Covid-19 prescription: Pharma players shift their focus over the counter

With the Covid-19 pandemic raging, analysts expect the focus on OTC brands to continue because visits to doctors are few and far between
Over-the-counter (OTC) consumer health businesses have been a focus area for pharmaceutical firms in the recent past. 

Last year quite a few prescription (Rx) products switched to the OTC portfolio of leading pharmaceutical firms like Lupin and Cipla. 

Consumer health products do not require a prescription from a doctor and can be purchased over the counter.

With the Covid-19 pandemic raging, analysts expect the focus on OTC brands to continue because visits to doctors are few and far between. 

In its 2019-20 (FY20) annual report, Sun Pharmaceutical Industries (Sun Pharma), one of the top 10 consumer health companies in India, said there was an increasing trend of brands switching to OTC.

Lupin’s OTC division, LupinLife Consumer Healthcare, fitted this trend in FY20. Lupizyme, used for treating digestion-related problems, and Aptivate, an appetite stimulant, have added heft to Lupin’s OTC portfolio. 

Anil Kaushal, head of LupinLife Consumer Healthcare, said: “During the lockdown we knew most consumer products were not really SOS products, but at the same time the consumer also became more health conscious.” He added the switch to OTC was a path many brands took.

“For a pharmaceutical company that develops equity for a prescription brand over a period of time, it becomes a good candidate for a switch to OTC. A consumer company, on the other hand, has to invest a lot to build the credibility of a brand,” said Kaushal. 

In the past four-five months, acute therapy sales have taken the back seat. Chronic sales have continued as people continued to refill their prescriptions. Brands that are related to immunity have picked up sales.

“We do not know how long this will last. But if a pharmaceutical firm has a diverse portfolio, it has the opportunity to address the demand of the consumer,” said Kaushal. 

Ahmedabad-based Cadila Healthcare, for example, came up with a brand called Supermune, a tablet with vitamins C, D, and E, apart from herbal extracts. People are consuming herbal immunity boosters as well as multivitamins to boost general immunity levels during the pandemic. The company saw an opportunity in this. 

“The idea is to spot an unmet consumer need, and customise products accordingly. It’s not the other way round,” said a company executive. 
Cipla, for example, has seen an opportunity in finding synergy between Rx and Gx (generic) brands. It has a sizeable trade generics business. 

“As distinct from the prescription business, where you can engage with doctors, it is hard to create demand in the generics business, especially in the hinterland. One engages with channel partners. Some of the brands in our generics business are amenable to transition to the consumer business. They work almost like fast-moving consumer goods brands now,” said Kedar Upadhye, global chief financial officer, Cipla. It has consolidated India branded prescription, trade generics, and the consumer health care businesses under its ‘One India’ strategy. 

Trade generics brands like Prolyte (ORS), MamaXpert (pregnancy test), and Maxirich (multivitamin) have transitioned to consumer brands. The company continued sustained efforts around building its Cofsils (cough lozenges) brand, which grew by 50 per cent (value) in FY20. 

Sun Pharma extended its leading consumer brands like Volini. It sells these products in over 20 markets, including Romania, Poland, Russia, Ukraine, South Africa, Nigeria, Myanmar, and Thailand.

Indian firms have focused on OTC in their international markets also. Lupin, for example, was the fastest-growing company in this segment in South Africa in FY20.

The global OTC consumer health products market was around $141.5 billion in 2019 and is projected to grow at a 4.3 per cent compound annual growth rate to touch $175 billion by 2024. 

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