,with an op- with sales growing by 4.1% on a currency-ad- the K Laus name – had offset some of the de- tion to purchase the remaining shares in 2011 justed basis to £244 million. China had been cline, the company added. (OTC bulletin,26 February 2010, page 11). a key growth driver, the company pointed out, OTC The company took complete control of Gain- backed up by “solid” gains in eastern Europe, bridge Investments on 1 October 2009 after ex- the Middle East and Switzerland. IN BRIEF ercising an option agreed in 2008 to acquire the Sales of the Durex Play range of personal business (OTC bulletin,30 May 2008, page 7). lubricants and vibrators advanced by 8.4% on ■ RELIV said its sales had fallen by 4.5% Following the close of the year,SSL expand- an adjusted basis to £49.3 million. The “excel- to US$22.7 million (C17.8 million) in the first ed its presence in Eastern Europe further with lent” performance had been drivenby Spain, quarter of 2010, as turnover at the company’s SSL remarked, where turnover had US business dropped by 9.0%, due to the ef- Russia/CIS* Ukraine** grown in excess of 50%, despite the fects of the economic recession. By contrast, (£ millions) (£ millions) difficult economic conditions. The international sales jumped by 36.1%, although Benelux and eastern Europe regions approximately half of the rise was thanks to Contex and Durex 50 5 had also made positive contributions, positive currency effects. Locally owned brands 12 1 the company said. Scholl footcare 1–Good performances in France, ■ VA LEANT PHARMACEUTICALS said Branded consumer636Germany and Japan boosted Scholl its first-quarter sales had increased by 30% to Medical gloves/others 53 2 Footcare sales, which increased by US$232 million (C189 million). Turnover at its Total sales 116 7 4.6% when adjusted for currency Specialty Pharmaceuticals division – including effects to £168 million. The gains OTC brands – grew by 40% to US$121 million. * Sales in the 10 months ended 31 March 2010 in those three markets managed to Sales of branded generics in Latin America rose ** Sales in the 6 months ended 31 March 2010 offset the adverse effects of phar- by 35% to US$42.1 million and in Europe by Figure 1: Contribution of Beleggingsmaatschappij Lemore BV in macy destocking in Italy and a dif- 18% to US$41.7 million. Royalties, alliances Russia and the Commonwealth of Independent States (CIS) – excluding Ukraine – and Gainbridge in Ukraine to SSL International’s ficult trading environment in the UK. and services added US$27.5 million. sales in the year ended 31 March 2010 (Source – SSL International) SSL noted that its Scholl Cracked OTC

8 OTC bulletin 31 May 2010 OTC31-05-10p8-9FIN.qxd 27/5/10 11:08 Page 3 OTC31-05-10p10-11FIN.qxd 27/5/10 07:46 Page 2

OTC COMPANY NEWS

Business Strategy/First-Quarter Results Stada shuns Poland due to high prices

ver-inflated prices for local pharmaceu- Business First-quarter salesChange Operating profit Change Otical companies mean it is unlikely that (C millions) (%) (C millions) (%) Stada Arzneimittel will expand in Poland via acquisitions in the near future, the German Generics 278 +3 37.8 -3 group’s executive chairman Hartmut Retzlaff Branded Products 101 +10 23.5 +32 told investors. Commercial 15 +22 1.7 +36 Retzlaff’s comments came shortly before Group/other 2-40 -11.6 – Sanofi-Aventis announced that it was set to ac- Total Stada 396 +5 51.4 +6 quire Polish OTC company Nepentes in a deal worth C105 million (see front page). The price Figure 1: Stada’s sales and operating profit in the first quarter of 2010 by business (Source – Stada) represents a multiple of around three-times Ne- operating margin from 19.3% to 23.2%. that its local Nizhpharm unit had agreed to pentes’ annual sales. Branded Products accounted for just over pay C0.2 million for a 50% share in Hetmak, Stada set up a sales subsidiary in Poland two a quarter of Stada’s total group sales, but 46% a purchasing company based in Dubai. years ago, but in the first quarter of 2010 its of the company’s total group operating profit, A 22% turnover decline for Branded Prod- sales of C1.27 million represented just 0.3% of which increased by 6% to C51.4 million. ucts in Italy to C9.9 million was in contrast to the group’s turnover, which grew by 5% to C396 Stada said sales of Branded Products in Ger- the double-digit sales growth by the Generics million. The German firm’s total sales in east- many had grown by 6% to C36.4 million, aided division, which helped drive up Stada’s total ern Europe advanced by 11% to C86.8 million, by acquiring the Eunova nutritional supplement sales in the country by 8% to C32.0 million. while turnover in western Europe was 3% high- at the end of 2009, which had contributed C1.1 In Belgium, Branded Products’ sales grew er at C291 million. Asia added C12.4 million million. Branded Products accounted for 25% by 67% to C1.5 million, accounting for 5% of and other markets C5.1 million. of Stada’s total domestic sales, which slipped Stada’s total sales in the country. These grew Sales at the Branded Products division were back by 3% to C143 million. by 13% to C30.0 million. up by a tenth to C101 million (see Figure 1). Ad- Retzlaff said the company would be sup- Stada’s Branded Products business in Spain justed for currency effects, as well as acquisi- porting its Grippostad OTC cold medicine and posted sales up by 11% to C2.1 million, as total tions and disposals, the division’s sales had Ladival sun-care brand in Germany with tele- group sales in the country increased by a quar- grown by 7%, the company noted. Around two- vision advertising during the year. ter to C23.4 million. thirds of the division’s sales are generated by Sales of Branded Products in Russia im- Branded Products generated 7% of Stada’s non-prescription products. proved by 43% to C22.2 million, representing total sales in Serbia, with turnover growing by Operating profit at Stada’s Branded Prod- around half of Stada’s total sales in the country. 50% to C1.5 million. Total group turnover in the ucts division moved ahead faster than sales, These jumped by 23% – 17% at constant ex- country jumped by 27% – 34% at constant ex- rising by 32% to C23.5 million. This lifted the change rates – to C44.7 million. Stada added change rates – to C21.3 million. OTC

First-Quarter Results First-Quarter Results Acquisition boosts Krka sees self-medication gains

Atrium Innovations lovenia’s Krka said sales of its self-medica- vit and Duovit vitamin and supplement brands Stion products had risen by 9% to C27.4 mil- in Russia with the Pikovit Omega 3 and Piko- cquiring the US-based nutritional supple- lion in the first quarter of 2010, driven by “posi- vit Prebiotik products and Duovit Elegance Aments firm Garden of Life, along with tive trends” in south-eastern and eastern Europe. skincare supplement. The Duovit range was organic growth, helped lift sales at Canada’s The biggest increases had been seen in the also boosted in Ukraine with the caffeine- Atrium Innovations by 27.5% to US$90.1 mil- company’s eastern European markets, Krka based Duovit Sila chewable tablet. lion (C73.0 million) in the first quarter of 2010. pointed out, where self-medication turnover Krka’s Orsoslim weight-management brand The company said buying Garden of Life in had grown by a fifth. The growth had been led had gained approvals in Kazakhstan and Uk- September last year (OTC bulletin,30 Septem- by a 65% increase in sales in Ukraine and a raine, the firm noted, while the Septolete Plus ber 2009, page 2) had driven a double-digit rise 28% jump in Russia, the company noted. honey and lime sore-throat pastilles had been in turnover at its US branded products business. Self-medication sales in south-eastern Eur- approved in Bulgaria and Czech Republic. Total sales of the Wobenzym enzyme brand ope had increased by 4%, Krka commented. Sales of self-medication products were re- had fallen slightly,Atrium said, due to a shift to This was thanks to a 35% advance in Romania sponsible for 11% of Krka’s total first-quarter a different version of the product in Germany. and a 15% gain in Macedonia. group sales, which edged forward by 0.4% to Earnings before interest, tax, depreciation These gains had been partially offset, Krka C246 million. The dominant prescription phar- and amortisation (EBITDA) jumped by 19.5% noted, by lower sales in central Europe and the maceuticals business generated 83% – C205 to US$21.2 million. company’s home market of Slovenia. million – of total group turnover. OTC During the quarter,Krka extended its Piko- OTC

10 OTC bulletin 31 May 2010 OTC31-05-10p10-11FIN.qxd 27/5/10 07:46 Page 3

COMPANY NEWS OTC

Regulatory Affairs J&J’s Weldon asked to testify at hearing

ohnson & Johnson’s chairman and chief ex- The recalls pointed to “a major problem in suspended production at its plant in Fort Wash- J ecutive officer,William Weldon, has been the production of McNeil products”, main- ington, Pennsylvania. “invited” to testify at a hearing of the US Com- tained the committee’s chairman Ed Towns and Commenting on the recall, the US Food and mittee on Oversight and Government Reform ranking member Darrell Issa. “We are deeply Drug Administration (FDA) said its inspectors about the company’s recent recall of medicines concerned about the recall of popular paedi- had found grime and contaminated ingredients for infants and children. atric medications that millions of families have at the plant. McNeil’s manufacturing deficien- A spokesperson for Johnson &Johnson said grown to rely on and stocked in their medicine cies could affect “quality,purity or potency” of that Weldon would be unable to testify at the cabinets,”they remarked. “The American peo- products, the agency noted. hearing on 27 May 2010, as he was recovering ple deserve answers and we intend to get to the Representatives Towns and Issa felt that the from back surgery. However, Colleen Goggins, bottom of this matter.” FDA’s “most alarming finding” was that “raw worldwide chairman of Johnson & Johnson’s According to McNeil, the latest recall had materials used to make these infant and chil- Consumer division, would testify,the spoke- been initiated because “some of these products dren’s products were contaminated with poten- sperson added. may not meet required quality standards”. The tially harmful bacteria”. They noted, however, The congressional committee announced on recall was not due to adverse medical events, that the FDA had not found the bacteria in any 6 May that it was investigating the company’s the company stressed. finished product. recall of 44 OTCmedicines for infants and chil- “Some of the products included in the recall The congressional committee has also in- dren (OTC bulletin,14 May 2010, page 1). The may contain a higher concentration of active vited FDA commissioner Margaret Hamburg liquid products are sold under the Motrin, Ty- ingredient than is specified; others may con- to testify at the hearing. lenol and Zyrtec brands in a number of coun- tain active ingredients that may not meet in- The hearing comes soon after Johnson & tries,including the US. ternal testing requirements; and others may Johnson revealed that product recalls had cut The move was the sixth significant recall contain tiny particles,”explained McNeil, in- the US sales of its OTC & Nutritionals business in North America by Johnson & Johnson’s sisting that the “potential for serious medical by 25.3% to US$542 million (C444 million) in McNeil Consumer Healthcare subsidiary in an events is remote”. the first three months of this year (OTC bulletin, eight-month period. The company added that it had temporarily 30 April 2010, page 1). OTC

