Q&A with Spotlight Time to Weifa’sMonica on win with Børter Bekkhus Genexa diversity page 15 page 8 page 20

Contents Sanofi finalises 13 January 2017 Issue Number 475 COMPANY NEWS Boehringer deal Prestige snaps up Fleet 3 anofi has taken its place as one of the ed to close early in 2017. Boehringer’sacqui- HRA aims to switch4Sworld’stop-three consumer healthcare sition of Merial in Mexico had also been held oral contraceptive companies after completing aswapdeal that up by regulatory delays, the firm noted. Perrigo to focus on 5 has giventhe firm Boehringer Ingelheim’s Over the past fewmonths, Sanofi and Boeh- Belgian turnaround global Consumer Health Carebusiness in ringer had “diligently prepared for the integra- OTCinhaler is hit 6 exchange forits Merial animal health unit. tion of the businesses”, Sanofi pointed out. En- by FDArejection OlivierBrandicourt, Sanofi’schief executive suring “uninterrupted business continuity”, was officer,saidthat combining the French firm’s both companies’ priority to achieve asmooth WBAstrikes deal with Fred’s7 existing Consumer Healthcare business with integration of thetransferred businesses. GENERAL NEWS the German firm’sOTC operation had creat- Commenting on the potential of the newly ed a“strong and innovative”global consumer enlarged Sanofi Consumer Healthcare busi- ASMI against codeine move 9 healthcare company. ness –which will be led by Alan Main (OTC Online OTCmarket10 “Theintegration of Boehringer’shighly-skill- bulletin,7October 2016, page 1) –when the continues to evolve ed consumerhealthcare team and itswell-est- deal wasconfirmed, Sanofi said that it would US issues supplements plan 11 ablished productsallowsSanofi to enhance enhanceits position in severalstrategic cate- its positions in corestrategic categories in a gories, including allergy solutions, cough and MARKETING NEWS promising consumer healthcare environment,” cold care, digestive health, feminine care, and Brandicourt claimed. “Indeed, this market serves vitamins, minerals and supplements (VMS). Dermalexadvert14 the growing expectations of consumers to bemore Thecombined business,Sanofi added, would banned by ASA in control of their ownhealth and wellness.” be the world-leader in OTCdigestive health- Pfizer backs heat wraps 15 The deal had been finalised on 1January 2017 andfeminine-care products, as wellasnumber OTCnominations to 16 in all relevant markets except India, where the twoinpain care. be revealed shortly swap had been delayed pending certain regu- Sanofi’sConsumer Healthcare unit is now RB’sAustralian fine17 latory approvals, Sanofi noted, and wasexpect- Continued on page 6 morethan tripled Sanofiand 5.2% REGULARS Boehringer Ingelheim Spotlight on –Genexa 8 Q&A–with Weifa’s15 GlaxoSmithKline 4.9% Monica BørterBekkhus

Events –Our regular listing 19 Bayer 4.6% People –Swisse names lead 23 after buy-out closes Value shareofOTC (%) Figure1:Value shareofglobal OTCmarketworth €95 billion in 2015 (Source –IMS Health) Connect with us on: Twitter LinkedIn OTC-bulletin.com promote your brand with ATV audience reach at magazine advertising ratesthrough an 'about health' title secure Category exclusivity on afirstcome firstserved basis. Call us &find out more 01489 860000 ABOUT: www.ids-uk.co.uk health COMPANY NEWS OTC

Mergers &Acquisitions Mergers &Acquisitions Lonza gains Prestige snaps up Capsugel Fleet forUS$825mn wissingredients firm Lonzaisset to snap up Sdrug-delivery technology company Capsugel restige Brands is set to expand its OTC regions of Asia-Pacific and Latin America. from private-equity firmKKR for US$5.5 bil- Pportfolio by acquiring US-based CB Fleet “The dealisalsoakey stepin aligning our lion (C5.3 billion) in cash. from private-equity firm Gryphon Investors portfolio with our long-term stated goal of 2-3% The deal –which is expected to close in the forUS$825 million(C782million).The trans- organicgrowth,”Lombardi insisted. “Webe- second quarter of 2017 –will include the re- action is expected to close in the first quarter lieve the addition of Fleet’smanufacturing facility financing of US-based Capsugel’sdebt of around of 2017. also provides strategic benefits and cost synergies US$2 billion. Describing Fleet as a“leading consumer as we looktoexpand manufacturing to include healthcare companywith astrong heritage”, current Prestige products.” Open up newopportunities Prestige saidthe deal wouldadd to itsOTC busi- “Over time,”continuedLombardi, “we also Announcing the agreement, Lonza said the ness arangeof“highly-attractive brands”cover- expect to takeadvantageofFleet’s researchand acquisitionwas “fully in line” withits strategy ing the women’shealth, gastrointestinal and developmentresources to enhance our newprod- to “accelerate growth and delivervaluealong paediatric categories. The companywill also uct development capabilities.” the healthcarecontinuum by complementing gain Fleet’sVirginia manufacturing facility. Separately,Prestige has offloaded its Early its existing offeringsand opening up newmar- With annual sales of around US$205 mil- PregnancyTest (EPT) brand to US-based NFI ketopportunities in the pharmaceutical, con- lion, Fleet’sportfolio includes the Summer’sEve Consumer Healthcare foranundisclosed sum. sumer healthcare and nutrition businesses”. feminine-hygiene range, Pedia-Laxpaediatric “The divestiture wasasuccessful outcome Thecompanyadded that the enlargedbusi- laxatives, Phazyme gastrointestinal treatments, as it enabled both Prestige and NFI to move ness would have combined 2015 revenues of and the Boudreaux’sButt Paste nappy-rash line. closer to their long-term goals,”commented Lom- around CHF4.8 billion (C4.5 billion) and ad- Commenting on the deal, Prestige’schief bardi. “NFI is well respected in the consumer justedearnings before interest, tax, depreciation executive officer,Ron Lombardi, said Fleet was healthcare channel and we believe this brand and amortisation (EBITDA) of CHF$1.1billion. “highlycomplementary” to the firm’s“current will be astrong addition to their portfolio.” Lonza claimedthe combinedportfolio would portfolio and categories of focus”. Susan Gregory,NFI’s chiefexecutiveofficer, “position Lonza as the development, formulation, “The acquisitionofFleet further enhances said the firm was“extremely excited to be en- delivery technology and manufacturingpartner ourwomen’shealth platform, currentlyanchored tering the women’shealth OTCmarket” with of choice for the pharma industry”, adding that by Monistat, with the addition of Summer’s the acquisition of EPT. the companywouldbecome a“fully integrat- Eve,”Lombardi insisted. “Upon closing, Sum- “NFI will builduponthe salesand marketing ed solutions provider in oral-delivery technolo- mer’sEve will also be our largest brand, gener- effortsfor EPT and continue to focusonits ex- gies and active ingredients to the consumer ating over US$125 million in annual sales.” pansion into existing and newmarket chan- healthcare and nutrition markets”. Fleet’sconsumer healthcare portfolio was nels,”Gregory added. KKRacquired Capsugel from Pfizer in 2011 “widely distributed across North America”, Prestige has also trimmed further its OTC forUS$2.38 billion in cash (OTC bulletin,15 Lombardi pointed out, andhad a“growingpres- portfolio by divesting the Dermoplastbrand to April 2011, page 5). OTC ence in selected emergingmarkets”acrossthe MobergPharma (see page 5). OTC

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13 January 2017 OTC bulletin 3 OTC COMPANY NEWS

Licensing Agreements Business Strategy JGL makes HRA aims to switch Asia move roatia’s Jadran-GalenskiLaboratorij (JGL) oral contraceptive Chassignedanagreementtolicenseits Aqua Maris nasal sprays in South-East Asia to ex- witching an oral contraceptivetoOTC status Ibis insisted. “A safe and effective hormonal birth pansion specialist DKSH. Sfor the firsttime in the US is the goalofa control pill available OTCwould improve access Underthe termsofthe deal,DKSH’sFavorex “groundbreaking” partnership between HRA and help people overcome some of those barriers.” subsidiary will provide registration, marketing, Pharma and Ibis Reproductive Health. “Research indicates,”continued the company, sales, distribution,and logistics services forJGL The French firm said it would work with “that making the pill available OTCwould lead in Malaysia, Singapore and Thailand. Ibis–anon-profit researchorganisation for re- to greateruse of effective birth control and lower DKSH claimed it would “makeAquaMaris productive health –to“conduct the research rates of unintended pregnancy.” asuccess acrossSouth-EastAsia”byleverag- neededand submit an application to theUSFood Ibisnoted that it had been working for“more ingits “deepunderstandingofthe markets, broad andDrug Administration (FDA) to makeabirth than adecade” with a“broad coalition” of part- reach and brand-building capabilities”. control pill available OTC”. ner sto“build the evidence and makethe case for Available in Classic, Babyand Strong pres- HRA will embarkonits attempt following the benefitsofmovingabirthcontrolpill OTC”. entations, Aqua Maris helped to relieve the asuccessful centralised switch across the Euro- HRA explained that oral contraceptiveswere symptoms of coldand flu, allergic reactions and pean Union (EU) in 2015 of its ulipristal ace- “someofthe best-studied medicinesonthe mar- illness of the nasal membrane, JGL noted. tate-based emergencycontraceptive EllaOne kettoday” enjoying“long-standing support from Commenting on the deal, JGL’s global brand (OTC bulletin,16January 2015, page 8). medical and public health experts”. manager,MarinaStanojevic Vecerina, said licens- OTC bulletin understands that HRA and “AtHRA we are proud of our pioneering ingAqua Maris to DKSH would help the firm Ibis will seek to switch aprogestin-only oral work to expand access to contraception for mil- to expand its presence in the “fast-developing contraceptive pill rather than acombined pro- lions of women,”the firm added. South-East Asia region”. gestin and estrogen pill. Oral contraceptiveshaveprescription-only “Nowisthe right time to enter the region,” Ibis explained that aprogestin-only pill pre- status in most developed markets,however some continued Vecerina, “because the use of sea- sented the fewest obstacles for the broadest popu- non-prescription supply is available via phar- water nasal sprays and knowledge of seawater’s lation. Combined pillscouldcause problems for macists in Australia,the UK andthe US. In the benefits are increasing.” women who were smokers or had high blood UK,pharmacists first supplied oral contracep- “WeselectedDKSH as our long-term growth pressure, the firm noted. tiveswithout aprescription via aPatient Group partner for the firm’sbroad service portfolio, Commenting on the rationale for pursuing a Direction in 2008 (OTC bulletin,25January strongregionalapproachand provencapabilities switch, Ibis claimed that requiring aprescrip- 2008, page 8). in the medical channel,”she added. OTC tion for oral contraceptivesin the US wasa NewZealand is currently considering aswitch “barrier for manywomen”. application to allowarange of oral contracep- “Too manypeople in the US face barriers to tivestobesuppliedwithoutaprescription (OTC Mergers &Acquisitions Taisho buys accessingthe contraceptive methods they want,” bulletin,7October 2016, page 14). OTC skin-carefirm Mergers &Acquisitions apan’s Taisho Pharmaceutical has bolstered Mylan growswithCold-EEZE Jits domestic Self-Medication business by ylan is set to add to its burgeoning OTC on its success by leveraging our expertise in snapping up skin-care firm Dr Program from Mportfolio after agreeing to acquire the therespiratory area,” Malik insisted. Kyorin Holdings for an undisclosed sum. Cold-EEZE homoeopathic coldand flubrand “Wealso look forward to continuing to ex- Acquiring Dr Program, Taisho noted, would from US-based ProPhase Labs for an undis- pand our presence in the global OTCmarket,” expand its skin-care portfolio with the Trinityline closed sum. The deal is expected to close in Malik added, “through acombination of prod- brand –which includes ranges of moisturisers, the first quarter of 2017. uctacquisitions, marketing and line extensions, cosmetics andsupplements–and “strengthen” Enjoying “strong brand recognition in the phar- and opportunities to leverageour portfolio into its mail-order business. The majority of Dr macyand agrowing and loyal customer base”, newmarkets.” Program’ssales were generated through the mail- Cold-EEZE would become Mylan’s“largest Mylan expanded significantly its OTCbusi- order channel, the firm pointed out. US OTCbrand” and “further augment its grow- nesslast year by acquiring Sweden’sMedaand Taisho said it intended to use its “expertise ingOTC business”, the generics specialist said. its range of “well-established and differenti- in the self-medicationmarket” to “efficiently ex- “Theacquisition of Cold-EEZE further builds ated brands” (OTC bulletin,12August 2016, pand” Dr Program’soperations and increase upon our US$1 billion (C951 million) global page 13). its annual sales. OTCbusiness and helps us to enhanceour pres- ProPhase’sdecision to offload Cold-EEZE Established in Tokyoin2001, Dr Program ence in the US market,”commented Mylan’s comes shortly after the firm vere aled it was reported sales of ¥1.29 billion (C10.5million) in president RajivMalik. considering divesting the brand in an effort to theyear ended 31 March 2016 and an operating “Weare excited to add another strong brand “enhance shareholder value” (OTC bulletin, loss of ¥77 million. OTC to our US portfolio and see potential to build 9September 2016, page 6). OTC

