Global Consumer Health Market Will Emerge Out Of Pandemic Stronger Than Ever
Executive Summary
Delta and Omicron variants of the coronavirus slowed the global consumer health market's return to normal in 2021. However, the resurgence of the cough and cold category, the continuing popularity of e-commerce and digital health, as well as the increasing appeal of self-care to cash-strapped governments all point to a "stronger and more sustained" bounce-back in 2022, according to IQVIA Consumer Health.
This year will see the international consumer health market emerge swinging from the COVID-19 pandemic, says IQVIA Consumer Health.
Progress had already been made in 2021, with individual markets – especially in the global North – major OTC categories and consumer health firms starting to get back to business as usual, IQVIA Consumer Health reported in a recent blog.
However, 2022 will see the global market rebound in an even “stronger and more sustained” way, according to IQVIA CH’s global vice-president, consulting services, Amit Shukla.
“In 2020, COVID created chaos across the global consumer health market,” Shukla explained. “Emerging and developed markets saw revenues fall.”
“While we experienced some rebound in 2021, Delta and Omicron slowed that recovery,” he continued.
“We are confident, however, that in 2022 the rebound will be stronger and more sustained,” Shukla said. “While there will be unevenness across markets, trends are indicating a good overall performance in line with 2018.”
Return Of Cough & Cold?
After a “rough” 2020, last year saw the global CHC market grow by 6.7% in sales value, Shukla revealed.
This growth was led by gastrointestinal category, which grew by 11.1%, IQVIA Consumer Health’s Global OTC Insights data shows (see Figure 1).
Analgesics also “picked up significantly,” Shukla noted, with sales increasing by 9.8% worldwide.
The cough cold category, “which was hardest hit during the pandemic,” Shukla pointed out, was still behind at the end of 2021, shrinking by 4% overall.
Shukla had hope for the future, however, expecting cough and cold sales to return to normal in 2022, “flattening the curve.”
“Consumers are also investing more in health and wellness products, which creates opportunities for manufacturers to increase sales and to address evolving consumer demands,” he said.
Compared to overall market growth of 6.7%, the majority of the top-10 multinational consumer health manufacturers failed to keep up.
Only Procter & Gamble, Nestle and Abbott grew ahead of the market, at 7.9%, 8.8% and 20.8%, IQVIA Consumer Health reported (see Figure 2).
Growth at P&G was driven by the firm’s digestive health brands Pepto-Bismol, Metamucil and Align, its flagship VMS lines Bion and Neurobion and by its sleep aid brand Zzzquil, Shukla explained.
Abbott’s “stand-out performance” was driven by a “very strong showing” from its Pedialyte, Duphalac and Creon digestive brands, Shukla said.
Looking ahead to the next five years, Shukla pointed to the fiscal consequences of COVID-19, rising inflation, e-commerce and digital health as key drivers of both growth and further turbulence in the global consumer health market.
Rx-To-OTC Switch Opportunities
While mass vaccination has enabled many global North countries to return to a “relative state of normal,” Shulka pointed out that runaway inflation will place extra burdens on consumer wallets over the next few months.
For countries that are still struggling to vaccinate their populations, continuing restrictions – with cities like Shanghai in China now back in strict quarantine – will continue to be a drag on the consumer health industry, he said.
At the same time, the need to claw back some of the government spending seen in the last couple of years will make self-care far more attractive to policy makers, perhaps opening up avenues for innovative Rx-to-OTC switches.
“This need to cut healthcare budgets and insurance costs could see a push to shift the cost of medicines for certain long-term, but self-treatable, chronic conditions to the user by removing them from reimbursable status or by making certain medications – statins for example – available without a prescription,” Shulka predicted.
“However, these opportunities could be hampered by rising costs. Raw material prices continue to increase due to inflation, which will likely require price hikes for consumer health products,” he said. “Manufacturers will have to determine how to achieve a balance between costs, revenues, and competition in the marketplace.”
The Rise Of The Machines
While e-commerce continues to be a major growth driver for OTC firms that have made the transition to digital sales and marketing, Shulka points to artificial intelligence as a perhaps more fundamental disruptor.
“The use of analytics tools that leverage artificial intelligence and machine learning (AI/ML) can help companies predict future trends, optimize costs, and adapt their market strategies to changing consumer behavior,” he said.
“There is also an opportunity for personalization in these digital engagements, as consumers generate more data about their individual needs and health status,” he added.
Digital health apps in particular represent an exciting avenue for consumer health innovation, Shulka said, with the “confluence of data and product categories” offering new opportunities for manufacturers to “integrate analytics more fully into their annual planning and implementation strategies.”
In 2020, disease-specific apps represented 22% of all apps in the marketplace, he noted. “Of those, the leading topics include mental health, digestive, respiratory, musculoskeletal pain, eyes, and ears, which align with consumer health product categories,” he said.