31 May 2010 OTC bulletin 11 OTC31-05-10p12-13FIN.qxd 27/5/10 07:02 Page 2

OTC COMPANY NEWS

First-Quarter Results Entering Sweden hits Celesio’s profits

stablishing its DocMorris pharmacy chain Business EBITDA Change 2009/2010 (%) Ein Sweden, coupled with government cost- (E millions) E Local currencies cutting measures, produced a 19.4% decline in earnings before interest,tax, depreciation and Retail Pharmacies 59.2 -19.4 -22.0 amortisation (EBITDA) at Celesio’s Retail Phar- Mail-Order Pharmacies 0.6 –– Other Business Areas -0.4 –– macies business in the first quarter of 2010. Patient and Consumer Solutions 59.4 -17.5 -20.1 Retail Pharmacies’ EBITDA had declined to Pharmacy Solutions 107.9 +22.5 +21.6 C59.2 million over the three months (see Figure 1), the pan-European wholesaler and retailer Other -14.1 –– pointed out, in part due to healthcare spending Total Celesio 153.2 +6.0 +4.1 cuts in various countries, but also because of Figure 1: Celesio’s earnings before interest, tax, depreciation and amortisation (EBITDA) in the first quarter of start-up costs in Sweden. 2010 broken down by business (Source – Celesio) Celesio opened its first Swedish DocMorris pharmacy in February (OTC bulletin,26 Febru- the first quarter of the year. In local-currency 20.1% in local currencies – to C70.1 million. ary 2010, page 2), and by the end of the quarter terms, the rise was 0.2% (see Figure 2). The firm’s largest mail-order business, Doc- had opened six branches across the country. “Robust development” at the group’s big- Morris in Germany, had “considerably” increas- Fritz Oesterle, chairman of Celesio’s man- gest pharmacy chain – Lloydspharmacy in the ed its turnover, Celesio said. agement board, confirmed the fledgling Swed- UK – helped drive the rise in sales at the Re- The smaller Lloydspharmacy and Vitusapo- ish chain’s success had prompted the company tail Pharmacies business. However, government tek mail-order operations continued to show to aim for 30-40 pharmacy openings in 2010, adjustments to the pharmacy margin for dis- promise, the company said, which reflected the up from the 20-30 originally planned (OTC bul- pensing generic drugs had damaged Lloyds- growth potential of mail-order pharmacy busi- letin,14 May 2010, page 3). pharmacy’s profit, Celesio pointed out. nesses in international markets. Oesterle added that the company’s move Mail-Order Pharmacies achieved a positive into Sweden reflected the fact that “direct ac- Cost cutting impacts Irish pharmacies EBITDA this time of C0.6 million, compared cess to end users” was, and would remain, “very Highlighting the situation in Ireland, Cele- with a loss of C0.6 million in the prior-year quar- important to the company”. sio pointed out that its 72 pharmacies in the ter due to higher advertising spending (OTC Establishing an entirely new pharmacy chain country had been impacted by cuts to the reim- bulletin,29 May 2009, page 9). in Sweden – as opposed to acquiring some of bursement prices of prescription medicines, In the Other Business Areas unit – which is the state-owned Apoteket pharmacies that the lower remuneration for Irish pharmacies and dominated by the Apotheke DocMorris franch- Swedish government had put up for sale when a 40% cut in the prices of off-patent products, ise business in Germany – turnover edged up it liberalised the country’s pharmacy market which had made some originator products less by 1.0% to C1.1 million. Celesio said it was work- (OTC bulletin,31 July 2009, page 3) – had expensive than their generic counterparts. ing to optimise the range of products, market- demonstrated how Celesio would expand its On a brighter note, Celesio said in March ing support and retail services offered to Doc- own chains in a way that conserved capital and that it had opened a second DocMorris-brand- Morris franchise members. goodwill, Oesterle insisted. ed pharmacy in Ireland after the success of a Last October,Celesio wiped C71.0 million Over the past year,Celesio has scaled back trial pharmacy opened in 2009 (OTC bulletin, off the goodwill valuation of the DocMorris pharmacy acquisitions in favour of opening en- 31 March 2010, page 5). Oesterle remarked re- franchise business, following operating failures tirely new stores. The firm has also closed or cently that once the company was sure the “re- (OTC bulletin,16 October 2009, page 1). sold stores with the aim of boosting efficiency. sounding success” of the trial pharmacy could Celesio had intended to sign up 500 phar- As a result, the Retail Pharmacies business be sustained, it would decide on the best way macies to the virtual pharmacy chain by 2011, was operating a total of 2,301 outlets as of 31 to roll out the brand in Ireland. but this will not now happen until 2015 at the March 2010, which was 31 fewer than a year Away from the Retail Pharmacies business, earliest. As of the 31 March 2010,154 pharma- earlier. Despite the reduction, Retail Pharma- Celesio’s mail-order operations enjoyed a strong cies had signed up to the scheme. cies’ sales increased by 3.3% to C783 million in start to the year,with sales rising by 20.2% – During the first quarter,Celesio’s Patient and Consumer Solutions division posted turn- Business First-quarter sales Change 2009/2010 (%) over up by 4.5% – 1.6% in local currencies – to (E millions) E Local currencies C854 million. However, the division’s EBITDA Retail Pharmacies 783 +3.3 +0.2 fell by 17.5% – 20.1% in local currencies – to Mail-Order Pharmacies 70 +20.2 +20.1 C59.4 million. Other Business Areas 1+1.0 +1.0 At the dominant Pharmacy Solutions divi- Patient and Consumer Solutions 854 +4.5 +1.6 sion, which includes Celesio’s Wholesale busi- Pharmacy Solutions 4,660 +10.8 +10.1 ness, sales grew by 10.8% – 10.1% in local cur- Other 154 ––rencies – to C4.66 billion. EBITDA increas- ed by 22.5% to C108 million,which in local Total Celesio 5,668 +10.8 +9.7 currencies was a rise of 21.6%. Figure 2: Celesio’s sales in the first quarter of 2010 broken down by business (Source – Celesio) OTC

12 OTC bulletin 31 May 2010 OTC31-05-10p12-13FIN.qxd 27/5/10 07:02 Page 3

COMPANY NEWS OTC

Business Strategy Sales & Distribution Agreements Pfizer mulls outsourcing Perrigo obtains OTC product production Delsym generic errigo has acquired from Tris Pharma the P exclusive US sales and distribution rights fizer may seek contract manufacturers to jobs would be affected at Richmond and a fur- to the store-brand equivalent of Reckitt Ben- Pproduce a number of the OTC brands that ther 330 would go at the Pearl River facility, ckiser’s Delsym (dextromethorphan polistirex) it gained through acquiring Wyeth, as the com- commented Pfizer. 12-hour OTC cough liquid. pany overhauls the manufacturing network of In the wake of the changes, the Richmond Tris is currently engaged in US patent lit- its Consumer Healthcare division. facility’s packaging and production activities igation with Reckitt Benckiser over the only The company said it had decided to cease would be transferred either to other Pfizer man- patent listed against Delsym in the US Food production of a number of its freshly-acquired ufacturing sites or to “external supply partn- and Drug Administration’s (FDA’s) Orange consumer healthcare brands at two former Wy- ers”, the company said, adding that it would Book – US patent 5,980,882,expiring on 16 eth facilities in the US. also expand production of Consumer Health- April 2017. Brands like Anbesol,ChapStick, Dimetapp, care’s products at its Guayama facility locat- The company believes that it holds first-to- Preparation H and Robitussin would be phased ed in Puerto Rico. file status in the US, entitling it to 180 days of out of Pfizer’s Richmond, Virginia, plant over Once the restructuring is complete, Con- generic market exclusivity. the next two to three years, the company said. sumer Healthcare’s manufacturing network Quoting Information Resources data, Per- Packaging of Advil products would also end will comprise the Guayama plant and Pfizer’s rigo said annual US sales of Delsym were ap- at the plant, which was obtained when Pfizer facilities in Montreal, Canada; Suzhou, China; proximately US$125 million (C101 million). bought Wyeth last year (OTC bulletin,30 Oct- Aprilia, Italy; Hsinchu, Taiwan; and Albany, Under the terms of the licensing agreement, ober 2009, page 3). Georgia in the US. Perrigo and Tris will share profits and Perrigo However, Consumer Healthcare’s research The move is part of a wider restructuring will also pay Tris certain milestone payments. and development unit would remain at the Rich- of Pfizer’s newly-enlarged manufacturing net- Reckitt Benckiser gained the Delsym brand, mond facility,Pfizer said. work, which the company said would result in along with the guaifenesin-based cough medi- Its Pearl River, New York, facility would the loss of 6,000 jobs worldwide. cine Mucinex, when the UK-based company cease to be the primary US supplier of Cen- Pfizer explained that by the end of 2015 it acquired Adams Respiratory Therapeutics for trum dietary supplements by the first half of planned to have ceased operations at eight sites US$2.3 billion in 2008 (OTC bulletin,17 Dec- 2014, Pfizer added. globally,and to have reduced operations at a ember 2007, page 1). Approximately 550 Consumer Healthcare further six. Perrigo is currently awaiting approval from OTC the FDA for its store-brand version of Muci- nex 600mg guaifenesin extended-release tab- Business Strategy lets, after a federal court rejected Reckitt Ben- Amway shifts some manufacturing out of US ckiser’s patent-infringement complaint against Perrigo in February (OTC bulletin,26 Febru- mway plans to shift production of a num- selling specialist, pointed out that “more than ary 2010, page 13). A ber of its products to Asia and Europe in 80%” of the company’s customers bought its Perrigo’s chairman and chief executive of- the next three years to reflect the US-based products outside of the US. ficer,Joseph Papa, said the deal was another company’s growth in international markets. Amway’s parent, Alticor,reported sales of example of the firm “making quality health- Steve Van Andel, chairman of the direct- US$8.4 billion (C6.9 billion) in 2009. care more affordable to Americans”. OTC OTC

31 May 2010 OTC bulletin 13 OTC31-05-10p14-15FIN.qxd 27/5/10 06:19 Page 2

OTC GENERAL NEWS

Pricing & Reimbursement neural therapy, herbal medicine and traditional Chinese medicine should become a definitive Switzerland could pay for part of basic healthcare insurance,”the group maintained. Switzerland’s federal council, the Bundesrat, has already passed a motion to support measures complementary medicines that would integrate complementary medicine in education for doctors, chiropractors, dentists omplementary medicines – such as herbal two-thirds of voters supported the idea of plac- and pharmacists. A consultation period is sche- Cremedies, homoeopathic and anthroposo- ing a commitment to complementary medicine duled to open at the end of this year. phic products, and traditional Chinese medi- in the country’s constitution (OTC bulletin,19 Meanwhile, Switzerland’s medicines regu- cine – could be reimbursed by Swiss statutory June 2009, page 8). latory agency, Swissmedic, last year created an health insurance funds from the end of this year A campaigning group called Ja zur Komple- expert pharmacopoeia committee for comple- if health authorities accede to industry demands. mentärmedizin – which included manufactur- mentary medicines (OTC bulletin,30 October Switzerland’s federal health authority,the ers, healthcare professionals, academics and re- 2009, page 11). Bundesamt für Gesundheit, said that it had re- tailers – insisted that therapies such as herbal Furthermore, legislation to simplify the mar- ceived formal requests from industry associa- medicines and homoeopathy had been “polit- keting authorisation process for complemen- tions to bring complementary medicines within ically marginalised” in Switzerland over the tary medicines could come into effect by the the scope of services provided by the statutory past few years. end of this year,providing the federal coun- funds. The country’s federal department of home “Anthroposophic medicine, homoeopathy, cil approves. affairs is expected to make a decision by the end OTC of this year. The health authority said it would review the formal requests for completeness, but the IN BRIEF assessment of efficacy and cost/benefit ratio ■ FDA – the US Food and Drug Administra- ates and makes decisions. The FDA said the would be the task of a federal commission that tion – said its Transparency Task Force had task force would review the comments receiv- could call on expert advice. The commission released 21 draft proposals for public consul- ed and decide which proposals would be im- would then pass its recommendations on to the tation. The drafts cover public disclosure poli- plemented. The task force was set up a year ago department of home affairs. cies aimed at helping consumers, stakeholders (OTC bulletin,19 June 2009, page 12). Last year,aSwiss referendum found that and others understand how the agency oper- OTC

14 OTC bulletin 31 May 2010 OTC31-05-10p14-15FIN.qxd 27/5/10 06:19 Page 3

GENERAL NEWS OTC

Regulatory Affairs Europe’s list of herbals grows to seven

ive entries have been added to the Commu- mit any entries for the Community list of her- Anisi fructus (aniseed) Fnity list of herbal substances, preparations bal substances to the European Commission dur- Calendulae flos (calendula flower) and combinations for use in traditional herbal ing 2009. This compared with five in 2008 and Echinaceae purpureae herba (purple medicinal products since the beginning of this two in 2007 (see Figure 2). coneflower herb) year,according to the European Commission. Furthermore, the report notes that the HMPC Eleutherococci radix (eleutherococcus root) The new additions have lifted the total num- only published one list entry for public consul- Foeniculi amari fructus (bitter-fennel fruit) ber of entries on the Community list of herbal tation in 2009. A total of three draft list entries Foeniculi dulcis fructus (sweet-fennel fruit) substances to seven (see Figure 1). are currently under active public consultation. Menthae piperitae aetheroleum (peppermint oil) Peppermint oil is the latest herbal substance The report adds that the HMPC finalised 17 Figure 1: Current entries in Europe’s Community list to join the list. Four others – aniseed, calendula Community herbal monographs in 2009, which of herbal substances, preparations and combinations flower,eleutheroccus root and purple coneflow- was exactly the same number as in 2008. In add- for use in traditional herbal medicinal products er herb – were added in January. Bitter-fennel ition, 16 draft Community herbal monographs Community herbal monographs for tradition- fruit and sweet-fennel fruit were already present. were published by the HMPC. al and well-established herbal medicinal prod- All seven were proposed for inclusion by The number of Community herbal mono- ucts are not legally binding on member states Europe’s Committee on Herbal Medicinal Pro- graphs finalised by the HMPC had reached 60 of the European Union, but they should be tak- ducts (HMPC), which has not yet submitted as OTC bulletin went to press (see Figure 3). en into account. By contrast, entries on the Com- any further entries to the European Commis- The most recent herbal monographs finalised munity list of herbal substances, preparations sion for consideration. by the HMPC at its March 2010 meeting were and combinations for use in traditional herbal The European Medicines Agency’s (EMA’s) for java tea leaf and purple coneflower root. medicinal products are legally binding. latest Annual Report, which has just been pub- The EMA’s Management Board has express- However, the European Parliament’s influ- lished, points out that the HMPC did not sub- ed concern about the slow progress with herbals. ential Environment, Public Health and Food Safety (ENVI) committee recently endorsed a