4 OTC bulletin 13 January 2017 COMPANY NEWS OTC

Mergers &Acquisitions Business Strategy Moberggets Perrigo to focus on Dermoplast oberg Pharma is set to bolster its US Belgian turnaround MOTCoffering by acquiring the Dermo- plast anaesthetic spray from Prestige Brands errigoiscompletely restructuring its Bel- forUS$47.6million(C44.9 million),plus the Pgian OTC operation in amove the firm stock value at closing. claims will “safeguard” the business’ future. Describing Dermoplast as a“strong and Following areviewlaunched in 2016 of profitable dermatologybrand”,Mobergsaid it itsBelgianOmega Pharma operation, the US would become the company’ssecond-largest store-brand specialist saidithad aplan to “im- productintermsofsales, behind the Kerasal Nail prove thefinancialprofile and enhance the focus anti-fungal line. of the business on branded OTCproducts”. Used externallyfor “reliefofpainand itch- Commenting on the actions it wastaking Perrigo’sEtixx sports-nutrition brand ing from skin chaps and injuries”, Dermoplast to turnaround the business,Perrigonotedthat our efforts on growing our OTCbrand portfolio.” generated annual sales of around US$12.0 mil- it had signed an agreement to divest the Etixx Perrigo initiated in April areviewofits OTC lion, theSwedish firmnoted,and earningsbe- sports-nutrition brand, agreed to terminate age- operations in anumber of “selected countries”, foreinterest, tax, depreciation and amortisation neric medicines distribution deal with Stada including Belgium, after its European Branded (EBITDA) of US$5.4 million. Arzneimittel, and allowed to expireadistribu- Consumer Healthcare unit –which includes The product is sold exclusively in the US in tion agreement with Meda. Omega andabasket of ex-GlaxoSmithKline drugstore chains such as CVS, Rite Aid and In addition, the firm had “initiated the con- (GSK) brands –posted fourth-quarter results that Walgreens, and in mass retailers including Wal- sultation process to better align the Belgian org- former chief executive officer Joseph Papa de- mart and Target. anisation to current business and marketdynam- scribed as a“personal disappointment” (OTC ics”, Perrigo explained. bulletin,4March 2016, page 1). Aperfect fitwith topical focus “Consistent withour previously-announced Thefirm has since continued to battle prob- “Through this acquisition, the firm strength- comprehensive portfolio review, we are today lems at Branded ConsumerHealthcareand late ensits portfolio of strategic brands. Dermoplast outlining specific actions to streamline operations last year announced it wastotakelegal action fits perfectly with the company’sfocus on topi- and safeguard the future of our Branded Con- against Omega’s former owners (OTC bulletin, cal products,”commented Moberg’schief ex- sumer Healthcare Belgium business,”comment- 25 November 2016, page 1). The decision was ecutive officer Peter Wolpert. ed Perrigo’schief executive officer hnJo Hen- made afterthe business washit with aUS$1.67 “The acquisition of Dermoplast is in line drickson. “The action plan for Belgium is directed billion (C1.57 billion) impairment chargeinits with our strategy,” continued Wolpert, “and lev- at enhancinglong-term profitability by focusing third quarter ended 1October 2016. OTC erages ourexistinginfrastructureand sales chan- nels in the US in an excellent way.” Licensing Agreements Thomas Eklund,Moberg’schairman, noted that the companywould nowhave“three ma- Monrone grabs Halykoo rights jorstrategic brands –KerasalNail, Dermoplast and New-Skin”. onrone FZC Healthcare has signed a Commenting on the agreement, Mohamed “The focus overthe coming year,” he add- Mlicensing agreement allowingitto launch Samir,Monrone’smarket accessmanager,claimed ed,“is to successfully integrate our recent ac- Applied PharmaResearch’s (APR’s) Halykoo the “innovative”Halykoorange –which includes quisitions and to strengthen the positioning of range of paediatric herbal medicines in the theHalykooSoothing Throat Spray,Night-time our portfolio.” Middle East. Soothing Cough Syrup and Weather Protection Commenting on its decision to relinquish Under the terms of the deal, United Arab cream –would appeal to parents across the Dermoplast, Prestige said the product wasa“non- Emirates (UAE)-based Monrone has gained Middle East. core” brand. thepromotion,distribution andmarketing rights “Halykoo provides problem-solution prod- “The company plans to usethe proceeds from to the Halykoo portfolio in itsdomestic market, ucts offering parents asimple and safe range the divestiture to pay down debt and accelerate Bahrain,Kuwait,Oman, Qatarand Saudi Arabia. of goods to deal with their children’shealth- deleveraging,”the US firm explained. “The sale care needs,”Samir insisted. will also enable the companytomovecloser “Ourpartnership with APR,” he continued, to its stated goal of having aportfolio consisting “gives us an opportunity to gain asizeable share of 85% of its revenue from ‘invest for growth’ of the paediatrichealthcaremarket, which across brands and15% in ‘manage forcash’ brandsto the Middle East is worth up to US$120 million help support long-term organic growth.” (C114 million).” The sale of Dermoplast to Mobergfollows PaoloGalfetti, APR’schief executive officer, adealearlier this year which sawPrestige off- said Monrone’s“experience,geographic reach load Fiber Choice, New-Skin and PediaCare anddistributioninfrastructure” wouldenablethe to the Swedish company (OTC bulletin,22July firmsuccessfully to launch Halykooacrossthe 2016, page 2). OTC Halykoo’srange of herbal medicines Middle East. OTC

13 January 2017 OTC bulletin 5 OTC COMPANY NEWS

Mergers &Acquisitions Business Strategy Sanofi gets OTCinhaler is hit BI Consumer Continued from front page by FDArejection one of the world’sbiggest and on apar with the twoglobal leaders, GlaxoSmithKline (GSK) mphastar Pharmaceuticals’ plan to launch OTCmarket as soon as possible.” Consumer Healthcare and Bayer Consumer Aits Primatene Mist OTC inhaler in the US Amphastar is seeking approvalofPrima- Health (see Figure 1onfront page). has suffered asetback after the country’s Food tene Mist with theindication “intendedfor the The transaction consisted of an exchange of and Drug Administration (FDA) rejected anew temporary relief of mild symptoms of inter- Sanofi’s Merialanimalhealthcare business – drug application (NDA) for the product. mittent asthma”. which has an enterprise value of C11.4 billion The US-based company–whichhad been If approved, it would compete in the US OTC –for Boehringer’sConsumer Health Care as- preparing to launch Primatene Mist (epineph- asthma treatment market against Nephron Phar- setsoutsideofChina,which hold an enterprise rine) at the start of thisyear (OTC bulletin,25 maceuticals’Asthmanefrin (racepinephrine). value of C6.7billion. The German companyalso November 2016, page4)–said it hadreceived UnlikePrimatene Mist, Asthmanefrin is a made acash payment to the French firm of C4.7 acomplete response letter (CRL) from the FDA vaporiser that sprays aliquid-form of the active billion to “reflect the differencein value of the stating that its application “could not be approv- ingredient into the air.Nephron receivedan twobusinesses”. ed in its present form”. FDAwarning letter about the product in 2013 Boehringer’sConsumer Health Care busi- “The CRLindicated that Amphastarshould for violating the Federal Food and Drug Act ness generated sales of C1.13 billion in the year makefurther changes to the label and packag- (OTC bulletin,11October 2013, page 11). to September 2016, from aportfolio of brands ing for Primatene Mistand then conduct another Amphastar used to market an OTCinhaler, includingBuscopanantispasmodics,Dulcolax human factor validation study to assess consum- also under thePrimatene Mistname,before it laxatives, Mucosolvan cough and cold prod- ers’ability to use the product without the guidance wasphased out in December 2011 (OTC bul- ucts and the Pharmaton vitamins line. of adoctor or pharmacist,”the firm explained. letin,30September 2011, page 14) as it contained This portfolio has joined Sanofi’sConsumer Noting thatitwas currently “evaluating the chlorofluorocarbons (CFCs). Healthcare business, which is led by the Allegra content of the CRL”, Amphastar said it intended After taking the original Primatene Mist off Allergy brand, Doliprane analgesics line and to engagein“further discussion with the FDA”. the market, the company reformulated the prod- Essentiale VMS products, and reported sales “While we are disappointed not to have uctusing hydrofluoroalkane(HFA) as apropel- of C3.49 billion in 2015 (OTC bulletin,19Feb- receivedapprovalatthis time,”the company lant and filed anAw ND ith the FDAin2013. ruary 2016, page 6). commented, “we intend to continue to work with However, theagency’sadvisory committee in Germanywould become a“keycentre” for the FDAduring the post-action phase to ad- February 2014 rejected the application on the Sanofi Consumer Healthcare, the firm noted, dress its concerns in the CRL by the middleof grounds that safety had not been established with the expanded productportfolio benefitting 2017 and bring Primatene Mist back to the US for OTCuse. OTC fromthe “strongcapabilities”ofBoehringer’s Consumer Health Careteams. Despite the sizeand complexity of the deal, Licensing Agreements Brandicourt has indicated that Sanofiwould con- BioGaia makes Japanese move tinue to pursue further acquisitions to strengthen its Consumer Healthcare business. ioGaia is poised to expand significantly its “Through these twomilestone agreements Speaking in October,Brandicort said that BpresenceinJapan after signing distribution with Nippon Kabaya we have secured another while the Boehringer deal wasa“pretty good andlicensing agreementswith local player Nip- trusted partner in the complexJapanese mar- first step” towards strengthening theConsumer pon Kabaya Ohayo Holdings. ket,”commentedBioGaia’s managing director Healthcare business it did not mean the com- Under the terms of the deal, Nippon Kabaya Axel Sjöblad. panywould not be “opportunistic if the right has gained the exclusive rights to sell in Japan “In addition to themarketingand salesofour [acquisition] opportunity” arrived. BioGaia’sdietary supplements containing the supplements,”continued Sjöblad ,“we look for- Brandicourt’swordswere followed by actions probiotic Lactobacillus reuteri. ward to the creation of innovative functional foods in December,when Sanofi announcedthat it was Noting that that the supplements would be based on our Lactobacillus reuteri strains.” OTC significantly to expand its presence in China’s “mainly” targeted at adults, BioGaia said the OTCmarket after forming astrategic partner- products would be sold either under its ownbrand ship with China Resources Sanjiu (OTC bul- name or Nippon Kabaya’s“depending on the IN BRIEF letin,9December 2016, page 1). OTC product category”. In addition, BioGaia hasgrantedNipponKa- PL DEVELOPMENTS has commissioned baya an exclusivelicence to use strains of Lacto- a newGreenvilleCounty manufacturingfac- IN BRIEF bacillus reuteri in drinks and dairy products. ility in abid to expand its presence in South Both agreements were “longterm”,the Swed- Carolina,US. Themanufacturer,packager and MCKESSON hascompleted its acquisition ishfirm noted, and included “exclusivity fees distributor of OTCand prescription medicines of Canada’s Rexall Health through aCA$3.0 andminimumroyalties” which wouldhavea said the development wasexpected to generate billion (C2.1 billion) deal announced last year “substantial” positive effecton BioGaia’sJap- US$45 million (C43 million)incapital invest- (OTC bulletin,25March 2016, page 2). OTC anese business. mentand create 450 jobs. OTC

