AESGP Annual Meeting, Day 2 (Part 1): The Future For Europe’s Self-Care Industry Is Bright And Digital
Executive Summary
Day 2 of the AESGP’s 58th Annual Meeting in Madrid, Spain begins with optimism about the future of the European self-care industry. Google and IQVIA Consumer Health analyze COVID-19 trends to help industry prepare for the post-pandemic new normal, while Convert Group and Swedish e-pharmacy Meds.se emphasize the opportunity presented by e-commerce for consumer health.
Association of the European Self-Care Industry’s president Birgit Schuhbauer opened the conference proceedings of the 58th Annual Meeting in Madrid, Spain.
Reiterating the sentiments of her speech during the opening ceremony, Schuhbauer said that the European consumer healthcare industry had performed well during the pandemic and was well prepared for the future.
“I’m happy to say we haven’t missed anything big,” she said. “Through three years of crisis we been able to meet the needs of European consumers.”
After the pandemic, however, Europe’s consumer healthcare industry has even more to offer, she said.
“We are treating 1.2bn cases of minor ailments per year in Europe,” she explained. “Self-care is saving €34bn every year for healthcare systems.”
“We could save another €17bn if we had the right regulatory framework and implemented it with great discipline in European Union member states.”
A regulatory framework fit for the “new normal” would include greater harmonization between EU markets, she said.
“There are big divergences in how EU law is implemented within national legislation,” she said, “so we have a very different list of OTC products in different countries.”
Out of date regulations such as the “sunset clause” – in which a marketing authorization for a medicine ceases to be valid if it is not placed on the market within three years or for three consecutive years – should also be removed, she said.
Innovation should also be encouraged, she added, by granting data exclusivity for three years for clinical studies for Rx-to-OTC switches, as is the case in the US and Japan.
Trust In Self-Care
Google’s Germany head of healthcare industry insights, Guillaume Gauthier, began the first session on self-care market trends with news that online searches for information about self-care have been growing steadily during the pandemic and peaked in March 2022.
The biggest and fastest growing consumer health category within these Google searches is vitamins, minerals and supplements, Gauthier reported, reflecting an increased concern for prevention among consumers. (Also see "Immune Health Vitamins And Minerals Drove German Supplement Market Growth In 2021" - HBW Insight, 18 May, 2022.)
Consumers are now also thinking about their health holistically, he continued. Consumer demand is now aspirational, he said, and includes a concern for mental and emotional health, as well as for nutrition and healthier lifestyles.
Furthermore, people now not only care about themselves but also others, he added, for example family and neighbors.
In terms of the commercial opportunity for OTC manufacturers, Gauthier said that companies need a strong brand presented well online.
Trust is crucial, he said, with consumers twice as likely to share their data with brands they believe in. (Also see "Trust, Innovation And Growth – Three Priorities For The Global Self-Care Industry In 2021" - HBW Insight, 15 Jan, 2021.)
Companies can build this trust by being a guardian of consumer data, as well as being authentic online, which means operating sustainably and ethically, and having robust COVID-19 systems in place.
The Bottom Line
Gauthier was followed by IQVIA Consumer Health’s Amit Shukla, global vice-president consulting services, who began by asking delegates to give themselves a round of applause.
“This is a fabulous industry,” he said. “You guys have done a tremendous job.”
Inflation has for a long time been a key consideration in consumer health business strategies, Shukla noted, having settled somewhere between zero and 2% for many years.
With these numbers rising rapidly in recent months, many people are becoming concerned. For industry, however, Shukla said it is an opportunity, because it means that companies can finally raise prices.
“Do it now if you haven’t already,” he advised. By 2023, inflation will settle down, he predicted, at which point it will be too late.
Natural Premium
Alongside inflation, sustainability is a major trend that can also drive margin growth for self-care firms, he continued. (Also see "Global Consumer Health Market Will Emerge Out Of Pandemic Stronger Than Ever" - HBW Insight, 20 Apr, 2022.)
Natural products have been talked about a lot, but in the context of preventing climate change, the potential is now there to put a premium price tag on such products, he said.
Personalizing self-care products – for example through at-home DNA testing and online subscription services – is another way to add value to consumer health brands, he suggested.
“People are ready for it and will pay a premium,” he said. “We just need to get it right, work with regulators and innovate within our supply chains.”
Away from pricing, consumer healthcare company spin outs are another positive trend in the global consumer health industry, Shukla said, with GSK Consumer Healthcare, Johnson & Johnson Consumer Health, Perrigo, Sanofi and Bausch + Lomb all looking to focus their OTC businesses in some way. (Also see "J&J Rides Standalone Consumer Health Track" - HBW Insight, 12 Nov, 2021.)
Such moves will increase investment in R&D, allow self-care firms to set their own agenda, accelerate participation in the e-commerce revolution, and release cash for moonshot ideas, he predicted.
E-Commerce Transformation
Next up, Convert Group CEO Panayotis Gezerlis focused on the transformation of consumer health by e-commerce and the growth of e-pharmacies worldwide.
Convenience, assortment, and price are three major factors drawing consumers online, he reported, based on Convert Group’s research.
In consumer health specifically, the availability of health-related information online, the growth of e-prescription in many countries, shortened delivery times and generally expanding OTC sectors are all accelerating the growth of online sales channels.
In 2020, there was a 26% growth in e-pharmacy visits, he explained, with Convert Group estimating that this growth rate will increase to 35-40% over the next few years.
Interestingly, Sweden is now the leading country in the world for e-pharmacy, he noted.
Swedish Model
Speaking on behalf of the Sweden’s e-pharmacy sector, Björn Thorngren – CEO of Swedish online retailer Meds.se – was proud to say that the country had gone from “worst to best in the world.”
There’s been lots of talk about the online future of consumer healthcare, he said, but Sweden is in many ways already there. “We have tried out all this in real life,” he commented.
Until relatively recently, the Swedish government operated a monopoly in the country, with state-run pharmacies the only option for consumers.
Then in 2010, Sweden deregulated pharmaceutical retail, allowing competition and private companies to enter the sector, as well as online dispensing of Rx and OTC medicines.
There are now four retail chains in Sweden, Thorngren noted. As a result, prices have gone down for consumers, and choice has increased. “For consumers it was a great win.”
However, these retail chains haven’t really done much online, having been too busy opening new physical stores to fill gaps left by the state monopoly.
To seize the Swedish e-commerce opportunity, Meds.se launched in 2018.
E-pharmacy now commands 19% of sales in Sweden’s pharmaceuticals market, which is currently worth about 50bn SEK.
Watch out for further installments of HBW Insight’s coverage of the AESGP’s 58th Annual Meeting from Madrid, Spain over the few days.