20.020 17 17 proposal that would make Community herbal

16.016 monographs legally binding on member states. 13 If the proposal is adopted, directive 2001/83/EC 12.012 Series1Herbal monographs would be amended to state that Community 8.08 Series2Proposed list entries Number 5 herbal monographs “shall be complied with” 4.04 2 0 by member states. 0.00 2007122008 2009 3 The proposal, which focuses on pharmaco- vigilance, has been forwarded to the European Figure 2: The number of Community herbal monographs finalised by Europe’s Committee on Herbal Medicinal Products (HMPC) together with the number of entries for Europe’s Community list of herbal substances Parliament for a full plenary vote in June. proposed to the European Commission by the HMPC (Source – European Medicines Agency) OTC

Absinthii herba (wormwood herb) Frangulae cortex (frangula bark) Primulae flos (primula flower) Aloe (barbados aloes, cape aloes) Gentianae radix (gentian root) Primulae radix (primula root) Althaeae radix (marshmallow root) Hamamelidis cortex (hamamelis bark) Psyllii semen (psyllium seed) Anisi aetheroleum (anise oil) Hamamelidis folium (hamamelis leaf) Rhamni purshianae cortex (cascara) Anisi fructus (aniseed) Hamamelidis folium et cortex aut ramunculus Rhei radix (rhubarb) Avenae fructus (oat fruit) destillatum (hamamelis leaf and bark distillate Rusci aculeati rhizoma (butcher’s broom) Avenae herba (oat herb) and twig distillate) Salicis cortex (willow bark) Betulae folium (birch leaf) Harpagophyti radix (devil’s claw root) Salviae officinalis folium (sage leaf) Boldi folium (boldo leaf) Hippocastani semen (horse chestnut seed) Sambuci flos (elder flower) Calendulae flos (calendula flower) Hyperici herba (St John’s wort) Sennae folium (senna leaf) Centaurii herba (centaury herb) Juniperi psuedo-fructus (juniper berry) Sennae fructus (senna pods) Curcumae longae rhizoma (tumeric root) Linum semen (linseed) Solidaginis virgaureae herba (European Echinacea pallidae radix (pale coneflower root) Lupuli flos (hop strobiles) goldenrod) Echinaceae purpureae herba (purple Meliloti herba (melilot) Taraxaci folium (dandelion leaf) coneflower herb) Melissae folium (melissa leaf) Taraxaci radix cum herba (dandelion root Echinaceae purpureae radix (purple Menthae piperitae aetheroleum (peppermint oil) and herb) coneflower root) Menthae piperitae folium (peppermint leaf) Thymi aetheroleum (thyme oil) Eleutherococci radix (eleutherococcus root) Orthosiphonis staminei folium (java tea leaf) Thymi herba (thyme herb) Equiseti herba (horsetail) Passiflorae herba (passion flower) Urticae folium (nettle leaf) Foeniculi amari fructus (bitter-fennel fruit) Plantaginis ovatae semen (ispaghula seed) Urticae herba (nettle) Foeniculi amari fructus aetheroleum Plantaginis ovatae seminis tegumentum Valerianae radix (valerian root) (bitter-fennel fruit oil) (ispaghula husk) Verbasci flos (mullein flower) Foeniculi dulcis fructus (sweet-fennel fruit) Polypodii rhizoma (polypody rhizome)

Figure 3: Community herbal monographs finalised to date by Europe’s Committee on Herbal Medicinal Products (HMPC) (Source – HMPC)

31 May 2010 OTC bulletin 15 OTC31-05-10p16-17FIN.qxd 27/5/10 06:20 Page 2

OTC GENERAL NEWS

Herbal Medicines Market Research Most Germans use German pharmacists favour herbals for children generic OTC manufacturers he vast majority of German parents give Ttheir children herbal remedies, according to a study published in the medical journal Deu- erman pharmacists favour generic com- erics companies, ranking second after having tsche Medizinische Wochenschrift. Gpanies over other manufacturers of OTC been named by a third of pharmacists. The study was conducted by a team from products, according to recent market research Hexal was identified as a preferred partner the paediatric departments of university hos- conducted by management consultancy Sem- by almost one out of three German pharma- pitals in Leipzig and Munich. They asked 413 pora Consulting. cists, but only one in 10 named its parent com- parents of children attending either the outpat- Sempora asked 133 German pharmacists pany Novartis. Stada’s low-cost Aliud busi- ient department of two hospitals or two pae- in March and April to name unprompted the ness found favour with 8% of pharmacists, the diatricians to fill out a questionnaire about the three OTC manufacturers with which they best same proportion that liked the Heumann gener- usage of herbal remedies by their children. liked working. ics unit of Indian generics firm Torrent. Of the parents, 353, or 85.5%, had given As can be seen from Figure 1, three of the German OTC divisions of Johnson & John- their children one or more herbal products, top four places were filled by generics com- son and Boehringer Ingelheim ranked fifth and with chamomile and fennel the most popular panies – Ratiopharm, Hexal and Stada. Top sixth, with 24% and 19% respectively,ahead choices ahead of eucalyptus. ranking Ratiopharm was named by around one of non-prescription specialist Klosterfrau, which In terms of herbal medicine brands, Bio- in two pharmacists. was named by 17% of pharmacists. norica’s thyme-based Bronchipret and Engel- Bayer broke up the dominance of the gen- Global generics leader Teva was eighth. hard’s ivy-based Prospan cough remedies were equally popular. They were named by 43% of the parents surveyed. Ratiopharm11 52% “Parents who gave phytotherapies to their Bayer10 33% children were significantly more often women Hexal9 32% living in large cities who had a good educa- Stada8 29% tional background and were better off finan- Johnson & Johnson7 cially,” the researchers commented. 24% OTC Boehringer Ingelheim6 19% Klosterfrau5 17% IN BRIEF Te4va 14% Nova3rtis 10% ■ ASA – the UK’s Advertising Standards Auth- Heumann2 8% ority – has upheld a complaint about an online Aliud1 8% advertisement for a weight-loss product from 0.0 10.0 20.0 30.0 40.0 50.0 60.0 LB CyberNet Entertainment. The authority 0102030405060 has also upheld a complaint about a reference Proportion of German pharmacists (%)

to cycling teams in Zipvit’s press advertise- Figure 1: Response of German pharmacists when they were asked to name the three OTC manufacturers with ment for its vitamin supplements. which they best liked working (Source – Sempora Consulting) OTC OTC

Regulatory Affairs base (OTC bulletin,14 May 2010, page 20). “Patients should not be put in a position PGEU warns about internet pharmacy logos where they have to discriminate between fake and real certification,”remarked John Chave, “false sense of security” could be creat- the website, they were taken to a certificate al- secretary general of the PGEU. “We need to Aed by a Europe-wide scheme for internet legedly issued by the PGEU and carrying the explore technological options which put cer- pharmacy certification, warns the Pharmaceu- signature of PGEU president Filip Babylon. tification beyond the counterfeiters.” tical Group of the European Union (PGEU). A scheme for internet-pharmacy certifica- The PGEU noted The Canadian Neighbor The pharmacy body says the ease with which tion was recently proposed by the European Pharmacy website at http://www.cancarephar- certification can be counterfeited exposes the Parliament’s influential Environment, Public macy.com was no longer on the internet. limitations of such schemes. Health and Food Safety (ENVI) committee as However, a Canadian Neighbor Pharmacy It points out The Canadian Neighbor Phar- part of anti-counterfeiting measures for phar- website at http://canadianneighborpharmacy. macy – a website registered in Russia – had maceuticals. ENVI wants internet pharmacies com was available on the internet at the time recently stated that it was supported by the to obtain a special authorisation, which would of writing. It carried a certificate said to be PGEU, claiming that all drugs sold on the web- be displayed as a European Union logo on their from the Royal Pharmaceutical Society of site were “considered to be approved by the homepages. The committee also said online Great Britain (RPSGB). PGEU”. If visitors clicked on a PGEU logo on retailers should be listed in a European data- OTC

16 OTC bulletin 31 May 2010 OTC31-05-10p16-17FIN.qxd 27/5/10 06:20 Page 3

MARKETING NEWS OTC

Advertising Complaints Mentholatum’s Regenovex runs into trouble in the UK

laims made by The Mentholatum Com- eral information about their use in joint health. Cpany in newspaper advertising for its Re- Concluding that the evidence was not product- genovex range of joint-health products have specific, the ASA said it did not demonstrate been thrown out by the UK Advertising Stan- that there were sufficient quantities of the in- dards Authority (ASA). gredients in the products, or that they would The ASA ruled that the company’s efficacy be absorbed and utilised by the body to pro- claims for the products’ ingredients – hyalur- duce the claimed effects. onic acid and the green-lipped mussel extract The ASA also highlighted that some of the Bionovex Oil – were “breakthrough claims” studies had been conducted on frogs and rats, and should be supported by “robust scientific and were “not appropriate to support a claim evidence”. The authority insisted that such evi- relating to humans”. dence should consist of “product-specific, con- The advertisement was “misleading”, ac- trolled, double-blind clinical trials conducted cording to the ASA, as the claims could not on people”. be substantiated. The advertisement described the products A spokesperson for Mentholatum told OTC A dietetic food for people with osteoporosis is the as “An advanced formulation for joint health” bulletin that the company was “extremely dis- latest addition to Sandoz’ range of vitamin and and “A new generation of joint-care products”. appointed” at the ruling. Regenovex products mineral products in Germany. It included the claims “Unique dual-action for- were backed by “health-maintenance claims”, Each Vitamin D-Sandoz Osteo Complex capsule provides not only 1,000 international units of vitamin D, mulation hyaluronic acid strengthens, lubri- commented the company, adding that “exten- but also folic acid and vitamins B6, B12 and K. cates and cushions by improving the quality of sive laboratory studies, as well as large-scale The predominantly yellow packs of 45 capsules synovial fluid in your joints” and “Natural mar- consumer trials, provided superior evidence to – which have a recommended retail price of C6.30 – carry a strapline stating the product is for ine Bionovex Oil soothes and eases discomfort that of many other products already on the mar- dietetic treatment of osteoporosis where there is in joints by providing a rich source of special- ket and exceeded the regulatory requirements vitamin D deficiency. ist nutrients”. for a food supplement”. Launch trade-press advertising (pictured above) describes the newcomer as “Das Sonnenvitamin für A report provided by Mentholatum was “not Although Mentholatum accepted the ASA’s die Knochen”, or “The sun vitamin for your bones”. a clinical trial, but an uncontrolled, unblinded ruling, it disagreed that placebo-controlled dou- OTC consumer-use study”, said the ASA. “Partici- ble-blind clinical trials were meaningful to sup- pants used the advertised products over specific port the joint-health-maintenance claims. “Non- Launches periods of time, and then gave their opinion as medicines – including cosmetics, cosmeceut- to the joint-care products’ effectiveness via a icals and other consumer wellness products – self-completion questionnaire,”said the auth- use consumer studies as a method of support- Stada Austria ority,adding that the “consumer-use trial was ing claims,”the company said. not sufficient substantiation to support the type The advertisement is part of the £1.0 mil- targets joints of claims being made in the advertisement”. lion (C1.2 million) UK launch campaign for the Furthermore, the ASA said supporting lit- Regenovex range, which consists of oral cap- erature for the efficacy of hyaluronic acid and sules, topical gel and a patch (OTC bulletin, he strong combination of glucosamine and green-lipped mussel extract consisted of gen- 30 April 2010, page 15). Tchondroitin is how Stada Arzneimittel is OTC positioning the latest addition to its OTC port- folio in Austria. “Complete mouth ulcer care” is the theme of Reckitt Each two-a-day KnorpelPlus capsule con- Benckiser’s launch campaign for the latest addition to its Bonjela brand in the UK. tains 750mg glucosamine sulphate and 400mg The company is backing Bonjela Complete Plus with television chondroitin sulphate, along with 100mg vita- and press advertising as well as public relations activity. min C and 2.5mg manganese sulphate. Consumer-press advertising (pictured left) points out that Stada said that glucosamine was vital for the medical device forms a “fast-acting protective barrier over the ulcer which lasts for up to four hours”. This “soothes the pain” and strengthening cartilage,tendons and ligaments, “aids healing”, it adds. while chondroitin acted as a protective film and Reckitt Benckiser said Bonjela Complete Plus was applied a “shock absorber” for joints. with a soft applicator which allowed “accurate and hygienic application”. The company noted that the applicator could be A month’s supply of 60 tablets of the phar- put straight back into the bottle after use with no need for rinsing macy-exclusive food supplement has a recom- or sterilising. mended retail selling price of C26.90. A strap- A pack containing 100 applications has a recommended retail selling price of £7.99 (C9.25). line on tubs says the supplement “encourages It joins Bonjela, Bonjela Cool and Bonjela Teething Gel. movement and reduces sensitivity of joints”. OTC OTC