6 OTC bulletin 13 January 2017 COMPANY NEWS OTC

Mergers &Acquisitions/First-QuarterResults WBAstrikes deal with Fred’s

algreens Boots Alliance (WBA) has enter- be able to do adeal [in China],”Pessina insist- Wed into an agreement to sell 865 Rite ed. “When? Idonot know, butitispossible.” Aid stores to US-based Fred’s Pharmacy for “The problem is you have to dedicate alot US$950 million (C915 million) in cash. of time to get adeal,”heexplained. “Todoa Thedeal has been struck in response to con- big [partnership] deal in China you must have cerns raised by the US Federal Trade Commis- an agreementwith the chairman of the relevant sion(FTC) overWBA’s proposed US$17.2 bil- company, andgenerally the chairman of the lion acquisition of the 4,600-strong Rite Aid Chinese firm will only talk to the chairman of chain, which wasfirstannounced in October 2015 the partner company.” (OTC bulletin,6November 2015, page 1). “In the past twoyears Ihavenot gone to WBAsaidlast year it had delayed the anti- China as frequentlyasIused to go. But in re- cipated closing date of the acquisition as it looked cent months Ihavestarted to spend some time to offload up to 1,000 stores to gain the FTC’s there,”Pessina noted. approval(OTC bulletin,4November 2016, WBAalready hasapresenceinChina through WBA’sStefano Pessina page 12). a50% stakein Guangzhou Pharmaceuticals, If approved, the deal, which is expectedto one of the country’slargest pharmaceutical sale unit–which mainlyoperates underthe Al- close during the first half of 2017, will establish wholesalers. The companyalso owns 12% of liance Healthcare brand –posted sales down by Fred’sasthe third-largestdrugstore chain in the wholesaler Nanjing Pharmaceutical. 6.5%to US$5.4 bil lionasaresult of negative US, with a“significant presence in areas such Turning to WBA’sfirst-quarter results, Pessina currencyeffects. At constant currencies, turn- as the South and on the East and West coasts”. reported aperformance “in line with expecta- overimprovedby4.7%. Founded in 1947 in Mississippi, and currently tions”, with sales down by 1.8% to US$28.5 bil- ThePharmaceutical Wholesale unit report- headquartered in Memphis, Tennessee, Fred’s lion –after eliminations of US$537 million – ed operating income up by 11.9% to US$160 operates 647 discount stores–including18fran- due to negative currencyeffects. At constant million for the three months. chised locations –and three speciality pharmacy- currencies, turnoveradvanced by 1.1%. WBApointed out that its Pharmaceutical only locations in 15 south-eastern US states. The Turnoveratthe Retail Pharmacy USA divi- Wholesale division supplied medicines, other firmalsohas 371 full servicepharmacy depart- sion movedforward by 1.4% to US$20.7 bil- healthcare products and services to more than ments located within Fred’soutlets, including lion in the three months. Prescription sales, 110,000 pharmacies, doctors, health centres and four franchised locations. which accounted for 69.1% of the total, had hospitals from over288 distribution centres increased by 2.5%, WBAnoted, while prescrip- located in 11 countries. Locations to be revealed tionsales in comparable storeshad movedfor- WBA’stotal operating income in the first WBApointed out that the specificlocations ward by 2.0%. quarter wasUS$1.45 billion. OTC of the stores to be sold wouldberevealed follow- The division’soperating income improved ing the approvalofthe merger with Rite Aid. by 7.5% to US$1.1 billion in the period. Business Strategy Under the terms of the transaction, Fred’s As of WBA’sfinancial year ended 31 August will also acquire “certain assets related to store 2016, Retail PharmacyUSA wasoperating 8,175 Vitamin Shoppe operations”. It will also operate the acquired drugstoresacross all 50 US states,the District of outlets under the RiteAid banner duringatwo- Columbia, Puerto Rico and the US Virgin Islands. adds twostores year transition period. Meanwhile, WBAreported sales at its Retail Furthermore,ifthe FTC requiresthat more PharmacyInternational division –consisting of itamin Shoppe has taken its first steps stores be di vested–and WBAagreestosellthem health and beauty chains in eight countries, VintoSouthAmericawith the opening of –Fred’smust purchase the additional locations. of which Boots UK is the largest –downby two stores in Paraguay. WBAsaiditwas “actively engaged in dis- 14.4% to US$3.0 billion, as aresult of nega- Located in the country’scapital, Asunción, cussionswith the FTC” regarding the RiteAid tive currencyeffects. At constant currencies, the twofranchise outlets were opened as part transaction and was“working towards” closing turnoveredged up by 0.5%. of apartnership between Vitamin Shoppe and the deal by “early calendar 2017”. Sales had advanced in constant currencies food companyVigor. Separately,WBA’s chief executive officer, in all markets except Chile and Mexico. The partnership between the US-based natu- Stefano Pessina, revealedthe firmwas working Increasedinvestmentsinstore upgrades, com- ralproducts retailer and the Brazilian firm will to establish aretail presence in the “enormously bined withthe drop in reported sales, had left seeVigor open afurther three Vitamin Shoppe interesting” Chinese market. the division’soperating income down by 39.7% to stores in Paraguay over the next four years. Speaking as the US-based wholesale and re- US$182 million, the firm explained. Commentingonthe announcement, Doug- tailgiant reported theresults for its first quarter As of 31 August 2016, Retail Pharmacy lasKennedy,Vigor’sdirector,saidthe company ended 30 November 2016, Pessina said WBA International wasoperating 4,673 health and was“very excited” to work withVitamin Shoppe hadbeen“very active”overthe pastfew years beauty stores across Chile, Ireland, Lithuania, to take“high quality supplements” to Paraguay. in China in an effort to acquire astake in a“big Mexico, the Netherlands,Norway,Thailand and “Weare bringing in aunique retailexperience pharmacychain”. the UK. and awide variety of products that were previ- “I strongly believethat sooner or laterwewill Meanwhile, WBA’sPharmaceutical Whole- ously unavailable in the country,” he added. OTC

13 January 2017 OTC bulletin 7 OTC COMPANY NEWS

Spotlight on…Genexa

l ESTABLISHED: 2014 l SELECTED PRODUCTS: l BASED: California, US Allergy-D children’s allergy l SALES: Not disclosed treatment, l LEADERSHIP: Arnica Advantage pain reliever, Calm Keeper anxiety and stress reliever, David Johnson, Cold Crush cold and flu line, chief executive Leg Cramp Rx pain reliever officer l MARKET: US l WEBSITE: genexahealth.com

BUSINESS FOCUS Cold Crush –with ingredients including “Genexa’sproprietary medicines comply “Genexa is apharmaceutical company using nux vomica and pulsatilla –treats symptoms with Food and Drug Administration (FDA) first-of-its-kind, proprietary organic technology of cold and flu, while ArnicaAdvantage,con- guidelines,”Johnson pointed out, “meet the to create healthier, higher quality homoeopathic taining calendula officinalis,isformulatedto highest standards in the industry and were devel- OTCmedicines,”accordingtothe firm’s chief reduce aches and pains. oped by our chief medical officer,Todd Rowe, executive officer David Johnson. Genexa’schildren’soffering includes the aphysician with expertise in homoeopathic “Our mission,”heexplained, “is to provide Calm Keeper anxiety and stress relieverand medicine formulation.” the healthiestmedicines on the market, withthe the Allergy-D allergy treatment. purest ingredients, to address the needs of con- The company’sproducts are sold in over FUTURE STRATEGY sumers looking for more natural products.” 4,500 retail locations across the US including Taking its homoeopathicmedicinesinto new Genexa, Johnson said, wasthe first-to-mar- GNC, LuckyVitamin and Vitamin World, as markets and expanding the company’sport- ketinthe US with OTCmedicines whose in- well as through online retailers such as Jet folio withinnovativeproductsare high on the gredients were both organic and non-genetically and Amazon. agenda forGenexainthe coming years, John- modified (GMO). “This ensuresour products “Our medicines are not areplacement, per sonnotes. are free of toxinsand unhealthyingredientsin- se,for conventional, synthetic OTCmedi- “Genexa would liketoserve more markets cluding pesticides and artificial fillers,”henoted. cines,”Johnson insisted. in the future,” he explained. “Weare already “What makes Genexa different from other “Genexa supports an effective andhealthier working withthe appropriate regulatory auth- OTCcompaniesiswhatisnot in our products,” alternative forconsumers who are concerned orities in anumber of countries around the Johsnonclaimed. “There areno syntheticchem- about what goesinto their bodies,” Johnsonex- world to makeour products available.” icals likedextromethorphan, phenylephrine, plained,“as well as forthose who areallergic “In manycountries GMO products are and sodium benzoate, which are all typically to chemicals likeartificialdyes or preserva- even lessaccepted,”Johnson pointedout,“and found in conventionalOTC medicines. Addi- tives; and for those looking for complete ap- we want to be able to provide healthier medi- tionally,nosweeteners and preservativesare proaches that treat the entire body holistically.” cines to treat common ailments without includ- used either.” “Ourproducts appeal to consumers because ing the artificial fillers, toxins and allergens.” theyare highly effective andbecause users can Separately,Genexa also had anumber of KEY BRANDS have peaceofmind that theproducts theyare innovations in the pipeline which the company The US-based company’sportfolio com- ingesting do not contain anyofthe synthetic hoped to bring to market in the near future, prises 11 homoeopathicmedicines, including chemicals, artificial fillers and toxins found Johnson revealed, “including specific prod- treatments for adults and children. in other OTCmedicines,”hesaid. uctsfor woman and babies”. OTC

