Executive Summary
The `over-the-counter' (OTC) pharmaceuticals market has enjoyed steady
growth over the last decade, with sales being fuelled by a wider range of
pharmaceutical products being deemed suitable for retail sale. The market was
valued at £1.24bn in 1995, and is estimated at £1.29bn in 1996.
The market is comprised of a wide range of product sectors, the largest of
which is comprised of analgesics (pain relievers). This sector was valued at
£205.8m in 1995. Gynaecological products achieved the highest level of
growth in 1995, with sales boosted by the introduction of new products onto the
OTC market. The smoking cessation products sector experienced the sharpest
decline in sales of some 20% -- this sector has, to some extent, been a victim
of its own earlier success, with its target market gradually declining.
In addition to the process of delisting, whereby `prescription-only'
pharmaceuticals are switched to OTC status, there has been a gradual relaxation
in the range of pharmaceuticals now available for sale in outlets, other than
pharmacies. This trend has contributed towards the increased involvement of
grocery multiples and drugstores in the retail distribution of OTC products.
Boots The Chemists remains dominant as the leading single retailer in the OTC
market.
In terms of product formulation, there has been a trend towards higher-strength
products -- this is evidenced by the growing share taken by ibuprofen-based
products in the analgesics market.
Following a period of intense corporate activity in the mid-1990s, in terms of
mergers and takeovers, the major event in 1996 was the battle for ownership of
Lloyds Chemists PLC. Overall, in terms of OTC pharmaceutical manufacturing, the
market continues to be led by the Anglo-American company, SmithKline Beecham.
OTC pharmaceuticals remain as the last products subject to a legally enforced
price-fixing system. However, this issue has been referred to the restrictive
practices court following an investigation by the Office of Fair Trading (OFT),
which recommended the resale price maintenance (RPM) agreement should be
abolished. While the outcome of this issue cannot be predicted, Key Note
forecasts continued steady growth in the OTC market of some 4% to 5% by value.
The continuing trend toward self-medication is predicted to fuel sales, while
greater polarisation of the market can be expected.
Eighth Edition 1997
Edited by Zoe Ratcliff
ISBN 1-85765-661-X
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