31 May 2010 OTC bulletin 17 OTC31-05-10p18-19FIN.qxd 27/5/10 06:21 Page 2

OTC MARKETING NEWS

Marketing Campaigns/Launches Scholl is ‘Keeping Britain on its Feet’

SL International is investing more than £3.0 Meanwhile, consumer-press advertising tar- Smillion (C3.5 million) in the “first overarch- gets women with the message “Are you ready ingbrand campaign” for its Scholl footcare pro- to bare your soles?”, and online banners reach ducts in the UK. out to men with a humorous creative carrying The campaign – which is based around the the headline “Want strokably soft balls?”. message “Keeping Britain on its Feet” – inc- In mid-May,the emphasis shifted to tele- ludes television, press, radio and online adver- vision, press and online advertising for SSL’s tising as well as public relations and social mar- Orthaheel orthotic inserts. Aimed at men and keting activity. women aged 35-55 years, the advertising is bas- “As the leading brand in footcare and with ed around the message “Walk away from pain” “Keeping Britain on its Feet” is the unifying theme for SSL International’s marketing initiatives for its broad the breadth of products that Scholl covers, we and highlights that the products are backed by portfolio of Scholl footcare products in the UK believe we are Keeping Britain on its Feet,” a 30-day money-back guarantee. said Scholl marketing director Mark Critch- The campaign will end with a burst of tele- HydraStep Sandal was aimed at women aged ley. “The campaign aims to celebrate the ordi- vision advertising for Scholl Cracked Heel pro- 35-65 years who used footcare for wellbeing, nary hardworking British people who are keep- ducts, which highlights that Scholl Cracked confidence and beauty. ing this country going.” Heel Repair Cream K+ is now available in a SSL said five of its product categories that SSL pointed out the campaign was a way of larger 120ml pack priced £9.99. It also draws were not covered by the television and press engaging with people in both their workplace attention to the new Scholl HydraStep sandals, initiatives – athlete’s foot, blister,insoles, nail- and community,and at key times when they which are claimed to “moisturise your feet with care and odour – would be supported by radio were with their peers, friends and family. “Vir- every step”. advertising. This runs for three weeks from 7 tually every adult in the UK will see and/or hear SSL explained that the sandals contained a May on Bauer Media’s radio stations, includ- some communication from Scholl this summer,” built-in gel footbed that “slowly releases soft- ing Forth 1, Radio City and Rock FM. noted the company. ening ingredients to the skin on your feet while In addition, there will be a nationwide com- The campaign, which is running nationally you go about your daily routine”. The top lay- petition to find “Britain’s Hardest Working Feet” from 26 April until 14 June, kicked off with tel- er comprised natural emollients, vitamin E and via 11 radio stations. evision, press and online advertising for SSL’s a “delicate” fragrance, while the insole under- In the blister category,SSL has launched Scholl Hard Skin range. Launched earlier this neath was made of “a soft and breathable bam- “improved” Scholl Clear Gel Blister Plasters. year,the range comprises softening cream, soft- boo and charcoal textile”, the company noted. The company said visibility through the Hy- ening pen, instant hard skin remover, and a file Scholl HydraStep sandals come in three col- draGel pad had been improved to allow more for hard skin and calluses (OTC bulletin,16 Ap- ours – black, fuchsia and white – and have a precise application, the adhesive border had ril 2010, page 14). recommended retail selling price of £24.99. been made larger,and the application method The television commercial, which explains SSL said the sandals should be worn for one had been simplified. Five-plaster packs – con- how Scholl Hard Skin products can give “Visi- to two hours a day. taining either five large plasters or three large bly softer skin in seven days”, is based around The sandals are available exclusively from and two small plasters – are priced £4.39. a woman on a beach with friends. She is ini- selected Boots stores as well as the websites tially embarrassed by the hard skin on her feet, www.boots.com and www.scholl.com. but regains her confidence after using Scholl According to SSL,television advertising Hard Skin products. for Scholl Cracked Heel products and Scholl

New Scholl HydraStep sandals are claimed to “moisturise your feet with every step”

DIARY DATE...... DIARY DATE...... DIARY DATE...... DIARY DATE The OTCMarketing Awards 2011 SSL International has just launched “improved” will be held in London on Thursday 10th March 2011 blister plasters in the UK OTC

18 OTC bulletin 31 May 2010 OTC31-05-10p18-19FIN.qxd 27/5/10 06:21 Page 3

MARKETING NEWS OTC FDARegulatory Affairs warns Americans about topical Benadryl

mericans have been warned about the dan- A gers of mistakenly ingesting McNeil Con- sumer Healthcare’s topical OTCmedicine, Ben- adryl Extra Strength Itch Stopping Gel. The Food and Drug Administration (FDA) in the US said it had received reports of “seri- ous side-effects” in people who had mistaken-

Alcon is relaunching its ICaps food supplement for ly swallowed the product. “People swallowing healthy eyes in the UK as a one-a-day formulation the gel can ingest a dangerous amount of the with extra lutein and zeaxanthin. active ingredient, diphenhydramine,”insisted New packaging for Benadryl Extra Strength Itch While the original version of ICaps provided the FDA, adding: “Large doses of diphenhyd- Stopping Gel in the US carries prominent warnings 4mg lutein/zeaxanthin per daily dose of two tablets, that the topical product is “For Skin Use Only” the newcomer contains 10mg lutein/zeaxanthin in ramine can result in serious side-effects such as each delayed-release tablet. unconciousness, hallucinations and confusion.” contribute to consumers mistakenly swallow- Commenting on the revamp, Chris Miller, Alcon business unit manager, said: “The new one-a-day Noting that some OTC Benadryl products ing the product. formula is certain to aid patient compliance, were intended to be swallowed, the FDAadvis- The FDAis urging manufacturers of simi- particularly in those above the age of 50.” ed consumers and pharmacies to store products lar products to make similar changes to their A yellow bar on the side of the pack highlights that the product is “easy-to-swallow”, while for the skin separately from products that should labelling and packaging. straplines on the front point out that ICaps now be swallowed. The Benadryl warning follows a series of comes with “extra lutein and zeaxanthin” and To address the FDA’s concerns, McNeil has product recalls by Johnson & Johnson’s Mc- contains “antioxidants, vitamins & minerals”. Alcon said recent research had found that changed the packaging for its Benadryl Extra Neil Consumer Healthcare subsidiary affect- ophthalmologists “considered lutein and zeaxanthin Strength Itch Stopping Gel to help consumers ing North American markets (OTC bulletin, to be the most important nutrients in relation to recognise that the product is for use on the skin. 14 May 2010, page 1). age-related macular degeneration problems and ocular supplementation”. Labelling now includes the prominent state- In April, Johnson & Johnson revealed that Current pharmacy-press advertising describes ment “For skin use only”, and the cap now car- product recalls had cut the US sales of its OTC ICaps as the “First choice ocular supplement of UK ries a sticker stating “For skin use only”. & Nutritionals business by 25.3% to US$542 ophthalmologists”. ICaps has a recommended retail selling price of In addition, the company has initiated stud- million (C444 million) in the first three months £11.49 (C13.55). ies to understand better the factors that may of 2010 (OTC bulletin,30 April 2010, page 1). OTC OTC

Business Strategy Made Easy training programme. In addition, the company has introduced an P&G puts PharmacyCare online in UK online forum for pharmacists and their staff “to share best practice with their counterparts in rocter & Gamble has launched an online The new online service – available at www. the profession”. P version of its PharmacyCare programme to pharmacycare-online.co.uk – includes inform- Procter and Gamble said it wanted “pharma- make it more accessible to independent pharma- ation on products, promotions and campaigns cists and their assistants to take a look, down- cies across the UK. as well as downloadable point-of-sale material, load the planograms, start implementing the The company said more than 500 stores had planograms and modules from the Retail Skills plans at store level, and see the results for them- now signed up to PharmacyCare, which was selves”. The company hoped that they would launched two years ago to help independent then “share their stories in the PharmacyCare pharmacies improve their merchandising and online forum”. increase retail sales (OTC bulletin,13 June Meanwhile, Procter & Gamble noted that 2008, page 14). 133 stores had signed up to its recently-launch- Quoting data from IRI, Procter & Gamble ed personal support programme for Retail Skills said value sales of Beauty & Baby Care prod- Made Easy,which coaches staff through the ini- ucts in pharmacy had dropped by 13% in the tiative either in store or by telephone. year ended 31 March 2010 compared with the The company noted that its future plans in- same period a year earlier. The company add- cluded the launch of Retail Skills Made Easy ed, however, that stores that had implemented Bitesize – documents containing hints and tips the PharmacyCare programme had bucked this to “get the best out of the front of store area” Pharmacists and assistants visiting Procter & trend with sales rises of between 7% and 20% Gamble’s new PharmacyCare website can download – as well as new category management cards. in three key health and beauty categories. planograms, point-of-sale material and training modules OTC

31 May 2010 OTC bulletin 19 OTC31-05-10p20FIN.qxd 27/5/10 06:22 Page 2

OTC MARKETING NEWS NovartisLine Extensions adds three to Savlon selection in UK

ovartis Consumer Health said a newcom- Ner to its Savlon range of antiseptics would bring the brand into “daily usage” in the UK and Ireland. Savlon Hand Gel – one of three new line ex- Lifeplan Products has extended its offering in Europe with the launch of two food supplements. tensions – made the brand “more accessible”, The company is introducing the newcomers pointed out the company, and could encourage – Lifeplan Rosehip Extract and Lifeplan Pumpkin Seed impulse purchases to “increase basket spend Extract – to Cyprus, Ireland, Italy, Latvia, Lithuania, Malta, Portugal, Spain and the UK. from the first-aid fixture”. According to Lifeplan, the food supplements The company said the antibacterial hand gel, contained “superior quality, ethical ingredients in which is claimed to kill 99% of bacteria, had high-strength formulations that are registered with the Vegan Society”. The products were competitively been launched following the outbreak of swine priced and free of artificial colours, flavours and flu last year. It could be used to “complement preservatives, added Lifeplan. traditional hand washing or to cleanse and ster- The company said Lifeplan Rosehip Extract was a “2,000mg” strength product for consumers who had ilise the hands before treating minor wounds”, joint problems and wanted to maintain a healthy the company added. heart as well as lower high cholesterol levels. It Packaging highlights that the product pro- added that the “300mg” strength Lifeplan Pumpkin Seed Extract helped urinary problems including vides “clean hands on the go”. incontinence and benign prostatic hyperplasia. Meanwhile, Novartis has introduced Savlon A spray-on plaster that is antiseptic upon application In the UK, Lifeplan Rosehip Extract has a Anti-Bacterial Surface Spray following a surge is one of three new additions to Novartis Consumer recommended retail selling price of £8.99 (C10.49) Health’s Savlon brand in the UK and Ireland for 60 tablets, while Lifeplan Pumpkin Seed Extract in demand for antibacterial cleansers. The com- retails at £6.99 for 60 tablets. Users should take up pany claimed the trigger spray killed 99.9% products, Savlon Spray Plaster was antiseptic to two tablets a day. of bacteria and viruses including MRSA. upon application and had a “unique non-drip Earlier this year, the company launched the Lifeplan Acai Berry, Lifeplan Aloedophilus, Novartis maintained that its third newcomer formula for a fuss-free treatment”. The 40ml and Lifeplan Pine Bark Extract food supplements – Savlon Spray Plaster – brought “credibility bottle was “excellent value”, added Novartis. in Europe. and differentiation to the spray plaster cate- Packaging highlights the product “aids nat- OTC gory”, adding it had been launched to “cre- ural healing” and “reduces the risk of infection”. ate new interest in spray plasters and revitalise Novartis said that it was backing the Savlon the premium sector”. brand with consumer advertising, public rela- The product produces a flexible film when tions and in-store activity throughout 2010. sprayed onto cuts, making it particularly good The 100ml bottle of Savlon Hand Gel has for use on knees and elbows. The film seals a recommended retail selling price of £2.30 out water,dirt and germs, before wearing off (C2.70), the 500ml bottle of Savlon Anti-Bac- after two to three days. terial Surface Spray is priced at £1.99,and The company noted that, unlike competing Savlon Spray Plaster is priced at £6.19. OTC