For the opportunity to feature in the Spotlight section, email [email protected]

8 OTC bulletin 13 January 2017 GENERAL NEWS OTC

RegulatoryAffairs ASMI against codeine move

he Australian Self Medication Industry supported by an independentmodelling report “ManyASMI member companies have al- T(ASMI) has condemned adecisionbythe by KPMG, hadfound that a“net financialben- ready voluntarily applied label warning state- country’s government to reverse-switch all OTC efit to society could only beve achie dwhen ments,”Schoombie pointed out, “but making analgesics and cold and flu medicines contain- codeine wasup-scheduled to prescription-only”. themmandatory would harmonisethe practice.” ing codeine to prescription-only status. This would result in “reduced deaths from ac- Furthermore, the ASMI supported limiting Deon Schoombie, the ASMI’schief execu- cidental or deliberate codeine overdose, improved packs of OTCcodeine-containingmedicinesto tive officer,saidthe move was“extremely dis- quality of life, and reduced codeine dependence three-days supply,hesaid, which would meet appointing”. It would “inconvenience consum- and reduced risk of dependency”. the needs of people suffering from acute pain ers”, he said,and would have “several undesir- The ASMI and other stakeholders had begun butensure theyhad frequent contactwith aphar- able consequences”. implementing processes to reduce the risk of macist or other healthcareprofessional if further “Consumers willbedisadvantaged,”heex- misuse and convincethe regulator to keep co- relief wasneeded. plained, “as theywill have to visit ageneral deine-based products OTC. practitioner (GP) or emergency room to get a “Thedecision goes against the ASMI posi- Real-time monitoring prescription foracutepainthat could be safely tion,”Schoombie maintained, “which provided The ASMI had also backed areal-time mon- managed by apharmacist.” for apackage of targeted measures for OTC itoring system introduced by the PharmacyGuild “Theymay need to wait severaldaysfor a codeine-containing analgesics, includingman- ofAustralia’sMedsASSIST real-time monitoring doctor’sappointment and theymay have to take datory warning statements, reducing pack sizes system (OTC bulletin,25November 2016, page time offwork, which brings productivity costs and amandatory real-time monitoring system 13), which wasalready being used by 65% of to the economy,” he added. for community pharmacy.” the country’s5,500 pharmacists. “Furthermore,”Schoombie pointed out, “con- “Labelwarningstatements are an accepted Schoombie said that real-time monitoring sumer choice will be reduced, as the range of wayofmitigating risk by providing consumers provideda“valuabletool for pharmacists to en- cold and flu medicines and analgesics available with important advice thatfacilitates appropri- sure the quality use of medicines and to identify OTCwill decrease.” ateuse and addressesspecificrisks,”headded. problem use”. OTC The decision to shift codeine-containing medi- cines into schedule 4(prescription-only) comes after aprotracted reviewprocess, which began in 2015 when Australia’sTherapeutic Goods Administration (TGA) first proposedve re rse- switching the codeine products (OTC bulletin, Leading Innovation and Vision 17 April 2015, page 12). After alargely negative responsetothe pro- posed switch (OTC bulletin,27November 2015, page 13),the TGA launchedafurther consult- ationonthe proposal in December 2015 (OTC bulletin,15January 2016, page 10).

Compelling evidence of abuse Commenting on the reverse-switch, the TGA said that the Federal Government’sschedul- ing delegate –who made the final decision – believedthat there was“compelling evidence of the harm caused by overuse and abuse of OTCcodeine-containing medicines”. “Low-dose, codeine-containing medicines are not intended to treat long-term conditions, howeverpublicconsultation indicated that many consumers used these products to self-treat 1 Pharmacy Sales, Marketing & Distribution 5 Brand Strategy chronicpain,”the TGA pointed out.“Thismeant that consumers frequently became addicted 2 Global Grocery H&B Sales, Marketing & Distribution 6 Creative Design to codeine.” 3 Category Management & Shopper Insight 7 Data Insight The schedulingdelegate had alsotaken into account that there waslittle evidence that low- 4 Field & Experiential Marketing 8 Advisory dose codeine medicines were “anymore effect- ivefor pain relief or cough than similar medi- Get in touch today! cines without codeine”, the agencynoted. Visit www.ceutagroup.com - Call +44 (0)1202 449763 - email [email protected] In addition, aRegulation Impact Statement,

13 January 2017 OTC bulletin 9 OTC GENERAL NEWS

Market Research Online OTCmarket continues to evolve

ermany and the UK now share 80% of of entrepreneurial drive, caselaw from theEuro- GEurope’s mail order and online pharmacy pean Court of Justice, European Union (EU)- market for non-prescription products worth al- drivendirectives and cross border trade,headds, most C3billion, according to anew European noting that most of the players in the market study published by James DudleyManagement. have accepted thestatus quoand evolvedwith- OTCmedicines account for over athird of this in the established framework. James Dudley market, the study adds,with the remainder from As aresult of differences in direct regula- other non-prescription pharmacy products. tion governing the distance marketing of regi- those which are evolving omnichannel retail- The report – Mail Order and Internet Phar- stered medicinal products, and more general rules ing –where e-commerceand traditional retail- macy in Europe 2017: Reaping the Benefits governing pharmacyestablishment, the digital ing are merging –and those where aclear dis- of an OmnichannelPresence,which covers 17 retail landscape has split twoways: tinction persists (see Figure 1). European countries and includeskey learnings l The first split is between the regulatory The UK and Germanyillustrate the differ- from China and the US –found that the online conditions of different European markets. They ent approaches vividly,Dudleysays, with the pharmacy market in Europe hassplit into three divide the sector between countries allowing UK accounting for nearly C1.5 billion of Eu- distinct groups in terms of development: mature; afullrangeofpharmacy services, including pre- rope’smail order and online non-prescription developing; and entry. scription fulfillment, and those which restrict pharmacymarketin2015, mostly withanomni- Using sales of non-prescription products – mail order and internet pharmacytonon-pre- channel retailing approach. Meanwhile the Ger- which represent the bulk of online medicines scription medicines and parapharmacyprod- man model, with sales of over C1billion, has sales in Europe –Germanyand the UK are the ucts only. predominantly ‘pure play’ retailing by stand- most mature markets with mail order and inter- l The second split is in the waypharmacy alone online businesses. netpharmacies holding overa10% share of sales groupings in each market are developing strate- With companies like WalgreensBoots Al- of non-prescription products. gies to respond to e-commerce in the retail sector liance (WBA) and LloydsPharmacy(Celesio Austria, Norway,Poland and Sweden are overall. In those markets where there are sub- McKesson) leading the way, the UK has a45% classified as developing with non-prescription stantial, wholly-owned retail drugstore and phar- share of the European mail order and online market shares of between 4% and 10%, while macy chains, there is atrend towards omni- pharmacymarket, the report says, thanks to a entry-levelmarkets with shares of under 4% channel retailing whereby e-commerce is trans- ‘clicks and bricks’ approach by the country’s include Belgium, Bulgaria, Czech Republic, Den- forming traditional ‘bricks and mortar’ busi- retail pharmacychains (see Figure 2). mark,France, Hungary and the Netherlands. ness. Where thisisunfolding, ‘pure play’ entities Earlier thiscentury,there wasashiftinthe tend to struggle. But where chains are either Integrated services regulatoryenvironmentinfavour e-commerce non-existent or are unresponsive to the incursions “Retail pharmacychains have integrated in retail pharmacy, OTCmarket strategist James of ‘pure-play’ competition, these entities appear online servicesand mobileapplications into their Dudleypoints out. to thrive. traditional offer to provide shoppers with great- This resulted from the combined effects Hence countrymarkets can be split between er and more rapid access to the retail brand. This includes stock availability advice and dis- play,backed by real-time inventory data and effective logistics,”observes Dudley. “This omnichannel approach combines the physical and digital elements of the offer along all the touch points of the retail brand,”headds, notingthatoperations like ApoteketinDenmark and Poland’sApteki Dbam oZdrowie –Icare for my Health –are developing their ownap- proachestomulti-channel pharmacy retailing. With atotal European marketshare of more thanathird, Germanyisthe largest ‘pure play’ mail order andonlinepharmacy market in Eu- rope.OnlinefirmslikeDocMorris–owned by Switzerland’sZur Rose –generate over90% of e-commerce-generated sales. Forhistorical reasons, related to Germany’s ban on large pharmacychains, more than half of the German ‘pure play’marketisconcentrated Figure1:Matrix showing the evolutionarysplits in the mail order and internet pharmacylandscape (Source –James DudleyManagement) into twoforeign-owned companies, the report