“Slim while you sleep” is Power Health’s promise to consumers for a new food supplement in the UK. Power Health claimed that Slim-Nite, which Lloydspharmacy is touring the UK with an inflatable contains l-arginine, l-carnitine and l-ornithine, heart-shaped sofa to raise awareness of the effects harnessed the power of sleep to give “you incredible of high blood pressure. results fast”. As part of its Heart Health campaign, the pharmacy The “unique blend” of ingredients helped convert chain is offering shoppers a free blood-pressure check food into energy for the body to repair itself and boost at shopping centres in Birmingham, Cardiff, Leeds metabolism, added the company. and Southampton during May. Available from the website www.powerhealth.co.uk Lloydspharmacy said it aimed to encourage and selected independent healthfood stores, people to monitor their blood pressure regularly in Slim-Nite comes in a pack of 45 capsules and has a between doctors’ appointments. recommended retail selling price of £10.60 (C12.50). The retailer pointed out that it had offered free Consumers should take three capsules every evening blood-pressure checks in its pharmacies since 2003, before going to sleep. and had conducted more than 1.5 million checks to A strapline on the packaging states that Slim-Nite date. It also sells a range of blood-pressure monitors. is “A food supplement of particular amino acids”. OTC OTC

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EVENTS OTC

JUNE 17 June 24 June Fax: +49 6221 500 555. ■ Medicines and Medical ■ Pharmaceutical E-mail: h.wolf-klein@forum- 14-15 June Devices Borderline Quality of Herbals institut.de. ■ EuroPLX 43 Bonn, Germany Bonn, Germany Website: www.forum-institut.com. Berlin, Germany A one-day meeting organised by A one-day meeting organised by A two-day partnering and licens- Germany’s medicines manufac- Germany’s medicines manufac- AUGUST ing forum focusing on OTC medi- turers’ association, the BAH, and turers’ association, the BAH, and 4 August cines, nutraceuticals, branded pre- conducted in the German langu- conducted in German. Speakers ■ Basics of scription drugs and generics. age. Speakers will include Guido will include Klaus Reh from Ger- Regulatory Affairs Contact:RauCon. Middeler and Ralf Sibbing from many’s federal institute for drugs London, UK Tel: +49 6222 9807 0. Diapharm. and medical devices, BfArM. A one-day course from The Org- Fax: +49 6222 9807 77. Contact:BAH. Contact:BAH. anisation for Professionals in Reg- E-mail: [email protected]. Tel: +49 228 957 45 0. Tel: +49 228 957 45 0. ulatory Affairs (TOPRA). Website: www.raucon.com. Fax: +49 228 957 45 90. Fax: +49 228 957 45 90. Contact:TOPRA. E-mail: [email protected]. E-mail: [email protected]. 14 & 15-16 & 17 June Tel: +44 20 7510 2560. Website: www.bah-bonn.de. Website: www.bah-bonn.de. ■ Regulatory Affairs in Fax: +44 20 7537 2003. Central and Eastern 21-23 June JULY E-mail: [email protected]. Europe ■ Pharmacovigilance Website: www.topra.org. Budapest, Hungary London, UK 7-8 July A pre-conference symposium on A three-day training course cov- ■ Marketing Authorisation OCTOBER ‘Regulatory affairs in the CIS re- ering drug safety monitoring in in the Middle East 4-6 October gion’ and a post-conference work- Europe, Japan and the US. Frankfurt, Germany ■ The 7th TOPRA shop on pharmacovigilance will Contact: Management Forum. Countries to be discussed at this Annual Symposium accompany this two-day event. Tel: +44 1483 730071. two-day meeting include Jordan, London, UK Contact:Informa UK. Fax: +44 1483 730008. Lebanon and Saudi Arabia. A three-day meeting organised by Tel: +44 20 7017 7481. E-mail: registrations@management- Contact:Henriette Wolf-Klein, The Organisation for Profession- Fax: +44 20 7017 7823. forum.co.uk. Department Manager, als in Regulatory Affairs (TOPRA) E-mail: [email protected]. Website: www.management- Forum Institut für Management. together with the UK’s Medicines Website: www.informa-ls.com. forum.co.uk. Tel: +49 6221 500 680. and Healthcare products Regula- Fax: +49 6221 500 555. 17 June tory Agency (MHRA). 22-23 June E-mail: h.wolf-klein@forum- Building a Regulatory Contact:TOPRA. ■ ■ Pharmaceutical institut.de. Tel: +44 20 7510 2560. Strategy for Marketing Regulatory Affairs Website: www.forum-institut.com. Food Supplements in in Canada Fax: +44 20 7537 2003. Europe London, UK 8-9 July E-mail: [email protected]. Website: www.topra.org. Brussels, Belgium This two-day seminar will focus ■ Pharmaceutical Regulatory Affairs in This one-day conference is sub- on Canada’s regulatory environ- 25-26 October Russia, Belarus, Ukraine titled ‘The key steps to a success- ment for pharmaceuticals. ■ Nutraceuticals and ful product launch’. Contact: Management Forum. and Former Soviet Functional Foods Contact:Cindy Garcet, Tel: +44 1483 730071. States London, UK European Advisory Services (EAS). Fax: +44 1483 730008. London, UK Topics for discussion at this two- Tel: +32 2 218 1470. E-mail: registrations@management- This two-day meeting will cover day meeting include global per- Fax: +32 2 219 7342. forum.co.uk. recent and expected regulatory de- spectives and evolution of func- E-mail: [email protected]. Website: www.management- velopment and pharmacovigilance tional foods, marketing opportun- Website: www.eas.eu. forum.co.uk. requirements, as well as specific ities, nutrition and health claims, issues relating to Belarus, Ukraine nanotechnology,and probiotics. 9-11 June and the former Soviet States. Contact:Samantha Graves, ■ 46th AESGP Annual Meeting Contact: Management Forum. SMi Group. Dubrovnik, Croatia Tel: +44 1483 730071. Tel: +44 20 7827 6000. ‘Connecting with self-care. The future of self-medication in the new Eur- Fax: +44 1483 730008. Fax: +44 20 7827 6001. ope’ will be the theme of the 46th Annual Meeting of the Association of E-mail: registrations@management- E-mail: [email protected]. the European Self-Medication Industry,the AESGP. forum.co.uk. Website: www.smi-online.co.uk. The three-day meeting will include a session entitled ‘How to be suc- Website: www.management- cessful in self-care’, featuring presentations from Etienne de Laroullière, forum.co.uk. NOVEMBER vice-president and head of global business unit OTC at Nycomed; Brian 14 July McNamara, region head Europe OTC for Novartis Consumer Health; 8-9 November ■ Marketing Authorisation ■ EuroPLX 44 Luc Massart, chief operating officer of HRA Pharma; and James Hallatt, in Japan UK general manager of GlaxoSmithKline Consumer Healthcare. Barcelona, Spain Speakers at the meeting will also include: Martin Terberger and Basil Frankfurt, Germany A two-day partnering and licens- Mathioudakis of the European Commission; Thomas Lönngren of the Speakers at this one-day confer- ing forum focusing on OTC medi- European Medicines Agency (EMA); Dagmar Roth-Behrendt of the ence on Japan will include Bet- cines, nutraceuticals, branded pre- European Parliament; and Catherine Geslain-Lanéelle and Vittorio Silano tina Fiedler from Bayer Schering scription drugs and generics. of the European Food Safety Authority (EFSA). Pharma. Contact:RauCon. Contact:Association of the European Self-Medication Industry,the AESGP. Contact:Henriette Wolf-Klein, Tel: +49 6222 9807 0. Tel: +32 2 735 51 30. Fax: +32 2 735 52 22. Department Manager, Fax: +49 6222 9807 77. E-mail: [email protected]. Website: www.aesgp.be. Forum Institut für Management. E-mail: [email protected]. Tel: +49 6221 500 680. Website: www.raucon.com.

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OTC COMPANIES A tale of two companies

2010 is turning out to be a tale of two companies. Sanofi-Aventis is surging venture company with Minsheng Pharmaceu- ahead with a string of OTCacquisitions, while Johnson & Johnson is tical Group to produce vitamin and mineral sup- plements for the Chinese OTC market. Hans- struggling to defend the reputation of its key brands in North America in the peter Spek, president of global operations at wake of a series of product recalls. Deborah Wilkes follows the leading firms. Sanofi-Aventis, said that entering the “world’s second-largest consumer healthcare market” was an important strategic move (OTC bulletin, t was the best of times, it was the France, Italy,Mexico and Russia. 10 February 2010, page 2). worst of times,”was how Charles Chattem, by contrast, generated around 93% Furthermore, Sanofi-Aventis has just an- “IDickens chose to begin A Tale of of its turnover in the US through a portfolio of nounced that it plans to acquire Nepentes in a Two Cities. And that sums up the brands that includes ACT, Cortizone-10, Gold deal that values the Polish OTC company at fortunes of two of the world’s leading consum- Bond, Icy Hot, Selsun Blue and Unisom. In the PLN420 million (C105 million). The two com- er healthcare companies – Sanofi-Aventis and year ended 30 November 2008, the company panies said in a joint press statement that San- Johnson & Johnson – during the opening few increased its sales by 7% to US$455 million. ofi-Aventis would seek to acquire all the out- months of 2010. Sanofi-Aventis noted that the price tag for standing shares in Nepentes through a public Sanofi-Aventis has just announced plans to Chattem represented 4.8-times the US comp- tender offer (see front page). acquire Polish OTCcompany Nepentes. Mean- any’s sales in 2009 and 13.3-times its earnings while, as OTC bulletin went to press, Johnson before interest, tax, depreciation and amortisa- Affiliates in Bulgaria and Romania & Johnson was busy preparing to testify at a tion (EBITDA). Nepentes reported sales up by nearly a quar- hearing of the US Committee on Oversight and If Allegra is switched successfully in the ter to PLN135 million in 2009 from its portfo- Government Reform about its recent recall of US, then the premium price tag will be good lio of pharmaceuticals and dermocosmetics, in- medicines for infants and children. value. According to Viehbacher,switching Al- cluding the Emolium and Iwostin brands. The The Nepentes deal is the latest in a string legra had the potential to move Sanofi-Aven- majority of this figure was generated in Pol- of local OTC acquisitions that are transform- tis’ Consumer Health Care business up the rank- and, but Nepentes also has affiliates in Bulg- ing Sanofi-Aventis into a global OTCplayer. ings “pretty significantly”. aria and Romania. Earlier this year,Viehbacher forecasted that The past two years have seen Sanofi-Aven- Ideal platform in the US an OTC version of Allegra could double Chat- tis set about transforming its Consumer Health The big news at the beginning of this year tem’s annual sales of more than US$450 mil- Care business from a sleeping giant with a low was that Sanofi-Aventis intended to enter the lion. He highlighted that established OTC al- profile into a rapidly-growing player that is nev- US OTC market by acquiring Chattem for ap- lergy brands in the US, like Merck & Co’s Cla- er far from the headlines. The company intends proximately US$1.9 billion (C1.5 billion). Chris ritin (loratadine) and McNeil Consumer Health- to double the size of its Consumer Health Care Viehbacher,the chief executive officer of the care’s Zyrtec (cetirizine), generated a similar business to around C3.0 billion within the next French pharmaceutical firm, described Chat- figure on their own (OTC bulletin,26 Febru- five years through a combination of acquisi- tem as the “ideal platform in the US consumer ary 2010, page 5). tions and geographic expansion (OTC bullet- healthcare market, which represents 25% of the However, successfully launching an OTC in,20 January 2010, page 20). current worldwide opportunity” (OTC bulletin, In the run up to obtaining 20 January 2010, page 1). Nepentes is the latest in a string of local Chattem, Sanofi-Aventis ac- Announcing the deal, Viehbacher pointed OTC acquisitions that are transforming quired Symbion Health’s con- out that Chattem would provide a strong vehi- sumer healthcare business in cle for switching some of Sanofi-Aventis’ med- Sanofi-Aventis into a global OTC player Australia and New Zealand, icines from prescription-to-OTC status in the Zentiva in the Czech Repub- US. “Sanofi-Aventis probably has one of the version of Allegra in the US will not be easy. lic, Gramon in Argentina, Kernpharm in the most interesting portfolios of prescription-to- Capturing market share from Claritin and Zyr- Netherlands, and Oenobiol in France. OTCswitch candidates in the business,”he in- tec will be tough. Furthermore, Allegra already These bolt-on acquisitions helped push up sisted, adding that the company was seeking faces generic competition in the prescription sales by the company’s Consumer Health Care to switch the allergy medicine Allegra (fexo- sector,and store-brand players, such as Per- business by 18.9% – or 26.8% at constant ex- fenadine hydrochloride) in the US. rigo, are queuing up to capitalise on the OTC change rates – to C1.43 billion in 2009 (see Fig- Sanofi-Aventis was keen to point out that opportunity. ure 1). On a constant-structure and exchange- acquiring Chattem would make it the world’s Sanofi-Aventis submitted its switch applica- rate basis, the rise was still a strong 8.1%. fifth-largest consumer healthcare company with tion to the US Food and Drug Administration Growth in the first quarter of this year was sales of approximately C1.7 billion. At the time, (FDA) at the end of March. The company is even more rapid, as Chattem came on board for Sanofi-Aventis ranked number six. confident that Allegra will be an OTCmedi- about half of the period. Turnover at Sanofi- Before the deal was completed in early Feb- cine in the US by early 2011 (OTC bulletin,14 Aventis’ Consumer Health Care business grew ruary,Sanofi-Aventis’ Consumer Health Care May 2010, page 8). by 44.8% – 42.5% at constant exchange rates business did not have a direct presence in the In addition to entering the US OTCmarket, – to C491 million (see Figure 2 on page 25). US. Its main markets included Australia, Brazil, Sanofi-Aventis recently agreed to form a joint- Sales growth on a constant-structure and ex-

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COMPANIES OTC

Parent group OTC business Annual sales of OTC business Change as % of Comments reported (%) group

Bayer HealthCare Consumer Care C3.08 billion +2 19.3 – Boehringer Ingelheim Consumer Health Care C1.26 billion +6 9.9 – GlaxoSmithKline OTC Medicines £2.32 billion (C2.67 billion) +20 8.2 – Herbalife Herbalife US$2.32 billion (C1.85 billion) +1 100.0 Includes some sales of personal care products Johnson & Johnson OTC & Nutritionals US$5.63 billion (C4.48 billion) -4 9.1 Launched OTCZyrtec in the US at the end of January 2008 Merck & Co Consumer Care US$1.28 billion (C1.02 billion)– 2.8 Merck & Co bought Schering-Plough for US$41 billion on 3 November 2009 Merck KGaA Consumer Health Care C467 million +6 6.0 – Nycomed Total OTC C418 million -5 1.3 – Novartis OTCUS$3.00 billion (C2.39 billion) –6.8 Approximate figure Omega Pharma Omega Pharma C814 million ±0 100.0 Majority of sales are generated in Europe Perrigo Consumer Health Care US$1.64 billion (C1.31 billion) +23 81.7 Figures are for the year ended 27 June 2009. Made several acquisitions in the financial year. Majority of sales come from store-brands in the US Pfizer Consumer Healthcare US$663 million (C527 million) –4.0 Figures are for first quarter of 2010 only,as no figure was reported for the year 2009. Pfizer acquired Wyeth, including its Consumer Healthcare business, for US$68 billion in 2009 Procter & Gamble Health Care US$13.6 billion (C10.9 billion) -7 17.2 Figures for the year ended 30 June 2009. Health Care sales included Feminine Care, Oral Care and Pharmaceuticals businesses as well as Personal Health Care Reckitt Benckiser Health & Personal Care £2.08 billion (C2.39 billion) +24 26.8 Acquired Adams Respiratory Therapeutics in the US on 30 January 2008 Sanofi-Aventis Consumer Health Care C1.43 billion +19 4.9 Made a series of local OTC acquisitions in 2009 Taisho Self-Medication ¥159 billion (C1.41 billion) -1 61.5 Figures for the year ended 31 March 2010. Acquired Bristol-Myers Squibb’s OTC assets in the Asia-Pacific region, excluding China and Japan

Figure 1: Performance of selected OTC businesses in 2009 (unless otherwise stated) as reported by the parent groups. Changes in sales are as reported in the parent group’s chosen currency and include the effect of acquisitions/divestments and currency translations, and they are compared to the same period a year earlier. Currency conversions to euros are at rates on 21 May 2010. The range of products covered by OTC business units in this table varies from one company to another and may include personal-care products (Source – OTC bulletin)

change-rate basis, however, was 3.4%. vited to testify but will not put in an appearance the recall, McNeil said it had temporarily sus- Meanwhile, the world number one, John- as he is recovering from back surgery (see page pended production at its plant in Fort Wash- son & Johnson, is having a really tough time, 11). However, Colleen Goggins, worldwide ington, Pennsylvania (OTC bulletin,14 May following a series of product recalls in North chairman of Johnson & Johnson’s Consumer 2010, page 1). America by its McNeil Consumer Healthcare division, was expected to testify. According to McNeil, the latest recall had subsidiary. As OTC bulletin went to press, the FDA commissioner Margaret Hamburg has been initiated because “some of these products US-based company was about to testify at a also been invited to address the hearing. may not meet required quality standards”. The hearing of the US Committee on Oversight and The congressional committee is investigat- recall was not due to adverse medical events, Government Reform about its recent recall of ing the company’s recall of 44 OTCmedicines the company stressed. medicines for infants and children. for infants and children. These are sold under Nevertheless, the FDAsaid its inspectors Johnson & Johnson’s chairman and chief the Motrin, Tylenol and Zyrtec brands in a num- had found grime and contaminated ingredients executive officer,William Weldon, has been in- ber of countries, including the US. Announcing at the plant. McNeil’s manufacturing deficien-

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OTC COMPANIES

cies could affect “quality,purity or potency” of sales (OTC bulletin,14 May 2010, page 9). Personal Care division had slowed down to 4% products, the agency noted. Procter & Gamble explained that the drop – both as reported and at constant exchange The recall is the sixth significant such move was due to a mild cold and flu season, which rates. A weak cold and flu season in Europe in North America by McNeil in an eight-month had reduced shipments of Vicks products, as and North America had held back worldwide period. In January of this year,the FDA sent well as declining volume sales of its Prilosec sales growth at the Healthcare unit, said the McNeil a warning letter about another manu- OTCheartburn medicine containing the pro- company, but Personal Care had recorded a facturing facility at Las Piedras in Puerto Rico, ton-pump inhibitor omeprazole. Prilosec OTC “strong performance”. where a number of the company’s OTC medi- has now only recorded one quarter of volume Becht was keen to point out that the Health- cines are produced (OTC bulletin,10 Febru- sales growth in the two years since it lost mar- care unit had increased its market share dur- ary 2010, page 22). ket exclusivity in the US in March 2008, and ing the quarter. The Healthcare powerbrands It remains to be seen how the latest product store-brand competition began to eat away at Gaviscon, Mucinex, Nurofen and Strepsils had recall and congressional committee hearing will the brand’s sales. all improved their respective market shares in affect Johnson & Johnson’s sales and the rep- In addition to store-brand versions, Prilosec the period, he said. utation of its brands. OTC now has to compete with Merck & Co’s Last year,Johnson & Johnson’s OTC& Zegerid OTC brand, which combines omepra- Dark clouds on the horizon Nutritionals business saw its worldwide sales zole with sodium bicarbonate. Merck claims Some dark clouds, however, lie on the hori- decrease by 4.5% to US$5.63 billion. The com- the product’s “unique dual-ingredient formu- zon for Reckitt Benckiser. In the UK, for in- pany put the fall down to a tough year-on-year lation”protects the omeprazole from stomach stance, the company has been accused by the comparison in the US following the launch of acids and allows the medicine to be absorbed Office of Fair Trading (OFT) of abusing its OTC Zyrtec in early 2008, and from negative quickly. A heavyweight consumer-advertising dominant position in the supply of alginate and campaign for Zegerid OTC urges antacid heartburn drugs. The watchdog has al- It remains to be seen how the latest Americans to “Discover the Dif- leged that the firm limited generic competi- product recall and hearing will affect ference” (OTC bulletin,16 April tion through the UK’s National Health Service 2010, page 14). (NHS) to its Gaviscon brand (OTC bulletin, Johnson & Johnson’s sales and the Prilosec OTC also faces stiff 17 March 2010, page 5). reputation of its brands competition in the US from Nov- In the US, meanwhile, store-brand special- artis Consumer Health’s recently- ist Perrigo recently moved a step closer to in- currency effects. Excluding currency effects, launched Prevacid 24HR, based on rival pro- troducing a generic version of Reckitt Benck- the fall was only 1.1% (OTC bulletin,10 Feb- ton-pump inhibitor lansoprazole (OTC bullet- iser’s Mucinex cough medicine,when a federal ruary 2010, page 6). in,16 November 2009, page 1). court threw out the UK-based company’s pat- However, in the first three months of this Procter & Gamble’s total Health Care sales ent-infringement complaint (OTC bulletin,26 year – before the latest product recall and con- – including its Feminine Care and Oral Care February 2010, page 13). gressional committee hearing – US sales of its businesses as well as Personal Health Care – The Michigan district court granted Perrigo OTC & Nutritionals business dropped by 25.3% rose by 5% to US$2.8 billion in the quarter. summary judgement in litigation over its 600mg to US$542 million. The company blamed the Reckitt Benckiser’s performance in the first guaifenesin extended-release tablets. The court earlier product recalls, which affected the flag- quarter of 2010 compared favourably with its said Perrigo’s generic did not infringe the Muc- ship Tylenol analgesic brand amongst others. OTCindustry peers, but the UK-based com- inex patent. The US slump meant worldwide turnover by pany is accustomed to better. Perrigo is now waiting for the Abbreviated the business fell by 10.5% – 15.0% excluding In 2009, Reckitt Benckiser’s Health &Per- New Drug Application (ANDA) for its generic currency effects – to US$1.21 billion in the per- sonal Care division pushed its worldwide sales product to be approved by the FDA. At the start iod (OTC bulletin,30 April 2010, page 1). up by 24% to £2.08 billion (C2.39 billion). At of February,Perrigo’s chairman and chief ex- The problems in the OTC&Nutritionals constant exchange rates, the rise was still an ecutive officer,Joseph Papa, said the company business had a knock-on effect at Johnson & expected approval from the Johnson’s Consumer division. It experienced Reckitt Benckiser’s performance in the first FDA for its store-brand Muc- a 9.6% US sales decrease to US$1.56 billion quarter of 2010 compared favourably with inex in the next 30-60 days, during the first quarter. and that the product would be Commenting on the first-quarter results, its OTC industry peers, but the UK-based available before the close of Dominic Caruso, Johnson & Johnson’s chief company is accustomed to better the company’s financial year financial officer,claimed that the recalls had ending June 2010. However, “not really impacted physician recommenda- impressive 14% (OTC bulletin,26 February Papa said more recently that the company had tion or consumer preferences” for the comp- 2010, page 4). now removed the estimated impact of a store- any’s OTC products. Caruso acknowledged, Chief executive officer Bart Becht said that brand Mucinex from its fourth-quarter forecast however, that second-quarter sales would also Health &Personal Care had posted “very good (OTC bulletin,14 May 2010, page 11). be hit by the recalls. growth”, driven by its Healthcare powerbrands Quoting data from AC Nielsen, Perrigo said Meanwhile, the OTCbusiness of another US Gaviscon, Nurofen and Strepsils, as well as the Mucinex 600mg extended-release tablets had giant, Procter & Gamble, is also going through Personal Care powerbrand Dettol. The comp- generated sales of approximately US$162 mil- achallenging period. The company does not re- any’s strategy of rolling out the division’s pow- lion through food, drug and mass merchand- lease detailed sales figures for its OTC opera- erbrands into new markets had continued dur- iser retail outlets in the US during the 12-month tion, but during the first three months of this ing 2009, he noted. period ended January 2010. year its Personal Health Care business record- By the first quarter of this year,however, Perrigo filed an ANDA with a patent chal- ed a mid-single-digit fall in worldwide volume sales growth at Reckitt Benckiser’s Health & lenge against Mucinex in 2007, but Adams