10 OTC bulletin 13 January 2017 GENERAL NEWS OTC

notes, namely ZurRose and EuropaApotheek Others, 52% of Chinese smartphone Venlo(EAV) of theNetherlands withits Shop- Italy, 6% users do not use device to shop 2% apothekebrand. Sweden, 2% UK, Austria, 2% 45% With aturnoverinexcess of C400 million, Poland, 3% it adds,Doc Morris leads thetop-12 largest‘pure France,3% play’ internet pharmacies in Europe, which to- Spain, 3% gether had sales of more than C1billion in 2015. The developments in Europe, Dudleypoints out, contrast with the market in the US, which has been built on aprescription-based online model developed by PharmacyBenefit Manager Germany, (PBM) companies. 34% 48% of Chinese smartphone Prescription pharmaceuticals drive the US users use device to shop Figure2:National shares of Europe’smail mail order and internet pharmacysectorand order and online pharmacymarketfor non- Figure3:Proportion of China’s600 million smart- account for over80% of the channel’ssales, prescription products worthalmost €3 billion phone users who use their device to shop online Dudleyexplains, with the channel’sgrowth large- in 2015 (Source -James DudleyManagement) (Source –James DudleyManagement) ly thanks to PBMs, the largest of which have gether the different benefits offered by their works,which are fast becomingthe wayChinese built their ownmail order and internetpharma- physical stores, online models and mobile ap- consumers access the online world. cies to compete with their participating retail plicationsand blurring the differences between There are already 650 million smartphone pharmacynetworks. e-commerce and traditional in-store retailing. users in China –afigure which is set to rise to Furthermore, PBMs represent aconsolidat- Consumers today,headds, are shopping 700 million by 2018, the study shows, adding ing sector that competes on cost, he adds. Mail whereverand howevertheyare able to obtain that 48% of Chinese smartphone users employ order is the most economical form of distribution the goods and services theywant. the device to shop, compared to 33% in the US forfilling 90-day prescriptions for patients with Consumersare driving the growth of digital (see Figure 3). chronic conditions,hence the reason PBMsre- andmobiletechnologies,the study points out, Online pharmacybarely existed in China cruit customers to use the channel. with WBA’swebsites alonereceiving an aver- until earlier this decade, Dudleysays,but in the As aresult, PBMs have been ahead of the age of around 68 million visits per month. past fewyearsithas grown rapidlyand nowac- drugstore chains in developing mail order and This has resulted in the development of counts for overCNY7 billion (C957 million) online services. omnichannel retailing, Dudleysays, namely the –around 3% –ofall retail medicines sales. The stated aim of retail pharmacychains in integration of online and mobile technologies the US,such as Walgreens, is to squeezemore into aseamless shopping experience along all Unclear regulatoryenvironment profitout of their portfolios,Dudleysays,a the touch points of the retailer’sbrand. However, whether this fast rate of growth goaltheyare aiming to achieve by increasing This trend, he points out, is becoming est- will continue remains to be seen, Dudleywarns, the turnoverofhigher margin non-pharmacy ablished in the US and is one that is spreading giventhat the unclear regulatory environment front end merchandise such as cosmetics and to other markets, such as the UK. has stifled plans by some of the country’slargest OTCmedicines. The study has also looked at the rapidly online retailers to expand their offering into the Mail order will play akey role in support- developing Chinese mail order pharmacymar- online pharmacymarket. ing this development, he states. ket, noting that online e-commercehas primarily Noting that to operate an online pharmacy US retailers, Dudleynotes, are bringing to- been drivenbythe expansion of mobile net- in China,acompany must hold aInternet Drug Transaction Service Qualification Certificate RegulatoryAffairs issued by the Chinese Food and Drug Admin- istration (CFDA), Dudleypoints out that in US issues supplements plan May last year,the regulatory picture became cloudier,when the Hebei provincial branchof he US National InstitutesofHealth’s Office l Enhance the dietary supplements research theCFDAissued an “urgent”directivehalting Tof Dietary Supplements (ODS) has outlined workforce through training programmes and OTCsales via third-party platforms. the four key areas it wants to tackle in anew career development. Despite theuncertainregulatory environment, strategic plan for the 2017-2021 period. l Foster development and dissemination it seems unlikely China’sonline pharmacymar- In the document titled Stregthening Know- of research resources and tools to enhance the ketwill fail to take-off, Dudleysays, especially ledge&Undertsanding of Dietary Supple- quality of dietary supplement research. giventhat the world’sbiggest retailer,the Ali- ments,the ODS says that the five-year plan l Translate dietary supplementresearch find- babaGroup, recently entered the space withthe “captures the momentum of current ODS pro- ings into useful information for consumers, health purchase of apharmacychain with an official grammes and activities” and is flexible enough professionals, researchers and policymakers. online retailing licence. to coverany public health research opportuni- Expandingonhow theODS will better in- Furthermore,one of China’s biggest phar- ties that emerge during the period. form consumers about the risks and benefits maceutical wholesalers and distributors Shang- The four keygoals outlined in the plan are: of supplements,the plan notesthatmobile ver- haiPharmaisestablishinganomnichannel phar- l Expand thescientificknowledge baseon sions of theDietarySupplement Label Database macypresence in the world’sfastest-growing dietarysupplements by stimulating and support- will be rolled out to “enhanceconsumer access”. online market through adeal with Alibaba rival, ing afull range of biomedical research, and devel- Thefullstrategic plan document can be down- Jingdong Mall. oping and contributing to collaborative initia- loaded from the ODS website: https://ods.od. tives, workshops, meetings and conferences. nih.gov/About/StrategicPlan2017-2021.aspx OTC Moredetails available at james-dudley.co.uk OTC

13 January 2017 OTC bulletin 11

OTC MARKETING NEWS

Marketing Campaigns Advertising Complaints Faes pushes Dermalexadvert Venosmil aes Farma says it will develop its market- banned by ASA Fingactivity“throughout 2017” to promote the recentswitchtoOTC status in Spain of the Venosmil range for varicose veins. mega Pharma’s print advertisement for emollient and asteroid cream, which “could The 200mg Venosmil tablets and 20mg/g Oits Dermalex Eczema cream has been notbeapplied in thesamestep” of aregime. It gel –which are both formulated with the flav- banned by the UK’s Advertising Standards added that its product wasunique in that Der- one hidrosmin –were switched to non-pre- Authority (ASA) for making misleadingclaims malex wasused both for skin moisture retention scription status by the Spanish firm wato rds the and comparisons with other products. and to reduce flare-ups. end of last year. The firm wastold thatitmustnot state or Explaining its ruling, the ASA said that con- Pointing out that Venosmil had been on the imply that its products were as effective at treat- sumers wouldunderstandfrom the claims that market in Spain since 1987, Faes Farma said ing eczema symptoms –orbetter at hydrating DermalexEczema cream wasgenerally as effect- the brand had ahistory of efficacyand wasrecom- theskin–incomparison to other products, un- iveasother OTCsteroid creams, “in that it mended by “a large number of primary care less it held adequate evidence to substantiate could alleviate the symptoms of eczematothe physicians, specialists and pharmacists”. such claims. same extent and within asimilar timeframe”. Both the tablets and the gel are indicated The press advertisement showed aVenn dia- It added that the footnote text wasnot promi- for the relief of swelling and mild symptoms gram, with astatement onone side that the prod- nentenough and wasinsufficient to counteract of “mild venous insufficiency” in adults, such uct was“as effective as asteroid cream”, anda the overall impression that the comparison was as tired legs, legpainand heavy legs. footnote explaining that the comparison was ageneral one against steroidcreams available Adosageofone capsule threetimesaday is solely against a1%hydrocortisone cream. On OTC, rather than just 1% hydrocortisone products. recommended, whilethe gel should be massaged the other sideofthe diagram wasaclaimthat Similarly,the footnote relating to the hydration into the skin three times aday. the cream hydrated “better thananemollient”, claim wasalso not prominent enough nor suf- The marketing campaign would highlight with afootnote specifying that this wasincom- ficienttocounter the overall impression that the to consumers that “preventive measuressuch parison with products containing unguentum product wasgenerally as hydrating as emollients. as improving life habits and using appropriate leniens,or‘cold cream’. Furthermore, the ASAsaidthe study–which treatment” could inhibit the progression of chronic In the middle of the diagram wasadeclara- had atotal of 95 participants –had used only venous disease, the firm told OTC bulletin. tion that DermalexEczemacreamwas a“break- one steroid cream and one emollient, adding Spain wasthe first market to see the OTC through eczema treatment”. thatthesehad notbeen shown to be represent- switch of Venosmil, which Faes Farma said was ative of such products in general. also available in “Latin America and parts of Provided study There wasalso no data to compare the re- North Africa”. OTC Responding to the ASA’s investigation into a sults afteratypical application periodofanon- complaint made by GlaxoSmithKline (GSK) prescription steroid of aweek to 10 days, the Consumer Healthcare –which manufactures watchdog said, and no children were included the Oilatum range –Omega provided an un- in the study,despite the product being suitable published study to support the claims, noting for thoseoversix years of age. the study had not been peer reviewed at the time As thestatements had impliedthatthe com- the advertisement waspublished. parisons applied to emollients and OTCsteroid DermalexEczema cream –aclass IIa medi- creams in general –and that the results would cal device –had been shown in the study to be achieved within asimilar timeframe to those have superior skin protection and moisture achievedbysteroid creams –the claims were LloydsPharmacyemployees arethe stars of the properties to an emollient, the firm claimed, found to be misleading. firm’slatest UK marketing campaign, as it aims and to be as effective as 1% hydrocortisone TheASA added that the study supplied wasnot to promoteits own-brand product range. Set to runthroughout 2017, the ‘made foryou’- cream in reducing clinical symptoms of mild enough to substantiate the ‘breakthrough’ claim. themed marketing push featured workers with to moderate atopic dermatitis after six weeks. Omega waswarned that it must not mis- aselection of options from the 250-strong line The company argued thatthe traditional treat- lead when making breakthrough claims or com- of LloydsPharmacyproducts, parent company Celesio explained.These included travel first-aid ment of eczema required the use of both an parisons with other products. OTC kits, cold- and flu-relief options, blood-pressure monitors and the Solerosun-carebrand. The national campaign wasdesigned to highlight that in-storeemployees were ambassadors of the IN BRIEF LloydsPharmacyofferings,Celesio said, which had been developed to support consumers with QUEISSER PHARMA has added vita- and 5mg zinc. Queisser pointed out that the their “everydayhealth needs” at a“great value price point to that of abranded version”. min C‘micro-pellets’ to its Doppelherz System orodispersible granules had aspecial coating Celesio said the campaign would initially pharmacy-only supplement range in Germany. thatallowed the vitamin Cto be released into focus mainly on in-storeactivity –including Eachstick-pack of ‘freshorange’-flavoured Vita- the body throughout the day.One of the stick posters and in-storematerials –inaround 1,800 LloydsPharmacystores, as well as online and minC750 Depot granules –which aregluten- packs –which the firm noted were “handy for through social-media. OTC and lactose-free –provides 750mg vitamin C travelling” –shouldbetaken daily. OTC