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COMPANIES OTC

Respiratory Therapeutics – which is now part OTC business Change in sales in the first three of Reckitt Benckiser – responded by suing Per- months of 2010 as compared to the rigo for patent infringement (OTC bulletin,12 same period a year earlier (%) October 2007, page 9). As reported Constant currencies Earlier in 2007, Adams had settled a patent challenge to the Mucinex brand from URL/ Bayer’s Consumer Care unit +6 +6 Mutual, which potentially kept URL/Mutual’s GlaxoSmithKline’s OTCMedicines unit +8 +11 600mg guaifenesin product off the market in Herbalife +19 +13 the US until 2012 (OTC bulletin,30 March Johnson & Johnson’s OTC & Nutritionals unit -10 -15 2007, page 11). Merck & Co’s Consumer Care unit* -2 NP Perrigo’s victory,however,means that URL/ Mutual may soon be in a position also to launch Merck KGaA’s Consumer Health Care unit ±0 NP its extended-release 600mg guaifenesin prod- Nycomed’s total OTC sales +5 -2 uct, as the company’s settlement with Adams Omega Pharma +4 NP allowed it to launch if a third party was in a Perrigo’s Consumer Healthcare unit** +4 NP position to introduce its own generic guaife- Procter & Gamble’s Health Care unit*** +5 +1 nesin product before 1 July 2012. Reckitt Benckiser is also defending its Muc- Reckitt Benckiser’s Health & Personal Care unit +4 +4 inex,Mucinex D (pseudoephedrine hydrochlo- Sanofi-Aventis’ Consumer Health Care unit +45 +43

ride/guaifenesin) and Mucinex DM (dextro- * Sales in the US and Canada only. Merck & Co’s International Consumer Care sales are reported in a different unit methorphan/guaifenesin) products from patent ** First quarter of 2010 is the third quarter of Perrigo’s financial year challenges made by the generics company Wat- *** First quarter of 2010 is the third quarter of Procter & Gamble’s financial year son Pharmaceuticals (OTC bulletin,19 June NP Not provided 2009, page 12). Figure 2: Performance of selected OTC businesses in the first quarter of 2010, both as reported and excluding Turnover at Perrigo’s Consumer Healthcare currency effects. Changes in sales include the effect of acquisitions/divestments, and they are compared to the same period a year earlier. The range of products covered by OTC business units in this table varies from one division moved ahead by 10% to US$1.35 bil- company to another and may include personal-care products (Source – OTC bulletin) lion in the nine months ended 27 March 2010. Johnson & Johnson’s loss during the first three KGaA, Novartis, Omega Pharma and Taisho icines and Hythiol-C vitamin C products. months of this year was Perrigo’s gain, as the felt the effects of the difficult economic envi- Boehringer Ingelheim’s Consumer Health store-brand specialist reported that sales of its ronment, currency fluctuations and poor cough/ Care business saw its sales rise by 5.9% – 2.7% analgesics had been boosted by the recall of cold seasons to a greater or lesser degree. The on a currency-adjusted basis – to C1.26 billion the Tylenol products (OTC bulletin,14 May growing threat from retailers’ own-label prod- last year. Nevertheless, the German firm said 2010, page 10). ucts remains an ongoing challenge. Consumer Health Care had been “considerably Perrigo has struck some significant deals Taisho Pharmaceutical, for instance, report- weakened” by the global economic crisis. this year,including the acquisition of store- ed Self-Medication turnover down by 1.4% to brand infant formula and baby food special- ¥159 billion (C1.41 billion) in the year ended Less fortunate on the acquisition front ist PBM Holdings for US$808 million in cash. 31 March 2010. The Japanese company men- Merck KGaA was less fortunate on the ac- Perrigo said PBM, which generated sales of tioned the “sluggish” economy in its home mar- quisition front. Earlier this year,the German around US$265 million in 2009,took the firm ket, and a significant drop in sales of cold reme- firm admitted plans for its Consumer Health into another important product category in the dies (see page 6). Care business had been dealt a blow in 2009. US (OTC bulletin,31 March 2010, page 1). During the year,Taisho expanded its Self- Chairman Karl-Ludwig Kley said the company The deal for PBM was announced less than Medication division’s presence outside of Jap- had missed out on two unnamed acquisition tar- a month after Perrigo said it would expand its an by acquiring Bristol-Myers Squibb’s OTC gets (OTC bulletin,17 March 2010, page 1). Consumer Healthcare division into Australia assets in the Asia-Pacific region – excluding Just over a year ago, Merck KGaA said it in- by acquiring Orion Laboratories for approxi- China and Japan – for US$310 million. Taisho tended to turn its Consumer Health Care busi- mately US$48 million in cash (OTC bulletin, said the deal – which included the Tempra an- ness into “one of the top-10 global OTC play- 17 March 2010, page 3). algesic and the Counterpain topical analgesic ers by doubling annual sales to C1.0 billion over Acquiring Orion is part of the geographi- brands – meant the company could now enter the next three years”, via a combination of ac- cal expansion plan that Perrigo laid out for its the Asian OTC drug business “in earnest” (OTC quisitions and organic growth (OTC bulletin, Consumer Healthcare division last year (OTC bulletin,30 September 2009, page 1). 29 May 2009, page 20). bulletin,15 May 2009, page 6). At that time, Meanwhile, Boehringer Ingelheim recently “I was extremely confident of closing one Consumer Healthcare generated the majority strengthened its position in the Japanese con- of the acquisitions when I mentioned the C1.0 of its sales in the US, but also had a presence sumer healthcare market by acquiring the 40% billion target,”Kley revealed, “but it slipped in Mexico and the UK as well as “relation- stake in its Japanese OTC subsidiary,SSP,that through our fingers at the last minute.” ships” in Canada. it did not already own (OTC bulletin,26 Feb- Merck KGaA’s Consumer Health Care busi- However, as OTC bulletin went to press the ruary 2010, page 3). The company has held a ness produced sales growth of 6% in 2009 to news had just broken that Perrigo had receiv- majority stake in SSP since 2001 (OTC bul- C467 million, but sales were static during the ed a warning letter from the FDA about its man- letin,16 November 2001, page 1). first quarter of this year (OTC bulletin,14 May ufacturing plant in Allegan, Michigan. SSP generates annual sales of around ¥48 2010, page 2). Elsewhere in the OTC industry,companies billion from a portfolio of brands including the Following its US$41 billion purchase of such as Bayer,Boehringer Ingelheim, Merck S-Cup tonic drinks, S-Tac cough and cold med- ■ Continued on page 31

31 May 2010 OTC bulletin 25 OTC31-05-10p26-29FIn.qxd 27/5/10 06:26 Page 2

OTC MARKETS CEEgrowth masks mixed trends

Strong sales growth in local currencies in the non-prescription market of to leverage fully the growth potential of the Central and Eastern Europe is the tip of the iceberg, with mixed trends lying CEE region”. Based on local-currency comparisons, sales beneath the surface. Deborah Wilkes reports on new data from IMS. of non-prescription products in the CEE region increased by 15.3% to C8.53 billion at manu- entral and Eastern Europe (CEE) to this trend. “In addition, devaluation of CEE facturers’ selling prices in 2009 compared to continues to provide good growth currencies against the euro meant local-cur- the previous year,according to data from IMS opportunities for the OTC industry, rency growth hid a significant reduction in sales OTCReview Plus. The strong performance of Csays Andy Tisman, IMS Consult- at the euro level.” the CEE region last year followed value sales ing’s senior principal for Consumer Health, Tisman also highlights that volume sales growth of 20.1% in 2008 and 19.2% in 2007 noting that the region remains the “key growth actually declined in the CEE region last year. (see Figure 1). driver” in Europe. “Russia, Ukraine and Romania were the big- Countries included in the data are Bulgaria, Tisman points out, however, that the strong gest drivers of the volume declines in the re- the Czech Republic, Estonia, Hungary,Latvia, growth in sales of non-prescription products re- gion,”he observes. Lithuania, Poland, Romania, Russia, Slovakia corded in the region last year in terms of local Nevertheless, Tisman believes there is fur- and Ukraine. Data for Croatia and Slovenia are currencies was only part of the picture. “Value thergrowth potential in some CEE countries, not included in the total for the CEE region, growth in local currencies dropped back signif- as the per capita expenditure on non-prescrip- but are included in some of the figures that ap- icantly in many CEE countries as the econom- tion products is relatively low compared to oth- pear in this article. ic crisis took its toll,”says Tisman, adding that er European countries. Furthermore, he main- The data cover both prescription-generated Poland and Ukraine were notable exceptions tains that multinational companies are “failing and self-medication or OTC sales of non-pre-

+40.040 +31% +31% +30.030 +22% +22% +23% +19% +20.020 +17% +16% +12% +12% +10% +9% +10% Series12008 versus 2007 +10.010 +7% +8% +8% lue sales (%) +6% +6% +6% +4% va +2% Series22009 versus 2008

0.00 12 345678910 11 12-2% 13

Change in -10.0-10 -7% -10% -9% -14% -20.0-20

kia aria nia ve Russia va Latvia Poland Ukraine Bulg Croatia Estonia Romania Hungary Slo Lithuania Slo

Czech Republic

Figure 3: Comparison of the change in value sales of non-prescription products in Central and Eastern European markets in 2008 and 2009. Growth/decline figures are based on local-currency comparisons (Source – IMS Consumer Health’s IMS OTC Review Plus)

+40.040 +31% +30.030

+19% +20.020 +17% +10% Series1Local currencies lue sales (%) +10.010 +6% +7% +6% va +2% Series2Euros 0.00 1234567 8 -2% -3% -3% Change in -5% -10.0-10 -8% -7% -8% -10%

-20.0-20

ary kia Russia va Poland Ukraine Croatia Romania Hung Slo

Czech Republic

Figure 4: Comparison of the change in value sales of non-prescription products in Central and Eastern European markets in 2009, measured in local currencies and in euros (Source – IMS Consumer Health’s IMS OTCims)

26 OTC bulletin 31 May 2010 OTC31-05-10p26-29FIn.qxd 27/5/10 06:26 Page 3

MARKETS OTC

5,384 10,00010000 6,0006000 5,211 5,158 8,534 (+3.3%) (+15.3%) 5,204 (+0.1%) (-4.2%) 7,404 5,0005000 8,0008000 (+20.1%) 6,163 (+19.2%) 4,0004000 6,0006000

millions) 5,172 C 3,0003000 4,0004000 2,0002000 lue sales ( Unit sales (millions)

Va 2,0002000 1,0001000

00 00 200612342007 2008 2009 2006122007 2008342009

Figure 1: Value sales of non-prescription products in Central and Eastern Figure 5: Volume sales of non-prescription products in Central and Eastern Europe in 2009 at manufacturers’ selling prices. Growth figures are based on Europe in 2009 measured in millions of units (Source – IMS Consumer Health’s local-currency comparisons (Source – IMS Consumer Health’s IMS OTC Review Plus) IMS OTC Review Plus)

scription products. Growth rates use the lat- est exchange rate for all countries across all 40.040 time periods. 34.2%

Tisman points out Europe’s non-prescrip- th (%) 30.030 tion market consists of three distinct groups of ow 24.6% 20.8% countries. The CEE region was the “key growth 18.1% 17.5% 20.020 16.1% Series1Non-prescription driver” in 2009, while western Europe’s “de- 13.5% 13.2% 13.1% sales 9.5% 9.2% 9.6% Non-prescription reimbursed markets” – France and Germany 10.010 Series2growth – underperformed compared with the European 3.8% average. Other European markets sat between 0.00 1234567 the two extremes with value sales growth of -3.1% -10.0-10 around 6% in 2009. Proportion of sales or sales gr Western North Japan South East Latin Central and Others Within the CEE region, he notes, countries Europe America Asia/China America Eastern Europe outside of the European Union performed bet- ter than those that are member states. Figure 2: Contribution to global non-prescription sales and sales growth by region of the world in 2009. Figures are based on sales in euros at manufacturers’ selling prices. Growth figures are based on local-currency Tisman also highlights that the CEE region comparisons (Source – IMS Audits plus estimates) continues to be a significant contributor to the growth of the global non-prescription market. global non-prescription sales, but accounted for As can be seen from Figure 3, the biggest As can be seen from Figure 2, the CEE region more than two-thirds of global non-prescrip- market in the CEE region – Russia – recorded only generated 9.2% of global non-prescrip- tion sales growth in 2009. non-prescription sales up by 19% in local cur- tion sales but accounted for 18.1% of global Looking in more detail at the CEE region, rencies in 2009 compared with the previous non-prescription sales growth in 2009. Tisman comments that value growth in local year,but this was down on the 31% growth in Taken together,the developing regions of currencies fell significantly in many countries, sales seen in 2008. Similarly,the fourth-largest the world – CEE, Latin America, and South- although Poland, Ukraine and Slovenia buck- market in the region – the Czech Republic – East Asia/China – generated around a third of ed the trend. recorded 2% growth in 2009, following a 4%