14 OTC bulletin 13 January 2017 MARKETING NEWS OTC

Marketing Campaigns Q&A with Pfizer backs Weifa’s heat wraps Monica Børter fizer is emphasising in its latest German Ptelevision spot how its ThermaCare heat Bekkhus wraps are superior to competing products at relieving pain because they “really get warm”. The 30-second creative features aman in a Marketing Director laboratory,who notes that warmth helps to ease back and neck pain. However, he adds there are “some patches that What has been the biggest achieve- of your target group with one media burst don’tget warm”, pointing out that such products Q ment of your OTC marketing career? using one channel that provided high coverage, use an “analgesic active ingredient” –capsaicin, like television. Today, consumersare spread which is found in chilli peppers–that“reacts Workingonaconsumer insight project across different channels. Because of this, we with the skin and creates afeeling of warmth”. A to create an education programme for must track the behaviour of the targetgroup Capsaicin is found in products suchasBeiers- allNorwegian pharmacy chains. It was ateam andcreate campaigns based on how theymove dorf’s ABCWärme-Pflaster andWärme-Creme. effort, with people throughout the whole com- around in the media landscape. In addition, Theman goesontoexplain thatthe “patented pany working towards the same goal. consumers todaywant amessagethat is tar- warmth cells” of ThermaCare patches –which geted directly to them. combine iron powder,salt, activated carbon What hasbeenthe biggest challenge andwater–“heat up themselves and relieve pain Q of your OTC marketing career? Whathas beenthe most important with long-lasting, deep warmth”. Q lesson of your career? When aThermaCare patch package was After moving to the pharmaceutical in- opened, an oxidation process began, Pfizer noted, A dustryfromacareer in fast-moving Everything is possible with determin- which generated heat. The products –which consumer goods (FMCG), Iexperienced aregu- A ation and apositive attitude. Also, several include options for the back, neck, and shoulders latory framework that was very discretion- minds think better than one. –aswell as arecently-launched variant for larg- ary, and where it was difficult to get clear answers on what was and was notallowed. How do yousee OTCmarketing dev- Thelack of clarity gives room for different Q eloping in the future? interpretations from different companies, which creates unequal competition conditions. We As consumers becomemore informed still have away to go on this point. A andconscious not only about their health, but also who they buy from, companies must How have consumers changed over bring an added value to their products, and Q the course of your career, and how not only talk about the products’ attributes. have you responded? Secondly, the world is going digital and so Pfizer says ThermaCare“really” warms willOTC marketing. Ourmobile phone is our er pain areas,reached the“ideal therapeutic tem- Due to technological developments, con- most important tool, and regulations need perature” of approximately 40 degrees celsius A sumers are more informed, and they also to change so that it becomes possible to com- in around 30 minutes, the firm pointed out. consume media differently. Only afew years municate withpeople where they are in their The neck patch is said to keep the affected area ago, it was possible to reach the main part everyday lives. OTC warm for 12 hours, while the other products are claimedto provide at least eight hours of heat. For the opportunity to feature in the Q&A section, Pfizer addedthatthe newlargerpatchhad four email [email protected] adhesive surfacesdesigned to adhere to multiple locations on thebody,and featured 13 heat cells. The advertisement also features aconsumer testimonial,beforeendingwithavoiceoverde- claring that the brand “warms the pain away”. IN BRIEF There is also ashot of the heat-patch range. BAYER has returnedits 15g pharmacy-only (P) –which is indicated to treat sweat rash,aswell Pfizer said the television spot, which will air Canesten Hydrocortisone Cream to UK shelves as athlete’s foot when accompanied by inflam- until May,was beingsupported by point-of-sale after amore than six-month absence. The prod- mation –contains 1% w/w clotrimazole. Mean- activity and aprint media campaign in “high- ucthad been outofstock since June, the com- while,Bayer hasalsoannouncedthat itsgeneral- circulation women’smagazines and selected pany said, following manufacturing issues related sale list (GSL) GermoloidsSuppositories are medical trade press magazines”. There wasalso to one of the product’sactive ingredients, hy- available again following manufacturing issues. public-relationsactivity,the firm noted, adding drocortisone acetate. In addition to 1% w/w This product had also been absent from shelves that this would run until the end of January. OTC hydrocortisone, Canesten Hydrocortisone Cream since June. OTC

13 January 2017 OTC bulletin 15 OTC MARKETING NEWS

OTCMarketing Awards 2017 OTCnominations to be revealed shortly

ritish OTC firms have not too long to wait networking with your industry peers. Bto find outifthey areinthe runningfor one Tickets for the Awards –which areco-pre- of the prestigious trophies on offer at OTC bul- sented by IRI –are on sale now. Theycan be Reckitt Benckiser (RB) plans to promoteits recently- letin’s OTC Marketing Awards 2017. purchased online or overthe telephone. launched Senocalm IBS Relief &Prevention Nominations for all of the 19 Awards will be And it’snot too late for you to get involved capsules forirritable bowelsyndrome (IBS) in March with radio advertisements and digital activity. listedin aspecial eight-page supplementtobe in sponsoringand presentinganOTC Market- Thedigital campaign would include asponsored published in the next issue of OTC bulletin. ing Award. Facebook post with an animation “illustrating More than 60 expert judges –including re- Generate awareness of your name, your busi- the concept that it’sdifficult to pinpoint exactly what sets offIBS”, the firmexplained, adding tailers,consumer healthcare specialists,and auth- ness and your contribution to the British OTC that this animation would featureindisplay orities on advertising, innovation, packaging industry by sponsoring an Award. Your expo- advertisements across a“wide networkof design, pharmacy training, public relations, digi- sure before, during and after the Gala Dinner health and lifestyle websites”. RB added that the message of the campaign tal and social media, and sponsorship –have &Awards Presentation could include getting recognised that while therewas “a lot of consideredall of the manyentries andare cur- up on stage in front of 500 guests andpresent- guesswork involved” in tracing the cause of IBS rently drawing up their nominations. ingone of the sought-after OTCtrophies to a flare-ups, consumers didn’thavetoguess when it came to relieving them. Winners will be announced at the Gala Din- worthywinner. Containing 125mg simethicone per capsule ner&Awards Presentation on Thursday,9March Other sponsorship packages are also avail- –along with peppermint oil –Senocalm IBS Relief 2017 at London’sPark Lane Hotel. able to suit all budgets. &Prevention is indicated to relieve gas-related IBS symptoms including spasms and cramps, Butyou still have timetojoin the party at the Find out more about howtoattend or sponsor the OTC bloating, pressureand discomfort, as well as British OTCindustry’smost talked-about and Marketing Awards 2017 by contacting Natalie Corn- fullness and indigestion.The product is also said glamorous night of the year.Takeatabletoen- well at OTC bulletin.Call +44 1564 777 550 or email to be gentle on the body. The online activity would also runagainfrom tertain your clients or say thank you to your [email protected]. Alternatively,visit the October to November,RBpointed out. OTC colleagues. Or simply come along to have fun Awards website at otc-bulletin.com/awards. OTC

Packaging Redesign GSK unveils new-look Voltaren

laxoSmithKline (GSK)Consumer Health- The name of the product wasalso highlighted Gcare has begun rolling out revamped pack- in the same colour. aging for its Voltaren diclofenac-based an- Thepackaging nowalso bears the GSK logo, algesics in Germany to create “stronger brand- after the companytook control of the brand ing”for the range andoffer“easiernavigation through its OTCjoint venture with Novartis within the portfolio”. (OTC bulletin,6March 2015, page 1). Germanyisone of the first markets to see the Other options available under the Voltaren introduction of the global packaging change, brand umbrella in Germanyinclude Voltaflex EachVoltaren product has aspecific colour stripe which the companysaidwould soon be rolled glucosamine tablets,aswellasapatch andspray. out in countries such as Brazil, France, Portu- The firm said the packaging for these variants grewfainter towards the edge of the packaging. galand Russia. would be changed “at alater stage”. Explainingthe updated look, thefirm noted While the range still featured the ‘core’Volt- Consumers would be made aware of the new the colour red served “generally as awarning, aren ‘blue man’ logo to symbolise the brand’s designthrough television, printand online activ- just as blood in the sink can indicate an un- slogan of “the joyofmovement”, GSK ex- ity, GSK said. The companynoted that advertise- pleasantgum disease”. Theupdated packaging plained, the refreshed products –the original ments were also running in trade publications. would help the range stand out “clearly” on Schmerzgel, Schmerzgel Forte, Dolo tablets, shelf, GSK added. and Dolo liquid capsules –now each had a Parodontax refresh The companysaiditplanned to promote “specific colour stripe”,the firmpointedout, to Meanwhile, the firm has also recently re- thenew look in Germanyvia “strong media and help consumers differentiate betweenoptions. freshed in Germanythe livery of its Parodontax digital support throughout 2017”, including a toothpastes, which are claimed to reduce and pre- television campaign, onlinevideosand out-of- vent bleeding gums. home activity. The newdesign for the products –available Othercountries in which the newParodon- in Classic, Extra Fresh, Fluoride and Natural tax packaging would be rolled out included White options –now included ared flash that Austria, Belgium, Hungary,Italy,Japan, the Neth- TheParodontax toothpastes featureared flash accompanied the logo, GSK pointed out, and erlands, Romania and Thailand, GSKsaid. OTC

16 OTC bulletin 13 January 2017 MARKETING NEWS OTC

Marketing Campaigns Legal Cases SevenSeas RB’sAustralian fine tackles age morethan tripled erck Consumer Health is looking to “chal- Mlenge and redefine people’s attitudes to- eckitt Benckiser’s (RB’s) A$1.7 million wards ageing” in the UK with its £4 million R(C1.2 million) finefor misleading consum- (C4.6million)‘#TrueAge’-themed campaign to ersover its Nurofen ‘Specific Pain’ products support its Seven Seas supplement brand. in Australia has been more than tripled to A$6 Claimed by the firm to be its “biggest-ever million by the country’s Federal Court. marketing investment in SevenSeas”, the cam- The decision follows an appeal against the paign focusedonthe CodLiver Oil, JointCare original amount in May last year by the Aus- andPerfect 7products, Merck pointed out, and tralianCompetition and Consumer Commission encouragedconsumersto“realise that theonly (ACCC)(OTC bulletin,27May 2016, page 16), agethat matters is the age you feel inside”. which initially brought the case against RB in RB’sSpecific Pain products misled consumers The promotional pushincludedatelevision March 2015 (OTC bulletin,20March 2015, commercial and national print advertisements page 10). prescription medicines freefromrepresentations featuring “real-life brand ambassadors”, the com- RB wasfound by theFederal Court to have that are liable to mislead and thereby distort pany noted, as well as digital, social-media, pub- made“misleading representations” on the prod- their decision-making processes”. lic-relations and in-store activity. ucts’packagingand on its website,nurofen.com.au, In addition to monetary damages and aloss Fashion stylist and brandambassador Martha that each of the four Specific Pain variants – of consumer choice, the Federal Court said Ward stars in the television advertisement,which BackPain,MigrainePain, PeriodPain andTen- RB’sconduct created arisk of double-dosing features the Perfect 7range. This includes the sion Headache –had been formulated to treat by consumerssuffering frommore than one of original and Prime variants. aparticular type of pain, despite them all con- the types of painthe Nurofen Specific Pain prod- In the20-second spot, Ward says thather style taining 342mg ibuprofen lysine (OTC bulletin, ucts supposedly treated. “reflects wIfho eel inside, not my age”. She is then 15 January 2016, page 15). RB must also pay the costs of bringing the shown dressing ayoung model, who requests The products were sold at around double appeal to court. to wear thesameasWard, commentingthatthey the price of standard Nurofen. Commenting on the ruling, the ACCC’schair- could be twins. The twowomen areshown taking Afine of A$6 million wasoriginally pro- man, Rod Sims, said thecommission welcomed part in aphoto shoot wearing the same outfit. posed by the ACCC (OTC bulletin,22April the decision, pointingout that the fine was“the Ward is then asked what her secret to ageing 2016, page 16), which appealed against the A$1.7 highest corporate penalty awarded for mislead- is, to which she answers: “Feeling great.” million penalty as it claimed the amount wasnot ingconduct under theAustralian Consumer Law”. Avoiceoverpointsout thatPerfect7is “the enough to “act as an adequate deterrent and might Meanwhile, in astatement,RBinsisted that perfect wayto shine fromwithin”,and encour- be viewed simply as acostofdoing business”. the Specific Pain range wasintroduced“with the ages viewers to “live your true age”. Announcing the heavier fine, the Federal intentiontoprovide easynavigationofpain-relief Merck said the advertisement would run Court said the original penalty had been in- options, particularly within the grocery environ- until March on“keynationalchannels”and be creased to reflectthe loss sufferedbyconsumers, ment where pharmacysupport is not available”. supported by video-on-demand promotion. andto “ensure that RB and other ‘would-be- “The formulation of the Nurofen pain-spe- Adedicated campaign microsite wasavail- wrongdoers’ think twiceand decide not to act cific range is different and has afaster absorp- able at trueage.seven-seas.com,the company against the strongpublicinterestinconsumers tion rate compared to standard Nurofen,”the noted.Thisincludes expertadvice and profiles being able to makedecisions about buying non- companymaintained. OTC of brand ambassadors. Merck is also running acompetition offering entrants the opportunity to win an experience IN BRIEF of their choice –worth £1,000 –that helps them live their “true age”. PERRIGO has receivedapprovalfrom the LABORATORIOS HEEL has expand- The UK activity waspart of a“global integrat- US Food and DrugAdministration (FDA) for its ed its Sleepeel sleep-aid supplement brand in ed marketing campaign”, Merck said. OTC Abbreviated NewDrug Applications (ANDAs) Spainwithadrops option. While the Sleepeel for generic equivalents to GlaxoSmithKline’s drops contained largely the same ingredients (GSK’s) Nicorette White Ice Mint Gum con- –melatonin, vitaminB6and zinc –asthe tablet taining nicotine polacrilexin2mg and 4mg option introduced towards the end of last year strengths. The store-brand specialist noted (OTC bulletin,22September 2016, page 15), that annual sales for Nicorette White Ice Mint Heel said it had replaced the valerian found GumwereUS$79million (C76 million) for the in the tablets with passionflower extract. This 12 months ended 30 November 2016. Perrigo meant that the drops were suitable for those added that the products would provide consum- agedunderthree years, the company noted. Heel ers with “high-quality,value alternatives” to recommends that 0.5ml of the drops are taken The spot urges viewers to “liveyour true age” GSK’soffering. before bed. OTC