+20.020

+10% +10.010 +8% +5% +5% +2% +3% +1% +1% ±0% Series12008 versus 2007 0.00

lume sales (%) 2009 versus 2008 1234567-1% 89-1% 10 11 12 13-2% Series2 vo -2% -2% -3% -3% -4% -5% -4% -5% -10.0-10 -11% -11% -11% Change in -13% -13% -18% -20.0-20

nia aria kia va ve Russia Poland Latvia Croatia Ukraine Romania Republic Estonia Hungary Bulg Slo Lithuania Slo

Czech

Figure 6: Comparison of the change in volume sales of non-prescription products in Central and Eastern European markets in 2008 and 2009 (Source – IMS Consumer Health’s IMS OTC Review Plus)

31 May 2010 OTC bulletin 27 OTC31-05-10p26-29FIn.qxd 27/5/10 06:26 Page 4 OTC31-05-10p26-29FIn.qxd 27/5/10 06:26 Page 5

MARKETS OTC

rise in 2008. And the equivalent figures for the Sales growth in fifth-largest market – Romania – were 6% and local currencies (%)

22% respectively. Novartis10 7.0% +13.0%

By contrast, Poland – the second-largest mar- Sanofi-Aventis9 5.2% +11.5% ket in the CEE region –saw sales growth in Pharmstandard8 4.4% +30.8% local currencies increase from 10% in 2008 to Bayer7 4.0% +13.6% 17% in 2009. Similarly,the Ukraine – the third- largest market – saw sales growth rise from 22% Menarini6 3.8% +16.4% in 2008 to 31% in 2009. GlaxoSmithKline5 3.6% +13.2% Tisman points out that devaluation of CEE Reckitt Benckiser4 2.3% +19.1% currencies against the euro meant sales rises Teva3 2.3% +8.4% in local currencies translated into significant Johnson & Johnson2 2.2% +14.5%

sales reductions in euros. Russia’s 19% sales US Pharmacia1 1.6% +12.8% growth in local currencies,for example, trans- 0.0024682.0 4.0 6.0 8.0 lated into a 2% decline in euros. Similarly,Uk- Share of value sales (%) raine’s 31% sales growth in local currencies became a 10% decrease in euros (see Figure Figure 8: Top 10 companies in Central and Eastern Europe ranked by sales of non-prescription products in 4 on page 26). 2009, together with sales growth in local currencies for the year. Figures are based on sales in euros at manufacturers’ selling prices (Source – IMS Consumer Health’s IMS OTC Review Plus) He adds, however, that this effect was most marked in the first quarter of 2009, and there According to Tisman, there is still potential prescription companies in the CEE region in has been some recovery since then. for further growth in annual per capita expen- 2009. The Russian company pushed sales up In terms of volume, sales of non-prescrip- diture on non-prescription products in some of by 30.8% in local currencies,which was more tion products in the CEE region declined by the CEE countries. As can be seen from Fig- than double the 15.3% growth in the CEE re- 4.2% to 5.16 billion units last year compared ure 7, annual per capita expenditure was C16 gion as a whole. with 2008. The decline followed a period of at public prices in both Romania and the Uk- Of the eight multinational companies in the relative stability,with volume sales rising by raine in 2009. This figure was below the CEE top 10, only two – Menarini and Reckitt Ben- 3.3% in 2008 and by 0.1% in 2007 (see Fig- average of C28,and well below the Western ckiser – outperformed the overall CEE market ure 5 on page 27). European average of C68. in terms of sales growth in local currencies. Tisman says that the biggest drivers of this Tisman also maintains multinational com- Reckitt Benckiser did best with a 19.1% rise. decline were Russia, Ukraine and Romania, panies are not capitalising fully on the growth The leading company in the CEE region which recorded falls in volume sales of 4%, opportunities offered by the CEE region. last year was Novartis Consumer Health with 11% and 11% respectively (see Figure 6 on As can be seen from Figure 8, Pharmstan- a 7% share of value sales. It achieved growth page 27). dard was the fastest-growing of the top 10 non- of 13.0% in local currencies.

108 120120 (+6%) 91 91 100100 (+2%) (±0%) 74 74 )

C 68 8080 (+7%) (+4%) 64 62 (+3%) (+3%) (-1%) 55 54 (+8%) 47 46 6060 (+3%) 45 43 40 38 (+2%) (+17%) 37 37 37 (+5%) (+1%) (+3%) (+5%) (+7%) (+6%) (+12%) 30 28 4040 27 (+20%) (+9%) (+18%) 16 16

r capita expenditure ( 2020 (+6%) (+31%) Pe

0 0 al 12345678ay 91UK0111213141516171kia81ary9202aria1222324 Italy erage va Spain Russia France Finland Austria Ireland Greece av Poland Ukraine Belgium Germany Norw Portug Slo Hung Bulg Romania erage Switzerland Netherlands Av The Czech Republic n Europe Europe ster Central and Eastern We

Figure 7: Per capita expenditure in euros on non-prescription products at public prices in selected European countries in 2009 (Source – IMS Consumer Health’s OTCims) OTC We also publish Generics bulletin www.generics-bulletin.com

31 May 2010 OTC bulletin 29 OTC31-05-10p30-31FIN.qxd 27/5/10 06:27 Page 2

OTC PEOPLE

IN BRIEF Manufacturers ■ DAIICHI SANKYO’s strategy of becom- Procter & Gamble names ing a “global pharma innovator” by 2015 that saw it buy Indian firm Ranbaxy in 2008 has seen the Japanese firm name a new chairman and president. Takashi Shoda is moving up to new PharmacyCare team chairman from president and chief executive officer,while Joji Nakayama is promoted from rocter & Gamble has promoted UK phar- who has joined the firm’s laundry division. executive vice-president to president and chief Pmacy channel team leader Adam Bishop Dee played a central role in the launch two executive officer. Their appointments should to commercial manager of UK consumer health- years ago of the company’s PharmacyCare ini- be approved at a shareholders’ meeting on 28 care and pharmacy. He replaces Joanna Dee, tiative,which aims to help independent pharm- June 2010. Current chairman Kiyoshi Morita acists improve their merchandising and retail Adam Bishop will become corporate adviser. skills (see page 19). Bishop will work closely with associate dir- ■ PHAGRO – the association of German phar- ector of UK pharmacy Liz Caton – who suc- maceutical wholesalers – has re-elected Anz- ceeded Andy Mill on 1 March 2010 – to drive ag’s Thomas Trümper as its chairman for a the initiative forward. further two years. He has led the association Caton has spent 15 years with Procter & since 2006. Ralph Schüller from Ebert + Jac- Gamble, focusing mainly on its Femcare and obi has been elected deputy chairman. Babycare businesses. She was previously res- ponsible for market strategy and planning for ■ MATRIXX INITIATIVES has promoted Procter & Gamble’s western European Fem- William Barba to vice-president of finance and care business in Geneva,Switzerland. Mill has accounting, and treasurer. Barba has been with been appointed non-food sales director for west- the US-based company since 2004. ern Europe. He is based in Geneva. OTC OTC

30 OTC bulletin 31 May 2010 OTC31-05-10p30-31FIN.qxd 27/5/10 06:27 Page 3

PEOPLE OTC

Manufacturers Manufacturers Germany’s Stada drops Goldshield appoints new chief executive its production director ohn Beighton – former vice-president of J global business optimisation at the gener- ics company Teva Pharmaceutical Industries tada Arzneimittel’s supervisory board has Christof – has replaced Rakesh Patel as chief execu- Sdecided not to extend the contract of the Ger- Schumann tive officer of the UK-based healthcare com- man company’s chief production and develop- pany Goldshield. ment officer, Christof Schumann. Goldshield said that Beighton had been ap- The board wants someone else to implement pointed after Patel decided to step down from the German firm’s ‘Build the Future’ restructur- the role to focus on other business interests. ing and rationalisation project, details of which Patel would continue to advise the board of are currently being finalised. The project aims Goldshield, the company added, and would re- to save over C10 million per year. main a shareholder. Schumann, 47 – who stepped up onto Stada’s board in 2006 (OTC bulletin,26 January 2006, Part of management buyout team page 26) – will continue to fulfil his responsi- Patel was part of the team behind a £179 bilities “until further notice”. His contract ex- gang Jeblonski quit last year (OTC bulletin, million (C209 million) management buyout of pires on 31 December 2010. 31 August 2009, page 31). Goldshield in December of last year (OTC bul- Schumann’s departure continues the recent Jeblonski was replaced from the start of this letin,18 December 2009, page 6). run of changes at Stada’s senior management year by Helmut Kraft (OTC bulletin,16 Nov- Prior to joining Goldshield,Beighton spent team. About 21 months ago, chief legal officer ember 2009, page 27), who took over respon- 13 years at Teva,helping to build the Israeli Alexander Oehmichen and chief procurement, sibility for procurement from Schumann. On 1 company’s generics and branded pharmaceu- production and logistics officer Hans-Martin March 2010, executive chairman Hartmut Retz- ticals businesses. Beighton became managing Schwarm stepped down, reducing Stada’s ex- laff assumed Schumann’s previous oversight director of Teva UK in October 2002, a posi- ecutive board from five to three members (OTC of logistics. tion he held until February 2009, when he was bulletin,29 August 2008, page 27). Stada’s executive board comprises Kraft, named Teva’s vice-president of global business Furthermore, chief financial officer Wolf- Retzlaff and, until he leaves, Schumann. optimisation. OTC OTC

Retailers Merlo to succeed A tale of two companies

■ Continued from page 25 er Healthcare business would not be divested Ryan as CVS chief Schering-Plough last year,US-based Merck & like its predecessor (OTC bulletin,30 Octo- Co did not release a full set of figures in 2009 ber 2009, page 3). arry Merlo,54, is set to become the chief for its newly-acquired Consumer Care business. Ending with a positive note, GlaxoSmith- Lexecutive officer of CVS Caremark when In the first quarter of this year,sales by the busi- Kline’s OTC Medicines business continues to Thomas Ryan,58, steps down from the posi- ness in the US and Canada dropped by 2% to buck the trend and report relatively strong in- tion at the US pharmacy chain’s meeting of US$379 million, as Claritin OTC sales fell by creases after the pan-European OTC launch of shareholders in May 2011. 26% (OTC bulletin,14 May 2010, page 11). its Alli weight-loss medicine containing orli- As part of the succession plan, Merlo, who Merck & Co’s chairman and chief executive stat (OTC bulletin,30 April 2009, page 1). has spent 20 years with the company, has been officer,Richard Clark, reiterated that the Con- Worldwide turnover at the OTC Medicines immediately promoted to president and chief sumer Care business would play a critical part business improved by 8% – 11% at constant operating officer. In his new role, he will join in the group’s strategy going forward. Earlier exchange rates – to £617 million in the first the company’s board of directors and take re- this year,Bridgette Heller – former president quarter of 2010. Sales of Alli doubled to £63 sponsibility for human resources, legal, corpo- of Johnson & Johnson’s global Baby business million, and the company’s smoking-control rate compliance and government relations. unit – joined Merck as executive vice-presi- business recorded a strong improvement of 16% Merlo will remain president of the comp- dent and president of Consumer Care (OTC at constant exchange rates (OTC bulletin,14 any’sCVS/pharmacy retail operations – over- bulletin,26 February 2010, page 1). May 2010, page 6). seeing a portfolio of over 7,000 CVS/pharm- Similarly,Pfizer has not reported a full set Europe accounted for the majority of Alli’s acy locations and sales of US$55 billion plus of figures for its freshly-acquired Consumer turnover, with sales of £34 million. In the year (C45 billion) – until a successor is found. Healthcare business, following the company’s since Alli’s pan-European launch, the brand Ryan is now chairman and chief executive US$68 billion purchase of Wyeth last year. Jef- has now generated total sales for GlaxoSmith- officer but no longer president. frey Kindler, Pfizer’s chairman and chief ex- Kline of £139 million in Europe. OTC ecutive officer,has stressed that the Consum- OTC

31 May 2010 OTC bulletin 31 OTC Ad 2010:OTC Ad 1_07 5/1/10 14:16 Page 1

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