13 January 2017 OTC bulletin 17 FOR 2017NEW

MAIL ORDER AND INTERNET PHARMACYINEUROPE 2017 REAPING THE BENEFITS OF AN OMNICHANNEL PRESENCE

AStudy of Mail Order And Internet Pharmacy In 17 European Countries Plus Key Learnings From The US And China

Mail Order and Internet Pharmacy in Europe shows how e-commerce is reshaping the pharmacy landscape and playing a key role in the omnichannel strategies of leading healthcare retailers. The European mail order and Internet pharmacy landscape has continued to evolve since the last edition of this study in 2015, driven by the growth of mobile technologies, smartphones and the consequent changes in how consumers want to shop. Major pharmacy multiples have been using their considerable reach in consumer healthcare to develop complex omnichannel strategies at the expense of ‘pure play’ online pharmacy companies. But in other markets, these entrepreneurial and disruptive firms continue to shake the foundations of traditional retailing, as the study explains.

Mail Order and Internet Pharmacy in Europe covers: Austria, Belgium, China, Czech Republic, Denmark, Finland, France, Germany, Hungary, Italy, Netherlands, Norway, Poland, Slovak Republic, Spain, Sweden, Switzerland, UK and US.

® JAMES DUDLEY® Download study at www.james-dudley.co.uk MANAGEMENT

FV -MAIL ORDER A4ad 2017 A4.indd 1 11/01/2017 09:35 EVENTS OTC

FEBRUARY 20-21 February AESGP Conference 8February Malta OTCMedicines Advertising ‘Defining the priorities for the futureve de lopment of self-care’is the theme of this two-day event London, UK organised by the Association of the European Self-Medication Industry,the AESGP,with the This one-day workshop, run by the Proprietary European Union (EU) Heads of Medicines Agencies (HMA) during the Maltese EU Presidency. Association of Great Britain (PAGB), will look There will be sessions on ‘Howtofacilitate moving medicines from prescription to non- at howeffective advertisingisstill possible prescription status’ and ‘The future of self-care in aconnected world’. in acomplexregulatory environment. Described as a“unique opportunity to interact with keypeople in the regulatory environment”, Contact:PAGB. speakers will include: June Raine and Guido Rasi of the European Medicines Agency(EMA); Tel: +44 20 7242 8331. Andrzej Rys of the European Commission; Ian Hudson of the UK’sMedicines and Healthcare Email: [email protected]. products Regulatory Agency(MHRA); and Xavier de Cuyper of Belgium’sFederal Agency Website: pagb.co.uk/events-training/. for Medicines and Health Products (FAMHP). 20-21 February Contact:AESGP.Tel: +32 2735 51 30. Email: [email protected]. Website: aesgp.eu. Marketing Authorisation in Russia, Kazakhstan and Ukraine MARCH Tel: +1 202 429 9260. Berlin, Germany Email: [email protected]. An update on the Eurasian Economic Union 2-3 March Website: chpa.org/aec. will be included in this two-day meeting. Driving OTCGrowth 22-24 March Contact:Forum Institut für Management. Through Innovation and Tel: +49 6221 500 680. Health Ingredients Business Development Email: [email protected]. South-East Asia London, UK Website: forum-institut.com. Jakarta, Indonesia This two-day conference and networking event Athree-day trade show. 21 February is organised jointly by OTCToolbox and the Contact:UBM. Basics of Medical Devices Pharmaceutical Licensing Group (PLG). There Tel: +31 20 4099 554. Regulatory Affairs will be presentations by Bayer,GlaxoSmith- Email: [email protected]. London, UK Kline (GSK) and PGT Healthcare, as well as Website: figlobal.com/hisoutheastasia/. Aone-day seminar run by The Organisation for atechnology perspective from Google. Professionals in Regulatory Affairs (TOPRA). Contact:OTCToolbox. 29-31 March Contact:TOPRA. Tel: +44 121 314 8757. DIA 29th Annual EuroMeeting Tel: +44 20 7510 2560. Email: [email protected]. Glasgow, UK Email: [email protected]. Website: plg-group.com/events/2nd-otctoolbox- ‘Translational Healthcare, from bench to bed- Website: topra.org. plg-otc-conference-and-networking-event/. side –and back’ is the theme of this meeting runbythe Drug Information Association (DIA). 6-7 March 24 February Contact: DIA. Hot Topics in Advertising EuroPLX 63 Tel: +41 61 225 5151. London, UK Lisbon, Portugal Email: [email protected]. The Medicines and Healthcare products Regu- This two-day meeting will provide aforum Website: diaglobal.org/em2017. latory Agency(MHRA) is organising this one- for business development decision makers day meeting. for discussing and negotiating collaborative Contact:MHRA. agreements in licensing, marketing, and dis- APRIL Tel: +44 20 3080 6000. tribution of patented medicines, generics, bio- Email: [email protected]. similars, OTCproducts, medical devices and 19-21 April Website: gov.uk/government/collections/ food supplements. Pharmaceutical Regulatory mhra-conferences-and-events. Contact:RauCon. Affairs in Asia Tel: +49 6221 426 2960. London, UK 28 February-1 March Email: [email protected]. EEU &CIS Countries including India, Japan, Korea, Sing- Website: europlx.com. apore, Taiwan and Thailand will be discussed. Pharmaceutical Forum Contact: Management Forum. Moscow, Russia 19-22 March Tel: +44 20 7749 4730. Countries including Belarus, Kazakhstan, Uk- CHPAAnnual Email: [email protected]. raine and Uzbekistan will be discussed. ExecutiveConference Website: management-forum.co.uk. Contact:Adam Smith Conferences. Florida, US Tel: +44 20 8004 5694. The annual meeting of the US Consumer Email: [email protected]. Healthcare Products Association (CHPA). MAY Website: cispharmaforum.com. Contact:CHPA. 30 May-1 June 9 March 53rdAESGP Annual Meeting OTCMarketing Awards 2017 Vienna,Austria This three-day conference is the annual meet- London, UK ing of the Association of the European Self- These Awards, organised by OTC bulletin,recognise the best of Medication Industry,the AESGP. the British OTCindustry.Followthe OTCMarketing Awards on Contact: AESGP. Facebook, Instagram, LinkedIn and Twitter. Tel: +32 2735 51 30. Contact: OTC bulletin. Email: [email protected]. Tel: +44 1564 777 550. Email: [email protected]. Website: otc-bulletin.com/awards. Website: aesgp.eu.

13 January 2017 OTC bulletin 19 OTC BUSINESS STRATEGY

Creating amorediverse workforcehas beena stapleofcorporate social responsibility for manyyears.Despitethis, progress towardsamore inclusive industryhas been slowdespiteaclear business casethatit produces better results. Matt Stewarttalks to Bayer’s Najoh Tita-Reidonhow industrycan embrace and benefit from diversity. Time to win with diversity

iversity is not afad,” causal –that greatergenderand ethnic diversi- tions, there seems to be alack of diversity not Najoh Tita-Reid, Bayer ty in corporateleadership automatically trans- just in consumer healthcarebut othersectorsas Consumer Health’s vice- lates into more profit –but rather indicates that well. Ibelieve the consumer goods industry has “Dpresident and country companies that commit to diverse leadership great potential to evolveand we at Bayer are division head for UK &Ireland,insists. are more successful. focused on addressing this,”Tita-Reid pointsout. “It is acompetitive advantage and The existence of the relationshipis“statisti- “For diverse talent seeking employment,it away of working.” cally significantand consistently present in the is very much about access, awareness and know- “Likeall the other principles of runningasuc- data”, McKinseyclaims. ledge”she explains.“Oftenifyou do not know cessful business, diversity needs to be included,” This analysis also reveals apositive relation- anyone in theindustry, or anyone who has reach- she claims. “Peopleneed to be aware of the busi- ship between financial performanceand greater ed those positions,ordon’t seeanyone who looks ness case for diversity and not see it as something diversity at the leadership level, with the “strength likeyou in thosepositions,you potentiallydon’t that is just good to do, butsomething that can and significance of thatrelationship” varying by have anetwork or mentors that can tell you how help yougainacompetitiveadvantageand win.” type of diversity –gender or ethnicity –country to gain access and what the requirements are. Tita-Reid –who wasawarded Consumer, and industry. Due to these factors, sometimes diverse candi- Retail &LuxuryLeaderoftheYear at theBrit- Taking out the gender aspect, the McKinsey dates may not even knoworthink it is possible ish Black Business Awards 2016 –saysthat study also found that for every 10% elevation to attain roles in our organisations.” while the societal case for creating aworkforce in ethnic diversity in the executive leadership of “You need role models to believe it is pos- with abettergender andculturalbalance is ac- US companies, there wasa0.8%improvement sible,”Tita-Reid insists, noting that Bayer in cepted, the nature of business means that unless in earnings before interest and tax (EBIT). the UK employs close to 1,000 people from 37 peoplerealise that more diverseworkforcespro- “Cumulatively,more racially diverse com- different nationalities,with an even split between ducebetter results, nothingwillreally change. panies in the US had better financial perform- men and women. Citing astudy on diversity undertaken by Mc- ance,”the study points out, “with companies An intentional movement is needed to en- Kinsey, Tita-Reid points out that of the 366 in thetop quartile for ethnic diversityinleader- sure that opportunities are widely available to firms studied across the Canada and the US, shiproles havingahigher probability of above everyone, Tita-Reid claims, noting that it was LatinAmerica and the UK,those in the “top average performance than those in the bottom adeliberate strategy to form amore diverse quartile for gender diversity were 15% more quartile (see Figure 2).” workforce that enabled her to break into the likely to have returns above the nationalindustry As Figure 3shows,thiswas also the case in consumer goods industry. median” (see Figure 1). other countries, with the McKinseystudy showing “I cameupthrough Procter&Gamble (P&G). Furthermore, “those in the top quartile for 61% of companies in the top quartile for diversity Theyhad made adecision to be more diverse racial and ethnic diversity were 35% more like- in Canada,the US and the UK having an EBIT in theearly 1990s and have more senior manage- ly to have returns above thenational industry higher than the national median. In LatinAmerica, ment that would reflect the consumers that would median”, she adds. the figure wasonly slightly lower at 58%. exist in 2010-2020,”she explains. “Theyde- According to theMcKinsey report, this cor- “Despite the obvious businesscase, when it cided to hire the best and brightest diverse high relation does not prove thatthe relationship is comes to senior management or executive posi- school students intoaninternshipprogramme.”

20 OTC bulletin 13 January 2017 BUSINESS STRATEGY OTC

“I came into the industry at 17. No one in GENDER DIVERSITY ETHNIC DIVERSITY my family had been in the industry before, I 58 +15% 54 +35% didn’tknowanyone in the industryand had no 47 idea who the senior management were at the 43 time. But there wassome diversity in senior man- agement and that, along with advocacyfrom the chief executive to diversify the workforce, made me believe attaining seniormanagement waspossible,”she adds. “I wastaught about the industry and told Fourth quartile First quartile Fourth quartile First quartile thatwhat Ihavewas going to makeadifference,” Tita-Reidcontinues,“andthatP&G wantedto Figure1:Likelihood of financial performance veabo national industrymedian, broken down by diversity quartile (Source –McKinseyDiversity Database) reflect the consumers of the future.” “Aswithanyoneinbusiness, youfacechal- with the business case for diversity.” comes out of it. Bringing them to the front of lenges all the time. Iexperienced different at- “I have always sought to create diverse teams your consciousness so you can pause and ad- titudes, mixed levels of support, recognition and achieve better results,”she adds. “I would dress them, and lean into the discomfort and and bias,”she points out. “However, Irealised put success down to the diverse thinking of the look at the talent, qualifications and experi- Icouldonly impact thebehaviourthatwas mine team, which led to different approaches and ence, is an important element in achieving a and refer back to the vision of the people that more creative solutions.” diverse workforce.” wanted this to be asuccess. So Idecided to let “AtBayertoday,Ihaveavery diverseteam Combining this bias training with the strong my actions and results speak formeand that has in terms of style, culture, gender and background business case for diversity can lead to change, been my approach throughout my career.” and Ican absolutely say that the work and trans- Tita-Reid says, butithas to be drivenbypeople “Another bias wasthat diverse talent peaked formation my team is undertaking has atremend- of influence. at middle management,withmanyquestioning ousamount to do with the diversity on my lead- “If it becomes important to the leaders in whether FTSE 100 organisations were ready ership team,”Tita-Reid insists. the industry,change will happen,”she insists. for adiversechiefexecutive officer,” Tita-Reid Looking at the practical steps firms could “People likemyself and other more senior ex- notes. “Just the fact that this wasaquestion has take to address the challenges around diversity, ecutivesinthe industry will have to commit to an impact on howpeople see your potential, but Tita-Reid says that once the business case is un- startaskingthe questions, and start having hon- thankfully this hasimproved. We nowhavemore derstood, thereisaneed forthe inherent biasall est –and what can be at times uncomfortable examples of successful chief executive offic- people have to be addressed through bias training. –conversations on the issues. This will drive the ers from different backgrounds.” “Any firm that is best-in-class in terms of di- change and ensure we promote diversity from “You don’twant to believe it, butcoming up versityhas gone through an elementofbiastrain- the classroom to the boardroom.” in the industry you realised that there wasno- ing and directly addressed the barriers,”Tita-Reid “In my view, there is amisperception that body likeyou there, ”she adds. explains. “Bias training is aphenomenal train- diversity is agenerational issue. Saying that it “Itwas abig challenge.Ihad to choosemen- ing programme, butlikeall things, one must work will be resolved by our kids as theyare more tors and role models of all backgrounds –many on change management, capabilities, process, open won’twork,” Tita-Reid continues. “It is of whom were white males or females –that and training together to gain the desired outcome.” our responsibility to ensure the UK continues would be able to tell and teach me the unwrit- “The fundamentals of bias training makepeo- to succeed and this requires us as leaders to ten rules of the game,”Tita-Reid explains. “This pleaware that as humans we all have bias and leverage all of the resources to ensure we re- is another big challenge: if you are coming from we tend to feel most comfortable with things main competitive.Wehavetotakeownership aplacewith no knowledgeofthe executivelevel, that feel familiar,” sheexplains. for change as we create the environment in which you have no idea of the unwritten rules that “Anything that does not feel familiar,such the next generation will work.” govern that world.” as howaperson looks, where theywent to school, “All of us can makethe business case for “OnceIreached alevel thatenabledmeto their accent, are simple cues that can trigger diversity and makesure we have aworkforce have some influence, Iensured that my team’s that fight or flight instincts.” that reflects the consumers we serve,” sheinsists. approach to recruitment of all staffreflected “When you have someone that is less pre- “All of us can makesure that when we hire, re- the world we weregoing to serve,”she explains. dictable in front of you, it’snot comfortable. cruit and promote, we ask the questions: Are “I taught themall aboutbeing inclusive,not ex- And when the people in the leadership roles we being diverseand inclusive?Are we hiring clusive,and Imade sure theywere familiar are all the same bias, this works as adisadvant- people different from ourselves? And we can agetothose who aren’t,”Tita-Reid adds. “Being all have bias training, we do not have to wait. 61 +20% aware of your biases is the biggest thing that We can all do that in 2017.” OTC

41 Region Bottom quartile (%) Top quartile (%) US &Canada* 41 61 UK* 45 61 Latin America* 47 53 Overall 43 58 Bottom quartile Topquartile *Includes 186 organisations in US &Canada, 107 in the UK and 73 in Latin America (67 from Brazil) Figure2:Relationship between ethnic diversity Figure3:Percentage of companies with earning beforeinterest and tax(EBIT) above the national in leadership and performance by quartile median broken down by quartile forethnic diversity (Source –McKinseyDiversity Database) (Source – McKinseyDiversity Database)

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Manufacturers Manufacturers Valeant gets Swisse names lead derma head illiam Humphries,former chief execu- after buy-out closes Wtive officer of Merz in NorthAmerica, hasbeen named as executive vice-president of wisseWellness has appointed OliverHorn, Valeant Pharmaceutical’s dermatology business. Sformer integration director at Treasury Wine Reporting directly to Valeant’schief execu- Estates, as its managing director. tive officer Joseph Papa, Humphries has also The move wasmade as Chinese firm Bios- joinedthe company’s executive committee. time –which acquired an 83% stake in Swisse Commenting on theappointment, Papa said in 2015 (OTC bulletin,25September 2015, that Humphries had “nearly 30 years experience page 1) –took full control of the Australian sup- in the dermatology and speciality pharmaceuti- plements business. cals industry”. Horn has taken overfrom Radek Sali,who hassteppeddownafter nine years as chief ex- Proventrack record ecutive officerafter selling his stakeinSwisse Oliver Horn “Humphries has an unparalleled understand- to Biostime. ingofthe dermatology and aesthetics space,” Noting that Horn had a“strong track record” Papa claimed, “and aproventrack record of in the fast-moving consumer-goods (FMCG) successfully developing and commercialising industry,Swisse said that he had held “many products in these therapeutic areas.” international roles across blue-chip businesses, in- cluding Deutsche Bank in Germanyand L’Oréal in Spain and the UK. Mostrecently,Hornhad served as integration director for Treasury Wine Estates in Africa, Europe, Latin America and the Middle East, the companynoted, and was“accomplished at de- livering exponential growth in established and Radek Sali emerging markets”. cultural management skills,”Fei pointed out, “and Commentingon theappointment, Sali–who we look forward to working with him.” wasactively involved in the selection process –said Commenting on the future for Swisse now Hornwas “passionate about living and promot- Biostime had taken full control of the business, William Humphries ingahealthyculture and is committed to the on- Fei said that the integration of the twocompanies Prior to joining Merz, Humphries served going cultivation of the famous Swisse values”. had gone smoothlyand that Swissehad a“strong as president of Stiefel where he spearheaded “Heisbest placed to lead Swisse on the path growth outlook”. twomajoracquisitions andled the global inte- of itsglobal journey,”Sali added,“andtocon- “Maintaining Swisse’sleadingmarketposi- gration of the business into UK-based Glaxo- tinuemyvision for the firm to become the world’s tion in Australia is critical,”Fei said,“andfu- SmithKline (GSK). leading premium wellness brand.” ture global expansion plans will continue to be Humphries had also held anumber of senior Luo Fei, group chief executive officer and drivenbySwisse’steambased in Melbourne.” roles at Allergan, including head of the firm’s chairmanofBiostime, said Hornwould play a Throughout 2017, Swisse would continue to US skin-care business, the companynoted. critical role in driving the Swisse business in expand in China by focusingonnew channels, Outlining his plans for his newrole, Hum- Australia, NewZealand and globally. including e-commerce, retail pharmacyand gro- phries said he wanted to ensure the “under- “Horn is adynamic leader with strong interna- cery, he added, while also working on growing appreciatedinnovation pipeline”thatValeant’s tionalbusinessexperience,integration andcross- its presence in Europe and the US. OTC dermatologybusinesshad builtwas fully utilised. Furthermore, the business had an “unrivalled Manufacturers and robust product portfolio” he added, “with great brands with asignificant amount of un- Chr.Hansen recruits science chief tapped potential”. Meanwhile, Valeant also announced that robiotics specialist Chr. Hansen has named with the company, Hansen said. Anne Whitaker and Ari Kellen had left their PThomas Schäfer as chief scientific officer Meanwhile, Hansen also announced that roles as executive vice-presidents and compa- and executive vice president. its chiefoperating officer and deputy chiefex- ny group chairmen. Schäfer –who is expected to takeupthe ecutive officer, Knud Vindfeldt,would leave RobRosiello –who had served as Valeant’s role in the spring –will join the Danish firm thefirm on 28 February 2017. Vindfeldt also leads chieffinancial officer from July 2015 to August from biotechnology companyNovozymes. Hansen’sFood Cultures &Enzymes division. 2016and oversawthe transfer of therole to Having started his career at Novozymes in Vindfeldt will continue to act as an adviser Paul Herendeen –had also left the company, 1994, Schäfer had risen through the ranks to to the company’s chief executive officer, Cees Valeant said. OTC hold anumber of senior management positions de Jong,until August 2017. OTC

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